Federal Reserve Bulletin, 2000-01

Volume 86 • Number 1 • January 2000 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 L RECENT CHANGES IN U.S. FAMILY pline, discusses the motivation for and theory FINANCES: RESULTS FROM THE 1998 behind a subordinated debt policy, and presents SURVEY OF CONSUMER FINANCES an extensive summary of existing policy proposals. It then reviews the economic literature on the Using data from the Federal Reserve Board's two potential for SND to exert market discipline on most recent Surveys of Consumer Finances, this banks and presents a wide range of new evidence article provides a detailed picture of changes in acquired by the study group. The third major the financial condition of U.S. families between section of the study analyzes many characteristics 1995 and 1998. that an SND policy could have, in terms of both The financial situation of families changed notheir contribution to market discipline and their tably in the three-year period. While income conoperational feasibility. tinued a moderate upward trend, net worth grew strongly, and the increase in net worth was broadly shared by different demographic groups. 32 INDUSTRIAL PRODUCTION AND CAPACITY A booming stock market accounts for a substan- UTILIZATION FOR NOVEMBER 1999 tial part of the rise in net worth, but the data also Industrial production advanced 0.3 percent in suggest that improvements in financial circum- November, to 139.5 percent of its 1992 average, stances extended to many families that did not after a 0.8 percent increase in October. The rate own stocks. of capacity utilization for total industry was The indebtedness of families grew, but less unchanged at 81.0 percent, a level 1 percentage rapidly than their assets. Nonetheless, compared point below its 1967-98 average. with 1995, debt repayments in 1998 accounted for a larger share of the income of the typical 35 STATEMENT TO THE CONGRESS family with debt, and the proportion of debtors who were late with their payments by sixty days Richard A. Small, Assistant Director, Division of or more in the year preceding the survey was also Banking Supervision and Regulation, discusses higher. the Federal Reserve's role in the government's efforts to detect and deter money laundering and other financial crimes, particularly as these issues 30 STAFF STUDY SUMMARY relate to the private banking operations of finan- A growing number of observers have proposed cial institutions; he states that the Board will using subordinated notes and debentures (SND) continue its cooperative efforts with other bank as a way of increasing market discipline on banks supervisors and the law enforcement commuand banking organizations. Although policy pronity to develop and implement effective antiposals vary, all would mandate that banks subject money-laundering programs addressing the everto the policy must issue and maintain a minimum changing strategies of criminals who attempt to amount of SND. In recent years, the perceived launder their illicit funds through private banking need for more market discipline has derived pri- organizations, as well as through other compomarily from the realization that the increasing nents of banking organizations in the United size and complexity of the major banking organi- States and abroad (Testimony before the Permazations has made the supervisor's job of protect- nent Subcommittee on Investigations of the Sening bank safety and soundness ever more diffi- ate Committee on Governmental Affairs, Novemcult. A second important motivation is the desire ber 10, 1999). to find market-based ways of better insulating the banking system from systemic risk. A Federal 40 ANNOUNCEMENTS Reserve staff study of these issues, Using Subordinated Debt as an Instrument of Market Disci- Action by the Federal Open Market Committee pline, begins by carefully defining market disci- and an increase in the discount rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Modifications to the settlement finality for auto- 51 LEGAL DEVELOPMENTS mated clearinghouse credit transactions processed Various bank holding company, bank service by Federal Reserve Banks. corporation, and bank merger orders; and pend- Adjustment of the dollar amount that triggers ing cases. certain disclosure requirements under the Truth in Lending Act. A1 FINANCIAL AND BUSINESS STATISTICS Proposed revisions to the official staff commen- These tables reflect data available as of tary that applies and interprets the requirements November 26, 1999. of Regulation Z. A3 GUIDE TO TABULAR PRESENTATION Review of publications activities of the Federal Reserve Board. A4 Domestic Financial Statistics A42 Domestic Nonfinancial Statistics Survey results on consumer confidence in banks' A50 International Statistics Y2K preparations. Release of a report on a survey of web site A63 GUIDE TO STATISTICAL RELEASES AND privacy policies of banking and thrift institutions. SPECIAL TABLES Increase in adversely classified syndicated bank A66 INDEX TO STATISTICAL TABLES loans. Enforcement actions. A68 BOARD OF GOVERNORS AND STAFF A70 FEDERAL OPEN MARKET COMMITTEE AND 44 MINUTES OF THE MEETING OF THE STAFF; ADVISORY COUNCILS FEDERAL OPEN MARKET COMMITTEE HELD ON OCTOBER 5, 1999 A72 FEDERAL RESERVE BOARD PUBLICATIONS At this meeting, the Committee adopted a directive that called for maintaining the federal funds A74 MAPS OF THE FEDERAL RESERVE SYSTEM rate at an average of around 5XA percent and that contained a bias toward a possible firming of A76 FEDERAL RESERVE BANKS, BRANCHES, policy during the intermeeting period. AND OFFICES 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

Recent Changes in U.S. Family Finances: Results from the 1998 Survey of Consumer Finances Arthur B. Kennickell, Martha Starr-McCluer, and BACKGROUND Brian J. Surette, of the Board's Division of Research and Statistics, prepared this article with assistance In 1998, the U.S. economy entered the seventh year from Gerhard Fries, Annelise K. Li, and Amber Lynn of an economic expansion. The civilian unemploy- Lytle. ment rate had fallen from 5.7 percent in September 1995 to 4.5 percent in September 1998. At the same Using data from the Federal Reserve Board's two time, inflation remained subdued, with the consumer most recent Surveys of Consumer Finances, this price index rising at an average annual rate of 2.2 perarticle provides a detailed picture of changes in the cent over the period.2 financial condition of U.S. families between 1995 and Interest rates on deposits remained fairly steady. 1998. The discussion also refers to selected data from Mortgage rates fluctuated over the period but the two preceding surveys to provide a broader declined overall, from 7.4 percent in 1995 to 6.9 percontext within which to interpret the more recent cent in 1998. Over the same period, key asset prices changes.1 rose markedly. Standard and Poor's index of 500 The financial situation of families changed notably stock prices registered an extraordinary gain of between 1995 and 1998. While income continued a 76 percent, and the median price of existing homes moderate upward trend, net worth grew strongly, and sold rose 15 percent, to $129,400. the increase in net worth was broadly shared by Institutional, regulatory, and market changes durdifferent demographic groups. A continued rise in ing this time altered the context in which families the holding of stock equity combined with a booming planned their finances. Employers continued to stock market accounts for a substantial part of the rise expand offerings of tax-deferred retirement accounts in net worth. The 3.5 percentage point decline in the for their workers; new means of stock trading proportion of families without some type of trans- emerged, such as Internet-based brokerage services; action account—a group that tends to have low automobile dealers added less-expensive models to incomes—suggests that improvements in financial the range of vehicles available for leasing; lenders circumstances were also shared by many people who became increasingly willing to accept mortgages with did not own stocks. The indebtedness of families very low down payments; and many banks faced grew, but less rapidly than their assets. Nonetheless, increased regulatory pressure to provide equitable compared with 1995, debt repayments in 1998 access to credit.3 accounted for a larger share of the income of the Ongoing demographic trends continued to change typical family with debt, and the proportion of debt- the structure of the population. Overall population ors who were late with their payments by sixty days growth was about 2.8 percent between 1995 and or more in the year preceding the survey was also 1998. With the aging of the "baby boom" populahigher. tion, the number of people aged 45 to 64 grew about 9.5 percent. The population in some other age groups grew less, and the number of children aged less than 5 declined slightly. The number of households rose 1. The four surveys were conducted in 1989, 1992, 1995, and 1998. For a detailed discussion of results from earlier surveys, see Arthur B. Kennickell and Martha Starr-McCluer, "Changes in Family Finances from 1989 to 1992: Evidence from the Survey of Consumer 2. All aggregate statistics cited in this section are for September Finances," Federal Reserve Bulletin, vol. 80 (October 1994), except as noted; September is the midpoint of the period during which pp. 861-82; and Arthur B. Kennickell, Martha Starr-McCluer, and interviews were conducted. Annika E. Sunden, "Family Finances in the U.S.: Recent 3. For an examination of the wider availability of mortgage credit Evidence from the Survey of Consumer Finances," Federal over this period, see Glenn B. Canner, Wayne Passmore, and Eliza- Reserve Bulletin, vol. 83 (January 1997), pp. 1-24. Tabulations of beth Laderman, "The Role of Specialized Lenders in Extending data from the four surveys will be available on the Internet at Mortgages to Lower-Income and Minority Households," Federal www.federalreserve.gov/pubs/oss/oss2/98/scf98home.html. Reserve Bulletin, vol. 85 (November 1999), pp. 709-23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • January 2000 3.5 percent, while the average number of people per passed the levels observed in the 1989 survey, toward household declined somewhat. the end of the previous economic expansion (table 1). Overall, trends in mean and median income shown in the four surveys accord well with those shown in the FAMILY INCOME Current Population Survey (CPS) of the Bureau of the Census. To measure income, the survey requests information From 1995 to 1998, the proportion of families with on families' total cash income, before taxes, for the incomes of $50,000 or more rose about one-fifth, to full calendar year preceding the interview (see box 33.8 percent, while the proportion with incomes "The Survey of Consumer Finances"). In the 1998 below $10,000 fell about one-sixth, to 12.6 percent. survey, inflation-adjusted mean and median family Some cross-sectional patterns hold consistently in incomes continued the upward trend observed the survey data since 1989. Median income is succesbetween the 1992 and 1995 surveys; they also sur- sively higher for each age group through 45-54 and The Survey of Consumer Finances The Survey of Consumer Finances (SCF) is a triennial reported here and as reported in earlier Federal Reserve survey of U.S. families sponsored by the Board of Gover- Bulletin articles are attributable to additional statistical nors of the Federal Reserve System with the cooperation processing of the data, to revisions of the weights, and to of the U.S. Department of the Treasury. The term "family" adjustments for inflation. Since 1992, the SCF has been as it is used here is more comparable to the U.S. Bureau conducted by the National Opinion Research Center at the of the Census definition of "household" than to their use University of Chicago (NORC) between July and Decemof "family," which excludes the possibility of a family of ber of each survey year. The 1989 SCF was conducted by one individual. The appendix to this article provides a full the Survey Research Center at the University of Michigan. technical definition of "family" for the SCF. The survey is In the 1995 survey, 4,299 families were interviewed, and in designed to provide detailed information on U.S. families' the 1998 survey, 4,309 were interviewed. balance sheets and their use of financial services, as well as All dollar figures from the SCF in this article are adjusted on their pensions, labor force participation, and demo- to 1998 dollars using the "current methods" version of the graphic characteristics as of the time of the interview. It consumer price index (CPI) for all urban consumers.1 In an also collects information on families' total cash income, ongoing effort to improve accuracy, the Bureau of Labor before taxes, for the calendar year preceding the survey. Statistics has introduced a number of revisions to the CPI Because only minor changes have been made in the word- methodology. The current-methods index attempts to extend ing of the questionnaire since 1989, the underlying measure- these changes to earlier years to obtain a series as consistent ments are highly comparable over time. as possible with the current practices in the official CPI. The need to measure financial characteristics imposes Because the current-methods index shows a lower rate of special requirements on the sample design for the survey. past price inflation than does the official CPI, upward adjust- The survey is expected to provide reliable information both ments for inflation made to the pre-1998 nominal values on attributes that are broadly distributed in the population— are smaller than they would have been under the official for example, home ownership—and on those that are highly CPI. concentrated in a relatively small part of the population— To provide a measure of the significance of the developfor example, ownership of closely held businesses. To ments discussed in this article, standard errors due to samaddress this requirement, the SCF employs a dual-frame pling are given for selected estimates. Space limits presample design consisting of both a standard, geographically vented the inclusion of the standard errors for all estimates. based random sample and a special oversample of rela- Although we do not directly address the statistical signifitively wealthy families. This design has been essentially cance of the results, the article highlights findings that are unchanged since 1989. Weights are used to combine infor- significant or are interesting in a broader context. mation from the two samples to make estimates for the full population. Recent modifications to the survey weights, which are described in the appendix, have enhanced the comparability of the time series of survey estimates. 1. For technical information about the construction of this index, see This article draws principally upon the final data from the Kenneth J. Stewart and Stephen B. Reed, "Consumer Price Index Research Series Using Current Methods, 1978-98," Monthly Labor Review, vol. 122 1995 survey and nearly final data from the 1998 survey. To (June 1999), pp. 29-38. To adjust assets and liabilities to 1998 dollars, the provide a larger context, some information is also included following factors were applied to the earlier survey figures: for 1989, 1.2733; from the final versions of the 1989 and 1992 surveys. for 1992, 1.1417; and for 1995, 1.0622. To adjust family income for the previous calendar year to 1998 dollars, the following factors were applied: Differences between estimates from earlier surveys as for 1989. 1.3285; for 1992, 1.1697; for 1995, 1.0904; and for 1998. 1.0135. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 3 then declines. Mean income has a similar pattern, largely explained by a decrease in the fraction of but the age group at which it reaches its peak varies respondents reporting themselves as "Hispanic" in somewhat across survey years. In part because the SCF. income in the survey includes returns on assets, mean Families headed by the self-employed showed the and median incomes increase steadily with net worth. strongest gains in mean and median income of all the Education is also positively associated with income work-status groups over the 1995 to 1998 period. At in the surveys. the same time, mean income rose in all regions of the country, although the median fell slightly for families in the north central region. Mean income increased Income by Demographic Category over this time for all the net worth groups shown in the table, but the median increased markedly only for Between 1995 and 1998, mean inflation-adjusted families in the top half of the net worth distribution. family income either held steady or rose for all age groups. The percentage increases were particularly strong for families headed by those in the 55-to-74 Family Saving age groups. Median income, which is the income of the "typical" family, showed a similar pattern, Because saving out of current income is an important but it also grew substantially for the 45-to-54 age determinant of changes in family net worth, the 1992 group. and later surveys have asked respondents whether, Across education groups, mean income grew over the preceding year, the family spent less than its between 1995 and 1998 only for families headed by income, more than its income, or about as much as its individuals with at least some college education. income.6 Though only qualitative, these answers pro- However, mean incomes for all education groups vide a useful indicator of whether families are saving. in 1998 were lower than they had been in 1989.4 Asking instead for a specific dollar amount of spend- This broad decrease in the face of the rise in the ing or saving would require substantial additional overall mean since 1989 is explained, at least in part, time from respondents and might lower the rate of by a large gain in the proportion of all families response to the survey. headed by those with a college degree or at least Overall, the proportion of families reporting that some college education; these two groups have the they saved in the preceding year rose only slightly highest means. Indeed, median income between between 1995 and 1998 and was still below the level 1989 and 1998 rose appreciably only for families in 1992, near the outset of the current expansion. headed by college graduates. Between 1995 and Between the two most recent surveys, large declines 1998, median income grew for all families except in the saving measure for the youngest and oldest those whose head had not completed a high school groups were offset by increases for most of the other degree. age groups. Across net worth groups, the measure Mean and median income rose between 1995 and increased most for the groups with net worth between 1998 both for families with white non-Hispanic the 50th and 90th percentiles of the net worth distrirespondents and for all other families, but over the bution, and it decreased most for the top decile. 1989 to 1998 interval these measures increased only The upward movement in the SCF saving indicator for the latter group. At the same time, the data show contrasts with household saving as measured in the increases in the proportions of respondents reporting national income and product accounts (NIPA), which that they were white non-Hispanic.5 The change is declined between 1995 and 1998. However, there are 4. Data from the CPS give a similar result for the 1989-98 period. The proportion of respondents reporting Hispanic origin differs 5. The SCF question that is used to determine race and Hispanic from estimates based on the CPS, most likely because the CPS asks origin was changed in 1998. In earlier surveys, respondents were directly about ethnicity in a question separate from the one that asks asked to choose a single category that described their race or ethnicity about race. Thus, in the CPS, even respondents who do not normally best. In 1998, respondents were allowed to choose as many as seven identify themselves as Hispanic might provide an ethnic origin that is responses, but they were asked to report first the category with which later classified as Hispanic. The 1998 SCF estimates of the proportion they identified most strongly. of African-Americans and other minorities are close to CPS estimates. For comparability with the earlier surveys, this article uses only the 6. For a more detailed discussion of this variable, see Arthur B. first 1998 response. Very few respondents gave more than a single Kennickell, Saving and Permanent Income, Finance and Economics response, and more complex treatments of the data do not yield Discussion Series 95—41 (Board of Governors of the Federal Reserve conclusions that are substantively different from those reported in this System, November 1995). Available at www.federalreserve.gov/pubs/ article. oss/oss2/method.html. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

4 Federal Reserve Bulletin • January 2000 1. Before-tax family income, and distribution of families, by selected characteristics of families, 1989, 1992, 1995, and 1998 surveys, and percentage of families who saved, 1992, 1995, and 1998 surveys Thousands of 1998 dollars except as noted 1989 1992 Family Percentage characteristic Percentage of Percentage Median Mean of Median Mean of families families families who saved All families 32.8 51.7 100.0 30.4 45.6 57.1 100.0 (1.3) (3.6) (.7) (LI) Income (1998 dollars) Less than 10,000 6.6 6.3 15.1 6.5 6.2 27.9 14.8 10,000-24,999 16.5 16.9 23.9 17.5 17.2 47.8 27.0 25.000-49,999 35.9 36.2 29.7 36.3 36.7 63.3 29.8 50,000-99,999 66.4 68.9 22.7 65.7 68.8 71.4 20.7 100,000 or more 144.8 235.0 8.6 140.4 195.5 83.3 7.6 Age of head (years) Less than 35 26.6 35.5 28.1 28.1 34.6 59.1 25.8 35-44 46.5 62.9 21.5 40.9 53.2 56.9 22.8 45-54 49.2 76.8 15.1 47.6 64.7 59.0 16.2 55-64 33.6 60.7 13.9 33.9 56.5 59.2 13.2 65-74 20.6 42.2 12.5 20.4 33.0 54.0 12.6 75 or more 17.6 32.2 8.9 15.7 26.6 49.4 9.4 Education of head No high school diploma 17.3 24.8 24.3 14.0 19.9 38.1 20.4 High school diploma 28.8 38.1 32.2 27.2 34.3 56.8 30.0 Some college 37.2 51.8 15.7 31.6 42.2 59.5 17.8 College degree 53.1 90.7 27.8 51.5 74.7 68.1 31.9 Race or ethnicity of respondent White non-Hispanic 38.5 59.2 74.8 35.1 50.4 61.1 75.3 Nonwhite or Hispanic 18.6 29.3 25.2 21.1 31.1 44.9 24.7 Current work status of head Working for someone else 40.9 52.2 57.0 39.3 50.0 63.2 54.8 Self-employed 47.8 117.6 11.1 51.2 86.8 59.4 10.9 Retired 18.5 30.3 25.2 17.3 26.1 48.2 26.0 Other not working 9.3 17.9 6.7 12.9 23.9 41.3 8.3 Region Northeast 37.2 59.3 20.8 37.9 52.8 57.5 20.2 North central 31.8 53.9 24.4 33.0 47.1 61.3 24.4 South 27.9 44.1 34.4 26.9 38.8 54.2 34.6 West 38.5 54.0 20.4 30.2 48.4 56.4 20.9 Housing status Owner 42.5 65.0 63.9 39.8 55.9 63.2 63.9 Renter or other 17.5 28.0 36.1 19.5 27.5 46.2 36.1 Percentiles of net worth Less than 25 13.3 18.6 25.0 14.9 19.8 37.4 25.0 25-49.9 28.0 32.0 25.0 27.8 31.5 52.4 25.0 50-74.9 40.2 46.0 25.0 37.4 41.7 63.5 25.0 75-89.9 53.1 64.7 15.0 49.1 58.0 70.8 15.0 90-100 99.6 178.0 10.0 92.3 137.0 81.0 10.0 some important conceptual differences between the have caused the SCF saving indicator to suggest two measures. First, the underlying SCF question more saving than the NIPA. asks only whether the family has spent more, less, or The survey also collects information on motivaabout the same as its income over the past year. Thus, tions for saving (table 2).7 Several trends appear in the amounts by which families' expenditures differed the data: Retirement-related reasons for saving have from their income might have changed appreciably consistently increased in importance since 1989. This but without necessarily altering the outcome of the result is not surprising given the increased public SCF variable. Second, the NIPA measure of saving relies on definitions of income and consumption that may not be the same as those used by individual 7. Although families were asked to report their motives for saving families. Notably, the NIPA measure excludes saving regardless of whether they were currently saving, some families in the form of capital gains, whereas families might reported only that they do not save. The analysis here is confined to include such gains when reporting their saving in the the first reason reported by families that provided a motive. The proportion of families reporting only that they do not save declined SCF; hence, a strongly rising stock market could well almost 2 percentage points from 1995 to 1998. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 5 1.—Continued Thousands of 1998 dollars except as noted 1995 1998 Family Percentage Percentage characteristic of Percentage of Percentage Median Mean of Median Mean of families families families families who saved who saved All families 32.7 47.5 55.2 100.0 33.4 53.1 55.9 100.0 (-9) (LI) (1.0) (1.6) Income (1998 dollars) Less than 10,000 6.2 5.6 31.2 15.1 6.2 5.6 30.7 12.6 10,000-24,999 17.9 17.4 41.4 25.4 16.9 17.1 40.2 24.8 25,000-49,999 36.8 36.7 60.4 31.0 35.5 35.9 58.9 28.8 50,000-99,999 67.6 69.3 70.4 21.0 66.0 68.8 71.8 25.2 100,000 and more 147.9 218.9 86.5 7.4 142.4 239.5 81.6 8.6 Age of head (years) Less than 35 27.3 33.2 56.4 24.8 27.4 36.1 53.0 23.3 35-^4 40.8 51.9 54.3 23.0 42.1 60.0 57.3 23.3 45-54 42.9 70.3 58.0 17.9 50.7 69.7 57.8 19.2 55-64 36.0 57.3 58.0 12.5 38.5 71.7 61.1 12.8 65-74 20.5 39.8 50.0 12.0 24.3 46.6 56.3 11.2 75 or more 17.1 28.2 51.7 9.8 16.7 29.2 48.6 10.2 Education of head No high school diploma 15.5 22.3 42.8 18.5 15.5 21.7 39.5 16.5 High school diploma 27.7 37.2 50.6 31.7 29.2 37.0 53.7 31.9 Some college 32.7 43.2 54.1 19.0 35.5 50.8 56.7 18.5 College degree 48.7 75.9 68.2 30.7 54.7 85.5 65.6 33.2 Race or ethnicity of respondent White non-Hispanic 35.2 52.2 59.1 77.6 37.7 58.8 59.8 77.7 Nonwhite or Hispanic 21.1 31.1 41.7 22.4 23.3 33.5 42.1 22.3 Current work status of head Working for someone else 39.3 51.5 60.4 58.3 40.5 53.5 59.8 59.2 Self-employed 40.3 85.0 63.4 10.3 52.7 109.0 61.1 11.3 Retired 17.9 29.7 46.1 25.0 19.3 32.9 48.6 24.4 Other not working 12.0 19.8 30.6 6.5 11.7 21.9 33.7 5.1 Region Northeast 32.7 52.4 52.6 19.8 35.5 60.9 53.5 19.3 North central 33.3 48.4 59.2 23.9 32.9 48.9 58.3 23.6 South 30.2 43.9 54.6 35.1 31.6 49.4 55.0 35.7 West 33.8 47.7 54.0 21.2 36.2 56.9 56.9 21.3 Housing status Owner 40.3 58.8 61.3 64.7 43.7 66.6 62.2 66.2 Renter or other 19.6 26.7 44.0 35.3 20.3 26.7 43.4 33.8 Percentiles of net worth Less than 25 15.4 19.8 35.8 25.0 15.9 20.4 36.4 25.0 25-49.9 30.5 33.3 51.4 25.0 30.4 33.8 50.1 25.0 50-74.9 37.7 43.3 59.4 25.0 40.5 46.7 61.9 25.0 75-89.9 45.8 56.3 68.5 15.0 56.8 67.9 71.8 15.0 90-100 85.6 149.0 82.6 10.0 88.3 177.2 80.2 10.0 NOTE. In this and the following tables, percentage distributions may not sum In providing data on income, respondents were asked to base their answers on to 100 because of rounding. Dollars have been converted to 1998 values with the calendar year preceding the interview. In providing data on saving, the current-methods consumer price index for all urban consumers (see text box respondents were asked to base their answers on the year (that is, not specifi- "The Survey of Consumer Finances"). See appendix for details on standard cally the calendar year) preceding the interview. The 1989 survey did not ask errors (shown above, in parentheses in the first row of data, for the means and •amilies whether they had saved in the preceding year. medians) and for definitions of family and family head. discussion of the future of social security, the move- liquidity-related reasons (for example, "saving for ment toward greater reliance on account-type pension a rainy day") and of investment-related reasons plans, and the aging of the baby-boom generation. declined.8 The proportion of families reporting educationrelated reasons for saving has also risen since 1989. This result likely reflects both the increases in the costs of education and the increasing number of 8. The proportion of families citing "other reasons" increased children of the baby-boom generation at or near strongly from 1995 to 1998, mostly because of a greater frequency of general responses about the future (for example, "saving for the college age. Over the same period, the reporting of future"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

6 Federal Reserve Bulletin • January 2000 2. For respondents who gave a reason, distribution The medians for the income groups show a someof reasons most important for their families' saving, what different pattern than the means. Median net 1989, 1992, 1995, and 1998 surveys worth increased from 1995 to 1998 for those families Percent in the groups with incomes from $25,000 to $99,999, Reason 1989 1992 1995 1998 while slipping somewhat for the other groups. However, compared with the 1989 data, median net worth E Fo d r u c th at e i o f n a mily 9 3 . . 2 4 1 3 0 . . 0 3 1 2 1 . . 8 6 1 4 1 . . 1 5 was higher in 1998 for all families except those with Buying own home 5.3 4.5 5.5 4.6 incomes of $100,000 or more. The divergence of the Purchases 8.4 5.8 8.1 5.7 Retirement 20.4 22.0 25.5 34.7 mean and median outcomes for this income group is Liquidity 37.5 38.5 35.4 23.2 Investments 8.7 8.7 4.6 2.1 indicative of a widening dispersion of net worth Other 7.0 7.1 6.6 14.1 among the families in this group. MEMO Within any of the surveys, net worth shows the When asked for a reason, reported do not save 8.4 12.0 6.8 4.9 classic, hump-shaped pattern across age groups that NOTE. See note to table 1. is suggested by the life-cycle theory of household saving. In contrast to the mixed changes in net worth over income groups from 1995 to 1998, the changes NET WORTH in means and medians across age groups tended to go in the same direction: Mean net worth rose for all In an acceleration of a trend dating from the 1992 groups, and the median increased for all groups SCF, both mean and median net worth—the differexcept for families in the less-than-35 age group. The ence between families' gross assets and their medians rose particularly strongly for the families in liabilities—rose strongly between 1995 and 1998 the 65-and-older groups. By 1998, mean net worth (table 3).9 Between those two years, mean net worth for each age group was above its 1989 level. Howrose 25.7 percent, and the median rose 17.6 percent.10 ever, for the under-55 groups, the medians of net The levels of both of these measures surpassed the worth were still substantially below their 1989 levels, levels observed in 1989, toward the end of the last while the medians for the top two age groups were up expansion: Compared with the 1989 figures, 1998 notably. mean and median net worth were both nearly 20 per- Education tends to be a good predictor of earning cent higher. ability over the long term, and also of net worth. Recently, the differences in net worth among certain education groups have widened. Over the 1995-98 Net Worth by Demographic Category period, median net worth rose most markedly for families headed by someone with at least some col- Income and net worth have a clear, positive associalege education, while it fell for families headed by tion in each of the four surveys. As for changes those with less than a high school diploma; indeed, between years, mean net worth declined between for the latter group, the median has fallen over the 1995 and 1998 for the lowest income group and period of the four surveys. Since 1989, the gap increased for all other income groups; the strongest between families whose head does not have a high gain was for families with incomes of $100,000 or school diploma and the families in the other edumore, a group likely to have had large gains in the cation groups has been widening; the groups with stock market. Extending the comparison back to 1989 a high school diploma or some college (but not a also shows substantial increases in mean net worth college degree) have gained the most. for higher-income families, but it shows an increase The mean and median net worth of white nonof nearly one-third for the group with incomes below Hispanics rose between 1995 and 1998. The mean $10,000. net worth of nonwhites and Hispanics also rose, but the median leveled off after increasing steadily between 1989 and 1995. Over the full 1989-98 9. The asset values reported in this article do not account for future period, both groups showed gains in the mean and the tax liabilities. For example, a family that sold its stock would be required to pay taxes on any increase in the value of the stock. median. Nevertheless, the net worth of families with 10. Shifts of mean net worth relative to the median provide some nonwhite or Hispanic respondents remained substaninformation about changes in the concentration of net worth. But the tially below that of other families. shift alone does not reveal which net worth groups are affected (see Arthur B. Kennickell and R. Louise Woodburn, "Consistent Weight Families headed by the self-employed had the Design for the 1989, 1992, and 1995 SCFs, and the Distribution highest mean and median levels of net worth in each of Wealth," Review of Income and Wealth, series 42, June 1999, of the surveys. The self-employed group showed the pp. 193-215). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 7 largest increases in net worth between 1995 and the mean net worth of renters declined about 10 per- 1998: 24.0 percent for the mean and 49.9 percent for cent, while their median net worth rose about 68 perthe median. The median net worth of all the work- cent from a very low initial level. As noted later status groups grew from 1989 to 1998, although from in this article, the proportion of homeowners has 1995 to 1998 it declined a small amount for families increased notably in recent years, and this movement with heads who were neither working nor retired— may have entailed the transition of wealthier renters including unemployed workers, students, homemak- into home ownership. ers, and others not currently working for pay. Across the four principal regions of the country, the mean and median net worth of families increased ASSETS from 1995 to 1998. However, the longer-term patterns are more mixed, reflecting such factors as differ- Over the four surveys, the share of financial assets in ing cyclical variations in labor and housing markets families' total asset holdings has risen steadily, from across regions. 30.4 percent in 1989 to 40.6 percent in 1998 (table 4). Mean and median net worth of homeowners moved Ownership and holdings of a broad spectrum of up between 1995 and 1998, surpassing the 1989 financial assets rose, but direct and indirect holdings levels for the first time since that year. For renters, of stocks were the most important factor in the rising mean and median net worth slipped a bit over the share of financial assets (tables 5 and 6). By definirecent three-year period. Over the nine-year period, tion, the share of nonfinancial assets—mainly vehi- 3. Family net worth, by selected characteristics of families, 1989, 1992, 1995, and 1998 surveys Thousands of 1998 dollars 1989 1992 1995 1998 FFaammiillyy cchhaarraacctteerriissttiicc Median Mean Median Mean Median Mean Median Mean All families 59.7 236.9 56.5 212.7 60.9 224.8 71.6 282.5 (5.2) (50.1) (3.3) (13.8) (2.4) (14.9) (4.1) (16.4) Income (1998 dollars) Less than 10.000 1.9 30.5 2.9 32.1 4.8 46.6 3.6 40.0 10,000-24.999 22.8 72.0 27.1 69.8 31.0 80.3 24.8 85.6 25,000-49,999 58.1 134.2 55.6 131.4 56.7 124.0 60.3 135.4 50,000-99.999 131.4 247.4 129.9 245.6 126.6 258.1 152.0 275.5 100,000 or more 542.1 1,378.3 481.9 1,300.8 511.4 1,411.9 510.8 1,727.8 Age of head (vears) Less than 35 9.9 60.5 10.4 53.1 12.7 47.4 9.0 65.9 35-44 71.8 188.2 50.9 152.7 54.9 152.8 63.4 196.2 45-54 125.7 351.7 89.3 304.4 100.8 313.0 105.5 362.7 55-64 124.6 391.4 130.2 384.9 122.4 404.7 127.5 530.2 65-74 97.1 356.0 112.3 326.1 117.9 369.3 146.5 465.5 75 or more 92.2 307.4 99.2 244.4 98.8 273.8 125.6 310.2 Education of head No high school diploma 30.7 106.0 21.3 80.2 24.0 89.6 20.9 79.1 High school diploma 46.9 142.0 43.9 127.7 54.7 141.3 53.8 157.8 Some college 58.5 237.2 65.9 195.8 49.7 201.2 73.9 237.8 College degree 141.4 460.6 112.1 387.0 110.9 407.2 146.4 528.2 Race or ethnicity of respondent White non-Hispanic 90.5 289.6 79.5 253.5 81.2 265.9 94.9 334.4 Nonwhite or Hispanic 8.5 80.6 13.7 88.7 16.8 82.5 16.4 101.7 Current work status of head Working for someone else 48.3 145.0 44.7 139.6 51.9 145.2 52.4 168.9 Self-employed 216.0 829.0 164.7 682.3 165.5 742.0 248.1 919.8 Retired 84.2 232.5 80.7 214.0 86.2 239.4 113.0 307.2 Other not working 1.0 52.7 4.5 72.2 3.9 62.9 3.6 76.5 Region Northeast 111.1 275.1 73.2 240.0 88.0 266.9 94.2 302.4 North central 66.9 238.8 65.0 198.0 69.2 210.0 80.3 248.8 South 44.9 167.6 39.4 160.4 46.6 197.6 61.3 267.5 West 58.3 312.6 81.4 290.2 58.1 247.1 61.3 327.1 Housing status Owner 127.7 342.6 112.8 307.4 110.5 321.3 132.1 403.5 Renter or other 2.5 50.0 3.7 45.1 5.2 47.9 4.2 45.1 NOTE. See note to table 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

8 Federal Reserve Bulletin • January 2000 cles, real estate, and businesses—fell correspond- across age groups, the proportion owning financial ingly (table 7). assets does not vary much except for the lower fre- Overall, the percentage of families with assets quency of ownership among the youngest age group moved up slightly, to 96.8 percent, between the 1995 (table 5). Within each survey, the median holding and 1998 surveys (table 8). With ownership of assets among families having such assets rose strongly with in both surveys at 100 percent for families with income. The median holding generally rose and then incomes of $50,000 or more, this movement was the fell with age. result of small increases for the lowest income The overall proportion of families having any groups. By age of family head, the ownership rate financial asset rose almost 2 percentage points from declined for the 45-to-54 group and the oldest group. 1995 to 1998. Among all the demographic groups Increases in median amounts of total assets were not already at or near 100 percent, the percentage most pronounced for families with incomes of of families with financial assets moved up except $50,000 or more, families headed by those aged 55 among families headed by those aged 75 or more. and older, and families in the top half of the net worth The largest increases were among families in the 55distribution. to-64 age group, in the nonwhite or Hispanic group, among the group of families headed by someone neither working nor retired, among renters, and Financial Assets among families in the bottom 25 percent of the net worth distribution. Largely continuing earlier trends, the composition of For families with financial assets, the median holdfamilies' financial assets shifted from 1995 to 1998 ing rose 35.8 percent overall across the three-year (table 4). The share of financial assets held in transac- period.11 Gains were spread broadly, but the largest tion accounts and certificates of deposit fell sharply, were among families with incomes of $25,000 or to 15.7 percent in 1998—down from 19.7 percent in more, families in the 65-to-74 age group, homeown- 1995 and 29.3 percent in 1989. The shares of savings ers, families headed by the self-employed or retirees, bonds, other bonds, and the "other" category of with white non-Hispanic respondents, and those in financial assets have also fallen since 1989. Growth the upper half of the distribution of net worth. The over the nine-year period was concentrated among median level of financial assets fell for families with stocks, mutual funds, tax-deferred retirement incomes of less than $25,000, those in the youngeraccounts, and other managed assets; together these than-35 group, and those that were renters. assets accounted for 48.4 percent of financial assets in 1989 and 71.3 percent in 1998. In both the 1995 and 1998 surveys, the proportion Transaction Accounts and Certificates of Deposit of families having financial assets rose with income; In 1998, 90.5 percent of families had some type of transaction account—a category comprising checking, savings, and money market deposit accounts, money market mutual funds, and call accounts at 4. Value of financial assets of all families, distributed brokerages. The families without such accounts in by type of asset, 1989, 1992, 1995, and 1998 surveys 1998 were disproportionately likely to have low Percent incomes; to be renters; to be in the bottom quarter of Type of financial 1989 1992 1995 1998 the distribution of net worth; to be headed by a asset person younger than 35 or at least 75; to be headed Transaction accounts 19.1 17.5 14.0 11.4 by a person neither working nor retired; and to have a Certificates of deposit 10.2 8.1 5.7 4.3 Savings bonds 1.5 1.1 1.3 0.7 nonwhite or Hispanic respondent (see box "Families Bonds 10.2 8.4 6.3 4.3 Stocks 15.0 16.5 15.7 22.7 without a Checking Account"). Mutual funds (excluding money market funds) 5.3 7.7 12.7 12.5 Retirement accounts 21.5 25.5 27.9 27.5 Cash value of life insurance ... 6.0 6.0 7.2 6.4 Other managed assets 6.6 5.4 5.9 8.6 Other 4.8 3.8 3.4 1.7 11. In discussing the dollar value of families' holdings of detailed Total 100 100 100 100 components of net worth, we present only the median amounts held MEMO for those having such items. In general, the median is a statistically Financial assets as a more robust indicator of the typical amount held than is the mean percentage of total assets .. 30.4 31.5 36.6 40.6 when relatively few members of a group hold an item or when a NOTE. For this and following tables, see text for definition of asset relatively large fraction of the total holdings is concentrated among a categories. Also see note to table 1. small proportion of families. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 9 Families without a Checking Account The portion of families without any type of transaction 1992 surveys. Altogether, 19.6 percent of families in 1998 account has fallen in each SCF since 1989. In 1989, reported that either minimum balances or service charges 14.9 percent of families did not have a transaction account. were too high. Only 1.2 percent reported that bank location By 1998, the figure was 9.5 percent.1 or banking hours deterred them from having a checking The portion of families without a checking account also account. fell continuously, from 18.7 percent in 1989 to 13.2 percent The pattern of responses for families that once had a in 1998 (data not shown). Among these families in 1998, checking account differs substantially from that of other 47.9 percent had owned a checking account at some time in families without accounts. Those who had accounts in the the past. The great majority of families without a checking past were much more likely to report that fees were a account—82.6 percent—had incomes of less than $25,000, deterrent and much less likely to report that they did not and 44.7 percent of them had incomes of less than $10,000; write enough checks or that they did not like banks. 60.9 percent of them were headed by individuals under the age of 45, and 35.6 percent of them by those under 35; Distribution of reasons cited by respondents for their 57.1 percent of these families were nonwhite or Hispanic. families' not having a checking account, by reason, The survey asked all families without checking accounts 1989, 1992, 1995, and 1998 surveys to give the reason for not having an account (table). The Percent proportion of families reporting that they did not like banks moved up from 15.3 percent in 1992 to 18.6 percent in Reason 1989 1992 1995 1998 1995, and it stayed near this level in 1998. The proportion Do not write enough checks of families reporting that they did not write enough checks to make it worthwhile 34.4 30.4 25.3 28.4 to make an account worthwhile edged up, to 28.4 percent in Minimum balance is too high ... 7.7 8.7 8.8 8.6 Do not like dealing with banks .. 15.0 15.3 18.6 18.5 1998, but was still below the levels seen in the 1989 and Service charges are too high — 8.6 11.3 8.4 11.0 Cannot manage or balance a checking account 5.0 6.5 8.0 7.2 No bank has convenient hours 1. For the definition of transaction account, see text. For a discussion of or location 1.2 .8 1.2 1.2 Do not have enough money 21.2 21.2 20.0 12.9 the ways that lower-income families obtain checking and credit services and Credit problems * .7 1.4 2.7 the effects that developments in electronic transactions may have on such Do not need/want an account ... * 3.2 4.9 6.3 families, see Jeanne M. Hogarth and Kevin H. O'Donnell, "Banking Rela- Other 6.8 1.9 3.5 3.1 tionships of Lower-Income Families and the Governmental Trend toward Total 100 100 100 100 Electronic Payment," Federal Reserve Bulletin, vol. 85 (July 1999), pp. 459-73. * Responses not coded separately in 1989. From 1995 to 1998 the proportion of families Ownership of certificates of deposit, a traditional having transaction accounts rose 3.5 percentage savings vehicle, also edged up over the three-year points.12 Ownership of transaction accounts rose for period, though it remained below the 1989 level. every group that had less than a 100 percent owner- Increases for families in the bottom 90 percent of the ship rate except for families in the 75-or-older group, net worth distribution were offset by a large decline for whom the ownership rate fell 3.5 percentage in ownership by the wealthiest 10 percent of families. points. Gains in ownership were particularly large for Overall, for those having certificates of deposit, the the nonwhite or Hispanic group (7.7 percentage median value of holdings rose 41.5 percent over the points), for families headed by those neither working period. nor retired (11.0 percentage points), and for families in the bottom quarter of the net worth distribution Savings Bonds and Other Bonds (8.4 percentage points). Overall, median holdings of transaction accounts The percentage of all families owning savings bonds among those who had such accounts rose about onefell substantially between 1995 and 1998. The ownerthird, to $3,100; holdings were steady or rose for all ship rate declined for every demographic group; the demographic groups considered here except families median holding among those with savings bonds with incomes of less than $10,000 and renters. hardly changed. Other types of bonds—excluding bonds held through mutual funds, retirement accounts, and other managed assets—were held by only 3.0 percent of 12. This rise was driven in part by a notable increase in the families in 1998, virtually unchanged from 1995. proportion of families with savings accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

10 Federal Reserve Bulletin • January 2000 5. Family holdings of financial assets, by selected characteristics of families and type of asset, 1995 and 1998 surveys A. 1995 Survey of Consumer Finances Family Trans- Certifi- Savings Mutual Retire- Life Other Any characteristic action cates of bonds Bonds Stocks funds ment insurance managed Other financial accounts deposit accounts assets asset Percentage of families holding asset A11 families 87.0 14.3 22.8 3.1 15.2 12.3 45.2 32.0 3.9 11.1 91.0 Income (1998 dollars) Less than 10.000 59.2 7.9 5.3 * 2.3 1.3 7.9 15.2 * 9.5 67.4 10,000-24,999 82.3 15.6 12.4 * 8.4 4.9 25.1 24.8 3.1 8.3 87.8 25.000-49,999 93.4 13.8 25.7 2.7 13.9 12.2 52.5 32.3 4.3 13.1 97.0 50,000-99,999 98.7 16.2 38.0 4.6 24.7 20.9 71.6 44.8 5.3 11.6 99.5 100,000 or more 99.8 20.0 38.2 14.6 43.6 36.7 84.3 52.6 8.1 14.7 100.0 Age of head (years) Less than 35 80.4 7.2 20.4 * 10.8 8.0 40.7 22.8 1.6 13.8 86.9 35-44 87.2 8.1 31.0 1.7 14.6 11.2 54.3 29.3 3.5 10.9 91.8 45-54 88.8 12.5 25.3 4.5 17.7 16.3 57.4 38.4 3.0 12.9 92.8 55-64 88.4 17.1 20.3 3.1 15.0 16.3 50.9 37.4 7.7 9.3 90.8 65-74 91.3 24.0 17.0 5.6 18.6 15.0 36.6 37.5 5.9 10.0 92.6 75 or more 93.2 34.7 15.3 7.0 19.7 10.3 15.7 35.8 5.2 5.4 94.2 Race or ethnicity of respondent White non-Hispanic 92.5 16.7 26.2 3.8 18.2 14.8 49.1 34.0 4.8 11.7 94.9 Nonwhite or Hispanic 68.1 6.2 10.8 0.6 5.1 3.6 31.5 24.8 1.0 9.1 77.4 Current work status of head Working for someone else 89.6 10.4 26.6 2.5 15.3 12.4 55.8 32.2 3.6 11.8 94.1 Self-employed 91.5 18.7 25.8 5.3 18.7 19.0 50.7 41.9 3.1 16.8 94.6 Retired 86.6 23.4 15.3 4.2 16.5 11.5 24.9 32.0 5.3 7.1 88.7 Other not working 58.1 7.8 12.6 * 4.3 4.3 18.4 13.7 * 11.5 65.2 Housing status Owner 95.0 17.4 28.3 4.3 19.2 16.0 54.3 38.8 5.0 9.5 96.5 Renter or other 72.4 8.7 12.7 .9 7.9 5.5 28.4 19.4 1.9 14.0 80.8 Percentiles of net worth Less than 25 63.7 1.8 8.4 * 2.9 1.9 15.1 11.3 * 9.1 71.6 25-49.9 89.1 8.7 19.9 * 8.8 5.3 41.9 27.4 1.9 10.7 94.3 50-74.9 96.1 17.7 27.3 1.4 13.5 11.3 51.8 38.4 3.4 11.3 97.9 75-89.9 98.7 27.1 34.8 4.9 29.2 23.4 66.3 47.3 6.3 10.9 100.0 90-100 99.7 32.2 36.5 18.2 45.6 41.8 80.2 56.1 14.5 17.3 100.0 Median value of holdings for families holding asset (thousands of 1998 dollars) All families 2.3 10.6 1.1 31.1 9.6 21.2 18.1 5.3 31.9 3.2 16.5 Income (1998 dollars) Less than 10.000 .7 7.4 .3 * 1.6 26.6 5.3 2.1 * 2.1 1.4 10,000-24,999 1.3 10.6 .8 * 6.4 9.2 11.1 3.2 15.9 1.9 5.9 25,000-49,999 2.0 10.6 .7 30.8 6.4 13.8 10.6 5.0 22.3 2.1 13.3 50,000-99,999 4.4 13.8 1.3 15.9 7.4 17.8 24.6 7.4 42.5 5.0 44.0 100,000 or more 15.9 19.1 1.6 61.6 23.4 63.4 88.2 13.8 65.9 13.8 218.5 Age of head (years) Less than 35 11..33 55..66 ..55 * 3.2 5.8 6.4 3.7 4.8 1.1 5.7 35—44 2.1 5.6 1.1 11.7 4.8 10.6 15.6 5.6 11.5 2.1 14.6 45-54 3.2 12.7 1.1 26.6 10.6 22.3 29.7 8.3 60.3 5.3 29.7 55-64 3.3 14.9 1.6 10.6 20.6 59.5 33.6 5.6 53.1 10.6 34.8 65-74 3.5 21.2 1.6 53.1 21.2 58.4 30.3 5.3 37.2 9.6 22.5 75 or more 5.3 13.8 5.1 42.5 19.1 53.1 25.0 5.3 69.0 37.2 24.3 Race or ethnicity of respondent White non-Hispanic 22..66 11.2 1.1 31.1 9.8 22.3 19.5 5.3 31.9 4.2 19.9 Nonwhite or Hispanic 1.5 10.6 0.5 28.7 2.5 6.8 12.7 5.6 6.4 1.4 6.2 Current work status of head Working for someone else 22..11 88..55 11..00 1188..99 66..11 13.8 17.0 5.8 15.4 2.1 15.6 Self-employed 4.8 17.0 .9 53.1 19.1 26.6 26.0 6.4 45.7 4.2 26.5 Retired 3.2 16.5 2.7 41.4 20.2 53.1 27.6 4.5 53.1 10.6 20.6 Other not working .6 9.0 0.4 * 5.5 24.4 12.7 3.7 * 5.3 2.7 Housing status Owner 3.2 11.7 1.1 41.4 10.6 23.4 21.5 6.4 37.2 5.3 26.0 Renter or other 1.3 8.5 1.1 7.4 3.9 10.6 7.6 3.7 14.9 1.7 4.9 Percentiles of net worth Less than 25 ..66 11..44 ..22 * .6 2.1 1.3 1.3 * .9 1.1 25-49.9 1.5 5.3 .6 * 1.9 3.7 8.0 3.6 9.0 1.6 8.9 50-74.9 2.7 10.6 1.1 10.6 5.0 10.6 17.0 5.3 11.5 4.2 26.2 75-89.9 7.0 15.9 1.6 21.2 10.6 22.3 37.7 7.4 26.6 10.6 88.6 90-100 20.7 37.2 2.9 74.4 53.1 86.0 104.1 18.1 125.3 31.9 341.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 11 5.—Continued B. 1998 Survey of Consumer Finances Trans- Certifi- Retire- Other Any Family action cates of Savings Bonds Stocks Mutual ment Life managed Other financial characteristic accounts deposit bonds funds accounts insurance assets asset Percentage of families holding asset All families 90.5 15.3 19.3 3.0 19.2 16.5 48.8 29.6 5.9 9.4 92.9 Income (1998 dollars) Less than 10,000 61.9 7.7 3.5 * 3.8 1.9 6.4 15.7 * 8.0 70.6 10,000-24,999 86.5 16.8 10.2 1.3 7.2 7.6 25.4 20.9 4.9 8.2 89.9 25,000-49,999 95.8 15.9 20.4 2.4 17.7 14.0 54.2 28.1 3.9 10.2 97.3 50,000-99,999 99.3 16.4 30.6 3.3 27.7 25.8 73.5 39.8 8.0 9.1 99.8 100,000 or more 100.0 16.8 32.3 12.2 56.6 44.8 88.6 50.1 15.8 12.7 100.0 Age of head (years) Less than 35 84.6 6.2 17.2 1.0 13.1 12.2 39.8 18.0 1.9 10.1 8888..66 35-44 90.5 9.4 24.9 1.5 18.9 16.0 59.5 29.0 3.9 11.8 93.3 45-54 93.5 11.8 21.8 2.8 22.6 23.0 59.2 32.9 6.5 9.1 94.9 55-64 93.9 18.6 18.1 3.5 25.0 15.2 58.3 35.8 6.5 8.4 95.6 65-74 94.1 29.9 16.1 7.2 21.0 18.0 46.1 39.1 11.8 7.3 95.6 75 or more 89.7 35.9 12.0 5.9 18.0 15.1 16.7 32.6 11.6 6.4 92.1 Race or ethnicity of respondent White non-Hispanic 94.7 17.9 22.2 3.7 22.1 18.8 53.7 32.1 7.1 9.7 9966..33 Nonwhite or Hispanic 75.8 6.4 9.2 .4 9.1 8.4 32.0 20.8 1.7 8.3 81.2 Current work status of head Working for someone else 92.7 11.1 21.8 1.9 19.5 16.6 58.9 27.5 4.2 9.4 94.8 Self-employed 95.4 11.7 20.2 5.4 26.5 24.8 53.5 39.5 8.7 14.1 96.9 Retired 87.2 28.8 14.4 5.1 17.1 14.8 28.8 32.4 9.9 6.8 90.3 Other not working 69.1 7.6 11.8 * 8.8 4.8 17.5 17.6 * 10.9 75.2 Housing status Owner 96.2 18.9 23.3 3.8 24.9 21.0 58.4 36.9 7.7 8.7 97.5 Renter or other 79.2 8.3 11.5 1.3 8.0 7.5 30.1 15.2 2.4 10.8 84.1 Percentiles of net worth Less than 25 72.1 3.0 7.0 * 3.1 2.1 18.4 10.8 * 7.9 78.0 25-49.9 91.4 9.8 16.3 * 9.4 8.7 44.2 23.7 2.3 10.0 94.7 50-74.9 98.5 19.7 23.9 2.2 18.8 15.1 56.4 35.6 5.9 8.3 99.1 75-89.9 99.7 30.0 27.9 3.4 36.3 35.7 71.9 45.7 10.1 10.2 99.9 90-100 100.0 26.9 33.1 16.9 58.9 46.4 82.9 52.1 22.2 13.1 100.0 Median value of holdings for families holding asset (thousands of 1998 dollars) All families 3.1 15.0 1.0 44.8 17.5 25.0 24.0 7.3 31.5 3.0 22.4 Income (1998 dollars) Less than 10,000 .5 7.0 1.8 * 14.0 6.0 7.5 3.0 * .5 1.1 10,000-24,999 1.3 20.0 1.0 8.4 10.0 26.0 8.0 5.0 30.0 l.l 4.8 25,000-49,999 2.5 14.5 .6 25.0 8.0 11.0 13.0 5.0 15.0 2.0 17.6 50,000-99,999 6.0 13.3 1.0 19.0 15.0 25.0 31.0 9.5 32.0 5.0 57.2 100,000 or more 19.0 22.0 1.5 108.0 55.0 65.0 93.0 18.0 100.0 25.0 244.3 Age of head (years) Less than 35 1.5 2.5 .5 3.0 5.0 7.0 7.0 2.7 19.4 1.0 4.5 35-44 2.8 8.0 .7 55.3 12.0 14.0 21.0 8.5 25.0 2.5 22.9 45-54 4.5 11.5 1.0 31.7 24.0 30.0 34.0 10.0 39.3 6.0 37.8 55-64 4.1 17.0 1.5 100.0 21.0 58.0 46.8 9.5 65.0 10.0 45.6 65-74 5.6 20.0 2.0 52.0 50.0 60.0 38.0 8.5 41.3 6.0 45.8 75 or more 6.1 30.0 5.0 18.8 50.0 59.0 30.0 5.0 30.0 8.2 36.6 Race or ethnicity of respondent White non-Hispanic 3.7 17.0 1.0 46.0 20.0 29.0 26.0 7.5 32.0 4.0 29.9 Nonwhite or Hispanic 1.5 6.3 .7 14.2 9.0 10.0 13.0 5.0 23.0 1.0 6.4 Current work status of head Working for someone else 2.7 9.0 .7 15.0 10.0 16.0 20.0 7.0 30.0 1.8 19.0 Self-employed 6.3 22.0 .9 150.0 52.0 40.0 49.5 11.5 39.3 7.0 45.0 Retired 5.0 24.0 2.5 50.0 50.0 55.0 31.0 6.0 32.0 7.0 32.8 Other not working 1.0 10.0 .8 * 11.0 17.5 15.0 5.0 * 0.5 2.5 Housing status Owner 5.0 18.0 1.0 41.5 20.0 30.0 30.0 8.0 32.0 5.0 41.2 Renter or other 1.1 10.0 .6 50.0 8.0 12.0 7.5 5.0 23.0 1.0 3.4 Percentiles of net worth Less than 25 .6 1.5 .2 * .7 1.5 2.0 1.2 * .5 1.1 25-49.9 1.7 6.2 .5 * 3.0 6.0 8.1 5.0 10.0 1.8 10.4 50-74.9 4.8 15.0 1.0 10.0 8.0 14.0 28.0 7.0 21.4 6.0 42.7 75-89.9 10.5 25.0 2.0 25.0 26.3 35.3 59.8 10.0 23.4 7.0 144.4 90-100 23.0 44.0 2.0 100.0 85.0 107.0 125.0 20.0 120.0 20.0 456.8 NOTE. See note to table 1. * Ten or fewer observations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

