Federal Reserve Bulletin, 1999-12

Volume 85 • Number 12 • December 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 785 THE TREASURY SECURITIES MARKET: Adoption of a final rule amending Regula- OVERVIEW AND RECENT DEVELOPMENTS tion CC. The market for U.S. Treasury securities is by Issuance of a final rule on a proposal to expand many measures the largest, most active debt the examination frequency cycle for certain U.S. market in the world, and the securities play a branches and agencies of foreign banks. pivotal role in world financial markets. The mar- Extension of the comment period on proposals ket has evolved over time in keeping with the to allow electronic delivery of federally manchanging needs of both the Treasury and invesdated disclosures. tors. After describing the market's structure and examining the factors driving the demand for Low reserve tranche adjustment. Treasury securities in some detail, this article Availability of a new community development discusses recent developments, including the web site. introduction of inflation-indexed securities and a decline in the issuance of Treasury securities. Issuance of joint guidance by federal regulators on risks in high loan-to-value residential real 807 TREASURY AND FEDERAL RESERVE estate lending. FOREIGN EXCHANGE OPERATIONS During the third quarter of 1999, the dollar 819 MINUTES OF THE MEETING OF THE depreciated 12.1 percent against the yen and FEDERAL OPEN MARKET COMMITTEE 3.2 percent against the euro. Dollar movements HELD ON AUGUST 24, 1999 mainly reflected prospects for more balanced At this meeting, the Committee adopted a direcglobal growth, particularly among the major tive that called for an increase of lA percentage economies. The yen's substantial appreciation point in the federal funds rate, to an average of during the quarter against both the dollar and the around 51/4 percent, and that was symmetrical euro was accompanied by sizable portfolio flows with regard to the direction of possible adjustas international investors reassessed views of ments to policy during the intermeeting period. expected risk-adjusted returns in global capital markets. The U.S. monetary authorities did not intervene in the foreign exchange markets dur- 827 LEGAL DEVELOPMENTS ing the quarter. Various bank holding company, bank service corporation, and bank merger orders; and pend- 813 INDUSTRIAL PRODUCTION AND CAPACITY ing cases. UTILIZATION FOR OCTOBER 1999 Industrial production, which had edged down in A1 FINANCIAL AND BUSINESS STATISTICS September when Hurricane Floyd slowed activ- These tables reflect data available as of ity along the eastern seaboard, increased 0.7 per- October 27, 1999. cent in October, to 136.1 percent of its 1992 average. The rate of capacity utilization for total industry rose 0.3 percentage point, to 80.7 per- A3 GUIDE TO TABULAR PRESENTATION cent, a level 1.4 percentage points below its A4 Domestic Financial Statistics 1967-98 average. A42 Domestic Nonfinancial Statistics A50 International Statistics 816 ANNOUNCEMENTS Issuance of a directive by the Federal Open A63 GUIDE TO STATISTICAL RELEASES AND Market Committee. SPECIAL TABLES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 INDEX TO STATISTICAL TABLES A74 MAPS OF THE FEDERAL RESERVE SYSTEM A66 BOARD OF GOVERNORS AND STAFF AT6 FEDERAL RESERVE BANKS, BRANCHES, A68 FEDERAL OPEN MARKET COMMITTEE AND AND OFFICES STAFF; ADVISORY COUNCILS A70 FEDERAL RESERVE BOARD PUBLICATIONS All INDEX TO VOLUME 85 A72 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

PUBLICATIONS COMMITTEE Lynn S. Fox, Chair • Jennifer J. Johnson • Karen H. Johnson • Donald L. Kohn • Stephen R. Malphrus • J. Virgil Mattingly, Jr. • Michael J. Prell • Dolores S. Smith • Richard Spillenkothen • Richard C. Stevens The Federal Reserve Bulletin is issued monthly under the direction of the staff publications committee. This committee is responsible for opinions expressed except in official statements and signed articles. It is assisted by the Economic Editing Section headed by S. Ellen Dykes, the 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

The Treasury Securities Market: Overview and Recent Developments Dominique Dupont and Brian Sack, of the Board's toward electronic trading and alternative clearing Division of Monetary Affairs, prepared this article. arrangements. Emilie Archambeault provided research assistance. The market for U.S. Treasury securities is by many OVERVIEW OF THE MARKET measures the largest, most active debt market in the world. At the end of September 1999, the amount The market for U.S. Treasury securities has a comof Treasury debt held outside federal government plex structure and involves numerous participants— accounts totaled about $3.6 trillion, close to the the Department of the Treasury, the Federal Reserve amount of outstanding debt securities issued by all System, government securities dealers and brokers, U.S. corporations combined.1 Moreover, enormous and other holders of Treasury securities. amounts of Treasury securities are traded every business day. Over the first nine months of 1999, the primary dealers in government securities, which are Scope of the Market among the most active participants in the market, together executed an average of $ 190 billion worth of The federal government finances its expenditures in transactions in the securities each day.2 excess of tax receipts through the sale of debt obliga- The heavy trading is an indication of the pivotal tions. Over the years, the Congress has delegated to role of U.S. Treasury securities in world financial the Department of the Treasury its authority under markets. Investors of many types—commercial the Constitution to issue debt securities. The United banks, investment banks, money market funds, insur- States, initially as the Continental Congress, first ance companies, individual investors, and foreign incurred debt in 1776 when it borrowed funds to central banks, among others—use the Treasury mar- finance the Revolutionary War.3 Total Treasury debt ket for investing and hedging purposes. Yields on the remained fairly small in the first half of the ninesecurities are widely viewed as benchmarks in the teenth century but rose sharply with the Civil War pricing of other debt securities and are analyzed for and again with World War I (chart 1). After declining the information they might reveal about market par- slightly, the debt increased nearly threefold during ticipants' expectations about the future path of the the Great Depression and exploded in the 1940s as economy and monetary policy. the government financed expenditures related to This article begins with a description of the struc- World War II. From its postwar low in 1949, outture of the Treasury market, including the process by standing Treasury debt grew gradually for nearly two which securities are issued in the primary market and decades before accelerating at the time of the Vietthe mechanics of the secondary market. The determi- nam War and during the subsequent period of high nants of investor demand for Treasury securities are inflation. In the 1980s, the growth of the stock of debt then discussed in some detail. The article concludes picked up further, spurred by the tax cuts and rapid with a discussion of several recent developments and increases in defense spending of the decade. emergent trends that have affected the market, includ- In recent years, budget surpluses have halted the ing the advent of inflation-indexed securities, a reduc- upward climb in the total amount of Treasury debt tion in the issuance of Treasury securities, and shifts held outside government accounts. However, the overall magnitude of outstanding debt remains substantial, a legacy of past budget deficits. At the end of 1. Corporate debt securities include corporate bonds and commer- 3. Rafael A. Bayley, The National Loans of the United States of cial paper outstanding and exclude debt and mortgage-backed securi- America from July 4, 1776 to June 30, 1880, as Prepared for the Tenth ties issued by federal agencies and government-sponsored enterprises. Census of the United States (Washington, DC: U.S. Government 2. Source: Federal Reserve Bank of New York. Printing Office, 1883). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

786 Federal Reserve Bulletin • December 1999 1. Total outstanding Treasury debt, 1851-1999 maturity of one year or less—sell at a discount from their face value (par) and do not pay interest before Billions of dollars, log scale maturity. Investors realize a return on bills from the 5,000 increase in their price to face value at maturity. — 2,000 — 1,000 Notes—securities having an initial maturity of one to ten years—and bonds—securities having an initial maturity of more than ten years—offer investors semiannual interest payments, or coupons. More than half the marketable Treasury debt outstanding is in the form of notes, while bills and bonds each represent about 20 percent (chart 3). Some of the outstanding bonds are callable securities, which 0.1 may be redeemed by the Treasury before their matu- 0.025 rity; however, only noncallable securities have been issued since 1985. Most of the marketable debt out- NOTE. Data for 1999 are through the second quarter. standing (about 97 percent) is in the form of nominal SOURCE. U.S. Department of the Treasury. securities—securities for which the coupon and principal payments are fixed in dollar terms. Since September 1999, the total par value of outstanding 1997, the Treasury has also issued securities whose Treasury debt, including that held in government coupon and principal payments are indexed to the accounts, stood at about $5.6 trillion, or about 61 per- rate of inflation. (The indexed-securities program is cent of the total annual output of the economy. This described later in the section "Availability of a New fraction, though considerable, is well below the peak Instrument.") after World War II (chart 2). The Treasury also issues a considerable amount of nonmarketable securities, which, in contrast to marketable securities, may not be traded after their initial Types of Treasury Securities purchase. Nonmarketable debt is primarily in the form of Government Account Series (83 percent), Of the $5.6 trillion in outstanding debt at the end of State and Local Government Series (7 percent), and September 1999, about $3.2 trillion was in the form savings bonds (7 percent). Government Account of marketable securities—instruments that may be Series securities are held mainly by off-budget govtraded after their initial purchase. These securities are ernment programs, such as social security, which by the focus of this article. New marketable securities law must invest accumulated surpluses in nonmarketare regularly offered in maturities ranging from thirteen weeks to thirty years. Bills—securities having a 3. Distribution of marketable Treasury debt outstanding, by type of security, September 30, 1999 2. Ratio of total outstanding Treasury debt to gross domestic product, 1930-99 >- Indexed, 3% (92.4) Ratio , r-Other, <1% (15.0) Bonds, 20% (643.7) ^ v — — 1.2 — — 1.0 Bills, 20% (653.2) — • J — 0.8 1 — / — 0.6 — 0.4 — 0.2 11 Notes, 57% (1,828.8) 1 1 1 1 1 1 1 1939 1959 1979 1999 NOTE. Numbers in parentheses are amounts outstanding, in billions of dollars. NOTE. Data for 1999 are through the second quarter. SOURCE. Monthly Statement of the Public Debt of the United States (U.S. SOURCE. U.S. Department of the Treasury; U.S. Department of Commerce. Department of the Treasury), September 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 787 able Treasury securities. State and Local Government Reserve Bank of New York as counterparties for Series (SLGS) securities are Treasury securities open market operations (government securities transoffered to those governments as a result of 1969 actions related to the Federal Reserve's implementafederal legislation restricting them from investing tion of monetary policy). They are required to participroceeds from tax-exempt bonds in higher-yielding pate meaningfully in both open market operations investments; yields on SLGS securities are set on a and Treasury auctions and to provide policy-relevant case-by-case basis to make it possible for the pur- market information to the New York Reserve Bank. chaser to comply with that legislation, although the Along with the consolidation of the financial industry yields must be at least 5 basis points below the yields has come a decline in the number of primary dealers, on marketable Treasury securities having comparable from a peak of forty-six in 1988 to thirty as of maturities. Savings bonds, which are issued in small October 1999. denominations, are redeemable at any time after a short initial holding period. In addition to offering small investors an instrument for saving, some sav- Auctions ings bond series have special characteristics such as indexation to the rate of inflation and special tax To foster liquidity in the market, the Treasury issues exemptions on interest payments used to pay for securities consistently and predictably through a qualified higher education expenses. regular schedule of auctions. The process begins several days before the scheduled auction when the Treasury announces the details of the upcoming Issuance of Treasury Securities: issue, including the amount to be auctioned and the The Primary Market maturity date. After the auction is announced but before it takes place, investors begin trading the Marketable Treasury securities are issued through yet-to-be-issued security in what is called the whenregularly scheduled auctions in what is called the issued market. Transactions in this market are agreeprimary market. The process importantly involves ments to exchange securities and funds on the day the the Federal Reserve Banks, which serve as conduits new security is issued (although a considerable porfor the auctions.4 Because market activity is concen- tion of when-issued positions are unwound before the trated in New York, the Federal Reserve Bank of issue date). The when-issued market allows new New York coordinates much of the auction activity. Treasury issues to be efficiently distributed to investors and provides useful information to potential bidders about the prices the Treasury may receive at the Primary Dealers upcoming auction. On the day of the auction, bids may be submitted Approximately 2,000 securities brokers and dealers to a Federal Reserve Bank or Branch or to the Treaare registered to operate in the government securities sury's Bureau of the Public Debt. Although all entimarket.5 Although all these firms may bid at Treasury ties may submit bids for their own accounts, deposiauctions, participation is typically concentrated tory institutions and registered government securities among a small number of these firms, the primary brokers and dealers may also bid on behalf of their dealers. Primary dealers are selected by the Federal customers. Many of these bids are entered through TAAPS (Treasury Automated Auction Processing System), an automated system for processing auction 4. This is one of several ways in which the Reserve Banks act as bids that was implemented in the early 1990s. fiscal agents of the Treasury, as permitted by the Federal Reserve Act. Two types of bids may be submitted at the auction. Other fiscal agency services provided to the Treasury are detailed in Gerald D. Manypenny and Michael L. Bermudez, "The Competitive bids specify both the quantity of the Federal Reserve Banks as Fiscal Agents and Depositories of the security sought and a yield.6 If the specified yield is United States," Federal Reserve Bulletin, vol. 78 (October 1992), within the range accepted at the auction, the bidder is pp. 727-37. awarded the entire quantity sought (unless the speci- 5. These firms are registered with the Securities and Exchange Commission, as required by the Government Securities Act of 1986, fied yield is the highest rate accepted, in which case which establishes a comprehensive legal framework regulating all the bidder is awarded a prorated portion of the bid, government securities brokers and dealers so as to ensure the integrity of the government securities market. The legislation focuses on the capitalization of brokers and dealers and grants the Treasury authority to develop and implement rules regarding transactions of government securities. The enforcement of these rules is delegated to existing 6. At bill auctions, the bidder specifies a discount rate, described regulatory agencies and self-regulatory organizations. below, rather than a yield. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

788 Federal Reserve Bulletin • December 1999 as described below). Noncompetitive bids, which and thirty-year nominal securities are held around the typically account for a small proportion of auction middle of the quarter and are referred to as "midquaramounts in part because of restrictions on their size, ter refundings." Inflation-indexed notes and bonds do not specify a yield; instead, bidders agree to are also brought to market quarterly. In addition to accept the yield determined at the auction and in these regularly scheduled issues, the Treasury occareturn are guaranteed the amount of the security sionally offers cash management bills—securities sought. having very short maturities issued to bridge tempo- In most auctions, noncompetitive bids must be rary funding needs. The borrowing cost for cash submitted by noon and competitive bids by 1:00 p.m. management bills has tended to be a bit higher than (all times are local New York time, unless stated that for regularly issued instruments.10 otherwise). To determine the range of yields to be Instead of issuing a new security, the Treasury may accepted, the quantities specified in all noncompeti- add to, or reopen, an existing issue, allowing it to tive bids are summed and that total is subtracted from increase the outstanding amount of the issue. Securithe total offered. Competitive bids are then accepted ties with larger amounts outstanding tend to be more in ascending order in terms of their yields until the liquid, making them more attractive to investors. The quantity of accepted bids reaches the quantity offered. Treasury systematically reopens Treasury bills: Every Bids at the highest accepted yield, referred to as the fourth twenty-six-week bill is a reopening of a fiftystop-out yield, are prorated so that the total amount two-week bill (which is as often as possible given of bids accepted equals the total amount offered. the auction schedule), every thirteen-week bill is a The results of the auction are typically announced by reopening of a twenty-six-week bill, and some cash 1:30 p.m. management bills are reopenings of other bills. In Since November 1998, all Treasury securities have contrast, the Treasury has only infrequently reopened been auctioned according to the uniform-price notes and bonds; since 1990, about 20 percent of the method.7 Each successful competitive bidder and auctions of ten-year notes and thirty-year bonds have each noncompetitive bidder is awarded securities at been reopenings. The infrequency of reopenings of the price corresponding to the stop-out yield. Previ- notes and bonds may be due partly to an obstacle ously, most securities had been issued according to presented by the Internal Revenue Service's Original the multiple-price method, meaning that securities Issue Discount (OID) rule, which prevents the Treawere awarded at prices corresponding to the yield of sury from reopening an issue trading at a price diseach successful competitive bid. In such auctions, count equal to or greater than 0.25 percent of par bidders must be concerned with the "winner's value per full year of remaining maturity.11 On curse"—the tendency for a successful bidder to pay a November 3, 1999, the Treasury issued a temporary price higher than the value assessed by other auction rule allowing it to reopen securities within one year participants.8 By mitigating the winner's curse, the of issuance regardless of the size of the discount. uniform-price auction may elicit more aggressive The Treasury has adjusted the auction schedule bids, possibly increasing the Treasury's revenue. over time in keeping with its changing financing As of the end of September 1999, nominal Trea- needs (table 1). It has stopped issuing securities at sury securities were offered under the following those maturities it judged to be less popular with schedule: $6.5 billion of thirteen-week bills and investors, preferring to concentrate issuance in fewer $7.5 billion of twenty-six-week bills auctioned maturities in order to preserve the sizes of those weekly; $10 billion of fifty-two-week bills every issues. In particular, it canceled the twenty-year bond four weeks; $15 billion of two-year notes monthly; in 1986, the four-year note in 1990, the seven-year $15 billion of five-year notes and $12 billion of note in 1993, and the three-year note in 1998. It also ten-year notes quarterly; and $10 billion of thirty- recently reduced the frequency of issuance of the year bonds semiannually.9 The auctions of five-, ten-, five-year note from monthly to quarterly and the frequency of issuance of the thirty-year bond from three times to twice a year by eliminating the November auction. The Treasury has discussed possible 7. Before that time, the Treasury conducted uniform-price auctions for some of its issues, including two- and five-year notes. See box "Regulatory Reforms." 8. Vincent Reinhart, "An Analysis of Potential Treasury Auction 10. David Simon, "Segmentation in the Treasury Market: Evi- Techniques," Federal Reser\'e Bulletin, vol. 78 (June 1992), dence from Cash Management Bills," Journal of Financial and Quanpp. 403-13. titative Analysis, vol. 26 (March 1991), pp. 97-108. 9. These totals do not reflect quantities allocated to the Federal 11. The OID rule does not apply if the Treasury declares an acute, Reserve or to foreign official institutions. protracted shortage in a security. See box "Regulatory Reforms." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 789 1. Frequency of auctions of Treasury securities, by maturity, 1985-99 Type of security YYeeaarr 13-week 26-week 52-week 2-year 3-year 4-year 5-year 7-year 10-year 20-year 30-year 1985 Weekly Weekly Every 4th Monthly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly 1986 week None 1987 (1/15/86) 1988 1989 1990 None 1991 (12/31/90) Monthly 1992 (1/31/91) 1993 None Semiannually 1994 (4/15/93) (8/16/93) 1995 T 1996 6x/yr (7/15/96) 3x/yr (8/15/96) 1997 Quarterly 1 1998 None Quarterly (8/15/97) T 1999 T T ? • (5/15/98) (8/17/98) T Semiannually1 NOTE. Date indicates when a security was first issued under a new schedule SOURCE. Treasury Bulletin. . or, if discontinued, when a security was last issued. 1. In August 1999, the Treasury announced that it would discontinue the November auction and issue 30-year bonds in February and August only. future cutbacks in the issuance of one-year bills and Trading in Treasury Securities: two-year notes as well. The Secondary Market Changes in the auction schedule have naturally affected the maturity of outstanding Treasury debt. The market for government securities is an over-the- The average maturity of marketable debt has varied counter market in which participants trade with one considerably over the past three decades (chart 4). another on a bilateral basis rather than on an orga- More recently, the maturity peaked at about six years nized exchange. (Treasury securities are officially regat the beginning of the 1990s, after which the Trea- istered at the New York Stock Exchange, but trading sury began to shorten the maturity in an attempt to in that market is negligible.) Trading activity takes reduce its borrowing costs. Over the past several place between primary dealers, non-primary dealers, years, the maturity has again begun to rise as a result and customers of these dealers, including financial of a reduction in the issuance of securities having institutions, nonfinancial institutions, and individuals. shorter maturities (discussed in the section "Reduc- Many dealers, particularly the primary dealers, tion in the Supply of Nominal Treasury Debt"). The "make markets" in Treasury securities by standing elimination of the November thirty-year bond auction ready to buy and sell securities at specified prices. In may help counter this rise. the process of making markets, dealers purchase securities at the bid price and sell the same securities at a slightly higher price, the offer price. Through 4. Average maturity of marketable Treasury debt, these sales and purchases, the dealer can facilitate 1964-99 transactions between customers while taking only temporary positions in the security. In doing so, the Years dealer earns the difference between the bid and offer prices, referred to as the bid-offer spread. — 6 In addition to transacting directly with customers, — primary dealers frequently trade with one another. The majority of transactions between primary dealers — 5 and other large market participants take place through the six interdealer brokers. These brokers provide the — — 4 dealers with electronic screens that display the best bid and offer prices among the dealers. Dealers can — 3 execute trades through an interdealer broker—either — "hitting" a bid price or "taking" an offer price—for 1 1 1 1 1 1 It It a small fee. In this structure, the interdealer brokers 1969 1979 1989 1999 provide two important services: They disseminate price and trade information efficiently and provide NOTE. Excludes inflation-indexed securities and holdings of the Federal Reserve. Data for 1999 are through September. anonymity to market participants. SOURCE. U.S. Department of the Treasury. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

790 Federal Reserve Bulletin • December 1999 2. Daily trading volume in Treasury securities, 1999:Q2 Treasury securities appear to be less liquid than U.S. markets; dealers reportedly post wider bid-offer Average among all Percentage among spreads and stand ready to buy or sell smaller Type of security primary dealers most active (millions of dollars) primary dealers amounts of securities at the posted prices.16 The final exchange of securities for cash (settlement) typically Bills 2299,,445511 4444 occurs in New York, regardless of where the transac- Coupon securities 116622..661144 5522 tion originated. Indexed securities 11,,228822 7744 Total 119933,,334477 5511 NOTE. The most active primary dealers are the six with the highest volume of Quoting Conventions transactions in each type of security during the quarter. SOURCE. Federal Reserve Bank of New York. Treasury coupon securities are quoted in terms of their price, expressed in dollars. The quoted price of a The thirty primary dealers are among the most coupon security is the "clean price," which excludes active participants in the secondary market. In the accrued interest. When a transaction takes place, the second quarter of 1999, they engaged in an average purchaser must pay the seller the clean price plus the of $193 billion in transactions in Treasury securities accrued interest, which is determined by the coupon each day (table 2)—about $105 billion with other amount multiplied by the fraction of the coupon dealers through interdealer brokers and the other period that has passed. $88 billion either with customers or directly with The value of a Treasury coupon security is often other dealers.12 This activity is fairly concentrated: expressed in terms of its yield to maturity, or yield, The six primary dealers with the highest volume of rather than its price. The yield on a Treasury security transactions in Treasury securities accounted for is the constant interest rate at which the present about 50 percent of the primary dealers' trading discounted value of future coupon and principal payactivity. ments equals the current price of the security. In Treasury securities can be traded almost around the effect, the yield represents the rate of return an invesclock (about twenty-two hours a day). Trading begins tor would earn if he or she held the security to in Tokyo at 7:30 p.m. (New York time) and continues maturity, assuming semiannual compounding of until 3:00 a.m., when it passes to the London mar- interest. By definition, the yield and the price move in ket.13 Trading in London continues until 7:30 a.m., at opposite directions: An increase in the price implies which time it begins in New York, where it continues that an investor must pay more today to receive the until 5:30 p.m. Although market activity is world- same, fixed payments in the future, and therefore the wide, about 94 percent of the trading volume trans- rate of return, or the yield, on the initial investment acted through interdealer brokers takes place during is lower. Although levels of yields are expressed in New York trading hours, leaving about 4 percent and percentage points, researchers and market partici- 2 percent of volume during London and Tokyo hours pants often express changes in yields in basis points respectively.14 Moreover, according to market partici- (hundredths of a percentage point). pants, a significant portion of overseas trading occurs In contrast to coupon securities, Treasury bills are at times when trading operations are being shifted quoted in terms of a discount rate, which is the from one market to another.15 Overseas markets for difference between the face value and the market price as a percentage of the face value, scaled to an annual rate assuming a 360-day year (that is, multi- 12. In comparing these figures, note that dealer-to-dealer transac- plied by 360 and divided by the number of days tions are counted twice. remaining to maturity). The yield to maturity for a 13. To be precise, because Japan has not adopted daylight saving Treasury bill is the difference between the face value time, the market opens in Tokyo at 7:30 p.m. eastern daylight time or 6:30 p.m. eastern standard time. and the market price as a percentage of the market 14. Michael J. Fleming, "The Round-the-Clock Market for U.S. price, scaled to an annual rate using the actual num- Treasury Securities," Federal Reserve Bank of New York, Economic ber of days in the year. Policy Review, vol. 3 (July 1997), pp. 9-32. This analysis is based on 1994 data; preliminary analysis by the author using 1998 data does not suggest significant changes in the patterns of overseas trading of Treasury securities. 15. Brian Madigan, and Jeff Stehm, "An Overview of the Secondary Market for U.S. Treasury Securities in London and Tokyo," 16. Michael J. Fleming, "The Round-the-Clock Market for U.S. Finance and Economics Discussion Series 94-17 (Board of Gover- Treasury Securities"; also Market Liquidity: Research Findings and nors of the Federal Reserve System, Divisions of Research and Selected Policy Implications, Committee on the Global Financial Statistics and Monetary Affairs, July 1994). System, Bank for International Settlements (May 1999). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 791 Safekeeping and Transfer of Securities puter hardware and software are necessary to handle the large flow of transactions. These banks also Recordkeeping for Treasury securities is done in one extend intraday credit to their customers, allowing of two ways. In one system, ownership and legal them to overdraw their money accounts to pay for interests are recorded electronically, in a series of securities. To finance their intraday lending to cusbook-entry records on the books of the Federal tomers, clearing banks rely on daylight overdraft Reserve Banks and depository institutions: The Fed- credit from the Federal Reserve. The charges for eral Reserve manages the National Book-Entry Sys- daylight credit are then typically passed on by the tem (NBES), which maintains records for depository clearing banks to their customers. institutions; depository institutions, in turn, maintain records for their customers. Alternatively, an investor can maintain a book-entry securities account directly THE DEMAND FOR TREASURY SECURITIES with the Treasury through the Treasury Direct system. The securities held in Treasury Direct are pur- The supply of Treasury securities, as noted earlier, is chased when originally issued and are typically held largely a function of the need to finance the cumulato maturity. tive budget deficits of the U.S. government. The Through the NBES, depository institutions can demand for those securities is determined largely by electronically transfer Treasury securities among their usefulness for investment and hedging purposes. themselves to settle their trades and the trades of their customers. Most of these trades are settled on a delivery-versus-payment basis whereby the securities Treasury Securities in Investors' Portfolios are electronically deposited in the receiving institution's account and the corresponding payment is Treasury securities are held by various types of invessimultaneously electronically deposited in the send- tors, including domestic financial intermediaries such ing institution's account at the Federal Reserve. The as depository institutions; institutional investors; state depository institutions, in turn, adjust their custom- and local governments; international investors; and ers' records to reflect the transfer. the Federal Reserve System, which participates To facilitate the settlement process, the Federal actively in the market as part of its implementation of Reserve grants finality when securities transfers are monetary policy (chart 5). completed over the NBES—that is, the payments The widespread holding of Treasury securities is associated with these transactions are final and irrevo- an indication of several appealing characteristics. As cable. In addition, the Federal Reserve, for a fee, with other fixed-income products, the payments on provides intraday credit, commonly called daylight overdrafts, to financially healthy depository institutions. To limit the credit risk arising from such credit 5. Distribution of Treasury securities, by ownership, March 31, 1999 extensions, the Federal Reserve imposes limits, based on several factors, on depository institutions' daylight overdraft capacity. The Federal Reserve requires that depository institutions cover their daylight over- Others, 14% (518.7) Federal Reserve, 12% (464.5) drafts by the end of the day. If a depository institution ends the day with a negative account balance, the Depository institutions, institution incurs an overnight overdraft, which car- 7% (247.6) Foreign and ries a much higher fee than a daylight overdraft. international, Because only depository institutions have access to 33% (1,270.8) the NBES, other buyers and sellers of government securities must use a depository institution as an intermediary.17 Settlement activity is highly concentrated in a few depository institutions known as clear- State and local governments, 7% (266.6) ing banks. Clearing banks tend to be very large organizations because sizable investments in com- NOTE. Numbers in parentheses are amounts, in billions of dollars. Excludes interest-bearing public debt held in U.S. government accounts (mainly investments in the social security and federal retirement trust funds). For state and local governments, includes about $167.45 billion of nonmarketable Treasury debt. Institutional investors include insurance companies, mutual funds, and 17. Some government-sponsored enterprises also have access to pension funds. the NBES. SOURCE. Treasury Bulletin, September 1999, tables OFS-1, OFS-2. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

792 Federal Reserve Bulletin • December 1999 The Treasury STRIPS Market Although regular coupon payments may suit the needs of The considerable interest in zero-coupon securities was some investors, others may prefer securities offering a evident long before the advent of the STRIPS program. single payment when the security matures. These instru- Several investment banks began holding Treasury securities ments, called zero-coupon securities, sell at a discount to with custodians in special trust accounts and selling the their face value, allowing investors to realize a return from components of those securities to investors. The STRIPS the increase in the price of the instrument to its maturity program made this process more efficient and cost-effective, date. as STRIPS could be registered in the Federal Reserve's In 1985 the Treasury initiated a program that allows book-entry system in the same manner as other Treasury investors to split a Treasury note or bond into zero-coupon securities. securities, or STRIPS, corresponding to each coupon pay- The total amount of STRIPS outstanding increased rapment and the principal payment of the underlying security.1 idly following the introduction of the program, reaching For example, stripping a Treasury bond that has twenty $200 billion by 1993 before leveling out. Stripping activity years left to maturity generates forty coupon STRIPS, one has been concentrated in longer-term securities, possibly maturing every six months for twenty years, and one princi- because stripping makes it possible to create Treasury secupal STRIP maturing in twenty years. The final coupon rities having longer duration than available from coupon- STRIP and the principal STRIP are treated as distinct bearing Treasury securities, which may be of interest to securities despite having identical maturity dates. Since the investors having very long investment horizons. At the end inception of the program, all newly issued ten-year notes of September 1999, about 32 percent of all outstanding and thirty-year bonds have been eligible for stripping. The Treasury bonds were held in stripped form. Stripping activprogram was expanded in September 1997 to include all ity has been more limited for securities having shorter two-, three-, and five-year notes as well. maturities, in part because stripping simply replicates many The program also allows (as of 1987) the reconstitution of the zero-coupon securities that are created by stripping of a stripped security from STRIPS matching all the securi- longer-term securities. ty's coupon and principal payments. The principal payment The STRIPS market is characterized by heavy flows of needed to reconstitute a Treasury security must be gener- gross stripping and reconstitution activity, with an average ated from the principal STRIP originating from the security of about $ 11 billion of securities stripped and reconstituted being reconstituted. By contrast, the coupon payment stream each month over the first three quarters of 1999. Stripping may be created from coupon STRIPS derived from any and reconstitution transactions can be implemented relasecurity; that is, coupon STRIPS with the same maturity tively quickly and at very little cost, facilitating arbitrage date are fungible. between the markets. As a result, there is a relatively tight pricing relationship between a strippable Treasury security 1. STRIPS is an acronym for Separate Trading of Registered Interest and and its stripped components. Principal of Securities. nominal Treasury securities are specified in advance, investment in the world. Moreover, the interest providing the investor with a known stream of income derived from Treasury securities is exempt income. (Investors who prefer a single future pay- from state and local taxes. In addition, some Treasury ment rather than a stream of coupon payments may securities are extremely liquid, which may be particuinstead hold STRIPS, described in the box "The larly important to investors engaging in hedging and Treasury STRIPS Market.") Fixed-income securities other trading-intensive investment activities. Demand are often an important component of well-balanced arising from such activities is not spread evenly portfolios that seek to minimize the variance of across all Treasury securities but is concentrated in returns for a given expected return. a limited number of issues with superior liquidity Treasury securities are particularly appealing to (as discussed in the section "Factors Affecting Indiinvestors because they offer greater safety and liquid- vidual Treasury Securities"). ity than other fixed-income securities. The payments Liquidity is an important factor influencing the of principal and interest on the securities are backed Federal Reserve's holdings of Treasury securities as by the full faith and credit of the U.S. government. In well. The Federal Reserve tends to hold Treasury light of the sound financial history of the federal securities having maturities shorter than the average government and its ability to raise substantial tax maturity of marketable securities held by other invesrevenues, Treasury securities are considered to have tors, partly because securities having shorter maturithe lowest risk of default of any major financial ties tend to be more liquid and because it can fairly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 793 rapidly reduce the size of its holdings of such securi- securities are auctioned more frequently and because ties, should it need to, by merely not replacing matur- many previously issued longer-term securities fall ing holdings. The advantages of holding a liquid in that maturity range. The gap between noncallable portfolio became evident in 1984 when the Federal securities having maturities of ten years and fifteen Reserve had to sell a significant amount of Treasury years arises because the Treasury switched from issusecurities to offset the massive influx of reserves into ing twenty-year bonds to issuing thirty-year bonds in the banking system provided through a large volume the mid-1980s. of discount-window loans at the time.18 The Federal Securities having similar maturities tend to have Reserve reduced the maturity of its portfolio from similar yields because they offer fixed payments over about four years in 1985 to about three years in 1991. similar periods. Securities having very different matu- In 1992, the Federal Reserve's policymaking commit- rities are also linked. In particular, longer-term intertee decided that the portfolio had reached a sufficient est rates generally reflect expectations about the level of liquidity and instructed the trading desk at future path of short-term interest rates. This relationthe Federal Reserve Bank of New York to keep the ship, which is often referred to as the expectations average maturity from falling further. In the follow- hypothesis, arises because an investor can choose ing years, because of the paydown of Treasury bills among several strategies, including purchasing a outstanding, the average maturity crept back up to Treasury security whose maturity extends over his or about four years. her investment horizon or purchasing a short-term Overall, Treasury securities may appeal to inves- security and continuing to reinvest in that security tors seeking the safety and liquidity offered by those (that is, roll it over) through the investment period.19 securities, and the securities' prices are determined The former strategy offers a return equal to the yield by the value investors ascribe to those characteristics on the longer-term security, whereas the latter offers in the context of their investment strategies. a return determined, approximately, by the average of the yields on the short-term security over the investment horizon.20 Substitution between the two strate- Determinants of the Yield Curve gies tends to keep the expected returns from the two The values of Treasury securities are often summa- strategies close to one another, although not exactly rized by the yield curve, which plots the yields of equal because of differences in risk (discussed all noncallable securities against their maturities. An below). example is the yield curve on September 23, 1999 Yields on short-term Treasury securities are impor- (chart 6). This curve has an upward-sloping, concave tantly influenced by monetary policy decisions by the shape. Securities having maturities of less than five Federal Reserve. Under current operating procedures, years are highly concentrated because shorter-term the Federal Reserve sets a target level for the federal funds rate—the rate at which depository institutions make uncollateralized overnight loans to one another. 18. Cheryl L. Edwards, "Open Market Operations in the 1990s," Yields on short-term securities do not deviate sub- Federal Reserve Bulletin, vol. 83 (November 1997), pp. 859-74. stantially from that rate because the institutions are able to substitute between making short-term loans in 6. Yield curve for Treasury securities, September 23, 1999 the federal funds market and purchasing Treasury securities having very short maturities.21 Longer-term yields, because they reflect expectations of future short-term yields, can be significantly influenced by the outlook for monetary policy. For 19. The vast literature on the yield curve includes alternative versions of the expectations hypothesis as well as many criticisms. This article merely notes a general relationship between longer-term yields and expectations about future short-term interest rates without taking a stand on any particular variant of the expectations hypothesis. 20. Rates on longer-term Treasury securities are actually related to a weighted average of future short-term rates, where the pattern of the weights is determined by the size of the coupon payment on the longer-term instrument. 21. The relationship between yields on short-term Treasury securities and the federal funds rate is not exact, in part because of SOURCE. Federal Reserve Bank of New York. differences in tax treatment and credit risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

794 Federal Reserve Bulletin • December 1999 7. Yield curve for Treasury securities 3. Characteristics of selected Treasury securities, December 1987-September 1999 Yield to maturity (percent) February 2, 1994 Average Standard deviation — 7 SSeeccuurriittyy One-month On h e o - l m di o n n g t h otSgxxJD ocsxxssxsm Duration Yield change in return1 (years) (percent) yield (percentage (basis points) points) Two-year note 1.81 6.24 30.2 1.93 Five-year note 4.29 6.72 29.9 4.27 Ten-year note 6.91 7.03 26.9 6.43 Thirty-year bond .. 11.95 7.34 23.1 9.39 NOTE. Data are for the most recently issued security in each maturity class. 1. Standard deviation of monthly holding returns expressed at an annual rate, assuming that monthly returns are independent across time. SOURCE. Federal Reserve Bank of New York; authors' calculations. June 16, 1989 depends on the amount of variation in the yield on — 10 that security and on the sensitivity of the price of the security to changes in yields. The latter is determined by the duration of the security, which is given by a mathematical formula that summarizes how far into the future, on average, the payments of a security are to be made. The duration of a zero-coupon bond, — — 8 because it makes only a single payment, equals its maturity. The duration of a coupon-bearing security, because it makes coupon payments before it matures, is less than its maturity. 0 5 10 15 20 25 30 Years to maturity Longer-term bonds tend to have more interest rate SOURCE. Federal Reserve Bank of New York. risk because they have longer duration. Intuitively, the price of these securities must change more for a example, the yield curve was very steep on Febru- given change in yield because the change in yield ary 2, 1994, prior to a sequence of monetary policy must be realized over a longer period. The effects of tightenings that hiked the federal funds rate target longer duration are evident in table 3, which presents 3 percentage points over the next twelve months some summary statistics on yields and one-month (chart 7). In contrast, on June 16, 1989, yields on holding returns (including coupon payments and long-term bonds were below those on short-term capital gains or losses) for securities with differsecurities before a sequence of policy easings that cut ent maturities. Yields tend to vary less as the securithe target federal funds rate about 3'/2 percentage ty's maturity increases, indicating (according to the points over the subsequent twenty-four months. expectations hypothesis) that many of the movements Some differences in yields on Treasury securities in shorter-term yields are expected to be transitory. are not related to expected future movements in inter- However, this pattern is more than offset by differest rates. These differences for the most part reflect ences in the duration of the securities, so that over compensation for risk and are often referred to as the period considered, the standard deviation of the term premia. Although they are viewed as free of holding return for the thirty-year bond was nearly default risk, Treasury securities involve interest rate five times greater than that for the two-year note. risk, as movements in their yields generate capital Because investors typically demand a premium for gains or losses for investors.22 The uncertainty sur- bearing additional risk, longer-term Treasury securirounding the return from holding a Treasury security ties, on average, offer higher yields than shorter-term instruments.23 Indeed, for this sample the average 22. Some of the movements in yields may occur in response to expected changes in inflation. Unexpected movements in inflation that 23. The amount of variation in holding returns is not necessarily are not reflected in Treasury yields also present a risk to investors by the measure of risk considered by investors. Most finance models eroding the purchasing power of the returns on the security. The risks indicate that the covariance of holding returns with the returns on presented by inflation are discussed in more detail in the section on other assets or with changes in consumption determines the risk inflation-indexed securities. premium on an asset. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 795 yield on the thirty-year bond was more than a full corporate bonds average about 13.30 and for highpercentage point higher than that on the two-year yield corporate bonds, 19.10.24 note. In general, the greater risk of holding longer- The liquidity of the Treasury market is not evenly term securities imparts an upward-sloping shape to distributed across securities, however. Most of the the yield curve. trading activity takes place in on-the-run issues—the The expected return from holding a Treasury secu- most recently issued securities in a particular maturity depends not only on the level of its yield but also rity class. The difference in trading volume between on the volatility of its yield. The reason is that the on-the-run securities and previously issued (ojf-theincrease in the price of the security resulting from a run) securities is striking. In recent years, more than decline in its yield is greater in magnitude than the half of reported interdealer broker trading in nominal decrease in the price resulting from a equal-size rise Treasury debt, on average, took place in on-the-run in its yield. If the uncertainty surrounding future securities, even though off-the-run issues outnumyield changes is symmetric, potential capital gains bered on-the-run issues more than twenty to one.25 will exceed potential capital losses, increasing the Because of the remarkable liquidity of on-the-run expected return. As a result, the yield on a Treasury Treasury securities, some investors are willing to pay security can fall below its expected return by the a premium for (that is, accept a lower yield for) those amount that is gained from the imbalance in potential securities compared with similar, off-the-run securireturns. The magnitude of this effect—often referred ties. The preference for liquidity was evident in the to as the convexity premium—increases with the number of securities trading at yields that deviated security's maturity. The convexity premium is often from the rest of the yield curve on September 23, thought to add curvature to the shape of the yield 1999 (chart 6). Yields on recently issued five-, ten-, curve by pushing down longer-term yields more than and thirty-year securities were well below those on shorter-term yields. off-the-run securities with similar maturities. In contrast, some securities traded at yields notably above the curve, including long-ago-issued twenty-year Factors Affecting bonds that are much less liquid.26 At times, the mar- Individual Treasury Securities ket's preference for liquidity becomes acute, and spreads between on-the-run and off-the-run issues Although the factors described in the preceding sec- widen appreciably, as observed during the market tion largely determine the overall shape of the yield turmoil in fall 1998 (see box "The Flight to Quality curve, there is also considerable variation among the and Treasury Yields"). yields on individual Treasury securities having similar maturities. Some of this variation reflects additional characteristics of the Treasury market that Hedging Demand affect the yields of particular securities. Treasury securities are also commonly used as hedging instruments, primarily to offset the interest rate Liquidity risk inherent in positions in other fixed-income securities. Dealers often have positions in other fixed- Overall, the Treasury market is extraordinarily liquid. income products, including corporate debt securities Enormous amounts of securities are traded every day. and mortgage-backed securities, arising in part from Even counting only the transactions of the primary their role in issuing and making markets in such dealers, the value of the entire stock of marketable securities. Dealers may also choose to establish large Treasury debt would turn over completely in about three weeks. The considerable trading volume allows 24. Figures for corporate debt securities are from G. Hong and market participants to move in and out of large A. Warga, "An Empirical Study of Bond Market Transactions," Financial Analysts Journal (forthcoming). Treasury positions rapidly with little effect on the 25. Volume data are collected by GovPX, a joint venture of prices of those securities. Because of the extensive primary dealers and some interdealer brokers that reports data on trading and the high degree of competition and trans- transactions taking place through five of the six interdealer brokers. Reported trading volume primarily captures dealer-to-dealer trades. parency among dealers, dealers typically make mar- Retail and institutional investors may trade off-the-run issues in kets in Treasury securities at narrow bid-offer greater proportion than dealers. spreads. Bid-offer spreads for Treasury securities are 26. Market participants may also be reluctant to hold the twentyyear bonds because institutional considerations may make it less reported to be 1.60 or less per $100 face value. By appealing to purchase securities that have coupon rates well above comparison, bid-offer spreads for investment-grade current yields. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

796 Federal Reserve Bulletin • December 1999 The Flight to Quality and Treasury Yields Treasury securities generally have lower yields than other Indicators of increased concern about liquidity and risk fixed-income products because of their safety and liquidity. Basis points At times, the market's concern about risk and liquidity has become pronounced, resulting in a "flight to quality" into Liquidity premium on on-the-run five-year Treasury security Treasury securities despite their lower yields. Such a flight occurred in the fall of 1998. After the devaluation of the Russian ruble in August of that year and subsequent difficulties in other emerging-market economies, investors' aversion toward risk appeared to intensify. That sentiment was reinforced by the prospect of a default by Long-Term Capital Management, a prominent hedge fund that in August and September had sustained sharp losses from its investment positions. By generating sizable losses for the firm's counterparties and forcing the abrupt unwinding of the firm's extensive positions in the Treasury and other markets, a default could have significantly disrupted markets." over on-the-run ten-year Treasury note Liquidity in many markets declined sharply over this — 140 period, with bid-offer spreads widening and large transactions becoming more difficult to complete. Anecdotal reports suggest that bid-offer spreads on Treasury securities widened from their normal levels of 1.60 or less per $ 100 to as high as 160 for on-the-run issues and 250 for off-the-run issues. Moreover, investors showed a dramatic preference for the greater liquidity offered by on-the-run issues. Yield spreads between the most recently issued and second most recently issued securities (the liquidity premium on on-therun securities) widened sharply, as investors were willing to hold the more liquid securities at lower yields (chart). 1998 1999 The increased concern about liquidity and the reduced NOTE. Data are daily and extend through October 1999. SOURCE. Bloomberg. willingness of investors to bear risk also caused a widening of spreads between other fixed-income securities and Treadebt. Market strains began to subside following the Federal sury securities. The widening affected even highly rated Reserve intermeeting policy easing on October 15, 1998. Soon thereafter, bid-offer spreads on Treasury securities, premiums for on-the-run issues, and yield spreads between 1. Hedge Funds, Leverage, and the Lessons of Long-Term Capital Man- government-sponsored enterprise and Treasury securities agement, Report of the President's Working Group on Financial Markets (April 1999). began to decline. positions in non-Treasury fixed-income products as income products. Probably most important is their part of their portfolio strategies. remarkable liquidity. Because their balance sheet To hedge the interest rate risk associated with those positions can change rapidly, dealers want to be able positions, dealers frequently take short positions to quickly alter their holdings of the hedging instruin Treasury securities. As described in more detail ment in order to maintain the proper hedges. Therebelow, the short position is established by selling fore, a preferred hedging instrument is one that can securities that the dealer does not own but instead be traded quickly and at little cost. A second charborrows, with the intention of purchasing those secu- acteristic is that dealers can readily establish short rities at a later time. By doing so, the dealer profits positions in these instruments at reasonable costs if yields rise, which could offset some of the because the repo market in Treasury securities is losses incurred in long positions in other fixed- active (discussed in the next section). income securities. Of course, Treasury securities and their derivatives Several characteristics of Treasury securities make do not offer a perfect hedge against movements in the them well suited for hedging positions in other fixed- value of other types of debt instruments. This'became Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 797 apparent in the fall of 1998, when investors became the securities outright. On the other side, investors increasingly concerned about the safety and liquidity frequently rely on the repo market to finance their of their investments.27 The ensuing "flight to qual- long positions in Treasury securities by repoing out ity" (see box) pushed down yields on Treasury secu- those securities. Partly as a result of these activities, rities sharply relative to yields on corporate and trading volume in the repo market is heavy: Primary mortgage-backed debt securities (some of which dealers reported about $1.2 trillion of lending and actually rose), generating large losses in short posi- borrowing in the repo market on their balance sheets tions in Treasury securities that were not offset by as of October 20, 1999. gains in other fixed-income securities. Since that Most repo transactions involving Treasury securitime, market participants have evinced an increasing ties take place at what is called the general-collateral reliance on non-Treasury securities for their hedg- repo rate. This interest rate typically follows the ing needs, including debt issued by government- federal funds rate closely, as depository institutions sponsored enterprises. can use either market as a source of overnight financing.28 However, if the demand for a particular Treasury security in the repo market is sufficiently high, Related Markets or if the supply of that security is limited, the repo rate for that security can fall below the general- The demand for Treasury securities is also impor- collateral repo rate. In such a case, the security is said tantly affected by the markets for repurchase agree- to go "on special" in the repo market. The firm ments and derivatives. reversing in the desired security is willing to pay a cost to obtain that security by letting the holder of the security borrow at an interest rate below the general Repurchase Agreements market rate. This situation frequently arises in on-the-run Trea- Dealers and other investors often establish short posi- sury securities, as these issues are heavily used in tions in Treasury securities as part of their hedging establishing short positions for hedging and other activity or, more generally, as part of their portfolio purposes, resulting in considerable demand for them strategies. To establish short positions, they sell secu- in the repo market. The repo rate for the on-the-run rities they do not own and deliver those securities to ten-year note has often fallen several percentage the purchaser by obtaining them in the market for points below the general-collateral repo rate (chart 8). repurchase agreements, the repo market. Researchers have found that the "specialness" of an The repo market allows participants to exchange on-the-run issue—the difference between its repo rate funds and securities on a temporary basis—in effect, and the general-collateral rate—tends to build followborrowing and lending using Treasury and other debt ing an auction as a larger proportion of the issue securities as collateral. More specifically, a firm comes to be held by investors who do not make the engaging in a repo transaction simultaneously sells a security available to the repo market. The specialness particular security to a counterparty and agrees to typically peaks around the announcement of the next repurchase that same security at a specified price at a auction, after which it declines as short positions later date, often the next day. This firm is said to begin to shift to the next on-the-run issue.29 In addi- "repo out" the security, by which it borrows money tion to this regular pattern, other factors influence at what is called the repo rate, which is based on the the specialness of these securities. For example, difference between the current price and the agreed-to increased hedging activity around periods of heavy future price. A reverse repo is simply the other side issuance of corporate debt or mortgage-backed secuof the transaction—agreeing to purchase particular rities can lead to sizable short positions that cause securities temporarily and to resell them to the same particular securities to go on special in the repo counterparty at a specified price at a later date. In this market. case, the firm "reverses in" the security. Securities that are on special in the repo market Investors can therefore deliver securities that they frequently trade at lower yields (higher prices) than sold short by reversing in the securities repeatedly until they decide to cover the position by purchasing 28. The main difference between the transactions is that a repo transaction is akin to a collateralized loan, whereas a federal funds transaction is an uncollateralized loan. 27. A Review of Financial Market Events in Autumn 1998, Com- 29. Frank Keane, "Repo Rate Patterns for New Treasury Notes," mittee on the Global Financial System. Bank for International Settle- Federal Reserve Bank of New York, Current Issues in Economics and ments (October 1999). Finance, vol. 2 (September 1996). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • December 1999 8. Overnight repo rates for Treasury securities, 1995-99 General-collateral security 1996 1997 1998 1999 NOTE. Data are daily and extend from November 7, 1995, to October 22, SOURCE. Federal Reserve Bank of New York. 1999. other securities with comparable maturities, as is a competitive auction format. Under the current strucoften the case for on-the-run Treasury securities.30 If ture, initiated on April 26, 1999, the Bank conducts a a security is on special in the repo market, holders daily auction at which it accepts bids in terms of a can realize a profit by borrowing against the security "lending fee" for borrowing particular securities. at below-market rates; because this profit increases When a bid is accepted, the particular security is the return on the security for a given yield, investors delivered to the dealer's account. The dealer, in turn, may be willing to hold the security at a lower yield. delivers a different Treasury security to the Federal However, investors that value the greater liquidity of Reserve as collateral and pays the lending fee. The on-the-run securities may be willing to hold them lending fee is closely related to the spread between without repoing them out despite their lower yields. the general-collateral repo rate and the repo rate for The patterns observed around Treasury auctions, the borrowed security, because from the dealer's which reflect the activity associated with bringing perspective the transaction is similar to repoing out new issues to market, account for a significant por- a (general-collateral) security and reversing in the tion of the movements in yields and repo rates for the desired security. The minimum bid is 150 basis most recently issued securities. However, extensive points, high enough that borrowing activity is limited specialness in the repo market has at times also to those securities that are scarce, and hence deeply signaled severe shortages of particular Treasury secu- on special, in the repo market. rities that have disrupted the effective functioning of The Federal Reserve's portfolio of Treasury securithe market for those securities. Several such short- ties as of October 31 of this year totaled $492 billion. ages took place around the time that Salomon Broth- By making a portion of these holdings available for ers admitted in 1991 to repeated violations of Trea- borrowing, the securities lending program increases sury auction rules. In response, several regulatory the potential supply of Treasury securities available and policy changes were implemented to prevent to the repo market, which should help reduce the violations of auction rules and to alleviate such scarcity of particular issues. The Federal Reserve shortages if they develop (see box "Regulatory originally stood ready to lend up to 25 percent of its Reforms"). holdings of any security but on September 7, 1999, To facilitate transactions in the repo market, the increased the limit to 45 percent. Over the two Federal Reserve Bank of New York operates a securi- months following the increase, dealers borrowed an ties lending program that allows primary dealers to average of about $1.4 billion of Treasury securities, borrow individual Treasury securities from the Fed- typically distributed across several different securi- < eral Reserve's portfolio overnight by posting a differ- ties, every business day. ent Treasury security as collateral. The program uses Derivatives 30. For a discussion of the repo market and its effects on Treasury A large and active market exists for derivative securiyields, see Darrell Duffie, "Special Repo Rates," Journal of Finance, ties whose values are based on the prices of Treasury vol. 51 (June 1996), pp. 493-526. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 799 Regulatory Reforms Following Violations of Auction Rules by Salomon Brothers Following the April and May 1991 Treasury auctions, sev- Other changes were aimed more directly at the enforceeral widely publicized "short squeezes" occurred in the ment of auction rules. Customer bids are now spot-checked two-year note during which an apparent scarcity of the by the Federal Reserve Bank of New York to ensure their securities caused their yields and repo rates to fall substan- authenticity, and all large auction awards are now confirmed tially below those for other Treasury securities. The infor- directly with the customer. The report also emphasized the mation available to the Treasury suggested that the May need to automate the auction procedure, which has since squeeze had resulted from a concentration of auction awards taken place. to Salomon Brothers and some of its customers. In addition, The report also considered the benefits of replacing the there had earlier been inquiries into several Salomon Broth- then-current multiple-price auction system for notes and ers bids at the February 1991 auction of the five-year note bonds with a uniform-price system, under which all successthat appeared to violate the rule limiting the amount bid by ful bidders would be awarded securities at the lowest price. a single bidder to 35 percent of the publicly offered amount. The report suggested that such a change might alleviate These events prompted investigations by the Securities some concern among auction participants about bidding and Exchange Commission (SEC) and the Antitrust Divi- above the market consensus. Consequently, more investors sion of the Department of Justice, leading Salomon Broth- might bid on their own rather than through primary dealers, ers to conduct its own investigation. In August 1991, the reducing the primary dealers' advantage at the auctions that firm admitted to submitting unauthorized customer bids at arises from knowing the bidding intentions of their customseveral auctions in 1990 and 1991 and to failing to report ers. The Treasury subsequently began an experiment with large net long positions on auction tender forms as required. this auction method for two- and five-year notes. By Subsequently, the Treasury, the SEC, and the Federal November 1998, all Treasury securities were being auc- Reserve jointly reviewed the government securities market tioned on a uniform-price basis. and issued a report describing a number of policy and In addition, some changes were implemented to detect regulatory changes aimed at improving the functioning of and respond to short squeezes in the secondary market. A the market and avoiding such violations in the future.1 group made up of representatives of the SEC, the Treasury, Some of the reforms were implemented immediately, and the Federal Reserve Bank of New York, and the Board of others were recommended for legislative approval. Governors of the Federal Reserve System was established Many of the reforms were intended to make Treasury to improve surveillance efforts. The Treasury stated its auctions accessible to more participants. The set of firms intention to reopen any security that was experiencing an allowed to submit bids for customers was broadened to "acute, protracted" shortage in order to increase the supply include all government securities brokers and dealers, of the security. The reopening could be implemented in not just primary dealers and depository institutions. The several different ways, one of which is to immediately requirements for becoming a primary dealer were loosened auction an amount sufficiently large to eliminate the possiby eliminating the rule that to qualify the dealer must bility that the squeeze would persist. account for at least 1 percent of the dollar volume of all Finally, the Congress enacted the Government Securities customer trades in the secondary market. In addition, the Act Amendments of 1993. Among other provisions, the maximum for noncompetitive tender awards for notes and amendments give the Treasury the authority to require bonds was raised from $1 million to $5 million; however, to holders of large positions in a particular security to report ensure that noncompetitive awards were reserved for the on their positions if a shortage emerges. The Treasury has smaller bidders for whom they were intended, noncompeti- conducted two tests of the reporting system, one in June tive bids were restricted to bidders having no positions in 1998 and the other in July 1999. In both cases, the Treasury the when-issued, futures, or forward markets at the time of required investors with reportable positions in excess of the auction and not submitting competitive bids. $2'/2 billion in the specified security to file large-position reports. 1. Joint Report on the Government Securities Market (Washington, DC: Government Printing Office, January 1992). securities. Futures and options contracts for two-, As of the end of October 1999, open interest for five-, and ten-year notes and for bonds are listed by CBOT long-bond futures (that is, the total number of the Chicago Board of Trade (CBOT), and similar contracts held by market participants) was about futures contracts are offered on the Cantor Financial 635,000, with each contract based on $100,000 face Futures Exchange. In addition, the Chicago Mercan- value of the Treasury bond. Daily trading volume in tile Exchange offers options and futures on various these contracts over the month averaged about Treasury bills and other short-term interest rate 300,000 contracts. The CBOT also offers trading in products. options on Treasury futures (contracts that allow the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 Federal Reserve Bulletin • December 1999 holder to buy or sell a futures contract at a specified Availability of a New Instrument: price). For options on long-bond futures, open inter- Inflation-Indexed Securities est totaled about 950,000 contracts and daily trading volume averaged about 130,000 contracts. Because A significant innovation in the Treasury market in of the liquidity of this market, combined with the the past several years has been the introduction of a ease with which investors can establish "short" posi- new type of debt instrument: Treasury inflationtions by selling futures contracts, these instruments indexed securities, or TIIS.32 Since the program's are also commonly used for hedging purposes. inception in January 1997, about $92 billion of TIIS The seller of a CBOT Treasury futures contract have been issued.33 Unlike previously issued Treaagrees to deliver a Treasury security to the purchaser sury securities, the coupon and principal payments of the contract at a specified price at a future date. on TIIS increase with a measure of the general price Most positions in these futures contracts are closed level—the consumer price index (CPI). Indexation out prior to delivery by entering into offsetting trades, provides protection against the possibility that inflaand delivery does not take place. However, the possi- tion will erode the amount of goods and services that bility of delivery links the price of the contract to could be purchased with the interest or principal the deliverable Treasury securities. Typically, several payments. securities are eligible for delivery into the contract.31 The long-bond futures contract, for example, allows any Treasury bond with more than fifteen years The Mechanics of TIIS remaining to maturity at the expiration of the contract to be delivered (for the March 2000 contract, thirty- Whereas the principal amount of a nominal Treasury five such securities are eligible). security remains fixed in nominal terms, the principal One of the securities eligible for delivery is the amount on a TIIS adjusts over time by the rate of "cheapest to deliver." That is, the cost to the seller of inflation. The value of the principal on a given day the futures contract of purchasing the security to is calculated by multiplying the principal amount make delivery will be lower than the cost of delivat issuance by a daily index ratio determined by a ering any other eligible security. The price of the reference CPI for that day divided by the reference contract is influenced primarily by the value of the CPI on the day of issue. The reference CPI is based cheapest-to-deliver security. Moreover, the cheapeston the non-seasonally adjusted CPI lagged about two to-deliver status has at times significantly affected the and one-half months, as published by the Bureau of yield of that Treasury security. In particular, the Labor Statistics (BLS).34 cheapest-to-deliver security is often traded more If the average rate of inflation is positive, the actively as market participants hedge their futures principal amount of the TIIS generally rises over the position, which enhances the security's liquidity. life of the security.35 Coupon payments will also Because of this enhanced liquidity and because some increase in line with the rate of inflation, as coupon investors may need to purchase the security to make delivery into the futures contract, the cheapest-todeliver security may trade at a premium to Treasury securities having similar maturities. 32. Several government-sponsored enterprises, corporations, and local governments followed the Treasury's lead by issuing indexed debt in early 1997. In addition, the Treasury began selling inflation- RECENT DEVELOPMENTS indexed savings bonds, called I-bonds, in September 1998. 33. When adjusted for the accrual of inflation compensation, the AFFECTING THE MARKET total amount of TIIS outstanding is higher than this amount. 34. Specifically, the CPI refers to the non-seasonally adjusted U.S. The structure and behavior of the Treasury market is City Average All Items Consumer Price Index for All Urban Consumcontinually changing. Some of the developments and ers. The reference CPI for the first day of a given month is the CPI reported for the third preceding calendar month, and the reference CPI emergent trends that have recently influenced the for days over the rest of the month is a weighted average of the market are discussed in this section. reference CPI figures on the first days of the current month and the following month. The lag involved in calculating the index ratio is unavoidable because the monthly CPI is released with a lag and the 31. Eligible securities trade at a premium or a discount to face reference CPI for the beginning of the following month must be value simply because of differences in their coupon rates. To adjust known. for this effect, the CBOT contract scales the invoice amount—the 35. A period of deflation could decrease the principal amount of amount that the investor who is long the futures contract must pay the TIIS. However, the TIIS program provides that the cumulative upon receiving an eligible security—by a "conversion factor" for that adjustment to the principal amount at the maturity of the security may security. not be negative. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 801 payments on TIIS are determined by the specified level of inflation as well as an inflation risk premium, coupon rate multiplied by the principal amount. The as described below. quoted prices of TIIS do not reflect the accumulated By holding an inflation-indexed security to matuamount of inflation compensation; the value of the rity, an investor can lock in a long-term real rate of security exchanged when a TIIS is traded is the return, a strategy that may be appealing to investors quoted price multiplied by the current index ratio with long investment horizons. Investors with shorter plus the amount of accrued interest. horizons also can protect themselves against inflation TIIS do not offer perfect protection against infla- by holding TIIS, although they are subject to real tion risk, for several reasons. First, TIIS holders face interest rate risk; that is, changes in TIIS yields will some inflation risk because of the lag involved in generate capital gains or losses that depend on the calculating the reference index. Second, holders pay duration of the security. taxes on inflation compensation, so the degree of However, the risks from holding TIIS are likely to inflation protection is reduced by an investor's tax be smaller than those from holding nominal Treasury rate.36 In addition, TIIS holders face some risk that securities. In addition to real interest rate risk, returns the method used to calculate the CPI will change.37 on nominal securities are subject to the risks pre- The BLS has implemented several methodological sented by unpredictable changes in inflation. An changes in recent years, partly in response to recom- increase in expected inflation, for example, typically mendations by the Boskin Commission, an advisory causes yields on nominal Treasury securities to rise group appointed to study the CPI. Some market par- (assuming that investors demand the same real return ticipants estimate that these changes have shaved going forward), generating capital losses for current about 0.7 percentage point from the index's annual investors. In contrast, TIIS would maintain the same rate of growth. Such a reduction directly affects the real return without a change in yields, and thus holdrate at which payments on TIIS increase, and hence ers of TIIS would not suffer any capital losses.38 By the value of TIIS. The risk of additional changes in eliminating this "inflation risk," TIIS may offer more the method of calculating the CPI may result in a risk stable real returns than nominal Treasury securities. premium in TIIS yields; however, many market par- Thus, investors may demand a higher expected real ticipants believe that most of the likely changes have return on nominal Treasury securities than on TIIS to already been implemented. compensate them for the additional risks of holding those securities.39 By issuing indexed debt, the government, rather than the investor, assumes the risks The Potential Appeal of TIIS associated with unpredicted changes in inflation and therefore does not have to pay this "inflation risk The protection against inflation provided by TIIS, premium" to the investor, which may lower the govpreviously unavailable in the Treasury market, may ernment's cost of borrowing. be valued by investors, who tend to be concerned An additional benefit of issuing TIIS, it has been about real rates of return (that is, about the amount of argued, is that yields on indexed debt might provide goods and services they will be able to purchase with policymakers with a timely and informative measure the payments from a security). Because the payments of market expectations about real interest rates. In automatically adjust to compensate for inflation, the that case, the difference between yields on TIIS and yield on an inflation-indexed security reflects the real yields on nominal Treasury securities—the measure rate of return that would be realized over the maturity of inflation compensation on nominal securities— of the security. The yield on a nominal security, in may contain valuable information about investors' contrast, includes not only the anticipated real return outlook for inflation. This measure of inflation comon the security, but also compensation for inflation. pensation reflects primarily the expected level of This inflation compensation includes the expected inflation over the maturity of the instruments plus the 36. This effect is inconsequential if TIIS are held in nontaxable accounts. The taxation of the inflation compensation on TIIS is 38. In addition, TIIS protect investors from unexpected changes in comparable to that for nominal Treasury securities, on which the inflation that are not reflected in nominal yields. Such changes would inflation compensation (embedded in the coupon rate) is also taxed. not generate capital losses on nominal Treasury securities but would 37. If the CPI is discontinued or substantially altered in a manner still erode the real returns on those securities. that is deemed "materially adverse to the interests of an investor," the 39. The measure of risk considered here is the variation in real Treasury, in consultation with the BLS, will substitute an appropriate returns. Investors may instead be concerned about the covariance alternative index. However, incremental improvements in the CPI do of returns with the returns on other assets or with changes in not receive special treatment. consumption. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

802 Federal Reserve Bulletin • December 1999 inflation risk premium, but it may also be influenced This spread is somewhat wider than bid-offer spreads by differences in the liquidity of the securities.40 for nominal Treasury securities, which are reportedly The possibility that interest costs may be lower, 1.60 or less, but it is much narrower than bid-offer along with potential attendant benefits, may explain spreads for corporate bonds. why a growing number of countries are issuing According to market participants, liquidity in the indexed debt. Canada and France have launched new TIIS market is gradually improving. Aside from the programs over the past decade, and a number of other pickup in volume during the market turmoil in the countries, some with high and variable levels of infla- third quarter of 1998, the volume of TIIS transactions tion, had established indexed debt programs much among primary dealers reported to the New York earlier. The United Kingdom implemented its pro- Reserve Bank has been about 26 percent higher in gram in 1981, and as of September 1999 indexed 1999 than in 1998, whereas the volume in nominal gilts represented about 22 percent of all outstanding Treasury coupon securities has declined 12 percent. U.K. government debt.41 By comparison, TIIS repre- TIIS volume is concentrated around the auction sented about 3 percent of all marketable U.S. govern- cycle: Over the past four auctions, average daily ment debt at that time. However, because of the size volume during the four weeks after the announceof the U.S. Treasury market, the dollar amount of ment of an auction has been 92 percent higher than TIIS outstanding is approaching the dollar-equivalent that during other weeks. Although the Chicago Board amount of outstanding indexed gilts. of Trade offers options and futures contracts on TIIS similar to those on other Treasury securities, market activity has been negligible. Market Activity in TIIS To date, the Treasury has issued six inflation-indexed Yields on TIIS securities—one five-year note, three ten-year notes, and two thirty-year bonds. Each issue has been The first TIIS issued, a ten-year note, was auctioned reopened once, leaving its total size roughly between on January 29, 1997, at a yield of 3.45 percent. Since $14 billion and $16 billion. Currently, the Treasury then, the yield on the ten-year TIIS has generally issues only ten- and thirty-year TIIS, alternating risen to the current level above 4 percent (chart 9). between the two maturities at auctions in the first Over that period, the yield on TIIS has been less month of every quarter. volatile than that on the nominal ten-year security. Activity in the secondary market for TIIS has On an average day, the ten-year TIIS yield changed remained moderate relative to comparable nominal less than 1 Vz basis points, compared with more than issues. According to data for primary dealers col- 4 basis points for the nominal security. In addition, lected by the Federal Reserve Bank of New York, the yield on the nominal security has moved in a daily trading volume in TIIS over the second quarter much wider range of about 2l/i percentage points, of 1999 averaged about 1.7 percent of TIIS outstand- compared with about 3A percentage point for the TIIS ing, compared with about 5.0 percent for nominal yield. Treasury notes and bonds. The more limited activity The spread between these yields—the inflation in TIIS may reflect the nature of these securities: compensation on the ten-year nominal Treasury They provide safe, stable long-run returns and may note—fell over 1997 and the first half of 1998, along therefore appeal to investors who are less inclined to with the actual rate of CPI inflation and a survey trade their holdings actively. measure of long-run inflation expectations among Other measures suggest that TIIS are somewhat professional forecasters. However, the decline in less liquid than off-the-run nominal Treasury securi- inflation compensation was more dramatic than that ties 42 Discussions with some primary dealers indi- of the survey measure, suggesting that some of the cate that bid-offer spreads on TIIS, in terms of prices, narrowing of the yield spread may have been driven are typically about 1.60 to 6.30 per $100 face value. by a decline in the inflation risk premium. Relative changes in yields may also be explained in part by differences in the liquidity of nominal 40. Differences in duration and convexity between TIIS and nomisecurities and TIIS. In the fall of 1998, yields on nal securities may also affect the yield spread. 41. Quarterly Gilts Review: 3rd Quarter 1999, United Kingdom nominal Treasury securities dropped sharply, pushing Debt Management Office (October 1999). ten-year inflation compensation as low as 69 basis 42. No distinction is made between on-the-run and off-the-run TIIS points. This dramatic narrowing of the yield spread, because there are no large differences in liquidity between those securities, as is the case with nominal Treasury securities. though it may have partially reflected a change in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 803 outlook for inflation, was undoubtedly driven by a 9. Yields on nominal and indexed Treasury securities shift in investors' preferences toward more-liquid and indicators of inflation, 1997-99 assets, particularly on-the-run nominal Treasury secu- Yield (percent) rities. Inflation compensation returned to higher levels in 1999 as the demand for liquidity lessened and inflation expectations rose. TIIS yields also appear to be significantly influenced by supply. In particular, seven of the fourteen largest daily changes in the ten-year TIIS yield over the period shown in chart 9 took place immediately before or after TIIS auctions. The largest movements in the ten-year nominal yields, by contrast, were all in response to either macroeconomic news or the reallocation into safe and liquid assets during the fall of 1998. Percentage points Reduction in the Supply of Nominal Treasury Debt In response to the budget surpluses of the past two years, the Treasury has decreased its securities issuance enough to shrink the amount of marketable debt outstanding. This development has several implications for the Treasury securities market. Developments in the Treasury Bill Market 1997 1998 1999 NOTE. Yield data are based on most recently issued securities and extend After decades of increases, marketable Treasury debt through October 1999; yield spread is yield on ten-year nominal securities less outstanding has decreased over the past two years.43 yield on ten-year TIIS. Expectations data and CPI data extend into the third quarter. Because the issuance of Treasury bills has been cut I. Median expectation of CPI inflation over the next ten years among professional forecasters surveyed by the Federal Reserve Bank of Philadelphia. more sharply than that of Treasury coupon securities, SOURCE. Board of Governors of the Federal Reserve System, Federal Reserve the decline has not been evenly spread across the Bank of New York, Bureau of Labor Statistics. maturity spectrum (table 4). From December 1996 to September 1999, total coupon securities outstanding The spread between the six-month yield implied by a declined about 7 percent whereas total bills outstand- smoothed yield curve based on coupon securities and ing decreased about 16 percent. In association with the yield on the six-month bill has increased over the the downtrend in supply, the average daily trading past four years (chart 10). Although bills have typivolume in bills reported by primary dealers declined cally commanded higher prices (lower yields) than about 44 percent over the period (chart 10). In con- coupon securities of similar maturities because of trast, the average daily trading volume in nominal their greater liquidity, the recent increase in the coupon securities reported by primary dealers in Sep- spread is correlated with the decrease in the supply of tember 1999, though off its peak of fall 1998, was bills and could suggest a scarcity premium on bills 45 only about 2 percent below its level in December Two conflicting effects may have been at play in the 1996. bill market: The reduction in issuance may have The decline in the amount of bills outstanding may made bills less liquid, reducing their attractiveness have weakened the connection between yields on relative to coupon securities; at the same time, the bills and those on longer-term Treasury securities.44 reduction in supply in the face of continuing strong 43. However, total Treasury debt, which includes securities held in 45. For insights into the relation between the liquidity of bills government accounts, has increased over the period. and coupon securities and their yields, see Yakov Amihud and 44. Similar effects have been documented by Gregory R. Duffee, Haim Mendelson, "Liquidity, Maturity, and the Yields on U.S. Trea- "Idiosyncratic Variation of Treasury Bill Yields," Journal of Finance, sury Securities," Journal of Finance, vol. 46 (September 1991), vol. 51 (June 1996), pp. 527-51. pp. 1411-25. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