12 Federal Reserve Bulletin • January 2000 At the same time, the median amount of bonds among Mutual Funds families that had them rose 44.1 percent. Changes for the different demographic groups were quite mixed, Continuing a trend going back at least to 1989, the but among the groups with relatively large holdings proportion of families owning mutual funds of any in 1995—the top income and top net worth groups— type (excluding money market funds or funds held ownership moved down while the median holding through retirement accounts or other managed assets) rose substantially. The increase in the median holding rose 4.2 percentage points, to 16.5 percent, between for families headed by the self-employed was also 1995 and 1998. Ownership increased substantially notable. Given the sparseness of bond ownership for most of the demographic groups, and it eased off among most other groups, estimates of the amounts only for the families in the 55-to-64 age group, which of their holdings are subject to a relatively high level had a particularly large rise in the fraction of families of statistical variability. with directly held stock. Between 1995 and 1998, median holdings of mutual funds among those who had them rose Publicly Traded Stocks 17.9 percent. The changes in holdings over demographic groups were more mixed than was the case The fraction of families having direct ownership of for directly held stocks, but increases were nonethepublicly traded stocks—that is, stocks other than less broadly spread. As was the case with bonds and those held through mutual funds, retirement accounts, directly held stocks, the increase among the workor other managed assets—rebounded to 19.2 percent status groups was particularly notable for the selfin 1998; the proportion had fallen to 15.2 percent in employed. Among the net worth groups, the largest 1995 from about 17 percent in both 1989 and 1992. proportional increases were for families between the Although the largest increases in ownership were in 25th and 90th percentiles of the distribution. the highest income and net worth groups, almost all of the groups showed some increase. Among families with incomes from $25,000 to $49,999, the propor- Retirement Accounts tion owning stock rose 3.8 percentage points. For those in the 55-to-64 age group, the increase was Continuing earlier trends, the ownership of tax- 10.0 percentage points. Some of the additional own- deferred retirement accounts rose broadly, from ership may be attributable to the increasing ease of 45.2 percent of families in 1995 to 48.8 percent individual stock trading. in 1998.14 Across the income groups, ownership Fueled by a rising stock market, the median declined only among the under-$ 10,000 group; howamount of stock held by those having direct holdings ever, the shrinkage of this group over the three years rose 82.3 percent, from $9,600 in 1995 to $17,500 in suggests that its composition may have changed 1998.13 Most of the demographic groups also had in important ways. Ownership also declined for large proportional increases. Among the work-status the younger-than-35 and neither-working-nor-retired groups, the increases in holdings were most notable groups. Ownership of retirement accounts increased for the self-employed and retired. Of all the demo- 4.6 percentage points for families with white nongraphic categories, only one, the 55-to-64 age group, Hispanic respondents, while it rose Vi percentage had minimal growth in their holdings over the period, point for other families. probably because of an influx of new owners with relatively small holdings. 14. The tax-deferred retirement accounts include individual retirement accounts (IRAs), Keogh accounts, and certain employersponsored accounts. The amounts held in retirement accounts may be invested in virtually any asset, including stocks, bonds, mutual funds, options, and real estate. 13. During the interview period of the 1998 survey—July to Here, employer-sponsored accounts are those from current jobs December—the stock market, as measured by the Wilshire index of held by the family head and that person's spouse or partner as well as 5000 companies, slipped from an average of 10,770 in July to 9,270 in those from past jobs held by them. The accounts from current jobs are September but bounced back to an average of 10,840 in December. restricted to those in which loans or withdrawals can be made, such as This variation raises a concern that the net worth values reported in 401 (k) accounts; those from past jobs are restricted to accounts from the survey may be affected by the date of the interview. Regression which the family expects to receive the account balance in the future. analysis of the 1998 survey data suggests that the reporting of equity These restrictions on the types of accounts are intended to confine the values was not significantly affected by fluctuations in the value of the analysis to amounts that are portable across jobs and to which families market index except for families that were relatively active stock will ultimately have full access. Earlier articles on the survey in the traders. Reporting by other families may have been based on broker- Federal Reserve Bulletin included only the accounts from current age statements, which are typically mailed quarterly. jobs. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 13 For families with tax-deferred retirement accounts, tional income for the worker. In 1998, 82.7 percent median holdings jumped 32.6 percent. Increases of families with account-type pension plans on a appeared in all the demographic groups except rent- current job had employers who made a contribution ers and families with incomes from $10,000 to to the plan, and 86.6 percent of families with such $24,999. The median value of holdings of the white plans made contributions themselves. non-Hispanic group rose considerably, but for the Participation in defined-contribution plans is usunonwhite or Hispanic group, median holdings only ally voluntary. In 1998, 22.7 percent of family heads edged up. who were eligible to participate in such a plan failed Tax-deferred retirement accounts are only a part of to do so, down from 26.0 percent in 1995. The data the retirement assets that families have. Many fami- indicate that this choice is related strongly to income: lies also have coverage under defined-benefit pension Heads of families with incomes of less than $25,000 plans, which typically provide annuity income at were less likely to participate than others. Among the retirement based on workers' salaries and years of family heads who were eligible but chose not to service. Most families also have some entitlement participate, 40.2 percent were covered by a definedto social security retirement income. Unfortunately, benefit plan. future retirement income from these sources is difficult to value because it depends crucially on assumptions about future events and conditions—work deci- Cash Value Life Insurance sions, earnings, inflation rates, discount rates, mortality, and so on. Because of the lack of widely Cash value life insurance combines insurance coveragreed standards for these assumptions, this article age in the form of a death benefit with an investment does not include a measure of the present value of vehicle. Some types of cash value policies offer a such income in families' net worth.15 high degree of choice on the investments. Like However, the survey does provide general informa- returns earned within IRAs, Keoghs, and personal tion on pension coverage, which consists of defined- annuities, investment returns on cash value life insurbenefit plans and defined-contribution—that is, ance are typically shielded from taxation until money account-type—plans. According to the 1998 survey, is withdrawn. Ownership of cash value policies 41.0 percent of families had some type of pension declined 2.4 percentage points between 1995 and coverage through a current job of either the family 1998. This decline continued a downward trend from head or the spouse or partner of that person; the level the 1989 survey, and it was shared by almost every was 39.1 percent in 1995 (not shown in table). Con- demographic group. This movement may reflect sevtinuing a trend away from defined-benefit pension eral factors. First, other investments may have plans, the share of families with pension coverage become more attractive to consumers than cash value through a current job that participated in a defined- insurance. Second, term life insurance—which pays benefit plan slipped from 47.5 percent in 1995 to a death benefit if the insured dies within the term 42.9 percent in 1998, while the share participating in of the coverage but pays nothing otherwise—has an account-type plan rose from 73.9 percent in 1995 been competitive with cash value insurance; in addito 79.4 percent in 1998. The share with both types of tion, advances in the availability of information may plans went up from 21.4 percent in 1995 to 22.3 per- have made it easier for consumers to compare costs. cent in 1998. Finally, consumers' demand for life insurance may In many account-type pension plans, contributions have eased somewhat: As with the ownership of cash may be made by the employer, the worker, or both. value insurance, ownership of any type of life insur- In some cases these contributions represent a sub- ance policy has slipped, from 75.1 percent of families stantial amount of saving, though workers may offset in 1989 to 69.2 percent in 1998. this saving by reducing their saving in other forms. For families that held cash value insurance, the The employer's contributions also represent addi- median cash value increased 37.7 percent between 1995 and 1998. The median also rose for all groups except the youngest and oldest age classes, families with incomes from $25,000 to $49,999, and families 15. For one possible calculation of net worth that includes the in the bottom quarter of the distribution of net worth. annuity value of pension benefits and social security retirement pay- The decline in ownership, taken together with the ments, see Arthur B. Kennickell and Annika E. Sunden, Pensions, Social Security, and the Distribution of Wealth, Finance and Econom- increase in the median holding, suggests that the ics Discussion Series 1997-55 (Board of Governors of the Federal typical family owning this asset is using it more Reserve System, October 1997). Papers in this series from 1996 to intensively as an investment vehicle. date are available at www.federalreserve.gov/pubs/feds. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

14 Federal Reserve Bulletin • January 2000 Other Managed Assets an employer during the preceding year. Overall, 11.2 percent of families in the 1998 survey reported Ownership of other managed assets—including perhaving received stock options. sonal annuities and trusts with an equity interest and managed investment accounts—rose from 3.9 percent of families in 1995 to 5.9 percent in 1998. Part Direct and Indirect Holdings of the rise is attributable to the increased holding of of Publicly Traded Stocks personal annuities with an equity interest: 4.5 percent Families may hold stock in publicly traded compaof families had such annuities in 1998, up from 3.9 percent in 1995.16 Most groups increased their nies in many different ways—through direct ownership of shares or through mutual funds, retirement ownership of other managed assets over the threeaccounts, or other managed assets—and information year period, with a particularly notable rise for famiabout each of these asset types is collected separately lies with incomes of $100,000 or more and those in in the SCF. When all these forms of stock ownership the top 10 percent of the distribution of net worth. are combined, the data show considerable growth in Median holdings for those having other managed stock ownership in every survey since 1989 (table 6). assets declined slightly. In light of the sparseness of In 1998, 48.8 percent of families owned stock equity ownership for many of the groups, much of the large through some means. Since 1989, the ownership rate change observed in various groups is likely attributhas grown 17.2 percentage points, with nearly half able to sampling variation. of the gain since 1995. Between 1995 and 1998, ownership rose for all family income and age groups; Other Financial Assets among these, the increases were largest in the $50,000-$99,999 income group and the 55-to-64 age For the other financial assets—a heterogeneous categroup. gory including oil and gas leases, futures contracts, Not surprisingly, given the robust growth in stock royalties, proceeds from lawsuits or estates in settleprices, the median value of stock holdings among ment, and loans made to others—ownership fell those having any rose strongly—from $15,400 in 1.7 percentage points from 1995 to 1998. The decline 1995 to $25,000 in 1998, a 62.3 percent increase. was broadly spread across demographic groups. For Moreover, the proportion of financial assets attributthose having such assets, the median holding dipped able to all forms of stock ownership also moved up, about $200 from the 1995 level. The pattern of from 40.0 percent in 1995 to 53.9 percent in 1998. changes across the demographic groups appears to The rise reflects both an increase in the market valuahave no straightforward interpretation. tion of stocks and the increased tendency of families Publicly traded companies have increasingly been to hold stock. offering stock options to their employees as a form of compensation.17 Although such stock options, when executed, may make an appreciable contribu- Nonfinancial Assets tion to family net worth, the survey did not specifically ask for the value of these options because their Nonfinancial assets as a proportion of the total assets valuation is not straightforward until their exercise of all families fell from 69.6 percent in 1989 to date.18 Instead, in 1998 the survey for the first time 59.4 percent in 1998 (table 7). The proportion of asked whether the family head or that person's nonfinancial assets attributable to the primary resispouse or partner had been given stock options by dence or other residential property held steady at about 55 percent over the 1989-98 period. At the same time, the part attributable to vehicles and net 16. In 1998, the SCF questionnaire was changed so that informaequity in privately owned businesses rose slightly, tion on annuities was collected separately from information on trusts and managed investment accounts. The earlier surveys had asked while the proportion attributable to net equity in about the total value of holdings in these types of assets after responnonresidential properties and other nonfinancial dents had specified the types they had. Some of the increase in the ownership of annuities may reflect this change. assets fell. The patterns across demographic groups 17. See David Lebow, Louise Sheiner, Larry Slifman, and Martha in 1995 and 1998 are similar to those seen for finan- Starr-McCluer, Recent Trends in Compensation Practices, Finance cial assets: Ownership and median holdings rise with and Economics Discussion Series 1999-32 (Board of Governors of the income; by age group, they rise initially and then Federal Reserve System, July 1999). 18. Because such options are typically not publicly traded, their decline (table 8). value is uncertain until the exercise date; until then, meaningful Overall, the proportion of families with any type of valuation would require complex assumptions about future movements in stock prices. nonfinancial asset slipped a bit, from 90.9 percent in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 15 6. Direct and indirect family holdings of stock, by selected characteristics of families, 1989, 1992, 1995, and 1998 surveys Percent except as noted Median value among families Families having stock holdings, Stock holdings as share of FFaammiillyy direct or indirect1 (thousa w nd it s h o h f ol 1 d 9 i 9 n 8 g s d ollars) group's financial assets cchhaarraacctteerriissttiicc 1989 1992 1995 1998 1989 1992 1995 1998 1989 1992 1995 1998 All families 31.6 36.7 40.4 48.8 10.8 12.0 15.4 25.0 27.8 33.7 40.0 53.9 Income (1998 dollars) Less than 10.000 * 6.8 5.4 7.7 * 6.2 3.2 4.0 * 15.9 12.9 24.8 10,000-24,999 12.7 17.8 22.2 24.7 6.4 4.6 6.4 9.0 11.7 15.3 26.7 27.5 25.000-49,999 31.5 40.2 45.4 52.7 6.0 7.2 8.5 11.5 16.9 23.7 30.3 39.1 50,000-99,999 51.5 62.5 65.4 74.3 10.2 15.4 23.6 35.7 23.2 33.5 39.9 48.8 100,000 or more 81.8 78.3 81.6 91.0 53.5 71.9 85.5 150.0 35.3 40.2 46.4 63.0 Age of head (years) Less than 35 22.4 28.3 36.6 40.7 3.8 4.0 5.4 7.0 20.2 24.8 27.2 44.8 35^*4 38.9 42.4 46.4 56.5 6.6 8.6 10.6 20.0 29.2 31.0 39.5 54.7 45-54 41.8 46.4 48.9 58.6 16.7 17.1 27.6 38.0 33.5 40.6 42.9 55.7 55-64 36.2 45.3 40.0 55.9 23.4 28.5 32.9 47.0 27.6 37.3 44.4 58.3 65-74 26.7 30.2 34.4 42.6 25.8 18.3 36.1 56.0 26.0 31.6 35.8 51.3 75 or more 25.9 25.7 27.9 29.4 31.8 28.5 21.2 60.0 25.0 25.4 39.8 48.7 NOTE. See note to table 1. 1. Indirect holdings are those in mutual funds, retirement accounts, and other managed assets. * Ten or fewer observations. 1995 to 89.9 percent in 1998. Declines were spread of $100,000 or more. However, between the 1995 fairly evenly over most demographic groups except and 1998 surveys, the growth of leasing among famithe income and net worth groups, in which the lies in that income group had leveled off, while it had decreases were largest for families at the lower ends picked up among families with incomes below of the scales. The median holding of nonfinancial $50,000. assets for all families with such assets rose 11 percent Among owners, the median value of owned vehiover the three-year period. Although most groups cles rose about $300 between 1995 and 1998, a shared in the rise, the increases in the medians 2.9 percent increase. Across income groups, the value for the nonwhite or Hispanic group and for the self- of vehicles owned rose notably only for families with employed were particularly noteworthy. incomes of $100,000 or more. The median value of vehicles owned also increased substantially for families in the top 10 percent of the net worth distribution Vehicles and in the 55-or-older age groups. Vehicles continue to be the most widely held nonfinancial asset; 86 percent of families either owned Primary Residence and them (table 8) or leased them (not shown) in both Other Residential Real Estate the 1995 and 1998 surveys.19 Although the share of families leasing vehicles is still fairly small (6.4 per- Continuing a trend since 1989, home ownership rose cent in 1998), it has been growing quickly, while the 1.5 percentage points from 1995, reaching 66.2 perrate of ownership slid down a bit between 1995 and 1998, to 82.8 percent.20 Between the 1992 and 1995 surveys, the greatest 7. Value of nonfinancial assets of all families, distributed by type of asset, 1989, 1992, 1995, and 1998 surveys growth in leasing was among families with incomes Percent Type of nonfinancial asset 1989 1992 1995 1998 19. Vehicles include automobiles, vans, trucks, sport utility vehicles, motorcycles, recreational vehicles, airplanes, and boats that are 5.6 5.7 7.1 6.5 Primary residence 45.9 47.0 47.4 47.1 owned for personal use. Counting families that have personal use of a Other residential property 8.1 8.5 8.0 8.5 car owned by a business raises the proportion of families with a Equity in nonresidential vehicle to 87.2 percent in 1998. property 11.0 10.9 7.9 7.7 20. The share of families leasing a vehicle was 2.9 percent in 1992 Business equity 26.9 26.3 27.3 28.5 Other 2.5 1.6 2.3 1.7 and 4.5 percent in 1995. Leased vehicles represented 25.0 percent of Total 100 100 100 100 all new vehicles acquired by families in 1998, up from 20.5 percent in 1995 and 10.1 percent in 1992. For additional evidence on vehicle MEMO Nonfinancial assets leasing, see Ana Aizcorbe and Martha Starr-McCluer, "Vehicle Ownas a share of total assets .. 69.6 68.5 63.4 59.4 ership, Vehicle Acquisitions and the Growth of Auto Leasing," Monthly Labor Review, vol. 120 (June 1997), pp. 34-40. NOTE. See note to table 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

16 Federal Reserve Bulletin • January 2000 Family holdings of nonfinancial assets, by selected characteristics of families and type of asset, and of any asset, by family characteristic, 1995 and 1998 surveys A. 1995 Survey of Consumer Finances Other Equity in Any cha F ra a c m te il r y is tic Vehicles r P es ri i m de a n r c y e re p s r i o d p e e n r t t i y a l non p r r e o s p id er e t n y t ial B e u q s u in it e y s s Other nonf a i s n s a e n t cial a A ss n e y t Percentage of families holding asset All families 84.1 64.7 11.8 9.4 11.1 9.0 90.9 96.3 Income (1998 dollars) Less than 10,000 54.9 36.1 3.9 4.0 4.8 3.8 66.8 83.0 10,000-24,999 82.3 54.9 7.0 5.5 6.6 5.9 89.4 96.0 25,000-49.999 91.7 67.0 9.9 8.0 9.4 1 9 1 . . 4 0 96.4 99.7 50,000-99,999 93.4 84.5 16.7 14.5 16.3 98.8 100.0 100,000 or more 91.6 91.1 38.4 24.5 31.5 23.0 99.5 100.0 Age of head (years) Less than 35 83.8 37.9 4.2 3.6 8.3 7.2 87.1 94.3 35-44 84.7 64.7 9.7 7.1 14.3 10.0 90.6 96.0 45-54 88.2 75.3 16.3 14.3 15.5 11.4 93.6 97.3 55-64 88.4 82.0 19.9 13.4 12.7 10.2 93.9 96.4 65-74 82.5 79.5 16.1 16.2 8.7 9.0 92.6 97.7 75 or more 72.2 72.8 12.2 6.4 3.7 5.6 89.9 98.4 Race or ethnicity of respondent White non-Hispanic 88.2 70.6 13.2 10.4 12.8 10.6 95.1 Nonwhite or Hispanic 69.7 44.3 7.1 5.7 5.3 3.6 76.3 Current work status of head Working for someone else .. 89.9 63.8 10.3 8.0 6.9 9.6 93.9 98.6 Self-employed 86.1 74.5 21.3 22.2 58.1 15.5 96.0 97.8 Retired 76.2 70.6 13.1 8.5 3.3 5.8 88.1 95.6 Other not working 59.0 34.4 5.0 4.2 4.0 5.9 66.2 76.9 Housing status Owner 90.9 100.0 15.1 12.1 13.7 10.5 100.0 100.0 Renter or other 71.6 5.7 4.4 6.3 6.3 74.1 89.6 Percentiles of net worth Less than 25 65.4 13.7 .9 1.6 3.0 68.4 85.3 25-49.9 87.8 64.1 5.4 4.5 5.7 7.0 96.3 100.0 50-74.9 90.9 88.3 11.1 9.0 12.3 10.5 99.0 100.0 75-89.9 92.3 92.2 21.3 15.8 16.5 12.4 99.8 100.0 90-100 92.3 93.5 42.6 33.8 37.1 20.3 99.9 100.0 Median value of holdings for families holding asset (thousands of 1998 dollars) AH families 10.5 95.6 53.1 31.9 47.8 9.3 88.1 108.1 Income (1998 dollars) Less than 10,000 4.0 41.4 28.0 15.9 54.1 6.2 14.2 13.5 10,000-24,999 6.2 69.0 31.9 14.9 35.1 6.4 45.7 55.5 25,000-49,999 11.1 85.0 45.1 42.5 26.0 6.2 84.0 104.4 50,000-99,999 16.9 126.4 63.7 21.2 31.9 14.3 146.7 202.2 100,000 or more 24.4 196.5 106.2 106.2 265.5 19.1 314.7 608.5 Age of head (years) Less than 35 9.4 80.7 36.1 12.7 21.2 5.3 23.2 34.1 35-44 11.3 100.9 49.9 18.1 37.2 10.6 102.2 118.1 45-54 13.7 106.2 63.7 19.1 74.4 10.6 120.0 159.8 55-64 12.2 92.4 58.4 67.8 69.0 10.6 114.7 170.8 65-74 8.7 90.3 60.5 42.5 106.8 14.9 100.7 132.9 75 or more 5.6 85.0 28.7 6.4 37.4 8.5 83.9 102.3 Race or ethnicity of respondent White non-Hispanic 11.4 96.7 58.4 34.0 53.1 10.6 99.5 126.3 Nonwhite or Hispanic 7.8 74.4 30.9 21.2 27.9 6.9 37.0 40.9 Current work status of head Working for someone else .. 11.5 95.6 49.9 18.1 22.3 10.6 86.4 105.0 Self-employed 13.4 127.5 85.0 55.8 79.7 8.5 189.0 243.5 Retired 7.8 80.7 47.8 37.2 106.2 10.6 83.9 102.0 Other not working 6.6 63.7 45.1 53.1 21.2 7.4 21.2 22.3 Housing status Owner 12.7 95.6 55.2 37.2 58.4 10.6 123.0 168.1 Renter or other 6.7 39.8 12.7 23.4 5.3 7.9 13.1 Percentiles of net worth Less than 25 4.8 28.7 2.1 1.6 2.7 6.2 6.1 25-49.9 9.1 53.1 29.7 7.4 10.6 5.3 43.6 51.7 50-74.9 11.9 90.3 32.4 10.6 23.4 8.5 107.7 137.1 75-89.9 15.1 136.0 53.1 37.2 95.6 10.6 180.5 273.3 90-100 21.6 196.5 132.8 108.9 345.2 26.6 421.2 802.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 17 -Continued B. 1998 Survey of Consumer Finances Other Equity in Any cha F ra a c m te il r y is tic Vehicles r P es ri i m de a n r c y e re p s r i o d p e e n r t t i y a l non p r r e o s p id er e t n y t ial B e u q s u in it e y s s Other nonf a i s n s a e n t cial a A s n se y t Percentage of families holding asset AH families 82.8 66.2 12.8 8.6 11.5 8.5 89.9 96.8 Income (1998 dollars) Less than 10,000 51.3 34.5 3.8 2.6 62.7 83.8 10,000-24,999 78.0 51.7 5.8 5.0 5.0 5.6 85.9 96.4 25,000-49,999 89.6 68.2 11.4 7.6 10.3 9.4 95.6 99.2 50,000-99,999 93.6 85.0 19.0 12.0 15.0 10.2 98.0 100.0 100,000 or more 88.7 93.3 37.3 22.6 34.7 17.1 98.9 100.0 Age of head (years) Less than 35 78.3 38.9 3.5 2.7 7.2 7.3 83.3 94.8 35-44 85.8 67.1 12.2 7.5 14.7 8.8 92.0 97.6 45-54 87.5 74.4 16.2 12.2 16.2 9.2 92.9 96.7 55-64 88.7 80.3 20.4 10.4 14.3 8.5 93.8 98.2 6 75 5 - o 7 r 4 more 6 8 9 3 . . 8 4 8 7 1 7 . . 5 0 1 1 8 3 . . 4 6 1 8 5. . 3 1 1 2 0 . . 7 1 1 7 0 . . 0 3 9 8 2 7 . . 0 2 9 9 6 8 . . 4 5 Race or ethnicity of respondent White non-Hispanic 87.3 71.8 14.1 9.4 13.2 10.0 93.8 98.8 Nonwhite or Hispanic 67.2 46.8 8.4 5.8 5.4 3.1 76.4 89.9 Current work status of head Working for someone else .. 87.6 63.5 10.6 6.7 5.5 8.8 92.4 98.2 Self-employed 89.5 81.3 25.3 17.7 63.4 13.3 98.1 99.2 Retired 73.3 72.4 14.3 10.1 3.6 6.4 85.2 94.7 Other not working 58.5 35.8 4.5 * 3.7 * 66.3 85.7 Housing status Owner 90.6 100.0 16.8 11.3 14.5 9.5 100.0 100.0 Renter or other 67.6 5.1 3.3 5.4 6.4 70.1 90.7 Percentiles of net worth Less than 25 62.3 14.1 * * 1.4 2.5 65.2 87.4 25-49.9 87.4 67.2 5.8 3.5 6.5 8.0 96.1 100.0 50-74.9 90.4 89.3 11.8 7.9 10.6 8.9 99.1 100.0 75-89.9 90.8 94.0 26.2 16.7 17.9 11.4 99.3 100.0 90-100 92.0 95.1 41.7 30.6 41.4 18.8 99.6 100.0 Median value of holdings for families holding asset (thousands of 1998 dollars) All families 10.8 100.0 65.0 38.0 60.0 10.0 97.8 123.5 Income (1998 dollars) Less than 10,000 4.0 51.0 * * 37.5 5.0 16.3 11.7 10,000-24,999 5.7 71.9 70.0 25.0 31.1 5.0 43.7 46.2 25,000-49,999 10.2 85.0 50.0 28.0 37.5 6.0 83.5 112.0 50,000-99,999 16.6 130.0 60.0 30.0 56.0 12.0 156.3 233.2 100,000 or more 26.8 240.0 132.0 114.1 230.0 36.0 380.0 665.6 Age of head (years) Less than 35 8.9 84.0 42.5 25.0 34.0 5.0 22.7 28.9 35-44 11.4 101.0 45.0 20.0 62.5 8.0 103.5 128.0 45-54 12.8 120.0 74.0 45.0 100.0 14.0 126.8 178.9 55-64 13.5 110.0 70.0 54.0 62.5 28.0 126.9 198.2 65-74 10.8 95.0 75.0 45.0 61.1 10.0 109.9 165.2 75 or more 7.0 85.0 103.0 54.0 40.0 10.0 96.1 135.0 Race or ethnicity of respondent White non-Hispanic 11.8 100.0 67.0 42.5 67.6 10.0 107.6 144.9 Nonwhite or Hispanic 8.0 85.0 59.0 24.0 30.0 5.0 52.0 43.1 Current work status of head Working for someone else .. 11.2 98.0 50.0 24.0 30.0 7.0 89.6 112.4 Self-employed 15.5 150.0 85.0 80.0 100.0 50.0 256.6 329.3 Retired 8.6 89.0 100.0 50.0 50.0 10.0 97.8 134.5 Other not working 7.2 90.0 64.6 * 39.0 * 28.5 18.0 Housing status Owner 13.2 100.0 65.0 45.0 75.0 13.0 130.6 193.3 Renter or other 6.2 64.6 15.0 31.0 5.0 7.2 11.6 Percentiles of net worth L 25 es - s 4 9 t . h 9 a n 25 4 8 . . 9 6 4 6 0 0 . . 0 0 3 * 7 .5 1*0 .0 1 3 2 . . 5 0 5 1 . . 0 0 51 6 . . 5 4 6 5 0 . . 9 7 50-74.9 12.6 95.0 35.0 21.0 40.0 8.8 118.0 165.4 75-89.9 15.5 140.0 80.0 45.0 87.5 15.0 218.5 362.5 90-100 23.3 250.0 151.5 120.0 300.0 55.0 519.0 973.7 NOTE. See note to table 1. * Ten or fewer observations. Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

18 Federal Reserve Bulletin • January 2000 cent in 1998. Ownership grew strongly for families groups; notable exceptions were families headed by with incomes of $100,000 or more, for families those aged 75 or more and by retirees. headed by those younger than 45 or those 65 or older, Among owners of nonresidential real estate, the for those with nonwhite or Hispanic respondents, and median net equity in such property—its value less the for families headed by the self-employed. Home amount of any outstanding loans secured by it—rose ownership fell for families with less than $25,000 19.1 percent over the 1995-98 period. The increase of income and for families headed by those aged was shared by most of the demographic groups. 45 to 64. The median value of a primary residence among Net Equity in Privately Held Businesses homeowners rose only 4.6 percent from 1995 to 1998, but increases for some groups were very large: 23.2 percent for families with less than $10,000 of In 1998, 11.5 percent of families owned privately income, 22.1 percent for those with incomes of held business interests, a proportion that has hardly $100,000 or more, 13.0 percent for the 45-to-54 age changed since 1989.22 Between 1995 and 1998, busigroup, and 27.2 percent among the wealthiest 10 per- ness ownership rose 3.2 percentage points for famicent of families. The median home value for families lies with $100,000 or more of income, while moving with nonwhite or Hispanic respondents increased only slightly for the other income groups. 14.2 percent, compared with 3.4 percent for other Among families with business interests, the median families.21 value of the business net of borrowing done by the business rose 25.5 percent over the three-year period. In 1998, 12.8 percent of families had some form of Changes were quite mixed across the demographic residential real estate besides a primary residence groups considered. The median increased for fami- (second homes, time shares, one- to four-family lies with incomes from $25,000 to $99,999 but rental properties, and other types of residential propdeclined for the other income groups. By age of erty), up from 11.8 percent in 1995. The pattern of family head, the median fell for the 55-to-74 groups, changes was mixed across demographic groups, with while it rose for the others. The median holding fell a notable increase for families headed by the selffor families in the top 25 percent of the net worth employed. For families with this kind of property, the distribution, for whom business interests have been a median value of their property rose 22.4 percent over key asset. The increase in business ownership for the three-year period. Percentage gains were particuthese families suggests that the decline in the median larly large for families in the 75-or-older age group, may have been driven by the startup of new busifor families with nonwhite or Hispanic respondents, nesses that have relatively low initial net values and and for families headed by retirees; however, because possibly by the change in form of ownership of relatively few families in these groups have such particularly successful businesses to that of publicly property, these estimates may be imprecise. traded corporation. Net Equity in Nonresidential Real Estate Other Nonfinancial Assets Continuing a trend observed since the 1989 SCF, ownership of nonresidential real estate (commercial For the remaining nonfinancial assets (a broad cateproperties, rental properties with five or more units, gory of tangible items including artwork, jewelry, farm land, undeveloped land, and all other types of precious metals, and antiques), ownership rates fell a nonresidential real estate except property owned bit between 1995 and 1998. The decline was spread through a business) slipped between 1995 and 1998. across most of the demographic groups. In contrast, This trend partly reflects the expiration of real estate the median value of holdings for those who had such partnerships that had been established before changes assets rose slightly. Although patterns of change in the tax code limited the deductibility of losses on in median holdings were varied across groups, the investments in which a person has a "passive" intermedian grew strongly for the 55-or-older and selfest. Ownership fell for most of the demographic employed groups and families in the top quarter of the net worth distribution. 21. Among homeowners, mean and median equity in a primary residence—that is, the difference between the market value of the property and the amounts outstanding on any debt secured by the 22. The forms of business in this category are sole proprietorships, property—also rose over the 1995-98 period: The median increased limited partnerships, other types of partnerships, subchapter S corpofrom $53,100 in 1995 to $57,000 in 1998, while the mean jumped rations, other types of corporations that are not publicly traded, and from $78,300 to $87,400. other types of private businesses. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 19 9. Family holdings of unrealized capital gains, by selected characteristics of families, 1989, 1992, 1995, and 1998 surveys Thousands of 1998 dollars 1989 1992 1995 1998 FFaammiillyy cchhaarraacctteerriissttiicc Median Mean Median Mean Median Mean Median Mean All families 12.7 91.5 8.6 79.8 6.3 71.8 10.8 96.3 Income (1998 dollars) Less than 10,000 t 11.9 t 15.3 t 16.5 t 16.0 10,000-24,999 t 30.1 .6 28.4 t 25.7 t 26.6 25,000-49.999 12.7 55.3 6.9 49.4 5.3 37.6 10.0 46.9 50,000-99,999 38.2 89.0 27.4 85.8 26.1 69.3 27.0 80.8 100,000 or more 159.0 531.5 134.7 490.7 81.3 493.8 105.3 629.2 Age of head (years) Less than 35 t 20.6 f 15.4 f 10.1 t 15.4 35-44 14.1 68.6 5.7 62.2 4.2 38.8 7.1 63.3 45-54 40.7 132.3 20.6 117.9 19.8 101.3 22.4 125.6 55-64 38.2 160.7 33.1 150.1 30.8 145.7 35.6 185.8 65-74 33.7 139.5 34.3 123.9 31.9 125.5 46.5 163.5 75 or more 21.5 126.2 28.9 75.8 34.7 91.3 36.0 114.7 NOTE. See note to table 1. t Less than $50. Unrealized Capital Gains Families' Holdings of Debt Changes in the values of assets such as businesses, From 1995 to 1998, the overall proportion of families real estate, and stocks are a key determinant of with any sort of debt inched down from 74.5 percent changes in family net worth. Unrealized gains are to 74.1 percent (table 11). Nonetheless, the 1998 increases in the value of assets that are yet to be sold. level remained above the 73.0 percent figure regis- To obtain information on this part of net worth, the tered in 1989. Among families with debt, the median survey asks about changes in value from the time of amount of debt outstanding rose 42.3 percent from purchase for certain key assets—the primary resi- 1995 to 1998, and in 1998 stood 73.3 percent above dence, other real estate, businesses, publicly traded its level in 1989. stock, and mutual funds.23 Driven by the appreciation In all the surveys, the prevalence of debt rises with of residential real estate and especially by the strong income through the $99,999 mark and then drops off. rise in the stock market, the median unrealized In contrast, the median amount of debt among those capital gain rose 71.4 percent between 1995 and with debt rises continuously across income groups, 1998, while the mean moved up 34.1 percent probably because of borrowing associated with the (table 9). The mean in 1998 was above its value in acquisition of nonfinancial assets by higher-income 1989, whereas the median was a bit below its 1989 groups. Across age groups, the proportion of families level. with debt rises relatively slowly up to about age 45 and then declines; the median shows a similar pattern. The drop-off in debt for older families is LIABILITIES driven by the paying off of mortgages on primary residences. The substantial growth in family assets from 1995 to 1998 was accompanied by substantial growth in fam- 10. Amount of debt of all families, distributed ily debt. The growth in assets was somewhat faster, by type of debt, 1989, 1992, 1995, and 1998 surveys however, producing a slight decline in the ratio of Percent family debts to assets (the leverage ratio), from Type of debt 1989 1992 1995 1998 14.7 percent in 1995 to 14.4 percent in 1998 (table 10). But the movement in the ratio reversed Home-secured debt 69.4 72.5 73.3 71.9 Other residential property 7.6 10.0 7.5 7.4 only part of the upward trend observed from 1989 to Installment loans 16.6 11.3 11.8 12.8 Other lines of credit 1.4 .7 .6 .3 1995. Credit card balances 2.8 3.2 3.9 3.8 Other 2.2 2.3 2.8 3.7 Total 100 100 100 100 MEMO Debt as a percentage 23. The survey does not collect information on capital gains for of total assets 12.4 14.6 14.7 14.4 every asset. Most notably, it does not collect such information for retirement accounts. NOTE. See note to table 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

20 Federal Reserve Bulletin • January 2000 11. Family holdings of debt, by selected characteristics of families and type of debt, 1995 and 1998 surveys A. 1995 Survey of Consumer Finances cha F ra a c m te il r y is tic Home-secured re p s r O i o d t p e h e n e r t r t i y a l Ins l t o al a l n m s ent li O c n r e t e h s d e i o r t f b C a c l r a a e n r d d c i e t s Other A de n b y t Percentage of families holding debt All families 41.0 4.7 45.9 1.9 47.3 8.5 74.5 Income (1998 dollars) 6.1 Less than 10,000 9.0 1.6 25.1 23.9 47.2 10,000-24,999 23.9 1.3 38.9 41.2 8.1 65.8 25,000-49.999 44.9 3.9 53.7 2.2 54.5 8.7 82.2 50.000-99,999 67.6 7.0 60.0 3.1 62.8 8.6 89.4 100,000 or more 72.7 19.7 39.7 4.6 41.2 13.5 85.3 Age of head (years) Less than 35 33.0 2.1 62.5 2.7 54.7 7.4 83.5 35-44 54.3 4.9 59.7 2.1 55.9 10.5 86.9 45-54 61.8 8.4 53.3 2.2 56.4 13.0 86.3 55-64 45.2 8.3 34.8 1.7 43.2 7.8 73.7 65-74 24.7 3.5 16.5 1.3 30.5 5.4 53.4 75 or more 6.8 1.0 17.5 2.9 28.4 Race or ethnicity of respondent White non-Hispanic 44.1 5.0 46.1 2.1 47.1 8.5 75.3 Nonwhite or Hispanic 30.2 3.5 45.3 48.0 8.5 71.6 Current work status of head Working for someone else .. 51.2 5.4 58.6 2.3 58.0 9.9 87.4 Self-employed 51.6 8.1 45.3 3.6 45.3 80.9 Retired 18.7 2.4 18.0 25.8 4.6 44.8 Other not working 18.2 40.8 36.8 9.6 63.2 Housing status Owner 63.3 5.8 45.4 1.5 51.1 8.0 79.6 Renter or other 2.7 46.9 2.6 40.3 9.4 65.2 Percentiles of net worth Less than 25 9.6 48.9 2.4 41.4 9.6 66.7 25-49.9 47.3 2.5 55.0 2.2 55.5 9.4 81.4 50-74.9 55.6 3.4 47.0 1.2 57.3 7.0 79.3 75-89.9 49.5 8.0 36.2 * 39.5 8.1 70.5 90-100 54.4 18.6 27.9 3.2 27.9 7.4 70.8 Median value of holdings for families holding debt (thousands of 1998 dollars) All families 54.9 31.9 6.4 3.7 1.6 2.1 23.4 Income (1998 dollars) Less than 10,000 19.1 10.6 2.7 .6 2.1 2.2 10,000-24,999 29.7 19.1 3.8 1.3 1.2 8.4 25,000-49,999 45.7 29.7 6.9 3.2 1.6 1.8 21.6 50,000-99,999 69.2 33.8 9.5 2.3 2.1 3.7 64.1 100,000 or more 105.2 42.5 9.1 5.3 2.7 7.4 114.8 Age of head (years) Less than 35 65.9 26.6 7.5 1.5 1.4 1.6 16.1 35-44 64.8 33.8 5.9 2.1 2.0 2.1 40.0 45-54 53.1 31.9 7.6 6.4 2.1 3.2 42.4 55-64 39.3 35.1 5.3 3.6 1.4 4.2 22.4 65-74 20.2 35.1 5.2 4.0 .9 2.1 7.4 75 or more 19.3 8.5 3.6 .4 4.2 2.0 Race or ethnicity of respondent White non-Hispanic 57.4 35.1 6.9 4.0 1.6 2.7 28.6 Nonwhite or Hispanic 42.0 26.6 5.2 1.3 1.6 11.2 Current work status of head Working for someone else .. 59.5 30.8 7.3 2.6 1.7 2.1 30.8 Self-employed 65.9 44.6 6.4 7.4 2.7 5.3 44.1 Retired 24.4 35.1 4.3 .9 3.2 6.4 Other not working 47.8 5.2 .9 1.6 8.2 Housing status Owner 54.9 31.9 7.3 5.1 1.6 3.2 48.8 Renter or other 52.0 5.3 1.5 1.3 1.6 5.1 Percentiles of net worth Less than 25 49.8 5.6 2.8 1.7 1.6 6.6 25-49.9 47.8 20.2 6.4 3.2 1.4 1.7 22.5 50-74.9 55.8 26.6 6.2 2 * .4 1.6 2.1 39.1 75-89.9 53.1 27.9 7.6 1.5 3.2 37.9 90-100 81.8 63.2 8.3 8.5 1.5 8.5 80.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 21 11.—Continued B. 1998 Survey of Consumer Finances Other Other Credit Family Installment Any Home-secured residential lines of card Other characteristic loans debt property credit balances Percentage of families holding debt All families 43.1 5.1 43.7 2.3 44.1 8.8 74.1 Income (1998 dollars) Less than 10,000 8.3 25.7 20.6 3.6 41.7 10,000-24,999 21.3 34.4 1.2 37.9 7.0 63.7 25,000-49,999 43.7 4.1 50.0 2.9 49.9 7.7 79.6 50,000-99,999 71.0 7.7 55.0 3.3 56.7 12.2 89.4 100,000 or more 73.4 16.4 43.2 2.6 40.4 14.8 87.8 Age of head (years) Less than 35 33.2 2.0 60.0 2.4 50.7 9.6 81.2 35^14 58.7 6.7 53.3 3.6 51.3 11.4 87.6 45-54 58.8 6.7 51.2 3.6 52.5 11.1 87.0 55-64 49.4 7.8 37.9 1.6 45.7 8.3 76.4 65-74 26.0 5.1 20.2 29.2 4.1 51.4 75 or more 11.5 4.2 11.2 2.0 24.6 Race or ethnicity of respondent White non-Hispanic 46.7 5.4 44.3 2.4 44.4 74.9 Nonwhite or Hispanic 30.7 4.0 41.6 1.9 43.3 71.1 Current work status of head Working for someone else — 50.8 5.2 55.2 2.7 53.5 10.8 Self-employed 63.1 10.7 46.3 3.7 47.5 10.7 84.6 Retired 18.6 3.1 15.8 20.9 3.3 39.9 Other not working 26.8 39.0 39.0 7.5 65.7 Housing status Owner 65.1 6.2 44.3 1.8 46.2 9.3 79.4 Renter or other 2.9 42.6 3.4 40.0 7.8 63.5 Percentiles of net worth Less than 25 11.3 47.1 2.8 39.5 9.3 65.5 25-49.9 47.2 3.2 50.0 2.5 54.8 9.2 81.5 50-74.9 56.2 4.8 46.4 1.7 48.7 7.7 76.8 75-89.9 57.0 8.9 34.3 1.9 36.9 7.6 70.2 90-100 58.9 14.8 27.2 2.6 28,2 10.8 75.9 Median value of holdings for families holding debt (thousands of 1998 dollars) All families 62.0 40.0 8.7 2.5 1.7 3.0 33.3 Income (1998 dollars) Less than 10,000 16.0 4.0 1.1 .6 4.1 10,000-24,999 34.2 34.0 6.0 1.1 1.0 1.3 8.0 25,000-49,999 47.0 20.0 8.0 3.0 1.9 2.2 27.1 50,000-99,999 75.0 42.0 11.3 2.8 2.4 3.8 75.0 100,000 or more 123.8 60.0 15.4 5.0 3.2 10.0 135.4 Age of head (years) Less than 35 71.0 55.0 9.1 1.0 1.5 1.7 19.2 35-44 70.0 40.0 7.7 1.4 2.0 3.0 55.7 45-54 68.8 40.0 10.0 3.0 1.8 5.0 48.4 55-64 49.4 41.0 8.3 4.9 2.0 5.0 34.6 65-74 29.0 56.0 6.5 1.1 4.5 11.9 75 or more 21.2 29.8 8.9 .7 1.7 8.0 Race or ethnicity of respondent White non-Hispanic 62.0 42.6 9.0 2.8 2.0 3.3 40.0 Nonwhite or Hispanic 62.0 30.0 7.2 0.7 1.1 1.7 15.3 Current work status of head Working for someone else 66.0 37.0 2.8 2.0 3.0 35.5 11.0 Self-employed 74.0 54.0 3.8 2.0 6.5 67.9 Retired 37.0 34.0 5.8 1.0 1.9 10.2 Other not working 57.0 6.7 1.2 1.1 12.6 Housing status Owner 62.0 42.6 9.5 2.2 2.0 4.0 60.9 Renter or other 27.5 7.7 2.8 1.3 1.3 PflUj 6.0 Percentiles of net worth Less than 25 56.5 8.0 1.0 1.6 1.5 8.4 25-49.9 55.0 29.0 7.8 3.0 1.7 2.0 28.4 50-74.9 59.0 22.0 8.9 3.0 1.8 5.0 46.2 75-89.9 72.0 54.0 10.1 1.3 1.5 6.0 67.4 90-100 100.0 72.0 14.7 10.0 2.0 20.0 98.0 NOTE. See note to table 1. * Ten or fewer observations. Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

22 Federal Reserve Bulletin • January 2000 Between 1995 and 1998, changes in the proportion rowing against a primary residence remained 16 perof families in different demographic groups holding centage points below that of other families; however, debt were mixed. Although the proportion declined the median level of borrowing by the nonwhite or in most groups, increases were appreciable for fami- Hispanic group jumped to the level of the other lies with incomes of $100,000 or more, for the 55- families in 1998. to-64 age group, and for families headed by the For home equity lines of credit, the amount self-employed. The median amount of debt increased included in home-secured debt is only the balance for most of the demographic groups, and many of the outstanding at the time of the interview. The use of changes were large. home equity credit lines has expanded since 1995, when 5.1 percent of families had a line and 56.0 percent of those families were drawing funds on it; Mortgages and Other Home Equity Borrowing in 1998 the figures were 7.0 percent with lines and on the Primary Residence 63.7 percent drawing on them (not shown in table). Home-secured debt (first and second mortgages and home equity loans and lines of credit secured by the Borrowing on Other Residential Real Estate primary residence) declined slightly as a share of total family debt between 1995 and 1998 (table 10). Across income and net worth groups, borrowing for Nonetheless, the proportion of families with such other residential real estate is most prevalent in all the debt rose over the period, from 41.0 percent to surveys among families at the upper ends of the 43.1 percent (table 11), a level substantially above distributions. While the overall proportion of families the 40.0 percent registered in 1989.24 The proportion having this type of debt rose slightly from 1995 to of families holding such debt rose for most groups 1998, the shares of families in the top income and net in the 1995-98 period. Increases were particularly worth groups having such debt fell distinctly. At the notable for families headed by the self-employed same time, for those having this type of debt, the and for families in the top quarter of the net worth median amount owed rose in almost every demodistribution. graphic group. While home purchase continues to be the main purpose of home-secured debt, the use of such borrowing for other purposes has become increasingly Installment Borrowing important since the Tax Reform Act of 1986, which phased out the deductibility of interest payments on Although the share of installment borrowing in total most debt other than that secured by the primary family debt rose 1.0 percentage point between 1995 residence. Moreover, declining interest rates during and 1998, its prevalence dropped 2.2 percentage most of 1998 strengthened families' incentives that points, to 43.7 percent; the prevalence of such boryear to refinance existing mortgages and, by refinanc- rowing stood at 49.4 percent in 1989.25 Over the ing for more than the existing balance, use the oppor- recent three-year period, the prevalence declined for tunity to obtain funds for other purposes. all income groups except the top and bottom and for For families with home-secured debt, the median all age groups except those between 55 and 74. At amount of home-secured debt moved up 12.9 percent least some of the decline is attributable to the substiover the recent three-year period, while the median tution of other types of borrowing and to the growth value of primary residences rose 5.4 percent for this of vehicle leasing. group. Taken together with the fact that the share of Over the same period, for those with installment families with home-secured debt rose by more than loans the median amount owed on such loans climbed the share who were homeowners, this result suggests 36.0 percent, to $8,700. The median rose for most that many families may have been using such borrow- demographic groups, with pronounced increases for ing to extract equity from their homes. The median families with incomes of $100,000 or more, for famiamount of home-secured debt rose for almost every lies headed by those aged 75 or older and retirees, group, with the increases especially marked among and for the wealthiest 10 percent of families. the top income and net worth groups. The proportion of families in the nonwhite or Hispanic group bor- 25. The term "installment borrowing" in this article describes consumer loans that typically have fixed payments and a fixed term. 24. In 1998, 65.1 percent of homeowners had some type of home- Examples are automobile loans, student loans, and loans for furniture, secured debt. appliances, and other durable consumer goods. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 23 Borrowing on Other Lines of Credit newest card for families without balances. In both 1995 and 1998, the median interest rate reported was The use of personal lines of credit other than home 15 percent; the result is nearly the same if attention is equity lines rebounded slightly from 1995 to 1998. restricted only to families borrowing on their cards. Still, only 2.3 percent of families used such debt in 1998, and usage was similarly thin across demographic groups.26 At the same time, among those Other Debt borrowers the median amount borrowed declined 32.4 percent, with mixed changes across family Other borrowing (loans on insurance policies, loans groups. against pension accounts, borrowing on a margin account, and unclassified loans) was slightly more prevalent in 1998 than in 1995. Increases and Credit Card Borrowing decreases were scattered across the demographic groups. At the same time, for borrowers, the median The proportion of families that had an outstanding amount of other debt owed rose from $2,100 to balance on any of their credit cards after paying their $3,000. On a percentage basis, most of the changes most recent bills dropped 3.2 percentage points across the demographic groups were sizable. The from 1995 to 1998, to 44.1 percent.27 The decline increase in the amount of borrowing was driven was shared by all of the demographic groups except by somewhat greater borrowing against pension for families headed by those aged 55 to 64, by the accounts and cash value life insurance; while the self-employed, and by those neither working nor share of families reporting balances outstanding on retired and families in the highest net worth group. margin loans ticked up from 0.2 percent in 1995 to Among families having balances outstanding on 0.8 percent in 1998, the median amount of such loans any of their credit cards, the median total balances actually slipped a bit over the period. owed by the family hardly changed over the period, standing at $1,700 in 1998. Nonetheless, increases were much more common than declines across the Reasons for Borrowing demographic groups. Bank-type cards are the most widely held and most The SCF provides detailed information on the reawidely accepted credit cards. In 1998, 67.6 percent of sons that families borrow money (table 12).28 One families had a bank-type card—up from 66.5 percent subtle problem with the use of these data is that, even in 1995 (not shown in table). Of families with such though money is borrowed for a particular purpose, cards, the share carrying a balance edged down a bit, it may be used to offset some other use of funds. For from 56.0 percent in 1995 to 54.8 percent in 1998; example, a family may have sufficient assets to purthis result suggests some increase in the relative chase a home without using a mortgage but may importance of convenience use of bank-type cards instead choose to finance the purchase to free existing over the period (that is, use in which the balance is funds for another purpose. Thus, trends in the data paid in full each month). can be only suggestive of the underlying use of funds Among families with bank-type cards, the median by families. total credit limit on all their bank-type cards rose The survey shows that the proportion of total borfrom $8,700 in 1995 to $10,000 in 1998. Among rowing directly attributable to home purchase fell families with balances on their cards, the median 2.3 percentage points between 1995 and 1998, limits were somewhat lower, at $8,000 in 1995 and although the 68.1 percent level seen in 1998 was still $9,500 in 1998; the median fraction of the available above that observed in 1989 or 1992. Almost offsetcredit limit used by this group was about 28 percent in 1998, up slightly from 24 percent in 1995. The 28. The survey does not collect exhaustive detail on the uses of survey asks for the interest rate paid on the card on borrowed funds. In the case of credit cards, it was deemed impractical which the family has the largest balance, or on the to ask about the purposes of borrowing. For the analysis here, credit card debt is included in the category "goods and services." In the case of first mortgages taken out when a property was obtained, it was assumed that the funds were used for the purchase of the home. The 26. In 1998, another 0.9 percent of all families had such credit lines surveys before 1995 did not collect information on the use of funds available but had no outstanding balance at the time of the interview. from refinancing a first mortgage; in the table, such borrowing is 27. The debt could have been on bank-type cards (such as Visa, attributed to home purchase in all the years shown. The surveys before Mastercard, Discover, and Optima), store and gasoline company cards, 1998 did not collect information on the uses of funds borrowed from so-called travel and entertainment cards (such as American Express pension accounts; the table reports borrowing from pension accounts and Diners Club), and other credit cards. as a separate category, unclassified as to purpose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