804 Federal Reserve Bulletin • December 1999 4. Distribution of marketable Treasury debt outstanding, by maturity, 1994-99 Billions of dollars Maturity class YYYeeeaaarrr TTToootttaaalll ooouuutttssstttaaannndddiiinnnggg Notes and bonds (remaining maturity) BBiillllss Less than 5 years 5-10 years 10 years or more 1994 3,111 734 1,606 320 451 1995 3,292 761 1,749 325 457 1996 3,445 111 1,842 338 488 1997 3,409 715 1,823 356 515 1998 3,271 691 1,691 349 540 1999 3,125 653 1,567 346 559 NOTE. Data are for end of period; for 1999, data end on September 30. SOURCE. Monthly Statement of the Public Debt of the United States, table III. Excludes Treasury inflation-indexed securities (TIIS) and Federal Financing Bank series. investor demand may have enhanced their relative Treasury Debt Buy backs attractiveness, pushing their prices up and their yields down. Faced with the prospect of continuing declines in the volume of debt outstanding, the Treasury has proposed a new tool for debt management. In August 1999, it published for comment a proposed rule under 10. Effect of the reduction in supply on the Treasury bill market, July 1994-September 1999 which it could repurchase its own securities in the market. The Treasury expects to be able by early Billions of dollars Trillions of dollars 2000 to conduct buybacks should it decide to do so. The Treasury believes that the program would have Average daily transactions in bills Q g5 three benefits. First, buybacks would allow it to maintain the large size of new issues, a feature thought to promote greater liquidity. (As noted earlier, the Treasury has also concentrated issuance in fewer maturities in order to preserve their size.) Second, it could use buybacks as a cash management tool, absorbing excess cash when tax revenues exceed immediate spending needs. And third, by concentrating the buybacks on longer-term securities, it would be able to halt the recent upcreep in the average maturity of the Basis points debt. Under the current proposal, the buybacks would be implemented through "reverse auctions" in which the Treasury would announce the approximate total amount of the securities it wished to redeem and the particular securities that would be eligible. Bids would have to be submitted by or through primary dealers so that the Treasury could make use of the open market facility of the New York Reserve Bank. The total amount of bids accepted would not exceed, and could be less than, the announced amount of redemptions. 1995 1996 1997 1998 1999 Some market observers believe that buybacks NOTE. The data are monthly. The six-month yield on coupon securities is the could initially reduce yields on the targeted securities yield implied by a smoothed yield curve based on Treasury coupon securities relative to those on more liquid issues. They argue with remaining maturities ranging from a few months to several years. SOURCE. Transactions, amounts reported by primary dealers to the Federal that investors, knowing that they will periodically Reserve Bank of New York; outstanding amounts. Monthly Statement of the have an opportunity to sell them back to the Treasury, Public Debt of the United States', yield spread, authors' calculations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

The Treasury Securities Market: Overview and Recent Developments 805 may be less concerned about the lower liquidity of arranging for regular auctions of securities with matuthe targeted securities. However, some market partici- rities of less than one year. pants, in their comments about the proposed rule, Market participants characterize the liquidity of have expressed concern that removing a considerable the most recently issued benchmark and reference portion of an individual Treasury issue through a notes as comparable to that of off-the-run Treasury buyback could decrease the liquidity of the securities securities. Indicative of their increased liquidity, from that issue that remain in the market. benchmark and reference notes are actively used as Under current accounting rules for the federal bud- collateral in the overnight repo market, although, get, the buyback program could increase the reported reportedly, they are rarely used in term repo transaclevel of federal spending in the short term. If the tions. Benchmark and reference notes reportedly have price at which a security is repurchased is above par, begun to be used as substitutes for Treasury securities the premium would be counted as an interest expense as instruments for hedging. Their yields have tracked in the year of the repurchase, although reported inter- yields on corporate debt and mortgage-backed securiest expenses in the future would decline. ties more closely than have yields on Treasury securities, a characteristic traders have cited as an advantage for hedging purposes. The trading volume in Debt Issuance GSE debt by primary dealers, however, amounts to by Government-Sponsored Enterprises only a fraction of their trading in Treasury securities. To fill the gap left by a dwindling supply of Treasury securities, two government-sponsored enterprises Trends in Market Structure (GSEs), Fannie Mae and Freddie Mac, in 1998 introduced new series of debt securities that in some ways The structure supporting the trading of Treasury secumimic Treasury securities: Fannie Mae "benchmark" rities has changed in several ways in recent years. and Freddie Mac "reference" notes and bonds. GSEs Market participants have relied more heavily on priare federally chartered, private institutions; their debt vate clearing arrangements since the Federal Reserve securities are not backed by the full faith and credit began assessing a fee on intraday credit. More of the United States. However, debt securities issued recently, market participants have also increased their by GSEs are perceived as being quite safe and typi- use of electronic trading systems. cally trade at yields only slightly above those on Treasury securities.46 By issuing securities regularly and in large vol- Use of Alternative Clearing Arrangements umes, these two GSEs appear to be structuring their issues so as to achieve the greater liquidity and In April 1994, the Federal Reserve began to charge a benchmark status of Treasury securities, presumably fee on daylight overdrafts, initially at an annual rate to lower their financing costs. The two GSEs have of 24 basis points and raised to 36 basis points in also increased the predictability of the offerings by 1995. Within six months after the fee was imposed, announcing issuance calendars in advance. More- average daylight overdrafts fell 40 percent, from over, the new securities are designed to appeal to about $70 billion to about $43 billion. The decline international investors, as they can be electronically was due partly to government securities dealers' decitransferred through international clearing organiza- sion to arrange repo transactions earlier in the day tions such as Euroclear and Cedel as well as through and to deliver securities used as collateral more the NBES system. quickly to cover overdrafts generated by the repay- As of early November 1999, outstanding amounts ment of maturing repos. As a consequence, trading of benchmark and reference securities totaled more activity in the repo market became more concentrated than $150 billion, with maturities ranging from two early in the morning, spurring the trading desk at the to thirty years.47 That month, the two GSEs intro- Federal Reserve Bank of New York to enter the duced benchmark and reference bills programs market earlier to conduct open market operations. The desk moved its intervention time from about 11:30 a.m. to 10:30 a.m. in January 1997 and to 46. Debt securities issued by GSEs are considered government 9:30 a.m in April 1999. Another change in market securities for purposes of the Securities and Exchange Act of 1934. For details on legal provisions particular to GSE securities, see practice has been the growing use of tri-party repos, "Assessing the Public Costs and Benefits of Fannie Mae and Freddie in which both parties to the transaction use the same Mac," Congressional Budget Office (May 1996), p. 10. custodian bank, so that the securities used as collat- 47. Excludes callable benchmark and reference notes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

806 Federal Reserve Bulletin • December 1999 eral are shifted from one account to the other without works. Electronic trading represents a small, though leaving the custodian bank, thereby reducing day- rapidly increasing, share of the aggregate trading light overdrafts at the Federal Reserve. Tri-party re- volume of Treasury securities. Analysts estimate that pos also facilitate the back-office handling of the the share of electronic trading in total trading activity transactions. in the Treasury market had risen from about half a Market participants have also increased their use percent on average in 1998 to about 2 percent to of netting arrangements, such as those offered by 4 percent by fall 1999, still well below the share of the Government Securities Clearing Corporation equity trading done on line (reported to be about (GSCC). This industry service organization, estab- 14 percent). lished in 1986 and owned by market participants, In November 1999, the Bond Market Association provides centralized clearing and settlement services identified thirty-nine systems offering electronic for outright and repo transactions in Treasury securi- transaction services in the U.S. market for governties and some GSE-issued securities. GSCC estab- ment and private debt securities, up from twenty-six lishes a single net position for each participant's daily in 1998 and eleven in 1997.49 In addition, some trading activity in a given security by netting all cash interdealer brokers have introduced or plan to introand repo transactions and Treasury auction purchases. duce electronic systems (primarily) for the Treasury Netting may reduce the costs associated with securi- market. These systems offer the same anonymity of ties transfers by reducing the number of transactions the current interdealer broker system but could drive and lowering daylight overdraft charges.48 down interdealer broker fees, quicken execution, GSCC guarantees the settlement of all trades and streamline the relation between the "front office" entered in its system by interposing itself between the and the "back office." The development of electronic original trading parties and becoming the legal coun- interdealer brokerage is poised to boost the market terparty for settlement purposes. Were a firm to share of electronic trading of Treasury securities. become insolvent, GSCC would use the participant's clearing fund and margin deposits to liquidate the member's positions. If those deposits were insuffi- SUMMARY cient to cover the liquidation of all positions, the remaining liabilities would be prorated among the The market for Treasury securities is vast and serves participants who traded most recently with the failed important functions for numerous investors. The firm. GSCC is used by primary dealers and other characteristics and behavior of the market are not active market participants, who may value the static but instead evolve with the changing objectives confidentiality of brokered trades offered by the and needs of both the Treasury and investors. This organization. article has identified several important changes in recent years, including the introduction of indexed debt securities, a decline in budgetary needs, and Growth of Electronic Trading changes in the way Treasury securities are traded. Participants in the Treasury market have typically Although these and additional, unforeseen changes arranged transactions by telephone. In recent years, will continue to shape the Treasury market, the cruhowever, advances in technology have enabled them cial role of Treasury securities in world financial to transact through electronic communication net- markets is likely to remain unchanged. • 48. Heidi Willman Richards, "Daylight Overdraft Fees and the 49. eCommerce in the U.S. Fixed Income Markets: The 1999 Federal Reserve's Payment System Risk Policy," Federal Resene Review of Electronic Transaction Systems. Bond Market Association Bulletin, vol. 81 (December 1995), pp. 1065-77. (November 1999). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

807 Treasury and Federal Reserve Foreign Exchange Operations This quarterly report describes U.S. Treasury and 1. Yields on U.S. Treasury securities, 1999:Q3 System foreign exchange operations for the period from July through September 1999. It was presented by Peter R. Fisher, Executive Vice President, Federal Reserve Bank of New York, and Manager, System Open Market Account. Deborah L. Leonard was primarily responsible for preparation of the report. During the third quarter of 1999, the dollar depreciated 12.1 percent against the yen and 3.2 percent against the euro. Dollar movements mainly reflected prospects for more balanced global growth, particularly among the major economies. The yen's substan- July Aug. Sept. tial appreciation during the quarter against both the 1999 dollar and the euro was accompanied by sizable NOTE. The data are daily. portfolio flows as international investors reassessed SOURCE. Bloomberg L.P. views of expected risk-adjusted returns in global capital markets. The U.S. monetary authorities did producer price reports shortly after that date supnot intervene in the foreign exchange markets during ported the view that further tightening might not be the quarter. imminent, even though labor markets remained taut and the manufacturing sector remained strong. The FOMC raised the federal funds target rate 25 basis IMPROVEMENT IN THE OUTLOOK FOR GLOBAL points, to 5.25 percent on August 24, with an accompanying statement that the two recent rate increases ECONOMIC GROWTH should "markedly diminish the risk of rising inflation The U.S. economy continued to show buoyant activ- going forward." A weaker-than-expected report on ity in the third quarter, although its pace of growth nonfarm payrolls on September 3 and moderate conappeared to slow. Expectations for aggressive mone- sumer price data on September 15 bolstered this tary policy tightening in the United States waned in sentiment. the initial weeks of the quarter after the Federal Open Signs of ongoing economic stabilization in Japan Market Committee (FOMC) raised the federal funds were reflected in data releases throughout the third target rate from 4.75 to 5.00 percent and adopted a quarter. Strong industrial production figures released neutral policy stance on June 30. Many market par- on July 29 showing a 3.0 percent rise in output for ticipants posited that benign price data and forecasts June were followed on August 13 by a slight upward of slower growth made further near-term policy revision to the already surprisingly strong reading for changes less likely. Nevertheless, yields on U.S. first-quarter GDP growth, from 1.9 percent to 2.0 per- Treasury securities rose to fifteen-month highs cent over the fourth quarter of 1998. Second-quarter after Chairman Greenspan warned in his July 22 GDP data released on September 9, also surprisingly Humphrey-Hawkins testimony that the FOMC would strong, showed growth of 0.2 percent compared with act "promptly and forcefully" should inflationary market expectations for a contraction of 0.3 perpressures emerge. Rising commodity prices, par- cent. Several market participants cited gains in Japanese equities as a reflection of growing confidence ticularly for oil, also raised some concerns about in Japan's recovery, as the small-capitalization the outlook for inflation. The subsequent release of JASDAQ index soared 26 percent during the quarter; lower-than-expected second-quarter GDP growth of however, the Nikkei index traded in a narrower range 2.3 percent on July 29 and subdued consumer and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

808 Federal Reserve Bulletin • December 1999 2. Japanese equity prices, 1999:Q3 3. Implied yield on March 2000 euribor futures contract, 1999:Q3 NOTE. The data are daily. SOURCE. Bloomberg L.P. NOTE. The data are daily. The euribor rate is the European interbank offered rate for euro deposits. SOURCE. Bloomberg L.P. amid the uncertain effect of a stronger yen on shares of large-capitalization exporters. Improving economic indicators across Europe promarket participants responded to the neutral bias, vided mounting evidence of a cyclical recovery in the and then rose 28 basis points after Chairman euro area. Throughout the quarter, many private and Greenspan's Humphrey-Hawkins testimony. Howmultilateral institutions revised upward their foreever, the implied yield then fell 14 basis points from casts of economic growth. Data releases early in the its period high of 5.49 percent, to end the quarter quarter were inconclusive, but a marked improverelatively unchanged. In Europe, forecasts of stronger ment in surveys of German and French business growth, rising inflation, and comments from ECB sentiment and manufacturing orders later in the officials contributed to the view that the balance of period led to growing expectations for an upswing in risks implied a tightening of European monetary polindustrial activity across Europe. On July 15, Euroicy sooner rather than later. pean Central Bank (ECB) President Duisenberg sug- In Japan, the yield on Japan's ten-year benchmark gested that a "[tightening] bias was gradually creepgovernment bond rose as high as 2.00 percent. ing" into the ECB's policy considerations. Toward Stronger economic data and Bank of Japan Governor the end of the quarter, expectations for a near-term Hay ami's June 30 testimony that Japan's zero intertightening solidified as producer prices rose across est rate policy was "extraordinary," led some market Europe, surveys of purchasing managers indicated participants to expect that the Bank of Japan might higher prices paid for inputs, and senior ECB officials highlighted the risks of inflation in their public comments. 4. Implied yield on December 1999 federal funds futures contract, 1999:Q3 EXPECTATIONS FOR MONETARY POLICY ACTIONS SHIFT Fundamental economic developments and comments from public officials in the United States, Japan, and Europe contributed to changing expectations for monetary policy actions throughout the quarter. In the United States, the FOMC's choice of a symmetric policy outlook after monetary policy tightenings on June 30 and again on August 24 encouraged market participants to carefully evaluate new information for potential signs of near-term policy direction. Early in the quarter, the implied yield on the December fed- NOTE. The data are daily. eral funds futures contract fell 16 basis points, as SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 809 5. Implied yield on March 2000 Euroyen futures contract, about yen appreciation; that it was prepared to 1999:Q3 respond to developments in the economy as well as in the financial markets, including the foreign exchange market; and that it was exploring ways to ensure that liquidity further permeated the money markets in Japan. DOMINATION OF CURRENCY MOVEMENTS BY PORTFOLIO FLOWS A reassessment of economic fundamentals and changing policy expectations among the Group of Three was also reflected in portfolio flows during the quarter, particularly with respect to the yen. The yen NOTE. The data are daily. steadily appreciated to a three-and-a-half-year low of SOURCE. Bloomberg L.P. ¥103.72 against the dollar and an all-time low of ¥108.70 against the euro on September 23 and 24 abandon its loose monetary policy sooner than previ- respectively. Shifts in portfolio flows in favor of ously expected. Ongoing discussion about additional Japanese assets took place as Japanese and foreign fiscal stimulus measures further weighed on bond investors re-evaluated their perceived risk-adjusted prices. However, the implied yield on the December returns on capital in global markets. euroyen futures contract fell steadily, from 0.54 per- For Japanese investors, the yen's rise substantially cent to 0.18 percent, amid subsequent reassurances reduced the value of unhedged foreign assets. In that the current zero interest rate policy would remain yen terms, the price return on an index of eurointact until signs of deflation had dissipated. In addi- denominated sovereign bonds, which already had tion, the yen's persistent strength and domestic and fallen 11 percent from the beginning of 1999 to international political pressures directed attention to July 1, fell as much as 24 percent toward the end of the possibility that the Bank of Japan would provide September. Year-to-date, yen-adjusted price returns further monetary stimulus to the economy. on an index of U.S. Treasury notes and bonds had Throughout September, market discussion focused gained 3 percent as the third quarter began but fell on calls by some observers in Japan and in the 12 percent by September 30. Although the U.S. markets for the Bank of Japan to adopt "quantitative S&P 500 equity index declined 6.6 percent in the easing" measures, including unsterilized interven- third quarter, it fell approximately 18 percent in yen tion, to invigorate Japan's economy. At its Septem- terms. Such losses reportedly encouraged Japanese ber 21 meeting, the decision by the Bank of Japan's investors to hedge or liquidate overseas positions Policy Board to maintain its zero interest rate policy was accompanied by a statement emphasizing the central bank's belief that it was already supplying 6. The dollar and the euro against the Japanese yen, 1999:Q3 ample liquidity to the money market. The Bank of Japan further stated that the "foreign exchange rate Yen per dollar Yen per euro in itself is not a direct objective of monetary policy," Euro-yen exchange rate but also that the Bank "considers it is important to 125 J—v — 125 carefully monitor the development of the foreign exchange rate from the viewpoint of how it affects 120 — — 120 the economy and prices." Market participants per- 115 — \ — 115 ceived a greater willingness by the Bank of Japan to consider additional stimulus measures after the Sep- 110 — / \ \ j \J NO Dollar-yen exchange rate ^ tember 25 meeting of the Group of Seven finance ministers and central bank heads, who expressed 105 — V \ /— 105 shared concern with Japan about the potential effect 1 1 1 of the yen's appreciation. After the meeting, Bank July Aug. Sept. of Japan Governor Hayami issued a statement that 1999 the Bank shared the Japanese government's concern NOTE. The data are daily. SOURCE. Reuters. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

810 Federal Reserve Bulletin • December 1999 7. Currency-adjusted price returns on U.S. and European for higher interest rates in the United States and government bond indexes, January 1999-September 1999 Europe. On several occasions during the quarter, officials Index, January I = 100 from the Japanese Ministry of Finance publicly stated Returns on U.S. Treasury securities that the Bank of Japan had intervened in the foreign exchange markets, buying dollars and selling yen. Although Japanese officials repeatedly expressed concern about a "premature" strengthening of the yen before economic recovery had been firmly established, some market participants noted that the interventions appeared to attempt to smooth the rate of the yen's appreciation rather than to roll it back. Nevertheless, uncertainty regarding Japan's foreign exchange policy objectives contributed to a sharp rise Returns on euro-denominated sovereign bonds in market volatility. In the options market, one-month — 110 implied volatility for the dollar-yen exchange rate — 105 soared from around 10 percent to as high as 22 percent toward the end of the quarter, reflecting greater uncertainty among market participants about the yen's trading range. Movements in the euro's value against the yen were also largely influenced by portfolio flows, as Japanese investors hedged or reduced their exposure to euro-denominated assets. In contrast to the dollar's steady decline against the yen, movements in the 1999 dollar-euro exchange rate reflected changing expec- NOTE. The data are daily. SOURCE. Merrill Lynch. tations regarding relative economic growth and interest rate prospects in the United States and Europe. After trading to a low of $1.0136 early in the quarter, ahead of Japan's September 30 fiscal half-year-end the euro rebounded sharply in July in response to the book closings, thereby accelerating the yen's rise. rising momentum of European growth, President Improved Japanese growth prospects also encour- Duisenberg's intimation that a tightening bias was aged international investors to increase the share of "creeping" into ECB policy considerations, and Japanese equities in their portfolios. Such portfolio increased expectations of higher interest rates in shifts were further encouraged by concerns about Europe. growing external imbalances, persistent questions The euro reversed some of its gains after benign about valuation levels for U.S. stocks, and prospects U.S. price data supported a short-lived rally in U.S. 8. Volatility implied by one-month option prices, 1999:Q3 9. The euro against the dollar, 1999:Q3 Dollars per euro — — 1.08 — r \ A 7V\ f— 1.06 — / VVs/y — i.04 — 1.02 i i i July Aug. Sept. July Aug. Sept. 1999 1999 NOTE. The data are daily. NOTE. The data are daily. SOURCE. Reuters. SOURCE. Bloomberg L.R Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 811 10. Spread between ten-year U.S. Treasury and quarter and reaching a low of 82 basis points on German government bond yields, 1999:Q3 September 23, its lowest level since January. Basis points TREASURY AND FEDERAL RESERVE FOREIGN EXCHANGE OPERATIONS The U.S. monetary authorities did not undertake any intervention operations during the quarter. At the end of the quarter, the current values of reserve holdings of euros and Japanese yen totaled $16.1 billion for the Federal Reserve System and $16.1 billion for the Exchange Stabilization Fund.1 The U.S. monetary authorities invest all of their foreign currency bal- July Aug. Sept. ances in a variety of instruments that yield market- 1999 related rates of return and have a high degree of NOTE. The data are daily. SOURCE. Bloomberg L.P. liquidity and credit quality. To the greatest extent practicable, these investments are split evenly between the Federal Reserve System and the asset markets in August but subsequently rose in Exchange Stabilization Fund. response to European price and manufacturing data A portion of the balances is invested in German that was interpreted as increasing the possibility of and Japanese government securities held directly or near-term interest rate hikes. The euro again pared its under repurchase agreement. Government securities gains at the beginning of September, when U.S. proheld under repurchase agreement are arranged either ducer price and employment data made additional through transactions executed directly in the market interest rate increases in the United States appear less or through agreements with official institutions. Forimminent, and after Germany's ruling Social Demoeign currency reserves are also invested in deposits at cratic Party suffered widespread losses in regional the Bank for International Settlements and in facilielections. However, the European currency again rose ties at other official institutions. As of September 30, at the end of the quarter, after strong U.S. retail sales direct holdings of foreign government securities and trade data showing a rising deficit weighed totaled $9.1 billion—split evenly between the two heavily on U.S. equity markets. More generally, the authorities. Foreign government securities held under euro's appreciation against the dollar this quarter repurchase agreement totaled $13.2 billion at the end reflected the broader trend of narrowing U.S. and of the quarter and were also split evenly between the European yield spreads. Euro-area sovereign bonds two authorities. • underperformed U.S. Treasury securities, with the spread between ten-year U.S. and German govern- 1. Amounts are based on carrying value and September 30 ment bond yields narrowing 46 basis points over the exchange rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

812 Federal Reserve Bulletin • December 1999 1. Foreign currency holdings of U.S. monetary authorities based on current exchange rates, 1999:Q3 Millions of dollars Quarterly changes in balances, by source BBaallaannccee,, BBaallaannccee,, IItteemm JJuunnee 3300,, 11999999 Net purchases Effect of Investment Currency Interest accrual SSeepptt.. 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 6.943.7 0.0 0.0 53.0 225.1 0.0 7,221.8 Japanese yen 7,786.9 0.0 0.0 2.0 1,043.0 0.0 8,831.9 Total 14,730.6 0.0 0.0 55.0 1,268.1 0.0 16,053.7 Interest receivables4 68.4 -17.3 51.1 Other cash flow from investments3 ... 13.4 13.4 Total 14,799.0 0.0 0.0 55.0 1,268.1 -3.9 16,118.2 U.S. TREASURY EXCHANGE STABILIZATION FUND (ESF) EMU euro 6.944.6 0.0 0.0 49.3 225.2 0.0 7,219.1 Japanese yen 7,787.0 0.0 0.0 2.0 1.042.8 0.0 8.831.8 Total 14,731.6 0.0 0.0 51.3 1,268.0 0.0 16,050.9 Interest receivables4 45.5 20.7 66.2 Other cash flow from investments 5 .,. 13.3 13.3 Total 14,777.1 0.0 0.0 513 1,268.0 34.0 16,130.4 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, September 30, 1999 and Federal Reserve foreign exchange operations, Millions of dollars based on historical cost-of-acquisition exchange rates, 1999:Q3 Institution Amount of Outstanding, facility Sept. 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 2222....000000000000 0000....0000 3333,,,,000000000000 0000....0000 Valuation profits and losses on outstanding assets and liabilities, Total 5555,,,,000000000000 0000....0000 June 30. 1999 EMU euro -345.0 -562.0 U.S. Treasury Japanese yen 746.3 958.5 Exchange Stabilization Fund currency arrangements Total 401.3 396.5 333,,,000000000 000...000 Realized profits and losses from foreign currency sales, Total 333,,,000000000 000...000 June 30. 1999-Sept. 30, 1999 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. Sept. 30, 1999 EMU euro -119.9 -336.9 Japanese yen 1,775.8 1,988.0 Total 1,655.9 1,651.1 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

813 Industrial Production and Capacity Utilization for October 1999 Released for publication November 15 at electric utilities and in a number of manufacturing industries. At 136.1 percent of its 1992 average, industrial production in October was 2.8 percent Industrial production, which had edged down in Sep- higher than in October 1998. The rate of capacity tember when Hurricane Floyd slowed activity along utilization for total industry rose 0.3 percentage point, the eastern seaboard, increased 0.7 percent in Octo- to 80.7 percent, a level 1.4 percentage points below ber. In the recovery after the storm, output rebounded its 1967-98 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 — Consumer goods 145 145 135 135 — Durable / V^ " 125 125 115 115 105 105 <JyLrJv—\/3\f Nondurable 95 95 i V i i i i i i i i Ratio scale, 1992 = 100 Ratio scale, 1992 = 100 1990 1992 1994 1996 1998 1990 1992 1994 1996 1998 All series are seasonally adjusted. Latest series, October. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

814 Federal Reserve Bulletin • December 1999 Industrial production and capacity utilization, September 1999 Industrial production, index, 1992=100 Percentage change Category 1999 19991 Oct. 1998 to Julyr Aug.r Sept.' Oct.? July' Aug.' Sept.' Oct.P Oct. 1999 Total 135.0 13S.3 13S.2 136.1 .6 .3 -.1 2.8 Previous estimate 135.0 135.5 135.0 .6 .4 -.3 Major market groups Products, total2 125.7 126.4 126.0 127.0 .0 .6 1.7 Consumer goods ... 115.8 116.7 115.8 117.4 -.3 .7 1.4 1.9 Business equipment 172.2 172.8 172.4 172.4 .7 .4 .0 2.0 Construction supplies 132.8 132.6 133.0 134.0 1.1 -.2 .7 4.3 Materials 150.3 150.0 150.5 151.3 1.4 -.2 .5 4.7 Major industry groups Manufacturing 139.0 139.4 139.6 140.4 .4 .3 .1 .6 3.2 Durable 167.5 167.9 167.9 168.9 1.2 .3 .0 .6 4.8 Nondurable 110.7 111.1 111.4 112.1 -.5 .4 .3 .6 1.1 Mining 98.4 99.5 99.2 99.4 .7 1.1 -.2 .1 -2.6 Utilities 121.5 120.2 117.2 119.5 2.8 -1.1 -2.5 2.0 2.5 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1998 1999 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, OOOcccttt... 111999999888 11996677--9988 11998822 11998888--8899 tttooo Oct. July' Aug.' Sept.' Oct.P OOOcccttt... 111999999999 Total 82.1 71.1 85.4 81.3 80.6 80.6 80.4 80.7 3.6 Previous estimate 80.6 80.7 80.3 Manufacturing 81.1 69.0 85.7 80.3 79.5 79.5 79.4 79.7 3.9 Advanced processing 80.5 70.4 84.2 79.6 78.4 78.4 78.3 78.5 4.7 Primary processing . 82.4 66.2 88.9 82.4 82.7 82.9 82.8 83.1 2.1 Mining 87.5 80.3 88.0 84.7 81.1 81.9 81.7 81.7 1.0 Utilities 87.4 75.9 92.6 92.0 95.5 94.5 92.1 93.9 .5 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 information processing group, the output of computers has risen more slowly in recent months than The output of consumer goods rose 1.4 percent in earlier in the year. The output of defense equipment October after having dropped 0.8 percent in Septem- in October recouped about half of its 1.6 percent ber. The output of durable consumer goods increased decline in September. 2.1 percent as the production of both automotive The production of construction supplies rose products and other durable goods, particularly goods 0.7 percent in October, after a smaller increase in the for the home such as appliances, increased sharply. previous month, to a level 4.3 percent higher than After having declined 0.3 percent in September, the in October 1998. The output of materials increased production of nondurable consumer goods advanced 0.5 percent, a bit more than in September. The 1.1 percent. The output of energy products rebounded increases in the output of durable goods materials, 2.1 percent from declines that totaled 3 percent over which were strong over the past year, slowed to August and September, and the output of non-energy 0.3 percent in October, while growth in the output of consumer nondurables rose 1.0 percent, led by gains nondurable goods materials accelerated to 0.7 perin foods and consumer chemicals. cent. The production of energy materials reversed The production of business equipment, which had most of the 1 percent drop in September. eased 0.2 percent in September, was flat in October. Sharp declines in the output of transit equipment, INDUSTRY GROUPS particularly commercial aircraft, and other equipment offset gains in the production of information process- Manufacturing output advanced 0.6 percent in Octoing equipment and industrial equipment. Within the ber after a gain of only 0.1 percent in September. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 815 increase in the output of durables was led by gains at and the modified methods affect data from 1992 makers of iron and steel, light trucks, computers, onward. In addition, the supplementary series on the semiconductors, and miscellaneous manufactures; gross value of products leaving the industrial sector however, gains in hi-tech industries, such as comput- will be expressed in 1996 dollars; these series begin ers and related parts, while still rapid, have on bal- in 1977. ance been smaller in recent months. While most other The updated IP measures will include some annual durable industries recorded fractional increases, the data from the Bureau of the Census's 1997 Census of output indexes for commercial aircraft and parts and Manufactures and from selected editions of its 1998 for farm machinery declined noticeably. The ongoing Current Industrial Reports. Annual data from the contraction in the output of commercial aircraft and U.S. Geological Survey on metallic and nonmetallic parts brought its index in October to a level about minerals (except fuels) for 1997 and 1998 will also 20 percent below the level of October 1998. The be introduced. The updating will also include revioutput of farm machinery, which had dropped sharply sions to the monthly indicator for each industry to a low in August, remained more than 40 percent (either physical product data, production worker below its high in the summer of 1998. Production hours, or electric power usage) and revised seasonal in nondurable manufacturing increased for a third factors. month after earlier weakness. Among nondurables, The revision will introduce improved measures of gains in October were widespread, except for rubber production for computers and office equipment and plastics products and leather and products. The (SIC 357) and for motor vehicles (SIC 3711, 3). The tobacco, textile, and apparel products industries, new monthly production measure for computers is which had suffered setbacks in the preceding two derived from detailed information on the major prodor three months, reversed a portion of those losses ucts produced by the industry. For example, from in October. The output of printing and publishing, 1994 to 1998, quarterly data on the physical quantity chemicals and products, petroleum products, and and average unit value of about 1,100 distinct models foods advanced again. of personal computers, notebooks, servers, and work- The factory operating rate rose 0.3 percentage stations are used to construct the new IP index for point, to 79.7 percent, with increases in both durable computers; previously, monthly electric power use by and nondurable industries. While the utilization rate the industry was used as the within-year indicator of for durable manufacturing was a bit above its production. The new measures of motor vehicle pro- 1967-98 average, the rates for nondurable manufac- duction incorporate price weights for the different turing industries other than petroleum products were models of light vehicles; previously, all autos and below their averages. light trucks were weighted equally in compiling an The output at utilities, which had fallen back more aggregate figure. In addition, the monthly production than V-h percent in August and September, increased indicators for bolts and fasteners (SIC 345) and for 2.0 percent; utilization at utilities recovered and metalworking machinery (SIC 354) will be changed moved up, to 93.9 percent. Mine production edged up from electric power use to production worker hours. after having eased a bit in September; utilization at Capacity and capacity utilization rates will be mines remained at 81.7 percent. revised to incorporate preliminary data from the 1998 Survey of Plant Capacity of the Bureau of the Census, which covers manufacturing, along with REVISION OF INDUSTRIAL PRODUCTION AND other new data on capacity from the U.S. Geologi- CAPACITY UTILIZATION cal Survey, the Department of Energy, and other organizations. On November 30, 1999, the Federal Reserve Board Once the revision is published, it will also be will publish a revision to the index of industrial made available on the Board's web site, at http:// production (IP) and the related measures of capacity www.federalreserve.gov/releases/gl7, and on disand capacity utilization for the period January 1992 kettes from Publications Services (telephone 202to October 1999. The updated measures will reflect 452-3245). The revised data will also be available both the incorporation of newly available, more com- through the STAT-USA web site of the Department prehensive source data typical of annual revisions of Commerce (http://www.stat-usa.gov). Further and, for some series, the introduction of improved information on these revisions is available from methods for compiling the series. The new source the Board's Industrial Output Section (telephone data are for recent years, primarily 1997 and 1998, 202-452-3197). • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

816 Announcements FEDERAL OPEN MARKET COMMITTEE EXAMINATION FREQUENCY CYCLE FOR DIRECTIVE BRANCHES AND AGENCIES OF FOREIGN BANKS: FINAL RULE The Federal Open Market Committee decided on October 5, 1999, to leave its target for the federal The Federal Reserve Board, along with the Office of funds rate unchanged. the Comptroller of the Currency and the Federal Strengthening productivity growth has been foster- Deposit Insurance Corporation, on October 21, 1999, ing favorable trends in unit costs and prices, and issued a final rule on a proposal to expand the examimuch recent information suggests that these trends nation frequency cycle for certain U.S. branches and have been sustained. agencies of foreign banks. The rule was effective Nonetheless, the growth of demand has continued October 22, 1999. to outpace that of supply, as evidenced by a decreas- This rule finalizes an interim rule, effective ing pool of available workers willing to take jobs. In August 28, 1998, that made U.S. branches and agenthese circumstances, the Federal Open Market Com- cies of foreign banks with total assets of $250 million mittee will need to be especially alert in the months or less eligible for an eighteen-month examination ahead to the potential for costs to increase signifi- cycle if they met the qualifying criteria set out in the cantly in excess of productivity in a manner that rule. The ruling will implement provisions of seccould contribute to inflation pressures and undermine tion 2214 of the Economic Growth and Regulatory the impressive performance of the economy. Paperwork Reduction Act of 1996. Against this background, the Committee adopted a directive that was biased toward a possible firming of policy going forward. Committee members empha- PROPOSED ACTION sized that such a directive did not signify a commitment to near-term action. The Committee will need The Federal Reserve Board on October 18, 1999, to evaluate additional information on the balance of announced an extension of the comment period on aggregate supply and demand and conditions in proposals to allow electronic delivery of federally financial markets. mandated disclosures. On September 14, 1999, the Board published revised proposals for public comment under five consumer protection regulations: REGULATION CC: FINAL RULE B (Equal Credit Opportunity), E (Electronic Fund Transfers), M (Consumer Leasing), Z (Truth in Lend- The Federal Reserve Board on October 28, 1999, ing), and DD (Truth in Savings). The original deadannounced adoption of a final rule amending Regula- line for public comment was October 29, 1999. The tion CC (Availability of Funds and Collection of Board extended the comment period until Novem- Checks), to clarify the extent to which depository ber 15, 1999. institutions and others may vary the terms of the regulation by agreement for the purpose of instituting electronic return systems. The rule is effective Low RESERVE TRANCHE ADJUSTMENT December 15, 1999. The Board requested comments on this rule in The Federal Reserve Board on October 6, 1999, February 1999. Rather than adopting any of the announced a decrease from $46.5 million to options it proposed, the Board has revised the Com- $44.3 million in the net transaction accounts to which mentary to Regulation CC to add examples of inter- a 3 percent reserve requirement will apply in 2000. bank agreements on electronic presentment and This procedure is known as the low reserve tranche return of checks. This revision will not affect the adjustment. rights of any parties to the checks under Regula- The Board also changed from $4.9 million to tion CC. $5.0 million the amount of reservable liabilities of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

817 each depository institution that is subject to a reserve project, the kind of financial or technical assistance requirement of 0 percent. needed, and project location. IstSource will then Additionally, the Board increased the deposit cut- locate grant and loan programs and other resources off levels that are used in conjunction with the that fit those characteristics and provide a brief oneexemption level to determine the frequency and detail page summary. If a program looks promising, users of deposit reporting required for each institution from can contact the agency through the Internet link, $81.9 million to $84.5 million for nonexempt deposi- telephone number, or address provided. tory institutions and from $52.6 million to $54.3 mil- The Community Affairs staff at the Federal lion for exempt depository institutions. Reserve Bank of Kansas City collaborated with fed- For depository institutions that report weekly, the eral agencies to make this service available. Agencies low reserve tranche adjustment and reservable liabili- involved include the following: the Small Business ties exemption adjustment will apply to the reserve Administration, the Economic Development Admincomputation period that begins Tuesday, Novem- istration, the Department of Housing and Urban ber 30, 1999, and the corresponding reserve mainte- Development, the Bureau of Indian Affairs, the nance period that begins Thursday, December 30, Department of Agriculture, the Federal Home Loan 1999. Banks, the Federal Agricultural Mortgage Corpora- For institutions that report quarterly, the low tion (Farmer Mac), the Department of Health and reserve tranche adjustment and the reservable liabili- Human Services' Office of Community Services, and ties exemption adjustment will apply to the reserve the Department of Veterans Affairs. IstSource has computation period that begins Tuesday, Decem- also invited states to include information about their ber 21, 1999, and the corresponding reserve mainte- programs. nance period that begins Thursday, January 20, 2000. For more information on IstSource, contact In addition, normal shift procedures will resume John A. Wood, Assistant Vice President and Commuin September 2000 for nonexempt institutions that nity Affairs Officer, Community Affairs Department, would otherwise have shifted from quarterly to Federal Reserve Bank of Kansas City (telephone weekly reporting, and for exempt institutions that 1-800-333-1010, extension 2203). would otherwise have shifted from annual to quarterly reporting in September 1999 but for Y2K adjustments to the category shift procedures. ISSUANCE OF JOINT GUIDANCE BY FEDERAL REGULATORS ON RISKS IN HIGH LOAN-TO-VALUE RESIDENTIAL REAL ESTATE AVAILABILITY OF A NEW COMMUNITY LENDING DEVELOPMENT WEB SITE Federal financial institution regulators (the Board of The Federal Reserve Board on October 13, 1999, Governors of the Federal Reserve System, the Fedannounced the availability of a new Internet site, eral Deposit Insurance Corporation, the Office of the IstSource Community Development Resource Guide, Comptroller of the Currency, and the Office of Thrift designed to help people find resources for affordable Supervision) on October 12, 1999, advised banks and housing, business development, community infrastructure, and agribusiness. The new site, developed thrift institutions about the risks associated with high by the Federal Reserve Bank of Kansas City, can be loan-to-value (LTV) residential real estate loans. The accessed at www.lstsource.kc.frb.org/ guidance reminded insured institutions that the Inter- "The strength of IstSource is its simplicity," said agency Guidelines for Real Estate Lending Policies Thomas M. Hoenig, President of the Federal Reserve adopted in 1992 apply to these transactions. Bank of Kansas City. The 1992 guidelines advised institutions that they would come under increased supervisory scrutiny as With dozens of federal programs available, it can be diffi- the total of all high LTV loans approached 100 percult to pinpoint what is needed for a project. This is the cent of total capital. The guidance just issued first time people have had one source for community and describes steps regulators may take if an institution's economic development information. People interested in high LTV loan portfolio exceeds 100 percent of total financing projects that benefit economically-disadvantaged individuals, small businesses, small farms, and local com- capital. Supervisory action might include a request to munities will find IstSource especially useful. sell high LTV loans, raise additional capital, or submit a plan to achieve compliance with the capital IstSource users can describe their projects by limitation. clicking on specific characteristics, such as type of High LTV residential loans carry higher risks than Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

818 Federal Reserve Bulletin • December 1999 more traditional residential real estate loans. How- first-time homebuyers by financing closing costs or ever, the regulators advised banks and thrift institu- rehabilitation costs into their mortgage. There is also tions that high LTV residential loans—which repre- no intent in the guidance to restrict financing of sent 90 percent or more of the value of the residence well-managed community development or rehabilitaheld as collateral—can be profitable when risks are tion programs. effectively managed and loans are priced based on The guidance listed four primary credit risks assothat risk. ciated with this type of loan: increased risk of default The regulators also recognize that high LTV resi- and losses; inadequate collateral; longer terms, creatdential loans can serve a useful purpose in helping ing longer periods of exposure; and limited default financially burdened borrowers consolidate and man- remedies. age their debts. The regulators said that the guidance This guidance is intended to remind financial instijust issued is not intended to—and should not— tutions of their obligations to effectively manage the restrict access to mortgage credit for affordable hous- risks in their high LTV loan portfolios and to comply ing for low- and moderate-income borrowers. For with fair lending and consumer protection laws and example, high LTV home loans may be used to help regulations. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

819 Minutes of the Meeting of the Federal Open Market Committee Held on August 24, 1999 A meeting of the Federal Open Market Committee Ms. Edwards,1 Senior Economist, Division of was held in the offices of the Board of Governors of Monetary Affairs, Board of Governors the Federal Reserve System in Washington, D.C., on Ms. Low, Open Market Secretariat Assistant, Tuesday, August 24, 1999, at 9:00 a.m. Division of Monetary Affairs, Board of Governors Present: Mr. Greenspan, Chairman Mr. Stewart and Ms. Strand, First Vice Presidents, Mr. McDonough, Vice Chairman Federal Reserve Banks of New York and Mr. Boehne Minneapolis respectively Mr. Ferguson Mr. Gramlich Mr. Beebe, Ms. Browne, Messrs. Eisenbeis, Hakkio, Mr. Kelley Ms. Krieger, Messrs. Lacker, Rasche, and Mr. McTeer Steindel, Senior Vice Presidents, Federal Mr. Meyer Reserve Banks of San Francisco, Boston, Mr. Moskow Atlanta, Kansas City, New York, Richmond, Mr. Stern St. Louis, and New York respectively Messrs. Broaddus, Guynn, Jordan, and Mr. Weber, Senior Research Officer, Federal Parry, Alternate Members of the Reserve Bank of Minneapolis Federal Open Market Committee Mr. Bryan, Assistant Vice President, Federal Mr. Hoenig, Ms. Minehan, and Mr. Poole, Presidents Reserve Bank of Cleveland of the Federal Reserve Banks of Kansas City, Boston, and St. Louis respectively Mr. Viard, Senior Economist, Federal Reserve Bank of Dallas Mr. Kohn, Secretary and Economist Mr. Bernard, Deputy Secretary By unanimous vote, the minutes of the meeting Ms. Fox, Assistant Secretary of the Federal Open Market Committee held on Mr. Gillum, Assistant Secretary June 29-30, 1999, were approved. Mr. Mattingly, General Counsel Mr. Baxter, Deputy General Counsel By unanimous vote, Christine Cumming and David Mr. Prell, Economist Howard were elected to serve as associate econo- Ms. Johnson, Economist mists until the first meeting of the Committee after December 31, 1999, with the understanding that Messrs. Howard, Hunter, Lang, Lindsey, in the event of the discontinuance of their official Slifman, and Stockton, Associate connection with a Federal Reserve Bank or with the Economists Board of Governors, they would cease to have any Mr. Fisher, Manager, System Open Market official connection with the Committee. Account The Manager of the System Open Market Account reported on recent developments in foreign exchange Mr. Ettin, Deputy Director, Division of Research markets. There were no open market operations in and Statistics, Board of Governors foreign currencies for the System's account in the period since the previous meeting, and thus no vote Messrs. Madigan and Simpson, Associate Directors, Divisions of Monetary Affairs and Research and was required of the Committee. Statistics respectively, Board of Governors Mr. Whitesell, Assistant Director, Division of 1. Attended portion of meeting relating to issues pertaining to Monetary Affairs, Board of Governors year-end operations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

820 Federal Reserve Bulletin • December 1999 The Manager also reported on developments in pool of currently authorized securities for System domestic financial markets and on System open mar- open market operations. The Federal Reserve Bank ket transactions in government securities and federal of New York would need to establish custody agency obligations during the period June 30, 1999, arrangements with commercial banks to manage the through August 23, 1999. By unanimous vote, the clearing of the newly authorized securities on a tri- Committee ratified these transactions. party basis. Some time would be needed to make At this meeting, the Committee considered a num- these arrangements and inform other market particiber of proposals whose purpose was to enhance the pants, and it was anticipated that the new arrange- Manager's ability to counter potential liquidity strains ments would not be in place before early October. To in money and financing markets in the period sur- implement this decision, the Committee voted unanirounding the century date change and in the process mously to suspend until April 30, 2000, several provihelp to ensure the effective implementation of the sions of the "Guidelines for the Conduct of System Committee's monetary policy objectives. The mem- Operations in Federal Agency Issues," which impose bers believed that the prospects for major liquidity limits on transactions in federal agency transactions. problems associated with the century date change The "Guidelines" as temporarily amended now read were remote, but some strains were already in evi- as follows: dence, and they agreed that it would be prudent to provide the Manager with added leeway and flexibil- 1. System open market operations in Federal agency issues are an integral part of total System open market ity for a limited period. Because the plans of market operations designed to influence bank reserves, money participants were likely to be influenced by the Fedmarket conditions, and monetary aggregates. eral Reserve's contemplated action and because 2. System open market operations in Federal agency detailed preparations with market participants needed issues are not designed to support individual sectors of to begin promptly, the Committee decided to put the the market or to channel funds into issues of particular new authorizations in place at this meeting. agencies. The new authority encompassed three policy The Committee's decision to authorize the use instruments that, unless renewed, would expire dur- of reverse repurchase agreements until April 30 was ing the early part of 2000 and one permanent change. intended to facilitate temporary reserve draining The temporary authorizations included (1) the expan- operations. These agreements are fundamentally sion of collateral that could be accepted in System equivalent to matched sale-purchase transactions, open market transactions, (2) authority to use reverse which the Manager already has the authority to repurchase agreements in addition to the currently employ. However, the latter are not a common instruavailable matched sale-purchase transactions to ment in financial markets. Partly as a consequence, absorb reserves on a temporary basis, and (3) a they lack the flexibility for use to drain reserves standby financing facility involving the auction of late during the business day, a flexibility that might options on repurchase agreements, reverse repur- be particularly desirable to have in place during chase agreements, and matched sale-purchase trans- the upcoming year-end period. Accordingly, the actions that could be exercised in the period sur- Committee voted unanimously to add reverse repurrounding the year-end. The permanent change, which chase agreements to its "Authorization for Domestic also might prove useful during the year-end period, Open Market Operations," as shown in new parainvolved the extension of the maximum maturity on graph 1(c) below. regular repurchase and matched sale-purchase trans- The Committee also approved a temporary finanactions from sixty days to ninety days. cing facility authorizing the Federal Reserve Bank The broader range of collateral approved by the of New York to sell options on repurchase agree- Committee for repurchase transactions included ments, reverse repurchase agreements, and matched mainly pass-through mortgage securities of GNMA, sale-purchase transactions. The members hoped that FHLMC, and FNMA, U.S. Treasury STRIPS, and the availability of such a System facility would "stripped" securities of other federal government reduce concerns about year-end financial conditions agencies. The expanded pool would facilitate the and thus help avert the emergence of the illiquid Manager's task of addressing what potentially could markets that were feared by an apparently growing be very large needs to supply reserves in the months number of market participants and that would ahead, especially in the weeks surrounding the year- complicate the conduct of open market operations. end. Such transactions would have to be undertaken The sales would be made on a competitive basis at a time of likely heightened demand for U.S. gov- to the primary government securities dealers who ernment securities that would diminish the available are regular counterparties in the System's open Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 821 market operations. The details of these transactions (c) To sell U.S. Government securities that are direct would be worked out during the weeks ahead. obligations of, or fully guaranteed as to principal and Members agreed that there was some risk of interest by, any agency of the United States to dealers for System Open Market Account under agreements for unintended consequences in implementing these the resale by dealers of such securities or obligations in untried transactions. Nonetheless, the costs stem- 90 calendar days or less, at rates that, unless otherwise ming from a dysfunctional financing market at year- expressly authorized by the Committee, shall be deterend, in the unlikely event that it materializes, were mined by competitive bidding, after applying reasonable immeasurably greater. The members did not question limitations on the volume of agreements with individual dealers. the desirability of addressing the latter risks and 3. In order to ensure the effective conduct of open providing greater assurance that financing markets market operations, while assisting in the provision of shortwould retain sufficient depth and liquidity to permit term investments for foreign and international accounts market participants including the Federal Reserve to maintained at the Federal Reserve Bank of New York, the make necessary portfolio adjustments at year-end. Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York (a) for System Open Accordingly, the Committee voted unanimously to Market Account, to sell U.S. Government securities to such authorize the sale of options on temporary transacforeign and international accounts on the bases set forth in tions for exercise though January 2000. This author- paragraph 1(a) under agreements providing for the resale ity is indicated in the temporary addition of para- by such accounts of those securities within 90 calendar graph 4, shown below, to the Authorization for days on terms comparable to those available on such transactions in the market; and (b) for New York Bank Domestic Open Market Operations. account, when appropriate, to undertake with dealers, sub- The decision to extend the maximum maturity ject to the conditions imposed on purchases and sales of on repurchase and sale-purchase transactions was securities in paragraph 1(b), repurchase agreements in U.S. intended to bring the terms of such transactions into Government and agency securities, and to arrange corresponding sale and repurchase agreements between its own conformance with market practice and the pattern of account and foreign and international accounts maintained market demand, thereby enhancing the Manager's at the Bank. Transactions undertaken with such accounts ability to use these instruments. This maturity exten- under the provisions of this paragraph may provide for a sion, which the Committee decided to make perma- service fee when appropriate. nent, was likely to prove particularly useful in the 4. In order to help ensure the effective conduct of open period of unusually large reserve operations over the market operations during the transition period surrounding the century date change, the Committee authorizes the months ahead. The new authority is incorporated in Federal Reserve Bank of New York to sell options on paragraphs 1(b), 1(c), and 3 below. repurchase agreements, reverse repurchase agreements, and The paragraphs of the Authorization for Domestic matched sale purchase transactions for exercise no later Open Market Operations that were amended or added than January 2000. by the Committee, all by unanimous vote, read as follows: The Committee then turned to a discussion of the economic and financial outlook, and the implementation of monetary policy over the intermeeting period AUTHORIZATION FOR DOMESTIC ahead. OPEN MARKET OPERATIONS The information reviewed at this meeting sug- 1. The Federal Open Market Committee authorizes and gested that expansion of economic activity remained directs the Federal Reserve Bank of New York, to the solid. The growth of consumer spending and business extent necessary to carry out the most recent domestic outlays for durable equipment had moderated somepolicy directive adopted at a meeting of the Committee: what after having increased rapidly earlier in the (h) To buy U.S. Government securities, obligations year. Residential construction activity had weakened that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States, a little from the level of last winter but was still from dealers for the account of the Federal Reserve Bank elevated. Job growth was quite strong, however, and of New York under agreements for repurchase of such industrial production appeared to be picking up. securities or obligations in 90 calendar days or less, at rates Labor markets remained very tight, and recent wage that, unless otherwise expressly authorized by the Commitand price increases had been a little larger on baltee, shall be determined by competitive bidding, after ance, though price inflation continued subdued. applying reasonable limitations on the volume of agreements with individual dealers; provided that in the event Nonfarm payroll employment increased sharply in Government securities or agency issues covered by any June and July. Job growth in the service-producing such agreement are not repurchased by the dealer pursuant industries soared in both months, and construction to the agreement or a renewal thereof, they shall be sold in employment remained on an upward trend. In manuthe market or transferred to the System Open Market Account. facturing, the number of jobs turned up in July. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

822 Federal Reserve Bulletin • December 1999 civilian unemployment rate was 4.3 percent in July, sector at quarter's end was below the bottom of its matching its average for the first half of the year. narrow range for the past year. Inventory accumula- Industrial production recorded a large increase in tion in the retail sector slowed in the second quarter, July after having edged up in June. Part of the July but stocks kept pace with sales, and the aggregate advance reflected a surge in the output of electric stock-sales ratio was in the middle of its range for utilities associated with the heat wave in the eastern the past twelve months. United States and an upturn in mining production The nominal deficit on U.S. trade in goods and after a weak first half of the year. In manufacturing, services widened substantially in the second quarter, production advanced briskly over the June-July as the value of imports increased much more than period. While production of motor vehicles and air- that of exports. The rise in imports was spread widely craft fell on balance over the two months, output of across the major trade categories; sharply higher high-tech products continued to expand at a rapid prices for imported oil, along with a moderate addipace, and the manufacture of other goods rebounded tion in the quantity imported, accounted for much strongly in July after a small decline in June. Utiliza- of the rise, but there also were sizable step-ups in tion of manufacturing capacity edged up in July but imports of computers, semiconductors, and industrial remained below its long-run average rate. supplies—notably building materials. The increase in Growth of consumer spending slowed appreciably exports was concentrated in agricultural goods, autoin the second quarter after having surged earlier motive products, industrial supplies, computers, and in the year; still, the underlying trend in spending semiconductors. Recent information suggested that remained relatively strong as a result of continuing economic recovery in Europe was continuing to gain robust expansion of disposable incomes and house- momentum through the second quarter, while the hold wealth thus far this year and very positive Japanese economy was showing some signs of havconsumer sentiment. Retail sales had increased mod- ing bottomed out over the first half of the year. erately recently—a small decline in June was more Economic activity had remained on a strong upward than offset by a July rebound—while consumer out- trend in Canada in recent months, and economic lays for services were buoyant in the second quarter growth picked up during the spring in the United (latest data). Housing activity remained strong in the Kingdom after having stagnated over the previous June-July period; housing starts were only a little two quarters. The recent economic performance of below the very high levels of earlier months of the the developing countries had been mixed. Most Asian year, and home sales remained at an elevated level in economies grew robustly in the first half of the year, June (latest data). but economic activity in a number of Latin American The limited available information suggested that economies, with the notable exceptions of Brazil and the pace of expansion in business fixed investment Mexico, remained weak. had moderated somewhat after having advanced rap- Consumer prices rose moderately in July after idly in the second quarter. Demand for high-tech having been unchanged in May and June; a rebound equipment remained strong overall, even though in energy prices contributed to the July increase. The growth of outlays for computers appeared to have strong upturn in energy prices this year accounted for eased a little recently; spending for motor vehicles all of the uptick in consumer price inflation in the and aircraft seemed to be leveling out after a marked twelve months ended in July compared with the decrease in the first half of the year; and expenditures previous twelve-month period. Excluding food as on other types of durable equipment remained slug- well as the volatile energy component, core congish. Nonresidential construction activity slipped in sumer price inflation had remained subdued thus far the second quarter after sizable gains last year and the in 1999 and during the twelve months ended in July. early part of this year. Inflation was modest at the producer level as well, as The book value of business inventories increased prices of finished goods other than food and energy moderately in the second quarter, and in many indus- edged lower over the June-July period. Core protries the levels of inventory stocks were lean in ducer prices rose more in the twelve months ended in relation to sales. In manufacturing, inventories con- July than in the year-earlier period, but that pickup tinued to edge down in the second quarter, and the resulted in important part from sharp increases in the aggregate inventory-sales ratio for the sector at the prices of tobacco products. At earlier stages of proend of the quarter was slightly below the lower end cessing, producer prices of crude and intermediate of its range for the preceding twelve months. Whole- materials other than food and energy had firmed sale stocks recorded another modest gain in the sec- noticeably in recent months. While the source of ond quarter, and the stock-shipments ratio for this some of those increases had been the pass-through of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 823 higher crude oil prices, improved worldwide growth, In foreign exchange markets, the trade-weighted especially in Asia, also contributed. With labor mar- value of the dollar depreciated slightly over the interkets very tight, increases in wages and total com- meeting period in relation to the currencies of a broad pensation had been somewhat larger recently. The group of important U.S. trading partners. The dollar employer cost index for hourly compensation of pri- declined against the currencies of the major industrial vate industry workers jumped in the second quarter countries in response to indications of improved ecoafter an unusually small gain in the first quarter, and nomic performances in Europe and Japan and to increases in average hourly earnings of production or higher long-term interest rates in many of those counnonsupervisory workers picked up in June and July. tries. However, this depreciation was partially offset Nonetheless, year-over-year changes in some mea- by a rise in relation to the currencies of other imporsures of nominal compensation continued to decline. tant trading partners, reflecting increased uncertainty At its meeting on June 29-30, 1999, the Commit- in financial markets in many Asian and Latin Ameritee adopted a directive that called for a slight tighten- can countries that was associated in part with coning of conditions in reserve markets consistent with cerns about rising U.S. interest rates. an increase of XA percentage point in the federal funds The expansion of broad measures of money had rate to an average of around 5 percent. The members moderated in recent months. The slower growth of noted at that meeting that there were few current nominal GDP and the rise in market interest rates in indications of rising inflation; nonetheless, with the spring and summer likely had restrained increases financial markets and foreign economies recovering in both M2 and M3. In addition, M3's expansion since the Committee had eased policy last fall, the probably had been held down by a sharp slowing in persisting strength of demand was enough to put the growth of bank credit in July. For the year through added pressure over time on already very tight labor July, M2 was estimated to have increased at a rate markets and at some point lead to a pickup in infla- somewhat above the Committee's annual range and tion that could threaten the sustainability of the M3 at a rate approximating the upper end of its range. economy's expansion. Because there was substantial Total domestic nonfinancial debt had continued to uncertainty relating to the extent and timing of pro- expand at a pace somewhat above the middle of its spective inflationary pressures and thus the possibil- range, though borrowing by nonfinancial sectors had ity that further firming of policy might not be needed slowed in recent months. in the very near term, the directive did not contain The staff forecast prepared for this meeting sugany bias relating to the direction of possible adjust- gested that the expansion would gradually moderate ments to policy in the intermeeting period. to a rate commensurate with the growth of the eco- Open market operations immediately after the nomy's estimated potential. The growth of domestic meeting were directed toward implementing the final demand increasingly would be held back by desired, slightly greater pressure on reserve positions, the anticipated waning of positive wealth effects and the federal funds rate averaged very close to the associated with earlier large gains in equity prices; Committee's 5 percent target over the intermeeting the slower growth of spending on consumer durables, period. Treasury coupon yields fell early in the inter- houses, and business equipment in the wake of the meeting interval, as market participants apparently prolonged buildup in the stocks of these items; and adjusted downward their expectations regarding fur- the higher intermediate- and longer-term interest ther monetary tightening in response to the generally rates that had evolved as markets came to expect that unexpected move to a neutral directive and, sub- a rise in short-term interest rates would be needed to sequently, the receipt of favorable data on inflation. achieve a better balance between aggregate demand Yields later retraced their declines, however, in reac- and aggregate supply. The lagged effects of the earlier tion to the semiannual monetary policy report and the rise in the foreign exchange value of the dollar were Chairman's associated testimony and to the release of expected to place continuing, though diminishing, data indicating an acceleration of labor costs, grow- restraint on U.S. exports for some period ahead. Price ing signs of a firming of activity abroad, and a inflation was projected to rise somewhat over the weaker dollar. On net, most interest rates were about forecast horizon, in part as a result of higher import unchanged over the intermeeting interval. Key mea- prices and some firming of gains in nominal labor sures of share prices in equity markets, buoyed early compensation in persistently tight labor markets that in the period by lower interest rates and better-than- would not be fully offset by rising productivity. anticipated quarterly earnings reports, largely In the Committee's discussion of current and proreversed those gains when rates backed up, and share spective economic developments, members comprices ended the period with mixed results. mented that the expansion of economic activity con- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

824 Federal Reserve Bulletin • December 1999 tinued to display substantial underlying strength with and willingness to spend. The absence of further few indications of slowing in the growth of consumer large gains in stock prices, should recent trends perand business expenditures. While the information for sist, would remove this stimulus and probably induce the second quarter pointed to a marked deceleration some moderation in the growth of consumer spendfrom the pace in other recent quarters, the slow- ing. However, as the experience of recent years had down was induced to an important extent by sharply amply demonstrated, stock market trends were very reduced inventory investment that partly offset robust difficult to predict. Concerning the prospects for busifurther growth in consumer and housing expenditures ness capital investment, members saw indications and a surge in spending by business for equipment. that outlays might rise more moderately after a surge The members generally anticipated a rebound in the in the second quarter. Weak trends in orders for many rate of economic expansion over the balance of the types of equipment and softness in nonresidential year and in 2000, possibly to a pace averaging around construction pointed to a considerable deceleration in the economy's long-run potential. Growth at this rate total business investment. At the same time, however, would represent a noticeable slowing from the pace further advances in technology and declining prices that had prevailed in recent years, and its realization were likely to underpin continued very strong expendepended importantly on the damping effects on ditures for computer and communications equipment, domestic demand of the less accommodative finan- thereby sustaining still robust if reduced increases in overall business investment. cial conditions that had developed in recent months— higher long-term interest rates and a flattening of Residential construction activity was expected to equity prices. Given the persistent strength of domes- moderate a bit over coming quarters as the rise that tic demand and improving economies abroad, many had occurred in mortgage interest rates exerted its members saw the risks to this outlook as tilted to the lagged effects. The deceleration was likely to be upside, especially if short-term interest rates were to limited in the near term, however, as the backlogs remain at their current levels. Against this back- that had built up earlier in the year and associated ground, the risks in the outlook for prices also seemed shortages in inventories of new homes were worked to be tilted toward somewhat higher inflation. Price down. Indeed, anecdotal reports indicated currently inflation had been held in check by accelerating pro- strong housing markets in several areas of the counductivity and declines in oil and other import prices. try. Over time, the outlook for employment and Evidence was mixed on whether the acceleration in incomes should provide support to the housing marproductivity was persisting, but the earlier favorable ket, but likely at a modestly diminished level. developments in import prices were already dissipat- The outlook for inventory investment remained ing, adding to the inflation risk posed by the possibil- characteristically uncertain, though the members ity of further tightening in labor markets should commented that there were reasons to anticipate some domestic demand fail to moderate. pickup in such investment following the shortfall in In their comments about regional economic devel- the second quarter. While the long-run trend undoubtopments, the members reported generally favorable edly remained in the direction of declining inventorybusiness conditions and further growth in all regions, sales ratios, the shortfall of inventory investment with variations ranging from some acceleration in a during the spring probably had on the whole lowered number of Federal Reserve Districts to modest decel- holdings at least temporarily below intended levels as eration in some others. Several indicated that eco- evidenced in part by anecdotal reports that lean nomic activity in some parts of the country was being inventories had reduced sales in some areas. Moreheld down by shortages of labor. Most industries over, some buildup relating to century date change continued to exhibit strength, but weakness was concerns seemed likely; in this regard, anecdotal reported in agriculture and related businesses and in reports suggested that some businesses planned to manufacturing industries such as textiles. accumulate inventories in the form of imports because of questions about the availability of such With regard to the outlook for key sectors of the goods around the year-end. Members acknowledged economy, members referred to the favorable prosthat available survey and anecdotal evidence did not pects for continued robust growth in employment and point to any widespread perception of a significant incomes that likely would sustain appreciable further need to build up inventories, and indeed there were expansion in consumer expenditures. However, subindications of overstocking in some industries. Even stantial uncertainty surrounded the outlook for stock so, appreciable inventory accumulation was seen as market prices whose sharp rise and the associated the most likely prospect for the balance of the year. increase in wealth over the course of recent years had While such a forecast was subject to substantial risks helped to foster a high level of consumer confidence Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 825 in both directions, it implied, if realized, a significant ate and hold down the rise in unit labor costs. Recent boost to GDP growth over the second half of the year. data from the product side of the national income and The government sector was now expected to exert product accounts suggested some slowing in producsomewhat less restraint on overall demand in the tivity growth and pressure on unit labor costs, but economy, as burgeoning budget surpluses seemed to these tendencies were not confirmed by a close readbe weakening restraints on federal government out- ing of income side data. In these circumstances, the lays and tax cuts were a possibility. In addition, outlook for price inflation remained subject to considexport growth was projected to strengthen in conjunc- erable uncertainty. tion with an improving economic outlook in a num- In the Committee's discussion of policy for the ber of important U.S. trading partners, and import period ahead, the members with one exception growth seemed likely to moderate over the next sev- favored a proposal for a slight tightening of condieral quarters, reflecting the projected deceleration in tions in reserve markets that would be consistent with the U.S. economy and the waning effects of the past an increase in the federal funds rate to an average of appreciation of the dollar. A number of members about 5VA percent. In the view of these members, a commented, however, that they saw downside risks limited policy move at this time would appropriately to the trade outlook despite the improving economic supplement the small firming action taken at midyear performance in many countries. Adverse develop- and at least for now would position monetary policy ments in those countries remained a worrisome con- where it needed to be to foster continued subdued cern in light of unsettled political conditions that inflation and good economic performance. It would made it very difficult for government authorities in tend to validate the appreciable firming in financial many of them to implement the measures that were markets that had occurred in recent months, to some needed to solve underlying economic problems. extent in anticipation of Committee tightening. That In the course of the Committee's discussion of the firming was important to hold the expansion of ecooutlook for inflation, members commented that there nomic activity to a sustainable pace, especially as was no persuasive evidence in recent statistical mea- improving foreign economies boosted the demand for sures that price inflation was currently picking up or U.S. exports. While key measures of prices did not at that inflation expectations were rising, though the this point suggest any upturn in inflation, a failure to declines in both inflation and expectations experi- act would incur a substantial risk of increasing presenced over the course of recent years no longer sure on already tight labor markets and higher inflaseemed to be occurring. Members nonetheless tion. During the discussion, some members observed expressed concern about the risks of some accelera- that today's action would reduce further the stimulus tion under foreseeable economic circumstances. They provided during the autumn of last year to counter the cited a variety of statistical and anecdotal signs that global financial turmoil and related risks to the U.S. could be viewed as harbingers of rising price infla- economy. While not all vestiges of that turmoil had tion. Those included an upturn in commodity prices, disappeared, financial conditions had improved marknotably that of oil whose effects tended over time to edly, foreign economies had strengthened on balance, spread relatively widely through the economy, and and downside risks to economic performance in the the direct and indirect effects of the dollar's deprecia- United States were generally reduced. One member tion. Members also reported some indications of indicated that in light of the persistence of low inflareduced discounting by business firms and plans for, tion a policy tightening move was not warranted at or actual implementation of, higher prices that busi- this time and would in fact incur some risk of unnecnesses now saw as less likely than earlier to be essarily curbing the expansion in economic activity. reversed for competitive reasons. However, these All the members who supported a tightening action reports were still relatively scattered. also favored the retention of a symmetric directive. The members' basic concern about the outlook for These members agreed that the Committee should inflation related to the possibility that continued keep its options open with regard to the next policy strength in demand might not be accommodated with- move, whose direction and timing would depend on out placing greater pressures on labor compensation evolving economic and financial conditions. In this and prices. The greatest risks would come from a regard, while agreeing that inflation risks had been further tightening of labor markets, but many mem- substantially reduced by the actions taken in June and bers were also concerned about the possibility of contemplated at today's meeting, many members accelerating costs at current levels of labor resource continued to see a possible increase in inflation utilization. The major uncertainty was the extent to pressures as the main threat to sustained economic which labor productivity would continue to acceler- expansion. However, they did not anticipate that fur- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

826 Federal Reserve Bulletin • December 1999 ther tightening would be needed in the near term, in the immediate future seeks conditions in reserve markets allowing the Committee time to gather substantial consistent with increasing the federal funds rate to an average of around 5 LA percent. In view of the evidence additional information about the balance of aggregate currently available, the Committee believes that prospecsupply and demand. The members all agreed that a tive developments are equally likely to warrant an increase symmetric directive would not preclude a tightening or a decrease in the federal funds rate operating objective move if warranted by developments over the months during the intermeeting period. ahead. Votes for this action: Messrs. Greenspan, McDonough, At the conclusion of this discussion, the Commit- Boehne, Ferguson, Gramlich, Meyers, Moskow, Kelley, tee voted to authorize and direct the Federal Reserve and Stern. Vote against this action: Mr. McTeer. Bank of New York, until it was instructed other- Mr. McTeer dissented for essentially the same wise, to execute transactions in the System Account reasons he did at the June 30 meeting: low inflation in accordance with the following domestic policy and, except for energy, minimal inflation in the pipedirective: line. He believes that positive supply-side forces will continue to damp the impact of strong demand on The information reviewed at this meeting suggests continued solid expansion of economic activity. Nonfarm pay- output prices and that productivity gains will conroll employment has increased rapidly in recent months, tinue to damp the effect of higher wages on unit labor and the civilian unemployment rate, at 4.3 percent in July, costs. matched its average for the first half of the year. Manufacturing output continued to grow moderately on average in June and July. Total retail sales have grown less rapidly in ESTABLISHMENT OF SUBCOMMITTEE recent months, while housing activity has remained robust. Available indicators suggest that the expansion in business Chairman Greenspan announced the formation capital spending has slackened somewhat after a surge this of a subcommittee to review the wording of the spring. The nominal deficit on U.S. trade in goods and directive, its meaning, and what the Committee services widened substantially in the second quarter. Conannounces shortly after its meetings. He noted that sumer price inflation has been boosted in recent months by an appreciable rise in energy prices; against the back- the sentence relating to the symmetry of the directive ground of very tight labor markets, increases in wages and was subject to differing interpretations, and the Comtotal compensation have been somewhat larger. mittee's decision to announce immediately signifi- Most interest rates are little changed on balance since cant changes in the symmetry or asymmetry in the the meeting on June 29-30, 1999. Key measures of share directive had made it desirable to clarify its meaning. prices in equity markets have posted mixed changes over Members also had expressed some discomfort with the intermeeting period. In foreign exchange markets, the trade-weighted value of the dollar has declined slightly the way these announcements had been interpreted. over the period in relation to the currencies of a broad While the Committee did not contemplate retreating group of important U.S. trading partners. from its policy of immediate announcements, it might M2 and M3 have grown at a moderate pace in recent want to examine whether some adjustment in its months. For the year through July, M2 is estimated to have procedures would be helpful. The Chairman did not increased at a rate somewhat above the Committee's annual range and M3 at a rate approximating the upper end of its feel that the Committee was prepared to come to a range. Total domestic nonfinancial debt has continued to decision on these issues before more experience was expand at a pace somewhat above the middle of its range. gained with the current announcement approach, but The Federal Open Market Committee seeks monetary he believed it was advisable to form a subcommittee and financial conditions that will foster price stability and at this time to study the various questions that were promote sustainable growth in output. In furtherance of these objectives, the Committee reaffirmed at its meeting in involved. He anticipated that the subcommittee would June the ranges it had established in February for growth of come back to the Committee no later than next spring M2 and M3 of 1 to 5 percent and 2 to 6 percent respec- with recommendations or at least some alternatives tively, measured from the fourth quarter of 1998 to the for Committee consideration. He asked Mr. Ferguson fourth quarter of 1999. The range for growth of total to serve as its chairman and to select other memdomestic nonfinancial debt was maintained at 3 to 7 percent for the year. For 2000, the Committee agreed on a bers after consultation with his colleagues on the tentative basis in June to retain the same ranges for growth Committee. of the monetary aggregates and debt, measured from the fourth quarter of 1999 to the fourth quarter of 2000. The It was agreed that the next meeting of the Commitbehavior of the monetary aggregates will continued to be evaluated in the light of progress toward price level stabil- tee would be held on Tuesday, October 5, 1999. ity, movements in their velocities, and developments in the The meeting adjourned at 1:40 p.m. economy and financial markets. Donald L. Kohn To promote the Committee's long-run objectives of price stability and sustainable economic growth, the Committee Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

827 Legal Developments FINAL RULE—AMENDMENT TO REGULATION K available to meet its obligations to third parties; The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (2) Discretionary standards. In determining whether a (FDIC) (collectively, the Agencies) are adopting as a joint Federal branch or agency that meets the standards of final rule their joint interim rule implementing section paragraph (b)(1) of this section should not be eligi- 2214 of the Economic Growth and Regulatory Paperwork ble for an 18-month examination cycle pursuant to Reduction Act of 1996 (EGRPRA). Section 2214 of this paragraph (b), the OCC may consider additional EGRPRA authorizes the Agencies to extend the examina- factors, including whether: tion cycle for certain United States branches and agencies of foreign banks. This joint final rule makes United States Part 211—International Banking Operations branches and agencies of foreign banks with total assets of (Regulation K) $250 million or less eligible for an 18-month examination cycle if they meet certain qualifying criteria. Subpart B—Foreign Banking Organizations Effective October 22, 1999, 12 C.F.R. Parts 4, 211, and 347 are amended as follows: 1. The authority citation for Part 211 continues to read as follows: Part 4—Organization and Functions, Availability and Release of Information, Contracting Outreach Authority: 12 U.S.C. 221 etseq., 1818, 1835a, 1841 etseq., Program 3101 et seq., and 3901 et seq. 1. The authority citation for Part 4 continues to read as 2. In section 211.26, paragraphs (c)(2)(i)(C)(2) and follows: (c)(2)(ii) introductory text are revised to read as follows: Authority: 12 U.S.C. 93a. Subpart A also issued under 5 U.S.C. 552; 12 U.S.C. 481, 1820(d), and 3105(c)(1). Sub- Section 211.26—Examination of offices and part B also issued under 5 U.S.C. 552; E.O. 12600 affiliates of foreign banks. (3 C.F.R., 1987 Comp., p. 235). Subpart C also issued under 5 U.S.C. 301, 552; 12 U.S.C. 481, 482, 1821(o), 1821 (t); 18 U.S.C. 641, 1905, 1906; 31 U.S.C. 9701. Sub- (c) ^ ^ ^ part D also issued under 12 U.S.C. 1833e. (2) * * * (j) * * * (Q * * * 2. In section 4.7, paragraphs (b)(l)(iii)(B) and (b)(2) introductory text are revised to read as follows: (2) The branch or agency has maintained on a daily Section 4.7—Frequency of examination of Federal basis, over the past three quarters, eligible assets in agencies and branches. an amount not less than 108 percent of the preceding quarter's average third party liabilities (deter- (b) * * * mined consistent with applicable federal and state * * * law) and sufficient liquidity is currently available to (iii) * * * meet its obligations to third parties; (B) The branch or agency has maintained on a daily basis, over the past three quarters, eligible assets in an amount not less than (ii) Discretionary standards. In determining 108 percent of the preceding quarter's av- whether a branch or agency of a foreign bank erage third party liabilities (determined con- that meets the standards of paragraph (c)(2)(i) sistent with applicable federal and state of this section should not be eligible for an law), and sufficient liquidity is currently 18-month examination cycle pursuant to this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

828 Federal Reserve Bulletin • December 1999 paragraph (c)(2), the Board may consider addi- (iv) Is not subject to a formal enforcement action or tional factors, including whether: order by the Board, FDIC, or the OCC; and (v) Has not experienced a change in control during the preceding 12-month period in which a full- Part 347—International Banking scope, on-site examination would have been required but for this section. 1. The authority citation for Part 347 continues to read as (2) Discretionary standards. In determining whether an follows: insured branch that meets the standards of paragraph (b)(1) of this section should not be eligible for Authority: 12U.S.C. 1813, 1815, 1817, 1819, 1820, 1828, an 18-month examination cycle pursuant to this 3103, 3104, 3105, 3108; Title IX, Pub. L. No. 98-181, 97 paragraph (b), the FDIC may consider additional Stat. 1153. factors, including whether: (i) Any of the individual components of the ROCA supervisory rating of an insured branch 2. Section 347.214 is revised to read as follows: is rated "3" or worse; (ii) The results of any off-site monitoring indicate a Section 347.214—Examination of branches of deterioration in the condition of the insured foreign banks. branch; (iii) The size, relative importance, and role of a (a) Frequency of on-site examination. Each branch or particular insured branch when reviewed in the agency of a foreign bank shall be examined on-site at least context of the foreign bank's entire U.S. operaonce during each 12-month period (beginning on the date tions otherwise necessitate an annual examinathe most recent examination of the office ended) by: tion; and (1) The Board of Governors of the Federal Reserve (iv) The condition of the parent foreign bank gives System (Board); rise to such a need. (2) The FDIC, if an insured branch; (c) Authority to conduct more frequent examinations. Noth- (3) The Office of the Comptroller of the Currency ing in paragraphs (a) and (b) of this section limits the (OCC), if the branch or agency of the foreign bank authority of the FDIC to examine any insured branch as is licensed by the Comptroller; or frequently as it deems necessary. (4) The state supervisor, if the office of the foreign bank is licensed or chartered by the state. (b) 18-month cycle for certain small institutions. FINAL RULE—AMENDMENT TO REGULATION CC (1) Mandatory standards. The FDIC may conduct a full-scope, on-site examination at least once during The Board of Governors is amending 12 C.F.R. Part 229, each 18-month period, rather than each 12-month its Regulation CC (Availability of Funds and Collection of period as provided in paragraph (a) of this section, if Checks). The Board is adopting amendments to Subpart C the insured branch: of Regulation CC, which contains rules governing the (i) Has total assets of $250 million or less; collection and return of checks. The amendments to the (ii) Has received a composite ROCA supervisory regulation and Commentary are intended to provide further rating (which rates risk management, opera- clarification as to the extent to which depository institutional controls, compliance, and asset quality) tions and others may vary the terms of the regulation by of 1 or 2 at its most recent examination; agreement for the purpose of instituting electronic return (iii) Satisfies the requirement of either the following systems. paragraph (b)(iii)(A) or (B): Effective December 15, 1999, 12 C.F.R. Part 229 is (A) The foreign bank's most recently reported amended as follows: capital adequacy position consists of, or is equivalent to, Tier 1 and total risk-based Part 229—Availability of Funds and Collection of capital ratios of at least 6 percent and Checks (Regulation CC) 10 percent, respectively, on a consolidated basis; or 1. The authority citation for Part 229 continues to read as (B) The insured branch has maintained on a follows: daily basis, over the past three quarters, eligible assets in an amount not less than Authority. 12 U.S.C. 4001 et seq. 108 percent of the preceding quarter's average third party liabilities (determined con- 2. In section 229.36, paragraph (c) is removed and resistent with applicable federal and state served. law) and sufficient liquidity is currently available to meet its obligations to third 3. In Appendix E, under section XXII, paragraph C. is parties; removed and reserved. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 829 4. In Appendix E, under section XXIII, new paragraphs 554th largest commercial banking organization in Illinois, C.9. and C.10. are added to read as follows: controlling deposits of approximately $26.7 million, representing less than 1 percent of total deposits in commercial Appendix E to Part 229—Commentary banking organizations in the state. On consummation of the proposal, lllini would remain the 185th largest commercial banking organization in Illinois, controlling deposits of XXIII. Section 229.37 Variations by Agreement approximately $161.3 million, representing less than 1 percent of total deposits in the state. lllini and Farmers Bank do not compete in any banking fj * * * market. Based on all the facts of record, the Board con- 9. A presenting bank and a paying bank may agree that cludes that consummation of the proposal would not have a presentment takes place when the paying bank receives significantly adverse effect on competition or on the conan electronic transmission of information describing centration of banking resources in any relevant banking the check rather than upon delivery of the physical market, and that competitive considerations are consistent check. (See 12 C.F.R. 229.36(b).) with approval. 10. A depositary bank may agree with a paying or return- The BHC Act requires the Board to consider the finaning bank to accept an image or other notice in lieu of a cial and managerial resources and future prospects of the returned check even when the check is available for companies and banks involved in the proposal and certain return under this part. Except to the extent that other supervisory factors. The Board has carefully considered parties interested in the check assent to or are bound by the financial and managerial resources of lllini and its the variation of the notice-in-lieu provisions of this subsidiary bank in light of comments provided by a direcpart, banks entering into such an agreement may be tor of lllini ("Protestant").2 The Board also has reviewed responsible under this part or other applicable law to these factors in light of all the facts of record, including other interested parties for any losses caused by the supervisory reports of examination and other confidential handling of a returned check under the agreement. (See supervisory information assessing the financial and mana- 12 C.F.R. 229.30(f), 229.31(f), 229.38(a).) gerial resources of lllini; its subsidiary bank, lllini Bank, Sangamon, Illinois ("lllini Bank"); and Farmers Bank. The Board notes that lllini and lllini Bank are well ORDERS ISSUED UNDER BANK HOLDING COMPANY capitalized with satisfactory earnings and would remain ACT well capitalized after the proposed acquisition. lllini would incur debt as a result of this proposal, and appears to have Orders Issued Under Section 3 of the Bank Holding sufficient resources to service that debt without impairing Company Act lllini Bank. The Board also notes that lllini and lllini Bank have engaged in a planned streamlining of operations and lllini Corporation have found replacements to fill a number of recent key Springfield, Illinois vacancies. Farmers Bank is a well capitalized bank with satisfactory management, and lllini proposes to retain the Order Approving Acquisition of a Bank current management of Farmers Bank. Consummation of this proposal would result in the addition of a new sharelllini Corporation ("lllini"), a bank holding company holder who would control the second largest percentage of within the meaning of the Bank Holding Company Act Illini's shares and who has substantial banking experience. ("BHC Act"), has requested the Board's approval under The Board has considered the current and proposed mansection 3 of the BHC Act (12U.S.C. § 1842) to acquire agement resources of lllini in light of examination reports Farmers State Bank of Camp Point, Camp Point, Illinois and other supervisory information provided by the Federal ("Farmers Bank"). Deposit Insurance Corporation ("FDIC"), which is the Notice of the proposal, affording interested persons an primary federal supervisory agency for lllini Bank. Based opportunity to submit comments, has been published on these and other facts of record, the Board concludes that (64 Federal Register 41,429 (1999)). The time for filing considerations relating to the financial and managerial recomments has expired, and the Board has considered the sources and future prospects of lllini, its subsidiary bank, proposal and all comments received in light of the factors and Farmers Bank are consistent with approval of the set forth in section 3 of the BHC Act. lllini controls one subsidiary bank and is the 185th largest commercial banking organization in Illinois, con- 2. Protestant asserts that lllini has lost a number of its key managetrolling deposits of approximately $134.7 million, reprement personnel over recent years, has limited managerial resources senting less than 1 percent of total deposits in commercial and would be unable to manage Farmers Bank, which is located banking organizations in the state.1 Farmers Bank is the 100 miles from lllini. Protestant also asserts that Illini's management is overwhelmed by litigation and has had a substantial breakdown in communication with many of Illini's shareholders. Finally, Protestant contends that the financial performance of Illini's subsidiary bank has 1. All banking data are as of June 30, 1998. been poor. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

830 Federal Reserve Bulletin • December 1999 proposal, as are the other supervisory factors that the Board Voting for this action: Chairman Greenspan, Vice Chairman Fergumust consider under section 3 of the BHC Act. son, and Governors Kelley and Gramlich. Absent and not voting: Governor Meyer. The Board has carefully considered the effect of the proposed acquisition on the convenience and needs of the ROBERT DEV. FRIERSON community to be served in light of all the facts of record. Associate Secretary of the Board Based on all the facts of record, including the performance records of Illini Bank and Farmers Bank under the Community Reinvestment Act ("CRA") (12 U.S.C. § 2901 ORDERS ISSUED UNDER INTERNATIONAL BANKING et seq.), the Board concludes that convenience and needs ACT considerations are consistent with approval of the proposal.3 Antwerpse Diamantbank N. V. Based on the foregoing, and in light of all the facts of Antwerp, Belgium record, the Board has determined that the application should be, and hereby is, approved.4 Under its rules, the Order Approving Establishment of a Representative Board may, in its discretion, hold a public meeting or Office hearing on a application to acquire a bank if a meeting or hearing is necessary or appropriate to clarify factual issues Antwerpse Diamantbank N.V. ("Bank"), Antwerp, related to the application and to provide an opportunity for Belgium, a foreign bank within the meaning of the Internatestimony. 12 C.F.R. 225.16(e). The Board has carefully tional Banking Act ("IBA"), has applied under secconsidered Protestant's request in light of all the facts of tion 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish a record. In the Board's view, Protestant has had ample representative office in New York, New York. The Foreign opportunity to present his views and, in fact, has submitted Bank Supervision Enhancement Act of 1991, which written comments that have been carefully considered by amended the IBA, provides that a foreign bank must obtain the Board in acting on the proposal. Protestant's request the approval of the Board to establish a representative fails to identify disputed issues of facts that are material to office in the United States. the Board's decision and that may be clarified by a public Notice of the application, affording interested persons an meeting or hearing. Protestant also has failed to show that a opportunity to submit comments, has been published in a public meeting or hearing is necessary for the proper newspaper of general circulation in New York, New York presentation or consideration of his views. For these rea- (New York Daily News, April 26, 1999). The time for filing sons, and based on all the facts of record, the Board has comments has expired, and the Board has considered the determined that a public meeting or hearing is not required application and all comments received. or warranted in this case. Accordingly, the request is Bank, with total consolidated assets of approximately hereby denied. Approval of the application is specifically $1.07 billion, is primarily engaged in financing of and conditioned on compliance by Illini with all the commitproviding other financial services to participants in the ments made in connection with the proposal. For purposes diamond industry.1 Bank also operates a wholly owned of this order, the commitments and conditions referred to bank subsidiary in Switzerland, which also provides finanabove shall be deemed to be conditions imposed in writing cial services primarily to customers in the diamond indusby the Board in connection with its findings and decision try. and, as such, may be enforced in proceedings under appli- Bank is a subsidiary of KBC Bank N.V. (KBC Bank), cable law. Brussels, Belgium.2 KBC Bank, with total consolidated The acquisition of Fanners Bank shall not be consumassets of $157 billion, is the second largest bank in Belmated before the fifteenth calendar day after the effective gium.3 Through its offices and subsidiaries, KBC Bank date of the order, or later than three months after the offers banking services in approximately thirty countries effective date of this order, unless such period is extended worldwide. for good cause by the Board or by the Federal Reserve The proposed representative office would conduct mar- Bank of Chicago, acting pursuant to delegated authority. keting and promotional activities, and serve as a liaison By order of the Board of Governors, effective Octobetween Bank and its customers and correspondents. ber 25, 1999. In acting on an application to establish a representative office, the IBA and Regulation K provide that the Board shall take into account whether the foreign bank engages directly in the business of banking outside of the United 3. Illini Bank received a "satisfactory" rating at its most recent CRA performance examination by the FDIC in January 1999. Farmers Bank received a "satisfactory" rating at its most recent CRA performance examination by the FDIC, as of February 1999. 1. Unless otherwise indicated, data are as of March 31, 1999. 4. Protestant also requested that the Board hold a public meeting or 2. KBC Bank is wholly owned by KB ABB CERA Bank and hearing on the proposal. Section 3 of the BHC Act does not require Insurance Holding Company N.V. ("KBC Bank and Insurance"), the Board to hold a public hearing on an application unless the Brussels, Belgium, which in turn is majority owned by Almanij N.V., appropriate supervisory authority for the bank to be acquired makes a Antwerp, Belgium, a publicly traded financial holding company; the timely written recommendation of denial. The Board has not received remaining shares of KBC Bank and Insurance are widely held. such a recommendation from the appropriate supervisory authority. 3. Data are as of June 30, 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 831 States, and has furnished to the Board the information it has established controls and procedures for the proposed needs to assess the application adequately. The Board also representative office to ensure compliance with U.S. law. shall take into account whether the foreign bank and any With respect to access to information about Bank's foreign bank parent is subject to comprehensive supervi- operations, the Board has reviewed the restrictions on sion or regulation on a consolidated basis by its home disclosure in relevant jurisdictions in which Bank and country supervisor (12 U.S.C. § 3107(a)(2); 12 C.F.R. KBC Bank operate and has communicated with relevant 211.24(d)(2)).4 In addition, the Board also may take into government authorities regarding access to information. account additional standards as set forth in the IBA and Bank and its parents have committed to make available to Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. the Board such information on the operations of Bank and 211.24(c)(2)). KBC Bank and any of their affiliates that the Board deems As noted above, Bank and KBC Bank engage directly in necessary to determine and enforce compliance with the the business of banking outside the United States. Bank IBA, the Bank Holding Company Act of 1956, as amended, also has provided the Board with information necessary to and other applicable federal law. To the extent that the assess the application through submissions that address the provision of such information to the Board may be prohibrelevant issues. With respect to supervision by home coun- ited by law, Bank and its parents have committed to try authorities, the Board previously has determined, in cooperate with the Board to obtain any necessary consents connection with an application involving another bank in or waivers that might be required from third parties for Belgium, that the bank was subject to home country super- disclosure of such information. In addition, subject to vision on a consolidated basis.5 Bank and its foreign bank certain conditions, the Commission may share information parent, KBC Bank, are supervised by the Belgian Banking on Bank's and KBC Bank's operations with other superviand Finance Commission (the "Commission") on substan- sors, including the Board. In light of these commitments tially the same terms and conditions as the other bank. and other facts of record, and subject to the condition Based on all the facts of record, the Board has determined described below, the Board concludes that Bank and KBC that Bank and KBC Bank are subject to comprehensive Bank have provided adequate assurances of access to any supervision and regulation on a consolidated basis by their necessary information that the Board may request. home country supervisor.6 On the basis of all the facts of record, and subject to the The Board also has taken into account the additional commitments made by Bank and its parents, as well as the standards set forth in section 7 of the IBA and Regula- terms and conditions set forth in this order, the Board has tion K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. determined that Bank's application to establish the repre- 211.24(c)(2)). The Commission has no objection to the sentative office should be, and hereby is, approved. Should establishment of the proposed representative office. any restrictions on access to information on the operations With respect to the financial and managerial resources of or activities of Bank and its affiliates subsequently interfere Bank, taking into consideration Bank's record of opera- with the Board's ability to obtain information to determine tions in its home country, its overall financial resources, and enforce compliance by Bank or its affiliates with and its standing with its home country supervisors, the applicable federal statutes, the Board may require termina- Board has also determined that financial and managerial tion of any of Bank's direct and indirect activities in the factors are consistent with approval of the proposed repre- United States. Approval of this application also is specifisentative office. Bank appears to have the experience and cally conditioned on compliance by Bank and its parents capacity to support the proposed representative office and with the commitments made in connection with this application and with the conditions in this order.7 The commitments and conditions referred to above are conditions 4. In assessing this standard, the Board considers, among other imposed in writing by the Board in connection with its factors, the extent to which the home country supervisors: decision and may be enforced in proceedings under (1) Ensure that the bank has adequate procedures for monitoring and 12 U.S.C. § 1818 against Bank and its affiliates. controlling its activities worldwide; (2) Obtain information on the condition of the bank and its subsid- By order of the Board of Governors, effective Octoiaries and offices through regular examination reports, audit ber 27, 1999. reports, or otherwise; (3) Obtain information on the dealings with and relationship be- Voting for this action: Chairman Greenspan, Vice Chairman Fergutween the bank and its affiliates, both foreign and domestic; son, and Governors Kelley, Meyer, and Gramlich. (4) Receive from the bank financial reports that are consolidated on a worldwide basis or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated ROBERT DEV. FRIERSON basis; Associate Secretary of the Board (5) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No 7. The Board's authority to approve the establishment of the prosingle factor is essential, and other elements may inform the Board's posed representative office parallels the continuing authority of the determination. State of New York to license offices of a foreign bank. The Board's 5. See Credit Communal de Belgique S.A., 82 Federal Reserve approval of this application does not supplant the authority of the Bulletin 104 (1996). State of New York and the New York State Banking Department 6. By order dated October 27, 1999, the Board determined that KBC ("Department") to license the proposed office of Bank in accordance Bank was subject to supervision on a consolidated basis. with any terms or conditions that the Department may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

832 Federal Reserve Bulletin • December 1999 KBC Bank N.V. needs to assess the application adequately. The Board also Brussels, Belgium shall take into account whether the foreign bank and any foreign bank parent is subject to comprehensive supervi- Order Approving Establishment of a Branch, Agency, sion or regulation on a consolidated basis by its home and Representative Office country supervisor (12 U.S.C. 12 C.F.R. 3105(d)(2), 3107(a)(2); 12 C.F.R. 211.24(d)(2), 211.24(c)(1)).4 The KBC Bank N.V. ("Bank"), Brussels, Belgium, a foreign Board may also take into account additional standards as bank within the meaning of the International Banking Act set forth in the IBA and Regulation K (12 U.S.C. ("IBA"), has applied under section 7(d) of the IBA § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)-(3)). (12 U.S.C. § 3105(d)) to establish a branch in New York, As noted above, Bank engages directly in the business of New York, and an agency in Atlanta, Georgia. Bank has banking outside the United States. Bank also has provided also applied under section 10(a) of the IBA the Board with information necessary to assess the applica- (12 U.S.C. § 3107(a)) to establish a representative office in tion through submissions that address the relevant issues. Los Angeles, California. The Foreign Bank Supervision With respect to supervision by home country authorities, Enhancement Act of 1991, which amended the IBA, pro- the Board previously has determined, in connection with vides that a foreign bank must obtain the approval of the an application involving another bank in Belgium, that the Board to establish a branch, agency, or representative office bank was subject to home country supervision on a consolin the United States. idated basis.5 Bank is supervised by the Belgian Banking Notice of the application, affording interested persons an and Finance Commission (the "Commission") on substanopportunity to submit comments, was published on tially the same terms and conditions as that other bank. November 9, 1998, in a newspaper of general circulation in Based on all the facts of record, the Board has determined New York, New York (New York Daily News)\ Atlanta, that Bank is subject to comprehensive supervision on a Georgia (Atlanta Journal and Constitution); and Los Ange- consolidated basis by its home country supervisor.6 les, California (Los Angeles Times). The time for filing The Board also has taken into account the additional comments has expired, and the Board has considered the standards set forth in section 7 of the IBA and Regulaapplication and all comments received. tion K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. Bank, with consolidated total assets of $157 billion, is 211.24(c)(2)). The Commission has no objection to the the second largest bank in Belgium.1 Through its offices establishment of the proposed branch, agency, and repreand subsidiaries, Bank offers banking services in approxi- sentative office. mately thirty countries worldwide. Bank is a qualifying With respect to the financial and managerial resources of foreign banking organization within the meaning of Regu- Bank, taking into consideration Bank's record of operalation K (12 C.F.R. 211.23(b)). tions in its home country, its overall financial resources, Bank was established in connection with a series of and its standing with its home country supervisors, the mergers and related transactions creating its parent, Board has also determined that financial and managerial KB ABB CERA Bank and Insurance Holding Company factors are consistent with approval of the proposed branch, N.V. ("KBC Holding"), Brussels, Belgium.2 As part of agency, and representative office. Bank appears to have the these transactions, the former Kredietbank N.V. ("Krediet- experience and capacity to support the proposed branch, bank"), Brussels, Belgium, and the former CERA Bank agency, and representative office and has established con- C.V., Louvain, Belgium, were merged and their operations were contributed to Bank. Up until the merger, Kredietbank operated a branch in New York, New York; an 4. In assessing this standard, the Board considers, among other agency in Atlanta, Georgia; and a representative office in factors, the extent to which the home country supervisors: (i) Ensure that the bank has adequate procedures for monitoring Los Angeles, California. Bank has requested authority to and controlling its activities worldwide; retain and operate these offices through this application. (i) Obtain information on the condition of the bank and its subsid- Pursuant to Regulation K, the Board allowed the merger to iaries and offices through regular examination reports, audit proceed before an application to establish the offices was reports, or otherwise; filed and acted on by the Board.3 (iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; In order to approve an application by a foreign bank to (iv) Receive from the bank financial reports that are consolidated on establish a branch, agency, or representative office in the a worldwide basis or comparable information that permits anal- United States, the IBA and Regulation K require the Board ysis of the bank's financial condition on a worldwide consolito determine that the foreign bank applicant engages di- dated basis; rectly in the business of banking outside of the United (v) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. States, and has furnished to the Board the information it These are indicia of comprehensive, consolidated supervision. No single factor is essential, and other elements may inform the Board's determination. 1. Unless otherwise indicated, data are as of June 30, 1999. 5. See Credit Communal de Belgique S.A., 82 Federal Reserve 2. Almanij N.V., Antwerp, Belgium, a publicly traded financial Bulletin 104 (1996). holding company, owns a majority interest in KBC Holding; the 6. In this regard, KBC Holding and Almanij N.V. are also considremaining interest is widely held. ered financial holding companies subject to the E.U. Directive on 3. See 12 C.F.R.211.24(a)(3). Consolidated Supervision and to oversight by the Commission. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 833 trols and procedures for the proposed offices to ensure approved. Should any restrictions on access to information compliance with U.S. law. on the operations or activities of Bank and its affiliates With respect to access to information about Bank's subsequently interfere with the Board's ability to obtain operations, the Board has reviewed the restrictions on information to determine and enforce compliance by Bank disclosure in relevant jurisdictions in which Bank operates or its affiliates with applicable federal statutes, the Board and has communicated with relevant government authori- may require termination of any of Bank's direct or indirect ties regarding access to information. Bank and its parents activities in the United States. Approval of this application have committed to make available to the Board such infor- also is specifically conditioned on compliance by Bank and mation on the operations of Bank and any of its affiliates its parents with the commitments made in connection with that the Board deems necessary to determine and enforce this application and with the conditions in this order.7 The compliance with the IBA, the Bank Holding Company Act commitments and conditions referred to above are condiof 1956, as amended, and other applicable federal law. To tions imposed in writing by the Board in connection with the extent that the provision of such information to the its decision and may be enforced in proceedings under Board may be prohibited by law, Bank and its parents have 12 U.S.C. § 1818 against Bank and its affiliates. committed to cooperate with the Board to obtain any By order of the Board of Governors, effective Octonecessary consents or waivers that might be required from ber 27, 1999. third parties for disclosure of such information. In addition, subject to certain conditions, the Commission may share Voting for this action: Chairman Greenspan, Vice Chairman Ferguinformation on Bank's operations with other supervisors, son, and Governors Kelley, Meyer, and Gramlich. including the Board. In light of these commitments and other facts of record, and subject to the condition described ROBERT DEV. FRIERSON below, the Board concludes that Bank has provided ade- Associate Secretary of the Board quate assurances of access to any necessary information that the Board may request. 7. The Board's authority to approve the establishment of the pro- On the basis of all the facts of record, and subject to the posed offices parallels the continuing authority of the States of commitments made by Bank and its parents, as well as the New York, Georgia, and California to license offices of a foreign bank. The Board's approval of this application does not supplant the terms and conditions set forth in this order, the Board has authority of the States of New York, Georgia, and California, respecdetermined that Bank's application to establish the branch, tively, to license the proposed offices of Bank in accordance with any agency, and representative office should be, and hereby is, terms or conditions that they may 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 3 Applicant(s) Bank(s) Effective Date TransPecos Financial Corp., The Security State Bank of Pecos, October 14, 1999 San Antonio, Texas Pecos, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

834 Federal Reserve Bulletin • December 1999 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY 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. Section 3 Applicant(s) Bank(s) Reserve Bank Effective Date Backlund-White, Inc., Backlund Investment Company, Chicago October 19, 1999 Peoria, Illinois Peoria, Illinois State Street Bank and Trust Company, Quincy, Illinois Backlund-White, Inc., Backlund Scott Company, Chicago October 19, 1999 Peoria, Illinois Peoria, Illinois Wyoming Bank and Trust Company, Wyoming, Illinois Backlund-White, Inc., Hopedale Investment Company, Chicago October 19, 1999 Peoria, Illinois Peoria, Illinois Community Bank of Hopedale, Hopedale, Illinois Backlund Investment Company, Hopedale Investment Company, Chicago October 19, 1999 Peoria, Illinois Peoria, Illinois Community Bank of Hopedale, Hopedale, Illinois Bartonville Investment Company, Hopedale Investment Company, Chicago October 19, 1999 Peoria, Illinois Peoria, Illinois Community Bank of Hopedale, Hopedale, Illinois Backlund Scott Company, Hopedale Investment Company, Chicago October 19, 1999 Peoria, Illinois Peoria, Illinois Community Bank of Hopedale, Hopedale, Illinois Centennial First Financial Services, Redlands Centennial Bank, San Francisco October 8, 1999 Redlands, California Redlands, California Citrus Financial Services, Inc., The Commercial Bank of Highlands Atlanta October 13, 1999 Vero Beach, Florida County, N.A., Sebring, Florida First Bancshares, Inc., The Lawrence Bank, Kansas City September 30, 1999 Kansas City, Kansas Lawrence, Kansas FMLB Acquisition, Inc., First Medicine Lodge Bancshares, Inc., Kansas City October 13, 1999 Medicine Lodge, Kansas Medicine Lodge, Kansas Hillcrest Bancshares, Inc., American Bank, Kansas City October 15, 1999 Overland Park, Kansas Wichita, Kansas Horizon Bancorporation, Inc., Horizon Bank, Atlanta October 8, 1999 Bradenton, Florida Bradenton, Florida Kennett Merger Corporation, Kennett Bancshares, Inc., St. Louis October 7, 1999 Kennett, Missouri Kennett, Missouri Kennett National Bank, Kennett, Missouri Lea M. McMullan Trust, L. B. S. McMullan Limited Family St. Louis September 30, 1999 Shelbyville, Kentucky Partnership, Shelbyville, Kentucky Citizens Union Bancorp of Shelbyville, Inc., Shelbyville, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 835 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Marine Bancorp, Inc., Marine Bank of the Florida Keys, Atlanta October 12, 1999 Marathon, Florida Marathon, Florida National Bank of Commerce in New National Bank of Commerce in Minneapolis October 21, 1999 Superior, Superior, Superior, Wisconsin Superior, Wisconsin NATCOM Bancshares, Inc., Superior, Wisconsin Nexity Financial Corporation, Peoples State Bank, Atlanta October 15, 1999 Birmingham, Alabama Grant, Alabama Overton Financial Corporation, Longview Financial Corporation, Dallas October 14, 1999 Overton, Texas Longview, Texas Overton Delaware Corporation, Dover, Delaware Peninsula Bancorp, Inc., Peninsula Bank of Central Florida, Atlanta October 7, 1999 Daytona Beach, Florida Daytona Beach, Florida Pinnacle Bancorp, Inc., Park National Bank, Kansas City October 14, 1999 Central City, Nebraska Estes Park, Colorado Provident Bancorp, The Provident Bank, Boston October 1, 1999 Amesbury, Massachusetts Amesbury, Massachusetts Security Financial Services Security National Bank of Durand, Minneapolis October 12, 1999 Corporation, Durand, Wisconsin Durand, Wisconsin SJN Banc Co., St. John National Bank, Kansas City October 18, 1999 St. John, Kansas St. John, Kansas Synovus Financial Corp., Horizon Bancshares, Inc., Atlanta October 4, 1999 Columbus, Georgia Pensacola, Florida TB&C Bancshares, Inc., Horizon Bank of Florida, Columbus, Georgia Pensacola, Florida Village Bancorp, Inc., Village Bank and Trust of Munster, Chicago October 18, 1999 Prospect Heights, Illinois Munster, Indiana WCB Holding Company of Illinois, Winfield Community Bank, Chicago October 7, 1999 Geneva, Illinois Winfield, Illinois Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Area Bancshares Corporation, To engage in financial and investment St. Louis October 19, 1999 Owensboro, Kentucky advisory activities and agency transactional services as riskless principal Bank of America Corporation, 724 Solutions, Inc., Richmond October 8, 1999 Charlotte, North Carolina Toronto, Canada Boston Private Financial Holdings, RINET Company, Inc., Boston October 15, 1999 Inc., Boston, Massachusetts Boston, Massachusetts Cornerstone Fund Advisors, Inc., Boston, Massachusetts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

836 Federal Reserve Bulletin • December 1999 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Citigroup, Inc., 724 Solutions Inc., New York October 5, 1999 New York, New York Toronto, Canada Citicorp, New York, New York Citicorp Strategic Technology Corporation, New York, New York Citizens Banking Corporation, F & M Trust Company, Chicago October 7, 1999 Flint, Michigan Kaukauna, Wisconsin F & M Bancorporation, Kaukauna, Wisconsin GreatBanc, Inc., ANB Financial Services, Inc., Chicago September 30, 1999 Aurora, Illinois Aurora, Illinois Landesbank Baden-Wiirttemberg, SiidLeasing (USA) Corp., New York October 20, 1999 Stuttgart, Germany New York, New York Mid-Missouri Bancshares, Inc., Mid-Missouri Mortgage Co., St. Louis September 29, 1999 Springfield, Missouri Springfield, Missouri Valley View Bancshares, Inc., Valley View Financial Group Trust Kansas City October 1, 1999 Overland Park, Kansas Company, Mission, Kansas Wells Fargo & Company, 1st Com Mortgage, San Francisco October 4, 1999 San Francisco, California Palm Springs, California Norwest Mortgage, Inc., First Com Mortgage, Inc., Des Moines, Iowa Palm Desert, California Southwest Partners, Inc., RAS Financial Services, Inc., Des Moines, Iowa Palos Verdes Estates, California Wells Fargo & Company, MSC Mortgage, LLC, San Francisco October 1, 1999 San Francisco, California Sarasota, Florida Norwest Mortgage, Inc., Des Moines, Iowa Norwest Ventures, LLC, Des Moines, Iowa APPLICATIONS APPROVED UNDER BANK MERGER 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. Applicant(s) Bank(s) Effective Date Union Colony Bank, First National Bank of Johnstown, October 18, 1999 Greeley, Colorado Johnstown, Colorado Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 837 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 Pinnacle Bank, Pinnacle Bank, Kansas City October 14, 1999 Papillion, Nebraska Palmer, Nebraska Pinnacle Bank, N.A., Central City, Nebraska PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the holding company by acquiring Citicorp, New York, New Federal Reserve Banks in which the Board of Governors is not York, and its bank and nonbank subsidiaries. Oral argument named a party. was heard on October 1, 1999. Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK) Wasserman v. Federal Reserve Bank, No. 99-6280 (2d Cir., (S.D.N.Y., filed May 15, 1998). Action to freeze assets of filed August 26, 1999). Appeal of district court dismissal of individual pending administrative adjudication of civil case challenging refusal by the Board and the Federal money penalty assessment by the Board. On May 26, 1998, Reserve Bank of New York to investigate certain matters. the court issued a preliminary injunction restraining the Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed transfer or disposition of the individual's assets and appoint- August 3, 1999). Employment discrimination action. ing the Federal Reserve Bank of New York as receiver for Sheriff Gerry Ali v. U.S. State Department, No. 99-7438 (C.D. those assets. Cal., filed July 21, 1999). Action relating to impounded Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed bank drafts. May 4, 1998). Appeal and cross-appeal of district court Sedgwick v. Board of Governors, No. Civ 99 0702 (D. Ariorder granting in part and denying in part the Board's zona, filed April 14, 1999). Action under Federal Tort motion for summary judgment seeking prejudgment interest Claims Act alleging violation of bank supervision requireand a statutory surcharge in connection with a civil money ments. The Board filed a motion to dismiss on June 15, penalty assessed by the Board. On February 24, 1999, the 1999. court granted the Board's appeal and denied the cross- Hunter v. Board of Governors, No. 1:98CV02994 (TFH) appeal, and remanded the matter to the district court for (D.D.C., filed December 9, 1998). Action under the Freedetermination of prejudgment interest due to the Board. dom of Information Act and the Privacy Act. The Board filed a motion to dismiss or for summary judgment on Fenili v. Davidson, No. C-98-01568-CW (N.D. California, July 22, 1999. filed April 17, 1998). Tort and constitutional claim arising Folstad v. Board of Governors, No. 1:99 CV 124 (W.D. Mich., out of return of a check. On June 5, 1998, the Board filed its filed February 17, 1999). Freedom of Information Act com- motion to dismiss. plaint. On March 23, 1999, the Board filed a motion to Logan v. Greenspan, No. 1.98CV00049 (EGS) (D.D.C., filed dismiss or for summary judgment. January 9, 1998). Employment discrimination complaint. Nelson v. Greenspan, No. 1:99CV00215 (EGS) (D.D.C., filed On September 29, 1999, the case was dismissed without January 28, 1999). Employment discrimination complaint. prejudice. On March 29, 1999, the Board filed a motion to dismiss the Goldman v. Department of the Treasury, No. 98-9451 (11th action. Circuit, filed November 10, 1998). Appeal from a District Fraternal Order of Police v. Board of Governors, Court order dismissing an action challenging Federal Re- No. 1:98CV03116 (WBB)(D.D.C„ filed December 22, serve notes as lawful money. 1998). Declaratory judgment action challenging Board labor practices. On February 26, 1999, the Board filed a Kerr v. Department of the Treasury, No. CV-S-97-01877motion to dismiss the action. DWH (D. Nev., filed December 22, 1997). Challenge to Independent Community Bankers of America v. Board of Gov- income taxation and Federal Reserve notes. On Septemernors, No. 98-1482 (D.C. Cir., filed October 21, 1998). ber 3, 1998, a motion to dismiss was filed on behalf of all Petition for review of a Board order dated September 23, federal defendants. The court dismissed the action on 1998, conditionally approving the applications of Travelers March 31, 1999, and on April 28, 1999, the plaintiff filed a Group, Inc., New York, New York, to become a bank notice of appeal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

838 Federal Reserve Bulletin • December 1999 Bettersworth v. Board of Governors, No. 97-CA-624 (W.D. institution-affiliated party of the First Western Bank, Tex., filed August 21, 1997). Privacy Act case. On June 1, Cooper City, Florida, a state member bank. 1999, the Board filed a motion for summary judgment. Linda Marant Cooper City, Florida FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD OF GOVERNORS The Federal Reserve Board announced on October 1, 1999, William Barber the issuance of a consent Order against Linda Marant, an Cooper City, Florida institution-affiliated party of the First Western Bank, Cooper City, Florida, a state member bank. The Federal Reserve Board announced on October 1, 1999, the issuance of a consent Order against William Barber, an David Nieminen and Gay Lynn Nieminen institution-affiliated party of the First Western Bank, Cooper City, Florida Cooper City, Florida, a state member bank. William Carmichael The Federal Reserve Board announced on October 1, 1999, Cooper City, Florida the issuance of a consent Order against David Nieminen and Gay Lynn Nieminen, an institution-affiliated party of The Federal Reserve Board announced on October 1, 1999, the First Western Bank, Cooper City, Florida, a state memthe issuance of a consent Order against William ber bank. Carmichael, an institution-affiliated party of the First Western Bank, Cooper City, Florida, a state member bank. James Rouse and Jenene Rouse Cooper City, Florida Richard Edwards, Vivian Edwards, and Jeremy Edwards Cooper City, Florida The Federal Reserve Board announced on October 1, 1999, the issuance of a consent Order against James Rouse and The Federal Reserve Board announced on October 1, 1999, Jenene Rouse, an institution-affiliated party of the First the issuance of a consent Order against Richard Edwards, Western Bank, Cooper City, Florida, a state member bank. Vivian Edwards, and Jeremy Edwards, all institutionaffiliated parties of the First Western Bank, Cooper City, H. Burns Warfield Florida, a state member bank. Cooper City, Florida Grant Marant Cooper City, Florida The Federal Reserve Board announced on October 1, 1999, the issuance of a consent Order against H. Burns Warfield, The Federal Reserve Board announced on October 1, 1999, an institution-affiliated party of the First Western Bank, the issuance of a consent Order against Grant Marant, an Cooper City, Florida, a state member bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance—Continued A27 Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, 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 A3 3 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A3 5 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit A3 6 Total outstanding Commercial Banking Institutions— A36 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans 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