24 Federal Reserve Bulletin • January 2000 12. Amount of debt of all families, distributed by purpose 13. Amount of debt of all families, distributed of debt, 1989, 1992, 1995, and 1998 surveys by type of lending institution, 1989, 1992, 1995, Percent and 1998 surveys Percent Purpose of debt 1989 1992 1995 1998 Type of institution 1989 1992 1995 1998 Home purchase 63.5 67.4 70.4 68.1 Home improvement 2.5 2.5 2.0 2.0 Commercial bank 28.2 33.3 35.1 32.6 Other residential property 9.8 10.8 8.2 7.8 Savings and loan or savings bank . 26.1 16.8 10.8 9.6 Investments, excluding real estate . 3.8 1.8 1.0 3.2 Credit union 4.0 4.0 4.5 4.2 Vehicles 10.4 7.0 7.5 7.5 Finance or loan company 3.7 3.2 3.2 4.2 Goods and services 5.9 5.6 5.7 6.0 2.2 3.1 1.9 3.7 Education 2.3 2.8 2.7 3.4 Mortgage or real estate lender ... 21.2 27.1 32.7 35.9 Unclassifiable loans against Individual lender 6.8 4.3 5.0 3.4 pension accounts .2 .1 .2 .4 Other nonfinancial 1.6 1.6 .8 1.3 Other 1.5 2.1 2.2 1.5 Government 2.0 2.0 1.3 .6 Total 100 100 100 100 Credit card and store card 2.8 3.3 3.9 3.8 Pension account .2 .1 .2 .4 NOTE. See note to table 1. Other 1.1 1.1 .7 .3 Total 100 100 100 100 NOTE. See note to table 1. ting this decline was an increase in borrowing for investment purposes; in light of the rising stock them had extracted some of their home equity (not market and strong business conditions, some of this shown in table). Among families that removed some borrowing may include borrowing to invest in equiequity when they refinanced, the major uses reported ties or to start a new business. The shares of borrowfor the funds were home improvements or repairs ing for education, borrowing for purchases of goods (43.1 percent), payment of bills or bill consolidation and services, and borrowing from pension accounts (20.8 percent), investments (7.8 percent), education all rose. Borrowing for other residential real estate (6.4 percent), and vehicle purchases (4.5 percent). and for miscellaneous purposes both declined. First mortgages on primary residences may be used to purchase a home or to extract equity for other Choice of Lenders purposes. Borrowing for the initial home purchase accounts for the great majority of debt owed on first Reflecting ongoing changes in markets for financial mortgages. However, in 1998 approximately 41 per- services, the mix of institutions that families used for cent of all families with first mortgages had refi- borrowing shifted markedly (table 13). Continuing a nanced their home at some time, and 26.1 percent of secular decline, the share of family borrowing attrib- 14. Ratio of debt payments to family income, share of debtors with ratio above 40 percent, and share of debtors with any payment sixty days or more past due, by selected family characteristics, 1989, 1992, 1995, and 1998 surveys Percent Aggregate Median Family characteristic 1989 1992 1995 1998 1989 1992 1995 1998 All families 12.7 14.1 13.6 14.5 15.9 16.1 16.1 17.6 Income (1998 dollars) Less than 10,000 16.2 16.8 19.5 19.4 23.0 19.5 15.4 20.3 10,000-24,999 12.5 14.8 16.1 16.2 16.4 15.3 17.7 17.8 25,000-49,999 16.0 16.5 16.2 17.4 16.1 16.3 16.6 18.1 50,000-99,999 16.5 15.3 16.0 17.4 16.2 17.0 16.9 18.3 100,000 or more 8.0 10.7 8.7 10.0 11.8 13.7 11.1 13.1 Age of head (years) Less than 35 18.0 16.5 17.1 16.6 17.3 16.6 16.9 17.4 35^14 16.7 17.8 16.6 17.0 17.9 19.0 18.1 19.4 45-54 12.2 14.6 14.6 16.3 16.2 16.1 16.6 17.8 55-64 9.0 11.4 11.5 12.9 12.6 14.5 14.0 16.7 65-74 5.5 7.8 6.9 8.5 11.1 10.6 12.2 13.9 75 and more 2.1 3.4 2.9 3.9 9.8 5.0 3.4 8.9 Percentiles of net worth Less than 25 11.5 10.9 12.5 14.0 11.2 10.6 12.1 14.5 25-49.9 16.0 17.1 17.9 19.0 16.9 19.0 18.6 19.0 50-74.9 17.8 17.8 17.3 17.7 18.5 18.3 18.3 19.7 75-89.9 14.6 14.3 13.5 14.4 15.2 16.0 15.3 17.6 90-100 7.3 10.5 9.1 10.3 12.2 14.0 13.3 14.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 25 utable to savings and loan institutions and savings Interest rates on many types of loans fell somewhat banks moved down 1.2 percentage points from 1995 toward the end of the 1995-98 period. Over the to 1998. After rising in earlier surveys, the share of three-year period, family income rose broadly, the lending attributable to commercial banks also proportion of families with any type of debt fell declined, by 2.5 percentage points over the period. slightly, but the median amount owed increased sub- The share of families' debts held by mortgage and stantially.30 The net effect of all these movements on real estate lenders rose 3.2 percentage points, the the ability of families to service their loans is not share held by finance companies ticked up by 1 per- immediately obvious. centage point, and the share held by brokerages The ratio of total family debt payments to total moved up 1.8 percentage points.29 The shares of family income is a common measure of "debt burother nonfinancial lenders and of pension accounts den." Most often, this ratio is computed from aggrealso rose. At the same time, the importance of lend- gate data as the ratio of the total debt payments of ing by credit unions, individuals, government, credit all families to the total income of all families. Esticard lenders, and other lenders all declined. mates of this ratio constructed from the SCF data rose from 13.6 percent in 1995 to 14.5 percent in 1998 (table 14). This figure surpasses the 14.1 percent Debt Burden level recorded in the 1992 SCF, the previous high The rise in family indebtedness over the past decade point since 1989. has raised a concern that the debt might become The SCF data can also be used to compute the ratio excessively burdensome to families. The ability of by demographic group. With the exception of famifamilies to service their loans is a function of two lies in the less-than-35 age group, the ratio of payfactors: the terms of the loan payments and the ments to income held steady or rose between 1995 income and assets that families have available to and 1998 for every group in the table.31 The relative meet those payments. In planning their borrowing, size of the increase was particularly notable for famifamilies make assumptions about their future ability lies with incomes of $100,000 or more and those in to repay the loans. If events are sufficiently contrary the 65-or-older age groups. to their assumptions, the resulting defaults might induce restraint in spending and a broader pattern of financial distress in the economy. 30. As noted above, the SCF measures before-tax cash family income for the calendar year preceding the survey. 31. If the calculation of the ratio is limited to families that actually 29. In this analysis, the mortgages reported to be held by finance had debt, the results show very similar patterns of change between companies are classified with mortgage and real estate lenders. 1995 and 1998. 14.—Continued Percent Any payment sixty days Ratio above 40 percent FFaammiillyy or more past due cchhaarraacctteerriissttiicc 1989 1992 1995 1998 1989 1992 1995 1998 All families 10.1 10.9 10.5 12.7 7.3 6.0 7.1 Income (1998 dollars) Less than 10,000 28.6 28.4 27.6 32.0 20.9 11.6 8.4 15.1 10,000-24,999 15.0 15.5 17.3 19.9 12.2 9.3 11.3 12.3 25,000-49,999 9.1 9.6 8.0 13.8 4.8 6.3 8.6 9.2 50,000-99,999 4.9 4.4 4.2 5.7 4.5 2.2 2.7 4.5 100,000 or more 1.8 2.2 1.7 2.1 1.2 .5 1.3 1.5 Age of head (years) Less than 35 12.7 10.5 11.0 11.8 11.2 8.3 8.7 11.1 35-44 7.8 11.6 9.2 11.6 6.4 6.8 7.7 8.4 45-54 10.9 10.2 10.4 11.6 4.5 5.4 7.4 7.4 55-64 8.6 14.3 14.5 13.9 7.4 4.7 3.2 7.5 65-74 7.7 7.8 7.8 17.5 3.3 1.0 5.3 3.1 75 and more 14.1 8.7 8.9 20.9 1.2 1.8 5.4 1.1 Percentiles of net worth Less than 25 7.7 9.6 9.7 11.9 17.7 14.4 14.5 16.2 25-49.9 11.9 11.9 11.1 14.8 7.6 5.5 8.2 9.8 50-74.9 11.1 11.8 10.8 12.5 3.8 3.1 4.4 5.5 75-89.9 10.1 10.1 8.7 11.5 2.2 2.3 2.4 1.0 90-100 7.8 10.0 12.4 11.5 1.6 1.8 .7 2.4 NOTE. See note to table 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

26 Federal Reserve Bulletin • January 2000 While the aggregate ratios indicate the trends in groups considered in the article, but they declined for debt burdens for families and groups overall, the SCF a few groups. Underlying the rise in net worth was data also make it possible to look at the ratio of total wider ownership of many types of assets combined loan payments to income for typical borrowers. with higher valuations in key asset markets and a Among families with debt, the median ratio of pay- lesser rise in levels of indebtedness. ments to income stood at 15.9 percent in 1989; in Ownership of primary residences and retirement 1992 and 1995 it was only marginally higher, but in accounts increased notably between 1995 and 1998. 1998 it jumped to 17.6 percent. The median ratio also In addition, the proportion of families owning pubrose for almost every demographic group. The most licly traded stocks (either directly or through mutual striking increases were among families with incomes funds, retirement accounts, or other managed assets) of less than $10,000 and those in the 75-or-older jumped more than 8 percentage points, with substangroup. tial gains across income and age groups. For some Although both the aggregate and median measures demographic groups, increased ownership of assets of debt burden increased over the 1995-98 period, corresponded to declines in median holdings, most the levels of these ratios were still well below those likely because the "new" holders of these assets had often considered to be indicative of financial distress relatively small amounts. for individual borrowers. However, these measures The proportion of families with debt declined may not fully reflect problems among families with slightly over the period, but the median amount owed high levels of debt. One indicator of the prevalence jumped more than 42 percent. The median amount of of financial distress is the proportion of families mortgage debt grew strongly, although the overall whose debt payments represent more than 40 percent fraction of debt accounted for by mortgages declined. of their income. The fraction of such families, which On net, the ratio of debts to assets for all families was 10.1 percent in 1989, rose appreciably between declined a bit. However, some indicators of debt 1995 and 1998, from 10.5 percent to 12.7 percent. burden, such as the median ratio of debt payments to The measure rose for most demographic groups, with income among debtors, showed substantial increases. particularly large increases among families with Increases in overall mean and median income were incomes below $50,000 and those in the 65-or-older less dramatic than those for net worth, but for the first age groups. time since their low points observed in the 1992 SCF, If a family has any sort of debt at the time of the the mean and median pushed above their 1989 levels. survey, the SCF asks whether any payments have At least some part of the recent increases must be been late by sixty days or more at least once in the attributable to capital gains from the sale of assets. preceding year.32 The data show that the fraction of However, the 2.5 percentage point drop in the fracfamilies with debt who had been late rose from tion of families with incomes below $10,000 sug- 7.1 percent in 1995 to 8.1 percent in 1998—a high gests that improved employment and earnings for since 1989. Over the three-year period, the propor- some families were also key factors. tion rose notably in the under-$ 10,000 income group and the 55-64 age group and decreased in the oldest two age groups. APPENDIX: SURVEY PROCEDURES AND STATISTICAL MEASURES SUMMARY The 1998 data used here represent the best estimates at the current advanced stage of data processing, but Between 1995 and 1998, the mean and median net they may differ in some ways from the final version. worth of U.S. families rose considerably. These mea- Data from the 1998 SCF, suitably altered to protect sures of net worth rose for most of the demographic the privacy of respondents, will be available in February 2000 at www.federalreserve.gov/pubs/oss/oss2/ 98/scf98home.html. The data used in this article from the 1989, 1992, and 1995 SCFs are derived from the final versions of 32. The measure of late payments in the SCF differs conceptually those surveys. Results reported in this article may from the aggregate delinquency rate in some important respects. differ in some details from results reported earlier Whereas the delinquency rate records late payments on each loan in a given period, the survey asks families whether they have been late or either because of additional data processing, revibehind in any of their payments during the past year. Thus, for sions to the survey weights, or adjustments for example, a family with three delinquent loans would be counted three inflation. Further discussion of the methodology times in the aggregate data but only once in the SCF. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 27 underlying the SCF is available at the above web Second, a supplemental sample is selected to disaddress. proportionately include wealthy families, who hold Generally, the survey estimates correspond fairly a disproportionately large share of such thinly held well to external estimates. Comparisons of SCF esti- assets as noncorporate businesses and tax-exempt mates with aggregate data from the Federal Reserve bonds. This sample is drawn from a list of statistical flow of funds accounts suggest that when adjustments records derived from tax data. These records are are made to achieve conceptual comparability, these made available for this purpose under strict rules aggregate estimates and the SCF estimates are usu- governing confidentiality, the rights of potential ally very close.33 In general, only medians from the respondents to refuse participation in the survey, and SCF can be compared with those of other surveys the types of information that can be made available. because of the special design of the SCF sample. Of the 4,299 completed interviews in the 1995 survey, 2,780 families came from the area-probability sample, and 1,519 were from the list sample; the Definition of Family in the SCF comparable figures for the 4,309 cases completed in 1998 are 2,813 families from the area-probability The definition of "family" used throughout this sample and 1,496 from the list sample.35 article differs from that typically used in other government studies. In the SCF, a household unit is divided into a "primary economic unit" (PEU)—the The Interviews family—and everyone else in the household. The PEU is intended to be the economically dominant Since 1989, only minor changes to the SCF questionsingle individual or couple (whether married or living naires have been made, and then only in response to together as partners) and all other persons living financial innovations or to gather additional informain the household who are financially dependent on tion on the structure of family finances. Thus, the that person or those persons. In other government information obtained by the survey is highly compastudies—for example, those of the Bureau of the rable over this period. Census—an individual is not considered a family. In The generosity of families in giving their time for this report, the head of the family is taken to be the interviews has been crucial to the success of the SCF. central individual in a PEU without a core couple, the In the 1998 SCF, the median interview required about male in a mixed-sex core couple of the PEU, or the VA hours. However, for some particularly compliolder person in a same-sex core couple. The term cated cases, the amount of time needed was substan- "head" used in this article is an artifact of the organi- tially more than 2 hours. The role of interviewers in zation of the data and implies no judgment about the this effort is also critical: Without their dedication actual structure of families. and perseverance, the survey would not have been possible. Data for the 1995 and 1998 surveys were collected The Sampling Techniques by the National Opinion Research Center at the University of Chicago (NORC) between the months of The survey is expected to provide a core set of data June and December in each of the two years. The on family assets and liabilities. The major aspects of great majority of interviews were obtained in-person, the sample design that address this requirement have although interviewers were allowed to conduct telebeen fixed since 1989. The SCF combines two tech- phone interviews if that was more convenient for the niques for random sampling.34 First, a standard, respondent. In both years, interviewers used a promultistage area-probability sample (a geographically gram running on laptop computers to administer the based random sample) is selected to provide good survey and collect the data. coverage of characteristics, such as home ownership, The use of computer-assisted personal interviewthat are broadly distributed in the population. ing (CAPI) has the great advantage of enforcing systematic collection of data across all cases. In the implementation of CAPI for the SCF, the program 33. For the details of this comparison, see Rochelle L. Antonie- was tailored to allow the collection of partial informawicz, A Comparison of the Household Sector from the Flow of Funds Accounts and the Survey of Consumer Finances, Finance and Economics Discussion Series 1996-26 (Board of Governors of the Federal Reserve System, June 1996). 34. For additional technical details, see Kennickell and Woodburn, 35. The 1995 SCF represents 99.0 million families, and the 1998 "Consistent Weight Design." SCF represents 102.6 million families. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

28 Federal Reserve Bulletin • January 2000 tion in the form of ranges whenever a respondent Nonresponse—either complete nonresponse to the either did not know or did not want to reveal an exact survey or nonresponse to selected items within a dollar figure.36 survey—may be another important source of error. Response rates differ strongly in the two parts of As noted in more detail below, the SCF uses weightthe SCF sample. In both 1995 and 1998 about 70 per- ing to adjust for differential nonresponse to the surcent of households selected into the area-probability vey. To deal with missing information on individual sample actually completed interviews. The overall questions within the interview, the SCF uses statistiresponse rate in the list sample was about 35 percent; cal methods to impute missing data.38 in the part of the list-sample likely containing the wealthiest families, the response rate was only about 10 percent. Analysis of the data confirms that the tendency to refuse participation is highly correlated Weighting with net worth. To provide a measure of the frequency with which families similar to the sample families could be Sources of Error expected to be found in the population of all families, analysis weights are computed for each case to Errors may be introduced into survey results at many account for both the systematic properties of the stages. Sampling error, the variability expected to design and for differential patterns of nonresponse. occur in estimates based on a sample instead of a The SCF response rates are low by the standards of census, is a particularly important source of error. other major government surveys. However, unlike Such error may be reduced either by increasing other surveys, which almost certainly also have the size of a sample or, as is done in the SCF, by differential nonresponse by wealthy households, the designing the sample to reduce important sources of SCF has the means to adjust for such nonresponse. A variability. Sampling error can be estimated, and for major part of SCF research is devoted to the evaluathis article we use replication methods to do so. tion of nonresponse and adjustments for nonresponse Replication methods draw samples from the set of in the analysis weights for the survey.39 actual respondents in a way that incorporates the Preparations for the description of the 1998 SCF important dimensions of the original sample design. data included a detailed analysis of the assets and In the SCF, weights were computed for all the cases liabilities of families classified by a large number in each of the selected replicates. For each statistic of characteristics. At this stage, it became clear that for which standard errors are reported in this article, the 1998 SCF estimates of home ownership rates for the weighted statistic is estimated using the replicate nonwhites and Hispanics were substantially undersamples, and a measure of the variability of these stating the levels observed in other surveys, particuestimates is combined with a measure of the variabil- larly the Current Population Survey (CPS). The CPS ity due to imputation (see below) to yield the stan- was already used in weighting adjustments to benchdard error.37 mark the overall home ownership rate in the SCF. An In addition to errors of sampling, interviewers may examination of data from the earlier SCFs indicated introduce errors by failing to follow the survey proto- problems in other years as well, but the directions of col or misunderstanding a respondent's answers. SCF the differences were not consistent. interviewers are given lengthy, project-specific train- Because of the importance of SCF data in assessing to minimize such problems. Respondents may ing the financial behavior and well-being of nonintroduce error by interpreting a question in a sense whites and Hispanics, and because of the importance different from that intended by the survey. For the of home ownership as an indicator of key financial SCF, extensive pre-testing of questions and thorough relationships, it was decided to add a new adjustment review of the data tends to reduce this source of to the SCF weighting design to bring the survey's error. estimates of home ownership for nonwhites and His- 38. For a description of the imputation procedures used in the SCF, 36. For a review of the SCF experience in the collection of see Arthur B. Kennickell, "Multiple Imputation in the Survey of range data, see Arthur B. Kennickell, "Using Range Techniques Consumer Finances," in Proceedings of the Section on Business and with CAPI in the 1995 Survey of Consumer Finances" (Board of Economic Statistics (1998 Annual Meetings of the American Statisti- Governors of the Federal Reserve System, January 1997). Available at cal Association, Dallas, August), pp. 11-20. www.federalreserve.gov/pubs/oss/oss2/method.html. 39. For a description of the weighting methodology, see Kennickell 37. See Kennickell and Woodburn, "Consistent Weight Design." and Woodburn, "Consistent Weight Design." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Results from the 1998 Survey of Consumer Finances 29 panics more in line with the CPS estimates.40 Such For this article, the weights of a small number of adjusted weights were computed for the 1989, 1992, cases have been further adjusted to diminish the 1995, and 1998 surveys, and these weights were used possibility that the results reported could be unduly in all calculations reported in this article. These affected by influential observations. Such influential weights are available in the public version of the SCF observations were detected using a graphical techdata sets as X42001. nique to inspect the weighted distribution of the underlying data. Most of the cases found were holders of an unusual asset or liability or members of 40. Details of the adjustments are given in Arthur B. Kennickell, "Revisions to the SCF Weighting Methodology: Accounting for demographic groups in which such holdings were Race/Ethnicity and Homeownership" (Board of Governors of rare. These weight adjustments are likely to make the the Federal Reserve System, December 1999). Available at key findings in the article more robust. • www.federalreserve.gov/pubs/oss/oss2/method.html. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

30 Staff Studies The staff members of the Board of Governors of the necessarily indicate concurrence by the Board of Federal Reserve System and of the Federal Reserve Governors, by the Federal Reserve Banks, or by Banks undertake studies that cover a wide range of members of their staffs. economic and financial subjects. From time to time Single copies of the full text of each study are the studies that are of general interest are published available without charge. The titles available are in the Staff Studies series and summarized in the shown under "Staff Studies" in the list of Federal Federal Reserve Bulletin. The analyses and con- Reserve Board publications at the back of each clusions set forth are those of the authors and do not Bulletin. STUDY SUMMARY USING SUBORDINATED DEBT AS AN INSTRUMENT OF MARKET DISCIPLINE Federal Reserve System Study Group on Subordinated Notes and Debentures A growing number of observers have proposed using potential for SND to exert market discipline on banks subordinated notes and debentures (SND) as a way of and presents a wide range of new evidence acquired increasing market discipline on banks and banking by the study group. This includes information gathorganizations. Although policy proposals vary, all ered from extensive interviews with market particiwould mandate that banks subject to the policy must pants, new econometric work, and the experience issue and maintain a minimum amount of SND. In of bank supervisors. The third major section of the recent years, the perceived need for more market study analyzes many characteristics that an SND discipline has derived primarily from the realization policy could have, in terms of both their contribution that the increasing size and complexity of the major to market discipline and their operational feasibility. banking organizations has made the supervisor's job These potential characteristics include the types of of protecting bank safety and soundness ever more institutions that should be subject to an SND policy; difficult. A second important motivation is the desire the amount that should be required; the maturity, to find market-based ways of better insulating the optionality, interest rate cap, and other possible feabanking system from systemic risk. In light of the tures of the debt instrument; the frequency of issuongoing interest in using SND as an instrument of ance; and the way a transition period might work. market discipline, in mid-1998 staff of the Federal The study also includes appendixes that (1) provide a Reserve System undertook a study of the issues sur- detailed summary of the study group's interviews rounding an SND policy.1 with market participants, (2) examine the potential The study begins by carefully defining market dis- for banks to avoid SND discipline, (3) analyze the cipline, discusses the motivation for and theory potential macroeconomic effects of an SND policy, behind a subordinated debt policy, and presents an and (4) review the Argentine experience with impleextensive summary of existing policy proposals. The menting a mandatory subordinated debt policy. study then reviews the economic literature on the Because the overall purpose of the study is to conduct a broad review and evaluation of the issues, 1. This study was completed in May 1999, before enactment of the no policy conclusions are advanced. However, the Gramm-Leach-Bliley Act in November 1999. That act requires that overall tone of the study suggests that a properly the Federal Reserve Board and the U.S. Department of the Treasury designed SND policy is operationally feasible and conduct a joint study of the feasibility and appropriateness of requiring large insured depository institutions and depository holding com- would likely impose significant additional market panies to hold a portion of their capital in subordinated debt. The joint discipline on the banking institutions to which it study must be submitted to the Congress within eighteen months of applied. In addition, the study makes clear that the date of enactment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

31 assessment of a policy proposal would be helped fits of using the existing SND market, along with greatly by additional research in several areas: for existing markets for bank equity and other uninsured example, the marginal costs and benefits of required liabilities, to aid in bank supervisory surveillance SND issuance relative to those of the existing subor- activities. • dinated debt market and the potential costs and bene- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

32 Industrial Production and Capacity Utilization for November 1999 Released for publication December 15 total industry was unchanged at 81.0 percent, a level 1 percentage point below its 1967-98 average. Industrial production advanced 0.3 percent in November after a 0.8 percent increase in October. At MARKET GROUPS 139.5 percent of its 1992 average, industrial production in November was 4.3 percent higher than in The output of consumer goods ticked up 0.1 percent November 1998. The rate of capacity utilization for in November after having risen 1.6 percent in Octo- Industrial production and capacity utilization Ratio scale, 1992= 100 Percent of capacity _ Industrial production 140 Capacity utilization Manufacturing _ - 130 A/ Total industry - 85 - Total industry _ 120 110 » Manufacturing VV^J* 100 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1990 1992 1994 1996 1998 1988 1990 1992 1994 1996 1998 Industrial production, market groups Ratio scale, 1992 = 100 Ratio scale, 1992 = 100 Consumer goods 155 Intermediate products 155 - 145 - 145 _ Ajsp y — 135 135 Durable Vy — 125 — — 175 Construction supplies ff*^ - f — 115 115 105 105 Business supplies Nondurable 95 95 i V i i i i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 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, November. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

33 Industrial production and capacity utilization, November 1999 Industrial production, index, 1992=100 Percentage change CCaatteeggoorryy 11999999 19991 NNoovv.. 11999988 ttoo Aug.r Sept.r Oct.r Nov. P Aug.' Sept.r Oct.r Nov. P NNoovv.. 11999999 Total 137.7 138.0 139.1 139.5 4.3 Previous estimate 137.6 137.6 138.5 Major market groups Products, total2 127.6 127.5 128.8 129.0 1.1 3.1 Consumer goods 117.6 116.9 118.8 118.9 1.6 2.8 Business equipment 173.9 173.8 174.9 175.4 .6 5.0 Construction supplies 132.9 134.0 135.0 136.0 4.4 Materials 154.6 155.6 156.3 157.3 6.3 Major industry groups Manufacturing 142.5 142.9 144.0 144.6 .4 .5 4.6 Durable 174.4 174.9 176.1 177.0 .3 .7 .6 7.0 Nondurable 111.5 111.8 112.8 113.2 .4 .9 .3 1.4 Mining 98.5 98.4 99.2 99.9 .8 .8 .7 -1.5 Utilities 117.8 116.9 119.2 116.4 -1.7 1.9 -2.3 5.0 Capacity utilization, percent 1998 1999 Average, Low, High, 1967-98 1982 1988-8' Nov. Aug.r Sept.r Oct. Nov. P Total 82.1 71.1 85.4 80.9 80.7 80.6 81.0 81.0 4.2 Previous estimate 80.6 80.4 80.7 Manufacturing 81.1 69.0 85.7 80.2 79.7 79.7 80.0 80.1 4.7 Advanced processing 80.5 70.4 84.2 79.4 78.8 78.7 79.1 79.1 5.6 Primary processing . 82.4 66.2 88.9 82.6 82.8 82.8 83.0 83.3 2.4 Mining 87.5 80.3 88.0 84.2 81.9 81.9 82.6 83.2 -.2 Utilities 87.4 75.9 92.6 87.6 92.2 91.4 93.0 90.8 1.4 NOTE. Data seasonally adjusted or calculated from seasonally adjusted 2. Contains components in addition to those shown, monthly data. r Revised, 1. Change from preceding month. p Preliminary. ber. The production of durable consumer goods fell drop in the production of commercial aircraft and 0.3 percent, pulled down by a drop in home appli- parts. ances and televisions. After having advanced nearly The production of construction supplies rose Wi percent in October, the output of nondurable 3/4 percent for the third month in a row, to a level non-energy consumer goods rose 3A percent, led by 4V2 percent higher than in November 1998. The increases in food, tobacco, and consumer chemical output of materials increased 0.6 percent, a rise simiproduction. A 3.6 percent decline in the output of lar to the gains posted in the previous two months. energy products reflected an unusually warm Novem- Sizable increases in the production of steel and semiber as well as disruptions at a couple of petroleum conductors (the output of which has accelerated in refineries. the past two months) lifted the production of durable The production of business equipment increased goods materials 1.2 percent in November. The output for a second month; gains in information processing of nondurable goods materials, which had jumped equipment and other equipment offset decreases in nearly 1 percent in October, edged up 0.1 percent. industrial and transit equipment. Within the information processing group, the output of computers increased 2.1 percent, a step down from the high INDUSTRY GROUPS rates of growth seen recently. Within the "other equipment" category, farm machinery posted a large Manufacturing output rose V2 percent in November increase after having fallen much more sharply after a 3A percent gain in October. The increase in the during the past spring and summer. The output of output of durables was led by gains at makers of transit equipment was once again constrained by a primary metals (particularly iron and steel), motor Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

34 Federal Reserve Bulletin • January 2000 vehicles and parts, computers, semiconductors, and now expressed in 1996 dollars; these series begin communications equipment. While most other dura- in 1977. ble goods industries recorded increases, the output The updated IP measures include some annual data of commercial aircraft and construction machinery from the Census Bureau's 1997 Census of Manufacdeclined noticeably. The ongoing contraction in the tures and from selected editions of its 1998 Current production of commercial aircraft reduced the output Industrial Reports. Annual data from the U.S. Geoof aerospace and miscellaneous transportation equip- logical Survey on metallic and nonmetallic minerals ment in November to a level about 13 percent below (except fuels) for 1997 and 1998 are also introduced. that of November 1998. The updating includes revisions to the monthly indi- Production in nondurable manufacturing increased cator for each industry (either physical product data, for a fourth month after earlier weakness; the level production worker hours, or electric power usage) of production for nondurable manufacturing is and revised seasonal factors. 1.4 percent higher than a year earlier. Among non- The revision introduced improved measures of durables, food production increased nearly 1 percent production for computers and office equipment for a second month, as did chemicals and prod- (SIC 357) and motor vehicles (SIC 3711, 3). The new ucts. Losses were posted by the petroleum prod- monthly measure for computers is derived from ucts, textile, apparel, and printing and publishing detailed information on the major products produced industries. by the industry. For example, from 1994 to 1998, The factory operating rate edged up 0.1 percentage quarterly data on the physical quantity and average point, to 80.1 percent, the highest level since Novem- unit values of about 1,100 distinct models of personal ber 1998. The utilization rate for durable manufactur- computers, notebooks, servers, and workstations are ing was a bit above its 1967-98 average, while the used to construct the new IP index for computers; rate for nondurable manufacturing industries was previously, monthly electric power use by the induswell below its average. try was used as the within-year indicator of produc- The output at utilities fell 2lA percent in Novem- tion. The new measures of motor vehicle production ber; mine production, which was boosted by an incorporate price weights for the different models of increase in oil and gas well drilling, increased for the light vehicles; previously, all autos and light trucks second straight month. were weighted equally in compiling an aggregate figure. In addition, the monthly production indicators for bolts and fasteners (SIC 345) and for metalworking machinery (SIC 354) were changed from electric REVISION OF INDUSTRIAL PRODUCTION AND power use to production worker hours. CAPACITY UTILIZATION Capacity and capacity utilization rates have been On November 30, 1999, the Federal Reserve Board revised to incorporate preliminary data from the Cenpublished a revision to the index of industrial produc- sus Bureau's 1998 Survey of Plant Capacity, which tion (IP) and the related measures of capacity and covers manufacturing, along with other new data on capacity utilization for the period from January 1992 capacity from the U.S. Geological Survey, the Departto October 1999. The updated measures reflect both ment of Energy, and other organizations. the incorporation of newly available, more compre- The revision is available on the Board's web site, hensive source data typical of annual revisions and, at www.federalreserve.gov/releases/gl7, and on diskfor some series, the introduction of improved meth- ettes from Publications Services (telephone 202-452ods for compiling the series. The new source data are 3245). The revised data are also available through the for recent years, primarily 1997 and 1998, and the STAT-USA web site of the Department of Commerce modified methods affect data from 1992 onward. (www.stat-usa.gov). Further information on these In addition, the supplementary series on the gross revisions is available from the Board's Industrial value of products leaving the industrial sector are Output Section (telephone 202-452-3197). • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

35 Statement to the Congress Statement by Richard A. Small, Assistant Director, adopted by financial institutions to ensure their con- Division of Banking Supervision and Regulation, tinued adequacy. Board of Governors of the Federal Reserve System, The Federal Reserve places a high priority on before the Permanent Subcommittee on Investiga- participating in the government's efforts designed to tions of the Committee on Governmental Affairs, U.S. attack the laundering of proceeds of illegal activities Senate, November 10, 1999 through our nations's financial institutions. Over the past several years, the Federal Reserve has been actively engaged in these efforts by, among other I am pleased to appear before the Permanent Sub- things, redesigning the Bank Secrecy Act examicommittee on Investigations to discuss the Federal nation process, developing anti-money-laundering Reserve's role in the government's efforts to detect guidance, regularly examining the institutions we and deter money laundering and other financial supervise for compliance with the Bank Secrecy Act crimes, particularly as these issues relate to the pri- and relevant regulations, conducting money laundervate banking operations of financial institutions. ing investigations, providing expertise to the U.S. law You have asked the Federal Reserve to address enforcement community for investigation and trainseveral matters, including the Federal Reserve's ing initiatives, and providing training to various forreview of private banking activities; the extent to eign central banks and government agencies. which private banking is vulnerable to money laundering and what private banking activities raise concerns in this regard; the Federal Reserve's experience OVERVIEW OF PRIVATE BANKING in obtaining information from U.S. banks that conduct private banking activities outside the United Private banking offers the personal and discrete deliv- States; and any recommendations or comments ery of a wide variety of financial services and prodthe Federal Reserve may have with regard to the ucts to the affluent market, primarily high net worth strengthening of anti-money-laundering controls for individuals and their corporate interests who generprivate banking or on pending legislation. You have ally, on average, have minimum investable assets of also asked us to comment on the operations of a $1 million. Customers most often seek out the serspecific banking organization. I will address each of vices of a private bank for issues related to privacy, these matters; however, I am not at liberty to discuss such as security concerns related to public promithe activities of any one organization because of the nence or family considerations or, in some instances, confidentiality of examination findings that must be tax considerations. The private banking relationship maintained. is usually managed by a "relationship manager," who In order to better understand the money laundering is responsible for providing a high degree of personissues related to private banking, it would be very alized service to the customer and for developing and useful to first provide you with some background maintaining a strong, long-term banking relationship information on what we consider to be private bank- with that customer. ing and the way in which private banks operate. But Private banking accounts can typically be opened first, let me start by stating that, as a bank supervisor, in the name of an individual, a commercial business, of primary interest to the Federal Reserve is the need a law firm, an investment adviser, a trust, a personal to ensure that banking organizations operate in a safe investment company, or an offshore mutual fund. A and sound manner and have proper internal control private banking operation usually offers its customand audit infrastructures to support effective com- ers an all-inclusive money management relationship pliance with necessary laws and regulations. A key that could include investment portfolio management, component of internal controls and procedures is financial planning advice, custodial services, funds effective anti-money-laundering procedures. More- transfer, lending services, overdraft privileges, hold over, as part of our examination process, we review mail, letter-of-credit financing, and bill paying the anti-money-laundering policies and procedures services. These services, some of which I will Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

36 Federal Reserve Bulletin • January 2000 describe in some further detail in my testimony, may THE PRIVATE BANKING INDUSTRY be performed through a specific department of a commercial bank, an Edge corporation, a nonbank As the affluent market grows, both in the United subsidiary, or a branch or agency of a foreign bank- States and globally, competition to serve it has ing organization or in multiple areas of the institu- become more intense. Consequently, new entrants in tion, or such services may be the sole business of an the private banking marketplace include nonbank institution. financial institutions, as well as banks, and the range Private banking services almost always involve a of private banking products and services continues high level of confidentiality regarding customer to grow. A 1997 study estimated the private banking account information. Consequently, it is not unusual industry at $17 trillion globally and predicted that the for private bankers to assist their customers in achiev- private banking industry would grow at two to three ing their financial planning, estate planning, and con- times the pace of the overall consumer banking marfidentiality goals through offshore vehicles such as ket for the foreseeable future. personal investment corporations, trusts, or more Approximately 4,000 financial organizations are exotic arrangements, such as mutual funds. Through competing worldwide in the private banking market a financial organization's global network of affiliated with no one organization currently managing more entities, private banks often form the offshore vehi- than 2.5 percent of the estimated available business. cles for their customers. These shell companies, Private banking has a proven track record of being which are incorporated in such offshore jurisdictions profitable for banking organizations. as the Bahamas, the British Virgin Islands, the Cay- Typically, private banking services are organized man Islands, the Netherlands Antilles, and countries as a separate functional entity within the larger corpoin the South Pacific, such as the Cook Islands, Fiji, rate structure of a banking organization. As the pri- Nauru, and Vanuatu, are formed to hold the customvate banking industry has developed over the past er's assets, as well as offer confidentiality because the several years, the expectations of the customers have company, rather than the beneficial owner of the evolved. Historically, clients sought discretion, conassets, becomes the account holder at the private fidentiality, and asset preservation. This emphasis bank. has shifted as capital restraints have been dismantled, A customer's private banking relationship fre- and in some countries, autocratic regimes have been quently begins with a deposit account and then replaced with free market economies. expands into other products. Many banks require Today, while confidentiality is still important, private banking customers to establish a deposit investment performance has taken precedence. Priaccount before opening or maintaining any other vate banking customers' portfolios typically now accounts. To distinguish private banking accounts include a greater proportion of equities and sophistifrom retail accounts, institutions usually require sig- cated investment products. nificantly higher minimum account balances and assess higher fees. The customer's transactions, such as wire transfers, check writing, and cash deposits and withdrawals, are conducted through these deposit REVIEW OF PRIVATE BANKING ACTIVITIES accounts. Investment management for private banking cus- The Federal Reserve has long recognized that private tomers usually consists of either discretionary banking facilities, while providing necessary services accounts in which portfolio managers make the for a specified group of customers, can, without careinvestment decisions based on recommendations ful scrutiny, be susceptible to money laundering. In from the bank's investment research resources or our continuing efforts to provide relevant information nondiscretionary accounts in which customers and guidance in the area of effective anti-moneymake their own investment decisions. Private bank- laundering policies and procedures for private banking customers may request extensions of credit. ing, in 1997, the Federal Reserve published guidance Loans backed by cash collateral or managed assets on sound risk-management practices for private bankheld by the private banking function are quite ing activities. Besides distributing the guidance to common, especially in international private banking. all banking organizations supervised by the Federal Private banking customers may pledge a wide range Reserve, the guidance was made publicly availof their assets, including cash, mortgages, market- able through the Federal Reserve's web site. More able securities, land, or buildings, to secure their recently, the Federal Reserve developed enhanced loans. examination guidelines specifically designed to assist Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 37 examiners in understanding and reviewing private tively manage the private banking business and to banking activities. monitor for and report suspicious activity. Since 1996, the Federal Reserve has undertaken • Adequate segregation of duties to deter and pretwo significant reviews of private banking. In the fall vent insider misconduct and such things as unauthoof 1996, the Federal Reserve Bank of New York rized account activity and unapproved waivers of began a yearlong cycle of on-site examinations of the documentation requirements. risk-management practices of approximately forty banking organizations engaged in private banking During the course of the examinations, a number activities. Last year, a Private Banking Coordinated of banking organizations were reluctant to release Supervisory Exercise by several Reserve Banks and information on the beneficial ownership of personal Board staff was undertaken to better understand and investment corporations established in recognized assess the current state of risk-management practices secrecy jurisdictions that maintained accounts at the at private banks throughout the Federal Reserve banks. The banks raised concerns regarding the pro- System. hibition on disclosure imposed by the laws of the The examinations by the Federal Reserve Bank of countries in which the personal investment corpora- New York focused principally on assessing each tions were formed, as well as concerns that such organization's ability to recognize and manage the disclosures would lead to customer backlash. Howpotential risks, such as credit, market, legal, reputa- ever, as the result of continued persistence by Federal tional, or operational, that may be associated with an Reserve examiners, all banks provided the requested inadequate knowledge and understanding of its cus- information. Very few customers closed their tomers' personal and business backgrounds, sources accounts even after being asked to waive any confiof wealth, and uses of private banking accounts. dentiality protections that they may have had under These reviews were prompted by the Federal foreign law so that the beneficial ownership informa- Reserve's desire to enhance its understanding of the tion could be made available to examiners. risks associated with private banking. We recognized, In last year's Coordinated Supervisory Exercise, a for example, that some private banking operations sample consisting of the private banking activities of may not have been conducting adequate due dili- seven banking organizations was reviewed by a Sysgence with regard to their international customers. temwide team of examiners during regularly sched- While all organizations had anti-money-laundering uled safety and soundness examinations. As a result policies and procedures, the implementation and of the examinations, we concluded that the strongest effectiveness of those policies and procedures ranged risk-management practices existed at private banks from exceptional to those that were clearly in need of with high-end domestic customers. We found that improvement. among private banks with primarily international cus- As a result of the examinations of the private tomers, stronger risk-management practices were in banking activities of these organizations, which place at those organizations that had a prior history began in 1996, certain essential elements asso- of problems in this area but, as a result of regulatory ciated with sound private banking activities were pressure, had successfully corrected the problems. identified. These elements include the need for the The weakest risk-management practices were idenfollowing: tified at organizations whose private banking activities were only marginally profitable and who were • Senior management oversight of private banking attempting to build a customer base by targeting activities and the creation of an appropriate corporate customers in Latin America and the Caribbean. culture that embraces a sound risk-management and This exercise also identified emerging trends in the control environment to ensure that organization per- private banking industry, some of which were the sonnel apply consistent practices, communicate effec- following: tively, and assume responsibility and accountability for controls. • Established private banking operations maintain • Due diligence policies and procedures that strong risk-management controls and strong earnings, require banking organizations to obtain identification in contrast to relatively new entrants that have no and basic information from their customers, under- specific criteria for seeking customers and tend to stand sources of funds and lines of business, and have inadequate customer screening procedures. identify suspicious activity. • New software and hardware products are being • Management information systems that provide introduced into the marketplace that allow for banktimely information necessary to analyze and effec- ing organizations to direct products to their custom- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

38 Federal Reserve Bulletin • January 2000 ers, with the byproduct that these systems will allow identifying the beneficial owner of the account, unless for more effective identification of potentially suspi- the banking organization physically holds the bearer cious or criminal activity. shares in custody for the beneficial owner, which of course we encourage. The use of omnibus or concentration accounts by VULNERABILITIES TO MONEY LAUNDERING private banking customers that seek confidentiality for their transactions poses an increased vulnerability The Federal Reserve has addressed and continues to to banking organizations that the transactions could address perceived vulnerabilities to money launder- be the movement of illicit proceeds. Omnibus or ing in private banking by issuing private banking concentration accounts are a variation of suspense sound practices guidance and developing targeted accounts and are legitimately used by banks, among examination procedures for private banking, as well other things, to hold funds temporarily until they can as our regular on-site examinations of private bank- be credited to the proper account. However, such ing operations. There are some practices within pri- accounts can be used to purposefully break or convate banking operations that we believe pose unique fuse an audit trail by separating the source of the vulnerabilities to money laundering and, therefore, funds from the intended destination of the funds. This require a commitment by the banking organizations practice effectively prevents the association of the to increased awareness and due diligence. customer's name and account numbers with specific Personal investment corporations that are incorpo- account activity and easily masks unusual transacrated primarily in offshore secrecy or tax haven juris- tions and flows that would otherwise be identified for dictions and are easily formed and generally free of further review. tax or government regulation are routinely used to Much has been said about the use of correspondent maintain the confidentiality of the beneficial owner of accounts in facilitating money laundering transacaccounts at private banks. Moreover, and of primary tions. Admittedly, correspondent accounts may raise interest to the beneficial owners, are the apparent money laundering concerns because the interbank protections afforded the account holders by the flow of funds may mask the illicit activities of cussecrecy laws of the incorporating jurisdictions. Pri- tomers of a bank that is using the correspondent vate banking organizations have at times interpreted services. However, it is our belief that correspondent the secrecy laws of the foreign jurisdictions in which banking relationships, if subject to appropriate conthe personal investment corporations are located as a trols, play an integral role in the financial marketcomplete prohibition to disclosing beneficial owner- place by allowing banks to hold deposits and perform ship information. The Federal Reserve, however, has banking services, such as check clearing, for other continually insisted that for those accounts that are banks. This allows certain banks, especially smaller maintained within the United States, banking organi- institutions, to gain access to financial markets on a zations must be able to provide evidence that they more cost-effective basis than otherwise may be have sufficient information regarding the beneficial available. owners of the accounts to appropriately apply sound risk-management and due diligence procedures. A variant of personal investment corporation FOREIGN JURISDICTIONS accounts that could increase the risk of the accounts being used for money laundering purposes are per- A primary obstacle to our supervision of offshore sonal investment corporations that are owned through private banking activities by U.S. banking organizabearer shares. Bearer shares are negotiable instru- tions, not only with regard to beneficial ownership ments with no record of ownership so that title of the information but also with regard to the safety and underlying entity is held essentially by anyone who soundness of the operations, is our inability to conpossesses the bearer shares. Historically, bearer duct on-site examinations in many offshore jurisdicshares were used as a vehicle for estate planning in tions. While it appears that nearly all institutions that that at death the shares would be passed on to the we supervise have adequate anti-money-laundering deceased beneficiaries without the need for probate policies and procedures, our examination process of the estate. However, in the context of potential is most effective when we have the ability to review illicit activity being conducted through an entity and test an organization's policies and procedures. whose ownership is identified by bearer shares, it is Secrecy laws in some jurisdictions limit or restrict virtually impossible for a banking organization to our ability to conduct these on-site reviews or to apply sound risk-management procedures, including obtain pertinent information. In such instances, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statement to the Congress 39 practically our only alternative is to rely on a bank's The Federal Reserve has been contemplating, in internal auditors. cooperation with the banking industry, developing A number of offshore jurisdictions are currently guidance to assist banking organizations in implepreparing for on-site examinations by home country menting money laundering risk assessments of their supervisors. This effort is being led in large part by customer base. These risk assessments would be used members of the Basle Committee on Banking Super- to determine the appropriate due diligence required to vision and the Offshore Group of Banking Supervi- identify and, when necessary, report suspicious activsors. A report issued by these groups in 1996 stated, ity. For example, because of the increased concern that private banking accounts could be used for While recognizing that there are legitimate reasons for money laundering, we would expect that guidance in protecting customer privacy . . . secrecy laws should not this area would suggest that it may be necessary to impede the ability of supervisors to ensure safety and engage in a more in-depth analysis of a customer's soundness of the international banking system. intended use of the account coupled with a heightened ongoing review of account activity to determine if, in fact, the customer has acted in accordance with LEGISLATIVE AND REGULATORY INITIATIVES the expectations developed at the inception of the relationship. We believe that such policies and proce- The Federal Reserve has continually supported dures will be an effective tool against potential money efforts to better and more effectively attack money laundering activity. laundering activities because of our supervisory interests in establishing policies and procedures thwarting The banking system has a significant interest in money laundering, as well as our interests in support- protecting itself from being used by criminal eleing and participating in law enforcement's efforts to ments. Individual banking organizations have comdetect and deter money laundering. The use of the mitted substantial resources and achieved noticeable banking system to launder the proceeds of criminal success in creating operational environments that are activity can certainly damage the reputation of the designed to protect their institutions from unknowbanks involved, as well as have a detrimental impact ingly doing business with unsavory customers and on the banking sector as a whole. money launderers. Clearly, these efforts need to con- The proposed "Foreign Money Laundering Deter- tinue and the momentum needs to be maintained. I rence and Anticorruption Act" addresses a number want to emphasize that the Federal Reserve actively of areas in which current requirements would be supports these efforts. Consequently, we will constrengthened. We note that a number of the pro- tinue our cooperative efforts with other bank supervivisions of the proposed legislation address similar sors and the law enforcement community to develop issues to those set forth in the recently released and implement effective anti-money-laundering pro- National Money Laundering Strategy. The Strategy grams addressing the ever-changing strategies of requires a review of a number of critical areas in criminals who attempt to launder their illicit funds which the Federal Reserve will be an active partici- through private banking operations, as well as pant, and we believe that the results of the reviews through other components of banking organizations will provide information that should be useful to the here and abroad. • legislative process. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

40 Announcements ACTION BY THE FEDERAL OPEN MARKET MODIFICATIONS TO THE SETTLEMENT FINALITY COMMITTEE AND AN INCREASE IN THE FOR ACH CREDIT TRANSACTIONS PROCESSED DISCOUNT RATE BY FEDERAL RESERVE BANKS The Federal Open Market Committee on Novem- The Federal Reserve Board on November 12, 1999, ber 16, 1999, voted to raise its target for the fed- approved modifications to the settlement finality for eral funds rate by 25 basis points to 5Vi percent. In automated clearinghouse (ACH) credit transactions a related action, the Board of Governors approved processed by the Federal Reserve Banks so that a 25 basis point increase in the discount rate to settlement becomes final when posted to depository 5 percent. institutions' accounts. The Board will require pre- Although cost pressures appear generally con- funding for any ACH credit transactions that settle tained, risks to sustainable growth persist. Despite through a Federal Reserve account that is being monitentative evidence of a slowing in certain interest- tored in real time to help manage settlement risk. sensitive sectors of the economy and of accelerating The Reserve Banks will be modifying their softproductivity, the expansion of activity continues ware and their ACH operating circular to implement in excess of the economy's growth potential. As a settlement-day finality. To permit time for these consequence, the pool of available workers willing to changes, settlement-day finality and prefunding will take jobs has been drawn down further in recent be implemented in early 2001. A specific implemonths, a trend that must eventually be contained if mentation date will be announced three months in inflationary imbalances are to remain in check and advance of the effective date. economic expansion continue. Today's increase in the federal funds rate, together with the policy actions in June and August and the firming of conditions more generally in U.S. financial ADJUSTMENT OF THE DOLLAR AMOUNT markets over the course of the year, should markedly THAT TRIGGERS CERTAIN DISCLOSURE diminish the risk of inflation going forward. As a REQUIREMENTS UNDER THE TRUTH IN consequence, the directive the Federal Open Market LENDING ACT Committee adopted is symmetrical with regard to the outlook for policy over the near term. The Federal Reserve Board on November 3, 1999, In taking the discount rate action, the Federal published its annual adjustment of the dollar amount Reserve Board approved requests submitted by the that triggers additional disclosure requirements under Boards of Directors of the Federal Reserve Banks of the Truth in Lending Act for mortgage loans that bear Boston, Cleveland, Richmond, and Kansas City. Sub- fees above a certain amount. sequently the Board approved similar requests by the The Board has adjusted the dollar amount from board of directors of the Federal Reserve Bank of $441 for 1999 to $451 for 2000 based on the annual San Francisco, also effective on November 16; by the percent change reflected in the consumer price index boards of directors of the Federal Reserve Banks of that was in effect on June 1, 1999. The adjustment is Atlanta and Dallas, effective November 17; and by effective January 1, 2000. the boards of directors of the Federal Reserve Banks The Home Ownership and Equity Protection Act of St. Louis, New York, Philadelphia, Chicago, and of 1994 bars credit terms such as balloon payments Minneapolis, effective November 18. The discount and requires additional disclosures when total points rate is the rate charged depository institutions when and fees payable by the consumer exceed $400 (to be they borrow short-term adjustment credit from their adjusted annually) or 8 percent of the total loan District Federal Reserve Banks. amount, whichever is larger. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

41 PROPOSED ACTION about their Year 2000 readiness. The percentage of American adult depositors who have received infor- The Federal Reserve Board on November 3, 1999, mation about Y2K readiness from their financial published proposed revisions to the official staff com- institutions has significantly increased over the past mentary that applies and interprets the requirements seven months: An estimated 70 percent now report of Regulation Z (Truth in Lending). Comments are receiving information from their financial institution, requested by January 10, 2000. compared with 23 percent in March. Additionally, in March, 52 percent of respondents reported having seen or heard a great deal about the Y2K issue, but that percentage is now up to 68 percent. REVIEW OF PUBLICATIONS ACTIVITIES Only about 5 percent of bank customers currently OF THE FEDERAL RESERVE BOARD indicate that they are very concerned about the Y2K issue, down from 11 percent in the March report. The Federal Reserve Board on November 3, 1999, The November findings support the notion that announced a review of its publications activities. As a decreased level of concern about the likely effect of part of this effort, the Board is seeking public com- the century date change on computers is related to ment on how the Board's publications are individu- increased information about the Y2K issue. Conally and collectively meeting information needs and sumer confidence in their own financial institutions to offer suggestions for improving or possibly elimi- has also increased. More than 90 percent of those nating some publications or adding new ones. Com- surveyed expressed confidence in their own banks, ments are requested by December 17, 1999. with the proportion of those saying they would definitely or probably take extra cash declining from 62 percent to 39 percent in the period between the March and October surveys. A majority of those who plan to withdraw extra cash say that they will take SURVEY RESULTS ON CONSUMER CONFIDENCE less than $500. IN BANKS' Y2K PREPARATIONS The survey results also indicate that the public is The Federal Reserve Board and the Federal Deposit increasingly confident that basic payment systems Insurance Corporation (FDIC) announced on Novem- will work properly during the century date change. ber 18, 1999, the results of a survey by the Gallup Most American adult depositors believe that they will Organization. According to the survey, current fig- have access to their money; that checks will continue ures indicate that nine out of ten U.S. bank cus- to be processed accurately; and that automatic teller tomers believe that their banks are ready for the machines, credit card systems, and electronic direct Year 2000—or Y2K. By comparison, a March survey deposits will function normally. found that an estimated 76 percent of bank customers Edward W. Kelley, Jr., a member of the Board of were confident that their banks would solve the Y2K Governors of the Federal Reserve System stated, problem. Both surveys were sponsored by federal financial From the beginning of our preparations for Y2K we said that there were two challenges facing us—the technical institution regulatory agencies. The Federal Reserve challenge and the challenge of public confidence. I believe Board and the FDIC sponsored the current survey, we've met the technical challenge and these data indicate which was delivered to the agencies on Novem- we've made good progress in ensuring Americans know ber 15, 1999. The results, which are based on about we are ready for the century rollover. 1,400 completed interviews, are from an ongoing survey of adult Americans who have bank accounts. Over the past three years, FDIC-insured financial "The survey underscores growing consumer confi- institutions have been identifying and overhauling dence that banks are prepared for Y2K and that it will systems to make them Year 2000-ready. At the same be business as usual for bank customers on January 1, time, the regulatory agencies have been closely moni- 2000 and thereafter," said FDIC Chairman Donna toring their efforts. As of today, the regulators have Tanoue. assigned a "Satisfactory" rating, the highest possible The most recent Gallup report indicates that finan- rating, to 99.9 percent of FDIC-insured financial cial institutions have been informing their customers institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

42 Federal Reserve Bulletin • January 2000 RELEASE OF A REPORT ON A SURVEY INCREASE IN ADVERSELY CLASSIFIED OF WEB SITE PRIVACY SYNDICATED BANK LOANS The four federal banking agencies (the Federal The Federal Reserve Board, the Federal Deposit Reserve Board, the Federal Deposit Insurance Cor- Insurance Corporation, and the Office of the Compporation, the Comptroller of the Currency, and the troller of the Currency released data on Novem- Office of Thrift Supervision) on November 9, 1999, ber 10, 1999, on syndicated bank loans rated released a report on the results of a survey of Internet adversely by examiners. According to the data, synprivacy policies of banking and thrift institutions. dicated bank loans rated adversely by examiners The survey report, titled Interagency Financial increased in 1999 from low levels. The agencies Institution Web Site Privacy Survey Report, examined released aggregate data for the past six years and data 314 World Wide Web sites selected randomly, plus by major industry sector for the past three years. those of the 50 largest banks and thrift institutions Under the Shared National Credit (SNC) Program, with web sites. Conducted during May and July by the agencies review large syndicated loans annually, the federal agencies that supervise the institutions, usually in May and June. The program, established in the survey examined the collection of consumer 1977, is designed to provide an efficient and consisinformation, interactive capabilities, and privacy dis- tent review and classification of any loan or loan closures at these sites. The purpose of the survey was commitment shared by three or more institutions and to provide an indication of the state of the industry totaling $20 million or more. with respect to data collection and on-line privacy In 1999, the SNC Program covered 8,974 credits to disclosures. 5,587 borrowers totaling $1.8 trillion in drawn and Overall, 48 percent of the 364 web sites surveyed undrawn loan commitments. Of the total, $37.4 bilposted a privacy disclosure—a privacy policy (a com- lion, or 2 percent, was classified adversely because of prehensive statement regarding the collection and use default or other significant credit concerns. That was of consumer information) or an information practice up from the lowest level this decade, 1.3 percent in statement (a statement describing a particular infor- 1998, but still significantly below the 4.1 percent mation handling policy or practice, such as data level reached in 1994. security). Sixty-two percent of web sites that col- Borrowers have drawn down about a third of the lected personal information provided a privacy dis- $1.8 trillion in loan commitments, or $630 billion. Of closure. Sites that collected personal information this amount, $33 billion, or 5.3 percent, was classiwere three times as likely to post a privacy policy as fied adversely, up from 3.2 percent in 1998 but down sites that did not collect personal information. The from 11 percent in 1994. survey also found that 96 percent of the nation's fifty The percentage of adversely classified credits rose largest banks and thrifts that are on-line provided a in 1999 for most major industry sectors compared privacy policy or information practice statement. with 1998. The rise was sharpest for service indus- The agencies began work on the survey in Febru- tries because of a large increase in problem loans in ary 1999. The agencies will monitor, as appropriate, the health-care sector. Other industries recording an the industry's progress in responding to consumer increase included oil and gas and wholesale and retail privacy issues and complying with the new legal trade. mandates contained in the financial services reform Credits listed as "special mention" by examiners legislation through regular supervisory activities. because of potential weakness—a less serious cate- This survey supplements previous web site surveys gory than the three adverse classifications: substanthat did not focus on financial institutions, such as dard, doubtful, and loss—totaled $31.4 billion in the Federal Trade Commission's "Privacy Online: 1999, up from $22.8 billion in 1998 but about the A Report to Congress" (June 1998), and the George- same as in 1994. town Internet Privacy Policy Survey "Privacy Online in 1999: A Report to the Federal Trade Commission" (June 1999). Because the sample popula- ENFORCEMENT ACTIONS tion and content of the questionnaire used to conduct the interagency survey differ materially from those in The Federal Reserve Board on November 16, 1999, the surveys cited, direct comparisons between the announced the issuance of a consent order against results of the various surveys should not be made. Robert and Adele Barber, both institution-affiliated Copies of the survey report are available on the parties of the First Western Bank, Cooper City, agencies's web sites. Florida, a state member bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 43 The individuals, without admitting to any allega- Bertram Smith, an institution-affiliated party of the tions, consented to the order to resolve allegations First Western Bank, Cooper City, Florida, a state that they violated the Change in Bank Control Act in member bank. connection with their acquisition of beneficial owner- The individual, without admitting to any allegaship of the shares of the bank. tions, consented to the order to resolve allegations that he violated the Change in Bank Control Act in The Federal Reserve Board on November 16, 1999, connection with his acquisition of beneficial ownerannounced the issuance of a consent order against ship of the shares of the bank. Matthew J. Callahan, an institution-affiliated party of the First Western Bank, Cooper City, Florida, a state The Federal Reserve Board on November 16, 1999, member bank. announced the execution of a written agreement The individual, without admitting to any allega- by and among Heritage Bancorp Company, Inc., tions, consented to the order to resolve allegations Cleveland, Oklahoma; the First Bank of Cleveland, that he violated the Change in Bank Control Act in Cleveland, Oklahoma; the Federal Reserve Bank of connection with his acquisition of beneficial owner- Kansas City; and the Oklahoma State Banking ship of the shares of the bank. Department. • The Federal Reserve Board on November 16, 1999, announced the issuance of a consent order against Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