A2 Federal Reserve Bulletin • December 1999 INTERNATIONAL STATISTICS Reported by Nonbanking Business Enterprises in the United States Summary Statistics A58 Liabilities to unaffiliated foreigners A50 U.S. international transactions A59 Claims on unaffiliated foreigners A51 U.S. foreign trade A51 U.S. reserve assets Securities Holdings and Transactions A51 Foreign official assets held at Federal Reserve A60 Foreign transactions in securities Banks A61 Marketable U.S. Treasury bonds and A52 Selected U.S. liabilities to foreign official notes—Foreign transactions institutions Interest and Exchange Rates Reported by Banks in the United States A62 Foreign exchange rates A52 Liabilities to, and claims on, foreigners A53 Liabilities to foreigners A55 Banks' own claims on foreigners A63 GUIDE TO STATISTICAL RELEASES AND A56 Banks' own and domestic customers' claims on SPECIAL TABLES foreigners A56 Banks' own claims on unaffiliated foreigners A64 INDEX TO SPECIAL TABLES A57 Claims on foreign countries—Combined domestic offices and foreign branches Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected 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 smallest unit given is millions) MSA Metropolitan statistical area 0 Calculated to be zero NOW Negotiable order of withdrawal Cell not applicable OCD Other checkable deposit ATS Automatic transfer service OPEC Organization of Petroleum Exporting Countries BIF Bank insurance fund OTS Office of Thrift Supervision CD Certificate of deposit 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 Financial Statistics • December 1999 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1998 1999 1999 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q4 Q1 Q2 Q3 May June July Aug. Sept. Reserves of depository institutions2 1 Total -1.8 -1.2 -6.6 -15.4 10.4 -40.4 -24.9 2.5r 1.3 2 Required -2.5 1.0 -5.6 -15.0 8.0 -41.7 -20.3 1.1 -.7 3 Nonborrowed -.6 -1.3 -6.7 -17.1 11.5 -41.0 -29.6 1.6 1.4 4 Monetary base3 8.7 9.1 10.1 8.5 13.9 6.2 8.0 7.1r 11.2 Concepts of money and debt4 5 Ml 5.0 2.8 3.5 -2.3 -3.9r —4.0r -1.7 3.2r -9.7 6 M2 11.0 7.2 5.6 5.0 4.5 4.2 5.4 5.5 4.8 7 M3 12.9 7.6 5.7r 5.5 5.5r 6.2r 5.0r 5.2r 6.2 8 Debt 6.3 6.5 6.8 n.a. 5.1 5.4 5.4r 6.1 n.a. Nontransaction components 9 In M25 13.0 8.7 6.4 7.4 7.3 6.8 7.6 6.3 9.4 10 In M3 only6 18.4 8.6 5.9r 7.0 8.3r 11.9r 4.0r 4.2r 10.1 Time and savings deposits Commercial banks 11 Savings, including MMDAs 17.6 11.6 9.7 11.5 8.0 12.1 13.7 7.6 14.1 12 Small time7 .3 -5.5 —3.3 1.2 -1.8 -2.0 1.0 3.1 7.0 13 Large time8'9 3.8 -.3 -3.2 6.6 -2.5 -7.4 21.0 —4.7r 23.4 Thrift institutions 14 Savings, including MMDAs 10.1 12.8 14.6 15.1 27.0 18.5r 19.3r 4.0 5.0 15 Small time7 -6.7 -6.5 -7.9 -5.1 -9.4 -14.4 -4.6 1.5 3.5 16 Large time8 10.4 7.6 -7.0 4.2 -14.8 -1.4 10.9 6.8 9.4 Money market mutual funds 17 Retail 28.5 20.5 10.2 6.5 9.1 7.8 1.5 9.9 8.8 18 Institution-only 41.8 17.9 14.5 7.5 13.8 7.7 -4.6 22.9 6.3 Repurchase agreements and Eurodollars 19 Repurchase agreements10 18.9 14.1 -2.7 15.3 23.2 53.2 -.4 6.2 -1.9 20 Eurodollars10 3.2 -.8 32.0r -6.9 11.0r 22.5r —17.8r —32.6r 1.5 Debt components4 21 Federal -2.8 -3.1 -2.3 n.a. -5.1 .3 1.5r 1.0 n.a. 22 Nonfederal 9.2 9.4 9.5 n.a. 8.0r 6.8 6.5r 7.5 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 cunrent 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 Ml. 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 d A ai v ly e ra f g i e g u o re f s Average of daily figures for week ending on date indicated July Aug. Sept. Aug. 18 Aug. 25 Sept. 1 Sept. 8 Sept. 15 Sept. 22 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 525,806 528,020 536,558 527,445 530,311 534,561 538,420 U.S. government securities2 2 Bought outright—System account3 486,633 487,746 490,477 487,185 489,467 490,139 490,522 490,649 491,006 3 Held under repurchase agreements 1,718 1,296 2,373 1,052 642 917 2,458 1,268 1,938 Federal agency obligations 4 Bought outright 255 247 238 249 247 238 238 238 238 5 Held under repurchase agreements 3,4510 4,7510 9,5150 5,6470 4,5270 5,3580 8,3870 8,2240 11,1550 6 Acceptances Loans to depository institutions 7 Adjustment credit 75 57 25 36 56 14 23 72 8 Seasonal credit 2260 273 0 2830 2670 2790 2910 276 0 2680 2830 9 Extended credit 10 Float 388 430 288 341 195 858 -42 948 153 11 Other Federal Reserve assets 33,061 33,193 33,328 33,210 32,052 32,455 32,708 32,998 33,575 12 Gold stock 11,046 11,047 11,046 11,047 11,047 11,046 11,045 11,046 11,046 13 Special drawing rights certificate account 8,200 8,200 7,667 281,2,020 21' 8,200 8,200 8,200 8,057 7,200 14 Treasury currency outstanding 27,084 27,23 lr 27,333 27,262r 27,298 27,312 27,326 27,340 ABSORBING RESERVE FUNDS 15 Currency in circulation 533,769 536,083r 536,406r 536,203r 541,794 542,585 542,522 16 Treasury cash holdings 70 69 62 83 87 87 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 5,221 5,076 6,389 5,080 4,851 5,403 5,113 5,480 7,512 18 Foreign 213 196 226 207 180 212 196 229 265 19 Service-related balances and adjustments .. 7,110 7,020 7,101 7,005 7,033 6,919 7,019 7,119 6,925 20 Other 271 274 248 267 282 256 257 269 248 21 Other Federal Reserve liabilities and capital . 17,611 18,110 18,524 17,860 18,044 18,178 18,582 18,245 18,601 22 Reserve balances with Federal Reserve Banks' 7,872 7,669r 7,712 7,564 7,279 8,871 8,069 7,031 7,848 End-of-month figures Wednesday figures July Aug. Sept. Aug. 18 Aug. 25 Sept. 1 Sept Sept. 15 Sept. 22 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 527,785 534,796 535,708 541,915 540,481 544,833 U.S. government securities 2 Bought outright—System account3 486,103 490,198 489,037 488,290 490,096 490,257 490,474 491,129 491,054 3 Held under repurchase agreements 3,195 2,575 7,607 665 1,195 3,825 3,430 1,335 4,893 Federal agency obligations 4 Bought outright 249 238 238 249 238 238 238 238 238 5 6 Ac H ce e p ld ta n u c n e d s e r repurchase agreements 3,2800 9,1950 14,4560 4,9000 8,2500 8,5280 13,3500 13,0400 14,8770 Loans to depository institutions 7 Adjustment credit 82 53 179 20 33 53 28 132 9 8 E Se x a te s n o d n e a d l c c r r e e d d i i t t 2660 2850 3000 2820 2890 2840 2710 2780 2870 10 Float 81 -291 65 599 222 -230 1,098 1,241 -504 11 Other Federal Reserve assets 34,529 32,544 34,268 31,590 32,304 32,752 33,046 33,192 33,857 12 Gold stock 11,048 11,045 11,047 11,047 11,046 11,045 11,046 11,046 11,048 13 Special drawing rights certificate account 8,200 8,200 7,200 8,200 8,200 8,200 8,200 7,200 7,200 14 Treasury currency outstanding 27,151 27,298r 27,368 27,227r 21,262' 27,298 27,312 27,326 27,340 ABSORBING RESERVE FUNDS 15 Currency in circulation 533,517 538,466r 544,012 537,139' 537,307r 539,713 543,558 543,474 543,163 16 Treasury cash holdings 57 93 83 84 87 85 93 Deposits, other than reserve balances, with Federal Reserve Banks 17 Treasury 4,984 5,559 6,641 4,903 5,401 6,481 4,146 10,128 7,721 18 Foreign 257 166 243 241 164 175 216 242 161 19 Service-related balances and adjustments . . 7,010 6,919r 7,393 7,005 7,033r 6,919 7,019 7,119 6,925 20 Other 229 225 191 263 266 264 264 256 244 21 Other Federal Reserve liabilities and capital . 18,389 18,728 19,105 17,525 17,934 18,362 18,239 18,108 18,552 22 Reserve balances with Federal Reserve Banks' 9,739 11,194r 14,088 5,911 10,948 10,250 14,942 6,641 13,562 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 3. Includes compensation that adjusts for the effects of inflation on the principal of 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged inflation-indexed securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 4. Excludes required clearing balances and adjustments to compensate for float. under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Financial Statistics • December 1999 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1996 1997 1998 1999 Dec. Dec. Dec. Mar. Apr. May June July Aug. Sept. 1 Reserve balances with Reserve Banks2 13,330 10,664 9,021 8,851 9,238 10,070 8,539 7,797 7,802 7,697 2 Total vault cash3 44,525 44,740 44,305 42,898 42,164 42,459 42,632 44,059 44,664 44,519 3 Applied vault cash4 37,844 37,255 35,997 34,270 34,407 34,805 33,856 34,005 34,069r 34,089 4 Surplus vault cash5 6,681 7,485 8,308 8,628 7,757 7,654 8,776 10,054 10,595r 10,430 5 Total reserves6 51,174 47,920 45,018 43,121 43,645 44,875 42,394 41,802 41,871 41,785 6 Required reserves 49,758 46,235 43,435 41,816 42,486 43,619 41,133 40,726 40,742r 40,590 7 Excess reserve balances at Reserve Banks7 1,416 1,685 1,583 1,305 1,159 1,256 1,261 1,076 l,129r 1,196 8 Total borrowings at Reserve Banks8 155 324 117 65 166 127 145 309 344 338 9 Seasonal borrowings 68 79 15 18 39 89 127 226 271 282 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 June 2 June 16 June 30 July 14 July 28 Aug. 11 Aug. 25 Sept. 8r Sept. 22 Oct. 6 1 Reserve balances with Reserve Banks2 10,096 8,546 8,309 7,526 8,041 7,923 7,421 8,470 7,440 7,375 2 Total vault cash3 42,697 41,829 43,426 44,019 43,899 44,994 44,786 43,774 44,556 45,199 3 Applied vault cash4 34,962 33,492 34,062 33,788 34,198 34,123 34,003 34,126 34,327 33,635 4 Surplus vault cash5 7,736 8,337 9,365 10,231 9,702 10,871 10,783 9,648 10,229 11,564 5 Total reserves6 45,058 42,037 42,371 41,314 42,238 42,046 41,423 42,596 41,766 41,010 6 Required reserves 43,623 40,883 41,027 40,303 41,098 40,967 40,289 41,388 40,744 39,523 7 Excess reserve balances at Reserve Banks7 1,434 1,154 1,343 1,011 1,140 1,078 1,134 1,207 1,022 1,486 8 Total borrowings at Reserve Banks8 117 114 180 331 266 409 304 318 323 385 9 Seasonal borrowings 106 100 158 196 249 263 273 284 276 294 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 credit1 Seasonal credit2 Extended credit3 Special Liquidity Facility credit Federal Reserve Bank On Effective Previous On Effective Previous On Effective Previous On Effective 11/5/99 date rate 11/5/99 date rate 11/5/99 date rate 11/5/99 date Boston 8/24/99 6.75 10/1/99 New York .. 8/24/99 Philadelphia . 8/24/99 Cleveland .. , 8/24/99 Richmond . . . 8/24/99 Atlanta 8/24/99 Chicago 8/24/99 St. Louis 8/24/99 Minneapolis . 8/25/99 Kansas City .. 8/24/99 Dallas 8/26/99 San Francisco 8/24/99 Range of rates for adjustment credit in recent years Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank level)—All of 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 3.5^1.5 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—4 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 16 4.75 4.75 Sept. 26 11 11 Nov. 17 4.50-4.75 4.50 Nov. 17 12 12 1987—Sept. 4 5.5-6 6 19 4.50 4.50 Dec. 5 12-13 13 11 6 6 8 13 13 1999—Aug. 24 4.50-4.75 4.75 1981—May 5 13-14 14 1988—Aug. 9 6-6.5 6.5 26 4.75 4.75 8 14 14 11 6.5 6.5 Nov. 2 13-14 13 In effect Nov. 5, 1999 4.75 4.75 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 ordinarily is reestablished on the first business day of each two-week reserve maintenance funds that cannot be met through reasonable alternative sources. The highest rate established period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis for loans to depository institutions may be charged on adjustment credit loans of unusual size points. that result from a major operating problem at the borrower's facility. 4. Available in the period between October 1, 1999, and April 7, 2000, to help depository 2. Available to help relatively small depository institutions meet regular seasonal needs for institutions in sound financial condition meet unusual needs for funds in the period around the funds that arise from a clear pattern of intrayearly movements in their deposits and loans and century date change. The interest rate on loans from the special facility is the Federal Open that cannot be met through special industry lenders. The discount rate on seasonal credit takes Market Committee's intended federal funds rate plus 150 basis points. into account rates charged by market sources of funds and ordinarily is reestablished on the 5. For earlier data, see the following publications of the Board of Governors: Banking and first business day of each two-week reserve maintenance period; however, it is never less than Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 1970the discount rate applicable to adjustment credit. 1979. 3. May be made available to depository institutions when similar assistance is not In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit reasonably available from other sources, including special industry lenders. Such credit may borrowings by institutions with deposits of $500 million or more that had borrowed in be provided when exceptional circumstances (including sustained deposit drains, impaired successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was access to money market funds, or sudden deterioration in loan repayment performance) or in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed practices involve only a particular institution, or to meet the needs of institutions experiencing on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to difficulties adjusting to changing market conditions over a longer period (particularly at times 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the charged on extended-credit loans outstanding less than thirty days; however, at the discretion surcharge was changed from a calendar quarter to a moving thirteen-week period. The of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a surcharge was eliminated on Nov. 17, 1981. flexible rate somewhat above rates charged on market sources of funds is charged. The rate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • December 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 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 1V5 years was reduced from 3 percent to 1 Vz percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1 l/i years was reduced from 3 against which the 3 percent reserve requirement applies be modified annually by 80 percent of percent to zero on Jan. 17, 1991. the percentage change in transaction accounts held by all depository institutions, determined The reserve requirement on nonpersonal time deposits with an original maturity of 1 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 Vi 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 1999 TTyypp aa ee nn dd oo ff mm ttrr aa aa ttuu nn rr ss ii aa tt cc yy tt iioonn 11999966 11999977 11999988 Feb. Mar. Apr. May June July Aug. 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 0 00 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 426,928 436,257 450,835 36,862 35,065 48,142 37,107 35,045 42,037 37,052 4 For new bills 426,928 435,907 450,835 36,862 35,065 48,142 37,107 35,045 42,037 37,052 5 Redemptions 0 0 2,000 0 0 0 0 0 0 0 Others within one year 6 Gross purchases 524 5,549 6,297 2,103 1,060 1,677 1,421 880 951 429 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 30,512 41,716 46,062 5,578 3,015 3,768 3,768 2,740 3,279 7,669 9 Exchanges -41,394 -27,499 -49,434 -7,458 -5,956 -3,370 -4,607 -5,540 -368 -10,798 10 Redemptions 2,015 1,996 2,676 0 0 726 0 0 41 0 One to five years 11 Gross purchases 3,898 20,080 12,901 2,752 2,428 3,362 4,442 948 0 1,272 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -25,022 -37,987 -37,777 -4,928 -3,015 -3,768 -3,768 -2,740 -3,279 -4,751 14 Exchanges 31,459 20,274 37,154 4,778 5,956 3,020 2,562 5,540 0 8,433 Five to ten years 15 Gross purchases 1,116 3,449 2,294 335 346 945 1,584 65 0 447 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,469 -1,954 -5,908 —650 0 0 0 0 0 -2,918 18 Exchanges 6,666 5,215 7,439 1,340 0 0 2,045 0 373 1,290 More than ten years 19 Gross purchases 1,655 5,897 4,884 0 2,404 262 2,890 0 0 1,075 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -20 -1,775 -2,377 0 0 0 0 0 0 0 22 Exchanges 3,270 2,360 4,842 1,340 0 350 0 0 0 1,075 All maturities 23 Gross purchases 17,094 44,122 29,926 5,190 6,238 6,246 10,337 1,893 951 3,223 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 2,015 1,996 4,676 0 0 726 0 0 41 0 Matched transactions 26 Gross purchases 3,092,399 3,577,954 4,395,430 324,078 393,267 366,838 356,960 380,872 347,067 374,032 27 Gross sales 3,094,769 3,580,274 4,399,330 322,669 394,865 364,476 358,362 380,464 346,747 373,159 Repurchase agreements 28 Gross purchases 457,568 810,485 512,671 26,098 62,878 4455,,006677 27,605 17,710 27,707 2233,,009977 29 Gross sales 450,359 809,268 514,186 27,025 53,706 48,867 30,531 14,614 33,612 23,717 30 Net change in U.S. Treasury securities 19,919 41,022 19,835 5,672 13,812 4,082 6,008 5,397 -4,675 3,476 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 0 0 0 32 Gross sales 0 0 25 0 0 0 0 0 0 0 33 Redemptions 409 1,540 322 0 25 0 0 52 10 11 Repurchase agreements 34 Gross purchases 75,354 160,409 284,316 37,416 35,731 20,623 38,167 32,786 46,941 61,968 35 Gross sales 74,842 159,369 276,266 36,067 34,009 22,937 36,962 32,104 48,840 56,053 36 Net change in federal agency obligations 103 -500 7,703 1,349 1,697 -2,314 1,205 630 -1,909 5,904 37 Total net change in System Open Market Account... 20,021 40,522 27,538 7,021 15,509 1,768 7,213 6,028 -6,584 9,380 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 DomesticN onfinancial Statistics • December 1999 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAAccccccooouuunnnttt 1999 1999 Sept. 1 Sept. 8 Sept. 15 Sept. 22 Sept. 29 July 31 Aug. 31 Sept. 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,045 11,046 11,046 11,048 11,048 11,048 11,045 11,047 2 Special drawing rights certificate account 8,200 8,200 7,200 7,200 7,200 8,200 8,200 7,200 3 Coin 288 283 283 284 287 322 294 298 Loans 4 To depository institutions 337 279 306 418 418 348 338 480 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 238 238 238 238 238 249 238 238 8 Held under repurchase agreements 8,528 13,350 13,040 14,877 11,183 3,280 9,195 14,456 9 Total U.S. Treasury securities 494,082 493,904 492,464 495,946 496,239 489,298 492,773 496,644 10 Bought outright2 490,257 490,474 491,129 491,054 491,019 486,103 490,198 489,037 11 Bills 199,379 199,592 199,283 199,204 199,165 198,447 199,320 197,183 12 Notes 210,829 210,832 211,795 211,798 211,801 209,771 210,829 211,801 13 Bonds 80,049 80,050 80,051 80,052 80,053 77,884 80,049 80,053 14 Held under repurchase agreements 3,825 3,430 1,335 4,893 5,220 3,195 2,575 7,607 15 Total loans and securities 503,185 507,772 506,048 511,480 508,078 493,175 502,544 511,817 16 Items in process of collection 7,731 10,644 8,399 6,892 6,978 5,087 9,328 5,649 17 Bank premises 1,332 1,332 1,333 1,334 1,337 1,327 1,332 1,336 Other assets 18 Denominated in foreign currencies3 15,846 15,850 15,854 15,862 15,861 15,498 15,845 16,105 19 All other4 15,656 15,946 16,075 16,729 17,149 17,723 15,445 16,864 20 Total assets 563,283 571,073 566,238 570,827 567,937 552378 564,033 570,317 LIABILITIES 21 Federal Reserve notes 512,790 516,617 516,516 516,199 517,199 506,746 511,545 517,035 22 Total deposits 24,498 26,7X6 24,075 28,966 25,609 22,112 24,750 28,759 23 Depository institutions 17,577 22,089 13,449 20,840 16,996 16,642 18,800 21,684 24 U.S. Treasury—General account 6,481 4,146 10,128 7,721 8,232 4,984 5,559 6,641 25 Foreign—Official accounts 175 216 242 161 191 257 166 243 26 Other 264 264 256 244 191 229 225 191 27 Deferred credit items 7,633 9,500 7,539 7,110 6,643 5,131 9,011 5,418 28 Other liabilities and accrued dividends5 4,648 4,790 4,660 5,068 5,012 4,402 4,605 5,323 29 Total liabilities 549,569 557,624 552,790 557,343 554,464 538,391 549,911 556,535 CAPITAL ACCOUNTS 30 Capital paid in 6,308 6,308 6,312 6,318 6,329 6,296 6,308 6,330 31 Surplus 5,952 5,952 5,952 5,952 5,952 5,952 5,952 5,952 32 Other capital accounts 1,454 1,189 1,184 1,215 1,192 1,739 1,863 1,499 33 Total liabilities and capital accounts 563,283 571,073 566,238 570,827 567,937 552,378 564,033 570,317 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) 781,767 787,402 800,028 815,877 824,276 746,929 780,358 827,075 36 LESS: Held by Federal Reserve Banks 268,978 270,784 283,512 299,677 307,076 240,184 268,813 310,040 37 Federal Reserve notes, net 512,790 516,617 516,516 516,199 517,199 506,746 511,545 517,035 Collateral held against notes, net 38 Gold certificate account 11,045 11,046 11,046 11,048 11,048 11,048 11,045 11,047 39 Special drawing rights certificate account 8,200 8,200 7,200 7,200 7,200 8,200 8,200 7,200 40 Other eligible assets 0 0 0 0 0 0 0 0 41 U.S. Treasury and agency securities 493,544 497,372 498,271 497,952 498,952 487,498 492,300 498,788 42 Total collateral 512,790 516,617 516,516 516,199 517,199 506,746 511,545 517,035 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 Sept. 1 Sept. 8 Sept. 15 Sept. 22 Sept. 29 July 31 Aug. 31 Sept. 30 1 Total loans 337 279 306 418 418 348 338 480 2 Within fifteen days1 105 72 198 384 372 228 189 330 3. Sixteen days to ninety days 232 207 108 35 46 120 149 150 4 Total US. Treasury securities2 494,072 493,894 492,454 495,946 496,239 489,298 492,763 496,644 5 Within fifteen days1 15,830 14,583 17,471 14,729 19,310 7,883 11,187 10,704 6 Sixteen days to ninety days 99,846 100,852 100,875 101,811 97,374 107,061 100,038 96,836 7 Ninety-one days to one year 141,081 141,141 136,787 142,082 142,227 139,477 144,224 152,924 8 One year to five years 122,346 122,347 122,347 122,348 122,349 122,393 122,346 121,199 9 Five years to ten years 50,194 50,197 50,199 50,201 50,204 49,861 50,195 50,204 10 More than ten years 64,773 64,774 64,775 64,776 64,777 62,623 64,773 64,777 11 Total federal agency obligations 4,501 9,323 9,013 15,115 11,421 3,529 5,168 14,694 12 Within fifteen days1 4,263 9,085 8,775 14,887 11,223 3,280 4,930 14,496 13 Sixteen days to ninety days 27 27 57 47 17 31 27 17 14 Ninety-one days to one year 41 41 51 51 51 48 41 51 15 One year to five years 20 20 10 10 10 20 20 10 16 Five years to ten years 150 50 120 120 120 150 150 120 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 elfects of inflation on the principal of accordance with maximum maturity of the agreements. inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • December 1999 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1999 IItteemm 1995 1996 1997 1998 Dec. Dec. Dec. Dec. Feb. Mar. Apr. May June July Aug. Sept. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 56.45 50.16 46.86 44.90 44.55 43.72 43.98 44.36 42.87 41.98 42.07 42.11 2 Nonborrowed reserves4 56.20 50.01 46.54 44.79 44.44 43.65 43.81 44.23 42.72 41.67 41.72 41.77 3 Nonborrowed reserves plus extended credit5 56.20 50.01 46.54 44.79 44.44 43.65 43.81 44.23 42.72 41.67 41.72 41.77 4 Required reserves 55.16 48.75 45.18 43.32 43.34 42.41 42.82 43.11 41.61 40.90 40.94 40.92 5 Monetary base6 434.10 451.37 478.88 512.32 520.84 524.23 528.74 534.86 537.63 541.20 544.41r 549.51 Not seasonally adjusted 6 Total reserves7 58.02 51.45 48.01 45.12 45.25 43.14 43.67 44.91 42.43 41.85 41.92 41.85 7 Nonborrowed reserves 57.76 51.30 47.69 45.00 45.13 43.08 43.50 44.78 42.29 41.54 41.58 41.51 8 Nonborrowed reserves plus extended credit5 57.76 51.30 47.69 45.00 45.13 43.08 43.50 44.78 42.29 41.54 41.58 41.51 9 Required reserves8 56.73 50.04 46.33 43.54 44.03 41.84 42.51 43.65 41.17 40.77 40.79r 40.65 10 Monetary base9 439.03 456.63 484.98 518.28 519.70 523.35 526.77 533.12 535.88 540.98 543.87r 548.08 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves11 57.90 51.17 47.92 45.02 45.24 43.12 43.65 44.88 42.39 41.80 41.87 41.79 12 Nonborrowed reserves 57.64 51.02 47.60 44.90 45.12 43.06 43.48 44.75 42.25 41.49 41.53 41.45 13 Nonborrowed reserves plus extended credit5 57.64 51.02 47.60 44.90 45.12 43.06 43.48 44.75 42.25 41.49 41.53 41.45 14 Required reserves 56.61 49.76 46.24 43.44 44.02 41.82 42.49 43.62 41.13 40.73 40.74 40.59 15 Monetary base12 444.45 463.40 491.79 525.06 526.85 530.30 533.49 539.98 542.82 548.07r 550.86r 555.14 16 Excess reserves13 1.29 1.42 1.69 1.58 1.22 1.31 1.16 1.26 1.26 1.08 1.13 1.20 17 Borrowings from the Federal Reserve .26 .16 .32 .12 .12 .07 .17 .13 .15 .31 .34 .34 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 . D 19 e 9 c 7 . D 19 e 9 c 8 . June July Aug. Sept. Seasonally adjusted Measures2' 1 Ml 1,126.7 1,081.3 1,074.9 1,093.4 1,101.1 1,099.5 1,102.4' 1,093.5 2 M2 3,649.1 3,823.9 4,046.4 4,401.0 4,520.9' 4,541.1r 4,562.1' 4,580.4 3 M3 4,618.5 4,955.6 5,403.4 5,995.8 6,163.9r 6,189.5r 6,216.4' 6,248.5 4 Debt 13,716.1 14,460.8 15,223.5r 16,244.9 16,776.0r 16,851.2r 16,936.7 n.a. Ml components 5 Currency3 372.3 394.1 424.5 459.2 484.1 487.3 449911..00'' 495.0 6 Travelers checks4 8.3 8.0 7.7 7.8 8.2 8.6 8.6' 8.3 7 Demand deposits5 389.4 403.0 396.5 377.5 363.0r 362.6 363.2' 352.6 8 Other checkable deposits6 356.7 276.2 246.2 248.8 245.9 241.0 239.7 237.6 Nontransaction components 9 In M27 2,522.4 2,742.6 2,971.5 3,307.6 3,419.8 3,441.5 3,459.7 3,486.9 10 In M3 only8 969.4 1,131.7 1,357.0 1,594.8 l,643.0r l,648.5r l,654.3r 1,668.2 Commercial banks 11 Savings deposits, including MMDAs 775.3 905.2 1,022.9 1,189.8 1,246.3 1,260.5 1,268.5 1,283.4 12 Small time deposits9 575.0 593.7 626.1 626.0 612.5 613.0 614.6 618.2 13 Large time deposits10, 11 346.6 414.8 490.2 541.0 530.2 539.5 537.4' 547.9 Thrift institutions 14 Savings deposits, including MMDAs 359.8 367.1 377.3 415.2 447.9r 455.1 456.6 458.5 15 Small time deposits9 356.7 353.8 343.2 325.9 312.9 311.7 312.1 313.0 16 Large time deposits10 74.5 78.4 85.9 89.1 87.9 88.7 89.2 89.9 Money market mutual funds 17 Retail 455.5 522.8 602.0 750.7 800.3 801.3 807.9 813.8 18 Institution-only 255.9 313.3 379.9 516.2 548.1 546.0 556.4 559.3 Repurchase agreements and Eurodollars 19 Repurchase agreements12 198.7 211.3 251.7 297.8 308.7 308.6 310.2 309.7 20 Eurodollars12 93.7 113.9 149.3 150.7 168.1r 165.6r 161.1' 161.3 Debt components 21 Federal debt 3,639.1 3,781.3 3,800.3 3,750.8 3,703.6 3,708.1' 3,711.3 n.a. 22 Nonfederal debt 10,077.0 10,679.5 ll,423.2r 12,494.2 13,072.4r 13,143.1' 13,225.4 n.a. Not seasonally adjusted Measures2 23 Ml 1,152.4 1,104.9 1,097.4 1,115.3 l,098.4r 1,098.1' 1,097.6' 1,088.1 24 M2 3,671.7 3,843.7 4,064.6 4,417.8 4,508.8r 4,531.3' 4,556.5' 4,566.1 25 M3 4,638.0 4,972.5 5,419.6 6,011.9 6,147.2r 6,160.2' 6,199.4' 6,220.4 26 Debt 13,716.6 14,459.3 15,220.6r 16,241.8 16,724.2r 16,785.8' 16,874.5 n.a. Ml components 27 Currency3 376.2 397.9 428.9 464.2 483.2 487.8 490.2 493.4 28 Travelers checks4 8.5 8.3 7.9 8.0 8.1 8.3 8.2 8.1 29 Demand deposits5 407.2 419.9 412.3 392.4 361.4r 362.6 361.8' 350.6 30 Other checkable deposits6 360.5 278.8 248.3 250.7 245.7 239.5' 237.4 235.9 Nontransaction components 31 In M27 2,519.3 2,738.9 2,967.2 3,302.5 3,410.4 3,433.2 3,458.8 3,478.0 32 In M3 only8 966.4 1,128.8 1,355.0 1,594.1 l,638.4r 1,628.9' 1,642.9' 1,654.3 Commercial banks 33 Savings deposits, including MMDAs 774.1 903.3 1,020.4 1,186.8 1,249.8 1,261.4 1,267.7 1,276.5 34 Small time deposits9 573.8 592.7 625.3 625.4 611.1 612.8 614.2 617.9 35 Large time deposits10- 11 345.8 413.3 487.7 5374 535.7 539.3 537.6r 548.3 Thrift institutions 36 Savings deposits, including MMDAs 359.2 366.3 376.4 414.1 449.1 455.4 456.3 456.0 37 Small time deposits9 355.9 353.2 342.8 325.6 312.2 311.6 311.9 312.8 38 Large time deposits10 74.3 78.1 85.4 88.5 88.8 88.7 89.2 90.0 Money market mutual funds 39 Retail 456.1 523.2 602.3 750.6 788.2 792.1 808.8 814.8 40 Institution-only 257.7 316.0 384.5 523.3 540.6 533.4 548.0 547.5 Repurchase agreements and Eurodollars 41 Repurchase agreements12 193.8 205.7 245.1 290.5 308.6 305.9 308.4 308.4 42 Eurodollars12 94.9 115.7 152.3 154.5 164.7r 161.6' 159.7' 160.1 Debt components 43 Federal debt 3,645.9 3,787.9 3,805.8 3,754.9 3,662.8 3,652.3 3,666.1 n.a. 44 Nonfederal debt 10,070.7 10,671.4 11,414.8' 12,486.9r 13,061.4r 13,133.5' 13,208.4 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • December 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 1999 1999 Sept. Mar.r Apr.' Mayr June' July' Aug.' Sept. Sept. 8 Sept. 15 Sept. 22 Sept. 29 Seasonally adjusted Assets 1 Bank credit 4,393.9' 4,492.0 4,502.0 4,511.6 4,548.3 4,544.1 4,580.2 4,612.4 4,592.2 4,616.9 44,,661188..11 44,,662233..44 7 Securities in bank credit 1,177.6 1,187.4 1,188.9 1,188.5 1,206.7 1,224.4 1,241.6 1,252.1 1,241.8 1,264.1 1,257.0 1,246.6 U.S. government securities 771.6 800.5 801.4 799.7 812.6 813.8 819.9 817.2 818.7 818.3 817.1 814.3 4 Other securities 406.1 387.0 387.4 388.8 394.1 410.6 421.8 434.9 423.2 445.9 440.0 432.3 5 Loans and leases in bank credit2 . .. 3,216.3r 3,304.6 3,313.2 3,323.1 3,341.6 3,319.7 3,338.6 3,360.2 3,350.4 3,352.8 3,361.1 3,376.8 6 Commercial and industrial 920.9 956.2 960.6 956.2 962.3 963.9 972.1 980.4 982.0 978.8 977.1 984.4 7 Real estate l,294.4r 1,348.5 1,351.0 1,360.3 1,365.9 1,367.4 1,379.7 1,396.6 1,385.6 1,388.2 1,405.6 1,406.8 S Revolving home equity 103.6 102.0 103.0 104.3 103.7 97.9 98.5 106.4 98.9 99.3 113.4 113.9 9 Other l,190.8r 11,,224466..55 1,247.9 1,256.0 1,262.2 1,269.5 1,281.2 1,290.2 1,286.7 1,288.9 1,292.1 1,292.9 in 491.3 449988..66 499.5 495.9 491.3 481.9 480.1 481.2 480.1 482.2 482.6 480.5 ii Security3 141.7r 118.8 121.8 126.6 130.8 122.1 122.3 115.9 118.5 113.5 113.0 119.3 n Other loans and leases se&ff 382.4 380.3 384.1 391.3 384.4 384.3 386.0 384.2 390.1 382.8 385.7 n Interbank loans 217.0 221.2 217.4 227.5 224.5 224.1 215.0 207.8 211.1 206.3 210.3 202.4 14 Cash assets4 252.3 256.2 257.8 259.9 261.0 258.0 254.1 263.9 268.5 259.2 271.0 258.5 15 Other assets5 327.5 354.5 344.8 347.2 348.6 348.4 345.7 348.5 341.3 349.6 348.9 354.2 16 Total assets6 5,133.2r 5,2653 5,263.5 5,287.4 5323.7 5316.4 53363 5373.4 5354.0 5372.9 5,389.0 53793 Liabilities 17 Deposits 3,264.8 3,367.9 3,376.5 3,374.9 3,377.2 3,391.2 3,385.8 3,395.8 3,396.6 3,413.2 3,380.8 33,,338899..22 18 Transaction 675.3 660.9 656.6 649.6 655.7 648.9 638.0 635.8 625.0 643.7 634.6 643.7 19 Nontransaction 2,589.5 2,706.9 2,719.9 2,725.2 2,721.5 2,742.3 2,747.8 2,760.0 2,771.6 2,769.5 2,746.1 2,745.5 ?0 Large time 702.7 721.2 725.7 723.6 718.8 721.8 718.1 728.1 722.2 725.2 726.1 736.7 ?1 Other 1,886.8 1,985.7 1,994.2 2,001.7 2,002.7 2,020.6 2,029.7 2,031.8 2,049.4 2,044.3 2,020.0 2,008.8 ?? Borrowings 944.1 987.8 983.7 997.8 1,020.5 1,018.1 1,025.5 1,036.0 1,030.1 1,024.3 1,049.5 1,041.1 73 From banks in the U.S 305.0 319.0 311.8 324.3 338.4 339.1 338.2 342.4 343.8 340.3 342.5 341.3 ?4 From others 639.1 668.8 671.9 673.6 682.0 679.0 687.3 693.6 686.3 683.9 707.0 699.8 75 Net due to related foreign offices 206.4 210.4 210.2 203.9 215.1 212.5 222.3 218.3 227.1 218.7 216.9 209.9 26 Other liabilities 302.8 272.4 273.8 271.1 275.5 273.4 279.0 292.2 286.2 294.1 288.0 302.1 27 Total liabilities 4,718.1 4,838.4 4,844.2 4,847.7 4,888.2 4,895.2 4,912.6 4,942-2 4,940.0 4,9503 4,935.2 4,9423 28 Residual (assets less liabilities)7 415.2' 426.9 419.3 439.7 435.5 421.2 423.7 431.1 414.0 422.6 453.8 436.9 Not seasonally adjusted ?9 4,385.9' 4,490.5 4,510.3 4,514.3 4,542.5 4,528.2 4,559.2 4,602.5 4,573.8 4,608.4 4,608.7 4,619.9 30 Securities in bank credit 1,168.2 1,194.1 1,197.6 1,194.0 1,203.4 1,213.3 1,228.8 1,241.0 1,231.8 1,251.4 1,244.3 1,237.1 31 U.S. government securities 762.9 806.9 811.4 807.9 812.1 805.9 808.1 807.1 809.5 807.2 880055..99 805.1 3? Other securities 405.4 387.2 386.2 386.1 391.3 407.3 420.7 433.9 422.3 444.2 443388..44 432.1 33 Loans and leases in bank credit2 . . . 3,217.7r 3,296.5 3,312.8 3,320.3 3,339.1 3,315.0 3,330.4 3,361.5 3,342.0 3,357.0 3,364.4 3,382.8 34 Commercial and industrial 917.7 959.8 967.3 960.7 962.6 961.5 963.4 976.5 971.9 974.3 975.6 984.7 35 Real estate 1,297^ 1,341.9 1,347.6 1,359.7 1,366.5 1,368.4 1,382.3 1,400.3 1,389.5 1,393.5 1,407.9 1,410.1 36 Revolving home equity 104.4 101.1 102.4 103.9 103.3 97.7 98.7 107.2 99.4 100.0 114.3 114.9 37 Other l,193.5r 1,240.8 1,245.2 1,255.8 1,263.2 1,270.7 1,283.6 1,293.1 1,290.1 1,293.5 1,293.6 1,295.2 38 Consumer 494.2 493.9 496.0 493.4 488.6 479.6 481.3 484.2 482.4 485.6 486.7 483.1 39 Security3 13>1.f 122.3 123.7 126.4 130.2 120.1 118.6 112.6 111.9 112.2 111.0 115.6 40 Other loans and leases 370. lr 378.6 378.1 380.1 391.3 385.5 384.9 387.9 386.3 391.3 383.2 389.2 41 Interbank loans 213.1 224.4 222.4 223.3 221.8 217.8 207.2 204.2 211.4 204.0 202.3 197.8 47 249.9 248.8 255.5 257.6 256.6 250.2 243.7 261.1 275.3 256.4 258.1 255.5 43 Other assets5 329.7 349.8 347.8 348.7 354.5 351.1 348.4 350.5 348.2 349.8 345.9 357.4 44 Total assets6 5,120^ 5,255.0 5,277.7 5,285.2 5316.6 5,289.1 5,299.7 5359.0 5349.2 5359.2 5355.7 53713 Liabilities 45 Deposits 3,262.5 3,362.6 3,387.2 3,365.5 3,375.2 3,374.9 3,371.9 3,394.4 3,418.8 3,418.5 3,351.5 33,,338811..77 46 669.0 654.5 664.2 640.6 650.8 638.2 621.6 630.0 633.6 642.8 607.5 637.4 47 Nontransaction 2,593.4 2,708.1 2,723.0 2,724.9 2,724.4 2,736.7 2,750.2 2,764.4 2,785.2 2,775.6 2,743.9 2,744.3 48 704.3 723.2 722.6 724.8 716.1 715.1 715.5 729.6 723.0 726.6 728.4 738.4 49 Other 1,889.1 1,984.9 2,000.3 2,000.1 2,008.3 2,021.7 2,034.8 2,034.8 2,062.2 2,049.0 2,015.6 2,006.0 50 939.9 981.2 983.5 1,006.0 1,024.1 1,008.8 1,002.0 1,030.9 1,001.3 1,011.5 1,066.5 1,047.7 51 From banks in the U.S 301.8 318.6 312.4 325.2 338.3 334.5 331.0 338.7 334.0 334.8 345.4 339.4 5? From others 638.1 662.6 671.1 680.8 685.7 674.3 671.0 692.2 667.3 676.8 721.1 708.3 53 Net due to related foreign offices .... 203.1 208.5 203.1 210.1 209.3 204.7 217.3 214.3 212.6 208.3 219.5 217.2 54 Other liabilities 301.8 273.0 273.4 270.8 274.8 272.6 278.9 291.1 285.5 292.9 286.6 301.3 55 Total liabilities 4,707.2 4,8253 4^473 4,8523 4,883.4 4,861.0 4,870.1 4,930.7 4,918.2 4,931.1 4,924.0 4,947.9 56 Residual (assets less liabilities)7 413.7r 429.7 430.4 432.9 433.2 428.1 429.6 428.3 431.1 428.1 431.7 423.4 MEMO 57 Revaluation gains on off-balance-sheet items8 112.7 86.3 86.4 85.9 85.8 91.1 96.1 104.6 100.4 111.9 106.9 100.8 58 Revaluation losses on off-balancesheet items8 112.3 85.8 87.9 87.3 87.6 92.0 98.3 103.3 98.9 110.4 104.7 100.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • December 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 1999 1999 Sept. Mar. Apr. May June July' Aug.' Sept. Sept. 8 Sept. 15 Sept. 22 Sept. 29 Seasonally adjusted Assets 1 Bank credit 3,795.6r 3,941.4r 3,952.4' 3,972.1' 4,016.3' 4,025.0 4,057.8 4,094.8 4,083.4 4,092.8 4,099.8 4,105.6 2 Securities in bank credit 965.7 990.2 988.9 992.8 1,011.0' 1,034.9 1,051.7 1,062.9 1,059.6 1,068.2 1,066.4 1,058.5 3 U.S. government securities 687.9 715.1 712.3 712.7 724.5 728.0 735.8 735.6 736.2 736.4 736.6 733.0 4 Other securities 277.8 275.0 276.6 280.1 286.5' 306.9 315.8 327.3 323.3 331.8 329.8 325.5 5 Loans and leases in bank credit2 2,829.9r 2,951.2r 2,963.5' 2,979.4' 3,005.3' 2,990.1 3,006.1 3,032.0 3,023.8 3,024.6 3,033.4 3,047.1 6 Commercial and industrial 704.8 746.3 752.4 755.5 766.8 772.2 777.7 784.3 786.1 784.4 780.1 787.2 7 Real estate 1,270.5 1,328.4 1,331.0 1,340.5 1,346.7 1,349.0 1,362.1 1,379.0 1,368.3 1,370.5 1,387.8 1,389.2 8 Revolving home equity 103.6 102.0 103.0 104.3 103.7 97.9 98.5 106.4 98.9 99.3 113.4 113.9 9 Other 1,166.9 1,226.4 1,228.0 1,236.2 1,243.0 1,251.1 1,263.6 1,272.6 1,269.4 1,271.2 1,274.4 1,275.3 10 Consumer 491.3 498.6r 499.5 495.9 491.3' 481.9 480.1 481.2 480.1 482.2 482.6 480.5 11 Security3 74.8 68.1 70.1 73.4 79.0 69.6 67.4 64.8 67.9 60.5 64.4 67.4 12 Other loans and leases 288.5r 309.8r 310.5r 314.0r 321.5' 317.3 318.7 322.7 321.5 327.0 318.6 322.6 13 Interbank loans 189.7 195.6 192.0 200.9 200.0 196.7 189.2 184.9 184.2 186.2 185.8 182.2 14 Cash assets4 218.1 222.1 223.2 223.9 227.5 222.9 216.0 223.0 227.4 218.3 229.5 218.6 15 Other assets5 290.2 317.0 307.3 311.3 315.1 316.2 316.6 319.2 313.3 319.0 319.2 325.3 16 Total assets6 4,436.3R 4,617.8R 4,616.6R 4,649.8R 4,700.6R 4,702.9 4,721.3 4,763.0 4,749.5 4,757.5 4,775.3 4,772.7 Liabilities 17 Deposits 2,949.5 3,057.7 3,064.6 3,064.4 3,071.5 3,081.2 3,077.1 3,085.1 3,085.1 3,102.1 3,071.8 3,079.1 18 Transaction 660.0 650.4 646.5 639.1 644.8 637.9 627.0 625.0 613.4 632.7 624.4 633.0 19 Nontransaction 2,289.5 2,407.3 2,418.1 2,425.3 2,426.6 2,443.3 2,450.1 2,460.2 2,471.7 2,469.4 2,447.3 2,446.1 20 Large time 404.7 422.7 425.5 425.6 426.2 425.6 424.4 433.5 427.8 430.8 432.8 441.7 21 Other 1,884.7 1,984.6 1,992.6 1,999.7 2,000.5 2,017.7 2,025.7 2,026.6 2,043.9 2,038.6 2,014.5 2,004.5 22 Borrowings 738.7 814.3 811.6 825.1 839.6 846.0 853.6 867.4 865.6 852.5 881.8 871.7 23 From banks in the U.S 276.5 295.2 290.8 302.9 311.9 314.5 314.7 317.2 319.7 314.4 319.5 314.1 24 From others 462.2 519.1 520.8 522.3 527.7 531.5 539.0 550.1 546.0 538.1 562.3 557.7 25 Net due to related foreign offices .... 108.4 117.7 115.4 118.7 145.6 145.2 150.4 152.1 156.3 152.2 148.3 150.6 26 Other liabilities 226.9 204.4 206.6 211.1 214.1 210.1 217.4 227.7 225.4 226.4 221.8 238.3 27 Total liabilities 4,023.4 4,194.0 4,198.2 4,219.4 4,270.7 4,282.5 4,298.4 4,332.3 4,332.5 4,333.2 4,323.7 4,339.8 28 Residual (assets less liabilities)7 412.9r 423.8r 418.4r 430.4' 429.9' 420.4 422.9 430.7 417.0 424.2 451.6 432.9 Not seasonally adjusted Assets 29 Bank credit 3,788.5r 3,938.3r 3,963.5r S^O.O1 4,013.7' 4,012.2 4,040.5 4,085.9 4,069.0 4,086.7 4,090.9 4,098.7 30 Securities in bank credit 957.0 995.7 999.1 999.9 1,008.6' 1,025.4 1,040.0 1,052.4 1,050.4 1,057.1 1,054.2 1,048.7 31 U.S. government securities 680.0 720.7 722.6 720.1 723.6 720.7 725.1 726.4 728.3 726.3 726.0 724.5 32 Other securities 277.0 275.0 276.5 279.8 285.01 304.7 315.0 326.0 322.1 330.8 328.1 324.2 33 Loans and leases in bank credit2 2,831.5r 2,942.6r 2,964.4' 2,980.1' 3,005^ 2,986.9 3,000.4 3,033.5 3,018.6 3,029.6 3,036.7 3,050.0 34 Commercial and industrial 702.1 749.6 760.6 762.6 768.8' 770.6 770.7 780.7 778.1 780.8 778.6 785.9 35 Real estate 1,274.0 1,321.7 1,327.9 1,340.1 1,347.5 1,350.2 1,364.8 1,382.7 1,372.3 1,375.9 1,390.1 1,392.5 36 Revolving home equity 104.4 101.1 102.4 103.9 103.3 97.7 98.7 107.2 99.4 100.0 114.3 114.9 37 Other 1,169.6 1,220.6 1,225.5 1,236.3 1,244.2 1,252.5 1,266.1 1,275.5 1,272.8 1,275.8 1,275.8 1,277.5 38 Consumer 494.2 493.9 496.0 493.4 488.6' 479.6 481.3 484.2 482.4 485.6 486.7 483.1 39 Security3 70.8 70.9 72.1 73.5 78.2 67.9 63.7 61.3 61.9 58.9 61.9 63.2 40 Other loans and leases 290.5r 306.6r 307.9' 310.4' 322.0' 318.6 319.9 324.6 323.9 328.5 319.4 325.4 41 Interbank loans 185.8 198.7 197.0 196.7 197.3 190.4 181.5 181.4 184.6 183.8 177.9 177.6 42 Cash assets4 215.8 215.7 222.0 222.0 222.2 215.2 206.0 220.5 235.2 216.8 216.8 214.3 43 Other assets5 291.9 311.8 312.0 313.5 322.1 319.6 318.8 320.8 319.2 318.9 316.2 328.3 44 Total assets6 4,424.6R 4,606.2R 4,636.5R 4,653.8R 4,696.8R 4,679.5 4,688.2 4,749.5 4,748.9 4,747.1 4,742.6 4,759.8 Liabilities 45 Deposits 2,947.4 3,049.1 3,075.9 3,052.7 3,068.8 3,067.4 3,065.7 3,084.2 3,110.6 3,110.0 3,042.1 3,067.8 46 Transaction 653.0 643.8 654.3 630.3 640.1 627.3 610.7 618.6 621.9 631.5 596.8 625.6 47 Nontransaction 2,294.3 2,405.3 2,421.6 2,422.4 2,428.6 2,440.1 2,455.0 2,465.5 2,488.7 2,478.5 2,445.3 2,442.2 48 Large time 404.2 422.5 423.4 424.5 422.6 420.7 422.5 433.1 428.9 431.8 432.0 438.5 49 Other 1,890.2 1,982.8 1,998.2 1,997.9 2,006.0 2,019.4 2,032.5 2,032.5 2,059.9 2,046.7 2,013.3 2,003.7 50 Borrowings 734.5 807.7 811.4 833.3 843.1 836.7 830.2 862.3 836.8 839.8 898.8 878.3 51 From banks in the U.S 273.3 294.8 291.4 303.8 311.7 309.9 307.5 313.5 309.9 308.8 322.5 312.1 52 From others 461.2 512.9 519.9 529.5 531.4 526.8 522.7 548.8 526.9 531.0 576.4 566.2 53 Net due to related foreign offices .... 106.8 117.6 114.0 126.7 141.2 139.9 147.4 149.7 147.7 145.8 150.8 154.6 54 Other liabilities 226.3 205.0 207.3 211.3 213.9 210.1 217.1 227.0 224.7 225.6 221.2 237.7 55 Total liabilities 4,014.9 4,179.4 4,208.6 4,224.1 4,267.0 4,254.1 4,260.4 4,323.2 4,319.8 4,321.2 4,312.9 4,338.5 56 Residual (assets less liabilities)7 409.6r 426.91 427.9' 429.8' 429.8' 425.4 427.7 426.3 429.1 425.9 429.7 421.4 MEMO 57 Revaluation gains on off-balance-sheet items8 65.0 46.8 48.3 50.6 51.0 53.8 57.9 66.3 64.5 70.1 68.2 63.5 58 Revaluation losses on off-balancesheet items8 68.1 46.7 49.3 52.5 53.4 55.7 62.0 66.0 64.1 69.8 66.8 64.0 59 Mortgage-backed securities9 313.3 336.9 335.7 335.5 332.1 330.7 335.2 337.9 340.9 339.4 335.5 335.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities All 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 1999 1999 Sept/ Mar/ Apr/ Mayr Juner Julyr Aug/ Sept. Sept. 8 Sept. 15 Sept. 22 Sept. 29 Seasonally adjusted Assets 1 Bank credit 2,370.2 2,418.0 2,422.3 2,430.6 2,458.8 2,452.8 2,471.6 2,494.9 2,488.0 2,492.3 2,501.5 2,500.6 2 Securities in bank credit 557.2 547.5 544.5 544.3 555.0 575.0 589.6 599.2 594.7 603.2 605.4 594.7 3 U.S. government securities 376.4 383.2 379.4 377.5 383.8 383.9 391.5 389.7 391.0 390.6 391.2 386.1 4 Trading account 22.2 22.5 25.9 22.3 25.1 22.7 23.3 20.9 20.7 19.4 21.4 21.8 5 Investment account 354.2 360.8 353.5 355.2 358.7 361.2 368.3 368.9 370.3 371.2 369.7 364.2 6 Other securities 180.8 164.2 165.1 166.8 171.3 191.0 198.0 209.4 203.8 212.5 214.2 208.7 7 Trading account 91.4 66.7 66.1 68.3 67.5 73.0 77.0 84.2 80.7 88.4 86.4 82.5 8 Investment account 89.4 97.5 99.0 98.6 103.8 118.1 121.0 125.2 123.1 124.1 127.8 126.1 9 State and local government . 23.4 24.9 24.6 24.8 25.3 25.4 25.7 25.7 25.7 25.7 25.6 25.7 10 Other 66.0 72.7 74.4 73.8 78.5 92.6 95.3 99.5 97.4 98.4 102.2 100.4 11 Loans and leases in bank credit2 . .. 1,813.1 1,870.6 1,877.8 1,886.3 1,903.8 1,877.9 1,882.1 1,895.7 1,893.2 1,889.1 1,896.1 1,905.9 12 Commercial and industrial 518.6 548.3 552.7 552.9 561.4 564.0 567.7 571.6 574.4 571.9 567.5 573.1 13 Bankers acceptances 1.3 1.1 1.1 1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.2 14 Other 517.3 547.1 551.7 551.9 560.4 563.0 566.6 570.4 573.3 570.8 566.3 572.0 15 Real estate 708.4 718.8 718.7 722.2 721.6 716.4 721.4 732.8 724.9 725.6 740.7 740.5 16 Revolving home equity 75.1 73.4 74.2 75.1 74.1 68.1 68.7 76.6 69.2 69.6 83.6 84.1 17 Other 633.3 645.4 644.4 647.1 647.5 648.3 652.7 656.2 655.8 656.1 657.1 656.4 18 Consumer 299.1 302.0 300.5 297.6 292.8 284.0 280.8 279.1 280.2 280.0 279.3 277.3 19 Security3 68.9 62.3 64.6 68.3 73.8 64.3 62.2 59.4 62.3 55.0 59.4 62.2 20 Federal funds sold to and repurchase agreements with broker-dealers 51.7 46.3 47.9 51.4 55.6 46.9 45.3 42.1 45.3 38.5 41.8 44.1 21 Other 17.2 16.0 16.7 16.8 18.2 17.4 16.9 17.3 17.0 16.6 17.6 18.2 22 State and local government 11.3 11.3 11.4 11.4 11.4 11.7 11.8 11.9 12.0 12.0 11.9 11.8 23 Agricultural 8.9 8.9 8.9 8.6 8.6 8.5 8.8 8.8 8.8 8.8 8.8 8.8 24 Federal funds sold to and repurchase agreements with others 12.9 12.4 11.8 14.4 38.7 25.2 7.7 10.9 99..33 1111..22 11.8 11.8 25 All other loans 85.2 90.9 91.4 91.6 75.6 82.9 98.6 96.5 97.5 100.4 92.0 95.4 26 Lease-financing receivables 99.7 115.7 117.9 119.3 120.0 120.8 123.1 124.6 123.9 124.1 124.7 125.0 27 Interbank loans 121.3 133.9 131.7 143.3 144.7 139.8 134.6 132.6 131.4 131.4 136.3 130.1 28 Federal funds sold to and repurchase agreements with commercial banks 68.0 84.9 81.1 88.0 87.1 89.6 85.9 83.3 83.0 82.2 85.4 81.6 29 Other 53.3 48.9 50.6 55.2 57.6 50.1 48.7 49.4 48.4 49.2 50.9 48.5 30 Cash assets4 151.4 153.0 155.3 153.0 156.1 150.2 143.7 149.8 153.7 144.6 154.7 147.3 31 Other assets5 231.4 244.8 234.7 237.3 240.6 238.3 236.2 238.4 233.2 240.1 236.9 243.8 32 Total assets6 2,836.4 2^11.0 2,905.5 2,925.6 2^61.7 2,942.9 2,947.8 2fsrnz 2,967.7 2,969.8 2,990.7 2,983.2 Liabilities 33 Deposits 1,665.7 1,692.0 1,699.1 1,693.8 1,694.0 1,691.9 1,680.0 1,685.5 1,687.0 1,698.6 1,675.2 1,679.8 34 Transaction 378.3 361.8 364.2 355.3 357.0 350.6 338.3 338.9 333.0 346.3 336.8 342.1 35 Nontransaction 1,287.4 1,330.2 1,334.9 1,338.6 1,337.0 1,341.3 1,341.6 1,346.5 1,354.0 1,352.4 1,338.3 1,337.7 36 Large time 217.5 228.1 228.9 225.9 227.8 228.8 224.8 232.5 227.6 229.8 231.6 240.2 37 Other 1,069.9 1,102.1 1,106.0 1,112.7 1,109.2 1,112.5 1,116.8 1,114.1 1,126.4 1,122.6 1,106.8 1,097.5 38 Borrowings 578.3 626.8 625.9 633.6 643.4 639.3 645.3 653.6 652.7 638.9 668.4 655.9 39 From banks in the U.S 201.1 209.9 207.1 215.6 220.7 217.4 219.0 221.1 223.4 216.6 223.5 219.2 40 From others 377.2 416,9 418.8 418.0 422.7 421.8 426.3 432.4 429.3 422.3 444.9 436.7 41 Net due to related foreign offices 104.6 113.1 110.5 113.6 141.5 140.9 146.9 148.7 153.3 148.7 144.8 147.1 42 Other liabilities 199.1 174.9 176.3 180.0 182.0 178.7 184.2 193.5 191.1 192.1 187.8 204.1 43 Total liabilities 2,547.7 2,606.9 2,611.7 2,621.1 2,660.9 2,650.7 2,656.4 2,6813 2,684.0 2,678.4 2,676.2 2,686.8 44 Residual (assets less liabilities)7 288.8 304.1 293.8 304.6 300.8 292.1 291.4 296.0 283.7 291.5 314.5 296.5 Footnotes appear on p. A2], Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • December 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 1999 1999 Sept.r Mar.r Apr/ Mayr Juner Julyr Aug.r Sept. Sept. 8 Sept. 15 Sept. 22 Sept. 29 Not seasonally adjusted Assets 45 Bank credit 2,359.6 2,420.7 2,4283 2,428.4 2,449.1 2,438.8 2,452.2 2,482.8 2,473.0 2,482.3 2,486.2 2,490.8 46 Securities in bank credit 550.2 551.4 549.8 546.1 550.8 567.1 579.5 591.1 588.7 594.3 594.4 587.4 47 U.S. government securities 370.0 387.3 385.5 380.4 381.0 378.1 382.5 382.3 385.5 382.3 381.4 379.6 48 Trading account 22.0 23.4 25.2 20.8 23.5 20.9 22.2 20.7 214 19.7 20.8 20.8 49 Investment account 348.0 363.8 360.2 359.6 357.5 357.2 360.4 361.6 364.1 362.6 360.6 358.8 50 Mortgage-backed securities . . 240.1 245.2 242.3 239.3 234.9 233.6 237.7 240.5 243.3 241.9 2383 238.0 51 Other 107.9 118.7 117.9 120.3 122.6 123.5 122.6 121.2 120.8 120.7 122.3 120.7 52 One year or less 28.5 24.5 24.9 24.3 253 25.3 24.9 24.4 23.7 23.7 24.8 25.4 53 One to five years 45.5 53.5 54.1 55.8 57.6 58.7 58.5 58.1 583 58.2 58.7 57.1 54 More than five years ... 33.9 40.6 38.9 40.2 39.7 39.5 39.2 38.6 38.8 38.8 38.8 38.2 55 Other securities 180.2 164.2 164.4 165.8 169.8 189.0 197.0 208.7 203.3 212.1 213.0 207.8 56 Trading account 91.4 66.7 66.1 68.3 67.5 73.0 77.0 84.2 80.7 88.4 86.4 82.5 57 Investment account 88.9 97.5 98.2 97.5 102.3 116.0 120.0 124.5 122.6 123.6 126.6 125.3 58 State and local government .. 23.2 24.9 24.7 24.9 25.1 24.9 25.4 25.6 25.5 25.6 25.6 25.7 59 Other 65.6 72.6 73.5 72.6 77.2 91.1 94.6 98.9 97.1 98.1 101.0 99.6 60 Loans and leases in bank credit2 . . 1,809.4 1,869.2 1,878.5 1,882.3 1,898.3 1,871.7 1,872.7 1,891.7 1,884.2 1,887.9 1,891.8 1,903.4 61 Commercial and industrial 516.9 550.9 558.8 557.4 561.4 562.5 561.9 569.1 568.0 569.4 566.5 573.0 62 Bankers acceptances 1.3 1.1 1.1 1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.2 63 Other 515.6 549.8 557.7 556.4 560.4 561.5 560.9 568.0 566.9 568.2 565.4 571.9 64 Real estate 708.8 715.7 715.8 719.4 719.6 715.5 722.0 733.2 726.3 727.2 739.0 740.2 65 Revolving home equity 75.6 72.7 73.7 74.7 73.9 68.2 69.0 77.2 69.6 70.1 84.2 84.8 66 Other 393.1 392.6 390.5 392.3 393.1 394.1 398.5 400.0 401.6 400.9 398.5 398.9 67 Commercial 240.0 250.5 251.5 2524 252.6 253.2 254.4 256.0 255.1 256.2 256.2 256.5 68 Consumer 301.0 299.3 298.1 295.4 290.8 282.2 281.4 281.0 281.9 282.2 281.5 278.9 69 Security3 64.9 65.1 66.5 68.4 73.0 62.7 58.4 55.9 56.3 53.4 56.9 58.0 70 Federal funds sold to and repurchase agreements with broker-dealers .... 47.8 48.9 49.8 51.2 54.1 45.3 41.8 38.8 40.1 36.6 39.1 40.2 71 Other 17.1 16.2 16.7 17.2 18.9 17.4 16.6 17.1 16.2 16.8 17.8 17.8 72 State and local government .... 11.4 11.2 11.3 113 11.3 11.6 11.9 12.0 12.1 12.1 12.0 11.9 73 Agricultural 9.1 8.6 8.6 8.6 8.7 8.8 9.0 9.0 9.0 9.0 9.0 9.0 74 Federal funds sold to and repurchase agreements with others 12.9 12.4 11.8 14.4 38.7 25.2 7.7 10.9 9.3 11.2 11.8 11.8 75 All other loans 85.7 89.2 89.5 88.2 74.5 82.7 97.8 97.1 98.5 100.6 91.8 96.6 76 Lease-financing receivables .... 98.8 116.6 118.1 119.2 120.2 120.4 122.5 123.4 122.9 122.9 123.1 124.0 77 Interbank loans 119.4 134.0 135.7 143.4 145.1 137.6 129.3 130.3 128.2 129.6 132.8 129.4 78 Federal funds sold to and repurchase agreements with commercial banks 66.5 84.7 83.8 87.1 86.2 86.0 80.9 81.3 79.7 80.9 82.6 81.1 79 Other 52.9 49.3 52.0 56.3 58.8 51.5 48.4 49.0 48.5 48.6 50.2 48.3 80 Cash assets4 150.4 148.0 154.2 151.5 151.9 144.4 136.9 148.7 158.9 144.7 146.9 144.8 81 Other assets5 232.8 241.0 239.1 239.6 246.0 240.5 237.7 239.6 236.3 240.3 236.0 246.0 82 Total assets6 2^24.0 2,905.0 2,919.1 2,9243 2,9533 2^23.0 2,917.5 2,962.5 2,957.4 2,958.0 2,963.1 2,972.4 Liabilities 83 Deposits 1,661.2 1,690.5 1,705.2 1,679.4 1,688.0 1,680.6 1,670.0 1,681.5 1,696.7 1,701.2 1,651.7 1,6723 84 Transaction 374.2 356.6 368.3 348.8 353.4 343.9 329.0 335.6 335.8 346.5 320.5 340.4 85 Nontransaction 1,286.9 1,333.9 1,337.0 1,330.6 1,334.6 1,336.7 1,341.0 1,345.9 1,360.9 1,354.6 1,331.2 1,331.9 86 Large time 217.0 227.9 226.8 224.7 224.3 223.9 223.0 232.0 228.6 230.7 230.8 237.0 87 Other 1,069.9 1,106.0 1,1102-- 1,105.9 1,110.3 1,112.7 1,118.0 1,113.9 1,132.3 1,123.9 1,100.5 1,094.8 88 Borrowings 572.0 625.8 628.3 641.4 645.8 630.2 621.8 645.8 627.7 626.7 677.2 655.0 89 From banks in the U.S 197.5 211.9 209.4 216.7 220.3 213.7 212.5 216.9 216.1 212.0 223.8 214.4 90 From nonbanks in the U.S 374.5 414.0 418.8 424.7 425.5 416.5 409.3 428.9 411.6 414.7 453.4 440.7 91 Net due to related foreign offices . . . 103.0 113.1 109.0 121.7 137.1 135.7 144.0 146.3 144.7 142.3 147.3 151.1 92 Other liabilities 199.1 174.9 176.3 180.0 182.0 178.7 184.2 193.5 191.1 192.1 187.8 204.1 93 Total liabilities 2,5353 2,6043 2,618.8 2,6223 2,652.8 2^25.1 2,620.0 2,667.1 2,660.2 2,6623 2,663.9 2,682.4 94 Residual (assets less liabilities)7 .... 288.7 300.7 300.3 301.7 300.5 297.8 297.6 295.4 297.3 295.7 299.2 290.0 MEMO 95 Revaluation gains on off-balancesheet items8 65.0 46.8 48.3 50.6 51.0 53.8 57.9 66.3 64.5 70.1 68.2 63.5 96 Revaluation losses on off-balancesheet items8 68.1 46.6 49.3 52.5 53.4 55.7 62.0 66.0 64.1 69.8 66.8 64.0 97 Mortgage-backed securities® 263.7 273.3 270.6 266.6 262.0 260.4 265.2 267.5 270.7 269.0 265.1 264.8 98 Pass-through securities 170.3 183.5 180.6 177.8 174.5 174.1 177.8 176.8 179.7 178.4 174.5 174.2 99 CMOs, REMICs, and other mortgage-backed securities .. 93.5 89.8 90.0 88.7 87.5 86.3 87.4 90.7 91.0 90.6 90.6 90.6 100 Net unrealized gains (losses) on available-for-sale securities10 . . . 3.7 .6 .9 .6 .0 -3.3 -4.2 -4.9 -5.1 -4.9 -4.8 -4.8 101 Offshore credit to U.S. residents11 . .. 36.8 39.0 37.9 37.7 37.0 36.3 32.2 27.8 27.2 27.5 28.0 28.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A15 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1998 1999 1999 Sept.1" Mar.r Apr.r Mayr Juner Julyr Aug.r Sept. Sept. 8 Sept. 15 Sept. 22 Sept. 29 Seasonally adjusted Assets 1 Bank credit 1,425.4 1,523.4 1,530.1 1,541.5 1,557.5 1,572.2 1,586.2 1,599.9 1,595.4 1,600.5 1,598.3 1,605.0 2 Securities in bank credit 408.6 442.7 444.4 448.4 456.0 459.9 462.1 463.7 464.8 465.0 461.0 463.7 3 U.S. government securities 311.5 331.9 332.9 335.2 340.7 344.1 344.3 345.8 345.3 345.8 345.4 346.9 4 Other securities 97.0 110.8 111.5 113.2 115.2 115.8 117.8 117.8 119.6 119.2 115.6 116.9 5 Loans and leases in bank credit2 1,016.8 1,080.7 1,085.7 1,093.1 1,101.5 1,112.2 1,124.1 1,136.3 1,130.6 1,135.4 1,137.3 1,141.2 6 Commercial and industrial 186.2 198.0 199.7 202.6 205.4 208.2 210.1 212.7 211.7 212.5 212.6 214.1 7 Real estate 562.1 609.6 612.3 618.3 625.1 632.5 640.7 646.2 643.4 644.8 647.1 648.8 8 Revolving home equity 28.5 28.6 28.8 29.2 29.5 29.8 29.8 29.8 29.7 29.7 29.8 29.8 9 Other 533.6 581.0 583.5 589.1 595.6 602.8 610.9 616.4 613.6 615.1 617.3 619.0 10 Consumer 192.2 196.7 199.0 198.3 198.5 198.0 199.3 202.1 199.8 202.1 203.3 203.3 11 Security3 5.9 5.8 5.5 5.2 5.2 5.3 5.3 5.3 5.6 5.5 5.0 5.2 12 Other loans and leases 70.4 70.6 69.2 68.7 67.3 68.2 68.7 69.9 70.1 70.5 69.3 69.9 13 Interbank loans 68.4 61.7 60.3 57.6 55.3 56.9 54.7 52.3 52.8 54.8 49.5 52.0 14 Cash assets4 66.6 69.1 67.9 71.0 71.4 72.6 72.3 73.2 73.6 73.7 74.8 71.4 15 Other assets5 58.7 72.1 72.6 74.0 74.5 78.0 80.4 80.7 80.1 78.9 82.3 81.4 16 Total assets6 1,599.9 1,706.8 1,711.1 1,724.1 1,738.9 1,760.0 1,773.5 1,785.8 1,781.8 1,787.6 1,784.6 1,789.4 Liabilities 17 Deposits 1,283.8 1,365.7 1,365.5 1,370.6 1,377.4 1,389.4 1,397.1 1,399.6 1,398.2 1,403.5 1,396.6 1,399.4 18 Transaction 281.8 288.6 282.3 283.9 287.8 287.3 288.6 286.0 280.5 286.5 287.6 290.9 19 Nontransaction 1,002.1 1,077.1 1,083.2 1,086.8 1,089.6 1,102.0 1,108.4 1,113.6 1,117.7 1,117.0 1,109.0 1,108.5 20 Large time 187.2 194.6 196.6 199.8 198.3 196.8 199.6 201.1 200.3 201.0 201.2 201.5 21 Other 814.9 882.5 886.6 887.0 891.3 905.3 908.9 912.6 917.4 916.0 907.7 907.0 22 Borrowings 160.4 187.5 185.7 191.5 196.2 206.7 208.4 213.8 212.9 213.6 213.4 215.9 23 From banks in the U.S 75.4 85.3 83.7 87.3 91.2 97.1 95.7 96.1 96.3 97.8 96.0 94.9 24 From others 85.0 102.2 102.0 104.3 105.0 109.7 112.7 117.7 116.7 115.8 117.4 120.9 25 Net due to related foreign offices .... 3.7 4.5 4.9 5.0 4.1 4.3 3.5 3.4 3.0 3.5 3.5 3.6 26 Other liabilities 27.7 29.4 30.4 31.1 32.1 31.4 33.1 34.2 34.3 34.2 34.0 34.3 27 Total liabilities 1,475.7 1,587.1 1,586.5 1,598-3 1,609.8 1,631.7 1,642.0 1,651.1 1,648.4 1,654.9 1,647.5 1,653.1 28 Residual (assets less liabilities)7 124.2 119.7 124.6 125.8 129.0 128.3 131.5 134.8 133.3 132.8 137.1 136.4 Not seasonally adjusted Assets 29 Bank credit 1,428.9 1,517.6 1,535.2 1,551.6 1,564.6 1,573.4 1,588.3 1,603.2 1,596.0 1,604.5 1,604.7 1,607.9 30 Securities in bank credit 406.8 444.2 449.3 453.8 457.8 458.2 460.5 461.3 461.7 462.8 459.7 461.2 31 U.S. government securities 310.0 333.4 337.1 339.7 342.6 342.6 342.5 344.0 342.8 344.0 344.6 344.9 32 Other securities 96.7 110.8 112.2 114.0 115.2 115.6 118.0 117.3 118.9 118.7 115.1 116.3 33 Loans and leases in bank credit2 1,022.1 1,073.4 1,085.9 1,097.8 1,106.8 1,115.2 1,127.8 1,141.8 1,134.3 1,141.7 1,145.0 1,146.7 34 Commercial and industrial 185.2 198.6 201.8 205.2 207.4 208.1 208.8 211.6 210.1 211.4 212.1 212.9 35 Real estate 565.2 605.9 612.1 620.7 627.9 634.6 642.9 649.5 646.0 648.7 651.1 652.3 36 Revolving home equity 28.8 28.4 28.7 29.2 29.4 29.5 29.7 30.0 29.9 29.9 30.1 30.1 37 Other 536.5 577.5 583.4 591.6 598.5 605.1 613.2 619.5 616.1 618.8 621.0 622.1 38 Consumer 193.1 194.5 197.9 198.0 197.8 197.4 199.9 203.2 200.5 203.4 205.1 204.2 39 Security3 5.9 5.8 5.5 5.2 5.2 5.3 5.3 5.3 5.6 5.5 5.0 5.2 40 Other loans and leases 72.7 68.5 68.5 68.7 68.5 69.8 71.0 72.1 72.2 72.7 71.6 72.2 41 Interbank loans 66.4 64.7 61.3 53.3 52.2 52.8 52.1 51.1 56.4 54.3 45.1 48.2 42 Cash assets4 65.4 67.7 67.8 70.6 70.3 70.8 69.2 71.9 76.3 72.1 69.9 69.5 43 Other assets5 59.1 70.8 72.9 73.9 76.2 79.2 81.1 81.1 82.9 78.6 80.2 82.3 44 Total assets6 1,600.5 1,701.2 1,717.4 1,729.5 1,743.4 1,756.5 1,770.6 1,787.0 1,791.4 1,789.1 1,779.5 1,787.5 Liabilities 45 Deposits 1,286.2 1,358.6 1,370.7 1,373.3 1,380.8 1,386.8 1,395.7 1,402.7 1,413.9 1,408.8 1,390.4 1,395.5 46 Transaction 278.8 287.3 286.0 281.5 286.7 283.4 281.7 283.1 286.1 285.0 276.3 285.2 47 Nontransaction 1,007.4 1,071.4 1,084.7 1,091.8 1,094.1 1,103.4 1,114.0 1,119.6 1,127.8 1,123.9 1,114.1 1,110.3 48 Large time 187.2 194.6 196.6 199.8 198.3 196.8 199.6 201.1 200.3 201.0 201.2 201.5 49 Other 820.2 876.7 888.0 892.0 895.7 906.6 914.4 918.6 927.6 922.8 912.8 908.9 50 Borrowings 162.5 181.9 183.1 191.9 197.3 206.5 208.4 216.5 209.1 213.1 221.7 223.3 51 From banks in the U.S 75.8 82.9 82.0 87.1 91.4 96.2 95.0 96.5 93.8 96.8 98.7 97.7 52 From others 86.7 99.0 101.1 104.8 105.9 110.3 113.4 119.9 115.3 116.3 123.0 125.6 53 Net due to related foreign offices .... 3.7 4.5 4.9 5.0 4.1 4.3 3.5 3.4 3.0 3.5 3.5 3.6 54 Other liabilities 27.2 30.0 31.1 31.3 31.9 31.4 32.9 33.5 33.6 33.5 33.4 33.7 55 Total liabilities 1,479.6 1,575.1 1,589.7 1,6015 1,614.2 1,629.0 1,640.5 1,656.1 1,659.6 1,658.9 1,648.9 1,656.0 56 Residual (assets less liabilities)7 120.9 126.1 127.7 128.0 129.3 127.5 130.1 130.9 131.8 130.2 130.6 131.4 MEMO 57 Mortgage-backed securities' 49.5 63.6 65.1 68.9 70.1 70.4 70.0 70.4 70.2 70.4 70.4 70.7 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • December 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 1999 1999 Sept. Mar.r Apr.r Mayr June1 July Aug. Sept. Sept. 8 Sept. 15r Sept. 22 Sept. 29 Seasonally adjusted Assets 1 Bank credit 598.3r 550.6 549.6 539.5 531.9 519.1 522.4r 517.5 508.8 524.1 518.3 517.8 2 Securities in bank credit 211.9 197.3 200.0 195.7 195.7 189.5 190.0 189.3 182.3 195.9 190.7 188.1 3 U.S. government securities 83.6 85.3 89.1 87.0 88.1 85.8r 84.0 81.7 82.4 81.8 80.5 81.3 4 Other securities 128.2 112.0 110.9 108.7 107.6 103.8 106.0 107.6 99.8 114.1 110.2 106.8 5 Loans and leases in bank credit2 . . . 386.4r 353.4 349.7 343.7 336.3 329.6 332.4r 328.2 326.6 328.2 327.6 329.7 6 Commercial and industrial 216 .(f 209.9 208.2 200.7 195.5 191.61 194.4r 196.1 195.9 194.4 196.9 197.2 7 Real estate 23.^ 20.1 19.9 19.8 19.2 18.4 17.6 17.6 17.3 17.7 17.8 17.6 8 Security3 66.91 50.7 51.7 53.1 51.8 52.5r 54.8r 51.2 50.6 53.0 48.7 51.9 9 Other loans and leases 79.5r 72.6 69.8 70.1 69.8 67.1 65.6 63.3 62.7 63.0 64.2 63.1 10 Interbank loans 27.3 25.7 25.4 26.6 24.5 27.4 25.7 22.9 26.8 20.2 24.5 20.2 11 Cash assets4 34.3 34.1 34.6 35.9 33.5 35.1 38.1 40.9 41.1 40.8 41.5 39.9 12 Other assets5 37.3 37.5 37.5 35.9 33.4 32.2 29.0 29.3 28.0 30.6 29.7 28.9 13 Total assets6 696.9" 647.6 646.9 637.6 623.1 6135 615.0 6103 6045 615.4 613.7 606.6 Liabilities 14 Deposits 315.3 310.2 311.9 310.4 305.7 310.0 308.7 310.7 311.5 311.1 309.0 310.1 15 Transaction 15.3 10.5 10.1 10.5 10.9 10.9 11.0 10.9 11.6 11.0 10.2 10.7 16 Nontransaction 300.0 299.7 301.8 299.9 294.8 299.0r 297.7 299.8 299.9 300.1 298.8 299.4 17 Borrowings 205.4 173.5 172.1 172.7 180.9 172.1r 171.9 168.7 164.4 171.8 167.6 169.4 18 From banks in the U.S 28.5 23.8 21.0 21.4 26.6 24.6 23.6 25.2 24.1 26.0 23.0 27.3 19 From others 176.9 149.7 151.1 151.3 154.4 147.5' 148.3 143.4 140.3 145.8 144.7 142.1 20 Net due to related foreign offices 98.1 92.7 94.8 85.2 69.4 67.3 71.9 66.1 70.7 66.5 68.6 59.3 21 Other liabilities 75.9 68.0 67.2 59.9 61.4 63.4r 61.7 64.5 60.8 67.8 66.3 63.8 22 Total liabilities 694.7 644.4 645.9 6283 6175 612.7 614.2 609.9 6075 617.1 6115 6025 23 Residual (assets less liabilities)7 2.2r 3.1 .9 9.3 5.6 .8 .8 .4 -3.0 -1.6 2.2 4.1 Not seasonally adjusted Assets 24 Bank credit 597.51 552.3 546.8 534.3 528.8 516.0"^ 518.7r 516.6 504.8 521.7 517.8 521.2 25 Securities in bank credit 211.3 198.4 198.4 194.1 194.8 187.9 188.7 188.6 181.3 194.3 190.1 188.5 26 U.S. government securities 82.9 86.2 88.8 87.8 88.5 85.2 83.0 80.7 81.2 80.9 79.8 80.5 27 Trading account 20.7 20.4 21.7 19.0 20.6 19.0 16.5 14.8 15.9 14.9 13.7 14.5 28 Investment account 62.1 65.7 67.0 68.8 67.9 66.2 66.5 65.9 65.3 66.0 66.1 66.1 29 Other securities 128.4 112.2 109.6 106.3 106.3 102.7 105.7 107.9 100.1 113.4 110.3 107.9 30 Trading account 84.2 68.3 66.5 64.8 63.3 60.9r 65.2 70.0 62.4 75.5 72.0 70.7 31 Investment account 44.2 43.9 43.1 41.4 43.0 41.7 40.5 37.8 37.7 37.9 38.3 37.3 32 Loans and leases in bank credit2 . . . 386.2r 353.9 348.4 340.2 334.1 328. lr 330.0r 328.0 323.4 327.4 327.7 332.7 33 Commercial and industrial 215.6 210.2 206.7 198.0 193.8 190.8r 192.7r 195.8 193.7 193.6 197.0 198.8 34 Real estate 23.91 20.2 19.7 19.6 19.0 18.2 17.5 17.6 17.3 17.7 17.8 17.6 35 Security3 67. lr 51.4 51.7 52.9 52.0 52.1r 54.9 51.3 50.0 53.3 49.1 52.4 36 Other loans and leases 79.6r 72.1 70.3 69.7 69.3 66.9r 64.9 63.3 62.4 62.8 63.8 63.9 37 Interbank loans 27.3 25.7 25.4 26.6 24.5 27.4 25.7 22.9 26.8 20.2 24.5 20.2 38 Cash assets4 34.1 33.1 33.5 35.6 34.3 35.0 37.7 40.6 40.1 39.7 41.3 41.2 39 Other assets5 37.8 38.1 35.7 35.2 32.4 31.4 29.6 29.7 29.0 30.9 29.7 29.1 40 Total assets6 6963r 648.8 641.1 6313 619.8 609.5 611.5 609.6 600.4 612.1 613.1 611.4 Liabilities 41 Deposits 315.1 313.5 311.3 312.8 306.4 307.5 306.1 310.2 308.2 308.4 309.4 313.9 42 Transaction 16.0 10.7 9.9 10.3 10.7 10.8 10.9 11.4 11.8 11.3 10.7 11.8 43 Nontransaction 299.1 302.8 301.4 302.5 295.7 296.7 295.2 298.8 296.5 297.1 298.6 302.1 44 Borrowings 205.4 173.5 172.1 172.7 180.9 172. lr 171.9 168.7 164.4 171.8 167.6 169.4 45 From banks in the U.S 28.5 23.8 21.0 21.4 26.6 24.6 23.6 25.2 24.1 26.0 23.0 27.3 46 From others 176.9 149.7 151.1 151.3 154.4 147.51 148.3 143.4 140.3 145.8 144.7 142.1 47 Net due to related foreign offices .... 96.3 91.0 89.2 83.4 68.1 64.8 69.8 64.6 64.9 62.4 68.7 62.5 48 Other liabilities 75.5 68.0 66.1 59.4 61.0 62.5r 61.8 64.1 60.8 67.3 65.4 63.6 49 Total liabilities 6923 646.0 638.7 628.2 616.4 606.8 609.7 6075 598.4 610.0 611.1 609.4 50 Residual (assets less liabilities)7 4.1r 2.8 2.5 3.1 3.4 2.7 1.8 2.0 2.0 2.2 1.9 2.0 MEMO 51 Revaluation gains on off-balance-sheet items8 47.7 39.5 38.2 35.3 34.9 37.3 38.1 38.3 35.9 41.9 38.7 37.3 52 Revaluation losses on off-balancesheet items8 44.2 39.1 38.6 34.8 34.1 36.3r 36.3 37.3 34.8 40.6 37.9 36.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities All 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 US. government agencies, US. 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 • December 1999 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING A. Commercial Paper Millions of dollars, seasonally adjusted, end of period Year ending December 1999 IItteemm 1994 1995 1996 1997 1998 Mar. Apr. May June July Aug. 1 All issuers 595,382 674,904 775,371 966,699 1,163,303 1,204,627 1,219,789 1,230,009 1,221,020 1,242,107 1,257,658 Financial companies1 2 Dealer-placed paper, total2 223,038 275,815 361,147 513,307 614,142 684,616 697,030 710,857 705,603 712,718 710,320 3 Directly placed paper, total" 207,701 210,829 229,662 252,536 322,030 276,424 276,721 268,129 272,014 277,570 290,228 4 Nonfinancial companies4 164,643 188,260 184,563 200,857 227,132 243,587 246,038 251,023 243,404 251,819 257,110 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 Date of change Average Average rate rate 1996—Jan. 1 8.50 1996 8.27 1997-—Jan. ... 1999—Aug. 8.50 Feb. 1 8.25 1997 8.44 Feb. .. Sept. 8.49 1998 8.35 Mar. .. Oct. . 8.12 1997—Mar. 26 Apr. .. Nov. 7.89 1996—Jan. . 8.50 Mav .. Dec. 7.75 1998—Sept. 30 8.25 Feb. 8.25 June 1999—Jan. . 7.75 Oct. 16 8.00 Mar. 8.25 July ... Feb. 7.75 Nov. 18 7.75 Apr. 8.25 Aug. .. Mar. 7.75 May 8.25 Sept. . Apr. 7.75 1999—July 1 8.00 June 8.25 Ocl May 7.75 Aug. 25 8.25 July . 8.25 Nov. .. June 7.75 Aug. 8.25 Dec July . 8.00 Sept. 8.25 1998-—Jan. ... Aug. 8.06 Oct. . 8.25 Feb. .. Sept. 8.25 Nov. 8.25 Mar. .. Oct. . 8.25 Dec. 8.25 Apr. .. May .. June .. July 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 IItteemm 11999966 11999977 11999988 June July Aug. Sept. Aug. 27 Sept. 3 Sept. 10 Sept. 17 Sept. 24 MONEY MARKET INSTRUMENTS 1 Federal funds1'23 5.30 5.46 5.35 4.76 4.99 5.07 5.22 5.02 5.34 5.16 5.24 5.16 2 Discount window borrowing "4 5.02 5.00 4.92 4.50 4.50 4.56 4.75 4.57 4.75 4.75 4.75 4.75 Commercial paper3,5,6 Nonfinancial 3 1-month n.a. 5.57 5.40 4.95 5.06 5.18 5.28 5.23 5.28 5.28 5.28 5.29 4 2-month n.a. 5.57 5.38 4.98 5.08 5.23 5.29 5.28 5.29 5.29 5.30 5.29 5 3-month n.a. 5.56 5.34 4.98 5.11 5.25 5.32 5.30 5.31 5.31 5.33 5.33 Financial 6 1-month n.a. 5.59 5.42 4.96 5.08 5.20 5.29 5.26 5.29 5.29 5.28 5.29 7 2-month n.a. 5.59 5.40 5.00 5.10 5.24 5.31 5.30 5.31 5.31 5.31 5.31 8 3-month n.a. 5.60 5.37 5.04 5.14 5.28 5.32 5.32 5.32 5.32 5.31 5.33 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 (historicalf,5,8 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 5.04 5.16 5.30 5.37 5.36 5.37 5.36 55..3366 55..3388 16 6-month 5.31 5.57 5.30 5.14 5.42 5.64 5.75 5.70 5.71 5.76 5.76 5.77 Certificates of deposit, secondary market3,10 17 1-month 5.35 5.54 5.49 5.01 5.13 5.25 5.34 5.30 5.32 5.34 55..3344 5.34 18 3-month 5.39 5.62 5.47 5.13 5.24 5.41 5.50 5.42 5.45 5.45 5.45 5.45 19 6-month 5.47 5.73 5.44 5.31 5.58 5.83 5.89 5.86 5.88 5.89 5.88 5.88 20 Eurodollar deposits, 3-month3,11 5.38 5.61 5.45 5.09 5.21 5.36 5.48 5.39 5.41 5.44 5.44 5.44 U.S. Treasury bills Secondary market3,5 ?1 3-month 5.01 5.06 4.78 4.57 4.55 4.72 4.68 4.81 4.82 4.67 4.61 44..6655 7,2 6-month 5.08 5.18 4.83 4.82 4.58 4.87 4.88 4.89 4.97 4.93 4.89 4.85 23 1-year 5.22 5.32 4.80 4.82 4.75 4.91 4.96 4.91 5.00 4.99 4.97 4.95 Auction high ?4 3-month 5.02 5.07 4.81 4.59 4.60 4.76 4.73 4.85 4.88 4.72 4.66 4.66 ?5 6-month 5.09 5.18 4.85 4.81 4.62 4.88 4.91 4.95 4.99 4.95 4.93 4.89 26 1-year 5.23 5.36 4.85 4.89 4.71 4.95 5.00 n.a. n.a. n.a. 5.00 n.a. U.S. TREASURY NOTES AND BONDS Constant maturities13 77 1-year 5.52 5.63 5.05 5.10 5.03 5.20 5.25 5.19 5.29 5.28 5.26 5.23 78 2-year 5.84 5.99 5.13 5.62 5.55 5.68 5.66 5.61 5.72 5.68 5.66 5.64 29 3-year 5.99 6.10 5.14 5.70 5.62 5.77 5.75 5.69 5.80 5.78 5.76 5.71 30 5-year 6.18 6.22 5.15 5.81 5.68 5.84 5.80 5.71 5.86 5.82 5.80 5.77 31 7-year 6.34 6.33 5.28 6.05 5.94 6.15 6.12 6.02 6.18 6.15 6.12 6.07 32 10-year 6.44 6.35 5.26 5.90 5.79 5.94 5.92 5.81 5.97 5.94 5.92 5.88 33 20-year 6.83 6.69 5.72 6.36 6.28 6.43 6.50 6.35 6.50 6.51 6.52 6.46 34 30 year 6.71 6.61 5.58 6.04 5.98 6.07 6.07 5.93 6.08 6.07 6.08 6.06 Composite 35 More than 10 years (long-term) 6.80 6.67 5.69 6.31 6.22 6.37 6.43 6.28 66..4433 66..4444 66..4455 66..4400 STATE AND LOCAL NOTES AND BONDS Moody's series14 36 5.52 5.32 4.93 5.22 5.24 5.47 5.56 5.49 5.51 5.50 5.62 5.60 37 Baa 5.79 5.50 5.14 5.59 5.64 5.93 6.06 5.95 6.00 5.99 6.11 6.10 38 Bond Buyer series15 5.76 5.52 5.09 5.37 5.36 5.58 5.69 5.61 5.67 5.66 5.69 5.71 CORPORATE BONDS 39 Seasoned issues, all industries16 7.66 7.54 6.87 7.62 7.57 7.77 7.78 7.67 7.81 7.81 7.78 7.75 Rating group 40 7.37 7.27 6.53 7.23 7.19 7.40 7.39 7.29 77..4444 7.43 77..4400 77..3355 41 Aa 7.55 7.48 6.80 7.52 7.48 7.68 7.68 7.58 7.72 7.72 7.68 7.63 4? 7.69 7.54 6.93 7.69 7.65 7.84 7.84 7.74 7.88 7.87 7.85 7.81 43 Baa 8.05 7.87 7.22 8.02 7.95 8.15 8.20 8.06 8.21 8.20 8.18 8.19 MEMO Dividend-price ratio 44 Common stocks 2.19 1.77 1.49 1.25 1.20 1.25 1.27 1.20 1.25 1.24 1.27 1.27 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: U.S. 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 • December 1999 1.36 STOCK MARKET Selected Statistics 1999 IInnddiiccaattoorr 11999966 11999977 11999988 Jan. Feb. Mar. Apr. May June July Aug. Sept. Prices and trading volume (averages of daily figures)1 Common stock prices f indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 357.98 456.99 550.65 595.43 588.70 603.69 627.75 635.62 629.53 648.83 621.03 607.87 2 Industrial 453.57 574.97 684.35 741.43 736.20 751.93 780.84 791.72 783.96 809.33 778.82 769.47 3 Transportation 327.30 415.08 468.61 479.72 477.47 491.25 523.08 537.88 520.66 528.72 492.13 462.33 4 Utility 126.36 143.87 190.52 224.75 218.24 218.11 228.48 242.98 241.36 250.50 241.84 237.71 5 Finance 303.94 424.84 516.65 523.38 514.75 544.08 564.99 562.66 546.43 557.92 521.59 493.37 6 Standard & Poor's Corporation (1941-43 = 10)2 670.49 873.43 1,085.50 1,248.77 1,246.58 1,281.66 1,334.76 1,332.07 1,322.55 1,380.99 1,327.49 1,318.17 7 American Stock Exchange (Aug. 31, 1973 = 50)3 570.86 628.34 682.69 704.22 699.15 711.08 748.29 787.02 772.01 803.75 781.33 788.74 Volume of trading (thousands of shares) 8 New York Stock Exchange 409,740 523,254 666,534 847,135 756,932 776,538 874,818 785,778 723,025 721,294 709,569 772,627 9 American Stock Exchange 22,567 24,390 28,870 31,015 31,774 29,563 38,895 35,241 28,806 25,754 27,795 32,540 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers4 97,400 126,090 140,980 153,240 151,530 156,440 172,880 177,984 176,930 178,360 176,390 179,316 Free credit balances at brokers5 11 Margin accounts6 22,540 31,410 40,250 36,880 38,850 40,120 41,200 41,250 42,865 44,330 44,230 47,125 12 Cash accounts 40,430 52,160 62,450 59,600 57,910 59,435 60,870 61,665 64,100 60,000 62,600 62,810 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 11999977 11999988 11999999 Apr. May June July Aug. Sept. U.S. budget1 1 Receipts, total 1,579,292 1,721,798 1,827,285 266,229r 98,663r 199,507r 121,923r 126,324r 200,396 2 On-budget 1,187,302 1,305,999 1,382,817 219,490r 62,722r 156,929r 87,959r 91,554 161,304 3 Off-budget 391,990 415,799 444,468 46,739 35,941 42,578 33,964 34,770 39,092 4 Outlays, total 1,601,235 1,652,552 1,704,545 152,770r 122,63 lr 145,939r 147,086r 129,127r 143,966 5 On-budget 1,290,609 1,335,948 1,383,767 120,474r 91,434r 136,141r 117,652r 97,984r 108,846 6 Off-budget 310,626 316,604 320,778 29,296r 31,197 9,799 29,434 31,143 35,119 7 Surplus or deficit (—), total -21,943 69,246 122,740 113,459 -23,969 53,568 -25,164 -2,803r 56,430 8 On-budget -103,307 -29,949 -951 99,016r -28,712 20,788 -29,693 -6,430r 52,458 9 Off-budget 81,364 99,195 123,691 17,443r 4,744 32,779 4,530 3,627 3,973 Source of financing (total) 10 Borrowing from the public 38,171 -51,211 -88,304 -85,208 -551 -22,246 1,193 26,470 -47,718 11 Operating cash (decrease, or increase (-)) 604 4,743 -17,580 -36,512 32,495 -27,459 13,553 3,160 -20,069 12 Other 2 -16,832 -22,778 -16,856 8,261 -7,975 -3,863 10,418 -26,827r 11,357 MEMO 13 Treasury operating balance (level, end of period) 43,621 38,878 56,458 58,138 25,643 53,102 39,549 36,389 56,458 14 Federal Reserve Banks 7,692 4,952 6,641 10,040 5,506 6,720 4,984 5,559 6,641 15 Tax and loan accounts 35,930 33,926 49,817 48,098 20,586 46,382 34,565 30,831 49,817 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 • December 1999 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1997 1998 1999 1999 11999988 11999999 H2 HI H2 HI July Aug. Sept. RECEIPTS 1 All sources 1,721,798 1,827,285 773,810 922,630 825,057 966,045r 121,923r 126,324r 200,396 2 Individual income taxes, net 828,586 879,480 354,072 447,514 392,332 481,527 59,975 60,709 89,250 3 Withheld 646,483 693,940 306,865 316,309 339,144 351,068 59,717 57,476 49,244 4 Nonwithheld 281,527 308,185 58,069 219,136 65,204 240,278 3,262 5,163 43,077 Refunds 99,476 122,706 10,869 87,989 12,032 109,467r 2,988r l,921r 3,072 Corporation income taxes 6 Gross receipts 213,249 216,325 104,659 109,353 104,163 106,861 5,303 5,115 42,571 / Refunds 24,593 31,645 10,135 14,220 14,250 17,092 1,898 1,418 2,336 8 Social insurance taxes and contributions, net . . . 571,831 611,832 260,795 312,713 268,466 324,831 46,368 49,389 55,481 y Employment taxes and contributions2 540,014 580,880 247,794 293,520 256,142 306,235 44,392 44,960 54,794 10 Unemployment insurance 27,484 26,480 10,724 17,080 10,121 16,378 1,573 4,085 332 n Other net receipts3 4,333 4,472 2,280 2,112 2,202 2,216 403 344 356 12 Excise taxes 57,673 70,399 31,133 29,922 33,366 31,015 5,723 5,397 7,167 13 Customs deposits 18,297 18,336 9,679 8,546 9,838 8,440 1,725 1,814 1,727 14 Estate and gift taxes 24,076 27,782 10,262 12,971 12,359 14,915 1,938 2,175 2,294 15 Miscellaneous receipts4 32,658 34,777 13,348 15,829 18,735 15,140 2,771 3,131 4,242 OUTLAYS 16 All types 1,652,552 1,704,545 824,368 815,884 877,414r 817,235r 147,086r 129,127r 143,966 17 National defense 268,456 276,792 140,873 129,351 140,196 134,414 26,153 20,867 24,279 18 International affairs 13,109 15,264 9,420 4,610 8,297 6,879 569 530 1,371 19 General science, space, and technology 18,219 19,397 10,040 9,426 10,142 9,319 1,597 1,681 1,773 20 Energy 1,270 981 411 957 699 797 -13 26 375 21 Natural resources and environment 22,396 22,303 11,106 10,051 12,671 10,351 1,935 1,961 2,249 22 Agriculture 12,206 24,359 10,590 2,387 16,757 9.803 489 726 1,196 23 Commerce and housing credit 1,014 2,966 -3,526 -2,483 4,046 -1.629 64 - l,097r 7,361 24 Transportation 40,332 38,856 20,414 16,196 20,836 17,082 3,375 3,838 4,260 25 Community and regional development 9,720 12,791 5,749 4,863 6,972 5,368 755 879 1,330 26 Education, training, employment, and social services 54,919 57,438 26,851 25,928 27,762r 29,003 3,980 4,363 5,437 27 Health 131,440 140,803 63,552 65,053 67,838r 69,320 11,685 11,959 13,031 28 Social security and Medicare 572,047 580,491 283,109 286,305 316,809 261,146 51,157 45,607 48,681 29 Income security 233,202 237,180 106,353 125,196 109,481 126,552r 20,532r 16,505r 16,897 30 Veterans benefits and services 41,781 43,210 22,077 19,615 22,750 20,105 5,130 1,895 3,615 31 Administration of justice 22,832 25,837 10,212 11,287 12,041 13,149 1,935 2,349 2,306 32 General government 13,444 16,058 7,302 6,139 9,136 6,650 1,360 200 1,712 33 Net interest5 243,359 230,265 122,620 122,345 116,954 116,655 19,598 19,931 15,259 34 Undistributed offsetting receipts6 -47,194 -40,445 -22,795 -21,340 -25,793r — 17,724 -3,214 -3,095 -7,164 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 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 5,446 5,536 5,573 5,578 5,556 5,643 5,681 5,668 n.a. 2 Public debt securities 5,413 5,502 5,542 5,548 5,526 5,614 5,652 5,639 5,656 3 Held by public 3,815 3,847 3,872 3,790 3,761 3,787 3,795 3,685 4 Held by agencies 1,599 1,656 1,670 1,758 1,766 1,827 1,857 1,954 1 5 Agency securities 33 34 31 30 29 29 29 29 n.a. 6 7 H H e e l l d d b b y y p ag u e b n li c c i es 26 7 27 7 26 5 26 4 26 4 29 1 28 1 28 1 11 8 Debt subject to statutory limit 5,328 5,417 5,457 5,460 5,440 5,530 5,566 5,552 5,568 9 Public debt securities 5,328 5,416 5,456 5,460 5,439 5,530 5,566 5,552 5,568 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 5,950 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 Q4 Ql Q2 Q3 1 Total gross public debt 4,988.7 5,323.2 5,502.4 5,614.2 5,614.2 5,651.6 5,638.8 5,656.3 By type 2 Interest-bearing 4,964.4 5,317.2 5,494.9 5,605.4 5,605.4 5,643.1 5,629.5 5,647.2 3 Marketable 3,307.2 3,459.7 3,456.8 3,355.5 3,355.5 3,361.3 3,248.5 3,233.0 4 Bills 760.7 777.4 715.4 691.0 691.0 725.5 647.8 653.2 5 Notes 2,010.3 2,112.3 2,106.1 1,960.7 1,960.7 1,912.0 1,868.5 1,8 28.8 6 Bonds 521.2 555.0 587.3 621.2 621.2 632.5 632.5 643.7 7 Inflation-indexed notes and bonds' n.a. n.a. 33.0 50.6 50.6 59.2 59.9 67.6 8 Nonmarketable2 1,657.2 1,857.5 2,038.1 2,249.9 2,249.9 2,281.8 2,381.0 2,414.2 9 State and local government series 104.5 101.3 124.1 165.3 165.3 167.5 172.6 168.1 10 Foreign issues3 40.8 37.4 36.2 34.3 34.3 33.5 30.9 31.0 11 Government 40.8 47.4 36.2 34.3 34.3 33.5 30.9 30.8 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 181.9 182.4 181.2 180.3 180.3 180.6 180.0 180.0 14 Government account series4 1,299.6 1,505.9 1,666.7 1,840.0 1,840.0 1,870.2 1,967.5 2,005.2 15 Non-interest-bearing 24.3 6.0 7.5 8.8 8.8 8.5 9.3 9.0 By holder5 16 U.S. Treasury and other federal agencies and trust funds 1,304.5 1,497.2 1,655.7 1,826.8 1,826.8 1,857.1 1,953.6 17 Federal Reserve Banks 391.0 410.9 451.9 471.7 471.7 464.5 493.8 18 Private investors 3,307.7 3,431.2 3,414.6 3,334.0 3,334.0 3,327.6 3,199.3 19 Depository institutions 315.4 296.6 300.3 231 A' 237.4r 247.6 n.a. 20 Mutual funds 286.5r 315.8 321.3 339.5' 339.5r 341.3 n.a. 21 Insurance companies 241.5 214.1 176.6 144.6' 144.6r 137.7 n.a. n.a. 22 State and local treasuries6 289.8 257.0 239.3 269.3' 269.3r 266.6 n.a. Individuals 23 Savings bonds 185.0 187.0 186.5 186.7 186.7 186.6 186.6 24 Pension funds 474.5 505.1 539.1 547,0r 547.0r 544.9 n.a. 25 Private 298.7 314.6 334.3 345.4' 345.4r 347.3 n.a. 26 State and Local 175.8 190.5 204.8 201.6r 201.6r 197.6 n.a. 27 Foreign and international7 835.2 1,102.1 1,241.6 l,278.7r l,278.7r l,270.8r 1,257.3 28 Other miscellaneous investors6,8 619.1' 553.5 409.9 330.8r 330.8r 332.1 n.a. 1. The U.S. Treasury first issued inflation-indexed securities during the first quarter of 1997. 7. Includes nonmarketable foreign series treasury securities and treasury deposit funds. 2. Includes (not shown separately) securities issued to the Rural Electrification Administra- Excludes treasury securities held under repurchase agreements in custody accounts at the tion, depository bonds, retirement plan bonds, and individual retirement bonds. Federal Reserve Bank of New York. 3. Nonmarketable series denominated in dollars, and series denominated in foreign cur- 8. Includes individuals, government-sponsored enterprises, brokers and dealers, bank rency held by foreigners. personal trusts and estates, corporate and noncorporate businesses, and other investors. 4. Held almost entirely by U.S. Treasury and other federal agencies and trust funds. SOURCE. U.S. Treasury Department, data by type of security, Monthly Statement of the 5. Data for Federal Reserve Banks and U.S. government agencies and trust funds are actual Public Debt of the United States; data by holder, Treasury Bulletin. holdings; data for other groups are Treasury estimates. 6. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable federal securities was removed from "Other miscellaneous investors" and added to "State and local treasuries." The data shown here have been revised accordingly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • December 1999 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1999 1999, week ending IItteemm June July Aug. Aug. 4 Aug. 11 Aug. 18 Aug. 25 Sept. 1 Sept. 8 Sept. 15 Sept. 22 Sept. 29 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 28,954 24,009 26,323 22,956 20,259 25,938 25,259 38,241 27,843 32,118 23,234 24,693 Coupon securities, by maturity 2 Five years or less 98,738 93,047 99,186 93,758 109,543 96,467 97,441 95,890 81,430 77,284 68,958 95,035 3 More than five years 61,981 53,586 68,592 59,602 82,361 78,109 57,413 60,198 49,912 59,754 44,882 62,209 4 Inflation-indexed 1,278 1,372 826 630 1,011 882 558 1,006 475 462 347 629 Federal agency 5 Discount notes 44,580 43,320 45,889 43,379 42,671 45,086 49,259 48,585 46,278 47,150 43,798 47,373 Coupon securities, by maturity 6 One year or less 677 652 777 788 475 930 885 818 964 987 898 1,279 7 More than one year, but less than or equal to five years 5,526 4,592 5,126 5,109 6,285 5,273 3,076 6,068 4,235 4,681 5,336 9,346 8 More than five years 4,256 4,278 4,832 5,814 7,213 3,870 2,400 5,361 2,843 7,416 4,031 4,149 9 Mortgage-backed 72,636 69,129 66,417 63,647 95,043 66,965 49,728 52,887 79,337 93,477 41,392 44,491 By type of counterparty With interdealer broker 10 U.S. Treasury 103,512 93,223 105,210 92,648 118,908 108,038 97,926 103,077 85,541 90,150 72,030 100,747 11 Federal agency 3,636 3,677 4,070 5,008 4,831 4,854 2,494 3,407 3,470 4,800 5,686 4,507 12 Mortgage-backed 26,565 25,013 25,261 22,485 30,892 27,936 20,003 23,534 23,324 34,704 17,418 20,472 With other 13 U.S. Treasury 87,439 78,790 89,717 84,297 94,267 93,358 82,745 92,258 74,118 79,468 65,392 81,819 14 Federal agency 51,402 49,164 52,553 50,082 51,813 50,305 53,126 57,426 50,850 55,435 48,377 57,639 15 Mortgage-backed 46,072 44,117 41,156 41,162 64,152 39,028 29,725 29,353 56,013 58,773 23,974 24,019 FUTURES TRANSACTIONS3 By type of deliverable security 16 U.S. Treasury bills 0 0 0 0 0 0 0 0 n.a. n.a. n.a. 0 Coupon securities, by maturity 17 Five years or less 3,813 2,469 4,701 3,640 4,586 4,381 6,014 4,400 2,538 2,167 1,720 1,819 18 More than five years 14,278 12,348 14,980 12,391 15,454 14,282 15,022 17,151 13,485 14,803 11,765 14,028 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 1,725 951 1,197 923 1,978 883 994 1,074 879 989 754 645 27 More than five years 4,992 3,892 4,480 3,647 6,026 4,592 4,868 2,546 4,611 2,935 2,705 3,710 28 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 0 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 779 1,175 1,033 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 June July Aug. Aug. 4 Aug. 11 Aug. 18 Aug. 25 Sept. 1 Sept. 8 Sept. 15 Sept. 22 Positions2 NET OUTRIGHT POSITIONS3 By type of security 3,929 4,005 165 2,580 82 -105 -6,972 7,295 5,816 -1,306 2,541 Coupon securities, by maturity -30,024 -25,332 -31,236 -31,534 -32,317 -33,271 -28,766 -30,286 -33,085 -34,425 -35,223 -15,615 -14,263 -7,689 -11,258 -6,537 -8,053 -6,845 -7,215 -9,493 -15,435 -18,404 2,036 3,202 3,370 3,095 3,328 3,286 3,306 3,774 3,703 3,799 3,940 Federal agency 16,953 21,732 29,448 22,734 25,937 26,270 37,455 32,385 36,636 40,505 40,704 Coupon securities, by maturity 2,518 3,233 4,065 3,867 4,051 3,406 3,795 5,297 4,905 4,771 5,392 7 More than one year, but less than 6,288 7,633 6,923 5,376 5,924 6,975 7,645 8,216 7,354 6,918 6,443 6,450 2,882 1,023 347 331 1,978 996 1,200 1,736 2,877 2,418 14,787 18,844 17,990 13,840 20,397 18,723 18,721 16,238 17,132 20,159 22,066 NET FUTURES POSITIONS4 By type of deliverable security 10 U S. Treasury bills 0 0 0 0 0 0 0 0 n.a. 0 0 Coupon securities, by maturity 8,731 7,576 10,940 12,151 13,851 12,925 8,173 7,650 8,136 8,176 8,247 -827 -4,401 -5,879 -2,218 -3,923 -6,173 -8,300 -7,434 -4,965 2,020 203 0 0 0 0 0 0 0 0 0 0 0 Federal agency 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 0 0 0 0 0 0 0 0 0 0 0 16 More than one year, but less than 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NET OPTIONS POSITIONS By type of deliverable security 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity -2,266 -2,059 -1,661 -1,972 -3,326 -2,192 41 -878 -555 -456 523 -1,000 89 -553 725 1,748 -307 -2,826 -1,725 -2,364 -1,304 -671 0 0 0 n.a. 0 0 0 0 0 0 0 Federal agency 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 0 0 0 0 0 0 0 0 0 0 0 25 More than one year, but less than 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5,880 2,070 3,540 3,716 3,533 2,464 3,586 4,630 2,468 1,443 2,097 Financing5 Reverse repurchase agreements 78 Overnight and continuing 272,933 258,349 273,639 256,246 265,179 284,331 280,908 274,150 276,844 297,141 286,250 29 Term 790,804 821,067 780,367 855,989 905,104 703,068 729,755 733,653 757,629 793,309 821,609 Securities borrowed 30 Overnight and continuing 244,326 254,405 254,149 252,560 250,398 260,815 253,055 253,085 252,062 251,946 253,559 31 Term 91,955 90,588 87,850 91,564 90,094 88,964 86,402 83,148 84,953 91,765 95,900 Securities received as pledge 32 Overnight and continuing n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 33 Term 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Repurchase agreements 34 651,952 675,629 694,296 675,359 686,176 700,660 705,359 696,064 686,295 699,375 697,399 35 Term 674,583 688,157 650,774 721,927 764,896 580,375 604,961 605,775 631,178 674,289 710,400 Securities loaned 36 Overnight and continuing 13,306 11,458 9,885 11,626 9,344 9,109 10,542 9,492 9,022 9,194 8,974 37 Term 5,886 6,991 7,269 7,337 7,461 7,317 7,194 7,031 7,012 6,966 7,453 Securities pledged 38 Overnight and continuing 49,670 55,853 53,526 55,603 52,507 56,013 52,282 51,878 52,453 53,386 55,262 39 Term 9,290 9,530 8,213 9,467 9,294 7,145 7,735 7,920 7,914 8,034 8,153 Collateralized loans 40 Total 14,760 17,509 18,826 19,340 15,807 19,308 19,308 20,879 20,894 21,840 26,460 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 • December 1999 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1999 AAggeennccyy 11999955RR 11999966'' 11999977RR 11999988RR Mar. Apr. May June July 1 Federal and federally sponsored agencies 738,928 844,611 925,823 1,022,609 1,347,872 1,377,524 1,404,576 1,425,396 n.a. 2 Federal agencies 39,186 37,347 29,380 27,792 26,243 26,100 26,094 26,370 26,204 3 Defense Department' 6 6 6 6 6 6 6 6 6 4 Export-Import Bank2'3 3,455 2,050 1,447 552 n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 116 97 84 102 80 84 88 99 105 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. 7 Postal Service6 8,073 5,765 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 27,536 29,429 27,853 27,786 26,237 26,094 26,088 26,364 26,198 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 699,742 807,264 896,443 994,817 1,321,629 1,351,424 1,378,482 1,399,026 n.a. 11 Federal Home Loan Banks 205,817 243,194 263,404 313,919 402,364 415,602 421,655 437,109 444,775 12 Federal Home Loan Mortgage Corporation 93,279 119,961 156,980 169,200 299,196 310,387 317,533 314,412 334,575 13 Federal National Mortgage Association 257,230 299,174 331,270 369,774 475,418 478,994 492,913 499,897 502,653 14 Farm Credit Banks8 53,175 57,379 60,053 63,517 66,529 67,527 66,608 67,749 66,922 15 Student Loan Marketing Association9 50,335 47,529 44,763 37,717 36,762 37,660 38,129 37,959 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 103,817 78,681 58,172 49,090 41,454 41,637 41,131 40,585 39,901 Lending to federal and federally sponsored agencies 2 2 0 1 E Po x s p t o a r l t- S I e m r p v o ic r e t 6 Bank3 3 8 , , 4 0 4 7 9 3 2 5, , 7 0 6 4 5 4 n 1 . , a 4 . 31 n.a. 5 52 T f T f T • T f T 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority 3,200 3,200 n.a. n.a. I 1 1 I 1 24 United States Railway Association6 n.a. n.a. n.a. n.a. t 1 1 I t Other lending14 25 Farmers Home Administration 33,719 21,015 18,325 13,530 8,715 8,550 8,275 7,935 7,445 26 Rural Electrification Administration 17,392 17,144 16,702 14,898 13,980 13,999 13,997 13,877 13,944 27 Other 37,984 29,513 21,714 20,110 18,759 19,088 18,859 18,773 18,512 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 1999 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999966 11999977 11999988 Feb. Mar. Apr. May June July Aug. Sept. 1 All issues, new and refunding1 171,222 214,694 262,342 16,233 24,323 15,758 16,234 23,428 18,671 15,746 18,433 By type of issue 2 General obligation 60,409 69,934 87,015 6,786 8,323 6,443 5,294 10,997 6,206 4,268 5,171 3 Revenue 110,813 134,989 175,327 9,446 16,000 9,315 10,941 12,431 12,465 11,478 13,262 By type of issuer 4 State 13,651 18,237 23,506 1,837 1,895 907 1,220 1,236 2,194 911 2,341 5 Special district or statutory authority2 113,228 134,919 178,421 11,145 14,604 10,010 11,279 18,414 13,572 11,578 13,449 6 Municipality, county, or township 44,343 70,558 60,173 3,251 7,825 4,841 3,735 3,779 2,906 3,257 2,642 7 Issues for new capital 112,298 135,519 160,568 10,674 16,201 10,474 12,149 19,509 12,172 12,530 14,973 By use of proceeds 8 Education 26,851 31,860 36,904 3,751 3,537 2,734 2,795 3,793 3,415 2,842 2,885 9 Transportation 12,324 13,951 19,926 628 1,640 1,107 1,791 1,650 1,264 1,955 1,886 10 Utilities and conservation 9,791 12,219 21,037 394 2,839 1,372 603 1,594 535 1,038 1,976 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 8,594 343 1,084 618 1,058 739 850 585 1,271 13 Other purposes 32,462 35,095 42,450 3,207 3,918 2,592 3,760 7,195 2,729 3,255 3,941 1. Par amounts of long-term issues based on date of sale. SOURCE. Securities Data Company beginning January 1990; Investment Dealer's 2. Includes school districts. Digest before then. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 1999 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999966 11999977 11999988 oorr iissssuueerr Jan. Feb. Mar. Apr. May June Julyr Aug. 1 All issues1 773,110 929,256 1,128,491 93,665 103,175 126,161 85,862 110,475 96,608 96,608 83,466 2 Bonds2 651,104 811,376 1,001,736 86,529 92,885 116,440 76,721 94,713 88,338 83,546 75,708 By type of offering 3 Sold in the United States 567,671 708,188 923,771 76,511 82,871 101,024 65,886 86,730 79,031 69,451 63,383 4 Sold abroad 83,433 103,188 77,965 10,018 10,014 15,416 10,834 7,983 9,306 14,095 12,325 MEMO 5 Private placements, domestic 43,688 54,990 37,845 684 648 1,224 n.a. n.a. n.a. n.a. n.a. By industry group 6 Nonfinancial 167,904 222,603 307,935 21,193 23,131 39,818 30,676 32,843 24,531 25,526 22,704 7 Financial 483,200 588,773 693,801 65,336 69,754 76,623 46,045 61,870 63,807 58,020 53,005 8 Stocks3 122,006 117,880 126,755 7,136 10,290 9,721 9,141 15,762 8,270 13,062 7,758 By type of offering 9 Public 122,006 117,880 126,755 7,136 10,290 9,721 9,141 15,762 8,270 13,062 7,758 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 3,701 8,911 8,534 7,640 10,425 6,436 11,589 6,379 12 Financial 41,546 57,494 52,642 3,435 1,379 1,187 1,501 5,337 1,834 1,473 1,379 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 DomesticN onfinancial Statistics • December 1999 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1999 IItteemm 11999977 11999988 Feb. Mar. Apr. May June July Aug.r Sept. 1 Sales of own shares2 1,190,900 1,461,430 132,199 164,290 166,324 140,422 138,502 140,926 132,991 133,399 2 Redemptions of own shares 918,728 1,217,022 128,125 146,479 139,035 127,800 117,953 128,173 125,908 129,128 3 Net sales3 272,172 244,408 4,074 17,811 27,288 12,622 20,550 12,754 7,084 4,272 4 Assets4 3,409,315 4,173,531 4,180,115 4,328,150 4,505,237 4,442,880 4,650,385 4,585,131 4,548,784 4,499,681 5 Cash5 174,154 191,393 198,134 198,741 211,243 211,580 214,779 209,061 209,349 209,907 6 Other 3,235,161 3,982,138 3,981,982 4,129,409 4,293,994 4,231,300 4,435,607 4,376,070 4,339,435 4,289,774 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 Q3 Q4 Q1 Q2 Q3 Q4 QL Q2R 1 Profits with inventory valuation and capital consumption adjustment 750.4 817.9 824.6 840.9 820.8 829.2 820.6 827.0 821.7 868.8 859.3 2 Profits before taxes 680.2 734.4 717.8 758.9 736.4 719.1 723.5 720.5 708.1 752.6 768.0 3 Profits-tax liability 226.1 246.1 240.1 254.2 249.3 239.9 241.6 243.2 235.6 250.7 257.0 4 Profits after taxes 454.1 488.3 477.7 504.7 487.1 479.2 481.8 477.3 472.5 501.9 511.0 5 Dividends 261.9 275.1 279.2 275.1 276.4 277.3 278.1 279.0 282.3 285.6 289.7 6 Undistributed profits 192.3 213.2 198.5 229.5 210.6 201.8 203.7 198.3 190.2 216.4 221.3 7 Inventory valuation -1.2 6.9 14.5 4.8 4.3 25.3 7.8 11.7 13.4 11.6 -17.4 8 Capital consumption adjustment 71.4 76.6 92.3 77.2 80.1 84.9 89.4 94.8 100.2 104.6 108.7 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 11999988 Q4 Ql Q2 Q3 Q4 Ql Q2 ASSETS 1 Accounts receivable, gross2 637.1 663.3 711.7 663.3 667.2 676.0 687.6 711.7 733.8 756.5 2 Consumer 244.9 256.8 261.8 256.8 251.7 251.3 254.0 261.8 261.7 269.2 3 Business 309.5 318.5 347.5 318.5 325.9 334.9 335.1 347.5 362.8 373.7 4 Real estate 82.7 87.9 102.3 87.9 89.6 89.9 98.5 102.3 109.2 113.5 5 LESS: Reserves for unearned income 55.6 52.7 56.3 52.7 52.1 53.2 52.4 56.3 52.9 53.4 6 Reserves for losses 13.1 13.0 13.8 13.0 13.1 13.2 13.2 13.8 13.4 13.4 7 Accounts receivable, net 568.3 597.6 641.6 597.6 601.9 609.6 622.0 641.6 667.6 689.7 8 All other 290.0 312.4 337.9 312.4 329.7 340.1 313.7 337.9 363.3 373.2 9 Total assets 858.3 910.0 979.5 910.0 931.6 949.7 935.7 979.5 1,030.8 1,062.9 LIABILITIES AND CAPITAL 10 Bank loans 19.7 24.1 26.3 24.1 22.0 22.3 24.9 26.3 24.8 25.1 11 Commercial paper 177.6 201.5 231.5 201.5 211.7 225.9 226.9 231.5 222.9 231.0 Debt 12 Owed to parent 60.3 64.7 61.8 64.7 64.6 60.0 58.3 61.8 64.6 65.4 13 Not elsewhere classified 332.5 328.8 339.7 328.8 338.2 348.7 337.6 339.7 366.7 383.1 14 All other liabilities 174.7 189.6 203.2 189.6 193.1 188.9 185.4 203.2 220.3 226.1 15 Capital, surplus, and undivided profits 93.5 101.3 117.0 101.3 102.1 103.9 103.6 117.0 131.5 132.2 16 Total liabilities and capital 858.3 910.0 979.5 910.0 931.6 949.7 936.6 979.5 1,030.8 1,062.9 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 1999 TTyyppee ooff ccrreeddiitt 11999966 11999977 11999988 Mar. Apr. May June July Aug. Seasonally adjusted 1 Total 762.4r 810.5r 875.8r 909.8 919.5 931.9 938.1 954.7r 967.9 2 Consumer 307.6r 327.9r 352.8r 363.2 364.2 369.5 372.4 375.9 381.4 3 Real estate 111.9 121.1 131.4 137.5 141.2 142.8 141.2 144.2 146.7 4 Business 342.9r 361.5r 391.6r 409.1 414.2 419.5 424.5 434.6r 439.9 Not seasonally adjusted 5 Total 769.7 818.1 884.0 911.9 919.4 931.6 942.9 948.9r 962.7 6 Consumer 310.6 330.9 356.1 359.7 360.9 368.3 374.6 378.1 382.5 7 Motor vehicles loans 86.7 87.0 103.1 104.7 106.8 105.1 108.6 108.5 112.7 8 Motor vehicle leases 92.5 96.8 93.3 93.9 94.8 95.3 95.6 97.0 98.3 9 Revolving2 32.5 38.6 32.3 31.2 31.3 31.3 32.4 32.8 33.0 10 Other3 33.2 34.4 33.1 32.0 32.0 32.0 32.6 32.0 32.1 Securitized assets4 11 Motor vehicle loans 36.8 44.3 54.8 59.0 57.8 65.8 65.3 68.3 68.0 12 Motor vehicle leases 8.7 10.8 12.7 12.0 11.8 11.6 11.3 11.1 10.8 13 Revolving .0 .0 8.7 9.1 8.8 8.7 9.7 9.9r 9.4 14 Other 20.1 19.0 18.1 17.8 17.6 18.3 19.0 18.4r 18.1 15 Real estate 111.9 121.1 131.4 137.5 141.2 142.8 141.2 144.2 146.7 16 One- to four-family 52.1 59.0 75.7 77.7 81.7 83.6 80.5 83.6 86.0 17 Other 30.5 28.9 26.6 31.6 31.6 31.5 33.0 33.1 33.7 Securitized real estate assets4 18 One- to four-family 28.9 33.0 29.0 28.0 27.6 27.4 27.5 27.2 26.8 19 Other .4 .2 .1 .3 .3 .3 .2 .2 .2 20 Business 347.2 366.1 396.5 414.8 417.4 420.5 427.1 426.7r 433.5 21 Motor vehicles 67.1 63.5 79.6 84.8 86.2 84.4 82.8 78.8 78.6 22 Retail loans 25.1 25.6 28.1 30.0 30.7 31.6 30.9 31.7 33.3 23 Wholesale loans5 33.0 27.7 32.8 36.0 36.5 33.8 32.7 27.9 26.8 24 Leases 9.0 10.2 18.7 18.8 18.9 19.0 19.2 19.3 18.5 25 Equipment 194.8 203.9 198.0 202.3 203.1 203.8 208.3 208.5r 210.5 26 Loans 59.9 51.5 50.4 51.6 52.0 51.7 53.3 52.9 53.1 27 Leases 134.9 152.3 147.6 150.7 151.0 152.1 155.1 155.6r 157.4 28 Other business receivables6 47.6 51.1 69.9 75.7 76.9 78.9 82.6 89.2 92.7 Securitized assets4 29 Motor vehicles 24.0 33.0 29.2 31.0 30.5 32.0 32.1 28.4 30.4 30 Retail loans 2.7 2.4 2.6 2.4 2.4 2.2 2.9 2.8 2.7 31 Wholesale loans 21.3 30.5 24.7 26.6 26.2 27.8 27.2 23.5 25.7 32 Leases .0 .0 1.9 1.9 1.9 1.9 2.0 2.0 2.0 33 Equipment 11.3 10.7 13.0 12.8 12.5 13.2 13.3 13.8 13.5 34 Loans 4.7 4.2 6.6 6.1 5.8 6.5 6.7 7.1 6.9 35 Leases 6.6 6.5 6.4 6.7 6.6 6.6 6.6 6.7 6.6 36 Other business receivables6 2.4 4.0 6.8 8.2 8.3 8.3 8.0 7.9 7.8 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 • December 1999 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1999 IItteemm 11999966 11999977 11999988 Mar. Apr. May June July Aug. Sept. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 182.4 180.1 195.2 211.0 209.4 207.5 211.0 207.6 213.8 210.3 2 Amount of loan (thousands of dollars) 139.2 140.3 151.1 162.9 162.4 161.6 162.0 158.2 163.1 161.8 3 Loan-to-price ratio (percent) 78.2 80.4 80.0 79.4 79.5 79.8 79.0 78.6 78.3 78.8 4 Maturity (years) 27.2 28.2 28.4 28.8 28.9 28.7 28.6 28.5 28.5 29.1 5 Fees and charges (percent of loan amount)2 1.21 1.02 .89 .82 .77 .69 .72 .83 .68 .64 Yield (percent per year) 6 Contract rate1 7.56 7.57 6.95 6.74 6.74 6.78 6.92 7.16 6.99 6.99 7 Effective rate1'3 7.77 7.73 7.08 6.86 6.85 6.89 7.03 7.29 7.09 7.09 8 Contract rate (HUD series)4 8.03 7.76 7.00 7.03 6.93 7.17 7.59 7.75 7.87 7.76 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.19 7.89 7.04 7.07 7.08 7.58 8.13 8.00 8.10 8.05 10 GNMA securities6 7.48 7.26 6.43 6.58 6.50 6.79 7.21 7.28 7.53 7.42 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 287,052 316,678 414,515 440,139 446,025 464,530 473,315 480,651 495,302 504,938 12 FHA/VA insured 30,592 31,925 33,770 34,870 36,158 38,938 41,143 44,132 47,846 49,456 13 Conventional 256,460 284,753 380,745 405,269 409,867 425,592 432,172 436,519 447,456 455,482 14 Mortgage transactions purchased (during period) 68,618 70,465 188,448 16,923 14,225 25,640 15,934 14,004 21,094 15,200 Mortgage commitments (during period) 15 Issued7 65,859 69,965 193,795 16,891 20,192 12,517 19,507 12,966 18,153 7,998 16 To sell8 130 1,298 1,880 266 75 178 351 260 478 609 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 137,755 164,421 255,010 277,624 284,006 285,881 299,184 300,093 306,214 315,968 18 FHA/VA insured 220 177 785 754 1,613 1,610 1,726 1,735 1,708 1,708 19 Conventional 137,535 164,244 254,225 276,870 282,393 284,271 297,458 298,358 304,506 314,260 Mortgage transactions (during period) 20 Purchases 125,103 117,401 267,402 29,921 26,473 22,503 21,950 17,602 18,674 15,238 21 Sales 119,702 114,258 250,565 28,740 25,464 21,972 20,349 16,835 17,468 14,153 22 Mortgage commitments contracted (during period)9 128,995 120,089 281,899 32,546 24,050 20,052 21,610 14,988 18,951 14,608 1. Weighted averages based on sample surveys of mortgages originated by major institu- 6. Average net yields to investors on fully modified pass-through securities backed by tional lender groups for purchase of newly built homes; compiled by the Federal Housing mortgages and guaranteed by the Government National Mortgage Association (GNMA), Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mortgages; from U.S. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Department of Housing and Urban Development (HUD). Based on transactions on the first Mortgage Corporation's mortgage commitments and mortgage transactions include activity day of the subsequent month. under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured exclude swap activity. by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A35 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1998 1999 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999955 11999966 11999977 Q2 Q3 Q4 Ql Q2P 1 All holders 4,603,384 4,898,661 5,212,073 5,434,008 5,568,417 5,722,421 5,861,070 6,013,592 By type of property 2 One- to four-family residences 3,509.721 3,719,010 3,954,854 4,117,231 4,217,417 4,322,453 4,414,500 4,527,176 3 Multifamily residences 277,002 294,783 310,456 323,324 330,595 340,782 351,652 359,796 4 Nonfarm, nonresidential 732,100 797,734 856,464 900,453 926,039 962,680 997,514 1,026,903 5 Farm 84,561 87,134 90,299 93,001 94,367 96,506 97,403 99,717 By type of holder 6 Major financial institutions 1,900,089 1,981,885 2,083,978 2,121,961 2,137,438 2,195,376 2,202,494 2,243,008 7 Commercial banks2 1,090,189 1,145,389 1,245,315 1,281,870 1,295,828 1,337,772 1,337,218 1,361,947 8 One- to four-family 646,545 677,603 745,510 770,116 770,340 797,533 782,441 790,465 9 Multifamily 42,521 45,451 49,670 51,227 52,205 52,871 56,170 58,572 10 Nonfarm, nonresidential 377,293 397,452 423,148 432,208 444,596 458,333 469,095 482,367 11 Farm 23,830 24,883 26,986 28,319 28,688 29,035 29,512 30,544 12 Savings institutions3 596,763 628,335 631,822 632,359 634,251 643,964 646,213 656,383 n One- to four-family 482,353 513,712 520,672 522,088 525,844 533,792 534,494 544,659 14 Multifamily 61,987 61,570 59,543 58,908 56,696 56,825 56,763 55,002 15 Nonfarm, nonresidential 52,135 52,723 51,252 50,978 51,312 52,930 54,521 56,279 16 Farm 288 331 354 386 399 417 435 444 17 Life insurance companies 213,137 208,161 206,841 207,732 207,359 213,640 219,063 224,677 18 One- to four-family 8,890 6,977 7,187 6,814 6,594 6,590 6,956 7,285 19 Multifamily 28,714 30,750 30,402 30,618 30,565 31,522 31,528 32,321 20 Nonfarm, nonresidential 165,876 160,314 158,780 159,456 159,189 164,004 168,862 173,106 21 Farm 9,657 10,120 10,472 10,844 11,011 11,524 11,717 11,965 22 Federal and related agencies 308,757 295,192 286,167 287,161 287,125 292,636 288,313 288,235 23 Government National Mortgage Association 2 2 8 8 7 7 6 8 24 One- to four-family 2 2 8 8 7 7 6 8 25 Multifamily 0 0 0 0 0 0 0 0 26 Fanners Home Administration4 41,791 41,596 41,195 40,921 40,907 40,851 40,691 40,691 27 One- to four-family 17,705 17,303 17,253 17,059 17,025 16,895 16,777 16,777 28 Multifamily 11,617 11,685 11,720 11,722 11,736 11,739 11,731 11,731 29 Nonfarm, nonresidential 6,248 6,841 7,370 7,497 7,566 7,705 7,769 7,769 30 Farm 6,221 5,768 4,852 4,644 4,579 4,513 4,413 4,413 31 Federal Housing and Veterans' Administrations 9,809 6,244 3,821 3,631 3,405 3,674 3,675 3,684 32 One- to four-family 5,180 3,524 1,767 1,610 1,550 1,849 1,850 1,818 33 Multifamily 4,629 2,719 2,054 2,021 1,855 1,825 1,825 1,867 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 2,431 724 564 482 361 315 189 40 One- to four-family 492 365 109 85 72 54 47 28 41 Multifamily 428 413 123 96 82 61 54 32 42 Nonfarm, nonresidential 3,383 1,653 492 384 328 245 214 129 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 178,807 168,813 161,308 159,816 159,104 157,675 157,185 155,637 45 One- to four-family 163,648 155,008 149,831 149,383 149,069 147,594 147,063 145,033 46 Multifamily 15,159 13,805 11,477 10,433 10,035 10,081 10,122 10,604 47 Federal Land Banks 28,428 29,602 30,657 31,352 32,009 32,983 33,128 33,744 48 One- to four-family 1,673 1,742 1,804 1,845 1,883 1,941 1,949 1,985 49 Farm 26,755 27,860 28,853 29,507 30,126 31,042 31,179 31,758 50 Federal Home Loan Mortgage Corporation 43,753 46,504 48,454 50,869 51,211 57,085 53,313 54,282 51 One- to four-family 39,901 41,758 42,629 44,597 44,254 49,106 44,140 43,574 52 Multifamily 3,852 4,746 5,825 6,272 6,957 7,979 9,173 10,708 53 Mortgage pools or trusts5 1,863,210 2,064,882 2,273,022 2,442,715 2,548,301 2,632,839 2,762,770 2,861,430 54 Government National Mortgage Association 472,283 506,340 536,879 537,743 541,540 537,446 543,306 553,316 55 One- to four-family 461,438 494,158 523,225 523,400 527,043 522,498 527,912 537,407 56 Multifamily 10,845 12,182 13,654 14,343 14,497 14,948 15,395 15,909 57 Federal Home Loan Mortgage Corporation 515,051 554,260 579,385 609,791 635,726 646,459 687,179 718,085 58 One- to four-family 512,238 551,513 576,846 607,469 633,124 643,465 684,240 714,844 59 Multifamily 2,813 2,747 2,539 2,322 2,602 2,994 2,939 3,241 60 Federal National Mortgage Association 582,959 650,780 709,582 761,359 798,460 834,518 881,815 911,435 61 One- to four-family 569,724 ' 633,210 687,981 737,631 770,979 804,205 849,513 877,863 62 Multifamily 13,235 17,570 21,601 23,728 27,481 30,313 32,302 33,572 63 Farmers Home Administration4 11 3 2 2 2 1 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 1 1 1 68 Private mortgage conduits 292,906 353,499 447,173 533,820 572,573 614,416 650,469 678,594 69 One- to four-family6 227,800 261,900 318,000 364,316 391,736 410,900 430,653 447,938 70 Multifamily 15,584 21,967 29,218 38,098 40,895 44,654 48,403 50,713 71 Nonfarm, nonresidential 49,522 69,633 99,955 131,406 139,942 158,862 171,413 179,942 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 531,329 556,702 568,907 582,171 595,552 601,570 607,493 620,919 74 One- to four-family 371,440 360,235 362,033 370,811 377,896 386,025 386,458 397,491 75 Multifamily 64,970 69,179 72,629 73,536 74,987 74,971 75,249 75,524 76 Nonfarm, nonresidential 77,112 109,119 115,467 118,525 123,107 120,600 125,640 127,312 11 Farm 17,806 18,169 18,779 19,299 19,562 19,974 20,147 20,592 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 • December 1999 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1999 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999966 11999977 11999988 Mar. Apr. May June' July' Aug. Seasonally adjusted 1 Total 1,182,439 1,234,122 1,300,491 1,332,798r l,332,662r l,343,427r 1,347,831 1,356,696 1,367,498 2 Revolving 499,532 531,295 560,653 567,116r 569,860' 571,957' 578,530 584,362 588,681 3 Nonrevolving2 682,907 702,828 739,838 765,682' 762,801' 771,470' 769,301 772,334 778,816 Not seasonally adjusted 4 Total 1,211,590 1,264,103 1,331,742 1,319,263r l,322,021r l,331,267r 1,340,414 1,349,886 1,368,691 By major holder 5 Commercial banks 526,769 512,563 508,932 494,039 494,663 492,852 477,774 477,977 482,683 6 Finance companies 152,391 160,022 168,491 167,815 170,145 168,490 173,617 173,374 177,863 7 Credit unions 144,148 152,362 155,406 155,766' 156,797' 158,102' 158,177 159,920 162,509 8 Savings institutions 44,711 47,172 51,611 53,623 54,803 55,982 57,161 58,340 59,519 9 Nonfinancial business 77,745 78,927 74,877 67,134' 67,112' 68,051' 68,042 68,228 69,040 10 Pools of securitized assets3 265,826 313,057 372,425 380,886 378,501 387,790 405,643 412,047 417,077 By major type of credit 11 Revolving 522,860 555,858 586,528 561,377' 563,907' 566,019' 572,463 576,538 584,822 12 Commercial banks 228,615 219,826 210,346 190,028 191,295 190,216 178,031 177,098 178,702 13 Finance companies 32,493 38,608 32,309 31,197 31,327 31,296 32,408 32,846 33,031 14 Credit unions 17,826 19,552 19,930 18,729' 18,823' 18,732' 18,856 19,054 19,312 15 Savings institutions 10,313 11,441 12,450 12,373 12,507 12,641 12,775 12,909 13,043 16 Nonfinancial business 44,901 44,966 39,166 33,754 33,726 34,446 34,618 34,794 35,379 17 Pools of securitized assets3 188,712 221,465 272,327 275,296 276,229 278,688 295,775 299,837 305,355 18 Nonrevolving credit 688,730 708,245 745,214 757,886' 758,114' 765,248' 767,951 773,348 783,869 19 Commercial banks 298.154 292,737 298,586 304,011 303,368 302,636 299,743 300,879 303,981 20 Finance companies 119.898 121,414 136,182 136,618 138,818 137,194 141,209 140,528 144,832 21 Credit unions 126,322 132,810 135,476 137,037' 137,974' 139,370' 139,321 140,866 143,197 22 Savings institutions 34.398 35,731 39,161 41,250 42,296 43,341 44,386 45,431 46,476 23 Nonfinancial business 32.844 33,961 35,711 33,380' 33,386' 33,605' 33,424 33,434 33,661 24 Pools of securitized assets3 77,114 91,592 100,098 105,590 102,272 109,102 109,868 112,210 111,722 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 1999 IItteemm 11999966 11999977 11999988 Feb. Mar. Apr. May June July Aug. INTEREST RATES Commercial banks2 1 48-month new car 9.05 9.02 8.72 8,34 n.a. n.a. 8.30 n.a. n.a. 8.44 2 24-month personal 13.54 13.90 13.74 13.41 n.a. n.a. 13.26 n.a. n.a. 13.38 Credit card plan 3 All accounts 15.63 15.77 15.71 15.41 n.a. n.a. 15.21 n.a. n.a. 15.08 4 Accounts assessed interest 15.50 15.57 15.59 14.73 n.a. n.a. 14.94 n.a. n.a. 14.79 Auto finance companies 5 New car 9.84 7.12 6.30 6.43 6.31 6.52 6.57 6.60 6.70 6.28 6 Used car 13.53 13.27 12.64 12.08 12.09 12.17 12.16 12.31 12.69 12.96 OTHER TERMS3 Maturity (months) 7 New car 51.6 54.1 52.1 53.4 53.0 52.8 52.4 52.3 52.0 51.7 8 Used car 51.4 51.0 53.5 55.9 56.0 56.0 56.1 56.0 56.1 55.8 Loan-to-value ratio 9 New car 91 92 92 92 91 92 92 92 92 92 10 Used car 100 99 99 99 99 99 99 99 100 100 Amount financed (dollars) 11 New car 16,987 18,077 19,083 19,304 19,339 19,435 19,539 19,722 19,874 20,012 12 Used car 12,182 12,281 12,691 13,604 13,653 13,647 13,700 13,816 13,604 13,374 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999933 11999944 11999955 11999966 11999977 Q4 Q1 Q2 Q3 Q4 Ql Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors ... 584.4 575.8 720.4 743.0 785.3 912.0 1,075.5 1,042.4 899.2 1,072.8 1,248.1 865.6 By sector and instrument 7 Federal government 256.1 155.8 144.4 145.0 23.1 -5.5 -14.5 -28.4 -113.5 -54.1 -75.2 -112.2 3 Treasury securities 248.3 155.7 142.9 146.6 23.2 -7.3 -12.1 -26.9 -113.1 -66.3 -73.7 -112.8 4 Budget agency securities and mortgages 7.8 .2 1.5 -1.6 -.1 1.7 -2.4 -1.4 -.4 12.2 -1.5 .6 5 Nonfederal 328.3 420.0 576.0 598.0 762.2 917.5 1,090.0 1,070.8 1,012.6 1,127.0 1,323.3 977.8 By instrument 6 Commercial paper 10.0 21.4 18.1 -.9 13.7 12.8 51.1 3.8 85.6 -43.0 64.4 3.4 7 Municipal securities and loans 74.8 -35.9 -48.2 2.6 71.4 99.9 113.5 101.3 82.9 89.6 100.7 48.0 8 Corporate bonds 75.2 23.3 91.1 116.3 150.5 163.6 278.8 294.8 108.0 193.2 274.0 260.8 9 Bank loans n.e.c 6.4 75.2 103.7 70.5 106.5 178.1 35.0 169.2 107.8 120.9 70.0 21.8 10 Other loans and advances -18.9 34.0 67.2 33.5 69.1 141.4 76.3 40.8 77.7 102.5 114.1 -5.3 11 Mortgages 122.4 177.0 205.1 287.4 298.4 278.6 476.4 398.9 471.1 593.8 573.4 595.7 1? Home 160.1 183.4 179.8 243.0 235.8 188.8 376.5 287.3 373.7 427.8 414.6 424.2 n Multifamily residential -5.1 -2.1 7.6 11.5 10.8 18.3 21.6 21.1 16.1 30.6 35.9 36.8 14 Commercial -33.6 -6.5 16.2 30.4 48.7 68.6 74.1 83.8 75.9 126.8 119.3 125.4 15 Farm 1.0 2.2 1.6 2.6 3.2 2.9 4.1 6.7 5.5 8.6 3.6 9.3 16 Consumer credit 58.4 124.9 138.9 88.8 52.5 43.1 58.9 62.1 79.6 69.9 126.6 53.2 By borrowing sector 17 Household 209.4 316.3 350.3 351.7 325.5 311.1 463.3 418.5 471.9 552277..33 553.3 551111..00 18 Nonfinancial business 52.7 150.0 277.2 253.2 380.6 520.3 532.5 570.3 470.7 524.6 682.6 431.1 19 Corporate 46.9 142.3 243.7 164.6 297.0 425.0 426.9 467.4 365.8 413.7 574.4 320.6 20 Nonfarm noncorporate 3.2 3.3 30.6 83.8 77.4 86.6 97.1 95.4 97.6 103.3 101.6 111.2 21 Farm 2.6 4.4 2.9 4.8 6.2 8.6 8.4 7.5 7.3 7.5 6.6 -.7 22 State and local government 66.2 -46.2 -51.5 -6.8 56.1 86.2 94.2 82.0 70.0 75.1 87.4 35.7 23 Foreign net borrowing in United States 69.8 -13.9 71.1 77.2 57.6 44.8 95.0 97.9 -19.6 -38.9 17.3 -43.3 74 Commercial paper -9.6 -26.1 13.5 11.3 3.7 .7 55.3 -25.5 6.2 -4.7 18.3 -27.1 ?5 Bonds 82.9 12.2 49.7 55.8 47.2 34.2 42.5 119.2 -27.2 -34.2 .9 -19.1 26 Bank loans n.e.c .7 1.4 8.5 9.1 8.5 15.7 5.2 8.4 3.6 9.8 .9 5.7 27 Other loans and advances -4.2 -1.4 -.5 1.0 -1.8 -5.8 -8.0 -4.2 -2.2 -9.7 -2.8 -2.7 28 Total domestic plus foreign 654.2 561.9 791.5 820.3 842.9 956.8 1,170.4 1,140.3 879.5 1,034.0 1,265.4 822.4 Financial sectors 29 Total net borrowing by financial sectors 294.4 468.4 453.9 548.9 652.2 961.5 931.3 988.9 1,056.3 1,298.7 1,216.0 1,014.1 By instrument 30 Federal government-related 165.3 287.5 204.1 231.5 212.8 290.9 249.2 405.4 555.8 673.3 592.3 579.3 31 Government-sponsored enterprise securities 80.6 176.9 105.9 90.4 98.4 157.9 142.5 166.4 294.0 510.5 193.0 304.7 32 Mortgage pool securities 84.7 115.4 98.2 141.1 114.5 133.0 106.7 239.0 261.7 162.8 399.3 274.6 33 Loans from U.S. government .0 -4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 129.1 180.9 249.8 317.5 439.4 670.7 682.1 583.5 500.5 625.4 623.7 434.8 35 Open market paper -5.5 40.5 42.7 92.2 166.7 244.7 236.7 135.6 141.0 130.7 78.3 57.8 36 Corporate bonds 123.1 121.8 195.9 176.9 209.0 348.8 346.3 361.8 177.4 281.9 492.5 260.8 37 Bank loans n.e.c -14.4 -13.7 2.5 12.6 13.2 -4.7 57.3 -9.7 60.2 12.4 -8.8 10.5 38 Other loans and advances 22.4 22.6 3.4 27.9 35.6 61.7 32.7 76.0 82.3 169.9 41.6 117.9 39 Mortgages 3.6 9.8 5.3 7.9 14.9 20.1 9.1 19.9 39.6 30.6 20.1 -12.3 By borrowing sector 40 Commercial banking 13.4 20.1 22.5 13.0 46.1 61.4 82.8 80.8 61.7 6666..33 3311..11 6611..66 41 Savings institutions 11.3 12.8 2.6 25.5 19.7 41.7 10.6 31.2 63.7 103.2 58.0 58.6 47 Credit unions .2 .2 -.1 .1 .1 .3 .5 .2 1.0 .4 1.5 1.4 43 Life insurance companies .2 .3 -.1 1.1 .2 -.3 .0 -.6 1.6 1.8 3.3 3.0 44 Government-sponsored enterprises 80.6 172.1 105.9 90.4 98.4 157.9 142.5 166.4 294.0 510.5 193.0 304.7 45 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.5 133.0 106.7 239.0 261.7 162.8 399.3 274.6 46 Issuers of asset-backed securities (ABSs) 85.4 76.5 142.4 153.9 200.7 374.8 283.0 352.4 294.2 335.7 302.2 318.3 47 Finance companies -1.4 48.7 50.2 45.9 48.7 70.7 74.6 91.9 -12.0 17.8 71.2 88.4 48 Mortgage companies .0 -11.5 -2.2 4.1 -4.6 -46.8 29.4 -28.2 2.3 3.0 -4.6 5.1 49 Real estate investment trusts (REITs) 1.7 10.2 4.5 11.9 39.6 66.0 63.1 64.4 79.3 44.0 25.6 -19.7 50 Brokers and dealers 12.0 .5 -5.0 -2.0 8.1 7.0 -1.0 20.0 -2.6 12.4 -31.1 -18.3 51 Funding corporations 6.3 23.1 34.9 64.1 80.7 95.9 139.2 -28.6 11.2 40.9 166.5 -63.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • December 1999 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999933 11999944 11999955 11999966 11999977 Q4 Q1 Q2 Q3 Q4 Q1 Q2 All sectors 52 Total net borrowing, all sectors 948.6 1,030.3 1,245.4 1,369.2 1,495.1 1,918.3 2,101.7 2,129.3 1,935.8 2,332.7 2,481.3 1,836.4 53 Open market paper -5.1 35.7 74.3 102.6 184.1 258.2 343.0 113.8 232.7 83.0 161.1 34.1 54 U.S. government securities 421.4 448.1 348.5 376.5 235.9 285.3 234.7 377.1 442.3 619.1 517.1 467.1 55 Municipal securities 74.8 -35.9 -48.2 2.6 71.4 99.9 113.5 101.3 82.9 89.6 100.7 48.0 56 Corporate and foreign bonds 281.2 157.3 336.7 348.9 406.7 546.5 667.6 775.8 258.2 440.9 767.4 502.5 57 Bank loans n.e.c -7.2 62.9 114.7 92.1 128.2 189.2 97.6 167.9 171.6 143.0 62.1 38.0 58 Other loans and advances -.8 50.4 70.1 62.5 102.8 197.4 101.0 112.5 157.8 262.7 152.9 110.0 59 Mortgages 126.0 186.8 210.5 295.3 313.3 298.7 485.5 418.7 510.7 624.4 593.5 583.5 60 Consumer credit 58.4 124.9 138.9 88.8 52.5 43.1 58.9 62.1 79.6 69.9 126.6 53.2 Funds raised through mutual funds and corporate equities 61 Total net issues 429.7 125.2 144.3 228.9 188.4 160.9 213.5 268.5 -147.2 18.3 140.6 6.4 62 Corporate equities 137.7 24.6 -3.1 -8.6 -76.7 -100.0 -108.8 -109.3 -320.6 -206.5 -114.7 -241.5 63 Nonfinancial corporations 21.3 -44.9 -58.3 -69.5 -114.4 -143.3 -139.2 -129.1 -308.4 -491.3 -65.7 -354.0 64 Foreign shares purchased by U.S. residents 63.4 48.1 50.4 60.0 42.0 1.7 14.0 12.3 -32.8 317.4 -33.4 124.7 65 Financial corporations 53.0 21.4 4.8 .8 -4.3 41.6 16.4 7.5 20.5 -32.7 -15.6 -12.2 66 Mutual fund shares 292.0 100.6 147.4 237.6 265.1 260.9 322.3 377.8 173.4 224.8 255.3 247.9 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999933 11999944 11999955 11999966 11999977 Q4 Ql Q2 Q3 Q4 Ql Q2 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 948.6 1,030.3 1,245.4 1,369.2 1,495.1 1,918.3 2,101.7 2,129.3 1,935.8 2,332.7 2,481.3 1,836.4 7. Domestic nonfederal nonfinancial sectors 30.0 231.2 -90.0 22.5 -88.9 48.1 -49.7 512.7 94.9 -318.3 307.5 347.9 -10.6 268.0 5.5 61.4 -86.2 7.5 -64.2 385.2 -44.8 -424.1 244.9 255.1 4 Nonfinancial corporate business 9.1 17.7 -8.8 -.8 -2.3 -13.0 8.4 -46.9 14.0 14.1 10.4 39.5 Nonfarm noncorporate business -1.1 .6 4.7 -4.3 -.6 -.6 .0 .0 .0 .0 .0 .0 6 State and local governments 32.6 -55.0 -91.4 -33.7 .1 54.2 6.1 174.3 125.7 91.7 52.2 53.3 7 Federal government -18.4 -27.4 -.2 -7.4 5.1 9.2 15.7 12.9 13.8 11.7 17.5 6.5 8 129.3 132.3 273.9 414.4 310.7 203.9 223.8 321.8 60.8 390.7 213.3 51.6 9 807.8 694.1 1,061.7 939.7 1,268.1 1,657.1 1,912.0 1,281.9 1,766.3 2,248.6 1,943.0 1,430.5 10 Monetary authority 36.2 31.5 12.7 12.3 38.3 54.3 27.6 11.5 41.6 3.5 71.8 62.4 II Commercial banking 142.2 163.4 265.9 187.5 324.3 447.4 306.7 132.7 250.1 531.5 68.9 135.0 17 U.S.-chartered banks 149.6 148.1 186.5 119.6 274.9 357.6 268.4 130.0 309.2 540.2 134.1 231.5 N Foreign banking offices in United States -9.8 11.2 75.4 63.3 40.2 69.3 17.5 15.2 -68.1 -12.1 -54.9 -105.8 14 Bank holding companies .0 .9 -.3 3.9 5.4 19.4 15.3 -17.6 6.0 -7.4 -6.0 ..11 IS Banks in U.S.-affiliated areas 2.4 3.3 4.2 .7 3.7 1.1 5.5 5.1 2.9 10.7 -4.4 99..22 16 Savings institutions -23.3 6.7 -7.6 19.9 -4.7 8.9 11.8 2.1 17.9 113.3 102.7 8888..88 17 Credit unions 21.7 28.1 16.2 25.5 16.8 6.5 16.1 22.7 21.0 16.0 37.7 3344..77 18 Bank personal trusts and estates 9.5 7.1 -8.3 -7.7 7.6 8.8 2.4 3.1 2.0 3.9 3.1 2.2 19 Life insurance companies 100.4 72.0 100.0 69.6 94.3 34.1 92.1 63.4 65.6 86.0 72.6 89.0 ?N Other insurance companies 27.7 24.9 21.5 22.5 25.2 34.7 23.4 -1.5 -7.7 67.5 -19.7 5.0 71 Private pension funds 50.2 46.1 56.0 52.3 65.5 79.5 74.5 130.1 95.6 174.4 60.5 150.0 ?? State and local government retirement fimds 24.7 30.9 33.6 37.3 63.8 42.7 67.4 78.4 65.6 48.5 74.3 37.4 73 Money market mutual funds 20.4 30.0 86.5 88.8 87.5 141.8 159.3 208.1 255.5 353.1 227.6 -92.6 n Mutual funds 159.5 -7.1 52.5 48.9 80.9 64.8 156.4 146.4 92.9 103.5 101.5 9988..88 75 Closed-end funds 20.0 -3.7 10.5 4.7 -2.9 -2.9 4.5 4.5 4.5 4.5 4.4 44..44 76 Government-sponsored enterprises 87.8 117.8 86.7 84.2 94.3 158.1 198.3 150.6 264.7 429.5 157.2 259.5 71 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.5 133.0 106.7 239.0 261.7 162.8 399.3 274.6 78 Asset-backed securities issuers (ABSs) 82.8 69.4 120.6 123.6 162.3 321.9 223.9 321.4 248.7 312.7 284.6 301.5 29 Finance companies -20.9 48.3 49.9 18.4 21.9 -19.7 28.7 24.0 79.5 75.3 92.2 79.6 30 Mortgage companies .0 -24.0 -3.4 8.2 -9.1 -93.6 58.8 -56.4 4.5 6.0 -9.1 10.2 31 Real estate investment trusts (REITs) .4 -.7 1.4 4.4 20.2 38.9 25.6 6.1 -11.3 -40.8 1.7 -2.2 37 Brokers and dealers 14.8 -44.2 90.1 -15.7 14.9 71.7 245.8 -183.1 77.0 -209.1 184.5 -204.5 33 Funding corporations -31.0 -17.8 -21.2 14.0 52.7 126.2 82.0 -21.4 -63.3 6.4 27.1 96.8 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 948.6 1,030.3 1,245.4 1,369.2 1,495.1 1,918.3 2,101.7 2,129.3 1,935.8 2,332.7 2,481.3 1,836.4 Other financial sources 35 Official foreign exchange .8 -5.8 8.8 --66..33 .7 1177..55 11..00 88..11 88..99 88..66 --1144..00 --55..44 36 Special drawing rights certificates .0 .0 2.2 -.5 -.5 .0 .0 ..00 .0 .0 -4.0 .0 37 Treasury currency .4 .7 .6 .1 .0 -1.9 .3 .2 1.7 -2.3 .0 38 Foreign deposits -18.5 52.9 35.3 85.9 106.8 100.6 -46.5 92.9 84.9 -131.9 127.7 114.5 39 Net interbank transactions 50.5 89.8 10.0 -51.6 -19.7 54.3 -95.2 39.8 44.2 -122.9 49.1 68.2 40 Checkable deposits and currency 117.3 -9.7 -12.7 15.8 41.5 72.1 52.6 90.1 -24.9 72.8 61.7 10.3 41 Small time and savings deposits -70.3 -39.9 96.6 97.2 97.1 136.7 99.0 84.9 144.7 281.2 -63.8 104.0 47 Large time deposits -23.5 19.6 65.6 114.0 122.5 59.2 187.8 -5.6 81.8 104.4 -5.9 42.6 43 Money market fund shares 20.2 43.3 142.3 145.8 157.6 149.9 213.6 247.2 367.9 313.1 204.9 100.5 44 Security repurchase agreements 71.3 78.2 110.5 41.4 120.9 103.3 250.3 -100.8 231.1 -170.3 408.2 -65.6 45 Corporate equities 137.7 24.6 -3.1 -8.6 -76.7 -100.0 -108.8 -109.3 -320.6 -206.5 -114.7 -241.5 46 Mutual fund shares 292.0 100.6 147.4 237.6 265.1 260.9 322.3 377.8 173.4 224.8 255.3 247.9 4477 52.2 94.0 101.6 86.1 96.2 122.6 108.3 -57.4 34.6 -86.8 155.5 98.4 4488 61.4 -.1 26.7 52.4 111.0 128.0 159.3 134.3 167.0 -27.2 -86.9 89.3 49 37.1 35.5 45.8 44.5 54.3 37.4 49.3 53.3 51.7 59.0 40.8 65.9 50 Pension fund reserves 268.0 254.7 235.1 246.9 304.0 304.1 294.7 272.9 279.5 313.8 284.3 316.4 51 Taxes payable 11.4 2.6 6.2 16.0 16.8 3.9 12.2 .9 27.3 11.7 -10.3 27.2 5? Investment in bank personal trusts .9 17.8 4.0 -8.6 75.0 78.4 50.3 57.5 47.8 67.1 64.1 53.0 53 Noncorporate proprietors' equity 24.1 53.6 60.3 -.6 6.1 -43.5 -11.0 -5.4 -61.2 3.2 -2.5 12.3 54 Miscellaneous 356.0 245.6 444.6 498.3 513.3 222.2 980.1 376.5 712.6 702.0 238.7 1,092.8 55 Total financial sources 2337.6 2,088.3 2,773.2 2,975.1 3,487.1 3,624.1 4,621.2 3,687.3 3,988.1 3,746.3 4,069.6 3,968.0 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.2 -.5 -.9 -.6 -2.4 --..22 --..33 11..11 --33..44 --11..55 --..44 57 Foreign deposits -5.7 43.0 25.1 59.6 106.8 145.5 -95.7 119.9 69.9 -156.5 62.0 73.5 58 Net interbank liabilities 4.2 -2.7 -3.1 -3.3 -19.9 -38.1 35.1 8.9 22.3 -52.8 58.7 -1.7 59 Security repurchase agreements 50.5 67.7 20.2 4.5 62.3 185.1 120.8 -170.0 110.2 .2 362.2 -14.8 60 15.8 16.6 21.1 20.4 18.8 14.4 9.4 2.8 24.2 17.4 -22.4 -15.0 61 Miscellaneous -158.5 -160.1 -221.4 -66.9 -254.9 -640.7 61.0 -225.9 -106.7 -43.9 -568.0 -390.0 Floats not included in assets (-) 62 Federal government checkable deposits -1.5 -4.8 -6.0 .5 -2.7 -10.0 8.3 -44.4 32.4 14.0 -1.8 --4411..44 63 Other checkable deposits -1.3 -2.8 -3.8 -4.0 -3.9 -5.0 -4.0 -2.9 -3.6 -1.8 -1.9 -1.0 64 Trade credit -4.0 1.5 -11.7 -49.9 3.6 15.7 41.9 -150.7 -94.5 -31.1 55.7 -6.9 65 Total identified to sectors as assets 2,438.2 2,130.1 2,953.4 3,015.2 3,577.6 3,959.6 4,444.8 4,150.0 3,932.8 4,004.0 4,126.5 4,365.7 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F.l and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • December 1999 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1997 1998 1999 11999955 11999966 11999977 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 13,013.9 13,734.3 14,477.4 15,261.1 15,261.1 15,522.2 15,742.1 15,956.2 16,283.6 16,588.0 16,758.7 By sector and instrument 2 Federal government 3,492.3 3,636.7 3,781.8 3,804.9 3,804.9 3,830.8 3,749.0 3,720.2 3,752.2 3,759.7 3,651.7 3 Treasury securities 3,465.6 3,608.5 3,755.1 3,778.3 3,778.3 3,804.8 3,723.4 3,694.7 3,723.7 3,731.6 3,623.4 4 Budget agency securities and mortgages 26.7 28.2 26.6 26.5 26.5 25.9 25.6 25.5 28.5 28.1 28.3 5 Nonfederal 9,521.6 10,097.6 10,695.6 11,456.3 11,456.3 11,691.4 11,993.2 12,236.0 12,531.4 12,828.3 13,107.0 By instrument 6 Commercial paper 139.2 157.4 156.4 168.6 168.6 193.1 202.5 216.9 193.0 223.9 232.4 7 Municipal securities and loans 1,341.7 1,293.5 1,296.0 1,367.5 1,367.5 1,397.1 1,429.3 1,439.9 1,464.3 1,491.0 1,510.0 8 Corporate bonds 1,253.0 1,344.1 1,460.4 1,610.9 1,610.9 1,680.6 1,754.3 1,781.3 1,829.6 1,898.1 1,963.3 9 Bank loans n.e.c 759.9 863.6 934.1 1,040.5 1,040.5 1,047.9 1,097.6 1,120.6 1,148.8 1,165.2 1,178.4 10 Other loans and advances 669.6 736.9 770.4 839.5 839.5 863.5 873.1 886.8 913.8 947.5 945.8 11 Mortgages 4,374.2 4,579.4 4,866.8 5,165.2 5,165.2 5,273.3 5,379.7 5,504.0 5,650.3 5,784.1 5,939.2 12 Home 3,330.0 3,509.8 3,719.0 3,954.8 3,954.8 4,037.9 4,116.4 4,216.4 4,321.1 4,413.8 4,526.0 13 Multifamily residential 261.5 269.1 284.3 295.0 295.0 300.4 305.7 309.7 317.4 326.6 335.8 14 Commercial 699.8 716.0 776.4 825.1 825.1 843.6 864.6 883.6 915.3 946.3 977.7 15 Farm 83.0 84.6 87.1 90.3 90.3 91.3 93.0 94.4 96.5 97.4 99.7 16 Consumer credit 983.9 1,122.8 1,211.6 1,264.1 1,264.1 1,236.0 1,256.8 1,286.6 1,331.7 1,318.6 1,338.0 By borrowing sector 17 Household 4,427.0 4,782.2 5,105.1 5,433.3 5,433.3 5,494.5 5,613.2 5,746.1 5,903.6 5,985.9 6,128.1 18 Nonfinancial business 3,972.9 4,245.2 4,527.1 4,903.5 4,903.5 5,052.6 5,209.2 5,311.1 5,428.0 5,619.2 5,740.7 19 Corporate 2,708.9 2,947.7 3,141.0 3,433.8 3,433.8 3,559.4 3,686.4 3,762.5 3,852.2 4,019.2 4,107.9 20 Nonfarm noncorporate 1,121.8 1,152.4 1,236.1 1,313.6 1,313.6 1,337.9 1,361.8 1,385.5 1,411.9 1,437.6 1,466.7 21 Farm 142.2 145.1 149.9 156.1 156.1 155.3 161.0 163.1 163.8 162.4 166.2 22 State and local government 1,121.7 1,070.2 1,063.4 1,119.5 1,119.5 1,144.3 1,170.8 1,178.8 1,199.8 1,223.2 1,238.2 23 Foreign credit market debt held in United States 370.3 441.4 518.7 570.1 570.1 591.6 617.1 612.8 603.7 607.8 596.5 24 Commercial paper 42.7 56.2 67.5 65.1 65.1 76.7 71.4 74.0 72.9 77.2 70.1 25 Bonds 242.3 291.9 347.7 394.9 394.9 405.6 435.4 428.6 420.0 420.2 415.4 26 Bank loans n.e.c 26.1 34.6 43.7 52.1 52.1 53.4 55.5 56.4 58.9 59.1 60.5 27 Other loans and advances 59.3 58.8 59.8 58.0 58.0 55.9 54.8 53.8 52.0 51.3 50.4 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 13,384.2 14,175.8 14,996.0 15,831.2 15,831.2 16,113.8 16,359.2 16,568.9 16,887.3 17,195.8 17,355.2 Financial sectors 29 Total credit market debt owed by financial sectors 3,822.2 4,278.8 4,827.7 5,446.8 5,446.8 5,670.1 5,926.8 6,195.5 6,515.6 6,809.7 7,073.6 By instrument 30 Federal government-related 2,172.7 2,376.8 2,608.3 2,821.1 2,821.1 2,878.0 2,981.4 3,121.7 3,292.0 3,434.1 3,580.8 31 Government-sponsored enterprise securities 700.6 806.5 896.9 995.3 995.3 1,030.9 1,072.5 1,146.0 1,273.6 1,321.8 1,398.0 32 Mortgage pool securities 1,472.1 1,570.3 1,711.4 1,825.8 1,825.8 1,847.1 1,908.9 1,975.7 2,018.4 2,112.3 2,182.8 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 1,649.5 1,901.9 2,219.4 2,625.7 2,625.7 2,792.1 2,945.4 3,073.8 3,223.6 3,375.6 3,492.7 35 Open maricet paper 441.6 486.9 579.1 745.7 745.7 804.9 838.9 874.2 906.7 926.4 940.9 36 Corporate bonds 1,008.8 1,204.7 1,381.5 1,557.5 1,557.5 1,640.8 1,738.7 1,786.2 1,849.4 1,969.3 2,042.9 37 Bank loans n.e.c 48.9 51.4 64.0 77.2 77.2 90.6 88.2 103.2 107.2 104.1 106.8 38 Other loans and advances 131.6 135.0 162.9 198.5 198.5 206.6 225.6 246.2 288.7 299.1 328.6 39 Mortgages 18.7 24.1 31.9 46.8 46.8 49.1 54.1 64.0 71.6 76.6 73.6 By borrowing sector 40 Commercial banks 94.5 102.6 113.6 140.6 140.6 148.7 159.6 169.6 188.6 187.5 202.7 41 Bank holding companies 133.6 148.0 150.0 168.6 168.6 181.2 190.5 196.1 193.5 202.6 202.7 42 Savings institutions 112.4 115.0 140.5 160.3 160.3 162.9 170.7 186.6 212.4 226.9 241.6 43 Credit unions .5 .4 .4 .6 .6 .7 .8 1.0 1.1 1.5 1.8 44 Life insurance companies .6 .5 1.6 1.8 1.8 1.8 1.6 2.0 2.5 3.3 4.0 45 Government-sponsored enterprises 700.6 806.5 896.9 995.3 995.3 1,030.9 1,072.5 1,146.0 1,273.6 1,321.8 1,398.0 46 Federally related mortgage pools 1,472.1 1,570.3 1,711.4 1,825.8 1,825.8 1,847.1 1,908.9 1,975.7 2,018.4 2,112.3 2,182.8 47 Issuers of asset-backed securities (ABSs) 570.1 712.5 866.4 1,078.2 1,078.2 1,142.9 1,230.4 1,307.0 1,394.6 1,463.8 1,542.9 48 Brokers and dealers 34.3 29.3 27.3 35.3 35.3 35.1 40.1 39.4 42.5 34.8 30.2 49 Finance companies 433.7 483.9 529.8 554.5 554.5 571.9 596.9 589.4 597.5 614.4 639.2 50 Mortgage companies 18.7 16.5 20.6 16.0 16.0 23.4 16.3 16.9 17.7 16.5 17.8 51 Real estate investment trusts (REITs) 40.0 44.6 56.5 96.1 96.1 111.9 128.0 147.8 158.8 165.2 160.3 52 Funding corporations 211.0 248.6 312.7 373.7 373.7 411.6 410.5 417.9 414.4 459.1 449.6 All sectors 53 Total credit market debt, domestic and foreign ... 17,206.4 18,454.5 19,823.7 21,278.1 21,278.1 21,783.9 22,286.0 22,764.5 23,402.9 24,005.5 24,428.7 54 Open market paper 623.5 700.4 803.0 979.4 979.4 1,074.8 1,112.7 1,165.1 1,172.6 1,227.6 1,243.3 55 U.S. government secunties 5,665.0 6,013.6 6,390.0 6,626.0 6,626.0 6,708.7 6,730.3 6,841.9 7,044.3 7,193.8 7,232.5 56 Municipal securities 1,341.7 1,293.5 1,296.0 1,367.5 1,367.5 1,397.1 1,429.3 1,439.9 1,464.3 1,491.0 1,510.0 57 Corporate and foreign bonds 2,504.0 2,840.7 3,189.6 3,563.3 3,563.3 3,727.0 3,928.3 3,996.0 4,098.9 4,287.6 4,421.6 58 Bank loans n.e.c 834.9 949.6 1,041.7 1,169.8 1,169.8 1,191.9 1,241.3 1,280.3 1,314.9 1,328.3 1,345.6 59 Other loans and advances 860.5 930.6 993.1 1,095.9 1,095.9 1,126.1 1,153.6 1,186.8 1,254.4 1,297.8 1,324.8 60 Mortgages 4,393.0 4,603.4 4,898.7 5,212.0 5,212.0 5,322.4 5,433.7 5,568.0 5,721.9 5,860.7 6,012.7 61 Consumer credit 983.9 1,122.8 1,211.6 1,264.1 1,264.1 1,236.0 1,256.8 1,286.6 1,331.7 1,318.6 1,338.0 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1997 1998 1999 Transaction category or sector 1994 1995 1996 11999977 Q4 Ql Q2 Q3 Q4 Ql Q2 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 17,206.4 18,454.5 19,823.7 21,278.1 21,278.1 21,783.9 22,286.0 22,764.5 23,402.9 24,005.5 24,428.7 2 Domestic nonfederal nonfinancial sectors 2,988.8 2,856.8 2,924.6 2,781.4 2,781.4 2,761.2 2,847.0 2,876.6 2,813.0 2,875.4 2,915.9 Household 1,932.1 1,895.5 2,011.6 1,871.1 1,871.1 1,868.2 1,919.2 1,913.4 1,805.8 1,874.9 1,889.2 4 Nonfinancial corporate business 289.2 280.4 270.2 268.0 268.0 249.6 238.7 244.7 265.4 246.1 257.0 5 Nonfarm noncorporate business 37.6 42.3 38.0 37.4 37.4 37.4 37.4 37.4 37.4 37.4 37.4 6 State and local governments 729.9 638.6 604.8 605.0 605.0 606.0 651.6 681.1 704.4 717.1 732.3 7 Federal government 202.9 202.7 195.3 200.4 200.4 204.3 207.5 210.9 213.9 218.3 219.9 8 Rest of the world 1,216.0 1,531.1 1,926.6 2,256.8 2,256.8 2,317.1 2,396.0 2,412.2 2,534.3 2,591.8 2,603.3 9 Financial sectors 12,798.8 13,863.9 14,777.2 16,039.5 16,039.5 16,501.3 16,835.5 17,264.8 17,841.7 18,320.0 18,689.7 10 Monetary authority 368.2 380.8 393.1 431.4 431.4 433.8 440.3 446.5 452.5 466.0 485.1 11 Commercial banking 3,254.3 3,520.1 3,707.7 4,031.9 4,031.9 4,093.4 4,136.4 4,195.7 4,335.7 4,338.4 4,383.3 12 U.S.-chartered banks 2,869.6 3,056.1 3,175.8 3,450.7 3,450.7 3,505.1 3,543.6 3,616.2 3,761.2 3,782.9 3,847.6 13 Foreign banking offices in United States 337.1 412.6 475.8 516.1 516.1 517.9 525.6 510.1 504.2 487.8 465.7 14 Bank holding companies 18.4 18.0 22.0 27.4 27.4 31.2 26.8 28.3 26.5 25.0 25.0 15 Banks in U.S.-affiliated areas 29.2 33.4 34.1 37.8 37.8 39.2 40.4 41.1 43.8 42.7 45.0 16 Savings institutions 920.8 913.3 933.2 928.5 928.5 931.3 930.8 939.3 964.8 990.8 1,011.4 17 Credit unions 246.8 263.0 288.5 305.3 305.3 306.7 315.1 320.5 324.2 331.0 342.5 18 Bank personal trusts and estates 248.0 239.7 232.0 239.5 239.5 240.1 240.9 241.4 242.4 243.1 243.7 19 Life insurance companies 1,487.5 1,587.5 1,657.0 1,751.3 1,751.3 1,777.3 1,793.2 1,810.6 1,828.0 1,853.7 1,876.0 20 Other insurance companies 446.4 468.7 491.2 515.3 515.3 521.1 520.8 518.9 535.7 530.8 532.1 21 Private pension funds 660.9 716.9 769.2 834.7 834.7 853.4 885.9 909.8 953.4 968.5 1,006.0 2.2 State and local government retirement iunds 497.4 531.0 568.2 632.0 632.0 648.9 668.5 684.9 697.0 715.6 724.9 23 Money market mutual funds 459.0 545.5 634.3 721.9 721.9 775.0 815.9 869.9 965.9 1,036.2 1,001.8 24 Mutual funds 718.8 771.3 820.2 901.1 901.1 940.0 979.1 1,005.9 1,025.9 1,050.5 1,078.1 25 Closed-end funds 86.0 96.4 101.1 98.3 98.3 99.4 100.5 101.7 102.8 103.9 105.0 26 Government-sponsored enterprises 663.3 750.0 807.9 902.2 902.2 951.4 989.4 1,055.4 1,163.0 1,201.9 1,267.1 27 Federally related mortgage pools 1,472.1 1,570.3 1,711.4 1,825.8 1,825.8 1,847.1 1,908.9 1,975.7 2,018.4 2,112.3 2,182.8 28 Asset-backed securities issuers (ABSs) 532.8 653.4 777.0 939.3 939.3 989.2 1,068.9 1,134.2 1,216.0 1,280.8 1,355.7 29 Finance companies 476.2 526.2 544.5 566.4 566.4 572.0 579.0 592.7 618.4 639.9 660.9 30 Mortgage companies 36.5 33.0 41.2 32.1 32.1 46.8 32.7 33.8 35.3 33.0 35.6 31 Real estate investment trusts (REITs) 24.6 26.0 30.4 50.6 50.6 57.0 58.5 55.7 45.5 45.9 45.3 32 Brokers and dealers 93.3 183.4 167.7 182.6 182.6 244.0 198.3 217.5 165.2 211.4 160.2 33 Funding corporations 106.0 87.4 101.4 149.4 149.4 173.5 172.6 155.1 151.7 166.4 192.2 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 17,206.4 18,454.5 19,823.7 21,278.1 21,278.1 21,783.9 22,286.0 22,764.5 23,402.9 24,005.5 24,428.7 Other liabilities 35 Official foreign exchange 53.2 63.7 53.7 48.9 48.9 48.2 50.1 54.5 60.1 53.6 50.9 36 Special drawing rights certificates 8.0 10.2 9.7 9.2 9.2 9.2 9.2 9.2 9.2 8.2 8.2 37 Treasury currency 17.6 18.2 18.3 18.3 18.3 18.4 18.4 18.8 18.3 18.3 18.5 38 Foreign deposits 373.9 418.8 516.1 618.8 618.8 607.2 630.4 651.7 639.9 671.8 700.4 39 Net interbank liabilities 280.1 290.7 240.8 219.4 219.4 179.6 189.1 198.7 187.7 180.5 196.4 40 Checkable deposits and currency 1,242.0 1,229.3 1,245.1 1,286.6 1,286.6 1,259.2 1,320.7 1,282.3 1,334.2 1,311.5 1,354.3 41 Small time and savings deposits 2,183.2 2,279.7 2,377.0 2,474.1 2,474.1 2,525.4 2,531.0 2,553.8 2,626.5 2,638.6 2,646.6 42 Large time deposits 411.2 476.9 590.9 713.4 713.4 760.9 754.0 776.5 805.5 804.3 809.0 43 Money market fund shares 602.9 745.3 891.1 1,048.7 1,048.7 1,130.7 1,153.7 1,249.7 1,334.2 1,416.0 1,398.1 44 Security repurchase agreements 549.5 660.0 701.5 822.4 822.4 889.3 861.5 918.9 875.0 980.3 961.4 45 Mutual fund shares 1,477.3 1,852.8 2,342.4 2,989.4 2,989.4 3,339.3 3,438.4 3,137.3 3,610.5 3,760.8 4,029.9 46 Security credit 279.0 305.7 358.1 469.1 469.1 505.3 540.6 579.0 577.4 552.7 576.7 47 Life insurance reserves 520.3 566.2 610.6 665.0 665.0 677.3 690.6 703.5 718.3 730.9 747.4 48 Pension fund reserves 4,948.1 5,767.8 6,642.5 7,894.4 7,894.4 8,583.1 8,730.8 8,194.6 9,160.7 9,335.8 9,770.1 49 Trade payables 1,140.6 1,242.3 1,328.4 1,424.6 1,424.6 1,419.2 1,405.0 1,418.3 1,424.3 1,430.4 1,454.6 50 Taxes payable 101.4 107.6 123.6 140.4 140.4 151.7 144.4 154.7 153.4 159.6 158.4 51 Investment in bank personal trusts 699.4 803.0 871.7 1,082.8 1,082.8 1,179.5 1,204.9 1,118.9 1,274.2 1,317.0 1,402.7 52 Miscellaneous 5,287.2 5,634.7 6,098.8 6,663.5 6,663.5 6,737.3 6,807.2 7,024.1 7,094.4 7,087.4 7,184.8 53 Total liabilities 37381.6 40,927.2 44,843.8 49,867.0 49,867.0 51,804.7 52,765.9 52,809.1 55,306.8 56,463.3 57,897.0 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights 21.1 22.1 21.4 21.1 21.1 21.2 21.0 21.2 21.6 20.7 20.8 55 Corporate equities 6,237.9 8,331.3 10,062.4 12,776.0 12,776.0 14,397.6 14,556.1 12,758.4 15,437.7 15,970.3 17,137.5 56 Household equity in noncorporate business 3,410.5 3,658.3 3,864.5 4,213.4 4,213.4 4,039.4 4,255.1 4,265.5 4,288.4 4,293.4 4,257.7 Liabilities not identified as assets (—) 57 Treasury currency -5.4 -5.8 --66..77 -7.3 -7.3 -7.4 -7.4 -7.2 -8.0 -8.4 -8.5 58 Foreign deposits 325.4 360.2 431.4 534.0 534.0 510.1 540.1 557.6 539.7 555.1 573.5 59 Net interbank transactions -6.5 -9.0 -10.6 -32.2 -32.2 -21.2 -17.1 -15.4 -27.0 -11.3 -10.5 60 Security repurchase agreements 66.2 86.4 90.9 153.1 153.1 187.4 140.9 175.2 168.4 263.0 255.6 61 Taxes payable 48.8 62.4 76.7 93.5 93.5 89.6 95.6 101.9 103.9 90.6 108.2 62 Miscellaneous -948.1 -1,350.8 -1,714.9 -2,087.0 -2,087.0 -2,259.2 -2,311.2 -2,449.9 -2,719.9 -2,953.5 -2,998.9 Floats not included in assets (—) 63 Federal government checkable deposits 3.4 3.1 -1.6 -8.1 -8.1 -10.4 -16.1 -12.0 -3.9 -7.2 -12.4 64 Other checkable deposits 38.0 34.2 30.1 26.2 26.2 21.4 24.2 15.7 23.1 18.9 22.1 65 Trade credit -245.9 -257.5 -307.7 -314.5 -314.5 -358.1 -412.2 -440.1 -373.7 -415.3 -432.3 66 Total identified to sectors as assets 47,775.0 54,015.9 60,204.6 68,519.7 68,519.7 72,110.7 73,561.4 71,928.4 77,351.9 79,215.7 81,816.2 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. L. 1 and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • December 1999 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1999 MMeeaassuurree 11999966 11999977 11999988 Jan. Feb. Mar. Apr. May Juner Julyr Aug.1" Sept.p 1 Industrial production1 119.5 126.8 131.3 132.3 132.5 133.3 133.7 134.0 134.2 135.0 135.5 135.0 Market groupings 2 Products, total 114.4 119.6 123.5 124.5 124.6 125.2 125.6 125.8 125.7 125.7 126.6 125.8 3 Final, total 115.5 121.1 125.4 125.8 125.9 126.5 126.8 127.2 127.3 127.4 128.6 127.8 4 Consumer goods 111.3 114.1 115.2 115.2 115.3 115.3 115.5 115.6 116.2 115.9 116.8 116.1 Equipment 122.7 133.9 144.2 145.0 145.1 146.7 147.2 148.0 147.4 148.3 149.8 148.9 6 Intermediate 110.9 115.2 118.0 120.3 120.4 121.0 121.5 121.4 120.6 120.4 120.4 119.7 7 Materials 127.8 138.2 144.0 144.9 145.3 146.7 146.9 147.3 148.1 150.3 150.2 150.3 Industry groupings 8 Manufacturing 121.4 129.7 135.1 136.4 136.9 137.5 138.0 138.4 138.4 139.1 139.7 139.5 9 Capacity utilization, manufacturing (percent)2. . 81.4 82.0 80.8 79.5 79.5 79.5 79.6 79.5 79.3 79.5 79.7 79.3 10 Construction contracts' 130.9 143.lr 157.3r 179.0r 168.0r 170.0r 170.01 176.0 168.0 160.0 162.0 11 Nonagricultural employment, total4 117.3 120.3 123.4 124.9 125.3 125.4 125.7 125.7 126.0 126.3 126.4 126.4 12 Goods-producing, total 2.4 2.4 2.3 102.6 102.7 102.5 102.5 102.1 102.1 102.3 101.9 101.9 13 Manufacturing, total 97.4 98.2 98.5 97.8 97.6 97.4 97.2 97.0 96.8 97.1 96.7 96.6 14 Manufacturing, production workers 98.6 99.6 99.6 98.6 98.3 98.2 98.0 97.8 97.5 98.0 97.4 97.3 15 Service-producing 123.1 126.5 130.1 132.1 132.5 132.7 133.1 133.2 133.6 134.0 134.3 134.3 16 Personal income, total 165.7 174.9 183.8 188.8 189.6 190.2 191.0 191.6r 193.0 193.5 194.5 n.a. 17 Wages and salary disbursements 159.8 171.2 182.6 189.0 190.2 190.6 191.7 192.6 193.7 195.1 196.2 n.a. 18 Manufacturing 135.7 144.7 151.1 152,4 152.8 152.9 153.5 154.4 155.2 156.4 156.1 n.a. 19 Disposable personal income5 164.5 172.3 179.2 183.8 184.5 185.2 185.9r 186.3r 187.7 188.0 189.3 n.a. 20 Retail sales5 162.5 170.1 178.5 186.8 190.0 189.8 190.9 192.8 192.6 194.5 197.4 197.6 Prices6 21 Consumer (1982-84=100) 156.9 160.5 163.0 164.3 164.5 165.0 166.2 166.2 166.2 166.7 167.1 167.9 22 Producer finished goods (1982=100) 131.3 131.8 130.7 131.4 130.8 131.1 131.9 132.4 132.7 132.9 133.7 134.8 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 1999 CCaatteeggoorryy 11999966 11999977 11999988 Feb. Mar. Apr. May June Julyr Aug.r Sept. HOUSEHOLD SURVEY DATA1 1 Civilian labor force- 133,943 136,297 137,673 139,271 138,816 139,091 139,019 139,408 139,254 139,264 139,386 Employment 2 Nonagricultural industries3 123,264 126,159 128,085 129,817 129,752 129,685 129,929 130,078 130,015 130,192 130,413 3 Agriculture 3,443 3,399 3,378 3,328 3,281 3,384 3,295 3,354 3,292 3,219 3,137 Unemployment 4 Number 7,236 6,739 6,210 6,127 5,783 6.022 5,795 5,975 5,947 5,853 5,836 5 Rate (percent of civilian labor force) 5.4 4.9 4.5 4.4 4.2 4.3 4.2 4.3 4.3 4.2 4.2 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 119,608 122,690 125,833 127,730 127,813 128,134 128,162 128,443 128,816 128,919 128,911 7 Manufacturing 18,495 18,657 18,716 18,538 18,503 18,473 18,429 18,396 18,449 18,372 18,351 8 Mining 580 592 575 553 550 538 531 526 528 523 524 9 Contract construction 5,418 5,686 5,965 6,238 6,232 6,277 6,239 6,258 6,270 6,245 6,266 10 Transportation and public utilities 6,253 6,395 6,551 6,723 6,732 6,750 6,758 6,781 6,799 6,808 6,828 11 Trade 28,079 28,659 29,299 29,585 29,558 29,689 29,725 29,789 29,915 29,915 29,873 12 Finance 6,911 7,091 7,341 7,581 7,595 7,611 7,621 7,636 7,647 7,650 7,647 13 Service 34,454 36,040 37,525 38,458 38,556 38,697 38,782 38,952 39,055 39,201 39,240 14 Government 19,419 19,570 19,862 20,054 20,087 20,099 20,077 20,105 20,153 20,205 20,182 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 Q4 Q1 Q2 Q3r Q4 Q1 Q2 Q3r Q4 Q1 Q2 Q3r Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)' 1 Total industry 132.3 132.7 134.0 135.2 163.5 165.2 166.7 167.9 80.9 80.3 80.4 80.5 2 Manufacturing 136.4 136.9 138.3 139.4 170.3 172.3 174.0 175.4 80.1 79.5 79.5 79.5 3 Primary processing3 120.6 121.7 121.8 122.8 146.1 146.9 147.7 148.3 82.5 82.8 82.5 82.8 4 Advanced processing4 144.4 144.6 146.6 147.8 182.0 184.5 186.7 188.5 79.3 78.3 78.5 78.4 5 Durable goods 161.2 162.1 164.9 167.8 201.2 204.4 207.4 209.8 80.1 79.3 79.5 80.0 6 Lumber and products 119.2 121.6 121.6 119.0 144.9 146.0 147.1 148.2 82.3 83.3 82.6 80.3 7 Primary metals 119.3 120.4 123.5 128.4 144.4 145.4 145.9 146.3 82.6 82.8 84.6 87.8 8 Iron and steel 112.9 115.5 120.4 127.3 146.5 147.9 148.8 149.3 77.0 78.1 80.9 85.2 9 Nonferrous 126.9 126.3 127.3 129.9 141.7 142.1 142.4 142.6 89.6 88.9 89.4 91.1 10 Industrial machinery and equipment 211.7 214.6 219.1 223.7 251.6 259.8 266.9 272.9 84.1 82.6 82.1 82.0 11 Electrical machinery 304.8 310.3 327.1 349.4 396.6 411.0 424.9 437.2 76.9 75.5 77.0 79.9 17. Motor vehicles and parts 148.5 147.5 151.1 151.6 186.0 186.7 187.1 187.4 79.8 79.0 80.8 80.9 13 Aerospace and miscellaneous transportation equipment 105.8 103.1 100.0 96.1 128.5 128.8 128.7 128.5 82.4 80.1 77.7 7744..88 14 Nondurable goods 111.4 111.6 111.6 111.2 138.4 139.1 139.6 140.0 80.5 80.2 79.9 79.5 15 Textile mill products 110.2 109.7 111.4 111.6 135.2 135.0 134.7 134.2 81.5 81.2 82.7 83.1 16 Paper and products 114.3 116.3 114.9 115.9 133.4 134.2 135.0 135.8 85.7 86.7 85.1 85.3 17 Chemicals and products 114.0 114.0 115.2 116.3 149.7 150.3 150.8 151.2 76.1 75.8 76.4 76.9 18 Plastics materials 131.9 129.6 131.0 133.7 143.2 144.4 145.6 146.9 92.1 89.8 89.9 91.0 19 Petroleum products 111.9 115.4 112.9 113.1 117.1 117.4 117.7 118.1 95.6 98.3 95.9 95.8 7.0 Mining 100.7 98.8 97.9 99.4 120.6 120.9 121.2 121.4 83.5 81.7 80.8 81.8 ?1 Utilities 112.9 114.3 116.5 118.0 126.7 126.9 127.1 127.2 89.2 90.0 91.6 92.7 22 Electric 116.7 116.4 118.8 120.3 124.3 124.5 124.7 124.8 93.9 93.5 95.2 96.3 1973 1975 Previous cycle5 Latest cycle6 1998 1999 High Low High Low High Low Sept. Apr. May Juner July1" Aug.r Sept.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 81.3 80.4 80.4 80.3 80.6 80.7 80.3 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 80.1 79.6 79.5 79.3 79.5 79.7 79.3 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 82.1 82.5 82.5 82.4 82.8 82.9 82.8 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.5 78.6 78.6 78.3 78.4 78.6 78.2 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 80.3 79.5 79.5 79.5 80.1 80.2 79.6 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 81.1 82.1 83.6 82.3 81.1 80.2 79.5 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 83.7 83.9 84.1 85.8 87.1 88.6 87.6 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 78.1 80.0 80.4 82.3 84.4 86.4 84.9 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 90.6 88.9 88.9 90.4 90.7 91.4 91.1 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 84.5 82.9 82.1 81.1 81.8 82.2 81.9 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 77.0 76.7 76.9 77.3 79.7 80.2 79.8 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 80.9 79.9 80.6 81.8 81.0 81.6 80.1 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 82.6 78.5 77.9 76.7 76.3 75.0 73.2 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 80.2 80.2 80.0 79.6 79.3 79.5 79.6 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 82.3 82.6 82.4 83.1 84.1 82.5 82.8 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 85.7 85.1 84.6 85.7 84.7 85.6 85.6 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 75.9 76.4 76.5 76.3 76.1 77.3 77.3 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 87.1 90.0 90.4 89.5 91.7 90.9 90.5 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 94.7 97.2 96.0 94.5 95.9 95.6 95.9 70 Mining 94.3 88.2 96.0 80.3 88.0 87.0 85.2 81.1 80.8 80.5 81.3 82.1 82.1 71 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 95.0 91.1 90.8 93.0 94.4 93.0 90.7 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 98.8 94.9 94.5 96.4 98.5 96.6 93.9 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 • December 1999 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1998 1999 GGrroouupp p p r o o r - - 1 a 9 v 9 g 8 . tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June1 Julyr Aug.r Sept.p Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 131.3 131.9 132.4 132.2 132.3 132.3 132.5 133.3 133.7 134.0 134.2 135.0 135.5 135.0 2 Products 60.5 123.5 124.1 124.9 124.5 124.4 124.5 124.6 125.2 125.6 125.8 125.7 125.7 126.6 125.8 3 Final products 46.3 125.4 126.0 126.7 126.1 125.9 125.8 125.9 126.5 126.8 127.2 127.3 127.4 128.6 127.8 4 Consumer goods, total 29.1 115.2 114.8 115.2 114.8 114.9 115.2 115.3 115.3 115.5 115.6 116.2 115.9 116.8 116.1 5 Durable consumer goods 6.1 135.7 137.4 140.5 138.9 139.8 141.5 143.3 142.2 144.9 146.7 147.4 146.3 149.9 146.5 6 Automotive products 2.6 132.9 136.4 141.1 139.6 139.8 141.7 140.4 138.4 140.9 144.8 146.4 139.9 149.2 143.4 7 Autos and trucks 1.7 137.8 143.4 150.6 149.1 147.7 149.4 149.3 147.5 150.1 154.6 158.8 146.7 163.3 152.8 8 Autos, consumer .9 109.2 128.3 119.9 113.7 115.5 111.7 109.0 110.8 112.8 108.8 112.4 107.2 114.0 114.3 9 Trucks, consumer .7 166.2 161.1 181.0 183.2 179.1 185.2 187.2 182.5 185.7 197.2 202.0 184.0 208.9 189.7 10 Auto parts and allied goods .... .9 125.0 125.9 127.4 125.9 128.2 130.5 127.5 125.3 127.7 130.7 128.8 129.4 129.5 129.6 11 Other 3.5 137.8 138.0 139.7 137.9 139.5 141.0 145.4 145.0 147.9 147.9 147.9 151.4 150.1 148.7 12 Appliances, televisions, and air conditioners 1.0 206.2 209.9 215.2 222.5 226.0 229.6 241.4 241.7 251.5 248.0 250.8 267.0 264.6 259.5 13 Carpeting and furniture .8 117.1 116.3 120.3 117.5 116.8 120.7 123.1 117.8 119.0 120.3 120.7 123.7 121.8 122.2 14 Miscellaneous home goods 1.6 114.7 114.5 113.6 109.5 111.4 110.9 113.5 115.5 116.7 117.3 116.2 115.8 115.1 114.2 15 Nondurable consumer goods 23.0 110.1 109.3 109.1 109.0 108.9 108.9 108.6 108.8 108.5 108.3 108.8 108.6 108.9 108.9 16 Foods and tobacco 10.3 109.0 106.9 108.0 109.6 109.6 110.0 110.2 109.6 109.0 108.4 108.1 107.1 106.6 106.7 17 Clothing 2.4 97.8 97.1 95.4 94.5 94.6 93.4 92.6 92.3 92.9 91.5 91.4 90.0 89.6 88.5 18 Chemical products 4.5 120.5 118.0 117.2 119.3 118.7 115.3 117.4 117.3 116.8 117.4 118.2 118.7 121.7 121.4 19 Paper products 2.9 105.8 105.9 105.2 104.1 103.6 102.0 101.0 99.5 100.4 101.0 102.4 103.0 104.4 106.2 20 Energy 2.9 112.2 116.8 115.0 106.5 107.1 113.3 108.9 115.3 114.0 113.5 116.2 118.1 117.1 115.6 21 Fuels .8 110.5 108.3 108.4 109.1 109.6 112.2 113.3 110.5 112.0 111.5 110.1 111.4 112.4 113.5 22 Residential utilities 2.1 112.3 120.7 117.8 104.5 105.2 113.3 106.0 117.2 114.4 114.0 118.8 121.0 119.0 116.0 23 Equipment 17.2 144.2 146.2 147.5 146.5 145.6 145.0 145.1 146.7 147.2 148.0 147.4 148.3 149.8 148.9 24 Business equipment 13.2 163.5 167.4 169.0 168.1 167.9 167.3 167.6 169.3 170.6 171.4 171.0 172.1 173.9 172.9 25 Information processing and related 5.4 209.9 217.3 219.0 219.7 220.8 222.0 222.1 226.6 232.6 240.1 242.2 249.3 253.2 254.3 26 Computer and office equipment 1.1 646.0 693.6 716.7 745.2 759.9 777.0 787.2 824.8 852.8 870.1 877.3 912.4 935.6 965.1 27 Industrial 4.0 140.0 139.5 141.6 139.9 141.3 139.9 137.9 138.5 139.4 137.2 137.0 138.2 138.3 137.6 28 Transit 2.5 133.7 140.1 141.6 140.5 139.6 137.6 137.7 137.2 137.3 135.9 133.7 130.4 131.0 126.8 29 Autos and trucks 1.2 124.6 135.6 136.1 136.4 136.0 134.8 133.2 135.0 137.9 137.7 139.2 135.1 142.6 137.5 30 Other 1.3 138.9 140.9 141.1 138.5 131.7 131.5 140.2 142.8 135.7 133.3 128.9 125.4 129.0 129.4 31 Defense and space equipment 3.3 75.7 75.5 76.4 75.7 74.6 74.4 74.8 74.9 74.5 74.8 73.9 74.1 73.7 72.5 32 Oil and gas well drilling .6 134.7 123.4 119.4 115.2 103.2 99.2 97.4 104.2 97.2 100.3 100.4 103.1 108.2 111.6 33 Manufactured homes .2 149.2 147.8 150.9 154.6 156.6 159.1 154.1 152.8 148.0 145.2 142.8 133.6 136.0 132.0 34 Intermediate products, total 14.2 118.0 118.3 119.0 119.3 119.8 120.3 120.4 121.0 121.5 121.4 120.6 120.4 120.4 119.7 35 Construction supplies 5.3 127.2 126.9 128.4 129.6 131.0 132.4 132.7 131.7 132.0 132.1 131.4 132.7 132.4 132.1 36 Business supplies 8.9 112.6 113.3 113.5 113.2 113.3 113.1 113.1 114.7 115.2 115.0 114.2 113.2 113.3 112.4 37 Materials 39.5 144.0 144.4 144.5 144.6 145.2 144.9 145.3 146.7 146.9 147.3 148.1 150.3 150.2 150.3 38 Durable goods materials 20.8 176.4 177.7 178.8 179.9 180.4 180.1 180.0 182.6 183.3 184.0 185.4 189.2 188.9 189.6 39 Durable consumer parts 4.0 144.0 147.7 146.2 145,6 144.8 141.9 145.4 147.7 145.7 145.5 147.4 152.3 145.3 146.4 40 Equipment parts 7.6 277.4 282.7 287.0 289.9 292.6 293.2 292.5 297.0 302.5 305.5 309.9 318.2 323.4 325.8 41 Other 9.2 129.0 127.7 128.4 129.3 129.3 129.8 128.6 130.2 130.0 130.0 129.9 131.2 131.7 131.6 42 Basic metal materials 3.1 121.2 118.2 118.3 117.3 116.3 118.4 116.1 118.4 119.2 118.6 120.2 122.2 123.3 122.5 43 Nondurable goods materials 8.9 113.5 112.0 111.7 112.2 112.5 112.0 113.2 113.0 112.7 112.9 113.6 113.9 114.3 114.6 44 Textile materials 1.1 108.7 107.6 108.8 103.0 102.5 99.0 101.1 101.8 103.1 102.7 103.2 103.0 102.6 102.3 45 Paper materials 1.8 116.0 115.0 115.8 112.7 114.7 116.5 116.0 116.9 116.3 114.6 118.5 116.4 116.5 117.8 46 Chemical materials 3.9 114.5 111.8 111.1 113.7 113.0 112.8 114.0 113.7 113.7 114.3 115.0 115.7 116.4 116.7 47 Other 2.1 111.5 111.5 110.4 113.2 114.4 112.5 114.8 113.1 112.0 113.6 111.0 113,0 113.6 113.5 48 Energy materials 9.7 103.5 105.2 103.7 101.5 102.6 102.6 102.6 103.4 103.4 103.1 103.0 104.0 103.6 102.2 49 Primary energy 6.3 101.2 102.3 102.6 99.8 100.3 100.4 101.2 100.4 98.7 99.3 101.0 102.1 102.0 100.9 50 Converted fuel materials 3.3 108.1 110.9 106.1 104.9 107.2 107.1 105.6 109.2 112.4 110.5 107.0 108.0 106.7 104.8 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 131.3 131.7 132.1 131.9 132.1 132.0 132.3 133.2 133.4 133.6 133.8 134.9 135.0 134.8 52 Total excluding motor vehicles and parts 95.1 130.8 131.0 131.5 131.4 131.7 131.7 131.7 132.6 132.9 133.2 133.3 134.2 134.6 134.3 53 Total excluding computer and office equipment 98.2 127.1 127.4 127.8 127.4 127.5 127.4 127.6 128.2 128.4 128.6 128.8 129.4 129.8 129.3 54 Consumer goods excluding autos and trucks . 27.4 113.9 113.2 113.4 113.0 113.2 113.4 113.5 113.6 113.7 113.6 114.0 114.2 114.4 114.2 55 Consumer goods excluding energy 26.2 115.5 114.6 115.3 115.8 115.8 115.4 116.0 115.3 115.7 115.9 116.2 115.6 116.8 116.2 56 Business equipment excluding autos and trucks 12.0 167.9 171.0 172.7 171.6 171.5 170.9 171.5 173.1 174.3 175.2 174.5 176.3 177.4 176.8 57 Business equipment excluding computer and office equipment 12.1 142.4 145.1 146.2 144.6 144.1 143.1 143.2 144.0 144.7 145.1 144.5 145.0 146.3 144.8 58 Materials excluding energy 29.8 156.7 156.7 157.3 158.2 158.6 158.2 158.6 160.2 160.6 161.1 162.3 164.8 164.8 165.4 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 po ro r- - 1 a 9 v 9 g 8 . tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June1 Julyr Aug/ Sept.p Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 131.3 131.9 132.4 132.2 132.3 132.3 132.5 133.3 133.7 134.0 134.2 135.0 135.5 135.0 60 Manufacturing 85.4 135.1 135.2 136.1 136.4 136.7 136.4 136.9 137.5 138.0 138.4 138.4 139.1 139.7 139.5 61 Primary processing 26.5 120.7 119.3 120.1 120.3 121.3 121.8 121.6 121.7 121.7 121.8 121.9 122.6 123.0 123.0 62 Advanced processing 58.9 142.1 143.2 144.2 144.6 144.4 143.8 144.6 145.4 146.2 146.7 146.8 147.4 148.2 147.8 63 Durable goods 45.0 157.5 159.6 161.2 161.0 161.5 161.4 161.7 163.1 164.1 165.0 165.6 167.4 168.4 167.6 64 Lumber and products " ' 24 2.0 117.0 117.0 118.0 118.3 121.4 122.0 122.1 120.7 120.4 122.9 121.4 120.0 118.9 118.2 65 Furniture and fixtures 25 1.4 121.4 121.6 124.5 123.6 122.9 122.5 124.5 126.1 123.6 123.5 123.4 124.4 125.6 125.3 66 Stone, clay, and glass products 32 2.1 126.2 126.6 128.3 130.5 131.6 133.5 132.2 131.1 128.8 128.3 127.5 128.8 129.9 129.5 67 Primary metals 33 3.1 123.8 120.1 120.6 118.7 118.6 120.7 118.5 122.0 122.4 122.8 125.4 127.4 129.6 128.2 68 Iron and steel 331,2 1.7 121.1 113.4 114.4 109.7 114.6 116.7 112.6 117.1 118.9 119.6 122.6 125.8 129.0 126.9 69 Raw steel 331PT .1 115.7 112.6 109.7 100.2 102.0 106.6 106.6 109.1 110.5 113.4 110.9 112.6 116.8 116.5 70 Nonferrous 333-6,9 1.4 127.0 128.1 128.0 129.3 123.4 125.4 125.6 127.9 126.6 126.5 128.7 129.3 130.4 129.9 71 Fabricated metal products . . 34 5.0 127.3 126.2 126.9 127.7 128.7 127.6 126.7 127.5 127.6 126.9 127.8 128.6 128.4 128.1 72 Industrial machinery and equipment 35 8.0 203.7 207.7 211.2 211.1 212.7 212.3 213.9 217.6 219.5 219.3 218.5 221.6 224.5 225.0 73 Computer and office equipment 357 1.8 649.1 695.5 718.5 746.9 761.6 778.9 789.3 828.3 859.3 878.6 889.9 926.6 953.6 983.6 74 Electrical machinery 36 7.3 291.9 297.7 302.4 304.8 307.3 308.7 309.2 313.1 322.2 326.9 332.2 345.2 350.8 352.2 75 Transportation equipment. .. 37 9.5 123.0 127.6 128.4 127.1 125.6 124.0 125.6 125.5 124.9 125.1 125.4 124.3 124.0 121.5 76 Motor vehicles and parts . 