44 Minutes of the Meeting of the Federal Open Market Committee Held on October 5, 1999 A meeting of the Federal Open Market Committee Mr. Kumasaka, Assistant 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, October 5, 1999, at 9:00 a.m. Division of Monetary Affairs, Board of Governors Present: Mr. Greenspan, Chairman Ms. Browne, Messrs. Eisenbeis, Goodfriend, Kos, Mr. McDonough, Vice Chairman Rasche, and Sniderman, Senior Vice Presidents, Mr. Boehne Federal Reserve Banks of Boston, Atlanta, Mr. Ferguson Richmond, New York, St. Louis, and Cleveland Mr. Gramlich respectively Mr. Kelley Mr. McTeer Messrs. Judd and Sullivan, Vice Presidents, Federal Mr. Meyer Reserve Banks of San Francisco and Chicago Mr. Moskow respectively Mr. Stern Mr. Filardo, Assistant Vice President, Federal Reserve Messrs. Broaddus, Guynn, Jordan, and Bank of Kansas City Parry, Alternate Members of the Federal Open Market Committee By unanimous vote, the minutes of the meeting of the Federal Open Market Committee held on Mr. Hoenig, Ms. Minehan, and Mr. Poole, Presidents August 24, 1999, were approved. of the Federal Reserve Banks of Kansas City, The Manager of the System Open Market Account Boston, and St. Louis respectively reported on recent developments in foreign exchange Mr. Kohn, Secretary and Economist markets. There were no open market operations in Ms. Fox, Assistant Secretary foreign currencies for the System's account in the Mr. Gillum, Assistant Secretary period since the previous meeting, and thus no vote Mr. Mattingly, General Counsel was required of the Committee. Mr. Prell, Economist Ms. Johnson, Economist The Manager also reported on developments in domestic financial markets and on System open mar- Ms. Cumming, Messrs. Howard, Lang, Lindsey, ket transactions in government securities and federal Rolnick, Rosenblum, Slifman, and Stockton, agency obligations during the period August 24, Associate Economists 1999, through October 4, 1999. By unanimous vote, the Committee ratified these transactions. Mr. Fisher, Manager, System Open Market Account The information reviewed at this meeting suggested that the expansion of economic activity was Messrs. Ettin and Reinhart, Deputy Directors, Divisions of Research and Statistics and substantial in the quarter just ended. Consumer International Finance respectively, spending and business investment in durable equip- Board of Governors ment remained strong, and inventory investment picked up from the sluggish pace of the second Messrs. Madigan and Simpson, Associate Directors, quarter, while residential housing activity showed Divisions of Monetary Affairs and Research and some signs of deceleration. To meet aggregate Statistics respectively, Board of Governors demand, industrial production increased further and employment gains continued to be relatively robust, Mr. Whitesell, Assistant Director, Division of Monetary Affairs, Board of Governors keeping labor markets taut. Inflation was moderate, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

45 but somewhat above that in 1998, owing to a sharp shipments ratio remained at the bottom of its range rebound in energy prices. for the past twelve months. Wholesalers also Although private nonfarm payroll employment increased their inventories in July; while the expanded relatively slowly in August, the slowdown inventory-shipments ratio for this sector rose, it was had followed a surge in July, and growth for the two in the low end of its range for the past year. In the months was very close to the brisk pace of the first retail sector, inventories contracted somewhat in July, half of the year. Job gains in the service-producing and the inventory-sales ratio for this sector also was sector remained strong in the July-August period, near the bottom of its range over the past year. while employment in the goods-producing sector The nominal deficit on U.S. trade in goods and continued to decline, though at a slightly slower rate services widened in July from its second-quarter than earlier in the year. The civilian unemployment average, with the value of imports rising more than rate dropped back to 4.2 percent in August, matching the value of exports. The increase in imports was its low for the year. concentrated in aircraft, consumer goods, industrial Industrial production was up appreciably further supplies, and oil. The step-up in exports on balance in July and August. Mining activity rose occurred primarily in industrial machinery and semimarkedly, utility output increased moderately on conductors. Among the major foreign industrial counbalance, and manufacturing production recorded a tries, the limited available information suggested that further sizable advance over the two months. Within economic activity was strengthening in Europe and manufacturing, high-tech goods and motor vehicles the United Kingdom in the third quarter while ecowere sources of particular strength, while the produc- nomic indicators for Japan were mixed after the tion of nondurable goods changed little. The rate of strong advance in the first half of the year. Economic utilization of manufacturing capacity climbed over growth in Canada seemed to be continuing at a robust the two months but remained well below its long- pace, and economic recovery in most of the Asian term average. emerging-market economies was proceeding briskly. Total retail sales posted strong gains over July and Inflation remained relatively moderate, though August. Increases in sales were spread across all somewhat above the pace of 1998 because of a sharp major categories, with spending for nondurable goods rebound in energy prices. Overall consumer prices and motor vehicles notably strong. Expenditures on increased in July and August at about the secondservices rose moderately in the two-month period. quarter rate. Abstracting from the sharp advances in There were mixed signals with regard to the housing energy prices and the mild increases in food prices, sector. Construction was at a high level, the inventory consumer inflation continued to be relatively subdued of unsold homes remained quite low, and starts of over the two months. In the past twelve months, the multifamily units rose over the July-August period. core CPI rose less than in the previous twelve-month However, single-family housing starts edged lower period. At the producer level, prices of finished on balance over July and August, and sales of exist- goods other than food and energy were essentially ing homes weakened. unchanged over the two months; moreover, the The available information suggested that business change in core producer prices in the past year was capital spending continued to climb rapidly. Ship- about the same as in the year-earlier period. At earlier ments of nondefense capital goods posted further stages of processing, however, producer prices of large gains in July and August, with outlays for crude and intermediate materials excluding food and high-tech machinery and transportation equipment energy had firmed noticeably over recent months. particularly strong. In addition, new orders for dura- Average hourly earnings continued to grow at a modble equipment turned up sharply in the two months. erate pace over July and August, and the rise over the Nonresidential construction activity changed little on past year was considerably smaller than that for the balance in July as continued strength in the office and year-earlier period. an increase in the lodging and miscellaneous catego- At its meeting on August 24, 1999, the Committee ries offset reductions in the industrial and non-office adopted a directive that called for a slight tightening commercial categories. of conditions in reserve markets consistent with an Manufacturing and trade inventories, outside of increase of lA percentage point in the federal funds motor vehicles, picked up sharply in July after post- rate to an average of around 5'A percent. The meming a small increase in the first half of the year, but bers noted that this move, together with the firming in inventories remained lean in relation to sales. In June, should help to keep inflation subdued and to manufacturing, stocks rebounded from a substan- promote sustainable economic expansion. The Comtial June decline; however, the aggregate stock- mittee also agreed that the directive should be sym- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

46 Federal Reserve Bulletin • January 2000 metric. A possible rise in inflation remained the main to expand at a pace somewhat above the middle of its threat to sustained economic expansion, but it was range. not anticipated that further tightening would be The staff forecast prepared for this meeting sugneeded in the near term and there would be time to gested that the expansion would gradually moderate gather substantially more information about the bal- to a rate around or perhaps a little below the growth ance of risks relating to trends in aggregate demand of the economy's estimated potential. The growth and supply. of domestic final demand increasingly would be held Open market operations after the meeting were back by the anticipated waning of positive wealth directed toward implementing and maintaining the effects associated with earlier large gains in equity desired slight tightening of pressure on reserve posi- prices; the slower growth of spending on consumer tions, and the federal funds rate averaged very close durables, houses, and business equipment in the wake to the Committee's 5lA percent target. Most other of the prolonged buildup in the stocks of these items; short-term market interest rates posted small mixed and the higher intermediate- and longer-term interest changes on balance because the policy action was rates that had evolved as markets came to expect that widely anticipated and the FOMC's policy announce- a rise in short-term interest rates would be needed to ment after the August 24 meeting referenced mark- achieve a better balance between aggregate demand edly diminished inflation risks. However, longer-term and aggregate supply. The lagged effects of the earyields rose somewhat over the intermeeting period in lier rise in the foreign exchange value of the dollar response to the receipt of new information indicating were expected to place continuing, but substantially both surprisingly strong spending at home and abroad diminishing, restraint on U.S. exports for some period and higher commodity prices. Most measures of ahead. Core price inflation was projected to rise share prices in equity markets registered sizable somewhat over the forecast horizon, in part as a declines over the intermeeting period, apparently result of higher non-oil import prices and some firmreflecting not only higher interest rates but also ing of gains in nominal labor compensation in persisconcerns that U.S. stocks might be overvalued and tently tight labor markets that would not be fully that foreign equities were becoming relatively more offset by rising productivity growth. attractive as economic prospects brightened abroad. In the Committee's discussion of current and pro- In foreign exchange markets, the trade-weighted spective economic conditions, members commented value of the dollar changed little over the period in that the incoming information suggested that the relation to the currencies of a broad group of impor- expansion had been considerably stronger in recent tant U.S. trading partners. The dollar depreciated months than many had anticipated, while most meaagainst the currencies of the major foreign industrial sures of inflation had remained subdued. The econocountries, especially the Japanese yen, in response to my's substantial momentum seemed likely to persist generally stronger-than-expected incoming data on over the balance of the year, but the members conspending and production in those countries. How- tinued to expect some slackening during the year ever, the dollar rose against the currencies of the ahead. This outlook was supported by the emergence other important trading partners in the broad group, of somewhat less accommodative conditions in reflecting sizable declines in the currencies of several financial markets, including the increases that had countries in Latin America and Asia. occurred in interest rates over the past several months Despite a further rise in opportunity costs, M2 and and the steadying of stock market prices over the M3 continued to grow at moderate rates in August same period. On the other hand, foreign economies and evidently in September as well. Expansion of were strengthening more quickly than anticipated and these two monetary aggregates was supported by rising exports were likely to offset part of the slowfurther rapid expansion in the demand for currency down in domestic demand. and stronger inflows to retail money market funds at The implications of continued robust growth for a time of weakness in US. bond and equity markets. the inflation outlook depended critically on judg- In addition, growth of M3 was sustained by large ments about the supply side of the economy. Producflows into institution-only money market funds as the tivity and economic potential seemed to have been yields on those funds caught up to earlier increases growing at an increasingly rapid rate in recent years. in short-term market rates. For the year through That acceleration had itself tended to boost consump- September, M2 was estimated to have increased tion and investment demand—in complex interacat a rate somewhat above the Committee's annual tions of aggregate supply and demand—but it also range and M3 at a rate just above the upper end of had held down increases in unit costs and prices. A its range. Total domestic nonfinancial debt continued great deal of uncertainty surrounded the behavior of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee A1 productivity growth going forward, but some further office and hotel structures, but nonresidential conpickup, and the associated ability of the economy to struction activity more generally was relatively slugaccommodate more rapid growth without added infla- gish. It seemed likely that commercial building activtion, was a possibility that could not be overlooked. ity would be damped later as new capacity was However, a further pickup in productivity growth completed and financing became less attractive in was by no means assured, and a number of other response to the rise that had occurred in market favorable developments in supply and prices that had interest rates. acted to restrain inflation in recent years had already The prospects for business inventories over combegun to dissipate or reverse. These included the ing months were difficult to evaluate, with the usual substantial upturn in energy prices, the ebbing of uncertainties accentuated by century date change import price declines, and the pickup in health care effects. According to fragmentary information, invencosts; adverse trends in the latter two factors in tory investment picked up during the summer months particular were likely to be extended. In these circum- from a very low pace in the second quarter. To some stances, members generally saw some risk of rising extent, the recent strengthening may have reflected inflation going forward, but they also recognized that precautionary stockbuilding as insurance against similar forecasts in recent years had proved wrong potential supply disruptions relating to the century and that considerable uncertainty surrounded expec- date change. Such stockbuilding might well intensify tations of somewhat higher core inflation. during the closing months of the year and be reversed In their review of developments across the nation, early next year, with effects of uncertain magnitude members reported continued high levels of activity in on overall economic activity in that period. Looking all regions and few indications of moderating growth, beyond such a swing, business inventories, which though agriculture remained relatively depressed in currently appeared to be near desired levels in most many areas. The anecdotal information from around industries, were projected to grow at a moderate pace the nation clearly supported the overall statistical broadly in line with the expansion in final sales. evidence of persisting strength in key components of The strengthening of many economies around the domestic demand. Consumer spending, notably for world was seen as a harbinger of increasing demand light motor vehicles, was continuing to rise at a brisk for U.S. exports, a view that was reinforced by growpace. Some of the strength in consumer durables was ing anecdotal indications of improving foreign marrelated to purchases associated with homebuilding, kets for a wide range of U.S. products. An aspect of which, though likely to slacken a little owing to the that improvement was more attractive investment rise in mortgage interest rates, seemed to be staying opportunities abroad and some associated weakening at a high level. While consumer spending probably in the foreign exchange value of the dollar that would be sustained by further anticipated growth in implied upward pressure on the prices of imports and employment and incomes, the pause in the stock to an uncertain extent on those of competing domestimarket, should it persist, and the attendant effects cally produced products. Moreover, some members on financial wealth were expected with some lag to saw the possibility of a steeper drop in the dollar— damp further gains in consumer expenditures. under pressure from burgeoning foreign dollar port- Business fixed investment appeared to have accel- folios as a consequence of very large U.S. current erated to a surprising extent in the third quarter from account deficits—as an added source of risk to the an already robust pace earlier in the year. Further maintenance of sustainable growth and low inflation noteworthy gains were recorded in business expendi- in the United States. tures for computing and communications equipment, In the Committee's discussion of the outlook for evidently reflecting ongoing efforts to take advantage inflation, a number of members emphasized that the of declining prices and improving technology. Some behavior of prices had remained surprisingly benign of the rise in such spending could represent acceler- for an extended period, confounding earlier forecasts ated purchases in advance of the century date change of appreciable acceleration stemming from tight labor and might well tend to be offset in early 2000. Over markets and rising labor costs. That experience time, however, ongoing efforts to enhance productiv- argued forcefully in their view for the need to regard ity for competitive reasons suggested further vigor- forecasts of increasing inflation with considerable ous growth in spending for such equipment. Fore- caution. Most members nonetheless continued to casts of other business investment expenditures were view some increase in core price inflation as a defimuch less ebullient and on the whole pointed to little nite possibility. This view reflected their expectations change. Building activity currently displayed substan- that the current expansion, even if it did moderate to tial strength in some major cities, largely involving a pace approximating the economy's trend potential Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

48 Federal Reserve Bulletin • January 2000 growth, would do so at a level of resource use that, unclear how their interaction would affect the behavbased on the historical record, exceeded the econo- ior of inflation. In light of the uncertainties surroundmy's sustainable capacity—perhaps by even more ing these developments, the members agreed that it than at present, given the evident strength of aggre- would be desirable to await more evidence on the gate demand. Such an outcome seemed likely to performance of the economy, and in this regard congenerate further pressures on unit labor costs, which siderable new information on the behavior of the had tended in recent years to be contained by acceler- economy and the outlook for inflation would become ating productivity. There was no evidence that the available during the intermeeting period. The risks of acceleration was coming to an end, but the members waiting seemed small at this juncture, in part because saw a clear risk that upward pressures on labor costs inflation and inflation expectations were not likely could at some point outpace gains in productivity. to worsen substantially in the near term, and the Members also mentioned that labor compensation Committee had demonstrated its willingness to take would come under greater pressures as a result of needed anticipatory action to curb rising inflationary rising healthcare benefit costs and possible increases pressures that could threaten the overall performance in the minimum wage. of the economy. They also agreed that century date Other factors cited as pointing to a less benign change concerns were not likely to be of a kind or inflation performance involved the waning or reversal magnitude that would preclude a policy tightening of a number of temporary influences that had exerted move at the November meeting, should such an a beneficial effect on prices in recent years. In par- action seem warranted at that time. ticular, the decline of the dollar from its recent high On the issue of the tilt in the Committee's direcin July, especially if it were to continue, would mean tive, a majority of the members favored associating higher import prices and reduced price competition an unchanged policy stance with a directive that was for a wide range of domestic goods. In this regard, biased toward restraint. These members did not several members observed that they were hearing anticipate that intermeeting developments would noticeably fewer comments by business contacts require policy to be tightened during the weeks about their inability to raise prices. Members also immediately ahead, but they believed that the Comnoted that, in the context of apparently strengthening mittee probably would need to move to a less economic activity worldwide, non-oil commodity accommodative policy stance in the relatively near prices seemed poised to turn upward, though they future, possibly at the November meeting. They also had risen only slightly thus far. While oil prices, believed that, given the Committee's recently adopted which had increased sharply this year, had changed practice of immediately announcing its decisions to relatively little recently and could move down in the change the symmetry of the directive, an asymmetrifuture, secondary effects of the earlier increase on cal directive would help convey the message that costs and prices in other sectors of the economy policy adjustments might not yet be completed for seemed likely. Nonetheless, considerable uncertainty the balance of this year and that the Committee surrounded expectations of rising inflation. Labor remained concerned about potential inflationary cost increases had not turned up, and core inflation developments in coming months. Other members, continued to edge lower. Further improvements in while generally agreeing that the risks pointed on productivity growth could keep price pressures in balance to some rise in inflation over time, nonethecheck for some time. less were quite uncertain about the timing of any In the Committee's discussion of policy for the additional firming in monetary policy and preferred intermeeting period ahead, all the members indicated to leave the Committee's possible future course of that they favored or could accept an unchanged pol- action more open. Even so, they could accept an icy stance. Members commented that they saw little asymmetric directive in light of the consensus that risk of a surge in inflation over coming months, had emerged at this meeting in favor of an unchanged though some pickup from the currently subdued level policy stance. of core price inflation was a distinct possibility under With regard to the Committee's announcement of prospective economic conditions. It was noted that its decision to adopt an asymmetric directive, memexpanding aggregate supply, boosted by accelerating bers observed that the recent practice of making such productivity, had remained in reasonable balance with announcements had led to some misinterpretations of rapidly growing aggregate demand despite an already the Committee's intentions and seemed to have added high level of economic activity; however, substantial to volatility in financial markets. As a consequence, uncertainty surrounded the outlook for aggregate sup- Committee members briefly considered alternative ply and aggregate demand going forward, and it was treatments of symmetry and disclosure for this meet- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 49 ing. Because the Committee had begun a process increased at a rate somewhat above the Committee's annual for examining the wording of its directive and its range and M3 at a rate just above the upper end of its range. Total domestic nonfinancial debt has continued to announcement policy, most of the members conexpand at a pace somewhat above the middle of its range. cluded that the most satisfactory alternative for now, The Federal Open Market Committee seeks monetary though it was not fully satisfactory, was to continue and financial conditions that will foster price stability and with the Committee's recent announcement practice. promote sustainable growth in output. In furtherance of However, the working group chaired by Governor these objectives, the Committee reaffirmed at its meeting in June the ranges it had established in February for growth of Ferguson was requested to expedite its report, if M2 and M3 of 1 to 5 percent and 2 to 6 percent respecpossible. tively, measured from the fourth quarter of 1998 to the At the conclusion of this discussion, the Commit- fourth quarter of 1999. The range for growth of total tee voted to authorize and direct the Federal Reserve domestic nonfinancial debt was maintained at 3 to 7 per- Bank of New York, until it was instructed other- cent for the year. For 2000, the Committee agreed on a tentative basis in June to retain the same ranges for growth wise, to execute transactions in the System Account of the monetary aggregates and debt, measured from the in accordance with the following domestic policy fourth quarter of 1999 to the fourth quarter of 2000. The directive: behavior of the monetary aggregates will continue to be evaluated in the light of progress toward price level stabil- The information reviewed at this meeting suggests that ity, movements in their velocities, and developments in the the expansion of economic activity was substantial in the economy and financial markets. quarter just ended. Nonfarm payroll employment increased To promote the Committee's long-run objectives of price briskly through August, and the civilian unemployment stability and sustainable economic growth, the Committee rate dropped back to 4.2 percent, matching its low for the in the immediate future seeks conditions in reserve markets year. Industrial production was up appreciably further consistent with maintaining the federal funds rate at an in July and August. Total retail sales posted sizable gains average of around 514 percent. In view of the evidence over the two months. Housing construction apparently has currently available, the Committee believes that prospecslowed somewhat but has remained at a high level. Avail- tive developments are more likely to warrant an increase able indicators suggest that the expansion in business capi- than a decrease in the federal funds rate operating objective tal spending has continued to be rapid. The nominal deficit during the intermeeting period. on U.S. trade in goods and services widened in July from its average in the second quarter. Inflation has continued at Votes for this action: Messrs. Greenspan, McDonough, a moderate pace, albeit somewhat above that in 1998 Boehne, Ferguson, Gramlich, McTeer, Meyers, Moskow, owing to a sharp rebound in energy prices. Kelley, and Stern. Votes against this action: None. Most short-term interest rates have posted small mixed changes since the meeting on August 24, 1999, while It was agreed that the next meeting of the Commitlonger-term yields have risen somewhat. Most measures tee would be held on Tuesday, November 16, 1999. of share prices in equity markets have registered sizable The meeting adjourned at 1:25 p.m. declines over the intermeeting period. In foreign exchange markets, the trade-weighted value of the dollar has changed little over the period in relation to the currencies of a broad Donald L. Kohn group of important U.S. trading partners. Secretary M2 and M3 have continued to grow at a moderate pace. For the year through September, M2 is estimated to have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

51 Legal Developments JOINT FINAL RULE—AMENDMENTS TO SAFETY AND Section 570.1-Authority, purpose, scope and SOUNDNESS STANDARDS preservation of existing authority. The Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), the Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift Supervision (OTS) (collec- (c) Scope. This part and the Interagency Guidelines Estabtively, the Agencies) are updating their procedural rules lishing Safety and Soundness Standards as set forth at pertaining to safety and soundness standards issued under Appendix A to this part and the Interagency Guidesection 39 of the Federal Deposit Insurance Act (FDI Act). lines Establishing Year 2000 Standards for Safety and This joint final rule adopts, with only one technical change, Soundness as set forth at Appendix B to this part the Agencies' interim rules. implement the provisions of section 39 of the FDI Act Effective November 29, 1999, 12C.F.R. Parts 30, 263, as they apply to savings associations. 364, and 570 are amended as follows: Part 30-Safety and Soundness Standards Accordingly, the interim rule amending 12 C.F.R. Part 30, which was published at 63 Federal Register 55,486 on FINAL RULE—AMENDMENT TO REGULATION A October 15, 1998, was superseded by an interim rule published at 64 Federal Register 52,638 on September 30, The Board of Governors has amended 12 C.F.R. Part 201, 1999. its Regulation A (Extensions of Credit by Federal Reserve Banks; Change in Discount Rate), to reflect its approval of an increase in the basic discount rate at each Federal Part 263-Rules of Practice for Hearings Reserve Bank. The Board acted on requests submitted by the Boards of Directors of the twelve Federal Reserve Accordingly, the interim rule amending 12 C.F.R. Part 263, Banks. which was published at 63 Federal Register 55,486 on October 15, 1998, is adopted as a final rule without change. Effective November 16, 1999, 12 C.F.R. Part 201 is amended as follows. The rate changes for adjustment credit were effective on the dates specified in 12 C.F.R. 201.51. Part 364-Standards for Safety and Soundness Accordingly, the interim rule amending 12 C.F.R. Part 364, Part 201-Extensions of Credit by Federal Reserve which was published at 63 Federal Register 55,486 on Banks (Regulation A) October 15, 1998, is adopted as a final rule without change. 1. The authority citation for 12 C.F.R. Part 201 continues Part 570-Submission and Review of Safety and to read as follows: Soundness Authority. 12U.S.C. 343 et seq., 347a, 347b, 347c, 347d, Compliance Plans and Issuance of Orders to 348 et seq., 357, 374, 374a, and 461. Correct Safety and Soundness Deficiencies 2. Section 201.51 is revised to read as follows: 1. The authority citation for Part 570 continues to read as follows: Section 201.51-Adjustment credit for depository institutions. Authority: 12U.S.C. 1831p-l. The rates for adjustment credit provided to depository 2. Section 570.1(c) is revised to read as follows: institutions under section 201.3(a) are: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

52 Federal Reserve Bulletin • January 2000 In connection with this proposal, the Board received Federal Reserve Bank Rate Effective comments from Medford objecting to the proposal on the Boston 5.0 November 16, 1998 grounds that the investment would have an adverse effect New York 5.0 November 18, 1998 Philadelphia 5.0 November 18, 1998 on the managerial resources and financial condition of Cleveland 5.0 November 16, 1998 Brookline and Medford, and would harm the communities Richmond 5.0 November 16, 1998 Atlanta 5.0 November 17, 1998 that Medford serves. The Board has considered carefully Chicago 5.0 November 18, 1998 St. Louis 5.0 November 18, 1998 Medford's comments in light of the factors that the Board Minneapolis 5.0 November 18, 1998 must consider under section 3(c) of the BHC Act.3 Kansas City 5.0 November 16, 1998 Dallas 5.0 November 17, 1998 The Board previously has stated that the acquisition of San Francisco 5.0 November 16, 1998 less than a controlling interest in a bank or bank holding company is not a normal acquisition for a bank holding company.4 However, the requirement in section 3(a)(3) of ORDERS ISSUED UNDER BANK HOLDING COMPANY the BHC Act for Board approval before a bank holding ACT company acquires more than 5 percent of the voting shares Orders Issued Under Section 3 of the Bank Holding of a bank suggests that Congress contemplated the acquisi- Company Act tion by bank holding companies of between 5 and 25 percent of the voting shares of banks.5 On this basis, the Brookline Bancorp, MHC Board previously has approved the acquisition by a bank Brookline, Massachusetts holding company of less than a controlling interest in a bank or bank holding company where the proposal meets Brookline Bancorp, Inc. the factors set forth in the BHC Act.6 Brookline, Massachusetts Medford contends that the proposed investment would constitute a controlling investment in Medford, and would Order Approving Acquisition of Shares of a Bank enable Brookline to exercise a coercive influence on Med- Holding Company ford's corporate affairs. Brookline has agreed to abide by certain commitments that the Board has relied on in other Brookline Bancorp, MHC and its subsidiary, Brookline cases to determine that an investing bank holding company Bancorp, Inc., both of Brookline, Massachusetts (collec- would not be able to exercise a controlling influence over tively "Brookline"), bank holding companies within the another bank holding company or bank for purposes of the meaning of the Bank Holding Company Act ("BHC Act"), BHC Act.7 For example, Brookline has committed not to have requested the Board's approval under section 3 of the exercise or attempt to exercise a controlling influence over BHC Act (12 U.S.C. §1842) to acquire up to 9.9 percent of the voting shares of Medford Bancorp, Inc. ("Medford") 3. The Board may not approve an application that would violate and thereby acquire an interest in Medford's wholly owned state law. Whitney Nat'I Bank in Jefferson Parish v. Bank of New subsidiary bank, Medford Savings Bank, both of Medford, Orleans & Trust Co., 379 U.S. 411, 419 (1965). Medford contends Massachusetts.1 that Massachusetts law requires Brookline to file an application with Notice of this proposal, affording interested persons an the Massachusetts Board of Bank Incorporation ("State Bank Board"). The Massachusetts Commissioner of Banks ("Commissionopportunity to submit comments, has been published er") has been provided with notice of the application filed with Board, (64 Federal Register 55,290 (1999)). The time for filing as required under section 3 of the BHC Act, 12 U.S.C. § 1842(b)(1), comments has expired, and the Board has considered this and is reviewing whether Brookline also is required to file an applicaproposal and all comments received in light of the factors tion with the State Bank Board. The Commissioner has not filed any set forth in section 3 of the BHC Act. Brookline is the 33rd comments with the Board about this proposal. In addition, Massachusetts law appears to require Brookline to file such an application only largest depository institution in Massachusetts, controlling if Brookline owns or controls 25 percent or more of the voting stock total deposits of $509.3 million, representing less than of each of two or more banking institutions. Mass. Gen. Laws ch. 1 percent of total deposits in depository institutions in the 167A, § 2(2)(b). At this time, Brookline owns or controls 25 percent state.2 Medford is the 15th largest depository institution in or more of the voting stock of only one banking institution. Accordingly, it does not appear at this time that the Board is precluded from Massachusetts, controlling $902.6 million in deposits, repapproving this proposal. The Board's approval of the application is resenting less than 1 percent of total deposits in depository conditioned on Brookline obtaining any approval that is required by institutions in the state. Brookline has stated that it pro- Massachusetts law. poses to acquire the shares of Medford as a passive invest- 4. See, e.g., First Mariner Bancorp, 84 Federal Reserve Bulletin ment and that Brookline would not control Medford after 956, 957 (1998); Sun Banks, Inc., 71 Federal Reserve Bulletin 243 (1985) ("Sun Banks"); State Street Boston Corp., 67 Federal Reserve this investment. Bulletin 862, 863 (1981). 5. See 12 U.S.C. § 1842(a)(3). 6. See, e.g., GB Bancorporation, 83 Federal Reserve Bulletin 115 (1997) (acquisition of up to 24.9 percent of the voting shares of a 1. The proposed acquisition would be made by Brookline Securities bank); Mansura Bancshares, Inc., 79 Federal Reserve Bulletin 37 Corp., a wholly owned subsidiary of Brookline Bancorp, Inc. (1993) (acquisition of 9.7 percent of the voting shares of a bank 2. Asset and deposit data are as of June 30, 1999. In this context, holding company). depository institutions include commercial banks, savings banks, and 7. See, e.g., National Bancshares Corp. of Texas, 82 Federal Resavings associations. seme Bulletin 565 (1996); First Southern Bancorp, Inc., 82 Federal Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 53 the management or policies of Medford or any of its on all the facts of record, the Board concludes that consumsubsidiaries; not to seek or accept representation on the mation of this proposal would not have a significantly board of directors of Medford or any of its subsidiaries; adverse effect on competition or on the concentration of and not to have any director, officer, employee, or agent resources in any relevant market in which Brookline and interlocks with Medford. Brookline also has committed not Medford compete.13 to attempt to influence the dividend policies, loan decisions, or operations of Medford or any of its subsidiaries. Other Factors Moreover, Brookline, which proposes to acquire less than 10 percent of the voting shares of Medford, may not The Board also is required under section 3(c) of the BHC acquire any additional shares of Medford without prior Act to consider the financial and managerial resources and Board approval under the BHC Act. future prospects of the companies and banks concerned. Medford contends that these commitments by Brookline Medford contends that Brookline's investment could disare insufficient to prevent Brookline from exercising a tract the attention of Medford's management from the controlling influence on Medford. The Board notes, how- operation of Medford, restrict Medford's ability to effect a ever, that it has adequate supervisory authority to monitor merger, and adversely affect Medford's employees and its Brookline's compliance with its commitments, and ex- ability to retain customers. The Board believes that the pressly retains authority to initiate a control proceeding commitments made by Brookline to maintain its investagainst Brookline if facts presented later indicate that ment as a passive investment and not to exercise a control- Brookline or any of its subsidiaries or affiliates, in fact, ling influence over Medford reduce the potential adverse controls Medford for purposes of the BHC Act. Based on effects of the proposal. Moreover, the Board notes that these commitments and all other facts of record, it is the Brookline currently is well capitalized and would remain Board's judgment that Brookline would not acquire control well capitalized on consummation of the proposal. Based of Medford for purposes of the BHC Act through consum- on all the facts of record, the Board has concluded that the mation of this proposal. financial and managerial resources and the future prospects of Brookline, Medford, and their subsidiaries are consistent Competitive Considerations with approval of this application, as are the other supervisory factors the Board must consider under section 3 of the In considering an application under section 3 of the BHC BHC Act. In addition, considerations relating to the conve- Act, the Board is required to evaluate a number of factors, nience and needs of the communities to be served, includincluding the competitive effects of the proposal. The ing the record of performance of the institutions involved Board previously has noted that one company need not under the Community Reinvestment Act (12 U.S.C. § 2901 acquire control of another company in order to substan- et seq.), are consistent with approval of the application. tially lessen competition between them.8 The Board has found that noncontrolling interests in directly competing Conclusion depository institutions may raise serious questions under the BHC Act, and has concluded that the specific facts of Based on the foregoing, and on all other facts of record, the each case will determine whether the minority investment Board has determined that this application should be, and in a company would be anticompetitive.9 hereby is, approved. The Board's approval is specifically Brookline and Medford compete directly in the Boston conditioned on compliance by Brookline with all commitbanking market.10 If Brookline and Medford are consid- ments made in connection with this application, including ered as a combined organization, Brookline would be the the commitments discussed in this order. The commitments 12th largest depository institution organization in the and conditions relied on by the Board in reaching this Boston banking market, controlling $1.3 billion in depos- decision are deemed to be conditions imposed in writing its, representing less than 1 percent of total deposits in depository institutions in the market." The Herfindahl- Hirschman Index ("HHI") for the Boston banking market become, significant competitors of commercial banks. See, e.g., Midwould remain unchanged at 1899.12.12 Accordingly, based west Financial Group, 75 Federal Reserve Bulletin 386, 387 (1989); National City Corporation, 70 Federal Reserve Bulletin 743, 744 (1984). Thus, the Board regularly has included thrift deposits in the calculation of market share on a 50-percent weighted basis. See, e.g., Reserve Bulletin 424 (1996). These commitments are set forth in the First Hawaiian, Inc., 11 Federal Reserve Bulletin 52, 55 (1991). Appendix. 13. Under the DOJ Guidelines, 49 Federal Register 26,823 8. See, e.g. First State Corp., 76 Federal Reserve Bulletin 376, 379 (June 29, 1984), a market in which the post-merger HHI is above 1800 (1990); Sun Banks at 243. is considered to be highly concentrated. The Department of Justice has 9. See, e.g. Sun Banks at 244. informed the Board that a bank merger or acquisition generally will 10. The Boston banking market is defined as the Boston Ranally not be challenged (in the absence of other factors indicating anticom- Metropolitan Area and the town of Lyndeboro in New Hampshire. petitive elfects) unless the post-merger HHI is at least 1800 and the 11. Market deposit data are as of June 30, 1998, and reflect merger increases the HHI by more than 200 points. The Department acquisitions through October 15, 1999. of Justice has stated that the higher than normal thresholds for an 12. Market share data are based on calculations that include the increase in the HHI when screening bank mergers and acquisitions for deposits of thrift institutions at 50 percent. The Board previously has anticompetitive effects implicitly recognize the competitive effects of indicated that thrift institutions have become, or have the potential to limited-purpose and other nondepository financial entities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

54 Federal Reserve Bulletin • January 2000 by the Board in connection with its findings and decision, (9) Dispose or threaten to dispose of shares of Medford and, as such, may be enforced in proceedings under appli- or any of its subsidiaries as a condition of specific cable law. action or nonaction by Medford or any of its subsid- The transaction shall not be consummated before the iaries; or fifteenth calendar day following the effective date of this (10) Enter into any other banking or nonbanking transacorder, or later than three months after the effective date of tions with Medford or any of its subsidiaries, except this order, unless such period is extended for good cause by that MHC or SHC may establish and maintain dethe Board or by the Federal Reserve Bank of Boston, posit accounts with Medford's subsidiary depository acting pursuant to delegated authority. institution, provided that the aggregate balance of all By order of the Board of Governors, effective Novem- such deposit accounts does not exceed $500,000 and ber 29, 1999. that the accounts are maintained on substantially the same terms as those prevailing for comparable Voting for this action: Chairman Greenspan, Vice Chairman Fergu- accounts of persons unaffiliated with Medford or any son, and Governors Kelley, Meyer, and Gramlich. of its subsidiaries. ROBERT DEV. FRIERSON The Sanwa Bank, Limited Associate Secretary of the Board Osaka, Japan Order Approving the Acquisition of a Bank Holding Appendix Company As part of this proposal, Brookline Bancorp, MHC The Sanwa Bank, Limited ("Sanwa"), a bank holding ("MHC"), Brookline Bancorp, Inc. ("SHC"), and Brook- company within the meaning of the Bank Holding Comline Securities Corp. ("Securities Corp"), each of Brook- pany Act ("BHC Act"), has requested the Board's apline, Massachusetts, commit that they will not, without the proval under section 3 of the BHC Act (12 U.S.C. § 1842) prior approval of the Federal Reserve Board, directly or to retain up to 32 percent of the voting shares of The Toyo indirectly: Trust and Banking Company, Limited, Tokyo, Japan (1) Exercise or attempt to exercise a controlling influ- ("Toyo"), and thereby retain control of Toyo's wholly ence over the management or policies of Medford owned U.S. subsidiary bank, Toyo Trust Company of Bancorp, Inc. ("Medford") or any of its subsidiar- New York, New York, New York ("Toyo Bank").1 ies; Notice of the proposal, affording interested persons an (2) Seek or accept representation on the board of direc- opportunity to submit comments, has been published tors of Medford or any of its subsidiaries; (64 Federal Register 25,041 (1999)). The time for filing (3) Have or seek to have any employee or representative comments has expired, and the Board has considered the serve as an officer, agent, or employee of Medford or proposal and all comments received in light of the factors any of its subsidiaries; set forth in section 3 of the BHC Act. (4) Take any action that would cause Medford or any of Sanwa, with total consolidated assets of approximately its subsidiaries to become a subsidiary of MHC, $418 billion, is the fourth largest banking organization in SHC, Securities Corp, or any of their subsidiaries; Japan.2 In the United States, Sanwa owns Sanwa Bank (5) Acquire or retain shares that would cause the com- California, San Francisco, California ("Sanwa Bank"), a bined interests of MHC, SHC, Securities Corp, and state-chartered commercial bank. In addition, Sanwa operany of their subsidiaries and their officers, directors, ates branches in New York, New York, Chicago, Illinois, and affiliates to equal or exceed 25 percent of the and San Francisco and Los Angeles, California; and repreoutstanding voting shares of Medford or any of its sentative offices in Houston, Texas, and New York, New subsidiaries; York. Sanwa also engages in a broad range of permissible (6) Propose a director or slate of directors in opposition to a nominee or slate of nominees proposed by the management or the board of directors of Medford or 1. On March 30, 1999, Sanwa acquired newly issued shares of Toyo that, when aggregated with the 4.9 percent of Toyo's voting shares any of its subsidiaries; previously held by Sanwa, represented approximately 32 percent of (7) Solicit or participate in soliciting proxies with re- Toyo's voting shares. This investment was part of a plan to increase spect to any matter presented to the shareholders of Toyo's capital, which was approved by the Japanese government. On Medford or any of its subsidiaries; consummation of the investment, Sanwa placed the newly acquired Toyo voting shares in a voting trust that does not permit Sanwa to vote (8) Attempt to influence the dividend policies or pracsuch shares until U.S. regulators act on Sanwa's proposed acquisition tices; the investment loan, or credit decisions or of control of Toyo. Under the terms of the trust agreement, the voting policies; the pricing of services; personnel decisions; trust terminates if the Board and the New York State Banking Departoperations activities (including the location of any ment ("Department") approve Sanwa's retention of its ownership interest in Toyo. The Department approved Sanwa's application to offices or branches or their hours of operation, etc.); acquire control of Toyo on April 8, 1999. or any similar activities or decisions of Medford or 2. Asset data are as of March 31, 1999, and are based on exchange any of its subsidiaries; rates then applicable. Ranking data are as of December 31, 1998. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 55 nonbanking activities in the United States through subsid Certain Supervisory Considerations iaries, including underwriting and dealing in debt and equity securities to a limited extent. Under section 3 of the BHC Act, the Board may not Toyo, with total consolidated assets of approximately approve an application involving a foreign bank unless the $66 billion, is the 19th largest banking organization in bank is "subject to comprehensive supervision or regula- Japan. Toyo controls Toyo Bank and operates a branch in tion on a consolidated basis by the appropriate authorities New York, New York. in the bank's home country."7 The Board previously has determined, in applications under the International Bank- Interstate Analysis ing Act (12 U.S.C. § 3101 et seq.) ("IBA") and the BHC Act, that certain Japanese commercial banks were subject Section 3(d) of the BHC Act allows the Board to approve to comprehensive consolidated supervision by their home an application by a bank holding company to acquire country supervisor.8 In this case, the Board has determined control of a bank located in a state other than the home that Sanwa is supervised on substantially the same terms state of the bank holding company if certain conditions are and conditions as the other Japanese banks. Based on all met. For purposes of the BHC Act, the home state of the facts of record, the Board has concluded that Sanwa is Sanwa is California,3 and Toyo Bank is located in New subject to comprehensive supervision and regulation on a York. All the conditions for an interstate acquisition enu- consolidated basis by its home country supervisor. merated in section 3(d) are met in this case.4 In light of all The BHC Act also requires the Board to determine that the facts of record, the Board is permitted to approve the the foreign bank has provided adequate assurances that it proposal under section 3(d) of the BHC Act. will make available to the Board such information on its operations and activities and those of its affiliates that the Competitive Considerations Board deems appropriate to determine and enforce compliance with the BHC Act. The Board has reviewed the Sanwa and Toyo compete directly in the New York/New restrictions on disclosure in jurisdictions where Sanwa has Jersey Metropolitan banking market ("New York banking material operations and has communicated with relevant market").5 Sanwa's New York branch controls deposits government authorities concerning access to information. representing less than 1 percent of the deposits in the Sanwa has committed that, to the extent not prohibited by market. Toyo, through its New York branch and Toyo applicable law, it will make available to the Board such Bank, also controls deposits representing less than 1 per- information on the operations of Sanwa and any of its cent of the deposits in the market.6 On consummation of affiliates that the Board deems necessary to determine and the proposal, numerous competitors would remain in the enforce compliance with the BHC Act, the IBA, and other market, and the market would remain unconcentrated. applicable federal law. Sanwa also has committed to coop- Based on these and all other facts of record, the Board erate with the Board to obtain any waivers or exemptions concludes that consummation of the proposal would not that may be necessary in order to enable Sanwa to make result in any significantly adverse effects on competition or any such information available to the Board. In light of on the concentration of banking resources in the New York these commitments and other facts of record, the Board has banking market or any other relevant banking market. concluded that Sanwa has provided adequate assurances of access to any appropriate information the Board may request. For these reasons, and based on all the facts of record, the Board has concluded that the supervisory factors it is required to consider under section 3(c)(3) of the 3. A bank holding company's home state is that state in which the BHC Act are consistent with approval. total deposits of all banking subsidiaries of such company were the largest on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 12 U.S.C. § 1841(o) (4) (C). 4. Sanwa is adequately capitalized and adequately managed, as defined by applicable law. 12 U.S.C. § 1842(d)(1)(A). Toyo Bank has been in existence and operated continuously for at least the period of time required by New York state banking law. See 12 U.S.C. § 1842 (d) (1) (B); N.Y. Banking Law §142-a (1998). On consumma- 7. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the tion of the proposal, Sanwa and its affiliates would control less than Board determines whether a foreign bank is subject to consolidated 10 percent of the total amount of deposits of insured depository home country supervision under the standards set forth in Regulainstitutions in the United States. 12 U.S.C. § 1842(d)(2). All other tion K. 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign requirements of section 3(d) of the BHC Act would be met on bank may be considered subject to consolidated supervision if the consummation of the proposal. Board determines that the bank is supervised or regulated in such a 5. The New York banking market includes New York City; Nassau, manner that its home country supervisor receives sufficient informa- Orange, Putnam, Rockland, Suffolk, Sullivan, and Westchester Coun- tion on the worldwide operations of the foreign bank, including the ties in New York; Bergen, Essex, Hudson, Hunterdon, Middlesex, relationships of the bank to its affiliates, to assess the foreign bank's Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, War- overall financial condition and compliance with law and regulation. ren, and a portion of Mercer Counties in New Jersey; Pike County in 12 C.F.R. 211.24(c)(1)(h). Pennsylvania; and portions of Fairfield and Litchfield Counties in 8. See The Fuji Bank, Limited, 85 Federal Reserve Bulletin 338 Connecticut. (1999); and The Mitsubishi Bank, Limited, 82 Federal Reserve Bulle- 6. Deposit data are as of June 30, 1998. tin 436 (1996). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

56 Federal Reserve Bulletin • January 2000 Financial, Managerial, and Convenience and Needs with its findings and decision, and, as such, may be en- Considerations forced in proceedings under applicable law. By order of the Board of Governors, effective November 24, 1999. The Board also has carefully considered the financial and managerial resources and future prospects of Sanwa, Toyo, and their respective subsidiaries, and the effect the proposal Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich. would have on such resources. The Board notes that the proposal is incidental to a corporate restructuring of Japa- ROBERT DEV. FRIERSON nese banking organizations that is intended to enhance the Associate Secretary of the Board overall financial strength and future prospects of both organizations. Sanwa's reported capital levels exceed the Orders Issued Under Section 4 of the Bank Holding minimum levels that would be required under the Basle Company Act Capital Accord, and its capital levels are considered equivalent to the capital levels that would be required of a U.S. Bayerische Hypo- und Vereinsbank AG banking organization under similar circumstances. The Munich, Germany Board notes, moreover, that the proposal does not involve any expansion of the banking or nonbanking activities of Deutsche Bank AG Toyo, and that Sanwa's investment in Toyo has strength- Deutsche Bank AG ened Toyo's capital position and made additional financial Frankfurt, Germany resources available to Toyo Bank. In addition, the Board has reviewed supervisory informa- Stichting Prioriteit ABN AMRO Holding tion from the home country authorities responsible for Stichting Administratiekantoor ABN AMRO Holding supervising Sanwa and Toyo concerning the proposal and ABN AMRO Holding N. V. the condition of the parties, confidential financial informa- ABN AMRO Bank N. V. tion from Sanwa and Toyo, and reports of examination All of Amsterdam, The Netherlands from the appropriate federal and state supervisors of the affected organizations assessing the financial and manage- Order Approving Notices to Engage in Nonbanking rial resources of the organizations. Based on all the facts of Activities record, the Board has concluded that the financial and managerial resources and future prospects of the organiza- Bayerische Hypo- und Vereinsbank AG ("BHV"), a fortions involved in the proposal are consistent with approval. eign banking organization subject to the Bank Holding Sanwa Bank received an "outstanding" performance Company Act ("BHC Act"), and Deutsche Bank AG rating at its most recent examination under the Community ("Deutsche Bank") and Stichting Prioriteit ABN AMRO Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA") by Holding ("ABN AMRO"), Stichting Administratiekantoor the Federal Deposit Insurance Corporation ("FDIC"), as ABN AMRO Holding, ABN AMRO Holding N.V., and of August 24, 1998. Toyo Bank also received an "outstand- ABN AMRO Bank N.V., bank holding companies within ing" CRA performance rating from the FDIC at its most the meaning of the BHC Act, have requested the Board's recent examination, as of June 8, 1998. In light of all the approval under section 4(c)(8) of the BHC Act (12 U.S.C. facts of record, the Board has concluded that consider- §1843 (c) (8)), and section 225.24 of the Board's Regulaations relating to the convenience and needs of the commution Y (12 C.F.R. 225.24) to retain up to 12.5 percent of the nities to be served, including the records of performance of voting interests in Identrus, LLC, New York, New York the relevant depository institutions under the CRA, are ("Identrus"), and to engage through Identrus and other consistent with approval. nonbank subsidiaries in acting as a certification authority ("CA") in the United States in connection with financial Conclusion and nonfinancial transactions and other related activities.1 Based on the foregoing and all the facts of record, the 1. BHV, Deutsche Bank, and ABN AMRO and its subsidiaries listed Board has determined that the application should be, and above are hereafter collectively referred to as "Notificants". Foreign hereby is, approved. The Board's approval is specifically banks, such as Notificants, may engage in permissible banking activiconditioned on compliance by Sanwa with all the commit- ties in the United States directly through a U.S. branch or agency. A foreign bank must, however, receive the Board's prior approval under ments made in connection with the application and on the section 4(c)(8) to engage in the United States through a nonbank Board receiving access to information on the operations or subsidiary in activities that are closely related to banking. In this case, activities of Sanwa and any of its affiliates that the Board Notificants have requested approval under section 4(c)(8) of the BHC determines to be appropriate to determine and enforce Act to engage in the proposed activities in the United States through Identrus and other nonbank subsidiaries to provide themselves maxicompliance by Sanwa and its affiliates with applicable mum flexibility in structuring their Identrus-related activities. For federal statutes. The commitments and conditions relied on purposes of this order, references to activities conducted by Notifiby the Board in reaching its decision are deemed to be cants are intended to refer to activities conducted through Identrus or conditions imposed in writing by the Board in connection other U.S. nonbanking companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 57 Notice of the proposal, affording interested persons an pair and registers as the unique "owner" of the key pair opportunity to submit comments, has been published with a CA.4 Private keys and public keys are a set of (64 Federal Register 22,866 (1999)). The time for filing different but related mathematical functions that can be comments has expired, and the Board has considered the used to encrypt and decrypt electronic communications. A proposal and all comments received in light of the factors message encrypted by a particular private key can be set forth in section 4(c)(8) of the BHC Act. BHV, with total decrypted only by its corresponding public key. Although a consolidated assets of $575 billion,2 is the second largest private key and its corresponding public key are related, a commercial banking organization in Germany, and oper- private key cannot feasibly be derived from its correspondates branches in New York, New York, and Chicago, ing public key. Thus, while a private key must be kept Illinois, and an agency in Los Angeles, California. confidential by the company that is the registered "owner" Deutsche Bank, with total consolidated assets of of the key pair, the company's public key can be made $724 billion, is the largest commercial banking organiza- publicly available without jeopardizing the confidentiality tion in Germany. Deutsche Bank controls three subsidiary of the company's private key. A company sending a busibanks in the United States, and operates a branch in New ness communication (e.g., a purchase order) over an open York, New York, and a representative olfice in San Fran- electronic network like the Internet to another entity uses cisco, California. its confidential private key to digitally sign the message ABN AMRO, with total consolidated assets of being sent. A digital signature is a compressed and en- $544 billion, is the largest commercial banking organiza- crypted version of the message to which it is attached. The tion in The Netherlands. ABN AMRO controls seven de- entity receiving the digitally signed message then uses the pository institutions in Illinois and one commercial bank in sender's public key to decrypt the digital signature.5 If the New York. ABN AMRO Bank N.V. also operates branches receiver successfully decodes the signature with the sendin Boston, Massachusetts; Chicago, Illinois; New York, er's public key, the receiver can be assured that the mes- New York; Pittsburgh, Pennsylvania; and Seattle, Washing- sage was created using the sender's private key.6 To be ton; and agencies in Atlanta, Georgia; Miami, Florida; assured that the message was actually sent by the purported Houston, Texas; and Los Angeles and San Francisco, Cali- sender, however, the receiver must confirm that the private fornia. key/public key pair used to sign and decode the message is uniquely "owned" by the purported sender. A CA provides Each Notificant also engages in a number of nonbanking this assurance by issuing "digital certificates" certifying activities in the United States. that the relevant private key/public key pair is uniquely associated with the message sender and verifying upon Proposed Activities request the validity of such digital certificates. Notificants and other financial institutions participating in the Identrus Identrus is a joint venture among Notificants and other System ("Participants")7 would create unique private key/ commercial banks and foreign banking organizations.3 Unpublic key pairs for, and issue digital certificates on behalf der the proposal, Identrus would act as the global rulemakof, eligible customers that contract with a Participant to ing and coordinating body for a network of financial instireceive Identrus identity authentication services.8 Each Partutions that would act as CAs and thereby provide services designed to verify or authenticate the identity of customers conducting financial and nonfinancial transactions over the Internet and other "open" electronic networks. To provide 4. A number of nonbanking companies currently operate CA systhese services, Identrus and its network of participating tems that rely on public key cryptography and provide identity authenfinancial institutions (the "Identrus System") would utilize tication services to senders and receivers of electronic communicadigital certificates and digital signatures created through tions. the use of public key cryptography. 5. The sender's public key may be attached to the digitally signed communication, or the receiver of the message may obtain the send- In a CA system using public key cryptography, a comer's public key from a publicly available database. pany generates (or is assigned) a public key/private key 6. The receiver also can confirm that the message was not altered after it was signed by comparing the message received to the decrypted version of the message text embedded in the digital signature. 7. Participation in the Identrus System is available only to organiza- 2. Asset data are as of June 30, 1999, and ranking data are as of tions that are engaged primarily in the business of providing financial December 31, 1998. services, are subject to regulation and examination by a government 3. Bank of America NT & SA, Charlotte, North Carolina, and authority in their home country, and that meet certain eligibility Citibank, N.A., New York, New York, have applications pending criteria, such as minimum capital requirements and debt rating critebefore the Office of the Comptroller of the Currency to invest indi- ria. A Participant also must agree to be bound by the Identrus rectly in Identrus. The Chase Manhattan Bank, New York, New York, operating rules and execute certain participation agreements. Finanreceived the approval of the New York State Banking Department to cial institutions would not be required to purchase an ownership invest indirectly in Identrus. See Letter from P. Vincent Conlon, interest in Identrus to become a Participant. Deputy Superintendent of Banks, New York State Banking Depart- 8. Participants may provide Identrus-related services only to cusment, to Ronald C. Mayer, The Chase Manhattan Bank, dated April 9, tomers that have agreed to be bound by applicable provisions of the 1999 ("Chase Letter"). Identrus expects other U.S. commercial banks Identrus operating rules and have signed the appropriate customer and foreign banking organizations to seek approval from appropriate agreements. The Identrus operating rules allow Participants to provide regulatory authorities to invest in Identrus and engage in related Identrus-related services only to business entities, such as corporaactivities. tions, and governmental organizations, and not to natural persons. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