371 4.9 141.1 149.9 150.2 148.8 146.6 145.3 147.9 149.2 149.4 150.7 153.1 151.7 152.9 150.2 77 Autos and light trucks . 371PT 2.6 128.5 136.5 140.4 138.1 137.3 137.9 137.3 136.3 138.7 141.4 145.3 134.9 149.2 141.1 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 104.9 105.8 106.9 105.7 104.8 103.2 103.7 102.4 101.1 100.3 98.7 98.1 96.3 94.0 79 Instruments 38 5.4 113.0 114.2 114.6 114.1 113.9 114.3 113.8 114.6 115.6 117.9 117.7 118.4 118.0 117.4 80 Miscellaneous 39 1.3 117.7 117.0 115.9 114.1 115.4 114.8 115.8 116.7 118.2 119.4 118.4 119.0 119.1 118.4 81 Nondurable goods 40.4 111.9 110.6 110.9 111.6 111.7 111.3 111.9 111.7 111.8 111.7 111.3 111.0 111.3 111.5 82 Foods " ' 20 9.4 109.6 107.7 109.1 111.3 111.1 112.0 112.3 111.4 111.4 110.8 110.0 108.8 108.5 109.0 83 Tobacco products 21 1.6 106.0 104.2 101.9 99.8 100.0 96.9 97.4 97.3 96.0 97.2 96.3 97.9 96.5 93.7 84 Textile mill products 22 1.8 112.2 111.2 112.4 108.8 109.4 109.3 110.6 109.0 111.4 111.0 111.8 113.0 110.7 111.0 85 Apparel products 23 2.2 99.2 98.3 97.3 95.5 95.3 94.1 93.6 93.3 94.0 93.1 92.3 91.4 89.9 88.4 86 Paper and products 26 3.6 115.0 113.9 115.4 112.3 115.3 116.2 116.4 116.5 114.6 114.2 115.9 114.9 116.2 116.5 87 Printing and publishing .... 27 6.7 105.1 104.6 104.2 105.4 105.1 103.6 103.8 103.7 104.3 104.2 103.4 102.5 102.8 103.3 88 Chemicals and products .... 28 9.9 115.5 113.3 113.1 114.7 114.0 112.5 114.4 115.1 115.1 115.4 115.2 115.0 116.9 116.9 89 Petroleum products 29 1.4 112.0 110.7 110.4 112.8 112.5 116.7 116.4 113.1 114.3 113.0 111.4 113.1 112.9 113.3 90 Rubber and plastic products . 30 3.5 132.6 132.6 133.4 135.0 136.0 135.4 135,2 135.4 136.2 137.6 136.0 138.0 137.7 139.2 91 Leather and products 31 .3 75.3 73.5 72.8 74.3 73.0 70.9 70.5 70.7 70.3 70.6 71.0 69.9 70.3 69.6 92 Mining 6.9 104.0 102.4 102.0 101.1 99.0 98.5 98.9 98.9 98.3 97.9 97.7 98.7 99.6 99.8 93 Metal 10 .5 110.0 106.4 113.6 110.7 108.3 110.1 108.4 104.1 105.2 98.6 93.3 94.1 92.7 93.2 94 Coal 12 1.0 109.7 115.8 110.8 108.6 114.5 107.7 109.1 103.4 106.8 106.1 106.5 109.6 110.6 109.5 95 Oil and gas extraction 13 4.8 99.6 96.8 96.8 94.2 91.0 91.5 91.7 93.3 91.8 92.4 92.8 93.7 94.9 95.3 96 Stone and eaith minerals 14 .6 124.7 120.3 118.8 132.1 125.6 126.9 127.7 129.1 126.7 124.1 122.6 121.8 122.0 122.0 97 Utilities 7.7 113.9 120.3 116.5 110.6 111.8 114.7 111.3 116.7 115.8 115.4 118.2 120.1 118.3 115.4 98 Electric 491.493PT 6.2 117.2 122.6 120.3 114.6 115.2 116.2 114.1 118.9 118.2 117.8 120.3 122.9 120.7 117.3 99 Gas 492.493PT 1.6 101.9 109.7 98.7 92.0 96.0 108.4 98.6 106.9 104.5 104.3 108.9 107.4 107.7 106.8 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 134.7 134.4 135.3 135.7 136.2 136.0 136.3 136.8 137.4 137.7 137.6 138.4 139.0 138.9 101 Manufacturing excluding computer and office equipment 83.6 130.2 130.0 130.8 130.9 131.1 130.8 131.2 131.5 131.9 132.2 132.2 132.7 133.2 132.8 102 Computers, communications equipment, and semiconductors 5.9 515.6 538.3 552.1 562.8 571.2 576.6 580.0 597.8 620.1 636.7 650.5 680.0 697.0 708.9 103 Manufacturing excluding computers and semiconductors 81.1 120.1 119.9 120.4 120.4 120.5 120.1 120.5 120.7 120.8 120.9 120.7 121.0 121.4 120.9 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 118.5 118.1 118.7 118.8 118.9 118.5 118.9 119.0 119.0 119.0 118.7 118.8 119.2 118.7 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total 2,001.9 2,489.8 2,501.0 2,519.7 2,511.6 2,513.9 2,527.3 2,527.2 2,536.0 2,547.5 2,549.8 2,550.7 2,547.4 2,568.4 2,550.5 106 Final 1,552.1 1,958.0 1,966.4 1,982.3 1,973.4 1,972.7 1,982.5 1,982.7 1,989.4 1,997.8 2,000.0 2,005.3 2,002.0 2,024.1 2,009.0 107 Consumer goods 1,049,6 1,212.3 1,208.2 1,217.1 1,212.6 1,215.0 1,227.4 1,227.0 1,226.3 1,230.6 1,230.9 1,238.6 1,232.7 1,244.9 1,236.2 108 Equipment 502.5 746.9 762.7 769.8 765.2 762.0 758.8 759.5 767.3 771.5 773.5 770.8 773.7 783.8 777.4 109 Intermediate 449.9 533.6 535.7 538.7 539.1 541.9 545.4 545.1 547.1 550.2 550.3 546.5 546.4 546.0 543.1 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 • December 1999 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1998 1999 IItteemm 11999966 11999977 11999988 Nov. Dec. Jan. Feb. Mar. Apr. Mayr Juner July1 Aug. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,426 1,441 1,604 1,688 1,708 1,778 1,738 1,654 1,572 1,591 1,641 1,641 1,619 2 One-family 1,070 1,062 1,184 1,254 1,296 1,275 1,306 1,242 1,214 1,243 1,241 1,247 1,210 3 Two-family or more 356 379 421 434 412 503 432 412 358 348 400 394 409 4 Started 1,477 1,474 1,617 1,654 1,750 1,820 1,752 1,746 1,577 1,668 1,607 1,680 1,672 5 One-family 1,161 1,134 1,271 1,375 1,383 1,393 1,380 1,394 1,260 1,389 1,305 1,332 1,296 6 Two-family or more 316 340 346 279 367 427 372 352 317 279 302 348 376 7 Under construction at end of period1 819 834 935 971 999 1,011 1,032 1,036 1,031 1,029 1,017 1,021 1,030 8 One-family 584 570 638 667 688 697 712 714 708 708 702 704 707 9 Two-family or more 235 264 297 304 311 314 320 322 323 321 315 317 323 10 Completed 1,406 1,406 1,473 1,600 1,440 1,648 1,528 1,700 1,633 1,650 1,674 1,608 1,581 11 One-family 1,123 1,120 1,158 1,254 1,150 1,292 1,246 1,357 1,324 1,344 1,346 1,261 1,266 12 Two-family or more 283 285 315 346 290 356 282 343 309 306 328 347 315 13 Mobile homes shipped 361 354 372 389 382 390 381 383 368 365 355 336 340 Merchant builder activity in one-family units 14 Number sold 757 804 886 985 958 908 909 885 952 914 947 955 983 15 Number for sale at end of period1 326 287 300 292 295 295 297 300 300 304 307 308 313 Price of units sold (thousands of dollars f 16 Median 140.0 146.0 152.5 151.0 152.5 152.5 159.9 155.0 160.0 154.8 157.7 157.0 150.8 17 Average 166.4 176.2 181.9 178.6 183.3 182.8 191.4 189.4 191.4 188.2 193.6 188.2 198.3 EXISTING UNITS (one-family) 18 Number sold 4,196 4,381 4,970 5,020 5,340 5,060 5,140 5,420 5,250 5,000 5,630 5,400 5,240 Price of units sold (thousands of dollars)1 19 Median 115.8 121.8 128.4 129.4 128.5 130.3 128.1 129.6 130.7 132.8 136.9 136.0 137.4 20 Average 141.8 150.5 159.1 159.9 159.6 162.8 159.6 162.3 163.8 167.4 174.2 171.9 174.5 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 581,920 617,877 664,451 680,117 690,462 697,858 710,657 715,396 704,582r 698,461 698,852 694,783 692,013 22 Private 447,593 474,842 518,987 534,743 541,591 543,471 548,682 555,362 547,885r 546,880 546,931 542,334 536,190 23 Residential 255,577 265,908 293,569 306,299 310,261 315,828 318,483 323,133 322,213r 321,803 320,913 318,055 316,724 24 Nonresidential 192,017 208,933 225,418 228,444 231,330 227,643 230,199 232,229 225,672r 225,077 226,018 224,279 219,466 25 Industrial buildings 32,644 31,355 32,308 30,845 30,327 29,895 28,967 29,052 26,217r 24,975 25,465 24,537 23,358 26 Commercial buildings 75,829 86,190 95,252 99,831 101,605 100,164 102,802 103,983 102,180' 104,134 104,457 103,449 102,771 27 Other buildings 30,648 37,198 39,438 39,744 42,354 38,833 40,449 39,840 39,737r 38,876 38,592 38,047 37,227 28 Public utilities and other 52,896 54,190 58,421 58,024 57,044 58,751 57,981 59,354 57,538r 57,092 57,504 58,246 56,110 29 Public 134,326 143,035 145,464 145,374 148,871 154,387 161,975 160,033 156,697r 151,581 151,921 152,449 155,823 30 Military 2,604 2,559 2,588 2,296 2,306 1,881 2,636 2,223 2,268r 2,128 2,137 2,305 1,697 31 Highway 39,883 44,295 45,067 43,929 44,583 50,538 54,880 53,099 50,897r 48,542 45,518 47,279 47,330 32 Conservation and development 5,827 5,576 5,487 5,639 5,406 6,018 6,271 6,194 6,016r 5,101 5,845 5,816 6,674 33 Other 86,012 90,605 92,322 93,510 96,576 95,950 98,188 98,517 97,516r 95,810 98,421 97,049 100,122 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) Index level, Item 1998 1999 1999 Sept. 1998 1999 19991 Sept. Sept. Dec. Mar. June Sept. May June July Aug. Sept. CONSUMER PRICES2 (1982-84=100) 1.5 2.6 2.0 1.5 2.9 4.2 .0 .0 .3 .3 .4 167.9 2.0 2.2 2.8 1.7 1.7 2.5 .4 .0 .2 .2 .2 164.6 -9.8 10.2 -5.1 5.8 14.2 29.4 -1.3 -1.2 2.1 2.7 1.7 113.2 22..55 2.0 2.5 .9 2.3 2.5 .1 .1 .2 .1 .3 177.7 ..88 1.0 2.5 -3.0 2.0 2.5 -.1 .0 .1 -.1 .7 144.6 33..11 22..55 22..55 22..77 22..55 2.3 .2 .1 .3 .2 .2 196.6 PRODUCER PRICES (1982=100) -.9 3.2 2.2 .6 2.5 7.5 .2 -.1 .2 .5 1.1 134.8 .5 1.2 .3 2.1 .3 2.1 ,4r .4 -.9 .4 1.0 137.0 -11.6 13.9 -8.9 5.7 21.9 43.9 ,3r -.6' 3.4 3.7 2.2 85.9 2.1 2.8 8.3 -1.3 .3 4.3 .1 -.1 .1 -.1 1.1 151.6 --..44 ..00 ..33 -.6 ..00 .3 .0r -,lr -.1 .0 .2 136.7 Intermediate materials -2.1 2.0 -4.5 .3 5.7 7.0 .3' .2' .6 .7 .3 125.9 --..99 ..55 --22..77 --..99 33..11 2.7 .3r ,3r .4 .2 .1 133.7 Crude materials -8.4 -.8 -7.0 4.1 .0 .4 2.5' ,5r -4.8 3.8 1.3 100.5 -25.2 51.3 13.5 -21.1 158.3 126.6 13.2r -,5r 3.7 7.2 10.4 94.1 16 Other --1111..66 11..22 --2244..33 ..99 77..33 2288..11 22..11rr .5 22..33 1.8 2.2 139.6 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • December 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 Q2 Q3 Q4 Q1 Q2R GROSS DOMESTIC PRODUCT 1 Total 7,661.6 8,110.9 8,511.0 8,440.6 8,537.9 8,681.2 8,808.7 8,873.4 By source 2 Personal consumption expenditures 5,215.7 5,493.7 5,807.9 5,773.7 5,846.7 5,934.8 6,050.6 6,155.0 3 Durable goods 643.3 673.0 724.7 720.1 718.9 754.5 771.2 784.9 4 Nondurable goods 1,539.2 1,600.6 1,662.4 1,655.2 1,670.0 1,691.3 1,736.0 1,770.6 5 Services 3,033.2 3,220.1 3,420.8 3,398.4 3,457.7 3,488.9 3,543.4 3,599.5 6 Gross private domestic investment 1,131.9 1,256.0 1,367.1 1,345.0 1,364.4 1,392.4 1,417.4 1,417.4 7 Fixed investment 1,099.8 1,188.6 1,307.8 1,305.8 1,307.5 1,346.7 1,377.9 1,410.0 8 Nonresidential 787.9 860.7 938.2 941.9 931.6 957.9 972.6 994.2 9 Structures 216.9 240.2 246.9 245.4 246.2 250.9 255.0 256.1 10 Producers' durable equipment 571.0 620.5 691.3 696.6 685.4 706.9 717.6 738.1 11 Residential structures 311.8 327.9 369.6 363.8 375.8 388.9 405.3 415.7 12 Change in business inventories 32.1 67.4 59.3 39.2 57.0 45.7 39.5 7.5 13 Nonfarm 24.5 63.1 52.7 31.5 49.3 39.3 36.4 5.2 14 Net exports of goods and services -91.2 -93.4 -151.2 -159.3 -165.5 -156.2 -196.9 -240.6 15 Exports 873.8 965.4 959.0 949.6 936.2 976.8 962.7 973.8 16 Imports 965.0 1,058.8 1,110.2 1,108.9 1,101.7 1,133.0 1,159.6 1,214.4 17 Government consumption expenditures and gross investment 1,405.2 1,454.6 1,487.1 1,481.2 1,492.3 1,510.2 1,537.5 1,541.5 18 Federal 518.4 520.2 520.6 520.7 519.4 530.7 536.6 532.8 19 State and local 886.8 934.4 966.5 960.4 972.9 979.5 1,000.9 1,008.7 By major type of product 20 Final sales, total 7,629.5 8,043.5 8,451.6 8,401.3 8,480.9 8,635.5 8,769.1 8,865.9 21 Goods 2,780.3 2,911.2 3,044.7 3,025.3 3,029.0 3,118.8 3,154.1 3,189.2 22 Durable 1,228.8 1,310.1 1,391.0 1,380.8 1,373.0 1,433.1 1,436.1 1,449.8 23 Nondurable 1,551.6 1,601.0 1,653.7 1,644.4 1,655.9 1,685.7 1,718.1 1,739.4 24 Services 4,179.5 4,414.1 4,641.0 4,619.5 4,678.5 4,727.7 4,793.7 4,850.8 25 Structures 669.7 718.3 765.9 756.6 773.5 789.0 821.3 825.9 26 Change in business inventories 32.1 67.4 59.3 39.2 57.0 45.7 39.5 7.5 21 Durable goods 20.8 33.6 25.2 4.5 19.5 27.0 16.5 -3.9 28 Nondurable goods 11.4 33.8 34.1 34.7 37.5 18.7 23.1 11.4 MEMO 29 Total GDP in chained 1992 dollars 6,994.8 7,269.8 7,551.9 7,498.6 7,566.5 7,677.7 7,759.6 7,790.6 NATIONAL INCOME 30 Total 6,256.0 6,646.5 6,994.7 6,945.5 7,032.3 7,126.0 7,265.2 7,344.8 31 Compensation of employees 4,409.0 4,687.2 4,981.0 4,945.2 5,011.6 5,084.3 5,166.5 5,237.4 32 Wages and salaries 3,640.4 3,893.6 4,153.9 4,121.6 4,181.1 4,246.8 4,317.0 4,378.5 33 Government and government enterprises 640.9 664.2 689.3 685.8 692.7 699.2 711.2 716.2 34 Other 2,999.5 3,229.4 3,464.6 3,435.8 3,488.4 3,547.6 3,605.7 3,662.3 35 Supplement to wages and salaries 768.6 793.7 827.1 823.5 830.5 837.5 849.6 858.9 36 Employer contributions for social insurance 381.7 400.7 420.1 417.9 422.1 426.5 434.9 439.3 37 Other labor income 387.0 392.9 406.9 405.7 408.4 411.0 414.7 419.6 38 Proprietors' income1 527.7 551.2 577.2 571.7 576.1 596.9 598.3 609.0 39 Business and professional1 488.8 515.8 548.5 544.0 550.9 562.2 575.8 586.6 40 Farm1 38.9 35.5 28.7 27.7 25.2 34.7 22.5 22.4 41 Rental income of persons2 150.2 158.2 162.6 161.0 163.6 167.5 167.7 169.8 42 Corporate profits1 750.4 817.9 824.6 820.6 827.0 821.7 868.8 859.3 43 Profits before tax3 680.2 734.4 717.8 723.5 720.5 708.1 752.6 768.0 44 Inventory valuation adjustment -1.2 6.9 14.5 7.8 11.7 13.4 11.6 -17.4 45 Capital consumption adjustment 71.4 76.6 92.3 89.4 94.8 100.2 104.6 108.7 46 Net interest 418.6 432.0 449.3 447.1 454.0 455.6 463.9 469.2 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 Q2 Q3 Q4 Ql Q2r PERSONAL INCOME AND SAVING 1 Total personal income 6,425.2 6,784.0 7,126.1 7,081.9 7,160.8 7,257.9 7,349.3 7,441.0 ? Wage and salary disbursements 3,631.1 3,889.8 4,149.9 4,117.6 4,177.1 4,242.8 4,317.0 4,378.5 Commodity-producing industries 909.0 975.0 1,026.9 1,023.2 1,028.0 1,037.4 1,048.1 1,060.7 4 Manufacturing 674.6 719.5 751.5 750.8 750.9 754.1 759.2 767.5 Distributive industries 823.3 879.8 939.6 932.2 945.8 961.5 971.4 982.7 6 Service industries 1,257.9 1,370.8 1,494.0 1,476.4 1,510.6 1,544.6 1,586.2 1,618.9 7 Government and government enterprises 640.9 664.2 689.3 685.8 692.7 699.2 711.2 716.2 8 Other labor income 387.0 392.9 406.9 405.7 408.4 411.0 414.7 419.6 9 Proprietors' income1 527.7 551.2 577.2 571.7 576.1 596.9 598.3 609.0 in Business and professional1 488.8 515.8 548.5 544.0 550.9 562.2 575.8 586.6 n Farm 38.9 35.5 28.7 27.7 25.2 34.7 22.5 22.4 17 Rental income of persons 150.2 158.2 162.6 161.0 163.6 167.5 167.7 169.8 13 248.2 260.3 263.1 262.1 263.0 265.7 268.8 272.7 14 Personal interest income 719.4 747.3 764.8 763.0 769.2 769.9 771.0 777.8 15 Transfer payments 1,068.0 1,110.4 1,149.0 1,145.8 1,152.9 1,158.3 1,175.2 1,181.4 16 Old age survivors, disability, and health insurance benefits 538.0 565.9 586.5 585.0 589.0 590.6 597.9 601.4 17 LESS: Personal contributions for social insurance 306.3 326.2 347.4 345.1 349.5 354.1 363.4 367.9 18 EQUALS: Personal income 6,425.2 6,784.0 7,126.1 7,081.9 7,160.8 7,257.9 7,349.3 7,441.0 19 LESS: Personal tax and nontax payments 890.5 989.0 1,098.3 1,092.9 1,108.4 1,124.9 1,144.1 1,162.4 20 EQUALS: Disposable personal income 5,534.7 5,795.1 6,027.9 5,988.9 6,052.4 6,133.1 6,205.2 6,278.5 21 LESS: Personal outlays 5,376.2 5,674.1 6,000.2 5,963.3 6,039.8 6,133.6 6,250.7 6,358.6 22 EQUALS: Personal saving 158.5 121.0 27.7 25.6 12.6 -.6 -45.5 -80.1 MEMO Per capita (chained 1992 dollars) 23 Gross domestic product 26,335.7 27,136.2 27,938.9 27,783,0 27,972.1 28,299.8 28,527.9 2288,,556688..33 24 Personal consumption expenditures 17,893.0 18,340.9 19,065.0 19,007.8 19,156.3 19,336.4 19,602.7 19,783.1 25 Disposable personal income 18,989.0 19,349.0 19,790.0 19,719.0 19,829.0 19,980.0 20,101.0 20,183.0 26 Saving rate (percent) 2.9 2.1 .5 .4 .2 .0 -.7 -1.3 GROSS SAVING 27 Gross saving 1,274.5 1,406.3 1,468.0 1,448.5 1,474.5 1,466.6 1,511.4 1,484.9 28 Gross private saving 1,114.5 1,141.6 1,090.4 1,079.0 1,078.7 1,073.7 1,061.9 1,017.2 29 Personal saving 158.5 121.0 27.7 25.6 12.6 -.6 -45.5 -80.1 30 Undistributed corporate profits 262.4 296.7 305.4 300.9 304.8 303.9 332.5 312.6 31 Corporate inventory valuation adjustment -1.2 6.9 14.5 7.8 11.7 13.4 11.6 -17.4 Capital consumption allowances 32 Corporate 452.0 477.3 500.6 497.8 503.1 508.9 551144..99 552211..77 33 Noncorporate 232.3 242.8 252.7 250.7 254.2 257.5 260.0 262.9 34 Gross government saving 160.0 264.7 377.6 369.4 395.7 392.9 449.4 467.7 35 Federal -39.6 49.5 142.5 143.9 161.6 135.8 192.3 209.6 36 Consumption of fixed capital 70.6 70.6 69.7 69.5 69.6 70.0 69.5 69.4 37 Current surplus or deficit (-), national accounts -110.3 -21.1 72.8 74.4 92.0 65.8 122.7 140.2 38 State and local 199.7 215.2 235.2 225.6 234.2 257.1 257.2 258.1 39 Consumption of fixed capital 77.1 81.1 85.0 84.3 85.4 86.6 87.5 89.0 40 Current surplus or deficit (-), national accounts 122.6 134.1 150.2 141.3 148.7 170.5 169.7 169.1 41 Gross investment 1,242.3 1,350.5 1,391.5 1,362.7 1,372.5 1,402.4 1,418.3 1,364.7 42 Gross private domestic investment 1,131.9 1,256.0 1,367.1 1,345.0 1,364.4 1,392.4 1,417.4 1,417.4 43 Gross government investment 229.7 235.4 237.0 232.5 239.7 238.3 255.6 248.7 44 Net foreign investment -119.2 -140.9 -212.6 -214.8 -231.6 -228.3 -254.7 -301.4 45 Statistical discrepancy -32.2 -55.8 -76.5 -85.7 -102.0 -64.2 -93.1 -120.1 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 • December 1999 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1998 1999 IItteemm ccrreeddiittss oorr ddeebbiittss 11999966 11999977 11999988 Q2 Q3 Q4 Q1 Q2P 1 Balance on current account -129,295 -143,465 -220,562 -52,400 -63,476 -61,669 -68,654 -80,673 2 Balance on goods and services -104,318 -104,730 -164,282 -41,961 -45,724 -43,262 -53,974 -65,016 3 Exports 849,806 938,543 933,907 231,889 229,284 236,904 231,904 234,526 4 Imports -954,124 -1,043,273 -1,098,189 -273,850 -275,008 -280,166 -285,878 -299,542 5 Income, net 17,210 3,231 -12,205 -553 -6,965 -4,933 -4,340 -4,382 6 Investment, net 21,754 8,185 -6,956 735 -5,637 -3,571 -2,946 -3,011 7 Direct 67,746 69,220 59,405 16,177 11,834 14,558 14,834 14,103 8 Portfolio -45,992 -61,035 -66,361 -15,442 -17,471 -18,129 -17,780 -17,114 9 Compensation of employees -4,544 -4,954 -5,249 -1,288 -1,328 -1,362 -1,394 -1,371 10 Unilateral current transfers, net -42,187 -41,966 -44,075 -9,886 -10,787 -13,474 -10,340 -11,275 11 Change in U.S. government assets other than official reserve assets, net (increase, —) -989 68 -429 -483 185 -50 119 -380 12 Change in U.S. official reserve assets (increase, —) 6,668 -1,010 -6,784 -1,945 -2,026 -2,369 4,068 1,159 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) 370 -350 -149 72 188 -227 563 -190 15 Reserve position in International Monetary Fund -1,280 -3,575 -5,118 -1.031 -2,078 -1,924 3 1,413 16 Foreign currencies 7,578 2,915 -1,517 -986 -136 -218 3,502 -64 17 Change in U.S. private assets abroad (increase, —) -386,441 -464,354 -285,605 -118,089 -60,256 -48,188 -19,335 -124,940 18 Bank-reported claims3 -91,555 -144,822 -24,918 -27,704 -33,344 37,192 27,771 -37,082 19 Nonbank-reported claims -86,333 -120,403 -25,041 -14,327 -20,320 16,202 -13,853 -26,429 20 U.S. purchases of foreign securities, net -115,859 -89,174 -102,817 -32,886 14,994 -70,809 8,132 -26,387 21 U.S. direct investments abroad, net -92,694 -109,955 -132,829 -43,172 -21,586 -30,773 -41,385 -35,042 22 Change in foreign official assets in United States (increase, +) 127,390 18,119 -21,684 -10,551 -46,489 24,352 4,708 -986 23 U.S. Treasury securities 115,671 -6,690 -9,957 -20,318 -32,811 31,836 800 -6,708 24 Other U.S. government obligations 5,008 4,529 6,332 254 1,906 1,562 5,993 5,792 25 Other U.S. government liabilities3 -316 -1,798 -3,113 -807 -224 -1,054 -1,594 -770 26 Other U.S. liabilities reported by U.S. banks3 5,704 22,286 -11,469 9,488 -12,866 -7,133 -589 1,202 27 Other foreign official assets4 1,323 -208 -3,477 832 -2,494 -859 98 -502 28 Change in foreign private assets in United States (increase, +) 447,457 733,542 524,321 173,017 140,036 125,453 84,152 242,033 29 U.S. bank-reported liabilities2 16,478 149,026 40,731 34,138 77,313 -21,811 -14,184 49,374 30 U.S. nonbank-reported liabilities 39,404 107,779 9,412 18,040 11,875 -53,210 20,188 -710 31 Foreign private purchases of U.S. Treasury securities, net 154,996 146,433 46,155 25,759 -1,438 24,391 -8,781 -5,517 32 U.S. currency flows 17,362 24,782 16,622 2,349 7,277 6,250 2,440 3,057 33 Foreign purchases of other U.S. securities, net 130,240 196,258 218,026 71,785 20,103 49,328 61,540 77,272 34 Foreign direct investments in United States, net 88,977 109,264 193,375 20,946 24,906 120,505 22,949 118,557 35 Capital account transactions, net5 672 292 617 160 148 166 166 180 36 Discrepancy -65,462 -143,192 10,126 10,291 31,878 -37,695 -5,224 -36,393 37 Due to seasonal adjustment 528 -10,582 4,144 5,264 582 38 Before seasonal adjustment -65,462 -143,192 10,126 9,763 42,460 -41,839 -10,488 -36,975 MEMO Changes in official assets 39 U.S. official reserve assets (increase, —) 6,668 -1,010 -6,784 -1,945 -2,026 -2,369 4,068 1,159 40 Foreign official assets in United States, excluding line 25 (increase, +) 127,706 19,917 -18,571 -9,744 -46,265 25,406 6,302 -216 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 14,911 12,124 -11,499 -657 -11,642 2,057 2,058 1,774 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38—41. 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 1999 IItteemm 11999966 11999977 11999988 Jan.1" Feb.1" Mar/ Apr/ Mayr Juner Julyp 1 Goods and services, balance -104,318 — 104,731 -164,282 -18,515 -19,311 -18,787 -21,390 -24,604 -24,886 -24,095 2 Merchandise -191,270 -196,652 -246,932 -25,172 -25,680 -25,334 -27,899 -31,179 -31,422 -30,584 3 Services 86,952 91,921 82,650 6,657 6,369 6,547 6,509 6,575 6,536 6,489 4 Goods and services, exports 849,806 938,543 933,907 77,025 77,047 78,113 77,978 78,623 79,122 82,027 5 Merchandise 612,057 679,715 670,246 54,704 54,326 55,269 55,121 55,472 55,890 58,782 6 Services 237,749 258,828 263,661 22,321 22,721 22,844 22,857 23,151 23,232 23,245 7 Goods and services, imports -954,124 -1,043,273 -1,098,189 -95,540 -96,358 -96,900 -99,368 -103,227 -104,008 -106,122 8 Merchandise -803,327 -876,366 -917,178 -79,876 -80,006 -80,603 -83,020 -86,651 -87,312 -89,366 9 Services -150,797 -166,907 -181,011 -15,664 -16,352 -16,297 -16,348 -16,576 -16,696 -16,756 1. Data show monthly values consistent with quarterly figures in the US. 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 1999 AAsssseett 11999966 11999977 11999988 Mar. Apr. May June July Aug. Sept. Oct.? 1 Total 75,090 69,954 81,755 74,359 73,694 72,121 71,689 73,305 72,649r 73,414 73,228 2 Gold stock, including Exchange Stabilization Fund1 11,049 11,050 11,041 11,049 11,049 11,049 11,046 11,048 11,046r 11,047 11,047 3 Special drawing rights2'3 10,312 10,027 10,603 9,682 9,634 9,784 9,719 9,925 10,152 10,284 10,232 4 Reserve position in International Monetary Fund2 15,435 18,071 24,111 23,231 23,054 21,689 21,462 21,462 19,885 19,978 19,571 5 Foreign currencies4 38,294 30,809 36,001 30,397 29,957 29,599 29,462 30,870 31,566 32,105 32,378 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 1999 AAsssseett 11999966 11999977 11999988 Mar. Apr. May June July Aug. Sept. Oct.p 1 Deposits 167 457 167 166 260 157 409 257 166 243 189 Held in custody 2 U.S. Treasury securities2 638,049 620,885 607,574 610,649 606,662 606,579 611,372 619,004 626,669 634,086 621,351 3 Earmarked gold3 11,197 10,763 10,343 10,347 10,340 10,340 10,329 10,329 10,271 10,155 10,114 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 • December 1999 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1999 IItteemm 11999977 11999988 Feb. Mar. Apr. May June July Aug.? 1 Total1 776,505 759,387 765,480 765,689 766,569 760,410 765,708r 773,494r 782,575 By type 2 Liabilities reported by banks in the United States 135,384 125,332 127,989 124,743 135,791 124,270 112266,,118800rr 125,873r 126,287 3 U.S. Treasury bills and certificates3 148,301 134,177 138,235 141,941 135,765 136,199 138,518 147,492 153,499 U.S. Treasury bonds and notes 4 Marketable 428,004 432,127 429,891 425,046 418,350 421,573 421,970 420,197 422,590 5 Nonmarketable4 5,994 6,074 6,151 6,191 6,231 6,143 5,982 6,022 6,060 6 U.S. securities other than U.S. Treasury securities5 58,822 61,677 63,214 67,768 70,432 72,225 73,058 73,910 74,139 By area 7 Europe1 252,289 256,026 256,238 253,970 245,500 242,386 241,989 240,546 243,334 8 Canada 36,177 36,715 38,462 39,611 38,563 38,181 39,001 39,147 39,342 9 Latin America and Caribbean 96,942 79,422 75,986 72,828 81,379 81,075 76,828 77,832r 75,406 10 Asia 400,144 400,171 408,606 412,353 414,051 411,739 421,282 430,050 438,300 11 Africa 9,981 10,059 9,838 9,906 9,656 9,326 8,378r 8,376 8,122 12 Other countries 7,058 3,080 2,436 3,107 3,506 3,789 4,316 3,629 4,157 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 Sept. Dec. Mar. June 1 Banks' liabilities 109,713 103,383 117,524 92,934 101,125 101,359 97,751 2 Banks' claims 74,016 66,018 83,038 67,901 78,152 80,642 67,864 3 Deposits 22,696 22,467 28,661 27,293 45,985 42,147 41,895 4 Other claims 51,320 43,551 54,377 40,608 32,167 38,495 25,969 5 Claims of banks' domestic customers2 6,145 10,978 8,191 8,453 20,718 11,039 23,474 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 1999 IItteemm 11999966 11999977 11999988 Feb. Mar. Apr. May June July Aug.P BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,162,148 1,283,027 1,347,176 1,340,815 1,337,831 1,334,253 1,352,608 l,382,159r l,339,413r 1,384,848 2 Banks' own liabilities 758,998 882,980 884,874 880,164 872,914 879,742 900,821 919,635r 889,186' 907,365 3 Demand deposits 27,034 31,344 29,556 31,906 30,913 31,180 32,184 36,322 43,183' 44,938 4 Time deposits 186,910 198,546 152,227 153,275 152,157 157,727 156,634 156,677r 156,891' 155,201 5 Other3 143,510 168,011 140,245 161,865 157,083 160,393 160,611 152,193r 151,496' 151,412 6 Own foreign offices4 401,544 485,079 562,846 533,118 532,761 530,442 551,392 574,443r 537,616' 555,814 7 Banks' custodial liabilities5 403,150 400,047 462,302 460,651 464,917 454,511 451,787 462,524 450,227 477,483 8 U.S. Treasury bills and certificates6 236,874 193,239 183,494 184,890 192,840 178,515 177,768 179,351 187,872 192,347 9 Other negotiable and readily transferable instruments7 72,011 93,641 141,103 134,110 133,311 129,051 124,100 123,246 121,567 132,405 10 Other 94,265 113,167 137,705 141,651 138,766 146,945 149,919 159,927 140,788 152,731 11 Nonmonetary international and regional organizations8 . . 13,972 11,690 11,833 19,707 15,337 15,669 13,997 17,987r 18,463' 18,201 12 Banks' own liabilities 13,355 11,486 10,850 18,949 14,621 14,932 13,250 16,002r 16,964' 16,789 13 Demand deposits 29 16 172 407 194 13 25 49 66 31 14 Time deposits2 5,784 5,466 5,793 7,215 6,856 6,324 5,840 7,231 7,380 6,419 15 Other3 7,542 6,004 4,885 11,327 7,571 8,595 7,385 8,722r 9,518' 10,339 16 Banks' custodial liabilities5 617 204 983 758 716 737 747 1,985 1,499 1,412 17 U.S. Treasury bills and certificates6 352 69 636 549 548 555 616 956 953 896 18 Other negotiable and readily transferable instruments7 265 133 347 207 168 182 131 1,029 533 516 19 Other 0 2 0 2 0 0 0 0 13 0 20 Official institutions9 312,019 283,685 259,509 266,224 266,684 271,556 260,469 264,698r 273,365' 279,786 21 Banks' own liabilities 79,406 102,028 80,251 79,510 76,996 86,061 79,452 78,445r 80,400' 77,868 22 Demand deposits 1,511 2,314 3,003 3,107 3,393 3,599 2,789 2,952r 2,652 2,537 23 Time deposits2 33,336 41,396 29,602 25,988 23,840 29,109 27,372 26,643' 26,845' 24,856 24 Other3 44,559 58,318 47,646 50,415 49,763 53,353 49,291 48,850r 50,903 50,475 25 Banks' custodial liabilities5 232,613 181,657 179,258 186,714 189,688 185,495 181,017 186,253 192,965 201,918 26 U.S. Treasury bills and certificates6 198,921 148,301 134,177 138,235 141,941 135,765 136,199 138,518 147,492 153,499 27 Other negotiable and readily transferable instruments7 33,266 33,151 44,407 47,679 47,174 49,443 44,586 47,582 45,094 48,297 28 Other 426 205 674 800 573 287 232 153 379 122 29 Banks10 694,835 815,247 885,047 852,867 851,749 848,081 881,368 910,000r 853,184' 887,990 30 Banks' own liabilities 562,898 641,447 675,998 646,831 648,753 646,370 676,341 695,226r 656,403' 676,881 31 Unaffiliated foreign banks 161,354 156,368 113,152 113,713 115,992 115,928 124,949 120,783r 118,787' 121,067 32 Demand deposits 13,692 16,767 14,071 15,275 13,985 13,344 15,957 15,812' 14,086r 15,436 33 Time deposits2 89,765 83,433 46,219 46,704 49,101 50,206 49,336 47,998 49,540' 49,872 34 Other3 57,897 56,168 52,862 51,734 52,906 52,378 59,656 56,973 55,161 55,759 35 Own foreign offices4 401,544 485,079 562,846 533,118 532,761 530,442 551,392 574,443' 537,616' 555,814 36 Banks' custodial liabilities5 131,937 173,800 209,049 206,036 202,996 201,711 205,027 214,774 196,781 211,109 37 U.S. Treasury bills and certificates6 23,106 31,915 35,359 34,134 36,737 29,636 28,323 27,757 28,284 26,314 38 Other negotiable and readily transferable instruments7 17,027 35,393 45,102 40,108 37,304 34,959 35,580 36,983 37,459 41,253 39 Other 91,804 106,492 128,588 131,794 128,955 137,116 141,124 150,034 131,038 143,542 40 Other foreigners 141,322 172,405 190,787 202,017 204,061 198,947 196,774 189,474' 194,401r 198,871 41 Banks' own liabilities 103,339 128,019 117,775 134,874 132,544 132,379 131,778 129,962' 135,419' 135,827 42 Demand deposits 11,802 12,247 12,310 13,117 13,341 14,224 13,413 17,509 26,379 26,934 43 Time deposits2 58,025 68,251 70,613 73,368 72,360 72,088 74,086 74,805' 73,126' 74,054 44 Other3 33,512 47,521 34,852 48,389 46,843 46,067 44,279 37,648 35,914 34,839 45 Banks' custodial liabilities5 37,983 44,386 73,012 67,143 71,517 66,568 64,996 59,512 58,982 63,044 46 U.S. Treasury bills and certificates6 14,495 12,954 13,322 11,972 13,614 12,559 12,630 1122,,112200 11,143 11,638 47 Other negotiable and readily transferable instruments7 21,453 24,964 51,247 46,116 48,665 44,467 43,803 37,652 38,481 42,339 48 Other 2,035 6,468 8,443 9,055 9,238 9,542 8,563 9,740 9,358 9,067 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 14,573 16,083 27,026 23,341 23,035 21,718 24,141 22,569 21,811 22,565 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 • December 1999 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1999 IItteemm 11999966 11999977 11999988 Feb. Mar. Apr. May June July Aug.? AREA 50 Total, all foreigners 1,162,148 1,283,027 1,347,176 1,340,815 1,337,831 1,334,253 1,352,608 L,382,159R L,339,413R 1,384,848 51 Foreign countries 1,148,176 1,271,337 1,335,343 1,321,108 1,322,494 1,318,584 1,338,611 L,364,172R L,320,950R 1,366,647 52 Europe 376,590 419,672 427,367 436,331 418,436 409,512 434,124 430,580R 438,232' 450,777 53 Austria 5,128 2,717 3,178 3,070 3,274 2,428 2,224 2,678 2,770' 3,210 54 Belgium and Luxembourg 24,084 41,007 42,818 41,594 41,468 37,991 39,227 31,298' 31,242 34,834 55 Denmark 2,565 1,514 1,437 1,826 1,992 1,300 1,267 961 1,143 1,811 56 Finland 1,958 2,246 1,862 1,643 1,800 1,655 1,645 1,384 1,358 1,335 57 France 35,078 46,607 44,616 47,617 47,937 49,097 48,328 45,235' 42,622 42,424 58 Germany 24,660 23,737 21,357 23,111 23,747 18,575 24,689 21,999 23,950' 23,719 59 Greece 1,835 1,552 2,066 2,509 2,447 2,237 2,691 2,737 3,168 3,121 60 Italy 10,946 11,378 7,103 6,684 5,744 5,910 5,943 6,192 6,426 5,840 61 Netherlands 11,110 7,385 10,793 14,792 12,273 11,037 11,752 12,152 12,206 11,292 6 2 Norway 1,288 317 710 1,102 1,022 1,181 1,210 1,049 1,184 1,333 63 Portugal 3,562 2,262 3,235 2,225 2,237 2,277 2,461 2,439 2,237 1,912 64 Russia 7,623 7,968 2,439 2,438 2,500 2,693 2,794 2,871 2,756 2,665 65 Spain 17,707 18,989 15,775 13,457 9,336 11,075 8,083 8,678 7,700 8,194 66 Sweden 1,623 1,628 3,027 2,918 2,193 1,974 3,429 2,966 3,851 3,779 67 Switzerland 44,538 39,023 50,654 60,348 47,874 54,547 66,214 65,967 60,758 76,126 68 Turkey 6,738 4,054 4,286 5,045 5,639 5,787 5,810 5,914 7,786 7,883 69 United Kingdom 153,420 181,904 181,554 173,543 175,302 169,795 178,015 187,310' 200,038' 192,431 70 Yugoslavia" 206 239 233 287 274 221 242 254 289 270 /I Other Europe and other former U.S.S.R.12 22,521 25,145 30,224 32,122 31,377 29,732 28,100 28,496' 26,748 28,598 72 Canada 38,920 28,341 30,212 28,019 31,788 28,360 28,543 29,951 29,387' 29,908 73 Latin America and Caribbean 467,529 536,393 554,733 538,465 551,711 578,151 591,047 610,176' 554,346' 581,398 74 Argentina 13,877 20,199 19,013 18,245 16,891 18,349 16,428 17,804' 17,202' 17,061 75 Bahamas 88,895 112,217 118,085 118,727 119,207 118,649 118,122 123,524 122,465 132,442 76 Bermuda 5,527 6,911 6,839 8,370 7,514 6,957 7,951 9,168 9,410 9,319 77 Brazil 27,701 31,037 15,800 12,913 13,841 17,128 17,295 14,696 15,389 15,398 78 British West Indies 251,465 276,418 302,472 285,676 300,109 322,011 334,386 347,368' 294,208' 315,799 79 Chile 2,915 4,072 5,010 5,189 5,057 6,805 7,236 5,918 6,744' 5,805 80 Colombia 3,256 3,652 4,616 4,462 4,636 4,710 4,861 4,615 4,634 4,519 81 Cuba 21 66 62 62 63 64 64 70 70 72 82 Ecuador 1,767 2,078 1,572 1,513 1,606 1,688 1,800 1,930 1,975 1,724 83 Guatemala 1,282 1,494 1,333 1,338 1,392 1,386 1,449 1,468 1,425 1,521 84 Jamaica 628 450 539 542 551 534 547 527 471 533 85 Mexico 31,240 33,972 37,148 35,891 36,622 36,004 37,588 37,920 39.024' 36,296 86 Netherlands Antilles 6,099 5,085 5,010 8,406 7,256 5,633 3,853 5,662 3,012 3,408 87 Panama 4,099 4,241 3,864 4,401 4,196 3,974 3,984 4,130 3,844' 3,816 88 Peru 834 893 840 828 810 819 854 816 836 960 89 Uruguay 1,890 2,382 2,486 2,274 2,378 2,345 2,331 2,552 2,319 2,146 90 Venezuela 17,363 21,601 19,894 19,354 19,149 20,512 21,204 20,393 20,437 19,796 91 Other 8,670 9,625 10,150 10,274 10,433 10,583 11,094 11,615 10,881 10,783 92 249,083 269,379 307,490 302,561 305,483 228877,,554455 226699,,002266 227766,,991177'' 228833,,221188'' 228888,,991133 China 93 Mainland 30,438 18,252 13,041 15,345 13,996 16,350 14,753 13,366 10,872 12,359 94 Taiwan 15,995 11,840 12,708 12,211 13,183 12,641 10,795 11,408' 12,482 12,678 95 Hong Kong 18,789 17,722 20,900 25,510 27,589 26,314 25,728 24,575 24,200 24,148 96 India 3,930 4,567 5,250 5,241 6,189 5,979 5,520 5,421 5,864 5,408 97 Indonesia 2,298 3,554 8,282 6,172 6,675 7,434 6,211 6,530 7,309 6,633 98 Israel 6,051 6,281 7,749 7,598 8,246 7,037 7,004 6,144 5,076 5,059 99 Japan 117,316 143,401 168,563 161,073 161,887 142,326 132,605 143,635 145,652' 145,338 100 Korea (South) 5,949 13,060 12,454 9,990 11,141 9,849 11,387 12,901 12,792 12,724 101 Philippines 3,378 3,250 3,324 2,482 2,362 2,440 2,492 2,273 2,177 2,189 102 Thailand 10,912 6,501 7,359 6,590 6,588 6,296 5,739 5,296 6,054 5,809 103 Middle Eastern oil-exporting countries13 16,285 14,959 15,609 16,157 15,433 14,497 15,453 15,168 15,581 15,947 104 Other 17,742 25,992 32,251 34,192 32,194 36,382 31,339 30,200' 35,159 40,621 105 8,116 10,347 8,905 8,658 8,463 7,874 7,713 7,485 7,508 7,660 106 Egypt 2,012 1,663 1,339 1,902 1,758 1,599 1,339 1,576 1,566 1,851 107 Morocco 112 138 97 73 85 90 72 101 116' 108 108 South Africa 458 2,158 1,522 1,343 1,258 1,165 1,132 1,091 1,049 831 109 Zaire 10 10 5 13 9 4 12 16 13 13 110 Oil-exporting countries14 2,626 3,060 3,088 2,737 2,772 2,534 2,508 2,247 2,281' 2,511 111 Other 2,898 3,318 2,854 2,590 2,581 2,482 2,650 2,454 2,483 2,346 112 Other 7,938 7,205 6,636 7,074 6,613 7,142 8,158 9,063 8,259' 7,991 113 Australia 6,479 6,304 5,495 5,552 5,582 5,987 6,820 7,624 7,252' 6,963 114 Other 1,459 901 1,141 1,522 1,031 1,155 1,338 1,439 1,007 1,028 115 Nonmonetary international and regional organizations .. 13,972 11,690 11,833 19,707 15,337 15,669 13,997 17,987' 18,463' 18,201 lib International15 12,099 10,517 10,221 17,080 12,845 13,242 11,689 1144,,998877'' 15,822' 16,112 117 Latin American regional16 1,339 424 594 1,411 1,394 1,304 653 889988 819 658 118 Other regional17 534 749 1,018 1,216 1,098 1,123 1,655 2,102 1,822 1,431 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 1999 AArreeaa oorr ccoouunnttrryy 11999966 11999977 11999988 Feb. Mar. Apr. May June July Aug.P 1 Total, all foreigners 599,925 708,225 735,124 712,828 710,790 735,899 750,505 750,424r 720,129 730,014 2 Foreign countries 597,321 705,762 731,507 707,402 706,170 730,646 746,018 746,351r 715,722 727,156 3 Europe 165,769 199,880 233,362 230,307 226,441 236,306 265,798 299,977r 292,697 305,067 4 Austria 1,662 1,354 1,043 1,824 2,759 2,389 2,902 2,514 3,855 3,080 5 Belgium and Luxembourg 6,727 6,641 7,187 7,073 5,451 7,533 9,811 10,028 9,214 7,463 6 Denmark 492 980 2,383 1,656 1,619 2,297 2,141 1,901 1,763 1,440 7 Finland 971 1,233 1,070 1,233 1,351 1,349 1,480 1,730 2,197 1,915 8 France 15,246 16,239 15,251 18,583 15,187 15,942 15,800 18,253 19,944 18,970 9 Germany 8,472 12,676 15,922 16,362 16,879 17,188 18,367 20,793 23,965 23,556 in Greece 568 402 575 637 554 651 585 551r 628 659 n Italy 6,457 6,230 7,283 5,714 6,035 6,727 6,434 6,783 7,451 7,747 12 Netherlands 7,117 6,141 5,734 6,048 6,690 7,251 8,588 8,724 9,334 10,133 13 Norway 808 555 827 561 596 970 753 717 821 583 14 Portugal 418 777 669 888 1,205 1,060 1,134 1,122 1,056 1,222 15 Russia 1,669 1,248 789 723 971 787 1,016 768 831 782 16 Spain 3,211 2,942 5,735 4,260 3,041 2,949 4,516 6,178 4,606 3,700 17 Sweden 1,739 1,854 4,223 4,664 4,439 4,141 2,950 3,005 3,199 4,082 18 Switzerland 19,798 28,846 46,880 50,905 51,677 48,477 65,498 75,553 66,927 71,871 19 Turkey 1,109 1,558 1,982 1,871 2,078 1,943 1,918 2,281 2,220 2,260 20 United Kingdom 85,234 103,143 106,349 97,422 97,275 105,246 112,945 130,857r 125,261 137,636 21 Yugoslavia2 115 52 53 54 54 55 54 54 50 49 22 Other Europe and other former U.S.S.R.3 3,956 7,009 9,407 9,829 8,580 9,351 8,906 8,165 9,375 7,919 23 Canada 26,436 27,189 47,212 40,801 41,264 40,756 41,116 37,071 31,537 31,698 74 Latin America and Caribbean 274,153 343,730 342,564 340,678 341,434 365,120 352,479 326,012 311,673 310,134 75 Argentina 7,400 8,924 9,553 10,184 10,399 10,075 10,318 10,772 10,492 10,260 76 Bahamas 71,871 89,379 96,455 91,104 88,639 84,023 78,480 71,993 77,048 77,806 27 Bermuda 4,129 8,782 4,969 6,033 4,096 4,426 6,276 6,111 7,813 9,731 7.8 Brazil 17,259 21,696 16,193 15,357 15,143 14,788 14,891 14,858 14,577 13,802 79 British West Indies 105,510 145,471 153,752 155,326 162,867 193,306 184,928 166,497 146,862 137,104 30 Chile 5,136 7,913 8,261 8,085 8,082 7,810 7,545 7,531 7,153r 6,900 31 Colombia 6,247 6,945 6,523 6,462 6,222 6,105 5,877 5,570 5,590r 5,046 32 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 1,031 1,311 1,400 1,341 1,219 1,135 1,104 1,061 985 889 34 Guatemala 620 886 1,127 1,255 1,052 1,062 1,157 1,032 1,075 1,066 35 Jamaica 345 424 239 602 318 326 327 303 311 322 36 Mexico 18,425 19,428 21,143 21,564 20,532 19,434 19,314 18,633 18,977 17,821 37 Netherlands Antilles 25,209 17,838 6,779 6,571 6,661 5,711 5,867 5,483 5,101 14,020 38 Panama 2,786 4,364 3,584 3,390 3,320 4,329 3,298 3,351 3,064 2,899 39 Peru 2,720 3,491 3,260 3,353 3,232 3,111 3,053 2,974 2,710 2,516 40 Uruguay 589 629 1,126 934 838 772 724 1,050 1,105 1,049 41 Venezuela 1,702 2,129 3,089 3,684 3,506 3,138 3,245 3,479 3,501 3,460 42 Other 3,174 4,120 5,111 5,433 5,308 5,569 6,075 5,314 5,309 5,443 43 122,478 125,092 98,616 86,492 88,048 79,232 77,631 74,692 72,240 72,942 China 44 Mainland 1,401 1,579 1,311 2,400 3,398 3,461 3,006 3,745 3,144r 2,758 45 Taiwan 1,894 922 1.041 778 1,331 866 763 870 904r 937 46 Hong Kong 12,802 13,991 9,080 6,806 8,014 6,309 4,977 7,102 5,333 4,969 47 India 1,946 2,200 1,440 1,529 1,701 1,703 1,458 1,568 1,708 1,728 48 Indonesia 1,762 2,651 1,954 2,110 1,897 1,911 2,061 1,760 1,791 1,711 49 Israel 633 768 1,166 774 1,082 803 1,236 1,955 1,433 1,669 50 Japan 59,967 59,549 46,712 39,141 39,971 32,639 30,596 27,093 25,900 26,226 51 Korea (South) 18,901 18,162 8,238 8,479 9,119 11,119 12,326 11,317 12,753 12,194 52 Philippines 1,697 1,689 1,465 1,589 1,540 1,546 1,808 1,669 1,380 1,279 53 Thailand 2,679 2,259 1,806 1,708 1,720 1,732 1,623 1,850 1,683 1,549 54 Middle Eastern oil-exporting countries4 10,424 10,790 16,130 12,815 12,151 11,669 10,569 10,127 9,396 10,906 55 Other 8,372 10,532 8,273 8,363 6,124 5,474 7,208 5,636 6,815 7,016 56 Africa 2,776 3,530 3,122 3,087 2,938 2,688 2,448 2,629 2,499 2,178 57 Egypt 247 247 257 264 260 228 221 241 252 209 58 Morocco 524 511 372 361 422 463 444 454 431 444 59 South Africa 584 805 643 933 798 567 640 724 598 449 60 Zaire 0 0 0 0 0 0 0 0 0 0 61 Oil-exporting countries5 420 1,212 936 625 325 257 288 340 297 280 62 Other 1,001 755 914 904 1,133 1,173 855 870 921 796 63 Other 5,709 6,341 6,631 6,037 6,045 6,544 6,546 5,970 5,076 5,137 64 Australia 4,577 5,300 6,167 5,367 5,638 6,060 6,093 5,636 4,811 4,907 65 Other 1,132 1,041 464 670 407 484 453 334 265 230 66 Nonmonetary international and regional organizations6. . . 2,604 2,463 3,617 5,426 4,620 5,253 4,487 4,073 4,407 2,858 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 • December 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 1999 TTyyppee ooff ccllaaiimm 11999966 11999977 11999988 Feb. Mar. Apr. May Juner Julyr Aug.p 1 Total 743,919 852,852 875,986 862,754 897,993 2 Banks' claims 599,925 708,225 735,124 712,828 710,790 735,899 750,505 750,424 720,129 730,014 3 Foreign public borrowers 22,216 20,581 23,572 31,515 34,773 35,807 36,634 37,336 38,457 35,391 4 Own foreign offices2 341,574 431,685 484,456 461,705 467,948 485,347 492,109 488,744 460,218 457,526 5 Unaffiliated foreign banks 113,682 109,230 106,087 102,561 93,813 93,591 99,765 104,077 99,724 109,156 6 Deposits 33,826 30,995 27,208 29,406 25,070 23,979 25,251 24,270 24,979 24,029 7 Other 79,856 78,235 78,879 73,155 68,743 69,612 74,514 79,807 74,745 85,127 8 All other foreigners 122,453 146,729 121,009 117,047 114,256 121,154 121,997 120,267 121,730 127,941 9 Claims of banks' domestic customers3 143,994 144,627 140,862 151,964 147,569 10 Deposits 77,657 73,110 78,491 91,380 93,597 11 Negotiable and readily transferable instruments4 51,207 53,967 48,752 47,990 43,616 12 Outstanding collections and other claims 15,130 17,550 13,619 12,594 10,356 MEMO 13 Customer liability on acceptances 10,388 9,624 4,519 4,485 4,437 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 39,661 33,816 39,978 39,055 33,038 33,474 31,210 29,165 32,857 32,336 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 Sept. Dec. Mar. Junep 1 Total 224,932 258,106 276,550 281,342 250,547 242,463 259,219 By borrower 2 Maturity of one year or less 178,857 211,859 205,781 208,710 186,653 175,490 186,868 3 Foreign public borrowers 14,995 15,411 12,081 14,842 13,699 20,921 24,558 4 All other foreigners 163,862 196,448 193,700 193,868 172,954 154,569 162,310 5 Maturity of more than one year 46,075 46,247 70,769 72,632 63,894 66,973 72,351 6 Foreign public borrowers 7,522 6,790 8,499 10,926 9,840 13,290 11,657 7 All other foreigners 38,553 39,457 62,270 61,706 54,054 53,683 60,694 By area Maturity of one year or less 8 Europe 55,622 55,690 58,294 68,980 68,684 66,887 84,731 9 Canada 6,751 8,339 9,917 8,795 10,947 7,816 6,690 10 Latin America and Caribbean 72,504 103,254 97,207 100,161 81,911 71,214 65,853 11 Asia 40,296 38,078 33,964 22,320 18,005 21,347 21,957 12 Africa 1,295 1,316 2,211 1,762 1,835 1,571 1,543 13 All other3 2,389 5,182 4,188 6,692 5,271 6,655 6,094 Maturity of more than one year 14 Europe 4,995 6,965 13,240 15,264 14,923 16,949 18,754 15 Canada 2,751 2,645 2,525 2,982 3,140 2,781 3,276 16 Latin America and Caribbean 27,681 24,943 42,049 39,165 33,443 33,539 36,902 17 7,941 9,392 10,235 12,147 10,018 10,972 10,471 18 Africa 1,421 1,361 1,236 1,170 1,233 1,160 1,105 19 Allother3 1,286 941 1,484 1,904 1,137 1,572 1,843 1. Reporting banks include all types of depository institutions as well as some brokers and 2. Maturity is time remaining until maturity, dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1997 1998 1999 AArreeaa oorr ccoouunnttrryy 11999955 11999966 June Sept. Dec. Mar. June Sept. Dec. Mar. Junep 1 Total 551.9 645.3 678.8 711.0 719.3 739.1 749.7 738.9 714.1 678.3 667.3 2 G-10 countries and Switzerland 206.0 228.3 250.0 247.8 242.8 249.0 278.3 268.3 255.8 246.4 255.7 3 Belgium and Luxembourg 13.6 11.7 9.4 11.4 11.0 11.2 16.2 15.1 13.4 14.1 14.8 4 France 19.4 16.6 17.9 20.2 15.4 15.5 20.5 19.9 18.4 19.5 18.4 5 Germany 27.3 29.8 34.1 34.7 28.6 25.5 28.8 28.9 31.1 32.0 29.2 6 Italy 11.5 16.0 20.2 19.3 15.5 19.7 19.5 18.0 11.5 13.2 11.6 7 Netherlands 3.7 4.0 6.4 7.2 6.2 7.3 8.3 8.1 7.9 8.9 10.9 8 Sweden 2.7 2.6 3.6 4.1 3.3 4.8 3.1 2.2 2.3 3.6 2.3 9 Switzerland 6.7 5.3 5.4 4.8 7.2 5.6 6.9 7.5 8.3 7.3 7.8 10 United Kingdom 82.4 104.7 110.6 108.3 113.4 120.1 134.9 130.4 121.5 110.6 122.7 11 Canada 10.3 14.0 15.7 15.1 13.7 13.5 16.5 15.6 16.7 15.7 16.5 12 Japan 28.5 23.7 26.8 22.6 28.6 25.8 23.7 22.8 24.7 21.3 21.6 13 Other industrialized countries 50.2 65.7 71.7 73.8 64.5 74.3 72.1 71.6 68.5 75.8 76.5 14 Austria .9 1.1 1.5 1.7 1.5 1.7 1.9 2.1 1.4 2.5 2.7 15 Denmark 2.6 1.5 2.8 3.7 2.4 2.0 2.1 2.8 2.2 3.2 2.8 16 Finland .8 .8 1.4 1.9 1.3 1.5 1.4 1.6 1.5 1.4 .8 17 Greece 5.7 6.7 6.1 6.2 5.1 6.1 5.8 5.8 6.0 6.2 5.7 18 Norway 3.2 8.0 4.7 4.6 3.6 4.0 3.4 3.3 3.2 2.9 2.9 19 Portugal 1.3 .9 1.1 1.4 .9 .7 1.3 1.1 1.3 1.3 1.2 70 Spain 11.6 13.2 15.4 13.9 11.7 16.5 15.2 17.5 13.6 14.3 15.8 21 Turkey 1.9 2.7 3.4 4.4 4.5 4.9 6.5 5.2 4.8 5.0 4.7 22 Other Western Europe 4.7 4.7 5.5 6.1 8.2 9.9 9.6 10.3 10.6 10.1 10.1 73 South Africa 1.2 2.0 1.9 1.9 2.2 3.7 5.0 3.7 3.5 3.4 3.4 24 Australia 16.4 24.0 27.8 28.0 23.1 23.2 20.0 18.2 20.3 25.3 26.5 75 OPEC2 22.1 19.7 22.3 22.9 26.0 25.7 25.3 25.9 27.1 26.0 25.9 ?6 Ecuador .7 1.1 .9 1.2 1.3 1.3 1.2 1.2 1.2 1.1 1.0 77 Venezuela 2.7 2.4 2.1 2.2 2.5 3.3 3.2 3.1 3.2 3.4 3.1 78 Indonesia 4.8 5.2 5.6 6.5 6.7 5.5 5.1 4.7 4.8 4.5 4.9 79 Middle East countries 13.3 10.7 12.5 11.8 14.4 14.3 15.5 16.1 17.0 16.6 16.4 30 African countries .6 .4 1.2 1.1 1.2 1.4 .3 .8 1.0 .4 .4 31 Non-OPEC developing countries 112.6 130.3 140.6 137.0 138.7 147.4 141.7 140.6 147.9 143.7 145.3 Latin America 32 Argentina 12.9 14.3 16.4 17.1 18.4 19.3 20.2 22.3 22.3 23.5 22.0 33 Brazil 13.7 20.7 27.3 26.1 28.6 32.4 27.2 24.9 24.2 23.6 24.7 34 Chile 6.8 7.0 7.6 8.0 8.7 9.0 9.1 9.3 8.3 8.5 8.2 35 Colombia 2.9 4.1 3.3 3.4 3.4 3.3 3.6 3.4 3.2 3.2 3.1 36 Mexico 17.3 16.2 16.6 16.4 17.4 17.7 17.9 18.4 25.3 18.9 18.0 37 .8 1.6 1.4 1.8 2.0 2.1 2.2 2.2 2.2 2.2 2.1 38 Other 2.8 3.3 3.4 3.6 4.1 4.0 4.4 4.6 5.4 5.4 5.5 Asia China 39 Mainland 1.8 2.5 3.6 4.3 3.2 4.2 3.9 2.8 3.0 5.1 5.3 40 Taiwan 9.4 10.3 10.6 9.7 9.0 11.7 11.3 12.2 12.8 11.7 11.9 41 India 4.4 4.3 5.3 4.9 4.9 5.0 4.9 5.3 5.3 5.5 6.5 47 Israel .5 .5 .8 1.0 .7 .7 .9 .9 1.1 1.1 2.0 43 Korea (South) 19.1 21.5 16.3 16.2 15.6 16.2 14.5 12.9 13.7 13.3 14.9 44 Malaysia 4.4 6.0 6.4 5.6 5.1 4.5 4.7 5.1 5.7 5.9 5.9 45 Philippines 4.1 5.8 7.0 5.7 5.7 5.0 5.4 4.7 5.1 5.3 5.6 46 Thailand 4.9 5.7 7.3 6.2 5.4 5.5 4.9 5.3 4.6 4.5 4.1 47 Other Asia 4.5 4.1 4.7 4.5 4.3 4.2 3.7 3.1 2.9 3.0 2.8 Africa 48 Egypt .4 .7 1.1 .9 .9 1.0 1.5 1.7 1.3 1.4 1.4 49 Morocco .7 .7 .7 .7 .6 .6 .6 .5 .5 .5 .5 50 Zaire .0 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .9 .9 .9 .9 .8 1.1 .8 1.1 1.0 1.2 .9 52 Eastern Europe 4.2 6.9 7.1 9.8 9.1 12.0 10.9 6.0 5.2 6.1 5.1 53 Russia4 1.0 3.7 4.2 5.1 5.1 7.5 6.8 2.8 2.2 2.2 1.9 54 Other 3.2 3.2 2.9 4.7 4.0 4.6 4.1 3.2 3.1 3.9 3.2 55 Offshore banking centers 99.2 134.7 129.6 138.9 139.0 129.3 125.8 121.9 94.1 83.0 70.6 56 Bahamas 11.0 20.3 16.1 19.8 23.3 29.2 24.7 29.0 33.0 30.2 16.1 57 Bermuda 6.3 4.5 7.9 9.8 9.8 9.0 9.3 10.4 4.6 3.8 5.6 58 Cayman Islands and other British West Indies 32.4 37.2 35.1 45.7 43.4 24.9 34.2 30.6 15.4 6.3 7.0 59 Netherlands Antilles 10.3 26.1 15.8 21.7 14.6 14.0 10.5 6.0 2.6 2.7 1.2 60 Panama5 1.4 2.0 2.6 2.1 3.1 3.2 3.3 4.0 3.9 3.9 3.9 61 Lebanon .1 .1 .1 .1 .1 .1 .1 .2 .1 .1 .1 6? Hong Kong, China 25.0 27.9 35.2 27.2 32.2 33.8 30.0 30.6 23.4 22.8 21.9 63 Singapore 13.1 16.7 16.7 12.7 12.7 15.0 13.5 11.1 11.2 13.1 14.6 64 Other® .1 .1 .3 .1 .1 .1 .2 .2 .2 .2 .1 65 Miscellaneous and unallocated7 57.6 59.6 57.6 80.8 99.1 101.3 95.7 104.5 115.5 97.3 88.1 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 • December 1999 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1998 1999 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999955 11999966 11999977 Mar. June Sept. Dec. Mar. Junep 1 Total 46,448 61,782 57,382 55,681 51,433 49,279 46,570 46,663 49,337 2 Payable in dollars 33,903 39,542 41.543 41,601 40,026 38,410 36,668 34,030 36,032 3 Payable in foreign currencies 12,545 22,240 15,839 14,080 11,407 10,869 9,902 12,633 13,305 By type 4 Financial liabilities 24,241 33,049 26,877 25,691 22,322 19,331 19,255 22,458 25,058 5 Payable in dollars 12,903 11,913 12,630 12,911 11,988 9,812 10,371 11,225 13,205 6 Payable in foreign currencies 11,338 21,136 14,247 12,780 10,334 9,519 8,884 11,233 11,853 7 Commercial liabilities 22,207 28,733 30,505 29,990 29,111 29,948 27,315 24,205 24,279 8 Trade payables 11,013 12,720 10,904 10,107 9,537 10,276 10,978 9,999 10,935 9 Advance receipts and other liabilities 11,194 16,013 19,601 19,883 19,574 19,672 16,337 14,206 13,344 10 Payable in dollars 21,000 27,629 28,913 28,690 28,038 28,598 26,297 22,805 22,827 11 Payable in foreign currencies 1,207 1,104 1,592 1,300 1,073 1,350 1,018 1,400 1,452 By area or country Financial liabilities 12 Europe 15,622 23,179 18,027 18,793 15,468 12,905 12,589 16,098 19,578 13 Belgium and Luxembourg 369 632 186 127 75 150 79 50 70 14 France 999 1,091 1,425 1,545 1,699 1,457 1,097 1,178 1,287 15 Germany 1,974 1,834 1,958 2,518 2,441 2,167 2,063 1,906 1,959 16 Netherlands 466 556 494 472 484 417 1,406 1,337 2,104 17 Switzerland 895 699 561 130 189 179 155 141 143 18 United Kingdom 10,138 17,161 11,667 12,185 8,765 6,610 5,980 9,729 13,097 19 Canada 632 1,401 2,374 1,027 539 389 693 781 320 20 Latin America and Caribbean 1,783 1,668 1,386 965 1,320 1,351 1,495 11,,552288 11,,336699 21 Bahamas 59 236 141 17 6 1 7 11 11 22 Bermuda 147 50 229 86 49 73 101 78 52 23 Brazil 57 78 143 91 76 154 152 137 131 24 British West Indies 866 1,030 604 517 845 834 957 1,064 944 25 Mexico 12 17 26 21 51 23 59 22 19 26 Venezuela 2 1 1 1 1 1 2 2 1 27 Asia 5,988 6,423 4,387 4,197 4,315 4,005 3,785 3.475 3,217 28 Japan 5,436 5,869 4,102 3,964 3,869 3,754 3,612 3,337 3,035 29 Middle Eastern oil-exporting countries1 27 25 27 18 0 0 0 1 2 30 Africa 150 38 60 33 29 31 28 31 29 31 Oil-exporting countries2 122 0 0 0 0 0 0 2 0 32 All other3 66 340 643 676 651 650 665 545 545 Commercial liabilities 33 Europe 7,700 9,767 10,228 9,951 9,987 11,010 10,030 8,580 8,718 34 Belgium and Luxembourg 331 479 666 565 557 623 278 229 189 35 France 481 680 764 840 612 740 920 654 656 36 Germany 767 1,002 1,274 1,068 1,219 1,408 1,392 1,088 1,143 37 Netherlands 500 766 439 443 485 440 429 361 432 38 Switzerland 413 624 375 407 349 507 499 535 497 39 United Kingdom 3,568 4,303 4,086 4,041 3,743 4,286 3,697 3,008 2,959 40 Canada 1,040 1,090 1,175 1,347 1,206 1,504 1,390 1,597 1,670 41 Latin America and Caribbean 1,740 2,574 2,176 2,051 2,285 1,840 1,618 1,612 1,674 42 Bahamas 1 63 16 27 14 48 14 11 19 43 Bermuda 205 297 203 174 209 168 198 225 180 44 Brazil 98 196 220 249 246 256 152 107 112 45 British West Indies 56 14 12 5 27 5 10 7 5 46 Mexico 416 665 565 520 557 511 347 437 490 47 Venezuela 221 328 261 219 196 230 202 155 149 48 Asia 10,421 13,422 14,966 14,672 13,611 13,539 12,342 10,428 10,039 49 Japan 3,315 4,614 4,500 4,372 3,995 3,779 3,827 2,715 2,753 50 Middle Eastern oil-exporting countries' 1,912 2,168 3,111 3,138 3,194 3,582 2,852 2,479 2,209 51 Africa 619 1,040 874 833 921 810 794 727 832 52 Oil-exporting countries2 254 532 408 376 354 372 393 377 392 53 Other3 687 840 1,086 1,136 1,101 1,245 1,141 1,261 1,346 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 1998 1999 Type of claim, and area or country 11999955 11999966 11999977 Mar. June Sept. Dec. Mar. Junep 1 Total 52,509 65,897 68,128 71,004 63,188 67,976 77,462 68,973 63,767 2 Payable in dollars 48,711 59,156 62,173 65,359 57,587 62,034 72,171 63,988 56,931 3 Payable in foreign currencies 3,798 6,741 5,955 5,645 5,601 5,942 5,291 4,985 6,836 By type 4 Financial claims 27,398 37,523 36,959 40,301 32,341 37,262 46,260 38,136 31,877 5 Deposits 15,133 21,624 22,909 20,863 14,762 15,406 30,199 18,686 13,350 6 Payable in dollars 14,654 20,852 21,060 19,155 13,084 13,374 28,549 17,101 11,636 7 Payable in foreign currencies 479 772 1,849 1,708 1,678 2,032 1,650 1,585 1,714 8 Other financial claims 12,265 15,899 14,050 19,438 17,579 21,856 16,061 19,450 18,527 9 Payable in dollars 10,976 12,374 11,806 16,981 14,904 19,867 14,049 17,419 14,762 10 Payable in foreign currencies 1,289 3,525 2,244 2,457 2,675 1,989 2,012 2,031 3,765 11 Commercial claims 25,111 28,374 31,169 30,703 30,847 30,714 31,202 30,837 31,890 12 Trade receivables 22,998 25,751 27,536 26,888 26,764 26,330 27,202 26,724 27,754 13 Advance payments and other claims .... 2,113 2,623 3,633 3,815 4,083 4,384 4,000 4,113 4,136 14 Payable in dollars 23,081 25,930 29,307 29,223 29,599 28,793 29,573 29,468 30,533 15 Payable in foreign currencies 2,030 2,444 1,862 1,480 1,248 1,921 1,629 1,369 1,357 By area or country Financial claims 16 Europe 7,609 11,085 14,999 14,187 14,091 14,473 12,294 12,800 13,898 17 Belgium and Luxembourg 193 185 406 378 518 496 661 469 457 18 France 803 694 1,015 902 796 1,140 864 913 1,368 19 Germany 436 276 427 393 290 359 304 302 367 20 Netherlands 517 493 677 911 975 867 875 955 959 21 Switzerland 498 474 434 401 403 409 414 530 504 22 United Kingdom 4,303 7,922 10,337 9,289 9,639 9,849 7,766 8,357 8,589 23 Canada 2,851 3,442 3,313 4,688 3,020 4,090 2,503 3,111 2,828 24 Latin America and Caribbean 14,500 20,032 15,543 18,207 11,967 15,758 27,714 18,825 11,486 25 Bahamas 1,965 1,553 2,308 1,316 1,306 2,105 403 666 467 26 Bermuda 81 140 108 66 48 63 39 41 39 27 Brazil 830 1,468 1,313 1,408 1,394 710 835 1,112 1,102 28 British West Indies 10,393 15,536 10,462 13,551 7,349 10,960 24,388 14,621 7,393 29 Mexico 554 457 537 967 1,089 1,122 1,245 1,583 1,702 30 Venezuela 32 31 36 47 57 50 55 72 71 31 Asia 1,579 2,221 2,133 2,174 2,376 2,121 3,027 2,648 2,801 32 Japan 871 1,035 823 791 886 928 1,194 942 949 33 Middle Eastern oil-exporting countries' 3 22 11 9 12 13 9 8 5 34 Africa 276 174 319 325 155 157 159 174 228 35 Oil-exporting countries2 5 14 15 16 15 16 16 26 5 36 All other3 583 569 652 720 732 663 563 578 636 Commercial claims 9,824 10,443 12,120 12,854 12,882 13,029 13,246 12,782 12,958 37 Europe 231 226 328 232 216 219 238 281 286 38 Belgium and Luxembourg 1,830 1,644 1,796 1,939 1,955 2,098 2,171 2,173 2,092 39 France 1,070 1,337 1,614 1,670 1,757 1,502 1,822 1,599 1,660 40 Germany 452 562 597 534 492 463 467 415 389 41 Netherlands 520 642 554 476 418 546 483 367 385 42 Switzerland 2,656 2,946 3,660 4,828 4,664 4,681 4,769 4,529 4,615 43 United Kingdom 44 Canada 1,951 2,165 2,660 2,882 2,779 2,291 2,617 2,983 2,844 45 Latin America and Caribbean 4,364 5,276 5,750 5,481 6,082 5,773 6,296 5,930 6,267 46 Bahamas 30 35 27 13 12 39 24 10 21 47 Bermuda 272 275 244 238 359 173 536 500 583 48 Brazil 898 1,303 1,162 1,128 1,183 1,062 1,024 936 885 49 British West Indies 79 190 109 88 110 91 104 117 127 50 Mexico 993 1,128 1,392 1,302 1,462 1,356 1,545 1,431 1,474 51 Venezuela 285 357 576 441 585 566 401 361 383 52 Asia 7,312 8,376 8,713 7,638 7,367 7,190 7,192 7,080 7,678 53 Japan 1,870 2,003 1,976 1,713 1,757 1,789 1,681 1,486 1,509 54 Middle Eastern oil-exporting countries1 974 971 1,107 987 1,127 967 1,135 1,286 1,465 55 Africa 654 746 680 613 657 740 711 685 738 56 Oil-exporting countries 87 166 119 122 116 128 165 116 202 57 Other3 1,006 1,368 1,246 1,235 1,080 1,691 1,140 1,377 1,405 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 • December 1999 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1999 1999 Transaction, and area or country 1997 1998 J A a u n g .- . Feb. Mar. Apr. May June July1 Aug.? U.S. corporate securities STOCKS 1 Foreign purchases 1,097,958 1,574,185 1,450,877 159,759 179,894 223,006 185,819 179,785R 188,099 178,334 2 Foreign sales 1,028,361 1,524,189 1,382,053 155,650 177,007 205,493 177,326 167,878R 179,783 166,212 3 Net purchases, or sales (—) 69,597 49,996 68,824 4,109 2,887 17,513 8,493 ll,907r 8,316 12,122 4 Foreign countries 69,754 50,376 68,845 4,109 2,887 17,497 8,504 ll,893r 8,361 12,131 5 Europe 62,688 68,124 59,075 6,403 6,563 11,493 5,260 7,663 6,171 9,474 6 France 6,641 5,672 3,022 -175 1,199 534 -206 919 -55 269 / Germany 9,059 9,195 7,516 872 480 1,814 971 1,376 -354 1,322 8 Netherlands 3,831 8,249 5,451 956 1,103 417 738 1,181 404 566 9 Switzerland 7,848 5,001 3,995 582 1,551 1,934 481 1,452 -2,822 827 10 United Kingdom 22,478 23,952 27,163 2,833 575 3,758 1,822 1,300 8,498 4,484 11 Canada -1,406 -4,689 1,915 248 723 -129 -159 401 153 -50 12 Latin America and Caribbean 5,203 760 9,802 -1,279 -1,415 5,516 2,004 2,474R 2,935 846 13 Middle East1 383 -1,449 -293 -733 298 -355 419 64 -273 174 14 Other Asia 2,072 -12,347 -2,448 -630 -3,257 905 574 1,271 -671 1,666 13 Japan 4,787 -1,171 535 -344 -1,925 1,458 464 681 -452 1,269 16 Africa 472 639 351 11 87 37 138 81 14 -39 17 Other countries 342 -662 443 89 -112 30 268 -61 32 60 18 Nonmonetary international and regional organizations -157 -380 -21 0 0 16 -11 14 -45 -9 BONDS2 19 Foreign purchases 610,116 905,782 564,688 75,169 77,101 70,044 66,558 67,569 75,778 63,904 20 Foreign sales 475,958 727,044 405,858 56,187 52,331 47,516 49,145 52,197 47,984 46,667 21 Net purchases, or sales (—) 134,158 178,738 158,830 18,982 24,770 22,528 17,413 15,372 27,794 17,237 22 Foreign countries 133,595 179,081 158,609 18,941 24,974 22,468 17,326 15,383 27,520 17,264 23 Europe 71,631 130,057 91,075 14,402 12,832 10,527 10,911 9,553 18,196 9,889 24 France 3,300 3,386 1,472 124 22 -36 352 258 447 160 2B Germany 2,742 4,369 4,561 1,268 190 -43 797 321 1,707 -77 26 Netherlands 3,576 3,443 1,748 329 418 106 168 187 336 144 27 Switzerland 187 4,826 2,806 535 272 467 128 -26 705 322 28 United Kingdom 54,134 99,637 68,483 10,803 9,268 8,617 8,310 7,651 13,582 7,641 29 Canada 6,264 6,121 2,394 475 640 319 413 184 -23 286 30 Latin America and Caribbean 34,733 23,938 38,350 2,057 5,203 5,967 3,382 4,603 5,088 5,668 31 Middle East1 2,155 4,997 1,741 314 859 364 -717 -114 -182 -219 32 Other Asia 16,996 12,662 23,399 1,439 5,132 4,904 3,224 1,458 4,031 1,179 33 Japan 9,357 8,384 6,687 165 589 1,215 0 310 3,020 827 34 Africa 1,005 190 854 266 261 331 82 -307 122 59 3B Other countries 811 1,116 796 -12 47 56 31 6 288 402 36 Nonmonetary international and regional organizations 563 -343 221 41 -204 60 87 -11 274 -27 Foreign securities 37 Stocks, net purchases, or sales (—) -40,942 6,227 20,899 3,085 1,845 5,583 2,500 6,220R -2,236 594 38 Foreign purchases 756,015 929,923 727,512 73,948 95,216 98,501 86,179 97,622R 106,264 91,851 39 Foreign sales 796,957 923,696 706,613 70,863 93,371 92,918 83,679 91,402R 108,500 91,257 40 Bonds, net purchases, or sales (—) -48,171 -17,350 -2,286 -255 1,710 -5,147 -499 8,969 -4,677 -83 41 Foreign purchases 1,451,704 1,328,281 557,196 66,198 76,129 73,376 72,372 79,013 63,975 70,061 4'2 Foreign sales 1,499,875 1,345,631 559,482 66,453 74,419 78,523 72,871 70,044 68,652 70,144 43 Net purchases, or sales (—), of stocks and bonds .... -89,113 -11,123 18,613 2,830 3,555 436 2,001 15,189r -6,913 511 44 Foreign countries -88,921 -10,778 18,230 2,554 3,595 554 2,101 15,219r -7,004 328 45 Europe -29,874 12,632 52,068 6,431 14,014 9,710 5,846 16,749 -3,759 2,671 46 Canada -3,085 -1,901 -1,306 -551 -131 -449 -537 1,202' -1,055 525 47 Latin America and Caribbean -25,258 -13,798 -9,538 491 -3,586 -4,353 -2,306 -2,785' 545 101 48 -25,123 -3,992 -22,499 -3,344 -7,155 -3,946 -495 194 -3,330 -2,865 49 Japan -10,001 -1,742 -25,017 -3,390 -7,250 -3,445 -704 -1,241 -4,323 -4,805 50 Africa -3,293 -1,225 71 -25 -16 20 112 -25 -21 4 51 Other countries -2,288 -2,494 -566 -448 469 -428 -519 -116 616 -108 52 Nonmonetary international and regional organizations -192 -345 383 276 -40 -118 -100 -30 91 183 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 1999 AArreeaa oorr ccoouunnttrryy 11999977 11999988 J A a u n g .- . Feb. Mar. Apr. May June July Aug.? 1 Total estimated 184,171 49,039 -2,622 -14,623 1,532 -3,271 5,638 -609 -6,242r 19,118 2 Foreign countries 183,688 46,570 -2,662 -14,182 1,762 -3,257 5,316 -815 -6,226r 18,847 3 Europe 144,921 23,797 -32,638 -7,354 1,342 -15,394 -3,997 -5,796 -5,740r 1,771 4 Belgium and Luxembourg 3,427 3,805 1,413 204 -54 476 121 753 37 105 5 Germany 22,471 144 2,053 217 428 -653 -290 538 643 1,438 6 Netherlands 1,746 -5,533 1,653 -584 197 -256 797 -77 -1,224 453 7 Sweden -465 1,486 1,064 -228 386 -462 -21 579 -229 876 8 Switzerland 6,028 5,240 -3,963 47 -1,457 -302 -121 971 -216r -714 9 United Kingdom 98,253 14,384 -17,959 -5,721 1,129 -6,672 -4,528 -7,215 l,385r 1,934 in Other Europe and former U.S.S.R 13,461 4,271 -16,899 -1,289 713 -7,525 45 -1,345 -6,136 -2,321 li Canada -811 615 6,577 1,127 213 1,205 2,580 460 1,382 1,339 12 Latin America and Caribbean -2,554 -3,662 3,991 -6,037 1,100 5,200 1,364 -1,403 693r 8,695 13 Venezuela 655 59 206 463 -445 2 88 -31 131 15 14 Other Latin America and Caribbean -549 9,523 -1,487 -2,024 -2,570 3,654 -123 -52 -43r 1,650 15 Netherlands Antilles -2,660 -13,244 5,272 -4,476 4,115 1,544 1,399 -1,320 605 7,030 16 39,567 27,433 19,975 -2,216 -1,714 5,973 5,631 6,489 — 2,319r 6,832 17 Japan 20,360 13,048 10,614 -1,124 -1,311 6,475 1,284 4,905 -394 2,913 18 Africa 1,524 751 -1,296 -6 -52 -11 -198 -246 -178 -622 19 Other 1,041 -2,364 729 304 873 -230 -64 -319 -64 832 20 Nonmonetary international and regional organizations 483 2,469 40 -441 -230 -14 322 206 -16 271 ?1 International 621 1,502 -292 -371 -206 15 223 -8 -101 233 22 Latin American regional 170 199 679 1 -5 0 122 192 191 175 MEMO ?3 Foreign countries 183,688 46,570 -2,662 -14,182 1,762 -3,257 5,316 -815 -6,226r 18,847 24 Official institutions 43,959 4,123 -9,537 -3,699 -4,845 -6,696 3,223 397 -1,773 2,393 25 Other foreign 139,729 42,447 6,875 -10,483 6,607 3,439 2,093 -1,212 —4,453r 16,454 Oil-exporting countries 26 Middle East2 7,636 -16,554 7,211 -618 1,478 65 2,887 238 -38 130 27 -12 2 1 0 0 0 0 0 0 1 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • December 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 May June July Aug. Sept. Oct. Exchange Rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 78.28 74.37 62.91 66.28 65.63 65.62 64.46 64.95 65.09 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 1.6853 1.7669 1.8023 1.8859 1.8987 1.9688 5 Canada/dollar 1.3638 1.3849 1.4836 1.4611 1.4695 1.4890 1.4932 1.4771 1.4776 6 China, P.R./yuan 8.3389 8.3193 8.3008 8.2785 8.2780 8.2776 8.2772 8.2774 8.2775 7 Denmark/krone 5.8003 6.6092 6.7030 6.9925 7.1643 7.1792 7.0144 7.0828 6.9450 8 European Monetary Union/euro3 n.a. n.a. n.a. 1.0630 1.0377 1.0370 1.0605 1.0497 1.0706 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 240.82 273.28 295.70 305.96 312.49 313.52 307.84 311.68 307.71 13 Hong Kong/dollar 7.7345 7.7431 7.7467 7.7531 7.7575 7.7603 7.7638 7.7665 7.7696 14 India/rupee 35.51 36.36 41.36 42.86 43.21 43.36 43.50 43.60 43.55 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 108.78 121.06 130.99 122.00 120.72 119.33 113.23 106.88 105.97 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 9.396 9.515 9.370 9.398 9.341 9.575 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 55.30 53.25 52.61 52.59 52.30 51.42 22 Norway/krone 6.4594 7.0857 7.5521 7.7496 7.8749 7.9029 7.8036 7.8361 7.7402 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 1.7122 1.7107 1.6958 1.6787 1.6965 1.6757 75 South Africa/rand 4.3011 4.6072 5.5417 6.1809 6.0880 6.1182 6.1302 6.0563 6.1029 26 South Korea/won 805.00 947.65 1,400.40 1,197.92 1,168.91 1,189.10 1,198.31 1,201.00 1,205.29 71 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 70.581 71.211 71.912 71.868 71.942 71.747 29 Sweden/krona 6.7082 7.6446 7.9522 8.4432 8.5065 8.4431 8.2589 8.2264 8.1492 30 Switzerland/franc 1.2361 1.4514 1.4506 1.5078 1.5374 1.5474 1.5093 1.5262 1.4896 31 Taiwan/dollar 27.468 28.775 33.547 32.791 32.525 32.338 32.076 31.848 31.828 32 Thailand/baht 25.359 31.072 41.262 37.051 36.926 37.143 38.060 40.060 39.416 33 United Kingdom/pound2 156.07 163.76 165.73 161.54 159.50 157.51 160.58 162.47 165.72 34 Venezuela/bolivar 417.19 488.39 548.39 596.48 603.29 611.17 615.95 625.41 630.75 Indexes4 NOMINAL 35 Broad (January 1997= 100)5 97.40r 104.44r 116.48' 117.34' 117.93' 117.97' 117.00' 116.38' 115.88 36 Major currencies (March 1973=100)6 84.60r 91.24' 95.79' 95.25' 96.07' 96.31' 94.31' 92.92' 91.94 37 Other important trading partners (January 1997= 100)7 98.26r 104.67r 126.03' 128.96' 129.03' 128.73' 129.73' 130.60' 131.06 REAL 38 Broad (March 1973 = 100)5 86.72r 91.33r 99.35' 99.12' 99.61' 99.91' 99.04' 98.46' 97.83 39 Major currencies (March 1973 = 100)6 84.95r 92.25r 97.25' 97.76' 98.61' 99.19' 97.13' 95.91' 94.87 40 Other important trading partners (March 1973= 100)7 94.69' 95.87' 108.50' 107.21' 107.25' 107.18' 107.90' 108.18' 108.14 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 4. The December 1999 Bulletin will contain revised index values resulting from the annual table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, revision to the trade weights. For more information on the indexes of the foreign exchange see inside front cover. value of the dollar, see Federal Reserve Bulletin, vol. 84 (October 1998), pp. 811-18. 2. Value in U.S. cents. 5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies 3. As of January 1999, the euro is reported in place of the individual euro area currencies. of a broad group of U.S. trading partners. The weight for each currency is computed as an These currency rates can be derived from the euro rate by using the fixed conversion rates (in average of U.S. bilateral import shares from and export shares to the issuing country and of a currencies per euro) as shown below: measure of the importance to U.S. exporters of that country's trade in third country markets. 6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of Euro equals broad index currencies that circulate widely outside the country of issue. The weight for each 13.7603 Austrian schillings 1936.27 Italian lire currency is its broad index weight scaled so that the weights of the subset of currencies in the 40.3399 Belgian francs 40.3399 Luxembourg francs index sum to one. 5.94573 Finnish markkas 2.20371 Netherlands guilders 7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 6.55957 French francs 200.482 Portuguese escudos broad index currencies that do not circulate widely outside the country of issue. The weight 1.95583 German marks 166.386 Spanish pesetas for each currency is its broad index weight scaled so that the weights of the subset of .787564 Irish pounds currencies in the index sum to one. 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 September 30, 1998 February 1999 A64 December 31, 1998 May 1999 A64 March 31, 1999 August 1999 A64 June 30, 1999 November 1999 A64 Terms of lending at commercial banks November 1998 February 1999 A66 February 1999 May 1999 A66 May 1999 August 1999 A66 August 1999 November 1999 A66 Assets and liabilities of U.S. branches and agencies of foreign banks September 30, 1998 February 1999 A72 December 31, 1998 May 1999 A72 March 31, 1999 August 1999 A72 June 30, 1999 November 1999 A72 Pro forma balance sheet and income statements for priced service operations September 30, 1998 January 1999 A64 March 31, 1999 July 1999 A64 June 30, 1999 October 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 All 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 Federal Reserve Bulletin • December 1999 Index to Statistical Tables References are to pages A3-A62, although the prefix 'A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Federal finance Assets and liabilities (See also Foreigners) Debt subject to statutory limitation, and types and ownership Commercial banks, 15-21 of gross debt, 27 Domestic finance companies, 32, 33 Receipts and outlays, 25, 26 Federal Reserve Banks, 10 Treasury financing of surplus, or deficit, 25 Foreign-related institutions, 20 Treasury operating balance, 25 Automobiles Federal Financing Bank, 30 Consumer credit, 36 Federal funds, 23, 25 Production, 44, 45, Federal Home Loan Banks, 30 Federal Home Loan Mortgage Corporation, 30, 34, 35 Federal Housing Administration, 30, 34, 35 BANKERS acceptances, 5, 10, 22, 23 Federal Land Banks, 35 Bankers balances, 15-21. (See also Foreigners) Bonds (See also U.S. government securities) Federal National Mortgage Association, 30, 34, 35 New issues, 31 Federal Reserve Banks Rates, 23 Condition statement, 10 Business activity, nonfinancial, 42 Discount rates (See Interest rates) Business loans (See Commercial and industrial loans) U.S. government securities held, 5, 10, 11, 27 Federal Reserve credit, 5,6, 10, 12 Federal Reserve notes, 10 CAPACITY utilization, 43 Federally sponsored credit agencies, 30 Capital accounts Finance companies Commercial banks, 15-21 Assets and liabilities, 32 Federal Reserve Banks, 10 Business credit, 33 Certificates of deposit, 23 Loans, 36 Commercial and industrial loans Paper, 22, 23 Commercial banks, 15-21 Float, 5 Weekly reporting banks, 17, 18 Commercial banks Flow of funds, 37—41 Foreign currency operations, 10 Assets and liabilities, 15-21 Foreign deposits in U.S. banks, 5 Commercial and industrial loans, 15-21 Foreign exchange rates, 62 Consumer loans held, by type and terms, 36 Foreign-related institutions, 20 Real estate mortgages held, by holder and property, 35 Foreign trade, 51 Time and savings deposits, 4 Foreigners Commercial paper, 22, 23, 32 Condition statements (See Assets and liabilities) Claims on, 52, 55, 56, 57, 59 Construction, 42, 46 Liabilities to, 51, 52, 53, 58, 60, 61 Consumer credit, 36 Consumer prices, 42 GOLD Consumption expenditures, 48, 49 Certificate account, 10 Corporations Stock, 5, 51 Profits and their distribution, 32 Government National Mortgage Association, 30, 34, 35 Security issues, 31, 61 Gross domestic product, 48, 49 Cost of living (See Consumer prices) Credit unions, 36 HOUSING, new and existing units, 46 Currency in circulation, 5, 13 Customer credit, stock market, 24 INCOME, personal and national, 42, 48, 49 Industrial production, 42, 44 DEBT (See specific types of debt or securities) Insurance companies, 27, 35 Demand deposits, 15-21 Interest rates Depository institutions Bonds, 23 Reserve requirements, 8 Consumer credit, 36 Reserves and related items, 4, 5, 6, 12 Federal Reserve Banks, 7 Deposits (See also specific types) Money and capital markets, 23 Commercial banks, 4, 15-21 Mortgages, 34 Federal Reserve Banks, 5, 10 Prime rate, 22 Discount rates at Reserve Banks and at foreign central banks amI International capital transactions of United States, 50-61 foreign countries (See Interest rates) International organizations, 52, 53, 55, 58, 59 Discounts and advances by Reserve Banks (See Loans) Inventories, 48 Dividends, corporate, 32 Investment companies, issues and assets, 32 Investments (See also specific types) EMPLOYMENT, 42 Commercial banks, 4, 15-21 Euro, 62 Federal Reserve Banks, 10, 11 Financial institutions, 35 FARM mortgage loans, 35 Federal agency obligations, 5, 9, 10, 11, 28, 29 LABOR force, 42 Federal credit agencies, 30 Life insurance companies (See Insurance companies) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A65 Loans (See also specific types) Savings institutions, 35, 36, 37-41 Commercial banks, 15—21 Savings deposits (See Time and savings deposits) Federal Reserve Banks, 5, 6, 7, 10, 11 Securities (See also specific types) Financial institutions, 35 Federal and federally sponsored credit agencies, 30 Insured or guaranteed by United States, 34, 35 Foreign transactions, 60 New issues, 31 MANUFACTURING Prices, 24 Capacity utilization, 43 Special drawing rights, 5, 10, 50, 51 Production, 43, 45 State and local governments Margin requirements, 24 Holdings of U.S. government securities, 27 Member banks, reserve requirements, 8 New security issues, 31 Mining production, 45 Rates on securities, 23 Mobile homes shipped, 46 Stock market, selected statistics, 24 Monetary and credit aggregates, 4, 12 Stocks (See also Securities) Money and capital market rates, 23 New issues, 31 Money stock measures and components, 4, 13 Prices, 24 Mortgages (See Real estate loans) Mutual funds, 13, 32 Student Loan Marketing Association, 30 Mutual savings banks (See Thrift institutions) TAX receipts, federal, 26 NATIONAL defense outlays, 26 Thrift institutions, 4. (See also Credit unions and Savings institutions) National income, 48 Time and savings deposits, 4, 13, 15-21 Trade, foreign, 51 OPEN market transactions, 9 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 PERSONAL income, 49 Treasury operating balance, 25 Prices Consumer and producer, 42, 47 UNEMPLOYMENT, 42 Stock market, 24 U.S. government balances Prime rate, 22 Commercial bank holdings, 15-21 Producer prices, 42, 47 Treasury deposits at Reserve Banks, 5, 10, 25 Production, 42, 44 U.S. government securities Profits, corporate, 32 Bank holdings, 15-21, 27 Dealer transactions, positions, and financing, 29 REAL estate loans Federal Reserve Bank holdings, 5, 10, 11, 27 Banks, 15-21, 35 Foreign and international holdings and Terms, yields, and activity, 34 transactions, 10, 27, 61 Type of holder and property mortgaged, 35 Open market transactions, 9 Reserve requirements, 8 Outstanding, by type and holder, 27, 28 Reserves Rates, 23 Commercial banks, 15-21 U.S. international transactions, 50-62 Depository institutions, 4, 5, 6, 12 Utilities, production, 45 Federal Reserve Banks, 10 U.S. reserve assets, 51 VETERANS Administration, 34, 35 Residential mortgage loans, 34, 35 Retail credit and retail sales, 36, 42 WEEKLY reporting banks, 17, 18 Wholesale (producer) prices, 42, 47 SAVING Flow of funds, 37-41 National income accounts, 48 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • December 1999 Federal Reserve Board of Governors and Official Staff ALAN GREENSPAN, Chairman EDWARD W. KELLEY, JR. ROGER W. FERGUSON, JR., Vice Chairman LAURENCE H. MEYER 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 DAVID H. HOWARD, Deputy Director WINTHROP P. HAMBLEY, Deputy Congressional Liaison VINCENT R. REINHART, Deputy Director BOB STAHLY MOORE, Special Assistant to the Board THOMAS A. CONNORS, Deputy 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 OFFICE OF THE SECRETARY WILLIAM R. JONES, Associate Director 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 WILLIAM C. WHITESELL, Assistant Director NORAH M. BARGER, Assistant Director NORMAND R. V. BERNARD, Special Assistant to the Board BETSY CROSS, Assistant Director RICHARD A. SMALL, Assistant Director DIVISION OF CONSUMER WILLIAM C. SCHNEIDER, JR., Project Director, AND COMMUNITY AFFAIRS National Information Center 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

A67 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 JOHN R. WEIS, Adviser PAUL W. BETTGE, Assistant Director KENNETH D. BUCKLEY, Assistant Director MANAGEMENT DIVISION JACK DENNIS, JR., Assistant Director STEPHEN J. CLARK, Associate Director, Finance Function JOSEPH H. HAYES, JR., Assistant Director DARRELL R. PAULEY, Associate Director, Human Resources JEFFREY C. MARQUARDT, Assistant Director Function 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 BARRY R. SNYDER, Inspector General GEORGE M. LOPEZ, Assistant Director DONALD L. ROBINSON, Deputy Inspector General DAVID L. WILLIAMS, Assistant Director 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

A68 Federal Reserve Bulletin • December 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 DAVID H. HOWARD, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary WILLIAM C. HUNTER, Associate Economist LYNN S. FOX, Assistant Secretary RICHARD W. LANG, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID E. LINDSEY, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel ARTHUR J. ROLNICK, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel HARVEY ROSENBLUM, Associate Economist KAREN H. JOHNSON, Economist LAWRENCE SLIFMAN, Associate Economist MICHAEL J. PRELL, Economist DAVID J. STOCKTON, Associate Economist CHRISTINE M. CUMMING, 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

A69 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

A70 Federal Reserve Bulletin • December 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, Federal Reserve Bank Board of Directors $35.00 per year or $.80 each. Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL 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 about a Bank 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