58 Federal Reserve Bulletin • January 2000 ticipant would act as a repository for the digital certificates Permissibility of Proposed Activities that it has issued, i.e., it would maintain a database containing information on the status of the outstanding, expired, or Section 4(c)(8) of the BHC Act provides that a bank revoked digital certificates that it has issued to customers. holding company may, with the Board's approval, engage Participants also would verify for third parties the validity in any activity that the Board determines to be closely of digital certificates issued to their customers and, upon related to banking.13 The Board previously has authorized request of the third party, may provide an explicit warranty bank holding companies under section 4(c)(8) of the BHC as to the validity of the customers' digital certificates.9 Act to act as CAs and provide identity authentication Participants also may process and transmit verification and services in connection with payment-related and other fiwarranty requests received from customers concerning dig- nancial transactions conducted over electronic networks.14 ital certificates issued by other Participants in the Identrus The Board has not previously authorized bank holding System. In addition, Participants may provide customers companies under section 4(c)(8) to act as CAs or provide with a limited range of software and hardware required for identity authentication services in connection with nonficustomers to utilize the Identrus System.10 nancial transactions. Identrus would provide the infrastructure framework In determining whether an activity is closely related to within which Participants would act as CAs and provide banking, the Board and the courts look to whether related services. The primary function of Identrus would be (1) banks generally provide the proposed services; to act as the "root certification authority" of the Identrus (2) banks generally provide services that are operationally System, i.e., issuing digital certificates to Participants that or functionally so similar to the proposed services as to establish the status of Participants as CAs in the Identrus equip them particularly well to provide the proposed ser- System and authenticating for customers of, and Partici- vices; or (3) banks generally provide services that are so pants in, the Identrus System the identity of Participants.11 integrally related to the proposed services as to require Identrus also would (i) establish and maintain the operating their provision in a specialized form.15 rules governing the Identrus System, including the mini- Banks and bank holding companies have long provided mum technical requirements for digital certificates and identity authentication services in connection with nonfiother components of the System; (ii) monitor compliance nancial transactions conducted by third parties and their by Participants with the System's operating rules and tech- own traditional banking and lending activities. For examnical standards; and (iii) monitor collateral requirements ple, banks and bank holding companies are authorized to and aggregate warranty exposure for Participants in the provide notary services to customers.16 The role of a notary Identrus System.12 is to authenticate signatures on financial or nonfinancial documents for the benefit of third parties.17 In order to verify a signature on a paper-based document, a notary must verify the identity of the person signing the document. The role served by a CA with respect to electronic documents is functionally similar to the role served by a notary with respect to paper-based documents.18 Identrus operating rules and customer agreements would make each customer contractually responsible for ensuring that its private key is Similarly, banks traditionally have identified their cuskept confidential. tomers to third parties through the issuance of letters of 9. The operating rules of the Identrus System would provide that a company relying on a digital certificate issued by a Participant would have recourse against the Participant only if the company purchased an explicit warranty from the Participant and then only up to amount of the purchased warranty. A Participant that issues a digital certificate 13. 12 U.S.C. § 1843(c)(8). could refuse to issue a warranty with respect to a digital certificate for 14. See 12 C.F.R. 225.28(b)(14); Banc One Corporation, Inc., 83 any bona fide reason. The Identrus System would limit the aggregate Federal Reserve Bulletin 602, 606 (1997); Citicorp, 68 Federal Reamount of warranties that a Participant may have outstanding at any serve Bulletin 505, 510 (1982). one time and would require each Participant to post collateral with 15. See National Courier Association v. Board of Governors of the Identrus to cover its warranty exposure. Federal Reserve System, 516 F.2d 1229, 1237 (D.C. Cir. 1975). In 10. For example, Participants may provide smart cards containing addition, the Board may consider any other basis that demonstrates digital certificates and smart card readers to their customers. that the proposed activity has a reasonable or close connection or 11. Digital certificates issued by a Participant to a customer are relationship to banking or managing or controlling banks. See Board digitally signed by the Participant with the Participant's own private Statement Regarding Regulation Y, 49 Federal Register 806 (1984); key and are accompanied by a digital certificate issued by Identrus. Securities Industry Association v. Board of Governors of the Federal The digital certificates issued by Identrus would certify that the Reserve System, 468 U.S. 207, 210-11 n.5 (1984). Participant is an authorized Participant in the Identrus System and that 16. See OCC Unpublished Interpretive Letter dated June 11, 1985; the private key used by a Participant to digitally sign its certificates is Popular, Inc., 84 Federal Reserve Bulletin 481 (1998). uniquely associated with the Participant, thereby authenticating the 17. 58 Am. Jur. 2d Notaries Public § 31 (2d ed. 1989). identity of the Participant. 18. The American Bar Association, for example, has noted that the 12. The activities of Notificants and Identrus would be limited to issuance of digital certificates by CAs is "analogous to traditional providing the identity authentication and related services described certification processes undertaken by notaries with respect to docuabove. Notificants and Identrus would not provide a general encryp- ments executed with pen and ink." See Digital Signature Guidelines, tion or electronic message service, or any warranty of the underlying Information Security Committee, Electronic Commerce and Informafinancial or nonfinancial transaction between customers whose identi- tion Technology Division, Section of Science and Technology, Amerties are authenticated through the use of the Identrus System. ican Bar Association, p. 54 (Aug. 1, 1996). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 59 introduction or letters of reference.19 In addition, banks and also electronically authenticate the identity of persons in bank holding companies routinely authenticate the identity connection with the check and credit card verification of customers and noncustomers in connection with their services they are authorized to provide to merchants and authorized check cashing functions.20 other businesses.25 Banks and bank holding companies also have long been The Board notes, moreover, that state banks and national authorized to issue signature guarantees to issuers of secu- banks recently have been authorized to act as CAs and rities and their transfer agents in connection with the provide identity authentication services in connection with transfer of securities.21 A bank issuing a signature guaran- financial and nonfinancial transactions conducted over tee warrants that the signature of the customer indorsing a electronic networks.26 Based on the foregoing, the Board certificated security or authorizing the transfer of an uncer- concludes that acting as a CA and, more generally, authentificated security is authentic. The issuing bank also war- ticating the identity of customers conducting financial and rants that the signer was an appropriate person to indorse nonfinancial transactions are activities that are closely rethe security or authorization (or, if the signature is by an lated to banking within the meaning of section 4(c)(8) of agent, that the agent had actual authority to act on behalf of the BHC Act. the appropriate person) and the signer had legal capacity to As discussed above, Identrus and Notificants also prosign.22 In light of these warranties, a bank providing a pose to engage in a number of activities as part of and in signature guarantee must verify the identity of the cus- connection with their proposed CA activities. These activitomer providing the indorsement or signing the instruc- ties include (i) processing, transmitting, and storing data tion.23 necessary for the operation of the Identrus System, such as Furthermore, identity authentication services are an inte- digital certificates, requests for verification of digital certifgral part of many traditional banking functions. Accord- icates, and warranty requests; (ii) developing and marketingly, banks and bank holding companies have developed ing software and hardware necessary for the operation of sophisticated methods for authenticating the identity of the Identrus System; and (iii) complying with, monitoring, customers and noncustomers that transact business or com- and enforcing the collateral posting requirements associmunicate with the bank or bank holding company through ated with identity warranties. In addition, Identrus would electronic means or otherwise. Many of these activities are establish operating policies, procedures, and guidelines for operationally and functionally similar to the proposed ac- the Identrus System. tivities and equip banks and bank holding companies par- The Board's Regulation Y permits bank holding compaticularly well to provide the proposed services. For exam- nies to provide data processing and data transmission serple, banks and bank holding companies maintain systems vices and facilities (including software and hardware) for to electronically authenticate the identity of persons en- the processing and transmission of financial, banking, or gaged in credit and debit card, automated teller machine economic data, and to engage in activities related to mak- ("ATM"), home banking, and wire transfer transactions ing, acquiring, brokering, or servicing extensions of credit, with the institution.24 Banks and bank holding companies such as posting collateral and monitoring collateral requirements.27 Regulation Y also permits bank holding companies to engage in incidental activities that are necessary to 19. Banks have drafted letters of introduction or letters of reference the conduct of an activity that is closely related to bankon behalf of their customers that serve the purpose of introducing the ing.28 Identrus and Notificants have represented that they customer to other banks or third parties with which the customer seeks would engage in the additional activities only in connecto do business. See McLeod v. Fourth National Bank of St. Louis, tion with their CA activities and would not engage in such 122 U.S. 528, 534 (1887); OCC Interpretive Letter No. 610, reprinted activities separate or apart from their CA activities. Notifiin [1992-1993 Transfer Binder] CCH Fed. Banking L. Rep. 83,448 (Oct. 8, 1992). cants also have committed that the data processing and 20. Under the Uniform Commercial Code, a bank that accepts a data transmission activities of Notificants and Identrus, check for deposit warrants to the drawee bank that all indorsements on including any proposed development or sale of hardware the check are genuine, and the bank is liable to the drawee bank for the amount of the check plus expenses and lost interest if an indorsement on the check was forged. See, e.g., N.Y. U.C.C. § 4-207 (McKinney 1991). procedures, such as algorithms or other encryption devices, for authen- 21. See Letter from William B. Glidden, OCC Assistant Director, ticating the identity of customers that transmit wire transfer instrucdated Dec. 5, 1985; see also Acceptance of Signature Guarantees from tions to the bank. See, e.g., N.Y. U.C.C. § 4-A-202 (McKinney 1999). Eligible Guarantor Institutions, Exchange Act Rel. No. 29,663, [1983- 25. See 12 C.F.R. 225.28(b)(2)(iii); Barnett Banks of Florida, Inc., 1984 Transfer Binder] Fed. Sec. L. Rep. (CCH) 84,825, at 82,119 71 Federal Reserve Bulletin 648 (1985); OCC Unpublished Interpre- (Sept. 9, 1991); U.S. League of Savings Associations, SEC No-Action tive Letter dated March 26, 1982. Letter, [1982-1983 Transfer Binder] Fed. Sec. L. Rep. (CCH) 77,412, 26. See Chase Letter, OCC Conditional Approval No. 267 (Jan. 12, at 78,500 (Apr. 29, 1983). Broker-dealer subsidiaries of bank holding 1998). companies also have provided signature guarantees. 27. See 12 C.F.R. 225.28(b)(2) and (14). Under Regulation Y, a 22. See, e.g., N.Y. U.C.C. § 8-306(a) and (b) (McKinney 1999). bank holding company may develop and sell hardware and software 23. A bank issuing a signature guarantee is liable to the issuer of the that is designed and marketed for the processing and transmission of security or its transfer agent for any loss that results from a breach of financial, banking, or economic data, and may develop and sell any of these warranties by the bank. See, e.g., N.Y. U.C.C. § 8-306(h) general purpose hardware so long as such general purpose hardware (McKinney 1999). does not constitute more than 30 percent of the cost of any packaged 24. Article 4A of the Uniform Commercial Code, in fact, encour- offering. See 12 C.F.R. 225.28(b)(14). ages banks to develop and maintain commercially reasonable security 28. 12 C.F.R. 225.21(a)(2). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 and software, will comply with the Board's regulations and liability of the relevant parties and require the Participant interpretations. In light of the nature of these additional and customer to comply with the operating rules of Idenactivities, the fact that they would be conducted only in trus before they are permitted to participate in the Identrus connection with the CA activities of Identrus and Notifi- System.32 Each digital certificate issued by a Participant cants, and all other facts of record, the Board concludes would indicate that the recipient of the certificate may not that these activities are encompassed within the activities rely on the certificate unless the recipient purchases a previously approved by the Board by regulation or are separate warranty from the Participant issuing the certifiincidental to the permissible CA activities of Identrus and cate. Furthermore, Identrus proposes to (i) establish limits Notificants and, therefore, are permissible under Regula- on each Participant's per transaction and aggregate wartion Y.29 ranty exposure and monitor each Participant's compliance with these limits, (ii) require Participants to provide collat- Other Considerations eral to secure their warranty exposure and monitor compliance with such collateral requirements, and (iii) maintain a In order to approve the notices, the Board also must comprehensive auditing system that would monitor the determine that the performance of the proposed activities adherence of Participants to the Identrus operating rules by Notificants and Identrus "can reasonably be expected to and technical standards. produce benefits to the public . . . that outweigh possible The Board recognizes that neither the cryptographic adverse effects, such as undue concentration of resources, methods employed by Identrus nor any other security sysdecreased or unfair competition, conflicts of interests, or tem can provide absolute protection against the risks noted unsound banking practices."30 As part of its evaluation of above. The nature of these risks is not different, however, these factors, the Board considers the financial and mana- from those to which more traditional banking operations gerial resources of Notificants and their subsidiaries, and are exposed in other forms. The Board expects banking the effect the transaction would have on such resources.31 organizations considering whether to act as CAs to analyze The Board notes that each Notificant maintains capital carefully the associated risks, and to evaluate carefully equivalent to the capital levels that would be required of a whether those risks are consistent with their policies relat- U.S. banking organization. Based on all the facts of record, ing to the security of customer information and other including confidential examination reports and financial data.33 The Board believes that such analyses and evaluainformation submitted by Notificants, the Board has con- tions would mitigate the risk that acting as a CA would cluded that financial and managerial considerations are result in unsound banking practices.34 consistent with approval of the proposal. The Board also has carefully considered the competitive The Board has carefully considered the possibility that effects of the proposal. Notificants do not currently act as Identrus, Notificants, and their customers could expose CAs in the United States, and consummation of the prothemselves to the risks of electronic interception, interfer- posal would increase competition in the market for CA ence, and fraud by operating and participating in a system services. In addition, the Board notes that the Identrus that provides digital certification services for transactions System would permit Notificants and other Participants in conducted over open electronic networks like the Internet. The Board has carefully considered the proposal in light of these risks and the policies and procedures that the Identrus System would use to mitigate such risks. The Board notes 32. Notificants have indicated that the Identrus System is in the that an organization would be eligible to become a Partici- process of finalizing its operating rules, including the technical specipant in the Identrus System only if it provides financial fications for the system, and sample Participant and customer agreeservices, is regulated and examined by a government au- ments. The Board has carefully reviewed the Identrus System's draft operating rules and agreements, and Notificants have committed to thority in its home country, meets minimum capital stanprovide the Federal Reserve System with the final version of the dards, and has a minimum long-term debt rating. Identrus operating rules (including the technical specifications) and sample and Notificants also intend to use sophisticated cryptographic Participant and customer agreements prior to commencing operations. methods to seek to ensure the security of digital certificates 33. The Board notes that Identrus has engaged an independent and to adopt a highly secure root CA technology. public accounting firm to conduct a detailed risk analysis of the Identrus System. Moreover, Notificants have agreed to treat Identrus In addition, as noted above, Participants and customers as a subsidiary for purposes of the BHC Act, and Identrus has would be required to enter into written contracts that committed to include a provision in any contract with a vendor that carefully define the functions, responsibilities, and scope of provides services covered by the Bank Service Company Act (12 U.S.C. § 1861 et seq.) indicating that the Identrus-related operations of that vendor will be subject to the examination and regulatory 29. Notificants may engage in data processing and data transmission authority of the Board. activities, including the development and sale of hardware and soft- 34. Notificants have committed that neither Notificants nor Identrus ware, pursuant to this order only to the extent such activities are will represent that the Board's approval of these notices constitutes an necessary to permit the proper operation of the Identrus System. endorsement of Notificants' or Identrus's products or services by the Notificants and Identrus also must conduct their data processing and Federal Reserve System, and neither Notificants nor Identrus will data transmission activities subject to the software and hardware indicate in any of their marketing efforts or materials, either oral or limitations contained in Regulation Y. written, that the Federal Reserve System assures or has approved or 30. 12 U.S.C. § 1843(c)(8). endorsed the security, functionality, or effectiveness of the products or 31 .See 12 C.F.R. 225.26(b). services offered by Notificants or Identrus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 61 the Identrus System to compete with each other to provide Voting for this action: Chairman Greenspan, Vice Chairman Fergu- CA and related services to customers. son, and Governors Kelley, Meyer, and Gramlich. Notificants have stated that consummation of the pro- ROBERT DEV. FRIERSON posal would facilitate the use of the Internet and other open Associate Secretary of the Board electronic networks for business-to-business electronic commerce, and allow companies to reduce the transaction J.P. Morgan & Co. Incorporated costs associated with doing business. The Board also be- New York, New York lieves that consummation of the proposal would enhance the ability of Notificants to meet the needs of their custom- UBS AG ers. In addition, as the Board previously has noted, there Zurich, Switzerland are public benefits to be derived from permitting capital markets to operate so that banking organizations can make Order Approving Notices to Engage in Nonbanking potentially profitable investments in nonbanking compa- Activities nies and from permitting banking organizations to allocate their resources in the manner they consider to be most J.R Morgan & Co. Incorporated ("JPM"), a bank holding efficient when such investments and actions are consistent, company within the meaning of the Bank Holding Comas in this case, with the relevant considerations under the pany Act ("BHC Act"), and UBS AG ("UBS"), a foreign BHC Act.35 banking organization subject to the BHC Act, have re- Based on the foregoing and all other facts of record, the quested the Board's approval under section 4(c)(8) of the Board has determined that consummation of the proposal BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.24 of can reasonably be expected to produce benefits to the the Board's Regulation Y (12 C.F.R. 225.24) to acquire or public that outweigh any potential adverse effects of the retain more than 5 percent of the voting interests in proposal. Accordingly, based on all the facts of record, the TP Group LDC, Grand Cayman, Cayman Islands ("TP Board has determined that the balance of public interest Group"), and its majority owned subsidiary, Tradepoint factors that the Board must consider under the proper Financial Networks pic, London, United Kingdom incident to banking standard of section 4(c)(8) of the BHC ("Tradepoint"), and thereby engage in operating a securi- Act is favorable and consistent with approval. ties exchange. Notice of the proposals, affording interested persons an Conclusion opportunity to submit comments, has been published (64 Federal Register 46,196, 48,397, and 48,643 (1999)). Based on the foregoing and all the facts of record, the The time for filing comments has expired, and the Board Board has determined that the proposal should be, and has considered the notices and all comments received in hereby is, approved. The Board's approval is specifically light of the factors set forth in section 4(c)(8) of the BHC conditioned on compliance by Notificants with all the Act. commitments made in connection with the notices, includ- JPM, with total consolidated assets of $269 billion, is the ing the commitments discussed in this order, and the condififth largest banking organization in the United States. tions set forth in this order. The Board's determination also UBS, with total consolidated assets of $583 billion, is the is subject to all the conditions set forth in Regulation Y, largest banking organization headquartered in Switzerincluding those in sections 225.7 and 225.25(c) of Regulaland.1 UBS operates branches in Los Angeles and tion Y (12 C.F.R. 225.7 and 225.25(c)), and to the Board's San Francisco, California; Stamford, Connecticut; Chiauthority to require such modification or termination of the cago, Illinois; and New York, New York, and agencies in activities of a bank holding company or any of its subsid- Miami, Florida; and Houston, Texas. JPM and UBS also iaries as the Board finds necessary to ensure compliance engage through subsidiaries in a broad range of nonbankwith, or to prevent evasion of, the provisions of the BHC ing activities in the United States and worldwide. Act and the Board's regulations and orders issued thereun- JPM proposes to control approximately 17 percent of the der. These commitments and conditions are deemed to be voting shares of TP Group, and UBS proposes to control conditions imposed in writing by the Board in connection approximately 11 percent of the voting shares of with its findings and decision, and, as such, may be en- TP Group.2 TP Group owns approximately 54.1 percent of forced in proceedings under applicable law. This proposal shall not be consummated later than three months after the effective date of this order, unless such period is extended for good cause by the Board or by the appropriate Federal 1. Asset data are as of June 30, 1999, and ranking data are as of December 31, 1998. Reserve Bank, acting pursuant to delegated authority. 2. JPM currently owns directly and indirectly an approximately By order of the Board of Governors, effective Novem- 16 percent nonvoting interest in TP Group and UBS currently owns a ber 10, 1999. 10.79 percent voting interest in TP Group. JPM and UBS acquired these interests in July 1999 in reliance on section 4(c)(13) of the BHC Act and the Board's Regulation K (12 C.F.R. Part 211). On consummation of the proposal, JPM would convert its entire non-voting 35. See, e.g., Banc One Corporation, 84 Federal Reserve Bullienttienr est in TP Group into a voting interest in the organization. In 553 (1998). connection with this conversion, JPM also would acquire an addi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 the outstanding voting shares of Tradepoint, which oper- which is operated by CRESTCo., a corporation established ates the Tradepoint Stock Exchange ("Exchange"), an by the Bank of England for the settlement of uncertificated electronic securities exchange for the secondary trading of U.K. equities.7 Tradepoint is not affiliated with the London equity and equity-related securities listed on the London Clearing House or CRESTCo. Stock Exchange. JPM and UBS also have stated that Trade- The Exchange is a recognized investment exchange unpoint anticipates establishing an office or subsidiary in the der Section 37(3) of the U.K. Financial Services Act 1986, United States. In light of these proposed actions, JPM and and is regulated and supervised by the U.K. Financial UBS have requested the Board's approval under sec- Services Authority ("FSA") under the securities laws of tion 4(c)(8) of the BHC Act to control their interests in the United Kingdom. Although Tradepoint makes its ser- TP Group.3 vices available to customers in the United States, the The Exchange is a screen-based electronic market that Securities and Exchange Commission ("SEC") has granted provides securities trade matching, execution, and related Tradepoint a limited volume exemption from the registraservices to U.S. and foreign market-makers, broker-dealers, tion requirements of section 5 of the Securities Exchange and institutional investors that become members of the Act of 1934 ("1934 Act").8 The SEC's exemptive order Exchange.4 Currently, members may access the Exchange permits Tradepoint to operate in the United States without and enter bid and ask quotes through electronic terminals registering as a securities exchange so long as (i) the linked to certain financial networks (e.g., a Bloomberg Exchange's average daily dollar value of trades involving terminal) or through a personal computer linked directly to U.S. members does not exceed $40 million, and (ii) the the Exchange. Terminals linked to the Exchange can be Exchange's worldwide average daily volume does not exlocated anywhere in the world, though trading currently ceed 10 percent of the average daily trading volume on the may occur only during U.K. business hours.5 Orders en- London Stock Exchange. The SEC's exemptive order also tered into the Exchange's system are displayed on separate requires that the Exchange comply with a number of other electronic order books for each security, which displays, in conditions designed to protect U.S. investors and to ensure descending order, the best bid and ask quotations for the fair and orderly markets. security. The Exchange automatically and continuously matches equal bid and ask offers for each listed security on Closely Related to Banking Standard a first-come, first-served basis.6 Tradepoint does not take a principal position in securi- Section 4(c)(8) of the BHC Act provides that a bank ties, clear or settle the securities transactions executed on holding company may, with Board approval, engage in any the Exchange, or assume any principal risk for securities activity that the Board determines to be "so closely related trades executed on the Exchange. Tradepoint and its share- to banking or managing or controlling banks as to be a holders also are under no obligation to guarantee a mem- proper incident thereto." In considering whether an activity ber's trades. Each member of the Exchange is required to is closely related to banking, the Board and the courts look be a member of the London Clearing House, or to appoint to whether banks generally (1) conduct the proposed activa member of the London Clearing House to clear the ity, (2) provide services that are operationally or functionmember's trades on the Exchange. Trades matched by the ally so similar to the proposed services as to equip them Exchange are registered at the end of each business day particularly well to provide the proposed services, or with the London Clearing House in the name of the appro- (3) provide services that are so integrally related to the priate clearing member. The London Clearing House then proposed services as to require their provision in a specialbecomes the counterparty to each side of the trade until it is ized form.9 settled. Settlement occurs through the CREST system, The Board has not previously determined by regulation or order that operating a securities exchange is closely related to banking within the meaning of section 4(c)(8) of tional 1 percent of TP Group's shares from a third party. After the the BHC Act. The principal function of a securities exshare conversion and purchase, JPM would control approximately change is to provide a centralized facility for the execution, 17 percent of the voting shares of TP Group. 3. A bank holding company must obtain the Board's approval under section 4(c)(8) of the BHC Act if a foreign company held by the bank holding company seeks to engage in business in the United States. 7. Cross trades executed on the Exchange are not registered with the 4. As of June 30, 1999, the Exchange had approximately 92 mem- London Clearing House and are settled directly by the relevant members. Unlike many U.S. securities exchanges, the Exchange is not ber through CREST. Cross trades are trades where the buyer and seller owned by its members but rather by its shareholders, which may or are both customers of the same Exchange member. may not be members of the exchange. 8. 15 U.S.C. § 78e; see Tradepoint Financial Networks pic, 5. The Exchange's current trading hours are Monday to Friday, Exchange Act Release No. 41,199, 1999 SEC LEXIS 612 (March 22, 7:30 A.M. to 5:30 P.M. London time, with a post-trade administration 1999). session from 5:30 P.M. to 6:00 P.M. 9. See National Courier Association v. Board of Governors of the 6. The Exchange also has the capacity to operate periodic auctions. Federal Reserve System, 516 F.2d 1229, 1237 (D.C. Cir. 1975). The In a periodic auction, bid and ask quotations would be allowed to Board may also consider any other basis that may demonstrate that the accumulate and then filled, to the extent possible, at a single price proposed activity has a reasonable or close connection or relationship calculated to match the largest possible number of accumulated buy to banking or managing or controlling banks. See Board Statement and sell orders. The Exchange does not currently operate periodic Regarding Regulation Y, 49 Federal Register 806 (1984); Securities auctions but may do so in the future for infrequently traded securities Industry Association v. Board of Governors of the Federal Reserve or the securities of smaller capitalization issuers. System, 468 U.S. 207, 210-211 n.5 (1984). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 63 clearance, and settlement of securities transactions.10 Banks Proper Incident to Banking Standard and Other and bank holding companies currently are authorized to Considerations provide securities brokerage services to their customers and, as part of these services, to execute and clear such In order to approve the proposal, the Board also must transactions on a securities exchange.11 Bank holding com- determine that the proposed activities are a proper incident pany subsidiaries authorized to act as a dealer in securities to banking, that is, that performance of the proposed activ- ("section 20 subsidiaries") also may provide securities ities "can reasonably be expected to produce benefits to the execution, clearance, and settlement services in connection public .. . that outweigh possible adverse effects, such as with their dealer operations.12 In addition, subsidiaries of undue concentration of resources, decreased or unfair combanks and bank holding companies that act as a broker or petition, conflicts of interests, or unsound banking pracdealer frequently become members of securities exchanges tices."15 As part of its evaluation of these factors, the and, in the case of mutually owned exchanges such as the Board considers the financial condition and managerial New York Stock Exchange ("NYSE"), acquire small (less resources of the notificant and its subsidiaries and the effect than 5 percent) ownership interests in the exchange. the transaction would have on those resources.16 Through these relationships, banks and bank holding com- In considering the financial resources of the notificants, panies have gained extensive experience with and know- the Board has carefully reviewed the capitalization of JPM ledge of the rules and operations of securities exchanges. and UBS and has found the capitalization of each to be Banks and bank holding companies also provide services consistent with approval. In particular, the Board notes that that are functionally and operationally similar to those JPM and its subsidiary bank, Morgan Guaranty Trust Comprovided by the Exchange. Subsidiaries of banks and bank pany, New York, New York, are well capitalized and holding companies acting as a securities broker may exe- would remain so after consummation of the proposal, and cute cross-trades for their customers and thereby match that UBS's capital ratios satisfy applicable risk-based stanequal bid and offer orders received from their customers. In dards established under the Basle Accord, and are considaddition, section 20 subsidiaries of bank holding compa- ered equivalent to the capital levels that would be required nies may act as a specialist or market-maker on a securities of a U.S. banking organization. The Board also has considexchange, such as the NYSE or NASDAQ.13 A specialist ered recent financial statements of JPM and UBS, includgenerally maintains a book of current buy and sell orders ing pro forma financial statements and other available received from other brokers and matches equal bid and information, and the condition of the U.S. operations of offer quotes for execution.14 Market-makers for a security UBS. on the NASDAQ securities exchange also publish bid and Furthermore, as noted above, Tradepoint does not take a offer prices at which they stand ready to execute transac- principal position in any security and does not assume any tions in the relevant security, either for their own account principal risk for the clearance or settlement of securities or for the account of customers. In addition, a markettransactions executed on the Exchange. In addition, JPM maker receives customer orders and matches them, to the and UBS would not guarantee any securities transactions extent possible, against an order received from another executed on the Exchange. Based on these and other facts customer or against an order for the market-maker's own of record, including relevant supervisory information, the account. Board has determined that financial and managerial consid- For these reasons, and based on all the facts of record, erations are consistent with approval. the Board concludes that operating a securities exchange is The Board also has carefully considered the competitive an activity that is closely related to banking for purposes of effects of the proposal. There are numerous existing and section 4(c)(8) of the BHC Act. potential competitors for the proposed services. Accordingly, the Board concludes that consummation of the proposal would have a de minimis effect on competition. In considering the potential for conflicts of interests and other adverse effects, the Board also has carefully reviewed 10. The operations of the Exchange are more limited than many the operational and supervisory framework within which securities exchanges in that the Exchange does not directly or indi- the Exchange operates. As noted above, the Exchange is rectly clear or settle securities transactions executed on the Exchange. subject to regulation by the FSA under the securities laws Rather, the Exchange maintains systems to route trades to the London Clearing House for clearance and settlement through CREST. of the United Kingdom, and its U.S. activities are subject to 11. See 12 C.F.R. 225.28(b)(7)(i); BankAmerica Corporation, regulation by the SEC under the federal securities laws. 69 Federal Reserve Bulletin 105 (1983). See also 12 U.S.C. § 24U .K. law requires that recognized investment exchanges, (Seventh); OCC Interp. Letter No. 622 (April 9, 1993). such as the Exchange, promote and maintain high stan- 12. See J.P. Morgan & Co., Inc. et al., 75 Federal Reserve Bulletin dards of integrity and fair dealing.17 In furtherance of this 192 (1989), aff'd sub nom. Securities Industry Ass'n v. Board of Governors, 900 F.2d 360 (D.C. Cir. 1990); First of America Corporrae-quirement, the FSA has adopted a code of conduct govtion, 80 Federal Reserve Bulletin 1120 (1994). 13. See, e.g., Fleet Financial Group, 84 Federal Reserve Bulletin 227 (1998); Dresdner Bank AG, 82 Federal Reserve Bulletin 850 (1996). 15.See 12U.S.C. § 1843(c)(8). 14. See 5 L. Loss & J. Seligman, Securities Regulation 2513-14 16 .See 12 C.F.R. 225.26. (3d ed. 1990); New York Stock Exchange Rule 104. 17. See Financial Services Act of 1986, sch. 4, par. 5. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 erning recognized investment exchanges that is designed to with a lower-cost method of investing in foreign securities. ensure that the decisions of an exchange are not improperly In addition, the Board has noted that there are public influenced by conflicts of interest. Staff of the FSA has benefits to be derived from permitting capital markets to advised Board staff that the FSA could take supervisory operate so that bank holding companies can make potenaction against a recognized investment exchange under tially profitable investments in nonbanking companies and U.K. law if the exchange sought to deny a person access to from permitting banking organizations to allocate their the exchange on the basis of an improper conflict of resources in the manner they consider to be most efficient interest. when such investments and actions are consistent, as in this The U.K. Financial Services Act of 1986 also requires case, with the relevant considerations under the BHC Act. that the Exchange have financial resources sufficient to Based on all the facts of record, the Board has detersupport its activities, and maintain rules and procedures to mined that consummation of the proposal can reasonably ensure that trading is conducted in an orderly manner and be expected to produce public benefits that outweigh any consistent with the protection of investors.18 Pursuant to potential adverse effects of the proposal, and therefore that these requirements, Tradepoint has established rules for the the performance of the proposed activity by JPM and UBS Exchange that govern the admission of members, establish is a proper incident to banking for purposes of secstandard terms for the execution of securities transactions tion 4(c)(8) of the BHC Act.22 on the Exchange, and provide sanctions for noncompliance with the Exchange's rules. The FSA has reviewed the Conclusion Exchange's rules and determined that they are consistent with the requirements of U.K. law and must review any Based on the foregoing and all the facts of record, includproposed amendments to such rules.19 ing the commitments made by notificants in connection Tradepoint's operations in the United States also would with the notices, and subject to the terms and conditions set remain subject to the antifraud provisions of the federal forth in this order, the Board has determined that the securities laws.20 Although the SEC has granted Trade- notices should be, and hereby are, approved. The Board's point a limited volume exemption from the registration determination is subject to all the conditions set forth in the requirements of section 5 of the 1934 Act, the SEC's Board's Regulation Y, including those in sections 225.7 exemptive order requires that Tradepoint comply with a and 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and to the number of conditions designed to ensure the maintenance Board's authority to require modification or termination of of fair and orderly markets in the United States and the the activities of a bank holding company or any of its protection of U.S. investors. For example, these conditions subsidiaries as the Board finds necessary to ensure complipermit the SEC to monitor the Exchange for compliance ance with, or to prevent evasion of, the provisions and with the antifraud and other applicable provisions of the purposes of the BHC Act and the Board's regulations and federal securities laws; require the Exchange to adopt and orders issued thereunder. The Board's decision is specifiimplement procedures to ensure the nondisclosure of confi- cally conditioned on compliance with all the commitments made in the notices, including the commitments and condidential, material information held by the Exchange; and tions discussed in this order. The commitments and condiallow the SEC to obtain access to the books, records tions relied on in reaching this decision shall be deemed to (including copies of membership applications and stanbe conditions imposed in writing by the Board in connecdards for admission as a member), facilities, and personnel tion with its findings and decision and, as such, may be of the Exchange as necessary or appropriate. Based on enforced in proceedings under applicable law. these and other conditions, the SEC concluded that the limited volume exemption provided the Exchange was By order of the Board of Governors, effective Novemconsistent with the public interest and the protection of ber 8, 1999. investors.21 Notificants have stated that consummation of the pro- This action was taken pursuant to the Board's Rules Regarding posal would increase competition for the execution of Delegation of Authority (12 C.F.R. 265.4(b)(1)) by a committee of Board members. Voting for this action: Vice Chairman Ferguson and equity and equity-related securities listed on the London Stock Exchange and provide added convenience to marketmakers, broker-dealers, and institutional investors that seek to execute trades in such securities. The SEC also has 22. Regulation Y provides that a bank holding company must seek stated that the Exchange's services provide U.S. investors the Board's approval prior to altering in any material respect a nonbanking activity previously approved by the Board. See 12 C.F.R. 225.25(c)(3). As noted above, the Exchange does not currently clear or settle securities transactions executed on the Exchange. Because the 18. See Financial Services Act of 1986, sch. 4, pars. 1 and 2. clearance and settlement of securities transactions involves risks that 19. The FSA has the authority to conduct on-site inspections of the are materially different from the risks associated with the execution of Exchange if necessary or appropriate. securities transactions, notificants must separately seek the Board's 20. See, e.g., 15 U.S.C. § 78j(b). approval if the Exchange in the future proposes to clear or settle 21. JPM and UBS also have committed that Tradepoint will be securities transactions to permit the Board to determine whether the considered a subsidiary for purposes of the BHC Act, and as an performance of such additional activities by the Exchange would affiliate of any insured depository institution affiliate of the notificants constitute a proper incident to banking under section 4(c)(8) of the for purposes of sections 23A and 23B of the Federal Reserve Act. BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 65 Governors Kelley and Gramlich. Absent and not voting: Chairman Riegle-Neal Analysis Greenspan and Governor Meyer. Section 102 of the Riegle-Neal Interstate Banking and ROBERT DEV. FRIERSON Branching Efficiency Act of 1994 ("Riegle-Neal Act") Associate Secretary of the Board (Pub. L. No. 103-328, 108 Stat. 2338 (1994)) authorizes a bank to conduct an interstate merger with another bank unless, prior to June 1, 1997, the home State of one of the ORDERS ISSUED UNDER BANK MERGER ACT banks involved in the transaction has adopted a law expressly prohibiting merger transactions involving out-of- SunTrust Bank state banks.3 The Riegle-Neal Act also authorizes the ac- Atlanta, Georgia quiring bank to retain and operate, as a main office or branch, any bank offices of the acquired bank.4 Order Approving Merger of Banks All the states involved in the proposal, Alabama, Florida, Georgia, Tennessee, and Virginia, have enacted legis- SunTrust Bank, Atlanta, Georgia ("SunTrust-Atlanta"), a lation allowing interstate mergers between banks located in state member subsidiary bank of SunTrust Banks, Inc., their states and out-of-state banks pursuant to the provi- Atlanta, Georgia ("SunTrust"), has applied under sec- sions of the Riegle-Neal Act on or after June 1, 1997.5 tion 18(c) of the Federal Deposit Insurance Act (12 U.S.C. SunTrust-Atlanta has notified the appropriate state banking § 1828(c)) ("Bank Merger Act") to merge with SunTrust's agencies regarding its proposal to consolidate its banking twenty-six wholly owned subsidiary banks ("Merging operations and has provided a copy of its Bank Merger Act Banks"),1 and to retain and operate branches at the locaapplication to all the relevant state agencies. In light of the tions of the main offices and branches of the Merging foregoing, it appears that the proposal complies with the Banks. requirements of the Riegle-Neal Act.6 Notice of the application, affording interested persons an opportunity to submit comments, has been given in accor- Financial and Managerial Considerations dance with the Bank Merger Act and the Board's Rules of Procedure (12C.F.R. 262.3(b)). As required by the Bank In reviewing this proposal under the Bank Merger Act, the Merger Act, reports on the competitive effects of the Board also has considered the financial and managerial merger were requested from the United States Attorney resources and future prospects of the institutions involved. General and the other federal banking agencies. The time The Board has reviewed these factors in light of the facts for filing comments has expired, and the Board has considof record, including supervisory reports of examination ered the application and all the facts of record in light of assessing the financial and managerial resources of the factors set forth in the Bank Merger Act. SunTrust-Atlanta and the Merging Banks. Based on all the SunTrust is the largest commercial banking organization facts of record, and because the proposal represents the in Georgia, controlling deposits of $10.4 billion, representreorganization of banking operations already under coming 23.4 percent of the total deposits in commercial bankmon control, the Board concludes that the financial and ing organizations in Georgia.2 It also is the 14th largest managerial resources and future prospects of SunTrustcommercial banking organization in Alabama, controlling Atlanta and the Merging Banks are consistent with apdeposits of $298.1 million, representing less than 1 percent proval of the proposal. of the total deposits in commercial banking organizations in Alabama; the largest commercial banking organization Convenience and Needs Considerations in Florida, controlling deposits of $20.4 billion, representing 33.1 percent of the total deposits in commercial bank- The Board received a comment from the Coalition of ing organizations in Florida; the fourth largest commercial Black Business Enterprises and Organizations of Albany, banking organization in Tennessee, controlling deposits of $5.7 billion, representing 7.4 percent of the total deposits in commercial banking organizations in Tennessee; and the 3. 12 U.S.C. § 1831u(a)(l) (1994). largest commercial banking organization in Virginia, con- 4. 12 U.S.C. § 1831u(d)(l) (1994). trolling deposits of $18.6 billion, representing 34.5 percent 5. See Ala. Code §§ 5-13B-22, 23 (effective May 31, 1997); Fla. Stat. Ch. 658.2953 (effective May 31, 1997); Ga. Code Ann., Fin. Inst. of the total deposits in commercial banking organizations § 7-1-628.3 (effective June 1, 1997); Tenn. Code Ann § 452- 1402 in Virginia. This proposal represents a reorganization of et seq. (effective June 1, 1997); and Va. Code Ann. § 6.1^44.1 et seq. SunTrust's existing banking operations and, therefore, the (effective March 16, 1995). Board concludes that consummation of the proposal would 6. All the conditions for an interstate merger enumerated in Rieglenot have any significantly adverse effects on competition or Neal would be met in this case. Each bank involved in the transaction is adequately capitalized and the resulting bank will continue to be on the concentration of banking resources in any relevant adequately capitalized and adequately managed on consummation of banking market. this proposal. SunTrust-Atlanta and all affiliated depository institutions would not control more than 10 percent of the total amount of deposits of insured depository institutions in the United States and this 1. The Merging Banks are listed in the appendix. corporate reorganization would not cause an increase in the percent- 2. All banking data are as of June 30, 1998. age of deposits controlled by SunTrust in any state. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 Georgia ("Protestant"), maintaining that one of the Merg- CRA performance examination, OCC examiners found ing Banks, SunTrust Bank, South Georgia, N.A., Leesburg, that the level of lending by the bank throughout its assess- Georgia ("SunTrust-Leesburg"), does not provide needed ment area was responsive to the community's credit needs services or make adequate efforts to meet the credit needs and that no conspicuous gaps existed in the loan penetraof consumers who live in low- and moderate-income tion of geographies. Examiners determined that SunTrust- ("LMI") census tracts of Albany, Georgia. Specifically, Leesburg had good loan penetration in low-income geogra- Protestant states that African Americans, particularly small phies throughout its assessment area. OCC examiners also business owners in low-income census tracts, are harmed considered SunTrust-Leesburg's level of lending in the by "redlining" and indifference on the part of SunTrust- Albany, Georgia, Metropolitan Statistical Area ("Albany Leesburg.7 MSA")9 good and responsive to the credit needs in the The Board has long held that consideration of the conve- MSA.10 nience and needs factor includes a review of the records of SunTrust-Leesburg had a good record of serving the the relevant depository institutions under the Community credit needs of the small businesses throughout its assess- Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). As ment area. Specifically, examiners found that in the assessprovided in the CRA, the Board has evaluated this factor in ment area, 84 percent of SunTrust-Leesburg's small busilight of examinations by the primary federal supervisors of ness loans were in amounts of $100,000 or less, and that the CRA performance of the relevant institutions. An insti- 89 percent of the bank's small business loans were to tution's most recent CRA performance evaluation is a businesses with gross revenues of less than $1,000,000. In particularly important consideration in the applications pro- the Albany MSA, 32 percent of SunTrust-Leesburg's small cess because it represents a detailed, on-site evaluation of business loans were in LMI geographies. OCC examiners the institution's overall record of performance under the concluded that SunTrust-Leesburg's small business lend- CRA by its primary federal supervisor.8 54 Federal Regis- ing in the Albany MSA was adequate, noting that ter 23,618 and 23,641 (1999). 39 percent of that MSA's small businesses were in LMI The results of these examinations indicate that Sun- geographies.11 Examiners also considered SunTrust- Trust's depository institution subsidiaries, including Leesburg's performance in small farm lending to be ade- SunTrust-Leesburg, are helping to meet the convenience quate; SunTrust-Leesburg made 21 percent of its small and needs of the communities they serve. Each of Sun- farm loans in LMI geographies in its assessment area. Trust's depository institutions received a rating of "satis- Approximately 26 percent of the farms in the assessment factory" or higher at its last CRA performance examina- area were in LMI geographies. tion, with nine banks receiving an "outstanding" rating. SunTrust-Leesburg reports that it helps to meet the credit Examiners found that the CRA-related investments made needs of its assessment areas through participation in sevby SunTrust-Atlanta and the Merging Banks exhibited a eral community development organizations, including high level of responsiveness to the credit needs of the Albany Community Together ("ACT"), Georgia Developcommunities, the banks' branch networks were accessible ment Authority ("GDA"), and Community Development to most segments of the communities they served, and the Center ("CDC"). SunTrust-Leesburg has committed to banks provided a significant number and variety of com- invest $1 million in ACT, which is organizing a small munity development services. business revolving loan fund. GDA originates small farm SunTrust-Leesburg, which provides products and ser- loans throughout Georgia, and CDC provides small busivices to the area identified by Protestant, received a "satis- ness loans in the city of Albany. SunTrust-Leesburg has factory" rating on its most recent CRA performance exam- committed $110,000 to Vision Albany, an initiative to ination as of July 30,1997, by the Office of the Comptroller promote community development in Albany and Doughof the Currency ("OCC"). In SunTrust-Leesburg's 1997 erty Counties. SunTrust-Leesburg representatives assist these organizations in providing services in the bank's assessment areas. 7. Protestant further alleges that the CRA performance deficiencies of SunTrust-Leesburg result from the lack of minority representation on SunTrust-Leesburg's board of directors and its management and stalf. The Bank Merger Act does not authorize the Board to adjudicate 9. SunTrust-Leesburg includes the Albany MSA as one of its four disputes that arise in areas of employment discrimination or to moni- assessment areas. All seven of the low-income census tracts in tor the racial composition of the board of directors, management, or SunTrust-Leesburg's assessment areas are in the city of Albany. In staff of an organization. Under the regulations of the Department of addition, five of the nineteen moderate-income geographies in Labor, SunTrust and SunTrust-Leesburg are required to file reports SunTrust-Leesburg's assessment areas are in the city of Albany. with the Equal Employment Opportunity Commission ("EEOC") 10. SunTrust-Atlanta states that in 1998, SunTrust-Leesburg made covering all employees, and the EEOC has jurisdiction to determine more than 50 percent of the loans to African American borrowers in whether companies are in compliance with equal employment oppor- the Albany MSA's low-income census tracts that were reported by tunity statutes. See 41 C.F.R. 60-1.7(a), 60-1.40. local depository institutions under the Home Mortgage Disclosure 8. The Interagency Questions and Answers Regarding Community Act. Reinvestment provide that an institution's most recent CRA perfor- 11. SunTrust-Atlanta states that SunTrust-Leesburg's small busimance evaluation is an important consideration in the applications ness loan efforts have resulted in the bank making approximately process because it represents a detailed on-site evaluation of the 30 percent of the total business loans in amounts of less than $100,000 institution's overall record of performance under the CRA by the and 50 percent of the business loans between $100,000 and $250,000 appropriate federal financial supervisor. in LMI census tracts of Albany from 1996 to 1998. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 67 In reviewing the convenience and needs of the communi- Voting for this action: Chairman Greenspan, Vice Chairman Ferguties served by SunTrust-Leesburg, the Board also notes son, and Governors Kelley and Meyer. Absent and not voting: Governor Gramlich. that the bank provides a full range of services, including commercial, agricultural, real estate, and consumer loans, ROBERT DEV. FRIERSON trust services and a variety of community development Associate Secretary of the Board services. SunTrust has stated that its internal reorganization will not adversely affect the provision of these services Appendix by SunTrust-Leesburg because the reorganization plan involves no branch closings or any other actions that might Merging Banks: limit the bank's ability to serve the credit needs of its local communities. Crestar Bank, Richmond, Virginia The Board has carefully considered all the facts of SunTrust Bank, Alabama, N.A., Florence, Alabama record, including Protestant's comments, the response to SunTrust Bank, Augusta, N.A., Augusta, Georgia those comments, the CRA performance records of Sun- SunTrust Bank, Central Florida, N.A., Orlando, Florida Trust Bank-Atlanta and the Merging Banks, relevant re- SunTrust Bank, Chattanooga, N.A., Chattanooga, ports from their primary federal regulators, and other su- Tennessee pervisory information. Based on the facts of record, and for the reasons discussed above, the Board concludes that SunTrust Bank, East Central Florida, Daytona Beach, convenience and needs considerations, including the rele- Florida vant banks' records of CRA performance, are consistent SunTrust Bank, East Tennessee, N.A., Knoxville, with approval of the proposal. Tennessee SunTrust Bank, Gulf Coast, Sarasota, Florida SunTrust Bank, Miami, N.A., Miami, Florida Conclusion SunTrust Bank, Mid-Florida, N.A., Winter Haven, Florida SunTrust Bank, Middle Georgia, N.A., Macon, Georgia Based on the foregoing and all the facts of record, the SunTrust Bank, Nashville, N.A., Nashville, Tennessee Board has determined that the application should be, and SunTrust Bank, Nature Coast, Brooksville, Florida hereby is, approved.12 The Board's approval is specifically SunTrust Bank, North Central Florida, Ocala, Florida conditioned on compliance by SunTrust-Atlanta with all SunTrust Bank, North Florida, N.A., Jacksonville, Florida the commitments made in connection with the application. SunTrust Bank, Northeast Georgia, N.A., Athens, Georgia For purposes of this action, the commitments and condi- SunTrust Bank, Northwest Florida, Tallahassee, Florida tions relied on in reaching this decision are conditions SunTrust Bank, Northwest Georgia, N.A., Rome, Georgia imposed in writing by the Board and, as such, may be SunTrust Bank, Savannah, N.A., Savannah, Georgia enforced in proceedings under applicable law. SunTrust Bank, South Central Tennessee, N.A., Pulaski, The proposed acquisition shall not be consummated Tennessee before the fifteenth calendar day following the effective SunTrust Bank, South Florida, N.A., Fort Lauderdale, date of this order, or later than three months after the Florida effective date of this order, unless such period is extended SunTrust Bank, South Georgia, N.A., Leesburg, Georgia for good cause by the Board or by the Federal Reserve SunTrust Bank, Southeast Georgia, N.A., Brunswick, Bank of Atlanta, acting pursuant to delegated authority. Georgia By order of the Board of Governors, effective Novem- SunTrust Bank, Southwest Florida, Fort Myers, Florida ber 18, 1999. SunTrust Bank, Tampa Bay, Tampa Bay, Florida SunTrust Bank, West Georgia, N.A., Columbus, Georgia 12. Protestant requested that several public meetings or hearings be ORDERS ISSUED UNDER INTERNATIONAL BANKING held on this matter in Albany, Georgia. The Bank Merger Act does not ACT require the Board to hold a public hearing on an application. Under its rules, the Board may, in its discretion, hold a public meeting or hearing on an application if a meeting or hearing is necessary or Bank Austria Aktiengesellschaft appropriate to clarify factual issues related to the application and to Vienna, Austria provide an opportunity for testimony, if appropriate. See 12 C.F.R. 262.3(i). The Board has carefully considered Protestant's request in Order Approving Establishment of a Branch and light of all the facts of record. Protestant has had ample opportunity to Representative Offices submit its views and Protestant's request for a public meeting or hearing fails to demonstrate why written comments would not adequately present Protestant's evidence. Protestant's request also fails to Bank Austria Aktiengesellschaft ("Bank"), Vienna, Ausidentify disputed issues of fact that are material to the Board's tria, a foreign bank within the meaning of the International decision and that would be clarified by a public meeting or hearing. Banking Act ("IBA"), has applied under section 7(d) of For these reasons, and based on all the facts of record, the Board has determined that a public meeting or hearing is not required or war- the IBA (12 U.S.C. § 3105(d)) to establish a federally ranted in this case. Accordingly, Protestant's request is denied. licensed branch in Greenwich, Connecticut. Bank has also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 applied under section 10(a) of the IBA (12 U.S.C. account additional standards as set forth in the IBA and § 3107(a)) to establish representative offices in Atlanta, Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. Georgia; and San Francisco, California. The Foreign Bank 211.24(c)(2)-(3)). Supervision Enhancement Act of 1991, which amended the As noted above, Bank engages directly in the business of IBA, provides that a foreign bank must obtain the approval banking outside the United States. Bank also has provided of the Board to establish a branch or representative office in the Board with information necessary to assess the applicathe United States. tion through submissions that address the relevant issues. Notice of the application, affording interested persons an With respect to supervision by home country authorities, opportunity to submit comments, was published on the Board previously has determined, in connection with November 27, 1998, in a newspaper of general circulation applications involving other banks in Austria, that those in Greenwich, Connecticut (Greenwich Time)', Atlanta, banks were subject to home country supervision on a Georgia (Atlanta Journal and Constitution)', and San Fran- consolidated basis.5 Bank is supervised by the Austrian cisco, California (San Francisco Chronicle). The time for Federal Ministry of Finance (the "Ministry") and the Ausfiling comments has expired, and the Board has considered trian National Bank on substantially the same terms and the application and all comments received. conditions as those other banks. Based on all the facts of Bank, with total consolidated assets of $130 billion, is record, the Board has determined that Bank is subject to the largest bank in Austria.1 Anteilsverwaltung- comprehensive supervision on a consolidated basis by its Zentralsparkasse ("AV-Z"), an Austrian holding company, home country supervisor. is Bank's largest shareholder.2 Bank engages directly and The Board also has taken into account the additional indirectly in a number of banking, financial, and other standards set forth in section 7 of the IBA and Reguactivities in Europe, Asia, and the United States. In the lation K (see 12 U.S.C. § 3105(d) (3)-(4); 12 C.F.R. United States, Bank operates a federal branch in New 211.24(c)(2)-(3). The ministry has no objection to the York, New York; a representative office in Chicago, Illi- establishment of the proposed branch and representative nois; and several nonbank subsidiaries. Bank is a qualify- offices. ing foreign banking organization within the meaning of With respect to the financial and managerial resources of Regulation K (12 C.F.R. 211.23(b)). Bank, taking into consideration Bank's record of opera- In September 1998 Bank merged with Creditanstalt tions in its home country, its overall financial resources, Aktiengesellschaft, Vienna, Austria, which, up until the and its standing with its home country supervisors, the merger, operated a branch in Greenwich, Connecticut; and Board has also determined that financial and managerial representative offices in Atlanta, Georgia; and San Fran- factors are consistent with approval of the proposed branch cisco, California. Bank has requested authority to retain and representative offices. Bank appears to have the experiand operate these offices through this application. Pursuant ence and capacity to support the proposed branch and to Regulation K, the Board allowed the merger to proceed representative offices and has established controls and probefore an application to establish the offices was filed and cedures for the proposed offices to ensure compliance with acted on by the Board.3 US. law. In order to approve an application by a foreign bank to With respect to access to information about Bank's establish a branch or representative office in the United operations, the Board has reviewed the restrictions on States, the IBA and Regulation K require the Board to disclosure in relevant jurisdictions in which Bank operates determine that the foreign bank applicant engages directly and has communicated with relevant government authoriin the business of banking outside of the United States, and ties regarding access to information. Bank and its parent has furnished to the Board the information it needs to have committed to make available to the Board such inforassess the application adequately. The Board also shall take mation on the operations of Bank and any of its affiliates into account whether the foreign bank and any foreign that the Board deems necessary to determine and enforce bank parent are subject to comprehensive supervision or compliance with the IBA, the Bank Holding Company Act regulation on a consolidated basis by its home country of 1956, as amended, and other applicable federal law. To supervisor (12 U.S.C. §§ 3105(d)(2), 3107(a)(2); 12 C.F.R. the extent that the provision of such information to the 211.24(d)(2), 211.24(c)(1)).4 The Board may also take into Board may be prohibited by law, Bank and its parent have 1. Unless otherwise indicated, data are as of June 30, 1999. dealings with and relationship between the bank and its affiliates, both 2. As of October 1, 1999, AV-Z owned 24.5 percent of Bank foreign and domestic; (iv) receive from the bank financial reports that Austria. Although AV-Z is organized as a savings bank, Austrian law are consolidated on a worldwide basis or comparable information that provides that AV-Z may only hold and manage assets. permits analysis of the bank's financial condition on a worldwide 3. See 12 C.F.R. 211.24(a)(3), and Board Letter dated Septem- consolidated basis; (v) evaluate prudential standards, such as capital ber 21, 1998, to John C. Murphy, Jr., Esq. adequacy and risk asset exposure, on a worldwide basis. These are 4. In assessing this standard, the Board considers, among other indicia of comprehensive, consolidated supervision. No single factor factors, the extent to which the home country supervisors: (i) ensure is essential, and other elements may inform the Board's determinathat the bank has adequate procedures for monitoring and controlling tion. its activities worldwide; (ii) obtain information on the condition of the 5. See Creditanstalt-Bankverein, 82 Federal Reserve Bulletin 594 bank and its subsidiaries and offices through regular examination (1996); Erste Bank der Osterreichischen Sparkassen Aktiengesellreports, audit reports, or otherwise; (iii) obtain information on the schaft, 84 Federal Reserve Bulletin 1123 (1998). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 69 committed to cooperate with the Board to obtain any UBS AG necessary consents or waivers that might be required from Basel, Switzerland third parties for disclosure of such information. In addition, subject to certain conditions, the Ministry may share infor- Order Approving Establishment of a Representative mation on Bank's operations with other supervisors, in- Office cluding the Board. In light of these commitments and other facts of record, and subject to the condition described UBS AG ("Bank"), Basel, Switzerland, a foreign bank below, the Board concludes that Bank has provided ade- within the meaning of the International Banking Act quate assurances of access to any necessary information ("IBA"), has applied under section 10(a) of the IBA that the Board may request. (12 U.S.C. § 3107(a)) to establish a representative office in On the basis of all the facts of record, and subject to the Washington, D.C. The Foreign Bank Supervision Enhancecommitments made by Bank and its parent, as well as the ment Act of 1991, which amended the IBA, provides that a terms and conditions set forth in this order, the Board has foreign bank must obtain the approval of the Board to determined that Bank's application to establish the establish a representative office in the United States. federally-licensed branch and representative offices should Notice of the application, affording interested persons an be, and hereby is, approved. Should any restrictions on opportunity to submit comments, has been published in a access to information on the operations or activities of newspaper of general circulation in Washington, D.C. (The Bank and its affiliates subsequently interfere with the Washington Times, August 6, 1999). The time for filing Board's ability to obtain information to determine and comments has expired, and the Board has considered the enforce compliance by Bank or its affiliates with applicable application and all comments received. federal statutes, the Board may require termination of any Bank, with assets of approximately $581.7 billion,1 was of Bank's direct or indirect activities in the United States, created as a result of the 1998 merger of Swiss Bank or in the case of an office licensed by the Office of the Corporation and Union Bank of Switzerland. UBS is the Comptroller of the Currency ("OCC"), recommend termi- largest banking organization in Switzerland and the fourth nation of such office. Approval of this application is also largest banking organization in the world. Bank's shares specifically conditioned on compliance by Bank and its are publicly traded and widely held, with no single shareparent with the commitments made in connection with this holder owning more than 5 percent of the shares. application and with the conditions in this order.6 The Bank engages in a broad range of commercial and incommitments and conditions referred to above are condi- vestment banking activities, directly and through a number tions imposed in writing by the Board in connection with of subsidiaries, both foreign and domestic. In the United its decision and may be enforced in proceedings under States, Bank operates state-licensed branches in Stamford, 12 U.S.C. § 1818 or 12 U.S.C. § 1847 against Bank, its Connecticut, New York, New York, and Chicago, Illinois; offices, and its affiliates. federally-licensed branches in San Francisco and By order of the Board of Governors, effective Novem- Los Angeles, California; state-licensed agencies in Miami, ber 18, 1999. Florida, and Houston, Texas; and a representative office in Houston, Texas. Voting for this action: Chairman Greenspan, Vice Chairman Fergu- The proposed representative office would act as a liaison son, and Governors Kelley and Meyer. Absent and not voting: Gover- between Bank and existing and potential private banking nor Gramlich. customers in Washington, D.C., and adjacent areas in Virginia and Maryland. The office would market private bank- ROBERT DEV. FRIERSON ing products offered by Bank's New York branch. Associate Secretary of the Board 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 the United States and has furnished to the Board the information it needs to assess the application adequately. The Board also shall take into account whether the foreign bank is subject to comprehensive supervision or regulation on a consolidated basis by its home country supervisor (12 U.S.C. § 3107(a)(2); 12 C.F.R. 211.24(d)(2)).2 In addition, the 6. The Board's authority to approve establishment of the proposed branch office parallels the continuing authority of the OCC to license federal offices of a foreign bank; the Board's authority to approve 1. Data are as of June 30, 1999. establishment of the proposed representative offices parallels the con- 2. In assessing this standard, the Board considers, among other tinuing authority of the States of Georgia and California to license factors, the extent to which the home country supervisors: (i) ensure offices of a foreign bank. The Board's approval of this application that the bank has adequate procedures for monitoring and controlling does not supplant the authority of the OCC, or the States of Georgia its activities worldwide; (ii) obtain information on the condition of the and California, respectively, to license the proposed offices of Bank in bank and its subsidiaries and offices through regular examination accordance with any terms or conditions that they may impose. reports, audit reports, or otherwise; (iii) obtain information on the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 Board may take into account additional standards set forth the IBA, the Bank Holding Company Act of 1956, as in the IBA and Regulation K (12 U.S.C. § 3105(d)(3)-(4); amended, and other applicable federal law. To the extent 12C.F.R. 211.24(c)(2)). that the provision of such information may be prohibited As noted above, Bank engages directly in the business of by law, Bank has committed to cooperate with the Board to banking outside the United States. Bank also has provided obtain any necessary consents or waivers that might be the Board with information necessary to assess the applica- required from third parties for disclosure of such information through submissions that address the relevant issues. tion. In addition, subject to certain conditions, the Swiss With respect to supervision by home country authorities, Banking Commission may share information on Bank's the Board previously has determined that Bank was subject operations with other supervisors, including the Board. In to comprehensive home country supervision on a consoli- light of these commitments and other facts of record, and dated basis.3 There have been no material changes in the subject to the conditions described below, the Board conmanner in which Swiss banks are supervised and regulated cludes that Bank has provided adequate assurances of by their home country supervisors since that time. Accord- access to any necessary information the Board may reingly, based on all the facts of record, the Board has quest. determined that Bank continues to be subject to compre- On the basis of all the facts of record, and subject to the hensive supervision and regulation on a consolidated basis commitments made by Bank and the terms and conditions by its home country supervisor. set forth in this order, the Board has determined that The Board also has taken into account the additional Bank's application to establish the representative office standards set forth in section 7 of the IBA and Regula- should be, and hereby is, approved. Should any restrictions tion K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. on access to information on the operations or activities of 211.24(c)(2)). With respect to consent of appropriate home Bank subsequently interfere with the Board's ability to country authorities, the Swiss Banking Commission has no obtain information to determine and enforce compliance by objection to establishment of the proposed representative Bank or its affiliates with applicable federal statutes, the office. Board may require termination of any of Bank's or its With respect to the financial and managerial resources of affiliates' direct or indirect activities in the United States, Bank, taking into consideration Bank's record of operation or in the case of an office licensed by the Office of the in its home country, its overall financial resources, and its Comptroller of the Currency, recommend termination of standing with its home country supervisor, the Board also such office. Approval of this application also is specifically has determined that financial and managerial factors are conditioned on compliance by Bank with the commitments consistent with approval of the proposed representative made in connection with the application, and with the office. Bank appears to have the experience and capacity to conditions in this order.4 The commitments and conditions support the proposed representative office and has estab- referred to above are conditions imposed in writing by the lished controls and procedures for the proposed representa- Board in connection with its decision, and may be enforced tive office to ensure compliance with U.S. law. in proceedings under 12 U.S.C. § 1818 against Bank and its With respect to access to information about Bank's affiliates. operations, the Board has reviewed the restrictions on By order of the Board of Governors, effective Novemdisclosure in relevant jurisdictions in which Bank operates ber 24, 1999. and has communicated with relevant government authorities regarding access to information. Bank has committed Voting for this action: Chairman Greenspan, Vice Chairman Ferguto make available to the Board such information on the son, and Governors Kelley, Meyer, and Gramlich. operations of Bank and any of its affiliates that the Board ROBERT DEV. FRIERSON deems necessary to determine and enforce compliance with Associate Secretary of the Board dealings with and relationship between the bank and its affiliates, both 4. The Board's authority to approve the establishment of the proforeign and domestic; (iv) receive from the bank financial reports that posed representative office parallels the continuing authority of the are consolidated on a worldwide basis, or comparable information that District of Columbia to license or otherwise to permit the establishpermits analysis of the bank's financial condition on a worldwide ment of offices of a foreign bank. The Board's approval of this consolidated basis; (v) evaluate prudential standards, such as capital application does not supplant the authority of the District of Columbia adequacy and risk asset exposure, on a worldwide basis. These are and the Office of Banking and Financial Institutions ("Office") to indicia of comprehensive consolidated supervision. No single factor is license or otherwise to permit the establishment of the proposed office essential and other elements may inform the Board's determination. of Bank in accordance with any terms or conditions that the Office 3. See UBS AG, Federal Reserve Bulletin 684 (1998). may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 71 INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (JULY 1, 1999 - SEPTEMBER 30, 1999) Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page South Bancorporation, First American Corporation, August 30, 1999 85, 685 Birmingham, Alabama Nashville, Tennessee First American National Bank, Nashville, Tennessee First American Federal Savings Bank, Nashville, Tennessee First American Community Development Corporation, Nashville, Tennessee Banco de la Ciudad de Buenos Aires, To establish a representative office in May 5, 1999 85, 647 Buenos Aires, Argentina New York, New York Bank Iowa, U.S. Bank, N.A., August 18, 1999 85, 693 Red Oak, Iowa Minneapolis, Minnesota Caixa Geral de Depositos S.A., To establish a state-licensed branch in September 27, 1999 85, 774 Lisbon, Portugal New York, New York Canadian Imperial Bank of Commerce, The CIBC World Markets Corporation, September 20, 1999 85, 733 Toronto, Canada Toronto, Canada CIBC World Markets Inc., Toronto, Canada CIBC Delaware Holdings Inc., New York, New York CIBC National Bank, Maitland, Florida Civitas Bank, First Indiana Bank, July 14, 1999 85, 645 St. Joseph, Michigan Indianapolis, Indiana The Dai-Ichi Kangyo Bank, Limited, CIT Group, Inc., September 27, 1999 85, 736 Tokyo, Japan Livingston, New Jersey Newcourt Credit Group, Inc., Toronto, Canada Firstar Corporation, Mercantile Bancorporation Inc., September 1, 1999 85, 737 Milwaukee, Wisconsin St. Louis, Missouri Ameribanc, Inc., St. Louis, Missouri Mercantile Bank National Association, St. Louis, Missouri Fleet Financial Group, Inc., BankBoston Corporation, September 7, 1999 85, 747 Boston, Massachusetts Boston, Massachusetts BankBoston, N.A., Boston, Massachusetts The Fuji Bank, Limited, HealthCare Financial Partners, Inc., July 20 1999 85, 643 Tokyo, Japan Chevy Chase, Maryland Heller Financial, Inc., Chicago, Illinois Manufacturers and Traders Trust The Chase Manhattan Bank, August 16, 1999 85, 694 Company, New York, New York Buffalo, New York Security Pecos Bancshares, Inc., Security State Bank of Pecos, July 28, 1999 85, 640 Pecos, Texas Pecos, Texas Security Delaware Pecos Bancshares, Inc., Dover, Delaware Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 Index of Orders Issued or Actions Taken—Continued Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page Stockman Financial Corporation, Terry Bancshares, Inc., July 2, 1999 85, 641 Miles City, Montana Terry, Montana State Bank of Terry, Terry, Montana The Sumitomo Bank, Limited, Daiwa SB Investments Ltd., July 20, 1999 85, 644 Osaka, Japan New York, New York Texas Regional Bancshares, Inc., Harlingen Bancshares, Inc., August 23, 1999 85, 683 McAllen, Texas Harlingen, Texas Texas State Bank, HN Bancshares of Delaware, Inc., McAllen, Texas Harlingen, Texas Harlingen National Bank, Harlingen, Texas United Bank of Philadelphia, First Union National Bank, September 7, 1999 85, 773 Philadelphia, Pennsylvania Charlotte, North Carolina 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 Section 3 Applicant(s) Bank(s) Effective Date Compass Bancshares, Inc., Western Bancshares of Albuquerque, Inc., November 5, 1999 Birmingham, Alabama Albuquerque, New Mexico 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 Area Bancshares, Corporation, Lyon Bancorp, Inc., St. Louis November 4, 1999 Owensboro, Kentucky Eddyville, Kentucky Peoples Bank of Murray, Kentucky, Murray, Kentucky Dees Bank of Hazel, Hazel, Kentucky Bank of Livingston County, Tiline, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 73 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Arvest Bank Group, Inc., The First National Bank of Huntsville, St. Louis October 29, 1999 Bentonville, Arkansas Huntsville, Arkansas Bank of America Corporation, Bank of America, N.A., Richmond November 24, 1999 Charlotte, North Carolina Charlotte, North Carolina NB Holdings Corporation, Lake-Osceola State Bank, Charlotte, North Carolina Baldwin, Michigan Camden National Corporation, KSB Bancorp, Inc., Boston November 10, 1999 Camden, Maine Kingfield, Maine Kingfield Savings Bank, Kingfield, Maine Capitol Bancorp Ltd., Nevada Community Bancorp Limited, Chicago November 10, 1999 Lansing, Michigan Las Vegas, Nevada Sun Community Bancorp Limited, Phoenix, Arizona Charter Banking Corp., Columbia Bank, Atlanta October 25, 1999 Tampa, Florida Tampa, Florida Community First Bankshares, Inc., River Acquisition Corp., Minneapolis November 10, 1999 Fargo, North Dakota Minneapolis, Minnesota Community First National Bank, River Bancorp., Inc., Fergus Falls, Minnesota Ramsey, Minnesota Northland Security Bank, Ramsey, Minnesota The Employee Stock and Ownership First Grayson Bancshares, Inc. Dallas November 10, 1999 Trust of First Grayson Waco, Texas Bancshares, Inc., Celeste, Texas Farmers and Merchants Bancshares, Farmers and Merchants Bank and Trust, Chicago November 1, 1999 Inc., Mount Pleasant, Iowa Burlington, Iowa Farmers & Merchants Investment, North Central Bancorp, Inc., Kansas City November 24, 1999 Inc., Norfolk, Nebraska Milford, Nebraska First Bancshares Corporation, Bay bank Corporation, Minneapolis November 10, 1999 Gladstone, Michigan Gladstone, Michigan First Delta Bankshares, Inc., Merchants and Planters Bank, St. Louis November 18, 1999 Blytheville, Arkansas Manila, Arkansas First Manitowoc Bancorp, Inc. Dairy State Financial Services, Inc., Chicago November 3, 1999 Manitowoc, Wisconsin Plymouth, Wisconsin Dairy State Bank, Plymouth, Wisconsin First Minden Bancshares, Inc., First National Bank and Trust Company Kansas City November 10, 1999 Minden, Nebraska of Minden, Minden, Nebraska First State Financial Corporation, First State Bank of Pinellas, Atlanta November 10, 1999 Sarasota, Florida St. Petersburg, Florida F.N.B. Corporation, Sun Bancorp, Inc., Cleveland November 1, 1999 Hermitage, Pennsylvania Selinsgrove, Pennsylvania Gideon Enterprises, L.P., Silver Lake Bank, Kansas City November 9, 1999 Topeka, Kansas Topeka, Kansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Gold Banc Corporation, Union Bankshares, Ltd., Kansas City November 4, 1999 Leawood, Kansas Denver, Colorado Gold Banc Acquisition Corporation Union Bank and Trust, VIII, Inc., Denver, Colorado Leawood, Kansas Great River Banshares Corporation, Henry County Bank, Chicago November 15, 1999 Burlington, Iowa Mount Pleasant, Iowa Greenville First Banc shares, Inc., Greenville First Bank, N.A., Richmond November 2, 1999 Greenville, South Carolina Greenville, South Carolina Heritage Commerce Corp., Heritage Bank South Bay, San Francisco November 12, 1999 San Jose, California Morgan Hill, California Interbancorp, Inter Bank, San Francisco October 28, 1999 Duvall, Washington Duvall, Washington Interim First Capital Corporation, First Capital Bancorp, Inc., Atlanta October 25, 1999 Norcross, Georgia Norcross, Georgia First Capital Bank, Norcross, Georgia Intermountain First Bancorp, Nevada First Bank, San Francisco October 21, 1999 Las Vegas, Nevada Las Vegas, Nevada JD Financial Group, Inc., Pan American Bank, Chicago November 2, 1999 Evanston, Illinois Chicago, Illinois Lake Michigan Financial The Bank of Northern Michigan, Chicago November 15, 1999 Corporation, Petoskey, Michigan Holland, Michigan Merchants & Manufacturers Pyramid Bancorp., Chicago November 23, 1999 Bancorp, Grafton, Wisconsin New Berlin, Wisconsin Grafton State Bank, Merchants Merger Corp., Grafton, Wisconsin New Berlin, Wisconsin Miles Independent Bancorporation, The Bank of Advance, St. Louis October 22, 1999 Inc., Advance, Missouri Advance, Missouri The First National Bank of Lerna, Miles Bancshares, Inc., Lerna, Illinois Advance, Missouri Bowen State Bank, Bowen, Illinois NBT Bancorp Inc., Lake Ariel Bancorp, Inc, New York November 19, 1999 Norwich, New York Lake Ariel, Pennsylvania LA Bank, N.A., Lake Ariel, Pennsylvania North American Bancshares, Inc., Marble Falls National Bancshares, Inc., Dallas November 18, 1999 Sherman, Texas Marble Falls, Texas Northern Plains Investment, Inc., North Star Holding Company, Inc., Minneapolis November 4, 1999 Jamestown, North Dakota Jamestown, North Dakota NorthStar Bancshares, Inc., NorthStar Bank, Chicago November 10, 1999 Estherville, Iowa Esterville, Iowa Pacific Crest Capital, Inc., Pacific Crest Bank, San Francisco November 17, 1999 Agoura Hills, California Agoura Hills, California Paradigm Bancorporation, Inc., Dayton State Bank, November 10, 1999 Houston, Texas Dayton, Texas Regal Bancorp, Inc., Regal Bank & Trust, Richmond November 8, 1999 Owings Mills, Maryland Owings Mills, Maryland Regal Savings Bank, FSB, Owings Mills, Maryland Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Regions Financial Corporation, LCB Corporation, Atlanta November 3, 1999 Birmingham, Alabama Fayetteville, Tennessee Lincoln County Bank, Fayetteville, Tennessee Regions Financial Corporation, Minden Bancshares, Inc., Atlanta November 3, 1999 Birmingham, Alabama Minden, Louisiana Minden Bank & Trust Company, Minden, Louisiana SNB Holdings, Inc., Slocomb National Bank, Atlanta October 25, 1999 Slocomb, Alabama Slocomb, Alabama State Bank of Cokato Employee Cokato Bancshares, Inc., Minneapolis November 15, 1999 Stock Ownership Plan and Trust, Cokato, Minnesota Cokato, Minnesota State Bank of Cokato, State Bank of Cokato Employee Cokato, Minnesota Stock Ownership Plan and Trust II, Cokato, Minnesota St. Elizabeth Bancshares, Inc., Bank of St. Elizabeth, St. Louis November 10, 1999 St. Elizabeth, Missouri St. Elizabeth, Missouri Team Financial Acquisition Team Financial Employees Stock Kansas City November 17, 1999 Subsidiary, Inc., Ownership Plan, Paola, Kansas Paola, Kansas Team Financial, Inc., ComBankshares, Inc., Paola, Kansas Prairie Village, Kansas Community Bank of Chapman, Chapman, Kansas Texas Independent Bancshares, Inc., American Independent Bancshares, Inc., Dallas November 18, 1999 Texas City, Texas Santa Fe, Texas Tompkins Trustco, Inc., Letchworth Independent Bancshares New York November 10, 1999 Ithaca, New York Corporation, Castile, New York The Bank of Castile, Castile, New York The Mahopac National Bank, Mahopac, New York Uwharrie Capital Corp, Anson Bancorp, Inc., Richmond October 28, 1999 Albemarle, North Carolina Wadesboro, North Carolina VIB Corp, Kings River Bancorp, San Francisco November 10, 1999 El Centra, California Reedley, California Kings River State Bank, Reedley, California Westborough Bancorp, M.H.C., Westborough Savings Bank, Boston November 17, 1999 Westborough, Massachusetts Westborough, Massachusetts Westborough Financial Services, Inc., Westborough, Massachusetts Wilson & Muir Bancorp, Inc., Farmers Bank of Vice Grove, St. Louis November 22, 1999 Bardstown, Kentucky Vine Grove, Kentucky Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date ANB Bankcorp, Inc., To engage in data processing activities Kansas City October 27, 1999 Bristow, Oklahoma Banco Santander Central Hispano, To engage de novo in certain leasing New York October 28, 1999 S.A., activities Madrid, Spain Bay Banks of Virginia, Inc., Bay Trust Company, Richmond November 8, 1999 Kilmarnock, Virginia Kilmarnock, Virginia BostonFed Bancorp, Inc., Diversified Ventures, Inc., d/b/a Boston November 5, 1999 Burlington, Massachusetts Forward Financial Company, Northborough, Massachusetts Cera Stichting VZW, Cera Holding, C.V., New York October 29, 1999 Leuven, Belgium Leuven, Belgium Cera Beheersmaatschappij NV, Cera Ancora NV, Leuven, Belgium Leuven, Belgium Almanij, N.V., Antwerp, Belgium, KBC Bank & Insurance Holding Company, N.V., Brussels, Belgium KBC Bank, N.V., Brussels, Belgium D.E. Shaw & Co., L.P., New York, New York Commerce Bancorp, Inc., Chester Valley Bancorp, Philadelphia October 28, 1999 Cherry Hill, New Jersey Cherry Hill, New Jersey Dai-Ichi Kangyo Bank, Limited, Heller Financial Inc., San Francisco November 5, 1999 Tokyo, Japan Chicago, Illinois CIT Group, Inc., New York, New York Eagle Bancshares, Inc., Texas Bank, S.S.B., Dallas October 25, 1999 Fairfield, Texas Buffalo, Texas Fairfield Holdings, Fairfield, Texas First National Banc, Inc., First National Insurance Agency, Inc., Atlanta October 21, 1999 St. Marys, Georgia Woodbine, Georgia GBT Bancorp, Gloucester Investment Corporation, Boston November 12, 1999 Gloucester, Massachusetts Gloucester, Massachusetts Hartford Financial Corporation, City Insurance and Financial Services, Atlanta November 3, 1999 Hartford, Alabama Inc., Hartford, Alabama Hometown Bancorp, Ltd., Hometown Mortgage Services, Inc., Chicago November 17, 1999 Fond du Lac, Wisconsin Fond du Lac, Wisconsin Iowa State Bank Holding Company, Capitol Partners, L.C., Chicago November 15, 1999 Des Moines, Iowa Des Moines, Iowa Larch Bancorporation, Inc., To engage de novo in extending credit Chicago November 3, 1999 Larchwood, Iowa and servicing loans M & F Bancorp, Inc., Fidelity National Loans, Inc., St. Louis November 10, 1999 Holly Springs, Mississippi Holly Springs, Mississippi McCook National Company, Maplewood Apartments, L.L.C., Kansas City November 10, 1999 McCook, Nebraska McCook, Nebraska PAB Bankshares, Inc., Baxley Federal Savings Bank, Atlanta November 5, 1999 Valdosta, Georgia Baxley, Georgia PNC Bank Corp., First Data Investor Services Group, Inc., Cleveland November 8, 1999 Pittsburgh, Pennsylvania Westborough, Massachusetts Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 77 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Provident Financial Group, Inc. Fidelity Financial of Ohio, Inc., Cleveland November 17, 1999 Cincinnati, Ohio Cincinnati, Ohio Centennial Bank, Cincinnati, Ohio Provident Financial Group, Inc. OHSL Financial Corporation, Cleveland October 25, 1999 Cincinnati, Ohio Cincinnati, Ohio Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Graff Family, Inc., McCook National Company, Kansas City November 10, 1999 McCook, Nebraska McCook, Nebraska The McCook National Bank, McCook, Nebraska Maplewood Apartments, L.L.C., McCook, Nebraska North Central Bancorp, Inc., Bank of Norfolk, Kansas City October 27, 1999 Norfolk, Nebraska Norfolk, Nebraska Columbus Financial Corporation, Columbus, Nebraska Columbus Federal Savings Bank, Columbus, Nebraska The Royal Bank of Scotland Group RBSG International Holdings Limited, Boston November 19, 1999 pic, Edinburgh, Scotland Edinburgh, Scotland Citizens Financial Group, Inc., The Royal Bank of Scotland pic, Providence, Rhode Island Edinburgh, Scotland UST Corp., Boston, Massachusetts South Central Bancshares of First Deposit Bancshares, Inc., St. Louis October 22, 1999 Kentucky, Inc., Tompkinsville, Kentucky Horse Cave, Kentucky Deposit Bank of Monroe County, Tompkinsville, Kentucky South Central Savings Bank, FSB, Edmonton, Kentucky 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 AmSouth Bank, First American National Bank, November 2, 1999 Birmingham, Alabama Nashville, Tennessee Compass Bank, Western Bank, November 5, 1999 Birmingham, Alabama Albuquerque, New Mexico Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 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 The Bank of Orange County, Security First Bank, San Francisco October 27, 1999 Fountain Valley, California Fullerton, California CalWest Bank, National Business Bank, San Francisco October 27, 1999 Downey, California Torrance, California Peapack-Gladstone Bank, Chatham Savings, FSB, New York November 12, 1999 Gladstone, New Jersey Gladstone, New Jersey SunTrust Bank, Atlanta, STI Capital Management, N.A., Atlanta November 24, 1999 Atlanta, Georgia Orlando, Florida UnionB ank/West, Associated Bank Illinois, NA, Chicago November 5, 1999 Macomb, Illinois Rockford, Illinois Valencia Bank & Trust, First Valley National Bank, San Francisco November 16, 1999 Santa Clarita, California Lancaster, California Valley National Bank, Lancaster, San Francisco November 16, 1999 California PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Fraternal Order of Police v. Board of Governors, No. Federal Reserve Banks in which the Board of Governors is not 1:98CV03116 (WBB)(D.D.C„ filed December 22, 1998). named a party. Declaratory judgment action challenging Board labor practices. On February 26, 1999, the Board filed a motion to dismiss the action. Wasserman v. Federal Reserve Bank, No. 99-6280 (2d Cir., filed August 26, 1999). Appeal of district court dismissal of Independent Community Bankers of America v. Board of Govcase challenging refusal by the Board and the Federal ernors, No. 98- 1482 (D.C. Cir., filed October 21, 1998). Reserve Bank of New York to investigate certain matters. Petition for review of a Board order dated September 23, Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed 1998, conditionally approving the applications of Travelers August 3, 1999). Employment discrimination action. Group, Inc., New York, New York, to become a bank holding company by acquiring Citicorp, New York, New Sheriff Gerry Ali v. U.S. State Department, No. 99-7438 (C.D. York, and its bank and nonbank subsidiaries. On Novem- Cal., filed July 21, 1999). Action relating to impounded ber 2, 1999, the court affirmed the Board's order. bank drafts. Sedgwick v. Board of Governors, No. Civ 99 0702 (D. Ari- Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK) zona, filed April 14, 1999). Action under Federal Tort (S.D.N.Y„ filed May 15, 1998). Action to freeze assets of Claims Act alleging violation of bank supervision require- individual pending administrative adjudication of civil ments. The Board filed a motion to dismiss on June 15, money penalty assessment by the Board. On May 26, 1998, 1999. the court issued a preliminary injunction restraining the Hunter v. Board of Governors, No. 1:98CV02994 (TFH) transfer or disposition of the individual's assets and appoint- (D.D.C., filed December 9, 1998). Action under the Free- ing the Federal Reserve Bank of New York as receiver for dom of Information Act and the Privacy Act. The Board those assets. filed a motion to dismiss or for summary judgment on Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed July 22,1999. May 4, 1998). Appeal and cross-appeal of district court Folstad v. Board of Governors, No. 1:99 CV 124 (W.D. Mich., order granting in part and denying in part the Board's filed February 17, 1999). Freedom of Information Act com- motion for summary judgment seeking prejudgment interest plaint. On November 16, 1999, the district court granted the and a statutory surcharge in connection with a civil money Board's motion for summary judgment and dismissed the penalty assessed by the Board. On February 24, 1999, the action. court granted the Board's appeal and denied the cross- Nelson v. Greenspan, No. 1:99CV00215 (EGS) (D.D.C., filed appeal, and remanded the matter to the district court for January 28, 1999). Employment discrimination complaint. determination of prejudgment interest due to the Board. On March 29, 1999, the Board filed a motion to dismiss the Fenili v. Davidson, No. C-98-01568-CW (N.D. California, action. filed April 17, 1998). Tort and constitutional claim arising Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 79 out of return of a check. On June 5, 1998, the Board filed its TERMINATION OF ENFORCEMENT ACTIONS motion to dismiss. Goldman v. Department of the Treasury, No. 98-9451 (11th The Federal Reserve Board announced on November 16, Circuit, filed November 10, 1998). Appeal from a District 1999, the termination of the following enforcement ac- Court order dismissing an action challenging Federal Re- tions: serve notes as lawful money. Kerr v. Department of the Treasury, No. CV-S-97-01877- Mercantile Capital Corp. DWH (D. Nev., filed December 22, 1997). Challenge to Boston, Massachusetts income taxation and Federal Reserve notes. On September 3, 1998, a motion to dismiss was filed on behalf of all Written agreement dated January 26, 1996; terminated federal defendants. The court dismissed the action on August 23, 1999. March 31, 1999, and on April 28, 1999, the plaintiff filed a notice of appeal. Adairsville Bancshares, Inc., and Bank of Bettersworth v. Board of Governors, No. 97-CA-624 (W.D. Adairsville Tex., filed August 21, 1997). Privacy Act case. On June 1, Adairsville, Georgia 1999, the Board filed a motion for summary judgment. Written agreement dated December 10, 1998; terminated September 8, 1999. FINAL ENFORCEMENT ORDERS ISSUED BY THE BOARD OF GOVERNORS Pan American Bank Coconut Grove, Florida Robert and Adele Barber Cooper City, Florida Cease and Desist Order dated march 4, 1998; terminated September 29, 1999. The Federal Reserve Board announced on November 16, 1999, the issuance of a consent Order against Robert and California Center Bank Adele Barber, both institution- affiliated parties of the First Los Angeles, California Western Bank, Cooper City, Florida, a state member bank. Cease and Desist Order dated October 4, 1994; terminated Matthew J. Callahan October 15, 1999. Cooper City, Florida The Federal Reserve Board announced on November 16, WRITTEN AGREEMENTS APPROVED BY FEDERAL 1999, the issuance of a consent Order against Matthew J. RESERVE BANKS Callahan, an institution- affiliated party of the First Western Bank, Cooper City, Florida, a state member bank. Heritage Bancorp Company, Inc. Cleveland, Oklahoma Bertram Smith Cooper City, Florida The Federal Reserve Board announced on November 16, 1999, the execution of a Written Agreement by and among The Federal Reserve Board announced on November 16, Heritage Bancorp Company, Inc., Cleveland, Oklahoma; 1999, the issuance of a consent Order against Bertram the First Bank of Cleveland, Cleveland, Oklahoma; the Smith, an institution-affiliated party of the First Western Federal Reserve Bank of Kansas City; and the Oklahoma Bank, Cooper City, Florida, a state member bank. State Banking Department. 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 A33 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A3 5 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit A36 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A23 Interest rates—Money and capital markets A42 Nonfinancial business activity A24 Stock market—Selected statistics A42 Labor force, employment, and unemployment A43 Output, capacity, and capacity utilization A44 Industrial production—Indexes and gross value Federal Finance A46 Housing and construction A25 Federal fiscal and financing operations A47 Consumer and producer prices A26 U.S. budget receipts and outlays A48 Gross domestic product and income All Federal debt subject to statutory limitation A49 Personal income and saving Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 INTERNATIONAL STATISTICS Securities Holdings and Transactions A60 Foreign transactions in securities Summary Statistics A61 Marketable U.S. Treasury bonds and A50 U.S. international transactions notes—Foreign transactions A51 U.S. foreign trade A51 US. reserve assets Interest and Exchange Rates A51 Foreign official assets held at Federal Reserve A62 Foreign exchange rates Banks A52 Selected U.S. liabilities to foreign official A63 GUIDE TO STATISTICAL RELEASES AND institutions SPECIAL TABLES Reported by Banks in the United States SPECIAL TABLES A52 Liabilities to, and claims on, foreigners A53 Liabilities to foreigners A64 Pro forma balance sheet and income A55 Banks' own claims on foreigners statements for priced services operations, A56 Banks' own and domestic customers' claims on September 30, 1999 foreigners A56 Banks' own claims on unaffiliated foreigners A66 INDEX TO SPECIAL TABLES A57 Claims on foreign countries—Combined domestic offices and foreign branches Reported by Nonbanking Business Enterprises in the United States A58 Liabilities to unaffiliated foreigners A59 Claims on unaffiliated foreigners Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected 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 Nonfinancial Statistics • January 2000 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 Q3r June July1" Aug.r Sept.r Oct. Reserves of depository institutions2 1 Total -1.8 -1.2 -6.6 -15.4 -40.4 -24.9 2.5 1.3 -33.3 2 Required -2.5 1.0 -5.6 -15.0 -41.7 -20.3 1.1 -.6 -33.0 3 Nonborrowed -.6 -1.3 -6.7 -17.1 -41.0 -29.6 1.6 1.5 -31.9 4 Monetary base3 8.7 9.1 10.1 8.5 6.2 8.0 7.1 11.3 16.5 Concepts of money and debt4 5 Ml 5.0 2.8 3.5 -2.3 -4.0 — 1.7 3.2 -9.8 5.5 6 M2 11.0 7.2 5.1' 5.2 4.3r 5.5 5.7 4.9 5.0 7 M3 12.9 7.6 5.8r 5.7 6.4r 5.1 5.2 6.7 10.3 8 Debt 6.3 6.6r 6.8 5.7 5.4 5.3 6.2 6.5 n.a. Nontransaction components 9 In M25 13.0 8.7 6.4 7.6 7.1r 7.9 6.4 9.5 4.8 10 In M3 only6 18.4 8.6 5.9 7.1 11.9 4.1 4.0 11.5 24.9 Time and savings deposits Commercial banks 11 Savings, including MMDAs 17.6 11.6 9.7 11.7 12.1 14.0 8.0 14.4 4.2 12 Small time7 .3 -5.5 -3.3 1.3 -2.0 1.2 3.3 7.4 6.6 13 Large time8'9 3.8 -.3 -3.2 7.2 -7.4 21.3 -5.1 28.6 62.4 Thrift institutions 14 Savings, including MMDAs 10.1 12.8 14.6 15.0 18.5 19.0 4.2 4.5 -3.9 15 Small time7 -6.7 -6.5 -7.9 -5.1 -14.4 -4.6 1.2 3.5 4.6 16 Large time8 10.4 7.6 -7.0 4.1 -1.4 10.9 5.4 10.8 -8.0 Money market mutual funds 17 Retail 28.5 20.5 10.7r 6.9 8.7r 1.9 9.9 8.7 9.6 18 Institution-only 41.8 17.9 14.5 7.5 7.7 -4.6 22.9 6.3 25.1 Repurchase agreements and Eurodollars 19 Repurchase agreements10 18.9 14.1 -2.7 15.3 53.2 -.4 6.2 -1.9 -12.0 20 Eurodollars10 3.2 -.8 32.0 -7.2 22.5 -17.8 -32.6 -.7 -14.9 Debt components4 21 Federal -2.8 -3.1 -2.3 -.3 .3 1.4 1.0 -4.2 n.a. 22 Nonfederal 9.2 9.5r 9.5 7.4 6.9r 6.4 7.6 9.5 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 current reserve requirements. prises or federally related mortgage pools) and the nonfederal sectors (state and local 4. Composition of the money stock measures and debt is as follows: governments, households and nonprofit organizations, nonfinancial corporate and nonfarm Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, commercial banks other than those owed to depository institutions, the U.S. government, and which are derived from the Federal Reserve Board's flow of funds accounts, are breakforeign banks and official institutions, less cash items in the process of collection and Federal adjusted (that is, discontinuities in the data have been smoothed into the series) and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of month-averaged (that is, the data have been derived by averaging adjacent month-end levels). withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail credit union share draft accounts, and demand deposits at thrift institutions. Seasonally money fund balances, each seasonally adjusted separately. adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities OCDs, each seasonally adjusted separately. (overnight and term) issued by depository institutions, and (4) Eurodollars (overnight and M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time term) of U.S. addressees, each seasonally adjusted separately. deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail 7. Small time deposits—including retail RPs—are those issued in amounts of less than money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions balances at depository institutions and money market funds. Seasonally adjusted M2 is are subtracted from small time deposits. calculated by summing savings deposits, small-denomination time deposits, and retail money 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those fund balances, each seasonally adjusted separately, and adding this result to seasonally booked at international banking facilities. adjusted 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 Average of Average of daily figures for week ending on date indicated daily figures 1999 1999 Aug. Sept. Oct. Sept. 15 Sept. 22 Sept. 29 Oct. 6 Oct. 13 Oct. 20 Oct. 27 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 528,020 536,558 542,985 534,616 538,420 537,386 539,721 541,218 544,464 543,573 U.S. government securities2 2 Bought outright—System account3 487,746 490,477 490,849 490,649 491,006 489,966 490,373 491,044 490,907 490,711 3 Held under repurchase agreements 1,296 2,373 428 1,268 1,938 2,871 2,981 0 0 0 Federal agency obligations 4 Bought outright 247 238 206 238 238 238 229 219 198 194 5 Held under repurchase agreements 4,751 9,515 1,916 8,224 11,155 9,728 10,548 0 0 0 6 Repurchase agreements—triparty4 n.a. n.a. 14,248 n.a. n.a. n.a. 573 14,659 18,123 17,061 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 84 57 35 23 72 101 82 26 15 40 9 Seasonal credit 273 283 224 268 283 304 283 263 224 191 10 Special Liquidity Facility credit 0 0 3 0 0 0 1 0 1 7 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float 430 288 482 948 153 199 527 781 553 324 13 Other Federal Reserve assets 33,193 33,328 34,594 32,998 33,575 33,979 34,124 34,225 34,444 35,047 14 Gold stock 11,047 11,046 11,050 11,046 11,046 11,048 11,050 11,051 11,050 11,050 15 Special drawing rights certificate account 8,200 7,667 7,200 8,057 7,200 7,200 7,200 7,200 7,200 7,200 16 Treasury currency outstanding 27,231 27,381 27,483 27,367 27,397 27,427 27,457 27,471 27,485 27,499 ABSORBING RESERVE FUNDS 17 Currency in circulation 536,083 542,365 550,878 542,626 542,578 542,567 545,124 549,897 551,630 553,185 18 Reverse repurchase agreements—triparty4 . . . n.a. n.a. 0 n.a. n.a. n.a. 0 0 0 0 19 Treasury cash holdings 69 89 94 87 86 93 93 97 94 92 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,076 6,389 5,179 5,480 7,512 7,403 5,457 5,235 5.421 5,206 21 Foreign 196 226 182 229 265 218 167 202 187 180 22 Service-related balances and adjustments . . 7,020 7,100 7,165 7,119 6,924 7,323 7,392 7,080 7,097 7,062 23 Other 274 248 278 269 248 223 271 319 291 260 24 Other Federal Reserve liabilities and capital . 18,110 18,524 18,362 18,245 18,601 18,606 18,801 18,195 18,332 18,242 25 Reserve balances with Federal Reserve Banks' 7,669 7,712 6,580 7,031 7,849 6,627 8,123 5,916 7,146 5,095 End-of-month figures Wednesday figures Aug. Sept. Oct. Sept. 15 Sept. 22 Sept. 29 Oct. 6 Oct. 13 Oct. 20 Oct. 27 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 534,796 546,150 548,919 540,481 544,833 543,003 540,266 544,224 550,310 548,132 U.S. government securities2 2 Bought outright—System account" 490,198 489,037 490,738 491,129 491,054 491,019 491,266 491,282 491,367 492,051 3 Held under repurchase agreements 2,575 7,607 0 1,335 4,893 5,220 2,160 0 0 0 Federal agency obligations 4 Bought outright 238 238 188 238 238 238 228 198 198 188 5 Held under repurchase agreements 9,195 14,456 0 13,040 14,877 11,183 7,110 0 0 0 6 Repurchase agreements—triparty4 n.a. n.a. 22,560 n.a. n.a. n.a. 4,011 15,520 23,550 20,065 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 53 179 41 28 132 105 142 16 14 27 9 Seasonal credit 285 300 123 278 287 313 272 245 209 174 10 Special Liquidity Facility credit 0 0 10 0 0 0 5 0 6 10 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float -291 65 -297 1,241 -504 583 869 2,543 353 277 13 Other Federal Reserve assets 32,544 34.268 35,556 33,192 33,857 34,342 34,203 34,420 34,614 35,340 14 Gold stock 11,045 11,047 11,049 11,046 11,048 11,048 11,050 11,051 11,050 11,050 15 Special drawing rights certificate account 8,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 16 Treasury currency outstanding 27,298 27,457 27,513 27,367 27,397 27,427 27,457 27,471 27,485 27,499 ABSORBING RESERVE FUNDS 17 Currency in circulation 538,466 544,101 555,597 543,515 543,220 544,246 547,759 551,615 553,003 555,537 18 Reverse repurchase agreements—triparty4 . . . n.a. n.a. 0 n.a. n.a. n.a. 0 0 0 0 19 Treasury cash holdings 84 93 94 85 93 93 97 95 92 94 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,559 6,641 4,527 10,128 7,721 8,232 5,259 4,948 4,925 4,363 21 Foreign 166 243 189 242 161 191 178 284 167 172 22 Service-related balances and adjustments . . 6,919 7,392 7,276 7,119 6,924 7,324 7,392 7,080 7,097r 7,062 23 Other 225 191 202 256 244 191 274 270 311 223 2 2 4 5 O Re th s e e r r v F e e d b e a r la a n l c R es e s w er i v th e F li e a d b e il r i a ti l es R e a s n e d r v c e a p B it a a n l ks v 5 1 1 8 1 , , 7 1 2 9 8 4 1 1 9 4 , , 1 0 0 8 5 8 1 8 8 , , 3 4 9 0 5 1 1 6 8 , , 6 1 4 0 1 8 1 1 3 8 , , 5 5 6 5 3 2 1 9 8 , , 9 4 1 8 6 5 1 6 8 , , 6 3 3 8 4 0 1 7 7 , , 8 7 7 7 9 5 1 1 7 2 , , 9 4 9 5 1 9 r 1 8 7 , , 4 9 7 5 9 1 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 4. Cash value of agreements arranged through third-party custodial banks. These agree- 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged ments are collateralized by U.S. government and federal agency securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 5. Excludes required clearing balances and adjustments to compensate for float. under matched sale-purchase transactions. 3. Includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics • January 2000 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. Apr. May June July Aug. Sept. Oct. 1 Reserve balances with Reserve Banks2 13,330 10,664 9,021 9,238 10,070 8,539 7,797 7,802 7,698 6,769r 2 Total vault cash3 44,525 44,740 44,305 42,164 42,459 42,632 44,059 44,664 44,519 47,019 3 Applied vault cash4 37,844 37,255 35,997 34,407 34,805 33,856 34,005 34,069 34,089 33,933 4 Surplus vault cash5 6,681 7,485 8,308 7,757 7,654 8,776 10,054 10,595 10,430 13,086 5 Total reserves6 51,174 47,920 45,018 43,645 44,875 42,394 41,802 41,871 41,787 40,702r 6 Required reserves 49,758 46,235 43,435 42,486 43,619 41,133 40,726 40,742 40,590 39,548r 7 Excess reserve balances at Reserve Banks7 1,416 1,685 1,583 1,159 1,256 1,261 1,076 1,129 1,197 1,154r 8 Total borrowing at Reserve Banks 155 324 117 166 127 145 309 344 338 281 9 Adjustment 87 245 101 128 39 18 83 72 56 52 10 Seasonal 68 79 15 39 89 127 226 271 282 221 11 Special Liquidity Facility8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 12 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 30 July 14 July 28 Aug. 11 Aug. 25 Sept. 8 Sept. 22 Oct. 6 Oct. 20 Nov. 3 1 Reserve balances with Reserve Banks2 8,309 7,526 8,041 7,923 7,421 8,470 7,440 7,380 6,544 6,722r 2 Total vault cash3 43,426 44,019 43,899 44,994 44,786 43,774 44,556 45,199 47,350 47,593 3 Applied vault cash4 34,062 33,788 34,198 34,123 34,003 34,126 34,327 33,636 33,998 34,013 4 Surplus vault cash5 9,365 10,231 9,702 10,871 10,783 9,648 10,229 11,563 13,352 13,580 5 Total reserves6 42,371 41,314 42,238 42,046 41,423 42,596 41,766 41,016 40,542 40,735r 6 Required reserves 41,027 40,303 41,098 40,967 40,289 41,388 40,744 39,524 39,408 39,740r 7 Excess reserve balances at Reserve Banks7 1,343 1,011 1,140 1,078 1,134 1,207 1,022 1,491 1,133 995r 8 Total borrowing at Reserve Banks 180 331 266 409 304 318 323 385 265 246 9 Adjustment 23 136 17 146 31 35 48 91 21 72 10 Seasonal 158 196 249 263 273 284 276 294 244 153 11 Special Liquidity Facility8 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 1 1 22 12 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. Borrowing at the discount window under the terms and conditions established for the those banks and thrift institutions that are not exempt from reserve requirements. Dates refer Century Date Change Special Liquidity Facility in effect from October 1, 1999 through to the maintenance periods in which the vault cash can be used to satisfy reserve require- April 7, 2000. ments. 9. Consists of borrowing at the discount window under the terms and conditions estab- 4. All vault cash held during the lagged computation period by "bound" institutions (that lished for the extended credit program to help depository institutions deal with sustained is, those whose required reserves exceed their vault cash) plus the amount of vault cash liquidity pressures. Because there is not the same need to repay such borrowing promptly as applied during the maintenance period by "nonbound" institutions (that is, those whose vault with traditional short-term adjustment credit, the money market effect of extended credit is cash exceeds their required reserves) to satisfy current reserve requirements. similar to that of nonborrowed reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit Seasonal credit Extended credit Special Liquidity Facility credit Federal Reserve Bank On Effective Previous On Effective Previous On Effective Previous On Effective 12/10/99 date rate 12/10/99 date rate 12/10/99 date rate 12/10/99 date Boston 11/16/99 6.15 New York .. . 11/18/99 Philadelphia . 11/18/99 Cleveland .. . 11/16/99 Richmond . . . 11/16/99 Atlanta 11/17/99 Chicago 11/18/99 St. Louis 11/18/99 Minneapolis . 11/18/99 Kansas City . . 11/16/99 Dallas 11/17/99 San Francisco 11/16/99 Range of rates for adjustment credit in recent years Range (or F.R. Bank Range (or F.R. Bank Range (or level)—All of level)—All of Effective date level)—All F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks 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 1 7 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^.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 1 8 3.5 3.5 Sept. 19 10.15-111 11 26 8.5 8.5 Aug. 16 3.5^1 4 21 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 1 7 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. 5 121-133 13 11 6 6 8 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. 16 4.75-5.00 4.75 Nov. 2 13-14 13 1 8 5.00 5.00 6 13 13 1989—Feb. 24 6.5-7 7 Dec. 4 12 12 27 7 7 In effect Dec. 10, 1999 5.00 5.00 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 • January 2000 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt Percentage of Effective date deposits Net transaction accounts2 1 $0 million-$44.3 million3 33333 1111122222/////3333300000/////9999999999 2 More than $44.3 million4 1111100000 1111122222/////3333300000/////9999999999 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 30, 1999, for depository institutions that report include commercial banks, savings banks, savings and loan associations, credit unions, weekly, and with the period beginning January 20, 2000, for institutions that report quarterly, agencies and branches of foreign banks, and Edge Act corporations. the exemption was raised from $4.9 million to $5.0 million. 2. Transaction accounts include all deposits against which the account holder is permitted 4. The reserve requirement was reduced from 12 percent to 10 percent on to make withdrawals by negotiable or transferable instruments, payment orders of with- Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that drawal, or telephone or preauthorized transfers for the purpose of making payments to third report quarterly. persons or others. However, accounts subject to the rules that permit no more than six 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits preauthorized, automatic, or other transfers per month (of which no more than three may be with an original maturity of less than 1 Vi years was reduced from 3 percent to 11/2 percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1 Vi years was reduced from 3 against which the 3 percent reserve requirement applies be modified annually by 80 percent of percent to zero on Jan. 17, 1991. the percentage change in transaction accounts held by all depository institutions, determined The reserve requirement on nonpersonal time deposits with an original maturity of 1 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 30, 1999, 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 20, 2000, 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 $46.5 million to $44.3 million. deposits with an original maturity of less than 1 l/z 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 TTyyppee ooff ttrraannssaaccttiioonn 11999966 11999977 11999988 aanndd mmaattuurriittyy Mar. Apr. May June July Aug. Sept. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 9,901 9,147 3,550 0 0 0 0 0 00 0 7 Gross sales 0 0 0 0 0 0 0 0 0 0 Exchanges 426,928 436,257 450,835 35,065 48,142 37,107 35,045 42,037 37,052 42,643 4 For new bills 426,928 435,907 450,835 35,065 48,142 37,107 35,045 42,037 37,052 42,643 5 Redemptions 0 0 2,000 0 0 0 0 0 0 0 Others within one year Gross purchases 524 5,549 6,297 1,060 1,677 1,421 880 951 429 960 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 30,512 41,716 46,062 3,015 3,768 3,768 2,740 3,279 7,669 3,468 9 Exchanges -41,394 -27,499 -49,434 -5,956 -3,370 -4,607 -5,540 -368 -10,798 -2,125 10 Redemptions 2,015 1,996 2,676 0 726 0 0 41 0 0 One to five years 11 Gross purchases 3,898 20,080 12,901 2,428 3,362 4,442 948 0 1,272 0 1? Gross sales 0 0 0 0 0 0 0 0 0 0 N Maturity shifts -25,022 -37,987 -37,777 -3,015 -3,768 -3,768 -2,740 -3,279 -4,751 -3,468 14 Exchanges 31,459 20,274 37,154 5,956 3,020 2,562 5,540 0 8,433 2,125 Five to ten years 1.5 Gross purchases 1,116 3,449 2,294 346 945 1,584 65 0 447 0 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,469 -1,954 -5,908 0 0 0 0 0 -2,918 0 18 Exchanges 6,666 5,215 7,439 0 0 2,045 0 373 1,290 0 More than ten years 19 Gross purchases 1,655 5,897 4,884 2,404 262 2,890 0 0 1,075 0 ?0 Gross sales 0 0 0 0 0 0 0 0 0 0 71 Maturity shifts -20 -1,775 -2,377 0 0 0 0 0 0 0 22 Exchanges 3,270 2,360 4,842 0 350 0 0 0 1,075 0 All maturities ?3 Gross purchases 17,094 44,122 29,926 6,238 6,246 10,337 1,893 951 3,223 960 ?4 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 2,015 1,996 4,676 0 726 0 0 41 0 0 Matched transactions 76 Gross purchases 3,092,399 3,577,954 4,395,430 393,267 366,838 356,960 380,872 347,067 374,032 348,014 27 Gross sales 3,094,769 3,580,274 4,399,330 394,865 364,476 358,362 380,464 346,747 373,159 350,151 Repurchase agreements 78 Gross purchases 457,568 810,485 512,671 62,878 45,067 27,605 17,710 27,707 2233,,009977 2299,,336699 29 Gross sales 450,359 809,268 514,186 53,706 48,867 30,531 14,614 33,612 23,717 24,337 30 Net change in U.S. Treasury securities 19,919 41,022 19,835 13,812 4,082 6,008 5,397 -4,675 3,476 3,855 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 00 00 00 00 V Gross sales 0 0 25 0 0 0 0 0 0 0 33 Redemptions 409 1,540 322 25 0 0 52 10 11 0 Repurchase agreements 34 Gross purchases 75,354 160,409 284,316 35,731 20,623 3388,,116677 3322,,778866 4466,,994411 6611,,996688 5533,,222244 35 Gross sales 74,842 159,369 276,266 34,009 22,937 36,962 32,104 48,840 56,053 47,963 36 Net change in federal agency obligations 103 -500 7,703 1,697 -2,314 1,205 630 -1,909 5,904 5,261 37 Total net change in System Open Market Account... 20,021 40,522 27,538 15,509 1,768 7,213 6,028 -6,584 9,380 9,116 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 2. Transactions exclude changes in compensation for the effects of inflation on the principal Account; all other figures increase such holdings. of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics • January 2000 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1999 1999 Sept. 29 Oct. 6 Oct. 13 Oct. 20 Oct. 27 Aug. 31 Sept. 30 Oct. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,048 11,050 11,051 11,050 11,050 11,045 11,047 11,049 2 Special drawing rights certificate account 7,200 7,200 7,200 7,200 7,200 8,200 7,200 7,200 3 287 298 304 317 317 294 298 331 Loans 4 To depository institutions 418 419 261 228 211 338 480 173 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Triparty Obligations 7 Repurchase agreements—triparty2 n.a. 4,011 15,520 23,550 20,065 n.a. n.a. 22,560 Federal agency obligations3 8 Bought outright 238 228 198 198 188 238 238 188 9 Held under repurchase agreements 11,183 7,110 0 0 0 9,195 14,456 0 10 Total U.S. Treasury securities3 496,239 493,426 491,282 491,367 492,051 492,773 496,644 490,738 11 Bought outright4 491,019 491,266 491,282 491,367 492,051 490,198 489,037 490,738 12 Bills 199,165 199,410 199,423 199,669 200,350 199,320 197,183 199,035 13 Notes 211,801 211,803 211,806 211,270 211,272 210,829 211,801 211,273 14 Bonds 80,053 80,053 80,054 80,428 80,429 80,049 80,053 80,430 15 Held under repurchase agreements 5,220 2,160 0 0 0 2,575 7,607 0 16 Total loans and securities 508,078 505,194 507,261 515,343 512,515 502,544 511,817 513,659 17 Items in process of collection 6,978 9,050 13,877 7,656 6,656 9,328 5,649 4,726 18 Bank premises 1,337 1,340 1,341 1,342 1,341 1,332 1,336 1,344 Other assets 19 Denominated in foreign currencies5 15,861 16,108 16,112 16,116 16,120 15,845 16,105 16,251 20 All other6 17,149 16,721 16,937 17,108 17,464 15,445 16,864 17,678 21 Total assets 567,937 566,961 574,084 576,132 572,664 564,033 570,317 572,239 LIABILITIES 22 Federal Reserve notes 517,199 520,697 524,543 525,927 528,449 511,545 517,035 528,509 23 Reverse repurchase agreements—triparty2 n.a. 0 0 0 0 n.a. n.a. 0 24 Total deposits 25,609 19,778 20,927 25,035 19,533 24,750 28,759 20,420 25 Depository institutions 16,996 14,067 15,424 19,633 14,775 18,800 21,684 15,502 26 U.S. Treasury—General account 8,232 5,259 4,948 4,925 4,363 5,559 6,641 4,527 27 Foreign—Official accounts 191 178 284 167 172 166 243 189 28 Other 191 274 270 311 223 225 191 202 29 Deferred credit items 6,643 8,106 10,839 7,179 6,730 9,011 5,418 4,909 30 Other liabilities and accrued dividends 5,012 4,683 4,262 4,463 4,444 4,605 5,323 4,455 31 Total liabilities 554,464 553,263 560,570 562,604 559,156 549,911 556,535 558,293 CAPITAL ACCOUNTS 32 Capital paid in 6,329 6,333 6,336 6,337 6,354 6,308 6,330 6,355 33 Surplus 5,952 5,952 5,952 5,952 5,952 5,952 5,952 5,952 34 Other capital accounts 1,192 1,412 1,225 1,239 1,201 1,863 1,499 1,639 35 Total liabilities and capital accounts 567,937 566,961 574,084 576,132 572,664 564,033 570,317 572,239 MEMO 36 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 37 Federal Reserve notes outstanding (issued to Banks) 824,276 828,182 827,718 828,391 827,758 780,358 827,075 827,249 38 LESS: Held by Federal Reserve Banks 307,076 307,485 303,175 302,464 299,309 268,813 310,040 298,740 39 Federal Reserve notes, net 517,199 520,697 524,543 525,927 528,449 511,545 517,035 528,509 Collateral held against notes, net 40 Gold certificate account 11,048 11,050 11,051 11,050 11,050 11,045 11,047 11,049 41 Special drawing rights certificate account 7,200 7,200 7,200 7,200 7,200 8,200 7,200 7,200 42 Other eligible assets 0 0 0 0 0 0 0 0 43 U.S. Treasury and agency securities 498,952 502,447 506,292 507,677 510,199 492,300 498,788 510,261 44 Total collateral 517,199 520,697 524,543 525,927 528,449 511,545 517,035 528,509 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 5. Valued monthly at market exchange rates. release. For ordering address, see inside front cover. 6. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury 2. Cash value of agreements arranged through third-party custodial banks. bills maturing within ninety days. 3. Face value of the securities. 7. Includes exchange-translation account reflecting the monthly revaluation at market 4. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with exchange rates of foreign exchange commitments. Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Excludes securities sold and scheduled to be 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. 29 Oct. 6 Oct. 13 Oct. 20 Oct. 27 Aug. 31 Sept. 30 Oct. 31 1 Total loans 418 419 261 228 211 338 480 173 2 Within fifteen days' 372 192 72 198 181 189 330 106 3. Sixteen days to ninety days 46 227 189 30 29 149 150 66 4 Total U.S. Treasury securities2 496,239 493,426 491,282 491,367 492,051 492,763 496,644 490,738 5 Within fifteen days1 19,310 14,900 14,978 10,793 10,377 11,187 10,704 7,085 6 Sixteen days to ninety days 97,374 99,028 102,323 101,936 103,172 100,038 96,836 105,645 7 Ninety-one days to one year 142,227 143,316 137,796 142,077 141,937 144,224 152,924 141,442 8 One year to five years 122,349 121,199 121,200 121,200 121,200 122,346 121,199 121,201 9 Five years to ten years 50,204 50,205 50,207 50,209 50,211 50,195 50,204 50,212 10 More than ten years 64,777 64,777 64,778 65,152 65,153 64,773 64,777 65,153 11 Total federal agency obligations 11,421 7,388 198 198 188 5,168 14,694 188 12 Within fifteen days1 11,223 7,140 10 10 7 4,930 14,496 7 13 Sixteen days to ninety days 17 17 7 7 6 27 17 6 14 Ninety-one days to one year 51 51 51 51 45 41 51 45 15 One year to five years 10 10 10 10 10 20 10 10 16 Five years to ten years 120 120 120 120 120 150 120 120 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 effects of inflation on the principal of accordance with maximum maturity of the agreements. inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Financial Statistics • January 2000 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 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 . Mar. Apr. May June July Aug. Sept. Oct. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 56.45 50.16 46.86 44.90 43.72 43.98 44.36 42.87 41.98 42.07 42.11 40.95 2 Nonborrowed reserves4 56.20 50.01 46.54 44.79 43.65 43.81 44.23 42.72 41.67 41.72 41.77 40.66 3 Nonborrowed reserves plus extended credit5 56.20 50.01 46.54 44.79 43.65 43.81 44.23 42.72 41.67 41.72 41.77 40.66 4 Required reserves 55.16 48.75 45.18 43.32 42.41 42.82 43.11 41.61 40.90 40.94 40.92 39.79 5 Monetary base6 434.10 451.37 478.88 512.32 524.23 528.74 534.86 537.63 541.20 544.42r 549.56r 557.10 Not seasonally adjusted 6 Total reserves7 58.02 51.45 48.01 45.12 43.14 43.67 44.91 42.43 41.85 41.92 41.85 40.77 7 Nonborrowed reserves 57.76 51.30 47.69 45.00 43.08 43.50 44.78 42.29 41.54 41.58 41.51 40.49 8 Nonborrowed reserves plus extended credit5 57.76 51.30 47.69 45.00 43.08 43.50 44.78 42.29 41.54 41.58 41.51 40.49 9 Required reserves8 56.73 50.04 46.33 43.54 41.84 42.51 43.65 41.17 40.77 40.79 40.65 39.62 10 Monetary base9 439.03 456.63 484.98 518.28 523.35 526.77 533.12 535.88 540.98 543.87 548.13r 555.46 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves11 57.90 51.17 47.92 45.02 43.12 43.65 44.88 42.39 41.80 41.87 41.79 40.70 12 Nonborrowed reserves 57.64 51.02 47.60 44.90 43.06 43.48 44.75 42.25 41.49 41.53 41.45 40.42 13 Nonborrowed reserves plus extended credit5 57.64 51.02 47.60 44.90 43.06 43.48 44.75 42.25 41.49 41.53 41.45 40.42 14 Required reserves 56.61 49.76 46.24 43.44 41.82 42.49 43.62 41.13 40.73 40.74 40.59 39.55 15 Monetary base12 444.45 463.40 491.79 525.06 530.30 533.49 539.98 542.82 548.07 550.86 555.19r 562.59 16 Excess reserves13 1.29 1.42 1.69 1.58 1.31 1.16 1.26 1.26 1.08 1.13 1.20 1.16 17 Borrowings from the Federal Reserve .26 .16 .32 .12 .07 .17 .13 .15 .31 .34 .34 .28 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 . Julyr Aug/ Sept/ Oct. Seasonally adjusted Measures2 1 Ml 1,126.7 1,081.3 1,074.9 1,093.4 1,099.5 1,102.4 1,093.4 1,098.4 2 M2 3,649.1 3,823.9 4,046.4 4,401.0 4,543.1 4,564.5 4,583.1 4,602.2 3 M3 4,618.5 4,955.6 5,403.4 5,995.8 6,191.6 6,218.6 6,253.1 6,306.8 4 Debt 13,716.1 14,460.8 15,223.5 16,243.3r 16,851.1 16,937.6 17,029.0 n.a. MI components 5 Currency3 372.3 394.1 424.5 459.2 487.3 490.9 495.0 499.1 6 Travelers checks4 8.3 8.0 7.7 7.8 8.6 8.6 8.3 8.1 7 Demand deposits5 389.4 403.0 396.5 377.5 362.7 363.3 352.8 354.5 8 Other checkable deposits6 356.7 276.2 246.2 248.8 240.9 239.6 237.4 236.8 Nontransaction components 9 In M27 2,522.4 2,742.6 2,971.5 3,307.6 3,443.6 3,462.1 3,489.6 3,503.7 10 In M3 only8 969.4 1,131.7 1,357.0 1,594.8 1,648.6 1,654.1 1,670.0 1,704.6 Commercial banks 11 Savings deposits, including MMDAs . . 775.3 905.2 1,022.9 1,189.8 1,260.8 1,269.2 1,284.4 1,288.9 12 Small time deposits9 575.0 593.7 626.1 626.0 613.1 614.8 618.6 622.0 13 Large time deposits'0- 11 346.6 414.8 490.2 541.0 539.6 537.3 550.1 578.7 Thrift institutions 14 Savings deposits, including MMDAs . . 359.8 367.1 377.3 415.2 455.0 456.6 458.3 456.8 15 Small time deposits9 356.7 353.8 343.2 325.9 311.7 312.0 312.9 314.1 16 Large time deposits10 74.5 78.4 85.9 89.1 88.7 89.1 89.9 89.3 Money market mutual funds 17 Retail 455.5 522.8 602.0 750.7 802.9 809.5 815.4 821.9 18 Institution-only 255.9 313.3 379.9 516.2 546.0 556.4 559.3 571.0 Repurchase agreements and Eurodollars 19 Repurchase agreements'2 198.7 211.3 251.7 297.8 308.6 310.2 309.7 306.6 20 Eurodollars'" 93.7 113.9 149.3 150.7 165.6 161.1 161.0 159.0 Debt components 21 Federal debt 3,639.1 3,781.3 3,800.3 3,750.8 3,708.0 3,711.0 3,698.1 n.a. 22 Nonfederal debt 10,077.0 10,679.5 11,423.2 12,492.6r 13,143.1 13,226.6 13,330.9 n.a. Not seasonally adjusted Measures2 23 Ml 1,152.4 1,104.9 1,097.4 1,115.3 1,098.1 1,097.6 1,088.1 1,095.7 24 M2 3,671.7 3,843.7 4,064.6 4,417.8 4,533.3 4,558.9 4,568.8 4,586.7 25 M3 4,638.0 4,972.5 5,419.6 6,011.9 6,162.3 6,201.6 6,225.0 6,289.9 26 Debt 13,716.6 14,459.3 15,220.6 16,240.2r 16,785.3 16,875.8 16,973.3 n.a. Ml components 27 Currency3 376.2 397.9 428.9 464.2 487.7 490.2 493.4 498.9 28 Travelers checks4 8.5 8.3 7.9 8.0 8.3 8.2 8.1 8.0 29 Demand deposits5 407.2 419.9 412.3 392.4 362.7 361.9 350.8 353.9 30 Other checkable deposits6 360.5 278.8 248.3 250.7 239.4 237.3 235.7 234.9 Nontransaction components 31 In M27 2,519.3 2,738.9 2,967.2 3,302.5 3,435.2 3,461.3 3,480.7 3,491.0 32 In M3 only8 966.4 1,128.8 1,355.0 1,594.1 1,629.0 1,642.7 1,656.2 1,703.2 Commercial banks 33 Savings deposits, including MMDAs 774.1 903.3 1,020.4 1,186.8 1,261.7 1,268.4 1,277.5 1,279.5 34 Small time deposits9 573.8 592.7 625.3 625.4 612.9 614.4 618.3 622.8 35 Large time deposits'0, " 345.8 413.3 487.7 537.4 539.4 537.5 550.5 581.7 Thrift institutions 36 Savings deposits, including MMDAs 359.2 366.3 376.4 414.1 455.4 456.3 455.8 453.5 37 Small time deposits9 355.9 353.2 342.8 325.6 311.6 311.8 312.7 314.5 38 Large time deposits'0 74.3 78.1 85.4 88.5 88.6 89.2 90.0 89.8 Money market mutual funds 39 Retail 456.1 523.2 602.3 750.6 793.7 810.4 816.4 820.7 40 Institution-only 257.7 316.0 384.5 523.3 533.4 548.0 547.5 566.7 Repurchase agreements and Eurodollars 41 Repurchase agreements'2 193.8 205.7 245.1 290.5 305.9 308.4 308.4 305.2 42 Eurodollars'2 94.9 115.7 152.3 154.5 161.6 159.7 159.9 159.8 Debt components 43 Federal debt 3,645.9 3,787.9 3,805.8 3,754.9 3,652.2 3,665.8 3,655.8 n.a. 44 Nonfederal debt 10,070.7 10,671.4 11,414.8 12,485.2r 13,133.2 13,210.0 13,317.5 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • January 2000 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 Oct. Apr. May June Julyr Aug.r Sept/ Oct. Oct. 6 Oct. 13 Oct. 20 Oct. 27 Seasonally adjusted Assets 1 Bank credit 4,490.4r ^sio.o1 4,519.3r 4,555.6r 4,553.0 4,588.1 4,619.2 4,625.8 4,629.3 4,613.5 4,621.0 4,639.2 2 Securities in bank credit l,218.8r 1,195.^ l,195.4r l,213.7r 1,231.1 1,248.2 1,258.8 1,247.6 1,260.1 1,250.3 1,244.6 1,248.4 3 U.S. government securities 116.9 801.8r 799.9" 812.9r 813.9 819.8 817.3 809.5 816.8 814.3 808.0 807.1 4 Other securities 441.9 394.1r 395.5r 400.8r 417.2 428.4 441.5 438.2 443.3 435.9 436.6 441.2 5 Loans and leases in bank credit2 .. . 3,271.6r 3,314.1r 3.323.91 3,341.9r 3,321.9 3,339.9 3,360.5 3,378.2 3,369.1 3,363.2 3,376.4 3,390.8 6 Commercial and industrial 943.9r 961.7r 957.4r 963.5r 965.0 973.0 980.7 983.7 979.9 979.2 985.6 986.7 7 Real estate 1,301.2 1,351.0 1,360.3 1,365.9 1,367.4 1.379.7 1,396.7 1,421.0 1,415.0 1,420.4 1,422.0 1,423.0 8 Revolving home equity 102.4 103.0 104.3 103.7 97.9 98.5 106.4 115.1 114.6 115.2 115.3 115.2 9 Other l,198.9r 1,247.9 1,256.0 1,262.2 1,269.4 1,281.2 1,290.3 1,305.9 1,300.4 1,305.3 1,306.7 1,307.8 10 Consumer 493.1 499.5 495.9 491.3 481.9 480.1 481.0 480.7 479.7 479.7 481.0 482.1 11 Security3 156.6r 122.1r 126.8r 131.0r 122.2 122.4 116.0 107.8 105.8 101.7 105.7 114.0 12 Other loans and leases 376.7r 379.9r 383,5r 390.2r 385.4 384.6 386.1 385.0 388.8 382.2 382.1 385.1 13 Interbank loans 219.2 217.4 227.5 224.5 224.0 214.9 207.8 218.6 214.2 212.2 217.8 228.4 14 Cash assets4 246.1 257.8 259.9 261.0 258.2 253.5 263.7 271.4 262.4 271.5 273.7 276.3 15 Other assets5 329.0 344.8 347.2 348.6 348.7 345.5 349.4 360.5 355.6 362.4 363.1 362.9 16 Total assets6 5,226.7r 5,271.5r 5,295.1r 5,331.0" 5325.7 5,343.4 5381.0 5,416.9 5,402.4 5,400.2 5,416.2 5,4472 Liabilities 17 Deposits 3,287.6 3,376.5 3,374.9 3,377.2 3,392.0 3,385.5 3,396.0 3,434.0 3,421.5 3,437.3 3,424.1 3,443.5 18 Transaction 673.0 656.6 649.6 655.7 649.3 637.2 635.3 631.8 618.9 631.3 631.2 653.1 19 Nontransaction 2,614.5 2,719.9 2,725.2 2,721.5 2,742.8 2,748.3 2,760.7 2,802.1 2,802.6 2,806.0 2,792.9 2,790.4 20 Large time 714.8 725.7 723.6 718.8 722.4 720.4 728.6 765.9 753.6 762.3 766.7 769.7 21 Other 1,899.8 1,994.2 2,001.7 2,002.7 2,020.4 2,027.9 2,032.1 2,036.2 2,049.0 2,043.6 2,026.2 2,020.7 22 Borrowings 983.4 983.7 997.8 1,020.5 1,018.8 1,025.8 1,038.1 1,041.0 1,033.4 1,032.5 1,048.2 1,045.9 23 From banks in the U.S 315.5 311.8 324.3 338.4 339.2 338.5 342.6 352.6 355.3 347.3 350.6 351.9 24 From others 667.9 671.9 673.6 682.0 679.6 687.3 695.6 688.5 678.0 685.2 697.7 694.0 25 Net due to related foreign offices 221.0 210.2 203.9 215.1 212.5 222.4 218.3 220.6 235.9 218.5 218.5 210.7 26 Other liabilities 316.5 273.8 271.1 275.5 274.0 279.2 289.0 287.8 282.6 281.2 288.1 301.1 27 Total liabilities 4,808.4 4,844.2 4,847.7 4,888.2 4,897.4 4,912.9 4,941.4 4,983.4 4,973.5 4,969.4 4,978.9 5,001.2 28 Residual (assets less liabilities)7 418.3r 427.3r 447.5r 442.8r 428.3 430.5 439.6 433.5 428.9 430.8 437.3 446.0 Not seasonally adjusted Assets 29 Bank credit 4,495.4r 4,518.3r 4,522.0" 4,549.4r 4,537.0 4,567.0 4,609.4 4,630.3 4,628.0 4,615.5 4,623.9 4,641.3 30 Securities in bank credit l,216.7r l,204.6r 1,200.9" l,210.4r 1,220.0 1,235.4 1,247.6 1,244.1 1,251.6 1,243.7 1,239.6 1,247.7 31 U.S. government securities 772. lr 811.8r 808. lr 812.4r 806.0 808.1 807.1 803.8 807.7 805.6 801.8 803.8 32 Other securities 444.5 392.9" 392.8r 398.0" 413.9 427.3 440.5 440.3 444.0 438.1 437.9 443.9 33 Loans and leases in bank credit2 . . . 3,278.7r 3,313.7r 3,321.lr S^.O1" 3,317.0 3,331.7 3,361.8 3,386.2 3,376.4 3,371.8 3,384.2 3,393.6 34 Commercial and industrial 943.6r 968.4r 961.9r 963.8r 962.6 964.4 976.7 984.8 981.7 979.1 986.6 986.3 35 Real estate 1,304.7 1,347.6 1,359.7 1,366.5 1,368.4 1,382.3 1,400.4 1,424.7 1,418.7 1,425.2 1,424.9 1,425.6 36 Revolving home equity 103.2 102.4 103.9 103.3 97.7 98.7 107.2 116.0 115.3 116.0 116.2 116.1 37 Other 1,201.5 l,245.3r 1,255.8 1,263.2 1,270.6 1,283.6 1,293.2 1,308.7 1,303.4 1,309.3 1,308.7 1,309.5 38 Consumer 493.6 496.0 493.4 488.6 479.5 481.2 484.0 481.4 479.8 480.0 481.9 483.5 39 Security3 158.2r 124.0" 126.6r 130.4r 120.2 118.7 112.7 108.6 104.5 102.5 107.2 114.3 40 Other loans and leases 378.6r 377.7r 379.5r 389.8r 386.4 385.1 388.0 386.7 391.6 384.9 383.6 383.9 41 Interbank loans 217.0 222.4 223.3 221.8 217.7 207.1 204.2 215.1 211.9 208.0 211.1 221.2 42 Cash assets4 246.5 255.5 257.6 256.6 250.3 243.1 261.0 271.6 256.2 290.3 270.1 266.2 43 Other assets5 326.9 347.8 348.7 354.5 351.4 348.3 351.4 357.8 356.3 362.3 356.1 356.0 44 Total assets6 5,228.0r 5,285.6r 5,292.9r 5,323.5r 5,298.2 5,306.7 5366.7 5,415.6 53933 5,416.8 5,402.1 5,425.4 Liabilities 45 Deposits 3,287.1 3,387.2 3,365.5 3,375.2 3,375.7 3,371.6 3,394.6 3,436.5 3,432.7 3,456.5 3,418.3 3,417.5 46 Transaction 662.9 664.2 640.6 650.8 638.5 620.9 629.5 623.6 615.9 637.6 617.2 623.7 47 Nontransaction 2,624.1 2,723.0 2,724.9 2,724.4 2,737.1 2,750.7 2,765.1 2,812.9 2,816.7 2,818.8 2,801.1 2,793.8 48 Large time 716.4 722.6 724.8 716.1 715.7 717.7 730.1 767.5 755.8 762.9 766.6 772.9 49 Other 1,907.7 2,000.3 2,000.1 2,008.3 2,021.5 2,033.0 2,035.0 2,045.4 2,060.9 2,055.9 2,034.5 2,020.9 50 Borrowings 985.6 983.5 1,006.0 1,024.1 1,009.5 1,002.3 1,033.0 1,043.7 1,025.0 1,029.9 1,053.4 1,056.1 51 From banks in the U.S 313.6 312.4 325.2 338.3 334.6 331.3 338.8 350.2 349.8 343.5 348.3 351.2 52 From others 672.0 671.1 680.8 685.7 674.9 671.0 694.2 693.5 675.2 686.4 705.1 704.9 53 Net due to related foreign offices .... 223.5 203.1 210.1 209.3 204.7 217.4 214.3 222.3 222.4 218.0 221.1 228.7 54 Other liabilities 315.0 273.4 270.8 274.8 273.2 279.1 287.9 286.3 280.5 279.6 286.4 300.1 55 Total liabilities 4,811.2 4,847.3 4,852.3 4,883.4 4,863.1 4,870.4 4,929.9 4,988.8 4,960.6 4,983.9 4,979.2 5,002.4 56 Residual (assets less liabilities)7 416.8r 438.4r 440.6r 440. lr 435.1 436.3 436.8 426.8 432.7 433.0 422.9 423.0 MEMO 57 Revaluation gains on off-balance-sheet items8 134.1 93.2r 92.6r 92.6r 97.8 102.8 111.3 98.8 107.3 97.5 96.6 99.6 58 Revaluation losses on off-balancesheet items8 131.2 95.0" 94.5r 94.7r 99.1 105.4 110.4 97.4 105.1 95.5 94.5 99.1 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • January 2000 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 Oct. Apr. May June Julyr Aug.r Sept.r Oct. Oct. 6 Oct. 13 Oct. 20 Oct. 27 Seasonally adjusted Assets 1 Bank credit 3,871.4r 3,959.9r 3,979.5r 4,023.2r 4,032.5 4,064.5 4,100.7 4,108.0 4,110.4 4,097.6 4,104.1 4,119.7 2 Securities in bank credit 1,000.0 995.6r 999.5r l,017.7r 1,041.5 1,058.3 1,069.6 1,061.0 1,071.1 1,063.9 1,059.2 1,060.5 3 U.S. government securities 695.6 712.3 712.7 724.5 728.0 735.8 735.7 729.7 734.9 734.6 729.7 726.6 4 Other securities 304.4 283.3r 286.7r 293.2r 313.6 322.5 334.0 331.3 336.1 329.3 329.5 333.9 5 Loans and leases in bank credit2 2,871.3r 2,964.4r 2,980.0r 3,005.5r 2,991.0 3,006.1 3,031.0 3,047.0 3,039.4 3,033.7 3,044.9 3,059.1 6 Commercial and industrial 720.8 752.4 755.5 766.8 772.3 777.6 783.5 784.7 781.6 780.2 785.5 787.7 7 Real estate 1,277.7 1,331.0 1,340.5 1,346.7 1,349.0 1,362.1 1,379.1 1,403.2 1,397.0 1,402.6 1,404.2 1,405.2 8 Revolving home equity 102.4 103.0 104.3 103.7 97.9 98.5 106.4 115.1 114.6 115.2 115.3 115.2 9 Other 1,175.3 1,228.0 1,236.2 1,243.0 1,251.1 1,263.6 1,272.7 1,288.1 1,282.4 1,287.5 1,288.9 1,290.0 10 Consumer 493.1 499.5 495.9 491.3 481.9 480.1 481.0 480.7 479.7 479.7 481.0 482.1 11 Security3 86.5 70.1 73.4 79.0 69.6 67.4 64.8 56.1 55.1 51.4 54.6 61.9 12 Other loans and leases 293.3r 311.3r 314.7r 321.7r 318.2 318.9 322.7 322.3 326.0 319.7 319.6 322.2 13 Interbank loans 193.6 192.0 200.9 200.0 196.5 189.2 184.9 195.6 192.3 191.0 196.4 202.2 14 Cash assets4 210.6 223.2 223.9 227.5 223.1 215.5 222.9 227.3 218.5 229.2 230.1 231.7 15 Other assets5 290.6 307.3 311.3 315.1 316.6 316.5 320.1 328.6 325.6 330.3 331.0 330.6 16 Total assets6 4,508.5r 4,624.2r 4,657.1r 4,707.4r 4,710.9 4,727.3 4,769.7 4,800.5 4,788.1 4,789.1 4,802.4 4,824.8 Liabilities 17 Deposits 2,971.5 3,064.6 3,064.4 3,071.5 3,081.6 3,076.3 3,084.9 3,102.6 3,102.0 3,108.5 3,090.8 3,107.5 18 Transaction 657.7 646.5 639.1 644.8 638.3 626.2 624.4 620.4 607.6 619.8 619.3 641.7 19 Nontransaction 2,313.8 2,418.1 2,425.3 2,426.6 2,443.2 2,450.1 2,460.4 2,482.3 2,494.5 2,488.7 2,471.5 2,465.8 20 Large time 415.3 425.5 425.6 426.2 425.7 426.2 433.5 447.8 448.7 447.5 446.4 446.2 21 Other 1,898.5 1,992.6 1,999.7 2,000.5 2,017.6 2,023.9 2,026.9 2,034.4 2,045.8 2,041.2 2,025.1 2,019.6 22 Borrowings 767.6 811.6 825.1 839.6 846.5 853.6 869.2 871.5 866.6 864.5 878.5 875.7 23 From banks in the U.S 284.7 290.8 302.9 311.9 314.7 314.9 317.3 329.8 332.0 327.4 327.9 329.4 24 From others 482.9 520.8 522.3 527.7 531.8 538.8 551.9 541.7 534.6 537.1 550.6 546.3 25 Net due to related foreign offices .... 115.3 115.4 118.7 145.6 145.2 150.5 152.2 166.2 169.2 166.1 167.5 160.4 26 Other liabilities 237.5 206.6 211.1 214.1 210.7 217.5 224.5 224.9 219.9 218.7 225.8 237.2 27 Total liabilities 4,091.9 4,198.2 4,219.4 4,270.7 4,283.9 4,297.9 4,330.8 4,365.2 4,357.7 4,357.8 4,362.5 4,380.8 28 Residual (assets less liabilities)7 416.6r 425.9r 437.8r 436.7r 427.0 429.3 439.0 435.3 430.4 431.3 439.9 444.0 Not seasonally adjusted Assets 29 Bank credit 3,872.2r 3,971.0r 3,987.4r 4,020. lr 4,019.7 4,047.1 4,091.7 4,108.6 4,107.3 4,096.2 4,103.5 4,117.6 30 Securities in bank credit 994.8 l,005.8r l,006.6r l,015.3r 1,032.0 1,046.7 1,059.2 1,054.8 1,062.6 1,054.6 1,052.0 1,056.0 31 U.S. government securities 691.0 722.6 720.1 723.6 720.6 725.0 726.4 724.1 727.0 726.3 723.4 722.8 32 Other securities 303.9 283.2r 286.5r 291.7r 311.4 321.7 332.7 330.7 335.6 328.3 328.6 333.3 33 Loans and leases in bank credit2 2,877.4r 2,965.2r 2,980.8r 3,004.8r 2,987.7 3,000.4 3,032.6 3,053.7 3,044.7 3,041.5 3,051.5 3,061.6 34 Commercial and industrial 719.5 760.6 762.6 768.8 770.7 770.6 779.9 784.7 782.1 779.8 785.8 786.3 35 Real estate 1,281.0 1,327.9 1,340.1 1,347.5 1,350.2 1,364.9 1,382.8 1,406.7 1,400.6 1,407.3 1,407.0 1,407.7 36 Revolving home equity 103.2 102.4 103.9 103.3 97.7 98.7 107.2 116.0 115.3 116.0 116.2 116.1 37 Other 1,177.7 1,225.5 1,236.3 1,244.2 1,252.4 1,266.1 1,275.6 1,290.8 1,285.3 1,291.3 1,290.8 1,291.5 38 Consumer 493.6 496.0 493.4 488.6 479.5 481.2 484.0 481.4 479.8 480.0 481.9 483.5 39 Security3 88.3 72.1 73.5 78.2 67.9 63.7 61.3 57.2 53.8 52.1 56.5 63.3 40 Other loans and leases 295.0r 308.7r 311. R 321.8r 319.4 320.1 324.7 323.7 328.5 322.3 320.4 320.9 41 Interbank loans 191.5 197.0 196.7 197.3 190.2 181.4 181.4 192.1 190.1 186.8 189.7 195.0 42 Cash assets4 210.6 222.0 222.0 222.2 215.4 205.5 220.4 226.9 212.3 247.6 225.7 220.5 43 Other assets5 288.6 312.0 313.5 322.1 320.0 318.7 321.8 326.1 326.3 330.1 324.2 324.2 44 Total assets6 4,505.3r 4,644.0r 4,661.2r 4,703.2r 4,687.4 4,694.1 4,756.2 4,794.8 4,777.1 4,801.8 4,784.3 4,798.3 Liabilities 45 Deposits 2,970.6 3,075.9 3,052.7 3,068.8 3,067.7 3,065.0 3,083.9 3,105.1 3,112.2 3,128.4 3,085.8 3,080.2 46 Transaction 647.6 654.3 630.3 640.1 627.7 610.0 618.1 612.2 604.7 626.1 605.2 612.4 47 Nontransaction 2,323.0 2,421.6 2,422.4 2,428.6 2,440.0 2,455.0 2,465.8 2,493.0 2,507.5 2,502.4 2,480.5 2,467.8 48 Large time 417.1 423.4 424.5 422.6 420.8 424.3 433.1 449.9 448.9 448.7 448.2 449.2 49 Other 1,905.9 1,998.2 1,997.9 2,006.0 2,019.2 2,030.7 2,032.7 2,043.1 2,058.7 2,053.7 2,032.3 2,018.7 50 Borrowings 769.8 811.4 833.3 843.1 837.2 830.2 864.1 874.2 858.2 861.9 883.6 885.9 51 From banks in the U.S 282.8 291.4 303.8 311.7 310.0 307.7 313.6 327.4 326.4 323.6 325.7 328.7 52 From others 487.0 519.9 529.5 531.4 527.1 522.5 550.6 546.7 531.9 538.3 558.0 557.2 53 Net due to related foreign offices .... 115.5 114.0 126.7 141.2 139.9 147.5 149.8 166.1 157.4 163.3 168.7 173.3 54 Other liabilities 236.8 207.3 211.3 213.9 210.7 217.3 223.8 224.1 218.7 217.9 224.9 236.4 55 Total liabilities 4,092.7 4,208.6 4,224.1 4,267.0 4,255.5 4,259.9 4,321.6 4,369.5 4,346.6 4,371.5 4,363.0 4,375.7 56 Residual (assets less liabilities)7 412.6r 435.5r 437.1r 436.3r 431.9 434.2 434.5 425.3 430.5 430.3 421.2 422.6 MEMO 57 Revaluation gains on off-balance-sheet items8 82.2 55.0r 57.3r 57.7r 60.5 64.7 73.0 62.9 71.6 61.2 60.9 63.6 58 Revaluation losses on off-balancesheet items8 83.6 56.4r 59.6r 60.5r 62.8 69.1 73.1 62.2 70.5 60.2 59.7 63.1 59 Mortgage-backed securities9 335.9 335.7 335.5 334.3r 340.3 344.4 347.5 346.6 348.8 348.4 344.3 345.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 1998 1999" 1999 Oct. Apr. May June July Aug. Sept. Oct. Oct. 6 Oct. 13 Oct. 20 Oct. 27 Seasonally adjusted Assets 1 Bank credit 2,428.9" 2,430.6 2,438.8 2,466.5 2,461.2 2,479.2 2,501.2 2,487.2 2,491.8 2,478.1 2,482.9 2,496.5 2 Securities in bank credit 584.4r 551.5 551.3 562.0 581.9 596.6 606.2 595.4 603.7 597.2 593.6 595.7 3 U.S. government securities 380.0" 379.7 377.8 384.1 384.2 391.8 390.1 383.5 386.4 386.9 384.0 381.5 4 Trading account 21.0 25.9 22.3 25.1 22.7 23.3 20.9 20.0 20.6 19.3 20.8 19.9 5 Investment account 359. lr 353.8 355.5 359.0 361.5 368.6 369.2 363.5 365.8 367.6 363.2 361.6 6 Other securities 204.4 171.8 173.5 178.0 197.7 204.7 216.1 211.9 217.3 210.3 209.5 214.2 7 Trading account 112.7 72.8 75.0 74.2 79.7 83.7 90.9 83.8 90.5 82.8 81.9 84.5 8 Investment account 91.7 99.0 98.6 103.8 118.0 121.0 125.2 128.2 126.9 127.5 127.7 129.8 9 State and local government . 23.9 24.6 24.8 25.3 25.4 25.7 25.7 25.7 25.6 25.6 25.4 25.4 10 Other 67.8 74.4 73.8 78.5 92.6 95.3 99.5 102.5 101.2 101.9 102.3 104.3 11 Loans and leases in bank credit2 . . . 1,844.5" 1,879.1 1,887.5 1,904.5 1,879.3 1,882.6 1,895.0 1,891.8 1,888.1 1,881.0 1,889.4 1,900.7 12 Commercial and industrial 532.3 552.8 553.0 561.4 564.1 567.6 570.7 566.1 564.0 562.2 567.0 568.7 13 Bankers acceptances 1.3 1.1 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.1 1.1 1.1 14 Other 531.0" 551.7 552.0 560.4 563.2 566.6 569.5 564.9 562.8 561.0 565.9 567.6 15 Real estate 708.7" 719.0 722.5 721.9 716.8 721.8 733.2 745.7 742.2 746.4 746.7 745.7 16 Revolving home equity 74.2 74.2 75.1 74.1 68.2 68.7 76.6 84.8 84.4 84.7 85.2 84.9 17 Other 634.5" 644.8 647.4 647.8 648.6 653.0 656.6 660.9 657.8 661.7 661.6 660.8 18 Consumer 301.0" 300.6 297.7 292.8 284.1 280.9 278.9 277.0 276.0 276.2 276.8 277.8 19 Security3 80.4 64.6 68.3 73.8 64.3 62.2 59.4 50.8 49.8 46.1 49.4 56.7 20 Federal funds sold to and repurchase agreements with broker-dealers 63.6 47.9 51.4 55.6 46.9 45.3 42.1 34.0 32.0 2299..55 3311..88 4411..11 21 Other 16.7 16.7 16.8 18.2 17.4 16.9 17.3 16.8 17.8 16.6 17.7 15.6 22 State and local government 11.4 11.4 11.4 11.4 11.7 11.9 11.9 12.0 12.0 12.0 12.0 11.9 23 Agricultural 8.9 8.9 8.6 8.6 8.5 8.8 8.8 8.9 8.8 8.8 8.9 9.0 24 Federal funds sold to and repurchase agreements with others 13.4 11.8 10.7 15.5 4.2 7.7 11.0 9.7 10.9 10.3 1100..00 77..33 25 All other loans 87.0" 92.3 96.0 99.0 103.9 98.7 96.5 94.1 94.6 92.6 92.5 96.0 26 Lease-financing receivables 101.5 117.9 119.3 120.0 121.7 123.1 124.6 127.4 129.7 126.3 126.0 127.7 27 Interbank loans 123.3" 131.7 143.3 144.7 139.6 134.6 132.7 145.9 143.3 142.3 147.8 151.7 28 Federal funds sold to and repurchase agreements with commercial banks 77.2 81.1 88.1 87.1 8899..55 8855..99 8833..33 9900..66 8899..33 8888..33 9922..33 9955..88 29 Other 46.1 50.6 55.2 57.6 50.1 48.7 49.4 55.3 54.0 54.1 55.6 55.9 30 Cash assets4 144.4 155.3 153.0 156.2 150.5 143.2 149.8 154.3 148.1 155.4 158.4 156.4 31 Other assets5 228.8" 234.7 237.3 240.6 238.5 236.0 239.4 243.7 242.2 246.5 243.2 245.5 32 Total assets6 2,887.1r 2,913.9 2,933.9 2,969.4 2,951.7 2,954.7 2,984.5 2,992.6 2,987.1 2,983.9 2,993.9 3,011-3 Liabilities 33 Deposits 1,677.2" 1,700.0 1,694.7 1,694.9 1,693.0 1,680.0 1,685.9 1,685.7 1,691.4 1,693.2 1,677.2 1,684.8 34 Transaction 376.7" 364.5 355.5 357.3 351.3 337.8 338.7 334.7 328.5 336.2 333.9 345.9 35 Nontransaction 1,300.5" 1,335.5 1,339.1 1,337.6 1,341.7 1,342.2 1,347.2 1,351.0 1,362.9 1,357.0 1,343.3 1,338.8 36 Large time 227.1" 229.0 226.0 227.9 229.4 227.0 232.7 242.6 244.5 242.9 241.5 240.6 37 Other 1,073.4" 1,106.5 1,113.1 1,109.6 1,112.3 1,115.2 1,114.5 1,108.4 1,118.4 1,114.1 1,101.8 1,098.2 38 Borrowings 600.6 625.9 633.6 643.4 639.5 645.1 655.2 657.1 652.8 649.6 660.8 663.3 39 From banks in the U.S 205.4 207.1 215.6 220.7 217.5 219.1 221.1 237.0 239.0 234.2 233.2 238.5 40 From others 395.3 418.8 418.0 422.7 422.1 426.0 434.1 420.0 413.8 415.4 427.6 424.8 41 Net due to related foreign offices 110.6 110.5 113.6 141.5 140.9 147.0 148.8 161.9 165.1 161.6 163.4 156.0 42 Other liabilities 209.0 176.3 180.0 182.0 179.4 184.4 190.3 190.5 185.2 184.4 191.5 202.4 43 Total liabilities 2,597.4" 2,612.6 2,621.9 2,661.8 2,652.8 2,656.5 2,680.2 2,695.2 2,694.4 2,688.7 2,693.0 2,706.4 44 Residual (assets less liabilities)7 289.6" 301.3 311.9 307.7 298.9 298.2 304.3 297.4 292.7 295.1 300.9 304.9 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • January 2000 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 1999r 1999 Oct. Apr. May June July Aug. Sept. Oct. Oct. 6 Oct. 13 Oct. 20 Oct. 27 Not seasonally adjusted Assets 45 Bank credit 2,430.7r 2,436.7 2,436.6 2,456.4 2,447.2 2,459.7 2,489.0 2,489.0 2,491.4 2,477.2 2,483.2 2,494.8 46 Securities in bank credit 582.0r 556.8 553.1 557.8 574.1 586.5 598.1 592.3 599.3 590.8 589.4 593.6 47 U.S. government securities 378.1r 385.8 380.7 381.3 378.4 382.8 382.7 380.9 382.0 381.4 380.6 380.2 48 Trading account 21.9 25.2 20.8 23.5 20.9 22.2 20.7 20.8 20.9 19.8 22.0 20.4 49 Investment account 356. lr 360.5 359.9 357.8 357.5 360.7 361.9 360.1 361.1 361.6 358.6 359.8 50 Mortgage-backed securities . . 259.4r 242.5 239.4 235.1 233.8 237.5 240.6 238.2 239.8 239.5 236.1 237.5 51 Other 96.7r 118.0 120.5 122.7 123.6 123.2 121.4 121.8 121.3 122.1 122.4 122.3 52 One year or less 26.9 25.0 24.3 25.3 25.3 24.9 24.5 25.3 25.4 25.1 25.6 25.5 53 One to five years 38.3r 54.2 55.9 57.7 58.8 59.0 58.2 59.0 58.3 59.3 59.4 59.3 54 More than five years . . . 31.5 38.9 40.3 39.8 39.5 39.3 38.6 37.5 37.7 37.6 37.4 37.4 55 Other securities 204.0 171.0 172.5 176.5 195.7 203.7 215.4 211.5 217.3 209.5 208.8 213.4 56 Trading account 112.7 72.8 75.0 74.2 79.7 83.7 90.9 83.8 90.5 82.8 81.9 84.5 57 Investment account 91.3 98.2 97.5 102.3 116.0 120.0 124.5 127.7 126.8 126.7 126.9 128.9 58 State and local government . . 24.0 24.7 24.9 25.1 25.0 25.4 25.6 25.8 25.6 25.6 25.5 25.6 59 Other 67.4 73.5 72.6 77.2 91.1 94.6 98.9 101.9 101.2 101.1 101.4 103.3 60 Loans and leases in bank credit2 . . l,848.6r 1,879.9 1,883.5 1,898.6 1,873.0 1,873.2 1,891.0 1,896.6 1,892.1 1,886.3 1,893.8 1,901.2 61 Commercial and industrial 532.5r 558.9 557.5 561.5 562.7 561.9 568.2 567.5 566.1 563.2 568.6 568.8 62 Bankers acceptances 1.3 1.1 1.0 1.0 1.0 1.1 1.1 1.1 1.2 1.1 1.1 1.1 63 Other 531.1 557.8 556.5 560.5 561.7 560.8 567.1 566.4 565.0 562.1 567.5 567.7 64 Real estate 710.5r 716.1 719.8 719.9 715.9 722.3 733.5 747.8 744.5 749.3 748.1 746.6 65 Revolving home equity 74.8 73.7 74.7 73.9 68.2 69.1 77.2 85.5 84.9 85.3 85.9 85.6 66 Other 395.3r 390.7 392.5 393.2 394.3 398.7 400.2 404.1 402.6 406.3 404.0 402.1 67 Commercial 240.4r 251.7 252.6 252.8 253.4 254.6 256.2 258.2 257.1 257.7 258.3 258.9 68 Consumer 3Q0& 298.2 295.5 290.9 282.3 281.5 280.8 277.1 276.2 276.1 276.7 277.9 69 Security3 82.2 66.5 68.4 73.0 62.7 58.4 55.9 51.9 48.4 46.9 51.3 58.1 70 Federal funds sold to and repurchase agreements with broker-dealers .... 65.5 49.8 51.2 54.1 45.3 41.8 38.8 35.1 31.4 30.3 33.4 42.0 71 Other 16.7 16.7 17.2 18.9 17.4 16.6 17.1 16.8 17.0 16.6 17.9 16.1 72 State and local government .... 11.4 11.3 11.3 11.3 11.6 11.9 12.0 12.0 12.1 12.1 12.0 11.9 73 Agricultural 9.0 8.7 8.6 8.7 8.8 9.0 9.0 9.0 9.0 9.0 9.0 9.0 74 Federal funds sold to and repurchase agreements 11.0 with others 13.4 11.8 10.7 15.5 4.2 7.7 9.7 10.9 10.3 10.0 7.3 75 All other loans Klff 90.4 92.6 97.5 103.6 97.9 97.1 95.0 95.5 93.9 93.0 95.2 76 Lease-financing receivables .... 100.8 118.1 119.2 120.2 121.3 122.5 123.4 126.5 129.3 125.6 124.9 126.3 77 Interbank loans 119.7r 135.8 143.4 145.1 137.5 129.4 130.3 141.3 139.0 137.2 141.1 146.0 78 Federal funds sold to and repurchase agreements with commercial banks 74.2 83.8 87.2 86.3 85.9 80.9 81.3 86.8 85.2 83.3 86.2 91.6 79 Other 45.4 52.0 56.3 58.8 51.5 48.4 49.0 54.5 53.8 53.9 55.0 54.4 80 Cash assets4 145.1 154.2 151.5 152.0 144.7 136.4 148.6 154.8 143.0 170.4 155.9 149.6 81 Other assets5 226.7 239.1 239.6 246.0 240.7 237.5 240.6 241.2 241.5 244.7 238.6 241.2 82 Total assets6 2,883.8r 2,927.5 2,932.5 2,900.7 2,931.8 2,924.4 2,969.8 2,987.8 2,976.3 2^91.0 2,980-5 2,993.2 Liabilities 83 Deposits l,673.7r 1,706.1 1,680.3 1,688.8 1,681.7 1,670.0 1,681.9 1,684.3 1,694.6 1,703.4 1,671.4 1,664.3 84 Transaction 369.7r 368.6 349.1 353.7 344.6 328.5 335.3 329.5 324.9 340.9 325.4 328.2 85 Nontransaction UOW/ 1,337.5 1,331.2 1,335.1 1,337.1 1,341.6 1,346.6 1,354.8 1,369.6 1,362.5 1,346.0 1,336.1 86 Large time 228.9r 226.9 224.8 224.4 224.6 225.2 232.2 244.6 244.7 244.1 243.3 243.5 87 Other l,075.1r 1,110.6 1,106.3 1,110.7 1,112.6 1,116.4 1,114.3 1,110.2 1,124.9 1,118.4 1,102.7 1,092.6 88 Borrowings 600.5 628.3 641.4 645.8 630.4 621.6 647.5 656.9 644.6 645.6 662.1 667.3 89 From banks in the U.S 201.7 209.4 216.7 220.3 213.7 212.6 217.0 232.7 233.0 229.3 228.5 234.1 90 From nonbanks in the U.S 398.7 418.9 424.7 425.5 416.7 409.0 430.5 424.2 411.5 416.4 433.6 433.1 91 Net due to related foreign offices . .. 110.9 109.0 121.7 137.1 135.7 144.0 146.4 161.8 153.2 158.7 164.7 168.8 92 Other liabilities 209.0 176.3 180.0 182.0 179.4 184.4 190.3 190.5 185.2 184.4 191.5 202.4 93 Total liabilities 2£94.0r 2,619.7 2,623.4 2,653.7 2,6272 2,620.1 2,666.0 2,693.6 2,677.6 2,692.2 2,689.7 2,702.7 94 Residual (assets less liabilities)7 .... 289.9r 307.8 309.1 307.0 304.6 304.3 303.7 294.2 298.8 298.9 290.8 290.5 MEMO 95 Revaluation gains on off-balancesheet items8 82.2 55.0 57.3 57.7 60.5 64.7 73.0 62.9 71.6 61.2 60.9 63.6 96 Revaluation losses on off-balancesheet items8 83.6 56.4 59.6 60.5 62.8 69.1 73.1 62.2 70.5 60.2 59.7 63.1 97 Mortgage-backed securities9 284.5r 270.8 266.8 264.4 269.9 274.3 276.9 273.8 275.5 275.1 271.7 273.0 98 Pass-through securities 193.0r 180.7 177.9 176.8 183.6 187.3 186.3 184.0 185.8 185.0 182.2 183.6 99 CMOs, REMICs, and other mortgage-backed securities .. 91.5r 90.1 88.8 87.6 86.3 87.1 90.7 89.7 89.7 90.1 89.5 89.4 100 Net unrealized gains (losses) on available-for-sale securities10 ... 4.4 .9 .6 .0 -3.3 -4.2 -4.9 -5.6 -5.4 -5.7 -5.7 -5.4 101 Offshore credit to U.S. residents" .. . 38.5 37.9 37.7 37.0 36.3 32.2 27.8 26.7 27.6 27.6 27.1 25.8 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A19 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1998 1999r 1999 Oct.'' Apr. May June July Aug. Sept. Oct. Oct. 6 Oct. 13 Oct. 20 Oct. 27 Seasonally adjusted Assets 1 Bank credit 1,442.5 1,529.3 1,540.7 1,556.7 1.571.3 1,585.3 1,599.5 1,620.8 1,618.7 1,619.5 1,621.1 1,623.2 7 Securities in bank credit 415.7 444.1 448.1 455.7 459.6 461.8 463.5 465.6 467.4 466.7 465.7 464.8 U.S. government securities 315.6 332.6 334.9 340.4 343.8 344.0 345.6 346.2 348.6 347.7 345.7 345.1 4 Other securities 100.0 111.5 113.2 115.2 115.8 117.8 117.8 119.4 118.8 119.1 120.0 119.7 Loans and leases in bank credit2 1,026.8 1,085.2 1,092.6 1,101.0 1.111.7 1,123.5 1,136.0 1,155.2 1,151.3 1,152.8 1,155.5 1,158.4 6 Commercial and industrial 188.4 199.6 202.5 205.4 208.2 210.0 212.8 218.6 217.6 218.1 218.5 219.0 7 Real estate 569.0 612.0 618.0 624.8 632.2 640.4 645.9 657.5 654.8 656.2 657.5 659.5 8 Revolving home equity 28.2 28.8 29.2 29.5 29.8 29.8 29.8 30.3 30.2 30.4 30.2 30.2 9 Other 540.8 583.2 588.8 595.2 602.4 610.6 616.1 627.2 624.6 625.8 627.3 629.3 in Consumer 192.1 198.9 198.2 198.5 197.8 199.2 202.1 203.7 203.6 203.6 204.2 204.3 ii Security3 6.1 5.5 5.2 5.2 5.3 5.3 5.3 5.3 5.3 5.2 5.2 5.2 l? Other loans and leases 71.1 69.1 68.7 67.2 68.2 68.7 69.9 70.1 69.9 69.7 70.2 70.3 n Interbank loans 70.3 60.3 57.6 55.3 56.9 54.6 52.2 49.7 49.0 48.7 48.5 50.5 14 Cash assets4 66.2 67.8 70.9 71.4 72.6 72.3 73.1 72.9 70.3 73.8 71.7 75.3 15 Other assets5 61.7 72.6 74.0 74.6 78.1 80.5 80.7 84.9 83.4 83.8 87.7 85.1 16 Total assets6 1,621.4 1,710.2 1,7233 1,738.0 1,759.1 1,772.6 1,7853 1,807.9 1,801.0 1,8053 1,808.5 1,813.5 Liabilities 17 Deposits 1,294.3 1,364.6 1,369.8 1,376.6 1,388.5 1,396.3 1,399.0 1,416.9 1,410.6 1,415.2 1,413.6 1,422.7 18 Transaction 280.9 282.0 283.6 287.5 287.0 288.4 285.7 285.7 279.1 283.6 285.4 295.8 19 Nontransaction 1,013.3 1,082.6 1,086.2 1,089.1 1,101.5 1,107.9 1,113.3 1,131.3 1,131.6 1,131.7 1,128.2 1,127.0 70 Large time 188.2 196.5 199.6 198.2 196.2 199.1 200.8 205.3 204.1 204.6 204.9 205.6 71 Other 825.1 886.1 886.6 890.9 905.3 908.8 912.4 926.0 927.4 927.0 923.3 921.4 77 Borrowings 167.0 185.7 191.5 196.1 206.9 208.6 214.0 214.4 213.9 215.0 217.6 212.4 73 From banks in the U.S 79.4 83.7 87.3 91.2 97.2 95.8 96.1 92.7 93.0 93.2 94.7 90.9 74 From others 87.6 102.0 104.2 104.9 109.8 112.8 117.9 121.6 120.9 121.8 123.0 121.5 75 Net due to related foreign offices .... 4.7 4.9 5.0 4.1 4.3 3.5 3.4 4.3 4.2 4.6 4.1 4.5 26 Other liabilities 28.6 30.4 31.1 32.1 31.3 33.1 34.2 34.4 34.7 34.3 34.2 34.9 27 Total liabilities 1,494.4 1,585.6 1,597.5 1,608.9 1,631.1 1,641.4 1,650.6 1,670.0 1,6633 1,669.1 1,669.5 1,674.4 28 Residual (assets less liabilities)7 126.9 124.6 125.8 129.0 128.1 131.2 134.7 137.9 137.6 136.2 139.0 139.0 Not seasonally adjusted Assets 99 Bank credit 1,441.6 1,534.4 1,550.8 1,563.8 1,572.6 1,587.5 1,602.7 1,619.6 1,615.9 1,619.0 1,620.4 1,622.8 Securities in bank credit 412.8 449.0 453.5 457.5 457.9 460.2 461.1 462.5 463.3 463.8 462.6 462.4 31 U.S. government securities 312.9 336.8 339.4 342.3 342.2 342.2 343.8 343.3 345.0 345.0 342.8 342.6 37 Other securities 99.9 112.2 114.0 115.2 115.6 118.0 117.3 119.2 118.3 118.8 119.8 119.9 33 Loans and leases in bank credit2 1,028.8 1,085.4 1,097.3 1,106.3 1,114.7 1,127.3 1,141.6 1,157.1 1,152.6 1,155.2 1,157.8 1,160.4 34 Commercial and industrial 187.1 201.7 205.2 207.3 208.0 208.7 211.7 217.2 216.0 216.6 217.2 217.4 35 Real estate 570.5 611.8 620.4 627.6 634.3 642.5 649.3 658.9 656.0 658.0 658.9 661.1 36 Revolving home equity 28.4 28.7 29.1 29.4 29.5 29.7 30.0 30.5 30.4 30.6 30.4 30.5 37 Other 542.0 583.1 591.2 598.2 604.8 612.8 619.3 628.5 625.6 627.4 628.5 630.6 38 Consumer 192.7 197.8 197.9 197.7 197.3 199.7 203.2 204.3 203.6 204.0 205.2 205.5 39 Security3 6.1 5.5 5.2 5.2 5.3 5.3 5.3 5.3 5.3 5.2 5.2 5.2 40 Other loans and leases 72.4 68.5 68.7 68.5 69.8 71.0 72.1 71.4 71.7 71.4 71.4 71.1 41 Interbank loans 71.8 61.2 53.3 52.2 52.8 52.0 51.1 50.8 51.2 49.6 48.6 49.0 47 Cash assets4 65.5 67.8 70.5 70.3 70.7 69.1 71.8 72.1 69.3 77.2 69.7 70.9 43 Other assets5 61.9 73.0 74.0 76.2 79.3 81.2 81.1 85.0 84.8 85.5 85.7 82.9 44 Total assets6 1,621.5 1,716.6 1,728.7 1,742.5 1,755.7 1,769.7 1,786.4 1,807.0 1,800.7 1,810.7 1,803.8 1,805.1 Liabilities 45 Deposits 1,296.9 1,369.8 1,372.4 1,380.0 1,386.0 1,394.9 1,402.1 1,420.8 1,417.6 1,425.0 1,414.4 1,415.9 46 Transaction 277.9 285.7 281.2 286.5 283.1 281.5 282.8 282.6 279.7 285.1 279.9 284.2 47 Nontransaction 1,019.0 1,084.1 1,091.2 1,093.5 1,102.9 1,113.4 1,119.3 1,138.2 1,137.9 1,139.9 1,134.5 1,131.7 48 Large time 188.2 196.5 199.6 198.2 196.2 199.1 200.8 205.3 204.1 204.6 204.9 205.6 49 Other 830.7 887.6 891.6 895.3 906.6 914.3 918.4 932.9 933.7 935.3 929.6 926.1 50 Borrowings 169.4 183.1 191.9 197.3 206.7 208.6 216.6 217.3 213.7 216.3 221.5 218.6 51 From banks in the U.S 81.1 82.0 87.1 91.4 96.3 95.1 96.6 94.7 93.3 94.3 97.2 94.5 57 From others 88.3 101.1 104.8 105.9 110.4 113.5 120.0 122.6 120.3 121.9 124.3 124.1 53 Net due to related foreign offices .... 4.7 4.9 5.0 4.1 4.3 3.5 3.4 4.3 4.2 4.6 4.1 4.5 54 Other liabilities 27.8 31.1 31.3 31.9 31.4 32.9 33.5 33.5 33.6 33.5 33.4 34.0 55 Total liabilities 1,498.7 1,588.9 1,600.6 1,613.3 1,6283 1,639.8 1,655.6 1,675.9 1,669.0 1,6793 1,6733 1,673.0 56 Residual (assets less liabilities)7 122.7 127.7 128.0 129.3 127.3 129.9 130.8 131.1 131.7 131.4 130.4 132.1 MEMO 57 Mortgage-backed securities9 51.4 64.9 68.7 69.9 70.4 70.1 70.6 72.8 73.3 73.3 72.6 72.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • January 2000 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 Oct. Apr. May June July" Aug." Sept." Oct. Oct. 6 Oct. 13 Oct. 20 Oct. 27 Seasonally adjusted Assets 1 Bank credit 619.0r 550. r 539.8r 532.4" 520.5 523.6 518.6 517.8 518.8 515.8 516.9 519.5 2 Securities in bank credit 218.8r 200.4r 196.(7 196.0" 189.6 189.9 189.1 186.6 189.0 186.3 185.4 187.8 3 U.S. government securities 81.2r 89.5r 87.2r 88.4" 85.9 84.0 81.6 79.8 81.8 79.7 78.3 80.6 4 Other securities 137.5 110.9 108.7 107.6 103.7 105.9 107.5 106.9 107.2 106.6 107.1 107.3 5 Loans and leases in bank credit2 . . . 400.2r 349.7 343.9" 336.4" 330.9 333.7 329.4 331.2 329.8 329.5 331.5 331.7 6 Commercial and industrial 223.1r 209.3r 201.9" 196.7" 192.7 195.5 197.2 199.0 198.3 198.9 200.1 198.9 7 Real estate 23.5 20.0" 19.8 19.2 18.4 17.6 17.6 17.8 18.0 17.8 17.8 17.8 8 Security3 70.1 51.9r 53.3" 52.0" 52.6 54.9 51.3 51.6 50.7 50.4 51.1 52.0 9 Other loans and leases 83.4r 68.6r 68.8" 68.5" 67.2 65.8 63.4 62.8 62.8 62.4 62.6 63.0 10 Interbank loans 25.6 25.4 26.6 24.5 27.4 25.7 22.9 22.9 21.8 21.2 21.4 26.2 11 Cash assets4 35.5 34.6 35.9 33.5 35.0 38.0 40.8 44.1 43.9 42.3 43.6 44.6 12 Other assets5 38.5 37.5 35.9 33.4 32.1 29.0 29.3 31.8 30.0 32.1 32.1 32.3 13 Total assets6 7183r 6473r 638.0" 623.6r 614.8 616.1 6113 616.4 6143 611.1 613.7 622.4 Liabilities 14 Deposits 316.1 311.9 310.4 305.7 310.5 309.2 311.1 331.3 319.5 328.8 333.3 336.0 15 Transaction 15.4 10.1 10.5 10.9 10.9 11.0 10.9 11.5 11.4 11.6 11.9 11.4 16 Nontransaction 300.7 301.8 299.9 294.8 299.5 298.2 300.3 319.8 308.2 317.3 321.4 324.6 17 Borrowings 215.8 172.1 172.7 180.9 172.3 172.1 168.9 169.6 166.8 168.0 169.7 170.2 18 From banks in the U.S 30.8 21.0 21.4 26.6 24.5 23.6 25.3 22.8 23.4 19.9 22.7 22.5 19 From others 185.0 151.1 151.3 154.4 147.8 148.6 143.7 146.8 143.4 148.1 147.1 147.7 20 Net due to related foreign offices 105.7 94.8 85.2 69.4 67.3 72.0 66.1 54.4 66.7 52.3 51.0 50.3 21 Other liabilities 79.0 67.2 59.9 61.4 63.4 61.7 64.5 62.8 62.8 62.5 62.3 63.8 22 Total liabilities 716.5 645.9 6283 6173 6133 615.0 610.7 618.2 615.8 611.6 616.4 620.4 23 Residual (assets less liabilities)7 1.7r 1.4r 9.7" 6.1" 1.3 1.1 .6 -1.8 -1.4 -.5 -2.6 2.0 Not seasonally adjusted Assets 24 Bank credit 623.2r 547.2r 534.6" 529.3" 517.3 519.9 517.7 521.8 520.7 519.3 520.4 523.7 25 Securities in bank credit 221.9r 198.8r 194.3" 195.1" 188.0 188.7 188.5 189.3 189.1 189.0 187.7 191.7 26 U.S. government securities 81.2r 89.2r 88.0" 88.8" 85.4 83.0 80.7 79.7 80.6 79.3 78.4 81.0 27 Trading account 17.5r 22.91" 20.0" 21.6" 19.9 17.3 15.6 14.8 15.1 14.5 14.1 16.8 28 Investment account 63.7r 66.3r 68.0" 67.1" 65.5 65.7 65.1 64.9 65.5 64.8 64.3 64.3 29 Other securities 140.7 109.6 106.3 106.3 102.5 105.6 107.8 109.6 108.4 109.7 109.2 110.6 30 Trading account 91.7 66.5 64.8 63.3 60.9 65.2 70.0 71.8 70.7 72.3 70.9 73.0 31 Investment account 49.0 43.1 41.4 43.0 41.7 40.5 37.8 37.8 37.7 37.5 38.4 37.7 32 Loans and leases in bank credit2 . . . 401.3 348.4 340.3" 334.2" 329.3 331.2 329.2 332.4 331.7 330.3 332.7 332.0 33 Commercial and industrial 224. lr 207.8r 199.3" 195.0" 191.9 193.8 196.8 200.1 199.6 199.3 200.8 200.1 34 Real estate 23.8r 19.7 19.6 19.0 18.2 17.5 17.6 18.0 18.2 18.0 17.9 17.9 35 Security3 69.9r 51.9" 53.0" 52.2" 52.2 55.0 51.4 51.4 50.8 50.4 50.8 51.0 36 Other loans and leases 83.6r 69.0" 68.5" 68.0" 67.0 65.0 63.3 63.0 63.2 62.6 63.2 63.0 37 Interbank loans 25.6 25.4 26.6 24.5 27.4 25.7 22.9 22.9 21.8 21.2 21.4 26.2 38 Cash assets4 35.9 33.5 35.6 34.3 34.9 37.7 40.6 44.7 43.9 42.7 44.4 45.7 39 Other assets5 38.3 35.7 35.2 32.4 31.4 29.6 29.7 31.7 30.0 32.2 31.9 31.8 40 Total assets6 122.1' 641.6r 631.7r 6203r 610.8 612.6 610.5 620.8 616.2 615.0 617.8 6Z7.1 Liabilities 41 Deposits 316.5 311.3 312.8 306.4 308.0 306.6 310.7 331.4 320.5 328.0 332.5 337.3 42 Transaction 15.3 9.9 10.3 10.7 10.8 10.9 11.4 11.5 11.3 11.6 11.9 11.4 43 Nontransaction 301.2 301.4 302.5 295.7 297.2 295.7 299.3 319.9 309.2 316.5 320.6 325.9 44 Borrowings 215.8 172.1 172.7 180.9 172.3 172.1 168.9 169.6 166.8 168.0 169.7 170.2 45 From banks in the U.S 30.8 21.0 21.4 26.6 24.5 23.6 25.3 22.8 23.4 19.9 22.7 22.5 46 From others 185.0 151.1 151.3 154.4 147.8 148.6 143.7 146.8 143.4 148.1 147.1 147.7 47 Net due to related foreign offices .... 107.9 89.2 83.4 68.1 64.8 69.8 64.5 56.2 65.0 54.7 52.3 55.5 48 Other liabilities 78.3 66.1 59.4 61.0 62.5 61.8 64.1 62.2 61.8 61.7 61.5 63.7 49 Total liabilities 718.5 638.7 628.2 616.4 607.6 610.4 6083 619.4 614.0 612.4 616.1 626.7 50 Residual (assets less liabilities)7 4.2r 2.9r 3.4r 3.9" 3.2 2.2 2.2 1.4 2.2 2.7 1.7 .4 MEMO 51 Revaluation gains on off-balance-sheet items8 51.9 38.2 35.3 34.9 37.3 38.1 38.3 35.9 35.8 36.3 35.7 36.1 52 Revaluation losses on off-balancesheet items8 ' 47.5 38.6 34.8 34.1 36.3 36.3 37.3 35.2 34.6 35.3 34.8 36.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A22 Domestic NonfinancialS tatistics • January 2000 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 Apr. May June July Aug.r Sept. 1 All issuers 595,382 674,904 775,371 966,699 1,163,303 1,219,789 1,230,009 1,221,020 1,242,107 1,257,658 1,274,726 Financial companies1 2 Dealer-placed paper, total2 223,038 275,815 361,147 513,307 614,142 697,030 710,857 705,603 712,718 710,320 718,380 3 Directly placed paper, total3 207,701 210,829 229,662 252,536 322,030 276,721 268,129 272,014 277,570 290,228 293,381 4 Nonfinancial companies4 164,643 188,260 184,563 200,857 227,132 246,038 251,023 243,404 251,819 257,110 262,965 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 Loans' Percent per year Date of change Rate Period Av r e a r te a ge Period Av r e a r te a ge Period Av r e a r te a ge 1996—Jan. 1 8.50 1996 8.27 1997—Jan 8.25 1998-—July 8.50 Feb. 1 8.25 1997 8.44 Feb 8.25 Aug 8.50 1998 8.35 Mar 8.30 Sept 8.49 1997—Mar. 26 8.50 Apr. 8.50 Oct 8.12 1996—Jan 8.50 May 8.50 Nov 7.89 1998—Sept. 30 8.25 Feb 8.25 June 8.50 Dec 7.75 Oct. 16 8.00 Mar 8.25 July 8.50 Nov. 18 7.75 Apr 8.25 Aug 8.50 1999-—Jan 7.75 Mav 8.25 Sept 8.50 Feb 7.75 1999—July 1 8.00 June 8.25 Ocl 8.50 Mar 7.75 Aug. 25 8.25 July 8.25 Nov 8.50 Apr 7.75 Nov. 17 8.50 Aug 8.25 Dec 8.50 May 7.75 Sept 8.25 1998—Jan 8.50 June 7.75 Oct 8.25 Feb 8.50 July 8.00 Nov 8.25 Mar 8.50 Aug 8.06 Da. 8.25 Apr 8.50 Sept 8.25 8.50 Oct 8 25 88..5500 88..3377 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 July Aug. Sept. Oct. Oct. 1 Oct. 8 Oct. 15 Oct. 22 Oct. 29 MONEY MARKET INSTRUMENTS 1 Federal funds1'2'3 5.30 5.46 5.35 4.99 5.07 5.22 5.20 5.27 5.27 5.17 5.18 5.18 2 Discount window borrowing2'4 5.02 5.00 4.92 4.50 4.56 4.75 4.75 4.75 4.75 4.75 4.75 4.75 Commercial paper•3'5,6 Nonfinancial 3 1-month n.a. 5.57 5.40 5.06 5.18 5.28 5.28 5.29 5.30 5.28 5.27 5.27 4 2-month n.a. 5.57 5.38 5.08 5.23 5.29 5.30 5.30 5.30 5.31 5.30 5.30 5 3-month n.a. 5.56 5.34 5.11 5.25 5.32 5.88 5.30 5.90 5.87 5.96 5.90 Financial 1-month n.a. 5.59 5.42 5.08 5.20 5.29 5.29 5.31 5.31 5.30 5.28 5.28 7 2-month n.a. 5.59 5.40 5.10 5.24 5.31 5.32 5.32 5.33 5.32 5.31 5.31 8 3-month n.a. 5.60 5.37 5.14 5.28 5.32 5.93 5.32 5.93 5.95 5.99 5.97 Commercial paper (historical) 3,5,7 9 1-month 5.43 5.54 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 3-month 5.41 5.58 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 6-month 5.42 5.62 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Finance paper, directly placed (historical)3,5,8 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. 1.3 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 5.16 5.30 5.37 6.02 5.50 6.00 6.00 6.01 66..0066 16 6-month 5.31 5.57 5.30 5.42 5.64 5.75 5.89 5.77 5.82 5.90 5.90 5.95 Certificates of deposit, secondary market3,10 17 1-month 5.35 5.54 5.49 5.13 5.25 5.34 55..3366 5.35 55..3377 55..3366 55..3366 55..3366 18 3-month 5.39 5.62 5.47 5.24 5.41 5.50 6.13 5.79 6.10 6.13 6.15 6.14 19 6-month 5.47 5.73 5.44 5.58 5.83 5.89 6.04 5.90 6.00 6.05 6.09 6.07 20 Eurodollar deposits, 3-month3,11 5.38 5.61 5.45 5.21 5.36 5.48 6.09 5.74 6.06 6.09 6.14 6.12 U.S. Treasury bills Secondary market3,5 ?L 3-month 5.01 5.06 4.78 4.55 4.72 4.68 4.86 4.71 4.69 4.84 4.97 44..9966 ?? 6-month 5.08 5.18 4.83 4.58 4.87 4.88 4.98 4.79 4.88 4.94 5.03 5.10 23 1-year 5.22 5.32 4.80 4.75 4.91 4.96 5.12 4.94 5.03 5.11 5.16 5.20 Auction high ' ' 74 3-month 5.02 5.07 4.81 4.60 4.76 4.73 4.88 4.72 4.73 4.78 4.99 5.00 75 6-month 5.09 5.18 4.85 4.62 4.88 4.91 4.98 4.81 4.87 4.93 5.00 5.12 26 1-year 5.23 5.36 4.85 4.71 4.95 5.00 5.12 n.a. n.a. 5.12 n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities13 ?7 1-year 5.52 5.63 5.05 5.03 5.20 5.25 5.43 5.24 5.34 5.42 5.47 5.51 ?R 2-year 5.84 5.99 5.13 5.55 5.68 5.66 5.86 5.66 5.78 5.85 5.92 5.92 ?9 3-year 5.99 6.10 5.14 5.62 5.77 5.75 5.94 5.73 5.87 5.92 5.99 6.01 30 5-year 6.18 6.22 5.15 5.68 5.84 5.80 6.03 5.81 5.95 6.03 6.09 6.09 31 1-year 6.34 6.33 5.28 5.94 6.15 6.12 6.33 6.12 6.24 6.35 6.40 6.36 3?. 10-year 6.44 6.35 5.26 5.79 5.94 5.92 6.11 5.92 6.02 6.11 6.18 6.16 33 20-year 6.83 6.69 5.72 6.28 6.43 6.50 6.66 6.50 6.58 6.68 6.74 6.68 34 30-year 6.71 6.61 5.58 5.98 6.07 6.07 6.26 6.09 6.17 6.28 6.34 6.30 Composite 35 More than 10 years (long-term) 6.80 6.67 5.69 6.22 6.37 6.43 66..6600 6.43 66..5511 66..6611 66..6677 66..6611 STATE AND LOCAL NOTES AND BONDS Moody's series'4 36 5.52 5.32 4.93 5.24 5.47 5.56 5.78 5.56 5.69 5.75 5.82 5.85 37 Baa 5.79 5.50 5.14 5.64 5.93 6.06 6.23 6.10 6.15 6.20 6.26 6.31 38 Bond Buyer series15 5.76 5.52 5.09 5.36 5.58 5.69 5.92 5.73 5.80 5.89 5.98 5.99 CORPORATE BONDS 39 Seasoned issues, all industries16 7.66 7.54 6.87 7.57 7.77 7.78 7.93 7.79 7.84 7.95 8.00 7.95 RRaattiinngg ggrroouupp 40 7.37 7.27 6.53 7.19 7.40 7.39 7.55 7.39 7.47 7.59 77..6644 77..5555 41 Aa 7.55 7.48 6.80 7.48 7.68 7.68 7.79 7.67 7.71 7.80 7.85 7.83 4? A 7.69 7.54 6.93 7.65 7.84 7.84 7.99 7.85 7.91 8.01 8.06 8.01 43 Baa 8.05 7.87 7.22 7.95 8.15 8.20 8.38 8.24 8.28 8.40 8.44 8.42 MEMO Dividend-price ratio17 44 Common stocks 2.19 1.77 1.49 1.20 1.25 1.27 1.28 1.31 1.26 1.29 1.29 1.29 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 NonfinancialS tatistics • January 2000 1.36 STOCK MARKET Selected Statistics 1999 IInnddiiccaattoorr 11999966 11999977 11999988 Feb. Mar. Apr. May June July Aug. Sept. Oct. Prices and trading volume (averages of daily figures)1 Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 357.98 456.99 550.65 588.70 603.69 627.75 635.62 629.53 648.83 621.03 607.87 599.04 2 Industrial 453.57 574.97 684.35 736.20 751.93 780.84 791.72 783.96 809.33 778.82 769.47 753.94 3 Transportation 327.30 415.08 468.61 477.47 491.25 523.08 537.88 520.66 528.72 492.13 462.33 450.13 4 Utility 126.36 143.87 190.52 218.24 218.11 228.48 242.98 241.36 250.50 241.84 237.71 285.16 5 Finance 303.94 424.84 516.65 514.75 544.08 564.99 562.66 546.43 557.92 521.59 493.37 490.92 6 Standard & Poor's Corporation (1941-43 = 10)2 670.49 873.43 1,085.50 1,246.58 1,281.66 1,334.76 1,332.07 1,322.55 1,380.99 1,327.49 1,318.17 1,300.01 7 American Stock Exchange (Aug. 31, 1973 = 50)3 570.86 628.34 682.69 699.15 711.08 748.29 787.02 772.01 803.75 781.33 788.74 786.96 Volume of trading (thousands of shares) 8 New York Stock Exchange 409,740 523,254 666,534 756,932 776,538 874,818 785,778 723,025 721,294 709,569 772,627 882,422 9 American Stock Exchange 22,567 24,390 28,870 31,774 29,563 38,895 35,241 28,806 25,754 27,795 32,540 35,762 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers4 97,400 126,090 140,980 151,530 156,440 172,880 177,984 176,930 178,360 176,390 179,316 182,272 Free credit balances at brokerss 11 Margin accounts6 22,540 31,410 40,250 38,850 40,120 41,200 41,250 42,865 44,330 44,230 47,125 51,040 12 Cash accounts 40,430 52,160 62,450 57,910 59,435 60,870 61,665 64,100 60,000 62,600 62,810 61,085 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 May June July Aug. Sept. Oct. US. budget1 1 Receipts, total 1,579,292 1,721,798 1,827,285 98,663 199,507 121,923 126,324 200,396 121,035 2 On-budget 1,187,302 1,305,999 1,382,817 62,722 156,929 87,959 91,554 161,304 89,009 3 Off-budget 391,990 415,799 444,468 35,941 42,578 33,964 34,770 39,092 32,026 4 Outlays, total 1,601,235 1,652,552 1,703,639 122,631 145,939 147,086 129,127 143,059 147,701 5 On-budget 1,290,609 1,335,948 1,382,861 91,434 136,141 117,652 97,984 108,846 119,506 6 Off-budget 310,626 316,604 320,778 31,197 9,799 29,434 31,143 35,119 28,196 7 Surplus or deficit (—), total -21,943 69,246 123,646 -23,969 53,568 -25,164 -2,803 57,336 -26,667 8 On-budget -103,307 -29,949 -45 -28,712 20,788 -29,693 -6,430 52,458 -30,497 9 Off-budget 81,364 99,195 123,691 4,744 32,779 4,530 3,627 3,973 3,830 Source of financing (total) 10 Borrowing from the public 38,171 -51,211 -88,304 -551 -22,246 1,193 26,470 -47,718 5,754 11 Operating cash (decrease, or increase (—)) 604 4,743 -17,580 32,495 -27,459 13,553 3,160 -20,069 8,891 12 Other2 -16,832 -22,778 -17,762 -7,975 -3,863 10,418 -26,827 10,451 12,022 MEMO 13 Treasury operating balance (level, end of period) 43,621 38,878 56,458 25,643 53,102 39,549 36,389 56,458 47,567 14 Federal Reserve Banks 7,692 4,952 6,641 5,506 6,720 4,984 5,559 6,641 4,527 15 Tax and loan accounts 35,930 33,926 49,817 20,586 46,382 34,565 30,831 49,817 43,040 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 NonfinancialS tatistics • January 2000 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 Aug. Sept. Oct. RECEIPTS 1 All sources 1,721,798 1,827,285 773,810 922,630 825,057 966,045 126,324 200,396 121,035 2 Individual income taxes, net 828,586 879,480 354,072 447,514 392,332 481,527 60,709 89,250 63,505 3 Withheld 646,483 693,940 306,865 316,309 339,144 351,068 57,476 49,244 57,596 4 Nonwithheld 281,527 308,185 58,069 219,136 65,204 240,278 5,163 43,077 7,129 5 Refunds 99,476 122,706 10,869 87,989 12,032 110099,,446677 11,,992211 3,072 11,,222211 Corporation income taxes 6 Gross receipts 213,249 216,325 104,659 109,353 104,163 106,861 5,115 42,571 7,175 7 Refunds 24,593 31,645 10,135 14,220 14,250 17,092 1,418 2,336 4,995 8 Social insurance taxes and contributions, net . . . 571,831 611,832 260,795 312,713 268,466 324,831 49,389 55,481 43,879 y Employment taxes and contributions2 540,014 580,880 247,794 293,520 256,142 306,235 44,960 54,794 42,412 10 Unemployment insurance 27,484 26,480 10,724 17,080 10,121 16,378 4,085 332 1,049 ii Other net receipts3 4,333 4,472 2,280 2,112 2,202 2,216 344 356 418 12 Excise taxes 57,673 70,399 31,133 29,922 33,366 31,015 5,397 7,167 4,181 13 Customs deposits 18,297 18,336 9,679 8,546 9,838 8,440 1,814 1,727 1,788 14 Estate and gift taxes 24,076 27,782 10,262 12,971 12,359 14,915 2,175 2,294 2,554 15 Miscellaneous receipts4 32,658 34,777 13,348 15,829 18,735 15,140 3,131 4,242 2,948 OUTLAYS 16 All types 1,652,552 l,703,639r 824,368 815,884 877,414 817,235 129,127 143,059r 147,701 17 National defense 268,456 276,792 140,873 129,351 140,196 134,414 20,867 24,279 24,036 18 International affairs 13,109 15,264 9,420 4,610 8,297 6,879 530 l,382r 1,000 19 General science, space, and technology 18,219 19,397 10,040 9,426 10,142 9,319 1,681 1,773 1,524 20 Energy 1,270 981 411 957 699 797 26 375 -311 21 Natural resources and environment 22,396 22,303 11,106 10,051 12,671 10,351 1,961 2,246r 1,528 22 Agriculture 12,206 24,359 10,590 2,387 16,757 9,803 726 1,15 0r 6,759 23 Commerce and housing credit 1,014 2,966 -3,526 -2,483 4,046 -1,629 -1,097 6,509r 1,698 24 Transportation 40,332 38,856 20,414 16,196 20,836 17,082 3,838 4,260 3,750 25 Community and regional development 9,720 12,791 5,749 4,863 6,972 5,368 879 11,,333300 11,,662277 26 Education, training, employment, and social services 54,919 57.438 26,851 25,928 27,762 29,003 4,363 5,437 5,175 27 Health 131,440 140,803 63,552 65,053 67,838 69,320 11,959 13,031 12,229 28 Social security and Medicare 572,047 580,491 283,109 286,305 316,809 261,146 45,607 48,681 48,179 29 Income security 233,202 237,180 106,353 125,196 109,481 126,552 16,505 16,897 17,607 30 Veterans benefits and services 41,781 43,210 22,077 19,615 22,750 20,105 1,895 3,615 3,657 31 Administration of justice 22,832 25,837 10,212 11,287 12,041 13,149 2,349 2,306 2,127 32 General government 13,444 16,058 7,302 6,139 9,136 6,650 200 l,696r 1,117 33 Net interest5 243,359 230,265 122,620 122,345 116,954 116,655 19,931 15,259 18,894 34 Undistributed offsetting receipts6 -47,194 -40,445 -22,795 -21,340 -25,793 -17,724 -3,095 -7,164 -2,896 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 A25 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 5,685r i 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 n.a. 4 Held by agencies 1,599 1,656 1,670 1,758 1,766 1,827 1,857 1,954 n.a. 5 Agency securities 33 34 31 30 29 29 29 29 29r 6 Held by public 26 27 26 26 26 29 28 28 n.a. 7 Held by agencies 7 7 5 4 4 1 1 1 n.a. 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 1,82 8.8 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 issues" 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 31.0r 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 holder 5 16 U.S. Treasury and other federal agencies and trust funds 1,304.5 1,497.2 1,655.7 1,826.8 1,826.8 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 315.4 296.6 300.3 237.4 237.4 247.6 n.a. 20 Mutual funds 286.5 315.8 321.3 339.5 339.5 341.3 n.a. 21 Insurance companies 241.5 214.1 176.6 144.6 144.6 137.7 n.a. n.a. 22 State and local treasuries6 289.8 257.0 239.3 269.3 269.3 266.6 n.a. Individuals 23 Savings bonds 185.0 187.0 186.5 186.7 186.7 186.6 186.6 24 Pension funds 474.5 505.1 539.1 547.0 547.0 544.9 n.a. 25 Private 298.7 314.6 334.3 345.4 345.4 347.3 n.a. 26 State and Local 175.8 190.5 204.8 201.6 201.6 197.6 n.a. 27 Foreign and international7 835.2 1,102.1 1,241.6 1,278.7 1,278.7 1,270.8 1,257.3 28 Other miscellaneous investors6'8 679.7 553.5 409.9 330.8 330.8 332.1 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 • January 2000 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1999 1999, week ending item July Aug. Sept. Sept. 1 Sept. 8 Sept. 15 Sept. 22 Sept. 29 Oct. 6 Oct. 13 Oct. 20 Oct. 27 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 2244,,000099 2266,,332233 27,445 38,241 27,843 32,118 23,234 24,693 26,101 23,011 24,314 22,047 Coupon securities, by maturity 2 Five years or less 9933,,004477 9999,,118866 82,426 95,890 81,430 77,284 68,958 95,035 103,945 86,924 82,519 90,643 3 More than five years 53,586 68,592 54,516 60,198 49,912 59,754 44,882 62,209 55,369 53,537 61,196 55,937 4 Inflation-indexed 1,372 826 586 1,006 475 462 347 629 2,314 562 1,499 506 Federal agency 5 Discount notes 4433,,332200 4455,,888899 46,570 48,585 46,278 47,150 43,798 47,373 52,951 46,227 42,441 42,844 Coupon securities, by maturity 6 One year or less 665522 777777 1,018 818 964 987 898 1,279 939 968 849 790 7 More than one year, but less than or equal to five years 4,592 5,126 5,858 6,068 4,235 4,681 5,336 9,346 4,810 9,770 5,901 4,641 8 More than five years 4,278 4,832 4,593 5,361 2,843 7,416 4,031 4,149 3,479 3,856 3,737 3,006 9 Mortgage-backed 69,129 66,417 64,305 52,887 79,337 93,477 41,392 44,491 68,329 102,275 46,148 44,349 By type of counterparty With interdealer broker 10 U.S. Treasury 93,223 105,210 88,466 103,077 85,541 90,150 72,030 100,747 100,831 85,585 92,226 93,708 11 Federal agency 3,677 4,070 4,534 3,407 3,470 4,800 5,686 4,507 4,023 5,426 5,662 4,720 12 Mortgage-backed 25,013 25,261 23,835 23,534 23,324 34,704 17,418 20,472 21,249 30,508 18,721 17,042 With other 13 U.S. Treasury 78,790 89,717 76,506 92,258 74,118 79,468 65,392 81,819 86,898 78,448 77,302 75,426 14 Federal agency 49,164 52,553 53,504 57,426 50,850 55,435 48,377 57,639 58.157 55,394 47,267 46,560 15 Mortgage-backed 44,117 41,156 40,469 29,353 56,013 58,773 23,974 24,019 47,080 71,768 27,427 27,307 FUTURES TRANSACTIONS3 By type of deliverable security 16 U.S. Treasury bills 0 0 0 0 n.a. n.a. n.a. 0 n.a. n.a. n.a. n.a. Coupon securities, by maturity 17 Five years or less 2,469 4,701 2,226 4,400 2,538 2,167 1,720 1,819 3,354 2,186 3,050 1,862 18 More than five years 12,348 14,980 13,642 17,151 13,485 14,803 11,765 14,028 12,564 10,767 14,003 12,112 19 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 00 00 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 951 1,197 842 1,074 879 989 754 645 1,110 1,244 996 591 27 More than five years 3,892 4,480 3,440 2,546 4,611 2,935 2,705 3,710 3,332 3,377 4,531 3,190 28 Inflation-indexed 0 0 0 0 0 0 0 0 00 0 00 00 Federal agency 29 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 30 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 31 More than one year, but less than or equal to five years 0 0 0 0 n.a. n.a. n.a. n.a. 0 0 0 n.a. 32 More than five years 0 0 0 n.a. n.a. 0 n.a. 0 n.a. n.a. 0 0 33 Mortgage-backed 1,175 1,033 917 1,081 1,224 546 1,396 587 331 390 447 652 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 A25 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1999 1999, week ending July Aug. Sept. Sept. 1 Sept. 8 Sept. 15 Sept. 22 Sept. 29 Oct. 6 Oct. 13 Oct. 20 Positions2 NET OUTRIGHT POSITIONS By type of security 1 U.S. Treasury bills 4,005 165 1,862 7,295 5,816 -1,306 2,541 -341 1,598 8,456 8,929 Coupon securities, by maturity 2 Five years or less -25,332 -31,236 -33,167 -30,286 -33,085 -34,425 -35,223 -30,337 -33,225 -35,289 -39,504 3 More than five years -14,263 -7,689 -14,651 -7,215 -9,493 -15,435 -18,404 -15,694 -19,135 -21,983 -22,914 4 Inflation-indexed 3,202 3,370 3,758 3,774 3,703 3,799 3,940 3,531 4,161 4,035 3,528 Federal agency 5 Discount notes 21,732 29,448 38,620 32,385 36,636 40,505 40,704 37,279 40,332 39,198 35,664 Coupon securities, by maturity 6 One year or less 3,233 4,065 5,158 5,297 4,905 4,771 5,392 5,246 7,256 5,764 5,706 7 More than one year, but less than or equal to five years 7,633 6,923 6,989 8,216 7,354 6,918 6,443 7,430 4,438 5,018 4,406 8 More than five years 2,882 1,023 2,346 1,200 1,736 2,877 2,418 2,615 1,664 2,981 3.119 9 Mortgage-backed 18,844 17,990 18,585 16,238 17,132 20,159 22,066 15,596 16,636 22,120 22,955 NET FUTURES POSITIONS4 By type of deliverable security 10 U.S. Treasury bills 0 0 0 0 n.a. 0 0 n.a. n.a. n.a. n.a. Coupon securities, by maturity 11 Five years or less 7,576 10,940 7,803 7,650 8,136 8,176 8,247 6,301 10,411 12,073 9,928 12 More than five years -4,401 -5,879 -420 -7,434 -4,965 2,020 203 1,302 4,912 9,957 11,952 13 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 14 Discount notes 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 15 One year or less 0 0 0 0 0 0 0 0 0 0 0 16 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 17 More than five years 0 0 0 0 0 0 0 0 0 0 0 18 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 NET OPTIONS POSITIONS By type of deliverable security 19 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 20 Five years or less -2,059 -1,661 -57 -878 -555 -456 523 456 -614 -1,441 -2,486 21 More than five years 89 -553 -1,552 -1,725 -2,364 -1,304 -671 -1,483 -4,075 -4,888 -2,656 22 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 23 Discount notes 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 24 One year or less 0 0 0 0 0 0 0 0 0 0 0 25 More than one year, but less than or equal to five years n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 26 More than five years n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 32 32 27 Mortgage-backed 2,070 3,540 2,105 4,630 2,468 1,443 2,097 2,103 1,728 1,053 826 Financing5 Reverse repurchase agreements 28 Overnight and continuing 258,349 273,639 290,610 274,150 276,844 297,141 286,250 303,871 295,403 289,515 293,341 29 Term 821,067 780,367 792,662 733,653 757,629 793,309 821,609 810,388 765,661 792,836 810,239 Securities borrowed 30 Overnight and continuing 254,405 254,149 250,667 253,085 252,062 251,946 253,559 243,384 260,255 254,576 257,963 31 Term 90,588 87,850 91,796 83,148 84,953 91,765 95,900 95,524 93,727 93,874 98,054 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. 2,583 2,393 33 Term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Repurchase agreements 34 Overnight and continuing 675,629 694,296 692,032 696,064 686,295 699,375 697,399 684,837 689,566 691,509 695,993 35 Term 688,157 650,774 680,923 605,775 631,178 674,289 710,400 724,393 640,089 660,904 693,946 Securities loaned 36 Overnight and continuing 11,458 9,885 9,063 9,492 9,022 9,194 8,974 9,006 9,019 9,106 8,814 37 Term 6,991 7,269 7,026 7,031 7,012 6,966 7,453 6,689 6,916 6,671 7,412 Securities pledged 38 Overnight and continuing 55,853 53,526 53,966 51,878 52,453 53,386 55,262 54,502 57,870 57,441 52,812 39 Term 9,530 8,213 8,116 7,920 7,914 8,034 8,153 8,354 8,370 8,276 8,383 Collateralized loans 40 Total 17,509 18,826 23,284 20,879 20,894 21,840 26,460 24,024 25,111 20,695 27,676 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 NonfinancialS tatistics • January 2000 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1999 AAggeennccyy 11999955 11999966 11999977 11999988 Apr. May June July Aug. 1 Federal and federally sponsored agencies 844,611 925,823 1,022,609 1,296,477 1,377,524 1,404,576 1,425,396 l,457,925r 1,491,900 2 Federal agencies 37,347 29,380 27,792 26,502 26,100 26,094 26,370 26,204 26,107 3 Defense Department1 6 6 6 6 6 6 6 6 6 4 Export-Import Bank2'3 2,050 1,447 552 n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 97 84 102 205 84 88 99 105 109 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 5,765 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 29,429 27,853 27,786 26,496 26,094 26,088 26,364 26,198 26,101 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 807,264 896,443 994,817 1,269,975 1,351,424 1,378,482 1,399,026 1,431,721 1,465,793 11 Federal Home Loan Banks 243,194 263,404 313,919 382,131 415,602 421,655 437,109 444,775 458,320 12 Federal Home Loan Mortgage Corporation 119,961 156,980 169,200 287,396 310,387 317,533 314,412 334,575 340,972 13 Federal National Mortgage Association 299,174 331,270 369,774 460,291 478,994 492,913 499,897 502,653 517,200 14 Farm Credit Banks8 57,379 60,053 63,517 63,488 67,527 66,608 67,749 66,922 67,269 15 Student Loan Marketing Association9 47,529 44,763 37,717 35,399 37,660 38,129 37,959 40,843 40,310 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 1/ Farm Credit Financial Assistance Corporation11 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 78,681 58,172 49,090 44,129 41,637 41,131 40,585 39,901 39,341 Lending to federal and federally sponsored agencies 20 Export-Import Bank3 2,044 1,431 552 A 21 Postal Service6 5,765 n.a. n.a. T T T T T T 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority 3,200 n.a. n.a. 1 1 1 1 1 1 24 United States Railway Association6 n.a. n.a. n.a. i i i i 1 i Other lending14 25 Farmers Home Administration 21,015 18,325 13,530 9,500 8,550 8,275 7,935 7,445 7,270 26 Rural Electrification Administration 17,144 16,702 14,898 14,091 13,999 13,997 13,877 13,944 13,969 27 Other 29,513 21,714 20,110 20,538 19,088 18,859 18,773 18,512 18,102 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 Mar. Apr. May June July Aug. Sept. Oct. 1 All issues, new and refunding' 171,222 214,694 262,342 24,323 15,758 16,234 23,428 18,671 15,746 18,433 17,497 By type of issue 2 General obligation 60,409 69,934 87,015 8,323 6,443 5,294 10,997 6,206 4,268 5,171 4,183 3 Revenue 110,813 134,989 175,327 16,000 9,315 10,941 12,431 12,465 11,478 13,262 13,314 By type of issuer 4 State 13,651 18,237 23,506 1,895 907 1,220 1,236 2,194 911 2,341 1,753 5 Special district or statutory authority2 113,228 134,919 178,421 14,604 10,010 11,279 18,414 13,572 11,578 13,449 12,186 6 Municipality, county, or township 44,343 70,558 60,173 7,825 4,841 3,735 3,779 2,906 3,257 2,642 3,557 7 Issues for new capital 112,298 135,519 160,568 16,201 10,474 12,149 19,509 12,172 12,530 14,973 14,908 By use of proceeds 8 Education 26,851 31,860 36,904 3,537 2,734 2,795 3,793 3,415 2,842 2,885 2,049 9 Transportation 12,324 13,951 19,926 1,640 1,107 1,791 1,650 1,264 1,955 1,886 1,674 10 Utilities and conservation 9,791 12,219 21,037 2,839 1,372 603 1,594 535 1,038 1,976 1,176 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 1,084 618 1,058 739 850 585 1,271 726 13 Other purposes 32,462 35,095 42,450 3,918 2,592 3,760 7,195 2,729 3,255 3,941 4,509 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 Feb. Mar. Apr. May June July Aug. Sept. 1 All issues1 773,110 929,256 1,128,491 103,175 126,161 85,862 110,475 96,608 96,608 83,466 82,936 2 Bonds2 651,104 811,376 1,001,736 92,885 116,440 76,721 94,713 88,338 83,546 75,708 76,485 By type of offering 3 Sold in the United States 567,671 708,188 923,771 82,871 101,024 65,886 86,730 79,031 69,451 63,383 66,357 4 Sold abroad 83,433 103,188 77,965 10,014 15,416 10,834 7,983 9,306 14,095 12,325 10,128 MEMO 5 Private placements, domestic n.a. n.a. n.a. 648 1,224 n.a. n.a. n.a. n.a. n.a. n.a. By industry group 6 Nonfinancial 167,904 222,603 307,935 23,131 39,818 30,676 32,843 24,531 25,526 22,704 21,073 7 Financial 483,200 588,773 693,801 69,754 76,623 46,045 61,870 63,807 58,020 53,005 55,412 8 Stocks3 122,006 117,880 126,755 10,290 9,721 9,141 15,762 8,270 13,062 7,758 6,451 By type of offering 9 Public 122,006 117,880 126,755 10,290 9,721 9,141 15,762 8,270 13,062 7,758 6,451 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 8,911 8,534 7,640 10,425 6,436 11,589 6,379 5,491 12 Financial 41,546 57,494 52,642 1,379 1,187 1,501 5,337 1,834 1,473 1,379 960 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data include 144(a) offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data cover only public offerings. exclude secondary offerings, employee stock plans, investment companies other than closed- 4. Data are not available. end, intracorporate transactions, and Yankee bonds. Stock data include ownership securities SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve issued by limited partnerships. System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • January 2000 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1999 IItteemm 11999977 11999988 Mar. Apr. May June July Aug. Sept.1" Oct. 1 Sales of own shares2 1,190,900 1,461,430 164,290 166,324 140,422 138,502 140,926 132,991 132,226 140,237 2 Redemptions of own shares 918,728 1,217,022 146,479 139,035 127,800 117,953 128,173 125,908 126,207 124,011 3 Net sales3 272,172 244,408 17,811 27,288 12,622 20,550 12,754 7,084 6,019 16,226 4 Assets4 3,409,315 4,173,531 4,328,150 4,505,237 4,442,880 4,650,385 4,585,131 4,548,784 4,498,964 4,704,277 5 Cash5 174,154 191,393 198,741 211,243 211,580 214,779 209,061 209,349 209,709 225,111 6 Other 3,235,161 3,982,138 4,129,409 4,293,994 4,231,300 4,435,607 4,376,070 4,339,435 4,289,255 4,479,166 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 1998r 1999 AAccccoouunntt 11999966rr 11999977rr 11999988rr Q41 Q1 Q2 Q3 Q4 Ql1 Q2r Q3 1 Profits with inventory valuation and capital consumption adjustment 753.9 837.9 846.1 853.5 858.3 847.9 843.8 834.3 882.0 875.5 883.7 2 Profits before taxes 726.3 795.9 781.9 811.6 788.9 792.0 780.1 766.7 818.1 835.8 857.8 3 Profits-tax liability 223.6 238.3 240.2 244.1 239.9 241.1 244.3 235.6 248.0 254.4 259.1 4 Profits after taxes 502.7 557.6 541.7 567.4 548.9 550.9 535.8 531.0 570.1 581.4 598.6 5 Dividends 297.7 333.7 348.6 344.8 346.5 347.3 348.4 352.2 356.4 361.5 367.3 6 Undistributed profits 205.0 223.9 193.1 222.6 202.5 203.6 187.4 178.8 213.7 219.9 231.3 7 Inventory valuation 3.1 7.4 20.9 4.0 29.5 13.6 19.8 20.8 13.3 -13.6 -26.5 8 Capital consumption adjustment 24.4 34.6 43.3 38.0 39.9 42.4 43.9 46.9 50.6 53.2 52.4 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1998 1999 AAccccoouunntt 11999966 11999977 11999988 Ql Q2 Q3 Q4 Ql Q2 Q3 ASSETS 1 Accounts receivable, gross2 637.1 663.3 711.7 667.2 676.0 687.6 711.7 733.8 756.5 776.5 2 Consumer 244.9 256.8 261.8 251.7 251.3 254.0 261.8 261.7 269.2 271.3 3 Business 309.5 318.5 347.5 325.9 334.9 335.1 347.5 362.8 373.7 382.9 4 Real estate 82.7 87.9 102.3 89.6 89.9 98.5 102.3 109.2 113.5 122.3 5 LESS; Reserves for unearned income 55.6 52.7 56.3 52.1 53.2 52.4 56.3 52.9 53.4 54.0 6 Reserves for losses 13.1 13.0 13.8 13.1 13.2 13.2 13.8 13.4 13.4 13.6 7 Accounts receivable, net 568.3 597.6 641.6 601.9 609.6 622.0 641.6 667.6 689.7 708.8 8 All other 290.0 312.4 337.9 329.7 340.1 313.7 337.9 363.3 373.2 368.6 9 Total assets 858.3 910.0 979.5 931.6 949.7 935.7 979.5 1,030.8 1,062.9 1,077.4 LIABILITIES AND CAPITAL 10 Bank loans 19.7 24.1 26.3 22.0 22.3 24.9 26.3 24.8 25.1 27.0 11 Commercial paper 177.6 201.5 231.5 211.7 225.9 226.9 231.5 222.9 231.0 205.3 Debt 12 Owed to parent 60.3 64.7 61.8 64.6 60.0 58.3 61.8 64.6 65.4 84.7 13 Not elsewhere classified 332.5 328.8 339.7 338.2 348.7 337.6 339.7 366.7 383.1 396.2 14 All other liabilities 174.7 189.6 203.2 193.1 188.9 185.4 203.2 220.3 226.1 216.0 15 Capital, surplus, and undivided profits 93.5 101.3 117.0 102.1 103.9 103.6 117.0 131.5 132.2 148.2 16 Total liabilities and capital 858.3 910.0 979.5 931.6 949.7 936.6 979.5 1,030.8 1,062.9 1,077.4 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 Apr. May June July Aug. Sept. Seasonally adjusted 1 Total 762.4 810.5 875.8 919.5 931.9 938.1 954.7 967.4r 973.1 2 Consumer 307.6 327.9 352.8 364.2 369.5 372.4 375.9 380.8r 382.3 3 Real estate 111.9 121.1 131.4 141.2 142.8 141.2 144.2 146.7 148.9 4 Business 342.9 361.5 391.6 414.2 419.5 424.5 434.6 439.9 441.9 Not seasonally adjusted 5 Total 769.7 818.1 884.0 919.4 931.6 942.9 948.9 962.2r 968.7 6 Consumer 310.6 330.9 356.1 360.9 368.3 374.6 378.1 382.0r 383.5 7 Motor vehicles loans 86.7 87.0 103.1 106.8 105.1 108.6 108.5 112.7 109.4 8 Motor vehicle leases 92.5 96.8 93.3 94.8 95.3 95.6 97.0 98.3 98.1 9 Revolving2 32.5 38.6 32.3 31.3 31.3 32.4 32.8 33.0 30.9 10 Other3 33.2 34.4 33.1 32.0 32.0 32.6 32.0 31.6r 32.9 Securitized assets4 11 Motor vehicle loans 36.8 44.3 54.8 57.8 65.8 65.3 68.3 68.0 73.5 12 Motor vehicle leases 8.7 10.8 12.7 11.8 11.6 11.3 11.1 10.8 10.6 13 Revolving .0 .0 8.7 8.8 8.7 9.7 9.9 9.4 10.2 14 Other 20.1 19.0 18.1 17.6 18.3 19.0 18.4 18.1 17.9 15 Real estate 111.9 121.1 131.4 141.2 142.8 141.2 144.2 146.7 148.9 16 One- to four-family 52.1 59.0 75.7 81.7 83.6 80.5 83.6 86.0 87.7 17 Other 30.5 28.9 26.6 31.6 31.5 33.0 33.1 33.7 34.6 Securitized real estate assets4 18 One- to four-family 28.9 33.0 29.0 27.6 27.4 27.5 27.2 26.8 26.5 19 Other .4 .2 .1 .3 .3 .2 .2 .2 .2 20 Business 347.2 366.1 396.5 417.4 420.5 427.1 426.7 433.5 436.3 21 Motor vehicles 67.1 63.5 79.6 86.2 84.4 82.8 78.8 78.6 80.3 22 Retail loans 25.1 25.6 28.1 30.7 31.6 30.9 31.7 33.3 34.5 23 Wholesale loans5 33.0 27.7 32.8 36.5 33.8 32.7 27.9 26.8 26.8 24 Leases 9.0 10.2 18.7 18.9 19.0 19.2 19.3 18.5 19.0 25 Equipment 194.8 203.9 198.0 203.1 203.8 208.3 208.5 210.5 208.4 26 Loans 59.9 51.5 50.4 52.0 51.7 53.3 52.9 53.1 48.2 27 Leases 134.9 152.3 147.6 151.0 152.1 155.1 155.6 157.4 160.2 28 Other business receivables6 47.6 51.1 69.9 76.9 78.9 82.6 89.2 92.7 94.2 Securitized assets4 29 Motor vehicles 24.0 33.0 29.2 30.5 32.0 32.1 28.4 30.4 31.0 30 Retail loans 2.7 2.4 2.6 2.4 2.2 2.9 2.8 2.7 2.6 31 Wholesale loans 21.3 30.5 24.7 26.2 27.8 27.2 23.5 25.7 26.4 32 Leases .0 .0 1.9 1.9 1.9 2.0 2.0 2.0 2.0 33 Equipment 11.3 10.7 13.0 12.5 13.2 13.3 13.8 13.5 14.6 34 Loans 4.7 4.2 6.6 5.8 6.5 6.7 7.1 6.9 7.7 35 Leases 6.6 6.5 6.4 6.6 6.6 6.6 6.7 6.6 6.9 36 Other business receivables6 2.4 4.0 6.8 8.3 8.3 8.0 7.9 7.8 7.7 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 • January 2000 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1999 IItteemm 11999966 11999977 11999988 Apr. May June July Aug. Sept. Oct. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms1 1 Purchase price (thousands of dollars) 182.4 180.1 195.2 209.4 207.5 211.0 207.6 213.8 210.3 214.4 2 Amount of loan (thousands of dollars) 139.2 140.3 151.1 162.4 161.6 162.0 158.2 163.1 161.8 165.1 3 Loan-to-price ratio (percent) 78.2 80.4 80.0 79.5 79.8 79.0 78.6 78.3 78.8 79.0 4 Maturity (years) 27.2 28.2 28.4 28.9 28.7 28.6 28.5 28.5 29.1 29.1 5 Fees and charges (percent of loan amount)2 1.21 1.02 .89 .77 .69 .72 .83 .68 .64 .71 Yield (percent per year) 6 Contract rate1 7.56 7.57 6.95 6.74 6.78 6.92 7.16 6.99 6.99 7.06 7 Effective rate1,3 7.77 7.73 7.08 6.85 6.89 7.03 7.29 7.09 7.09 7.17 8 Contract rate (HUD series)4 8.03 7.76 7.00 6.93 7.17 7.59 7.75 7.87 7.76 7.77 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.19 7.89 7.04 7.08 7.58 8.13 8.00 8.10 8.05 8.02 10 GNMA securities6 7.48 7.26 6.43 6.50 6.79 7.21 7.28 7.53 7.42 7.52 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 287,052 316,678 414,515 446,025 464,530 473,315 480,651 495,302 504,938 509,990 12 FHA/VA insured 30,592 31,925 33,770 36,158 38,938 41,143 44,132 47,846 49,456 50,639 13 Conventional 256,460 284,753 380,745 409,867 425,592 432,172 436,519 447,456 455,482 459,351 14 Mortgage transactions purchased (during period) 68,618 70,465 188,448 14,225 25,640 15,934 14,004 21,094 15,200 10,057 Mortgage commitments (during period) 15 Issued7 65,859 69,965 193,795 20,192 12,517 19,507 12,966 18,153 7,998 10,480 16 To sell8 130 1,298 1,880 75 178 351 260 478 609 1,710 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 137,755 164,421 255,010 284,006 285,881 299,184 300,093 306,214 315,968 318,682 18 FHA/VA insured 220 177 785 1,613 1,610 1,726 1,735 1,708 l,689r 1,689 19 Conventional 137,535 164,244 254,225 282,393 284,271 297,458 298,358 304,506 314,279r 316,993 Mortgage transactions (during period) 20 Purchases 125,103 117,401 267,402 26,473 22,503 21,950 17,602 18,674 15,238 13,323 21 Sales 119,702 114,258 250,565 25,464 21,972 20,349 16,835 17,468 14,153 12,671 22 Mortgage commitments contracted (during period)9 128,995 120,089 281,899 24,050 20,052 21,610 14,988 18,951 14,608 10,810 1. Weighted averages based on sample surveys of mortgages originated by major institu- 6. Average net yields to investors on fully modified pass-through securities backed by tional lender groups for purchase of newly built homes; compiled by the Federal Housing mortgages and guaranteed by the Government National Mortgage Association (GNMA), Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mortgages; from U.S. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Department of Housing and Urban Development (HUD). Based on transactions on the first Mortgage Corporation's mortgage commitments and mortgage transactions include activity day of the subsequent month. under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured exclude swap activity. by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A3 5 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1998 1999 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999955 11999966 11999977 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 institutions'1 596,763 628,335 631,822 632,359 634,251 643,964 646,213 656,383 13 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 Farmers 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 77 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 • January 2000 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1999 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999966 11999977 11999988 Apr. May June July Aug.r Sept. Seasonally adjusted 1 Total 1,182,439 1,234,122 1,300,491 1,332,662 1,343,427 1,347,831 1,356,696 1,363,800 1,369,732 2 Revolving 499,532 531,295 560,653 569,860 571,957 578,530 584,362 586,684 587,849 3 Nonrevolving2 682,907 702,828 739,838 762,801 771,470 769,301 772,334 777,115 781,883 Not seasonally adjusted 4 Total 1,211,590 1,264,103 1,331,742 1,322,021 1,331,267 1,340,414 1,349,886 1,364,995 1,373,216 By major holder 5 Commercial banks 526,769 512,563 508,932 494,663 492,852 477,774 477,977 476,649 474,546 6 Finance companies 152,391 160,022 168,491 170,145 168,490 173,617 173,374 177,331 173,252 7 Credit unions 144,148 152,362 155,406 156,797 158,102 158,177 159,920 162,412 164,078 8 Savings institutions 44,711 47,172 51,611 54,803 55,982 57,161 58,340 59,519 60,699 9 Nonfinancial business 77,745 78,927 74,877 67,112 68,051 68,042 68,228 68,944 67,717 10 Pools of securitized assets3 265,826 313,057 372,425 378,501 387,790 405,643 412,047 420,140 432,924 By major type of credit4 11 Revolving 522,860 555,858 586,528 563,907 566,019 572,463 576,538 582,838 584,680 12 Commercial banks 228,615 219,826 210,346 191,295 190,216 178,031 177,098 172,612 172,393 13 Finance companies 32,493 38,608 32,309 31,327 31,296 32,408 32,846 33,014 30,884 14 Credit unions 17,826 19,552 19,930 18,823 18,732 18,856 19,054 19,335 19,489 15 Savings institutions 10,313 11,441 12,450 12,507 12,641 12,775 12,909 13,043 13,177 16 Nonfinancial business 44,901 44,966 39,166 33,726 34,446 34,618 34,794 35,418 34,289 17 Pools of securitized assets3 188,712 221,465 272,327 276,229 278,688 295,775 299,837 309,416 314,448 18 Nonrevolving 688,730 708,245 745,214 758,114 765,248 767,951 773,348 782,157 788,536 19 Commercial banks 298,154 292,737 298,586 303,368 302,636 299,743 300,879 304,037 302,153 20 Finance companies 119,898 121,414 136,182 138,818 137,194 141,209 140,528 144,317 142,368 21 Credit unions 126,322 132,810 135,476 137,974 139,370 139,321 140,866 143,077 144,589 22 Savings institutions 34,398 35,731 39,161 42,296 43,341 44,386 45,431 46,476 47,522 23 Nonfinancial business 32,844 33,961 35,711 33,386 33,605 33,424 33,434 33,526 33,428 24 Pools of securitized assets3 77,114 91,592 100,098 102,272 109,102 109,868 112,210 110,724 118,476 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 Mar. Apr. May June July Aug. Sept. INTEREST RATES Commercial banks2 1 48-month new car 9.05 9.02 8.72 n.a. n.a. 8.30 n.a. n.a. 8.44 n.a. 2 24-month personal 13.54 13.90 13.74 n.a. n.a. 13.26 n.a. n.a. 13.38 n.a. Credit card plan 3 All accounts 15.63 15.77 15.71 n.a. n.a. 15.21 n.a. n.a. 15.08 n.a. 4 Accounts assessed interest 15.50 15.57 15.59 n.a. n.a. 14.94 n.a. n.a. 14.79 n.a. Auto finance companies 5 New car 9.84 7.12 6.30 6.31 6.52 6.57 6.60 6.70 6.28 n.a. 6 Used car 13.53 13.27 12.64 12.09 12.17 12.16 12.31 12.69 12.96 n.a. OTHER TERMS3 Maturity (months) 7 New car 51.6 54.1 52.1 53.0 52.8 52.4 52.3 52.0 51.7 52.1 8 Used car 51.4 51.0 53.5 56.0 56.0 56.1 56.0 56.1 55.8 55.9 Loan-to-value ratio 9 New car 91 92 92 91 92 92 92 92 92 92 10 Used car 100 99 99 99 99 99 99 99r 100 100 Amount financed (dollars) 11 New car 16,987 18,077 19,083 19,339 19,435 19,539 19,722 19,873r 20,012 20,154 12 Used car 12,182 12,281 12,691 13,653 13,647 13,700 13,816 13,609r 13,374 13,449 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 9 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 Q4 Ql 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 2 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 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 in 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 ii 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 17. 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 13 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 209.4 316.3 350.3 351.7 325.5 311.1 463.3 418.5 471.9 527.3 553.3 511.0 IS 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 24 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 75 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 3n 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 66.3 31.1 61.6 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 1 -.1 .1 .1 .3 .5 .2 1.0 .4 1.5 1.4 4.3 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 5n 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 NonfinancialS tatistics • January 2000 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999933 11999944 11999955 11999966 11999977 Q4 Ql Q2 Q3 Q4 Ql 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 9 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 1369.2 1,495.1 1,918.3 2,101.7 2,129.3 1,935.8 2,332.7 2,481.3 1,836.4 ? 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 Household -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 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 Rest of the world 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 Financial sectors 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 11 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 1? 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 13 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 88.8 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 34.7 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 20 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 21 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 22 State and local government retirement funds 24.7 30.9 33.6 37.3 63.8 42.7 67.4 78.4 65.6 48.5 74.3 37.4 23 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 74 Mutual funds 159.5 -7.1 52.5 48.9 80.9 64.8 156.4 146.4 92.9 103.5 101.5 98.8 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 4.4 26 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 27 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 28 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 3? 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 -6.3 .7 17.5 11..00 8.1 8.9 88..66 --1144..00 --55..44 36 Special drawing rights certificates .0 .0 2.2 -.5 -.5 .0 .0 .0 .0 .0 -4.0 .0 37 Treasury currency .4 .7 .6 .1 .0 -1.9 .3 .2 1.7 -2.3 .0 .7 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 4? 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 47 Trade payables 52.2 94.0 101.6 86.1 96.2 122.6 