A71 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 general interest. Requests to obtain single copies of the full text or 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by 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, 168, and 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

A72 Federal Reserve Bulletin • December 1999 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (PAYMENT MUST ACCOMPANY REQUESTS) Annual Annual Approximate Corresponding Period or date to Release number and title USPS fax release Bulletin which data refer rate rate days1 table numbers2 Weekly Releases H.2. Actions of the Board: $55.00 n.a. Friday Week ended Applications and Reports previous Received Saturday H.3. Aggregate Reserves of $20.00 n.a. Thursday Week ended 1.20 Depository Institutions and previous the Monetary Base3 Wednesday H.4.1. Factors Affecting Reserve Balances $20.00 n.a. Thursday Week ended 1.11, 1.18 of Depository Institutions and previous Condition Statement of Wednesday Federal Reserve Banks3 H.6. Money Stock and Debt $35.00 n.a. Thursday Week ended 1.21 Measures3 Monday of previous week H.8. Assets and Liabilities of $30.00 n.a. Friday Week ended 1.26A-E Commercial Banks in the previous United States3 Wednesday H. 10. Foreign Exchange Rates3 $20.00 $20.00 Monday Week ended 3.28 previous Friday H. 15. Selected Interest Rates3 $20.00 $20.00 Monday Week ended 1.35 previous Friday Monthly Releases G.5. Foreign Exchange Rates3 $ 5.00 $ 5.00 First of month Previous month 3.28 G. 13. Selected Interest Rates $ 5.00 $ 5.00 First Tuesday of Previous month 1.35 month G. 15. Research Library—Recent No charge n.a. First of month Previous month Acquisitions G.17. Industrial Production and $15.00 n.a. Midmonth Previous month 2.12, 2.13 Capacity Utilization3 $ 5.00 $ 5.00 Fifth working day Second month 1.55, 1.56 G.19. Consumer Credit3 of month previous $ 5.00 n.a. End of month Second month 1.51, 1.52 G.20. Finance Companies previous Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A74 Federal Reserve Bulletin • December 1999 Maps of the Federal Reserve System LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 1-A 2-B 3-C 4-D 5-E ME Pittsburgh Baltimore MD CT y / NH • Cincinnati BulLiln /'• I M A" CT - m NT NY sc BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H KY / IL ) IN Detroit • Lmiisville MO _ TN LA Jacksonville • Memphis New Orleans Little / > Rock ( MS Miami ATLANTA CHICAGO ST. LOUIS 9-1 MT MN MINNEAPOLIS 10-J 12-L OlDdhil* XXSSKKAA WWAA SSeeaattttllee Portland KANSAS CITY NV 1 11-K " \ 1 Salt iSke City NM •Los Any eles HAWAII AZ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Federal Reserve Bulletin • December 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 21203 Daniel R. Baker William J. Tignanelli1 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 FlorineMark 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. Gambs1 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 Patty P. Mueller 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

A77 Index to Volume 85 GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES Issue Text "A" Pages Issue Text "A" pages Index to Index to tables tables January 1- 80 1-76 66 July 459-528 1-78 66 February 81-146 1-90 76 August 529-598 1-86 76 March 147-216 1-78 64 September 599-654 1-92 80 April 217-286 1-78 64 October 655-708 1-78 66 May 287-368 1-90 76 November 709-784 1-88 76 June 369-458 1-82 64 December 785-838 1-94 64 The "A" pages consist of statistical tables and reference information. Statistical tables are indexed separately (see p. A64 of this issue). Pages Pages IstSource Community Development Resource Guide, Bank Holding Company Act of 1956—Continued web site Applications approved under—Continued 1st State Bancorp, Inc 453 ADAIRSVILLE Bancshares, Inc 112, 145 1st State Bank Foundation, Inc 453 Adams, Donald, appointed Senior Adviser, International A.B. Bancshares of Delaware, Inc 590 Finance 331 A.B. Bancshares, Inc 590 Agreement corporation 601 ABN AMRO Bank, N.V., Amsterdam, Ahn, John H., enforcement action, 1996 216 The Netherlands 780 Alexander, Lewis S., Deputy Director, Division of International ABN AMRO Holding, N.V., Amsterdam, Finance, resignation 732 The Netherlands 780 Allison, Theodore E., Assistant to the Board, Federal Reserve Ace Gas, Inc 211 System Affairs, Office of Board Members, retirement 331 ACNB Corporation 134 Ambroseno, Laura F., articles 396-400, 616-20 Adbanc, Inc 211 Annual Report, 85th, 1998 491 AEA Bankshares, Inc 134 Annual Report, Budget Review, 1999 491 Alabama National Bancorporation 134 Articles Albion National Management Company, Inc 73 Aggregate disturbances, monetary policy, and the Aliant Financial Corporation 134 macroeconomy: The FRB/US perspective 1-19 Alta Vista Bancshares, Inc 776 Banking relationships of lower-income families and the Altrust Financial Services, Inc., ESOP 211 governmental trend toward electronic payment 459-73 Highlights of domestic open market operations Ambank Company, Inc 351 during 1998 217-35 AmBank Holdings, Inc 72 Industrial production and capacity utilization: Ameri-National Corporation 348 1998 annual revision 20-33 American Heartland Bancshares, Inc 701 International activities of U.S. banks and in U.S. AmericasBank Corp 776 banking markets 599—615 Ameriwest Corporation 453 Launch of the euro 655-66 Amoret Bancshares, Inc 521 Monetary policy reports to the Congress 147-77, 529-52 Amundson Family, Limited Partnership 72 Profits and balance sheet developments at U.S. Anchor Financial Corporation 134 commercial banks in 1998 369-95 Apex Mortgage Company 650 Role of specialized lenders in extending mortgages to Applachian Bancshares, Inc 72 lower-income and minority homebuyers 709-23 Area Bancshares Corporation 72, 211, 837 Treasury and Federal Reserve foreign exchange Arvest Bank Group, Inc 72, 701 operations 178-83, 396-400, 616-20, 808-13 Associated Banc-Corp 76, 135, 650 Treasury securities market: Overview and recent Astra Financial Corporation 72 developments 785-806 Atlantic BancGroup, Inc 280 Trends in home purchase lending: Consolidation and the Avondale Financial Corp 280 Community Reinvestment Act 81-102 Backlund Investment Company 836 U.S. international transactions in 1998 287-99 Backhand Scott Company 836 ATM cards, consumer protection 324 Backlund-White, Inc 836 Auctions, Treasury securities 791 Banc Corporation 590 Avery, Robert B., article 81-102 Bancorp of Okolona, Inc 72 Bancorp of Rantoul, Inc 211 BANK Examination Report Privilege Act 481 Bancorp, Inc 701 Bank holding companies 50, 267, 328 BancTenn Corporation 452, 590 Bank Holding Company Act of 1956 Bank Calumet 704 Applications approved under Bank Capital Corporation 590 1st Constitution Bancorp 453 Bank of America Corporation 704, 837 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Federal Reserve Bulletin • December 1999 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Bank of DeSoto, N.A., Employee Stock Ownership Central Bancompany, Inc 591, 652 Trust 453 Central Bancorp, Inc 211 Bank of Montreal, Toronto, Canada 523, 652 Central Bancshares of Kansas City, Inc 211 Bank of Nashville 593 Central Bancshares, Inc 280 Bank of New York Capital Markets, Inc 75 Central Bank 280 Bank of New York Company, Inc 75, 282, 523 Central Financial Corporation 521 Bank On It, Inc 776 Central Illinois Bancorp, Inc 779 Bank One Corporation 139, 280 Central of Kansas, Inc 777 Bank United Corp 590 Central South Bancorporation, Inc 72 BankFirst Corporation 593 Central Texas Bankshares Holdings, Inc 348 Banking Corporation of Florida 590 Centura Banks, Inc 71, 134 Bankmont Financial Corporation 523, 652 Century South Banks, Inc 348 Banknorth Group, Inc 72 Chambers Bancshares, Inc 213 Banque Nationale de Paris, Paris, France 139, 704 Chaparral Bancshares of Delaware, Inc 72 Banterra Corp 453 Chaparral Bancshares, Inc 72 Barret Bancorp, Inc 211, 453 Charter One Financial, Inc 704 Bartonville Investment Company 836 Chelsea Bancshares, Inc 280 Bauer Investments, Ltd 348 Cherokee Banking Company 591 Bauer Managment, Inc 348 Chickasha Bancshares, Inc 140 Baxter Bancshares, Inc 590 Citicorp 779,838 Bay View Bank 282 Citicorp Strategic Technology Corporation 779, 838 Bay View Bank, N.A 282 Citigroup, Inc 455, 779, 838 Bay View Capital Corporation 282, 593 Citizens Bancorp Investment, Inc 591 BB&T Corporation 75, 140, 525, 594, 653, 704 Citizens Bancorporation of New Ulm, Inc 72 BB&T Financial Corporation of Virginia 140 Citizens Bancshares of Southwest Florida 521 BCB Holding Company 701 Citizens Banking Corporation 838 BCC Bancshares, Inc 211 Citizens Bankshares Employee Stock Ownership BCC Bankshares, Inc 701 Plan and Trust 211 Belvedere Capital Partners, Inc 72, 591 Citizens Corporation 453 Belvedere Capital Partners, LLC 453, 650 Citizens First Corporation 211 Beulah Bancorporation, Inc 72 Citizens National Bank 136 Bloomfield Hills Bancorp, Inc 521 Citrus Financial Services, Inc 836 Bluestem Bank Holding Company, L.L.C 72 City Holding Company 591 BNKU Holdings, Inc 590 Clark County Bancshares, Inc 348 BNY Capital Markets, Inc 282 Clarkston Financial Corporation 135 Boiling Springs Bancorp 776 CNB, Inc 522 Boiling Springs, MHC 776 Coast Community Bancshares, Inc 280 BOK Financial Corporation 139, 521, 591 Coconut Grove Bankshares, Inc 650 Boston Private Financial Holdings, Inc 837 Colorado County Investment Holdings, Inc 348 Bridge Information Systems, Inc 71 Columbia Bancorp 73 Britton & Koontz Capital Corporation 75 Columbiana Bancshares, Inc 593 Brookline Bancorp, Inc 779 Comerica, Inc 139 Brookline Bancorp, M.H.C 779 Commerce Bancorp, Inc 135, 348 Bryan Family Management Trust 135 Commerce Bancshares, Inc 453, 651, 702 BSB Bancorp, Inc 521 Commercial Bancshares, Inc 591 BSB Bank and Trust Company 521 Commercial Credit Corporation 455 BT Financial Corporation 594 Commonwealth Bancshares, Inc 593, 704 Buckeye Bancshares, Inc 776 Community Bancorp of New Jersey 594 Bugbee Family, Limited Partnership 72 Community Bancshares Corp 73 Business Bank Corporation 211 Community Bancshares of Mississippi 281 BW Bancorp 348 Community Bancshares of Mississippi, Inc 777 California Community Financial Institutions Fund, Community Bancshares, Inc., Employee Stock Limited Partnership 72, 591, 650 Ownership Plan and Trust 73 California Financial Bancorp 72 Community Banks of the South, Inc 650 Cameron Bancshares of Delaware 280 Community Commercial Bancshares, Inc 453 Cameron Bancshares, Inc 280 Community Financial Group, Inc 75, 593 Capital Bancorp, Inc 280 Community First Bancshares, Inc 211, 453, 650 Capital Bancshares, Inc 348 Community First Bankshares, Inc 351 Capital Bank Corporation 135 Community Investments, Inc 213 Capital City Group, Inc 452 Community Loan Company 282, 351, 524 Capitol Bancorp, Ltd 521, 702, 111 Community National Bancorporation 777 Cardinal Bancshares, Inc 211 Community National Bank Corporation 76 Cardinal Financial Corporation 213, 650 Community One Bancshares, Inc 777 Carolina First Corporation 213, 348 Community Shores Bank Corporation 73 Carthage Nevada Financial Group, Inc 348 Community Spirit Bancshares, Inc 73 Carthage State Bancshares, Inc 348 Community State Bancshares, Inc 453 Castle Creek Capital Partners Fund I, L.P. 135, 212, 349 Community Trust Financial Services, Corp 282, 351, 524 Castle Creek Capital Partners Fund Ila, L.P. 348, 349, 650 Compass Bancshares, Inc 134 Castle Creek Capital Partners Fund lib, L.P. .... 348, 349, 650 Concord, EFS, Inc 351 Castle Creek Capital, L.L.C 135, 212, 349, 650 Consolidated Equity Corporation 455, 591 CBCC, Inc 211 Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., CBOT Financial Corporation 140 Rabobank Nederland, Utrecht, The Netherlands 351 CCBT Bancorp, Inc 135 Cornerstone Bancorp 702 CDS Bancorp, Inc 135 Cornerstone Bancorp, Inc 211 Centennial Bank Holdings, Inc 455 Cowlitz Bancorporation 652 Centennial First Financial Services 836 Credit Suisse First Boston, Zurich, Switzerland 652 Centon Bancorp, Inc 521 Credit Suisse Group, Zurich, Switzerland 652 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 85 A79 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Criterion Investment Management, LLC 653 First National Bank of Nevada Holding Company 522 Cullen/Frost Bankers, Inc 133, 452, 520 First National Bank of the Rockies 522 Cumberland Bancorp, Inc 351 First National Bankshares of Beloit, Inc 524 Cyrus Bancshares, Inc 211 First National Corporation 651 Dai-Ichi Kangyo Bank, Limited, Tokyo, Japan 704 First National Corporation, North Dakota 139 Dai-Ichi Kangyo Fuji Trust and Banking Co., Ltd., First National of Nebraska, Inc 520 Tokyo, Japan 704 First Perry Bancorp, Inc 136 Darlington County Bancshares, Inc 524 First Personal Financial Corp 281 Decatur Bancshares, Inc 139 First Poteau Corporation 523 Decatur Corporation, Inc 522 First Premier Financial Corporation 591 Delta Bancorp, Inc 351 First Pryor Bancorp, Inc 139 Delta Bancshares of Louisiana, Inc 591 First Security Bancorp 136 Delta Trust & Banking Corporation 777 First Security Corporation 520 Deutsche Bank AG, Frankfurt am Main, Federal First Security Group, Inc 777 Republic of Germany 139, 524 First Sooner Bancshares, Inc 779 DFC Acquisition Corporation Two 777 First State Bancorp 591 Diamond Bancshares 214 First State Bank of Canadian 778 Doral Financial Corporation 704 First Sterling Banks, Inc 349 Doss, Ltd 777 First Tennessee National Corporation 210 Dresdner Bank AG, Frankfurt, Germany 76 First Union Corporation 136, 779 Dresdner RCM Global Investors, LLC 76 First Valley Corporation 523 Durant Bancorp, Inc 211, 522, 111 First Washington Bancshares, Inc 73 East Alabama Financial Group, Inc 591 First Western Bancorp, Inc 139, 593, 652 East West Bancorp 73 First York Ban Corp 73 EBA Bancshares, Inc 135 FirstBank Holding Company of Colorado 520 Eggemeyer Advisory Corp 135, 212, 349, 650 FirstBank Holding Company of Colorado, ESOP 133 Enterbank Holdings, Inc 139 FirstBank Holding Company, Employee Stock EverTrust Financial Group, Inc 777 Ownership Plan 520 F&M Bancorporation, Inc 522, 838 Fishback Financial Corporation 212 F.N.B. Corporation 136 FJSB Bancshares 214 Farm and Home Insurance Agency, Inc 352 FLAG Financial Corporation 591, 704, 777 Farmers & Merchants Bancorp 349 Fleet Financial Group, Inc 139 Farmers State Bancshares, Inc 281 Florida Business BancGroup, Inc 778 Farmers State Corporation 652 FMLB Acquisition, Inc 836 Fayette Bancorporation 702 FNB Financial Services Corporation 704 FBOP Corporation, Inc 135, 139 FNBR Holding Corporation 522 FCNB Corp 525 Foresight Financial Group, Inc 522 Fidelity Company 702 Fortis (B), Brussels, Belgium 282 Fifth Third Bancorp 135, 213, 522, 591, Fortis (NL) N.V., Utrecht, The Netherlands 282 593, 652, 777, 780 Founders Bancshares, Inc 212 Fifth Third Bank of Southern Ohio 135 Fountain View Bancorp, Inc 281 Fifth Third Bank, Cincinnati 213, 652 Fox River Valley Bancorp, Inc 281 First Ada Bancshares, Inc 351 Franklin Bancshares, Inc 350 First American Bank Group, Ltd 135, 349 Frontier Financial Corporation 136, 592 First American Credit Corporation 135 Fuji Bank, Limited, Tokyo, Japan 704 First Bancshares Corporation 650 FVNB Corp 140 First Bancshares, Inc 135, 836 FVNB Delaware Corp 140 First Bank Corp 73 FWBI Acquisition Corp 592 First Bank Shares of the South East, Inc 213 Gateway American Bancshares, Inc 136 First Banking Company of Southeast Georgia 349 Georgia Community Bancorp, Inc 702 First Banks, Inc 650 German American Bancorp 139 First Busey Corporation 779 German American Capital Corporation 524 First Capital Bank Holding Corporation 454 Gibbon Exchange Company 211 First Commerce Bancshares of Colorado, Inc 212 Gilmer National Bancshares of Delaware, Inc 778 First Commerce Bancshares, Inc 212 Gilmer National Bancshares, Inc 778 First Commonwealth Financial Corporation 73 Glacier Bancorp, Inc 136 First Community Bancorp, Inc., Glasgow, Montana 73 GLB Bancorp, Inc 593 First Community Bancorp, Inc., Pahokee, Florida 73 Gold Banc Corporation, Inc 76, 351, 704 First Community Financial Corporation 349 Goodenow Bancorporation 454 First DuPage Bancorp, Inc 281 Grand Bancorp, Inc 281 First Express of Nebraska, Inc 135 Great Northern Corporation 702 First Financial Banc Corporation 522 Great Southern Bancorp, Inc 282 First Financial Bancorp 349, 454 GreatBanc, Inc 838 First Flo Corporation 702 Greater Bay Bancorp 350, 702 First Frederick Financial Corporation 75 Greater Community Bancorp 454 First Interstate BancSystem, Inc 591 Greene County Bancorp, Inc 73 First Leesport Bancorp, Inc 591 Greene County Bancorp, MHC 73 First Louisiana Bancshares, Inc 591 Greenville Community Financial Corporation 281 First M&F Corporation 779 Griffith Family Financial Holdings, L.L.C 702 First Merchants Corporation 281 Guaranty Development Company 524 First Mutual Bancshares, Inc 702 Guaranty Inc 524 First Mutual of Richmond, Inc 524 Habersham Bancorp 454 First National Bancshares, Inc., ESOP and 401 (k) Trusts . 73 HaleCo Bancshares, Inc 651 First National Bank at St. James, ESOP and Trust 136 Harbor Bancorp, Inc 778 First National Bank of Clovis, Employee Stock Harleysville National Corporation 136 Ownership Trust 212 HCNB Bancorp, Inc 651 First National Bank of Nevada 522 Heartland Bancshares, Inc 592 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A80 Federal Reserve Bulletin • December 1999 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Henderson Citizens Bancshares, Inc 136 MemphisFirst Corporation 281 Henderson Citizens Delaware Bancshares, Inc 136 Mercantile Bancorp, Inc 454, 702 Heritage Financial Corporation 136 Mercantile Delaware Bancorp, Inc 454 High Point Financial Services, Inc 73 Merchants & Manufacturers Bancorp 651 Hillcrest Bancshares, Inc 836 Merit Holding Corporation 282 Home Valley Bancorp 593 Metroplex North Bancshares, Inc., Employee Stock Homeside Lending, Inc 455 Ownership Plan 350 Homestead Financial Corporation, Employee Stock MHBC Investments, Limited Partnership 522 Ownership Plan 136 Mid-Atlantic Community BankGroup, Inc 74 Hometown Banc Corp 350 Mid-Missouri Bancshares, Inc 838 Hometown Independent Bancorp, Inc 350 Midwest Bancorporation, Inc 454 Horizon Bancorporation, Inc 836 Milk River Banquo, Inc 702 Horizon Financial Corp 454 Mille Lacs Bancorporation, Inc 778 HSBC Finance (Netherlands), London, England 649 Millennium Bankshares Corporation 350 HSBC Holdings B.V., Amsterdam, The Netherlands 649 Minster Financial Corp 522 HSBC Holdings, pic, London, England 134, 649 Monument Bancshares, Inc 350 Hudson City Bancorp, Inc 522 Mortgage Capital Investors 214 Hudson City, MHC 522 Morton Community Bank, Employee Stock Ownership Humboldt Bancorp 212 Plan and Trust 350 Huntsville Holdings, Inc 350 MSB Leasing, Inc 76 Imperial Bank 778 Mt. Sterling Bancorp, Inc 74 Independence Bancorp 454 Mutual Bancorp of the Berkshires, Inc 76 Independent Bancshares, Inc 75 NATCOM Bancshares, Inc 837 Independent Bank Corporation 592 National Australia Bank, Limited, Melbourne, Independent Community Bankshares, Inc 704 Australia 76, 455 Indiana Community Bancorp, Limited 777 National Bancshares Corporation of Texas 780 Intervest Bancshares Corporation 281 National Bank of Commerce in Superior 837 InterWest Bancorp, Inc 778 National City Corporation 705 Inwood Bancshares, Inc 702 National Commerce Bancorporation 651 Iowa Community Bancorp, Inc 454 National Westminster Bank, Pic, London, England ... 282, 705 Ipswich Bancshares, Inc 592 Nationwide Bankshares, Inc 281 J. Carl H. Bancorporation 593 NBC Capital Corporation 137 J.P. Morgan & Co., Incorporated 593 NCB Holdings, Inc 351 J.P. Morgan Capital Corporation 593 New Commerce BanCorp 522 J.R. Montgomery Bancorporation 281, 651 New Galveston Company 133, 520 Jacksonville Bancorp, Inc 136 Newco Alaska, Inc 522 James Monroe Bancorp, Inc 593 Nexity Financial Corporation 837 James River Bankshares, Inc 651, 779 Nixon Bancshares, Inc 137 Jamesmark Bancshares, Inc 651 North Country Financial Corporation 524 Jere J. Ruff Family, Limited Partnership II 703 Northern Star Financial, Inc 137, 652 Kennett Merger Corporation 836 Northfield Bancshares, Inc 454 Kentucky National Bancorp, Inc 350 Northpointe Bancshares, Inc 137 Kercheval Limited Partnership 778 Northwest Financial Corp 652 KeyCorp 593 Norway Bancorp, Inc 780 Kircher Bank Shares, Inc 592 Norway Bancorp, MHC 780 La Plata Bancshares Delaware, Inc 651 Norwest Financial Services, Inc 140, 214, 455 La Plata Bancshares, Inc 651 Norwest Financial, Inc 140, 214, 455 Lakeland Bancorp, Inc 350 Norwest Insurance, Inc 456, 652 Landesbank Baden-Wurttemberg, Stuttgart, Germany 838 Norwest Mortgage, Inc 140, 214, 594, 780, 838 Lea M. McMullan Trust 836 Norwest Services, Inc 705 Lehigh Acres First National Bancshares, Inc 702 Norwest Ventures, LLC 140, 214, 594, 838 Letchworth Independent Bancshares Corporation 454 Oak Hill Financial, Inc 703, 705 Lewiston Bancorp 702 Oakland Financial Services, Inc 780 Lincoln County Bancorp, Inc 136 Ogden Bancshares, Inc 522 LNCB Corporation 281 OGS Investments, Inc 74 Lubbock National Bancshares, Inc 455 Old Kent Financial Corporation 521, 701 M&F Bancorp, Inc 592 Old Mission Bancorp, Inc 778 M&I Data Services, Inc 214, 779 Old National Bancorp 210 M&T Bank Corporation 283 Old Point Financial Corporation 139 M.R. Melton, Limited Partnership 454 Olney Bancshares of Texas, Inc 778 Machias Bancorp, Inc 74, 76 Olympia Financial Corporation 283 Machias Bancorp, MHC 74, 76 Oneida Financial Corp 74 Macks Creek Bancshares, Inc 522 Oneida Financial, MHC 74 Madison Financial Corporation 136 Osceola Bancorporation, Inc 212 Mahaska Investment Company 652 Oswego County Bancorp, Inc 522 Main Street Bancorp, Inc 702 Oswego County, MHC 522, 592 Marine Bancorp, Inc 837 Overton Delaware Corporation 212, 837 Marine Bancshares, Inc 350 Overton Financial Corporation 212, 837 Marlborough Bancorp 212 P&C Investments, Inc 212 Marquette Bancshares, Inc 136, 139, 779 PAB Bankshares, Inc 137 Marshall & Ilsley Corporation 214, 351, 705, 779 Pacific Community Banking Group 590 Mason-Dixon Bancshares, Inc 137 Pacific Continental Corporation 281 McClain County Bancorporation 455 Palmer Bancshares, Inc 74 McDonald Investments, Inc 593 Pandora Bancshares 214 Mcllroy Family, Limited Partnership 212 Park Cities Bancshares, Inc 591 Mellon Bank Corporation 214, 705 Parkway National Bancshares, Inc 778 Memphis Bancshares, Inc 350 Passumpsic Bancorp 524 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 85 A81 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Patriot Bank Corp 76 South Texas Bancorp of Delaware, Inc 523 Patriot National Bancorp, Inc 778 South Texas Bancorp, Inc 523 PB Financial Services Corporation 592 Southeast Bancshares, Inc 454 Pembina County Bankshares, Ltd 651 Southern Bancorp, Inc 75 Peninsula Bancorp, Inc. 837 Southern Financial Bancorp, Inc 778 Penn Laurel Financial Corp 523 Southern Jersey Bancorp of Delaware, Inc 703 Pennsylvania Commerce Bancorp, Inc 593 Southwest Partners, Inc 780, 838 People's Utah Bancorp 212 St. Charles Financial Corporation 75 Peoples Bancorp of North Carolina, Inc 651 Standard Bancshares, Inc 281 Peoples Bancorp, Inc 651, 703 Standard Chartered Bank, London, England 455 Peoples Bancorporation, Inc 212 Standard Chartered, PLC, London, England 455 Peoples Florida Banking Corporation 703 State Financial Services Corporation 592 Peotone Bancorp, Inc 137 State National Bancshares, Inc 212, 282 PFSB Bancorporation, Inc 350 State Street Corporation 71, 282, 351 Piesco, Inc 454, 524 Stearns Financial Services, Inc., Employee Stock Pilot Grove Savings Bank, Employee Stock Ownership Plan and Trust 455 Ownership Plan 703 Sterling Bancorp, Inc 523 Pinnacle Bancorp, Inc 350, 778, 837 Stichting Administratiekantoor ABN AMRO Holding, Placer Capital Co 650 Amsterdam, The Netherlands 780 Pleasants County Bankshares, Inc 74 Stichting Prioriteit ABN AMRO Holding, Amsterdam, PNC Bank Corp 139 The Netherlands 780 Popular Cash Express 280 Stockgrowers Banc Corporation 455 Popular Cash Express, Inc 649 Stockmans Financial Group 350 Popular International Bank, Inc 280 Strategic Capital Bancorp, Inc 592 Popular North America 280 SUM Financial Corporation 137 Popular, Inc 280, 649 Summersville Bancorporation, Inc 703 Port William Bancshares, Inc 137 Summit Bancorp 523 Poteau Bancshares, Inc 523 Sun Bancorp, Inc 137 Premier Bancshares, Inc 651, 703, 778 Sun Community Bancorp, Limited 521, 702 Pritchard Acquisition Co., Inc 703 Suncoast Bancorp, Inc 455 Prosperity Bancshares, Inc 703 SunTrust Banks, Inc 525, 705 Provident Bancorp 837 Superior Financial Holding Corporation 215 PSB Corporation 137 Susquehanna Bancshares, Inc 137, 525 Quincy Bancshares, Inc 651 Swedish-American Bancshares, Inc 455 Rae Valley Financials, Inc 778 Synergy Bancshares, Inc 213 Readlyn Bancshares, Inc 524 Synovus Financial Corp 75, 703, 778, 780, 837 Red River Bancshares, Inc 137 Tampa State Bankshares, Inc 76 Regions Financial Corporation 74, 140, 281 TB&C Bancshares, Inc 75, 703, 778, 837 Reliance Bancshares, Inc 454 TCB Delaware, Inc 138 Republic Bancorp, Inc 524, 592 Terry and Kathy Barrett Family, Limited Partnership 75 Rich Land Bancorp, Inc 523 Texas Country Bancshares, Inc 138 Richland County Bancshares, Inc 137 Third Street Bancshares, Inc 651 Richmond Mutual Bancorporation, Inc 524 Tonti Financial Corporation 651 Ridgewood Financial, Inc 74 Tower Financial Corporation 213 Ridgewood Financial, MHC 74 Town & Country Bancshares, Inc 75 Ripley County Bancshares, Inc 350 TransPecos Financial Corp 835 Rome Bancorp, Inc 703 TriCounty Investment Company, Inc 593 Rome, MHC 703 Troy Financial Corporation 283 Roxton Corporation, Employee Stock Ownership Plan .... 523 Trustmark Corporation 525 Royal Bank of Canada, Montreal, Quebec, Canada 214 U.S. Bancorp 140, 214, 780 Salt Lick Bancorp, Inc 137 U.S. Trust Corporation 214, 705 Sam Houston Financial Corp 350 UBS AG, Basle, Switzerland 455 Santa Barbara Bancorp 74 UMB Financial Corporation 779 Satilla Financial Services, Inc 778 Union Bankshares Corporation 214 Scripps Financial Corporation 592 Union Bankshares, Inc 651 Security Bank Holding Company 75 Union National Bancorp, Inc 593 Security Bank Holding Company, Employee Stock Union Planters Corporation 138, 213 Ownership Plan 75 Union Planters Holding Corporation 138, 213 Security Financial Services Corporation 837 United Americas Bancshares, Inc 651 Sharon Bancshares, Inc 523, 524 United Bancorporation 71 Sherwood Banc Corp 214 United Bancshares 214 Silver State Bancorp 350 United Community Banks, Inc 350, 704 Simmons First National Corporation 133, 523 United Financial Corp 652 SJN Banc Co 454, 837 United Financial Group, Inc 76 Skandinaviska Enskilda Banken, Stockholm, United Security Bancorporation 213 Sweden 214 University National Bancshares 138 Skillman Bancshares, Inc 212 USABancShares, Inc 140 Sky Financial Group, Inc 592, 593, 703 Valley Community Bancshares, Inc 138 Skylake Bankshares, Inc 703 Valley National Bancorp 75 Somerset Bancorp, Inc 703 Valley National Corporation 138 South Alabama Bancorporation, Inc 592 Valley View Bancshares, Inc 838 South Branch Valley Bancorp, Inc 350 Van Orin Bancorp, Inc 523 South Georgia Bank Holding Company 212 VIB Corporation 214 South Holland Bancorp, Inc 652 Village Bancorp 779 South Holland Trust and Savings Bank 652 Village Bancorp, Inc 837 South Plains Delaware Financial Corporation 214 Village Bancshares, Inc 138 South Plains Financial, Inc 138, 214 Violeta Investments, Ltd 455 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A82 Federal Reserve Bulletin • December 1999 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Orders issued under—Continued Virginia Commonwealth Financial Corporation 525 HSBC Holdings, PLC, London, England 582-6 W Holding Company, Inc 523 Ideal Bancshares, Inc 577 Wachovia Corporation 701 Illini Corporation 831 Wallowa Bancorp 705 Istituto Bancario San Paolo di Torino-Istituto Mobiliare Warren County Bancshares, Inc 138 Italiano, S.p.A., Turin, Italy 275-7 Warwick Community Bancorp, Inc 76 Manufacturers and Traders Trust Company 694-9 Waukesha Bancshares, Inc 282 Otto Bremer Foundation 578 WB&T Bancshares, Inc 213 Peoples Heritage Financial Group, Inc 55-8 WB&T Delaware Bancshares 213 Piraeus Bank S.A., Athens, Greece 579-81 WCB Bancshares, Inc 351 PNC Bank Corp 66-8 WCB Holding Company of Illinois 837 Popular Transition Bank 59-61 Weatherford Foundation of Red Bay, AL, Inc 75 Popular, Inc 59-61 Wells Fargo & Company 71, 138, 140, 213, Royal Bank of Scotland Group, PLC, Edinburgh, 214, 455-6, 592, 593, Scotland 582-6 594, 652, 705, 780,838 Royal Bank of Scotland, PLC, Edinburgh, Scotland 582-6 Westbank Corporation 140, 705 Security Delaware Pecos Bancshares, Inc 640 Westdeutsche Landesbank, Girozentrale, Duesseldorf, Security Pecos Bancshares, Inc 640 Federal Republic of Germany 351, 653 Stockman Financial Corporation 641 Western Bancorp 138 Sulphur Springs Bancshares, Inc 126 Western Commerce Bank, Stock Bonus Plan and Trust Sulphur Springs Delaware Financial Corporation 126 Agreement 704 Sumitomo Bank, Limited, Osaka, Japan 644 Western Reserve Bancorp, Inc 75 Summit Bancorp 582-6 Western Sierra Bancorp 138 Sun Community Bancorp, Limited 521 Western State Agency, Inc 653 SunTrust Banks, Inc 271-5 Wewahitchka State Bank, Employee Stock Susquehanna Bancshares, Inc 61-4 Ownership Plan 704 Texas Regional Bancshares, Inc 683-5 WJR Corp 349, 351, 650 Texas State Bank 683-5 Woodlands Bancorp, Inc 213 Union Planters Corporation 205-7 Wrightsville Bancshares, Inc 282 Union Planters Holding Corporation 205-7 Zions Bancorporation 133, 701 Valley View Bancshares, Inc 64 Orders issued under Wachovia Corporation 271-5, 340-3 AmSouth Bancorporation 685-93 Zions Bancorporation 271-5 ANB Corporation 439^41 Bank Holding Company Supervision Manual 112, 568 Banc Corporation 269-71 Bank Merger Act Banco Popular de Puerto Rico 59-61 Applications approved under Banco Popular, New York 59-61 Adams Bank & Trust 352 Banco Santander, S.A., Madrid, Spain 441^1 Anadarko Bank and Trust Co 215 Banc West Corporation 271-5 Ashland Bank 141 Bank Iowa 693 Bank of Colorado 141 Bank of New York Company, Inc 582-6 Bank of Oakfield 352 BankAmerica Corporation 271-5 Bank of Utah 653 BankBoston Corporation 582-6, 747-72 BANKFIRST 526 Bay Port Financial Corporation 333-5 Baylake Bank 283 BB&T Corporation 271-5 Berks County Bank 141 BOK Financial Corporation 505-9 Central Savings Bank 525 BOKF Merger Corporation, Number Seven 505-9 Centura Bank 77 Bremer Financial Corporation 578 Chemical Bank, Bay Area 594 C-B-G, Inc 335 Chickasha Bank & Trust Company 141 CAB Holding, LLC 51 Citizens Bank 706 Canadian Imperial Bank of Commerce, Toronto, Citizens Bank & Trust Company 352, 781 Canada 733-6 Citizens Banking Company 77 CFBanc Holdings, Inc 52 Clear Lake Bank and Trust Company 706 Chase Manhattan Corporation 582-6 Community First Bank & Trust 594 Chittenden Corporation 499-505 County Bank 653 CIBC Delaware Holdings 733-6 Cumberland Bank 781 CIBC World Markets Corporation, Toronto, Canada .... 733-6 Eaton Bank 526 CIBC World Markets Inc., Toronto, Canada 733-6 Effingham State Bank 706 Citizens Financial Group, Inc 582-6 F&M Bank-Iowa Central 594 City Holding Company 53-5 F&M Bank-Northern Virginia 283 Comerica Incorporated 582-6 F&M Bank-Winchester 653 Commerzbank AG, Frankfurt am Main, Federal Farmers & Merchants Bank 141 Republic of Germany 336-8 Farmers Bank of Maryland 456 Community Capital Bancshares, Inc 444-6 FCNB Bank 526 Cooper Life Sciences, Inc 125 Fifth Third Bank, Kentucky, Inc 706 Dai-Ichi Kangyo Bank, Limited, Tokyo, Japan 736 Fifth Third Bank 595 Deutsche Bank, AG, Frankfurt am Main, Germany .... 509-18 First American Bank 706 First Banks America, Inc 268 First American Bank and Trust Company 215, 595 First Banks, Inc 268 First Community Bank 352 First Security Corporation 207-10 First Interstate Bank 456, 706 First Union Corporation 271-5, 582-6 First Liberty Bank & Trust 283 Firstar Corporation 738-^7 First Security Bank of Nevada 525 FirstMerit Corporation 128-31 First Security Corporation 525 Fleet Financial Group, Inc 582-6, 747-72 First State Bank 215 Fuji Bank, Limited, Tokyo, Japan 338^*0, 643 First Virginia Bank of Tidewater 595 Greater American Finance Group, Inc 125 First Virginia Bank-Southwest 283 HSBC Americas, Inc 582-6 Fort Madison Bank & Trust Co 706 HSBC Holdings, BV, Amsterdam, The Netherlands 582-6 Iowa State Bank 595 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 85 A83 Pages Pages Bank Merger Act—Continued Board of Governors—Continued Applications approved under—Continued Staff changes—Continued JRB Acquisition Bank, Inc 653 Connors, Thomas A 636 Laurel Bank 595 Emerson, Marianne M 425 Lemay Bank and Trust Company 595 Farnsworth, Clyde H„ Jr 492 Main Street Bank 706 Freeman, Richard T. 636 Manufacturers and Traders Trust Company 283 Hambley, Winthrop P. 113 Marine Midland Bank 141 Helkie, William L 636 Minster Bank 526 Hooper, Peter III 331, 673 Mobile County Bank 215 Howard, David H 636 Northwestern Bank 456 Jones, David S 113 Ohio Bank 141, 781 Kamin, Steven B 636 Ossian State Bank 595 Mingo, John J 569 People First Bank 215 Reinhart, Vincent R 673 Peoples Bank and Trust Company of Lincoln County 77 Riggs, Betsy 425 Pinnacle Bank 141, 352, 839 Robinson, Donald L 637 Pinnacle Bank-Torrington 352 Roseman, Louise L 492 Pinnacle Bank of Cheyenne 352 Stehm, Jeff 113 Pleasants County Bank 77 Stevens, Richard C 425 Premier Bank 456 Tryon, Ralph W. 331 Pullman Bank and Trust Company 595, 706 Weis, John R 569 Statements and testimony (See Statements (including Republic Security Bank 77, 595 reports and letters)) Salin Bank and Trust Company 141 Thrift Institutions Advisory Council, new members 109 Sky Bank 706, 781 Web site, new design 424 Southern California Bank 215 Bomfim, Antulio N., article 369-95 Southern Financial Bank 781 Bonanza, Jason J., article 178-83 Southwest Georgia Bank 77 Bond Market Association 806 Summit Bank 526 Bostic, Raphael W., article 81-102 U.S. Bank 215 Brazilian real 549 Union Bank & Trust Company 215 Buckley, Kenneth D. Union Colony Bank 838 Appointed Assistant Director, Division of Reserve Bank Valley Independent Bank 141 Operations and Payment Systems 113 WestStar Bank 456, 653 Statement 413-5 Orders issued under Business Access to Capital and Credit, conference 672 Arizona Bank 343-6 Business loans 370 Civitas Bank 645-7 Business sector, economic developments 155-8 Poteau State Bank 131-3 Buybacks, Treasury debt 804 United Bank of Philadelphia 773-6 Westdeutsche ImmobilienBank, Mainz, Germany 346 CALEM, Paul S., article 81-102 Bank Secrecy Act and money laundering, statement 415-9 Call Report and H.R. 1585 483 Bank supervision, Year 2000 readiness 406 Canner, Glenn B., articles 81-102, 709-23 Banking organizations Capacity utilization 21, 25 FAS 133 110 Capital Intercompany tax allocations Ill Accounts, U.S 540 Loan losses 329 Commercial banks 376 Supervision of large 566, 632 Flows, U.S 297 Banking practices, lower-income families, article 459-73 Capital adequacy, new paper by Basel Committee 566, 632 Banking, basic types 466 Carrasco, Ricardo 112, 142-5 Bankruptcy Reform Act of 1999 310-2 Century Date Change Special Liquidity Facility 491, 632 Basel Committee on Banking Supervision Chairmen and deputy chairmen, Federal Reserve Banks, (,See also Basle) 611, 613, 635 appointments 727 Basic banking services 466 Check Basle Committee on Banking Supervision Cashing outlets, use of 464—6 (See also Basel) 306,319,424,566 Collection regulation Ill, 256, 329, 333, 632, 817, 830 Bertaut, Carol C., article 655-66 Settlement 109, 111 Bids, competitive and noncompetitive 787, 788 Checking accounts, use of by lower-income families 461-3 Board of Governors (See also Federal Reserve System) Chicago Board of Trade 799 Consumer Advisory Council China, economic developments 550 Meetings 328, 490, 729 Clark, Tillena G„ appointed Assistant Director, New members 193-5 Division of Information Technology 425 Federal Reserve Bulletin, discontinued tables 112 Clearing arrangements 805 Final enforcement orders and decisions (See Litigation, Closeout, contractual agreements 311, 323 Final enforcements) Collateral Index of orders and actions taken 70, 277-9, 451, 699 Contractual agreements 311 Information Resources Management, Division of, Federal Reserve notes 411 name change 425 Commercial and industrial loans 372, 383 International Finance, Division of, reorganization 331 Commercial banks Members Balance sheet developments 370 Ferguson, Roger W., Jr., appointed Vice Chairman 727 Capital 376 Ferguson, Roger W., Jr., nomination 670 Developments of 369-95 Lists, 1913-99 597, 783 Interest income and expense 376 Rivlin, Vice Chair, Alice M., resignation 565 International operations 384 Retirement Portability Act, statement 252-5 Staff changes Liabilities 376 Adams, Donald 331 Noninterest income and expenses 380, 381 Alexander, Lewis S 331, 732 Commodity Exchange Act, statement 484—7 Allison, Theodore E 331 Community development web site 818 Buckley, Kenneth D 113 Community Reinvestment Act of 1977 81-102 Clark, Tillena G 425 Conference Report, H.R. 3150, statement 322-5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A84 Federal Reserve Bulletin • December 1999 Pages Pages Connors, Thomas A., promoted to Deputy Associate Farnsworth, Clyde H., Jr., Director, Division of Reserve Bank Director, Division of International Finance 636 Operations and Payment Systems, retirement 492 Consolidation, effects on mortgage lending 81-102 Federal Employees Retirement System (FERS) 252 Construction loans, regulation on risk-based capital 328 Federal funds rate 4, 229-32, 565, 670, 817 Consumer Advisory Council Federal government, budget 537 Meetings 328,490,729 Federal Open Market Committee New members 193-5 Action by 565, 670 Nominations sought 566 Conference call 46 Consumer Handbook on Adjustable-Rate Mortgages 491 Directive 817 Consumer Leasing (Reg. M) Ill, 328, 671, 672, 817 Disclosure policy 249 Consumer protection, credit, ATM, and debit cards 324 Domestic open market operations, authorization ... 122, 427, 822 Consumer spending 533 Foreign currency directive 429 Counterparty credit risk-management systems 195 Foreign currency operations, authorization 428, 430-6 Credit Meeting minutes Availability to lower-income families 466 Sept. 29, 1998 40-7 Cards 324, 463 Nov. 17, 1998 115-23 Discipline at banks 728 Dec. 22, 1998 197-203 Extensions 49 Feb. 2-3 1999 426-36 Risk, guidance by Basel Committee 635 May 18, 1999 570-5 Credit Risk Modelling: Current Practices and Applications, June 29-30 1999 674-81 August 24, 1999 820-7 paper released by Basle Committee 424 Open Market operations 218 Credit unions, Year 2000 readiness 412 Statement 490 Currency arrangements 122, 311, 322 Subcommittee established 827 Federal Reserve Banks DEBIT CARDS, CONSUMER PROTECTION 324 Chairmen and Deputy Chairmen, appointments 727 Debt Collection Improvement Act of 1996 468 Check settlement 109, 111 Debt, U.S 169 ; Directors, list 355-67 Demand deposits, interest on under H.R. 1585 480 Kansas City, new web site 818 Deposit-reporting schedule 633 Operating income 196 Depository Institution Regulatory Streamlining Act of 1999, Federal Reserve Board Retirement Portability Act, H.R. 1585, statement 479-84 statement 252-5 Depository institutions Federal Reserve notes 411, 671 Branch closings, policy 633 Federal Reserve System 37, 313 Deposit-reporting schedule 633 Fees for Federal Reserve services to depository institutions — 37 Disclosures on e-mail accounts 671 Ferguson, Governor Roger W., Jr., nomination and Fees charged by Federal Reserve Banks 37 appointment, Vice Chairman, Board of Governors Home mortgage disclosure requirements 110, 125 of the Federal Reserve System 670, 727 Loan losses, joint statement 38 FFIEC, Year 2000 Contingency Planning Working Group 409 Reporting requirements 110 Finance 534, 536 Settlement services 38 Financial Derivatives activities 106-8, 110, 485-7, 608, 798 Markets 4-12, 165-9 Directors, Federal Reserve Banks and Branches 355-67 Netting 311, 323 Disclosure requirements, Regulation Z 109 Privacy, statement 624—6 Discount rate, regulation 37, 639, 670 Reform, statements 240-3, 250-2 Discount Rates of Foreign Central Banks, Financial Contract Provision, H.R. 833, statement 310-2 discontinued table 112 Financial Management Service (FMS) 414 Dupont, Dominique, article 785-806 Financial Services Education Coalition 469 Financial Services Information Sharing 728 ECONOMIC developments, by sector Fisher index, weighted 24 Business 155-8, 535 Fisher, Peter R., articles 178-83, 217-35 Financial markets 165-9 396-400, 616-20, 808-13 Foreign 160-2, 539 Fleet Financial Group, Inc., public meeting 567 Government 158-60, 537-9 Flow of funds accounts, supplementary tables 256 Household 153-5, 533 Foreign Labor markets 162, 540-2 Banks, US. banking 609, 611, 817 Prices 163-5, 542^1 Branch offices 600, 603, 614, 615 Economy, U.S. Joint ventures 601 Monetary policy 1-19, 243-50 Sector, economic developments 160-2, 549-52 Performance, monetary policy reports .. 147-77, 529-52, 626-31 Stocks, list of marginable, availability 257 Statements 187-9, 626-31 Subsidiaries 604 Edge corporations 601, 605 Foreign exchange, Treasury and Federal Reserve EFT '99 469 operations, articles 178-83, 396-400, Electronic benefit transfers and payments 459-73 616-20, 808-13 Electronic Fund Transfers (Reg. E) 671, 817 Foreign Short-Term Interest Rates, discontinued table 112 Electronic trading 806 Foreign transactions in 1999, article 287-99 Emerson, Marianne M., appointed Deputy Director, FRB/US model 1, 2 Division of Information Technology 425 Freddie Mac 805 Enforcement actions {See Litigation, Final enforcement Freeman, Richard T., promoted to Assistant Director, orders issued by Board of Governors) Division of International Finance 636 Equal Credit Opportunity (Reg. B) 671, 817 Frontier Bank of Laramie County 39, 80 Equity prices 168 Euro 290 GILBERT, Charles, article 20-33 European Central Bank 656 Government sector, economic developments 158-60 Eurosystem 656, 657 Government Securities Clearing Corporation 806 Event Management Plan, Year 2000 405 Government-sponsored enterprises 805 Export prices 293 Gramlich, Governor Edward M., statements Conference Report on H.R. 3150 322-5 FANNIE Mae 805 Customer financial privacy 624—6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 85 A85 Pages Pages Gramlich, Governor Edward M., statements—Continued International Banking Act of 1978—Continued Social Security reform 239 Orders issued under—Continued Greenspan, Chairman Alan, statements Deutsche VerkehrsBank AG, Frankfurt am Main, Financial reform 240-3, 250-2 Germany 588 Monetary policy, semiannual report 243-50, 626-31 ING Bank, N.V., Amsterdam, The Netherlands 448 Secretary Rubin, resignation 490 KBC Bank N.V., Brussels, Belgium 834 Social security 190-2, 303-6 Paribas, Paris, France 449-51 Technology, effects on financial system International banking facilities (IBFs) 602, 606 (Board of Governors) 325-7, 556-8, 561^1 International Banking Operations (Reg. K) 829 Telecommunications technologies 487-9 International Finance, Division of, reorganization 331 U.S. Economy 187-9 Investments 534, 535, 536 Guangdong International Trust and Investment Corporation .... 550 Ireland, Oliver, statement 310-2 Iyigun, Murat F., article 655-66 H.R. bills 10, statement 240-3, 419-23 JAPAN, economic developments 290, 550 775 413 Joint Year 2000 Council 410 833, statement 310-2 Jones, David S., change in title to Senior Adviser, 1094 411 Division of Research and Statistics 113 1585, statement 479-84 3150, statement 322-5 KAMIN, Steven B., promoted to Assistant Director, Hambley, Winthrop P., promoted to Deputy Congressional Division of International Finance 636 Liaison, Office of Board Members 113 Kebede, Kassahum 112, 145 Hedge funds Kelley, Governor Edward W., Jr., statements Demand for 795 Federal Reserve Board Retirement Portability Act 252-5 Long-Term Capital Management L.P. 46, 106-8, Year 2000, financial readiness 404-13 306-9, 312-8, 318-21 Keynesian model, new 1 Helkie, William L., promoted to Assistant Director, Keys to Vehicle Leasing, Spanish version 672 Division of International Finance 636 Know Your Customer, programs and proposed rule ... Ill, 309, 328 Helping People in Your Community Understand Basic Korea, economic developments 550 Financial Services, resource guide 469 Highly leveraged institutions 306, 319, 321 LABOR markets, economic developments 162, 540-4 Hilton, Spence, article 217-35 Laderman, Elizabeth, article 709-23 Hogarth, Jeanne M., article 459-73 Leonard, Deborah L., article 808-13 Home Mortgage Disclosure (Reg. C) 125 Liabilities, commercial banks 376 Hong Kong, economic developments 550 Liquidity, Treasury securities 795 Hooper, Peter III, Deputy Director, Division of Litigation International Finance, resignation 673 Final enforcement orders and decisions issued Houpt, James V., article 599-615 by Board of Governors Household finances 153-5, 374, 534 Adairsville Bancshares, Inc 112 Howard, David H., promoted to Deputy Director, Ahn, John H., 1996 216 Division of International Finance 636 American Bank 672, 707 B.O.T. Corporation, N.V., Curacao, IMPORTS and exports 292, 295, 539 Netherlands Antilles 491, 527 Income and expenses Banco Atlantico, S.A., Barcelona, Spain 567, 596 Commercial banks, tables 386-95 Banco Popular de Puerto Rico 568, 596 Federal Reserve Banks 196 Banco Popular del Ecuador, S.A., Quito, Ecuador — 568, 596 Investment 296 Bank of Adairsville 707 Industrial production and capacity utilization Barber, William 731, 840 Article 20-33 Belmont Bancorp 672 Releases 34-36, 103-5, 184-6, 236-8, Carmichael, William 731, 840 300-2, 401-3, 474-6, 553-5, Carrasco, Ricardo 112, 142-5 621-3 , 667-9, 724-6, 814-6 Community Capital Corporation 567, 596, 672 Revised data 26—33 Edwards, Jeremy, Richard, and Vivian 731, 840 Inflation-indexed securities 800-3 Evergreen Bank, N.A 78 Information Resources Management, Division of, Fahrner, Craig J 654, 672, 707 name change 425 Farmers and Merchants Bank 707 Information technology, financial system 556-8 First Data Corporation 673 Information Technology, new name for IRM Division 425 First Data Merchant Services 424 Intercompany tax allocations Ill Fonkenell, Guillaume Henri Andrew 353, 568 Interest income and expenses 376, 480 Foxdale Bancorp, Inc 425 Interest rates Foxdale Bank 425 Commercial banks, tables 386-95 Frontier Bank of Laramie County 39, 80 Economic developments 165-8 Goglia, Kenneth 636, 654 Internal Revenue Service, Original Issue Discount rule 788 Grimes County Capital Corporation 636, 654 International Hank Rhon, Carlos 284-6 Banking services 600 Hyun, Hogi Patrick 286, 330 Developments, monetary policy 173-7, 549-52 Incus Co., Ltd., Tortola, British Virgin Islands 284-6 Operations, commercial banks 384 Kebede, Kassahum 112, 145 International activities of U.S. banks and in U.S. banking Kingdon, Bruce Jeffrey 636, 654 markets, article 599-615 Laredo National Bancshares 284-6 International Banking Act of 1978 Liu, Joseph C 636, 654 Orders issued under Marant, Grant and Linda 731, 840 Anglo Irish Bank Corporation pic, Dublin, Ireland 587 Marin National Bancorp 707 Antwerpse Diamantbank N.V., Antwerp, Belgium 832 Masagung, Putra 80, 111, 145 Banco BBA-Creditanstalt, S.A., Sao Paulo, Brazil 518-20 Nieminen, David and Gay Lynn 731, 840 Banco de Credito e Inversiones S.A., Santiago, Chile ... 446-8 P.T. Ekspor Impor Bank Indonesia, Jakarta, Banco de la Ciudad de Buenos Aires, Buenos Aires, Indonesia 112, 145 Argentina 647-9 P.T. Gunung Agung., Ltd., Corporation, Jakarta, Credit Suisse, Zurich, Switzerland 68 Indonesia Ill, 145 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A86 Federal Reserve Bulletin • December 1999 Pages Pages Litigation— Continued Money laundering and Bank Secrecy Act, statement 415-9 Final enforcement orders and decisions—Continued Money stock data, revision 257-61 Piper, Paul P., Jr 425, 457 Morisse, Kathryn A., article 287-99 Plante, Harvey 636, 654 Mortgage lending, articles 81-102, 709-23 Putnam-Greene Financial Corporation 672, 707 Redemann, James J 78 NATIONAL Book-Entry System 791 Riesmeyer, John 636, 654 National Check Cashers Association 470 Rouse, James and Jenene 732, 840 Nelson, William R., article 369-95 Sellers, Bob L., 1996 216 Netting, financial 323 Shilstone, William 39 Notes, Federal Reserve, ordered 671 Smilek, Fred J 112, 145 Southern Security Bank 112, 145 O'DONNELL, Kevin H„ article 459-73 Trans Alliance, L.P. 491 Off-the-run securities 795 Walker, Daniel K. and Kenneth G 286, 330 Oil prices in 1999 291, 295 Warfield, H. Burns 732, 840 On-the-run issues 795 Wellington State Bank 491 Over-the-counter derivatives 106-8, 485-7 Zia New Mexico Bank 286 Fleet Financial Group, Inc., public meeting 567 P.T. Ekspor Impor Bank Indonesia, Jakarta, Indonesia 112 Index of orders and actions taken 70, 277-9, 451, 699 P.T. Gunung Agung, Ltd. Corporation, Jakarta, Pending cases involving the Board of Indonesia Ill, 145 Governors, lists of 77, 142, 215, 283, Parkinson, Patrick M, statements 106-8, 477-9 352, 456, 526, 595, Passmore, Wayne, article 709-23 653, 706, 781, 839 Payments System Development Committee 634 Written agreements approved by Federal Reserve Banks Prices 163-5, 542-4, 548 Adairsville Bancshares, Inc 112, 145 Primary dealers 786 Belmont Bancorp 707 Primary market 786-8 Branch Skandinaviska Enskilda Banken Corporation 707 Production, industrial (See also Industrial production) 20 Community Capital Corporation 708 Profits, corporations 536 First Security Bancshares, Inc 731, 782 Proposed actions First Utah Bancorporation 257, 286 Automated clearinghouse transactions 491 First Utah Bank 257, 286 Availability of Funds and Collection of Checks Foxdale Bancorp, Inc 457 (Reg. CC) Ill, 256 Grimes County Capital Corporation 654 Century Date Change Special Liquidity Facility 491 Hanmi Bank 707 Consumer Leasing (Reg. M) Ill, 817 Premier Data Corporation 257, 286 Electronic Fund Transfers (Reg. E) 817 Security State Bank 731 Equal Credit Opportunity (Reg. B) 817 Skandinaviska Enskilda Banken 707 Know Your Customer Ill Skandinaviska Enskilda Banken's New York 707 Truth in Lending (Reg. Z) Ill, 817 Southern Security Bank 112, 145 Truth in Savings (Reg. DD) 817 Wellington State Bank 527, 708 Public Affairs Program, Year 2000 readiness 406 Zia New Mexico Bank 112, 145 Publications Loan losses by banks 329, 490, 558-61, 634 Annual Report, 85th, 1998 491 Loan-to-deposit ratios 731 Annual Report, Budget Review, 1999 491 Loan-to-value residential real estate loans 818 Bank Holding Company Supervision Manual 112, 568 Loans Consumer Handbook on Adjustable-Rate Mortgages 491 Business 370 Keys to Vehicle Leasing, Spanish version 672 Commercial and industrial 372 Looking for the Best Mortgage: Shop, Compare, Depository institutions, loss allowance 38 Negotiate 256 Household 374 Loan-to-value residential real estate 818 RADDOCK, Richard, article 20-33 Lower-income and minority homebuyers 709-23 Real, brazilian 549 Mortgage, article 81-102 Reciprocal currency arrangements 570 Long-Term Capital Management, L.P. 46, 306-9, Regulations, Board of Governors (See also Rules) 312-8, 318-21, 477-9 A, Extensions of Credit by Federal Reserve Banks; Looking for the Best Mortgage: Shop, Compare, Negotiate, Change in Discount Rate 49, 639 brochure 256 B, Equal Credit Opportunity 671, 817 Low reserve tranche adjustment 817 C, Home Mortgage Disclosure 125 Lower-income families, banking practices D, Reserve Requirements of Depository Institutions 49, 733 and loans to 459-73, 709-23 E, Electronic Fund Transfers 671, 817 H, Membership of State Banking Institutions MANUFACTURED-HOME lenders 709-23 in the Federal Reserve System 328 Marginable stock, availability of lists 257 K, International Banking Operations 829 Masagung, Putra 80, 111, 145 M, Consumer Leasing Ill, 328, 671, 817 McDonough, William J., President, Federal Reserve Y, Bank Holding Companies and Change Bank of New York, statements 306-9, 318-21 in Bank Control 50, 267, 328 Members, Board of Governors, lists, 1913-99 597, 783 Z, Truth in Lending 109, 111, 329, 671, 817 Meyer, Governor Laurence H., statements CC, Availability of Funds and Collection of Checks ... Ill, 256, H.R. 1585 479-84 329, 333, 632, 817, 830 Loan losses 558-61 DD, Truth in Savings 671, 817 Long-Term Capital Management 312-8 Reifschneider, David, article 1-19 Mingo, John J., Senior Adviser, Division of Research Reinhart, Vincent R., transferred and appointed and Statistics, retirement 569 Deputy Director, Division of International Finance 673 Minority homebuyers, loans to 709-23 Report on Hedge Funds, Leverage, and the Lessons Monetary aggregates 170-3, 545-7 of Long-Term Capital Management, statement 477-9 Monetary policy Repurchase agreements 797 Eurosystem 658 Reserve requirements FRB/US perspective, article 1-19 Low reserve tranche adjustment 817 Reports to the Congress 147-77, 243-50, 626-31 Net transaction accounts, decrease 38, 49 Monetary transmission channels 3 Open Market operations 221-9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 85 A87 Pages Pages Reserve requirements—Continued Statements to the Congress—Continued Ratios 733 Veterans' benefit payments, Year 2000 readiness Reserve Requirements of Depository Institutions (Reg. D) 733 (Kenneth D. Buckley, Assistant Director, Reserves, interest on under H.R. 1585 480 Division of Reserve Bank Operations and Retirement reform, statement 303-6 Payment Systems) 413-5 Riegle-Neal Interstate Banking and Branching Efficiency Year 2000 readiness (Governor Kelley) 404-13 Act of 1994 731 Stehm, Jeff, appointed Assistant Director, Division of Riggs, Betsy, Assistant Director, Division of Information Reserve Bank Operations and Payment Systems 113 Resources Management, retirement 425 Stevens, Richard C., appointed Director, Division of Risk, country and transfer 606 Information Technology 425 Risk-based capital 263, 328, 437-9 Subprime mortgage lenders 709-23 Rivlin, Vice Chair Alice M., resignation 565 Subsidiaries, foreign 604 Robinson, Donald L., promoted to Deputy Inspector Survey of Small Business Finances, 1998 635 General, Office of the Inspector General 637 Suspension of Penalties for Certain Year 2000 Failures Roseman, Louise L., appointed Director, Division of by Small Business Concerns, H.R. 775 413 Reserve Bank Operations and Payment Systems 492 Sweep programs 219 Rubin, Robert, Secretary of the Treasury, resignation, System Open Market Account 221-9, 233-5 statement by Chairman Greenspan 490 Rules Regarding Delegation of Authority 50 TARGET (Trans-European Automated Real-time Gross-settlement Express Transfer) 663 SACK, Brian, article 785-806 Technology effects on financial system, Saving by lower-income families 471 statements 325-7, 556-8, 561^1 Secondary market 792 Telecommunications technologies, statement 487-9 Securities and Exchange Commission (SEC) 558-61 Tetlow, Robert, article 1-19 Securities, U.S. Treasury 375, 547-9 Thrift Institutions Advisory Council, new members 109 Sellers, Bob L„ 1996 216 Title X, statement 310-2 Settlement services, depository institutions 38 Trade deficit, U.S 293 Shilstone, William 39 Trading activities 608 Shocks, economic 10 Transaction accounts 459 Small Business Finances, 1998 survey 635 Transfer risk 607 Small, Richard A., statements 309, 415-9 Treasury and Federal Reserve foreign exchange Smilek, Fred J 112 operations, articles 178-83, 396-400, 616-20, 808-13 Social Security, statement 190-2, 239 Treasury Automated Auction Processing System 791 Southern Security Bank 112, 145 Treasury debt and buybacks 787, 804 Special Liquidity Facility 632 Treasury Direct 791 State and local governments, budget 539 Treasury STRIPS Market 792 Statements to the Congress (including reports and letters) Treasury, U.S., securities Commodity Exchange Act (Patrick M. Parkinson, Article 785-807 Associate Director, Division of Research Bills 786 and Statistics) 484-7 Bonds 786 Conference Report, H.R. 3150 (Governor Gramlich) 322-5 Holdings, commercial banks 375 Customer financial privacy (Governor Gramlich) 624-6 Inflation-indexed 800-3 Depository Institution Regulatory Streamlining Monetary policy 547-9 Act of 1999, H.R. 1585 (Governor Meyer) 479-84 Notes 786 Federal Reserve Board Retirement Portability Act Truth in Lending (Reg. Z) 109, 111, 329, 671, 817 (Governor Kelley) 252-5 Truth in Savings (Reg. DD) 671, 817 Financial reform (Chairman Greenspan) 240-3, 419-23 Truth in Savings Act 671 Know Your Customer regulation (Richard A. Small, Try on, Ralph W., appointed Assistant Director, Assistant Director, Division of Banking Division of International Finance 331 Supervision and Regulation) 309 Loan losses (Governor Meyer) 558-61 U.S. capital accounts 540 Long-Term Capital Management, by U.S. Treasury, See Treasury Governor Meyer 312-8 United Kingdom, economic developments 550 William J. McDonough, President, Federal Reserve Bank of New York 306-9, 318-21 VETERANS' benefit payments, Year 2000 readiness, Monetary policy, semiannual reports statement 413-5 (Chairman Greenspan) 243-50, 626-31 Money laundering, Bank Secrecy Act (Richard A. Small, WEB sites Assistant Director, Division of Banking Supervision Federal Reserve Board, new design 424 and Regulation) 415-9 Kansas City, new site 424 Over-the-counter derivatives and hedge funds Weis, John R., Adviser, Office of Staff Director (Patrick M. Parkinson) 106-8 for Management, retirement 569 Report on Hedge Funds, Leverage, and the Lessons When-issued market 791 of Long-Term Capital Management (Patrick M. Williams, John, article 1-19 Parkinson, Associate Director, Division of Research and Statistics) 477-9 YEAR 2000 Social security, by Century Date Change Special Liquidy Facility 631, 632 Chairman Greenspan 190-2, 303-6 Financial system readiness 249, 404-13, 548, 631 Governor Gramlich 239 Holiday 411 Technology, effects on financial system Readiness 729-31 (Board of Governors) 325-7, 556-8, 561-4 Veterans' benefit payments, readiness 413-5 Telecommunications technologies (Chairman Greenspan) .. 487-9 Yield curve 793 Title X, Financial Contract Provisions (Oliver Ireland, Yield to maturity 790 Associate General Counsel) 310-2 U.S. Economy (Chairman Greenspan) 187-9 ZIA New Mexico Bank 112, 145 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A88 Federal Reserve Bulletin • December 1999 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. Looking for the Best Mortgage SHOP m Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A89 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

A90 Federal Reserve Bulletin • December 1999 Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve Sys- For further information regarding a subscription to tem makes some of its statistical releases available to the economic bulletin board, please call (202) 482the public through the U.S. Department of Com- 1986. The releases transmitted to the economic bullemerce's economic bulletin board. Computer access tin board, on a regular basis, are the following: to the releases can be obtained by subscription. Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z. 1 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis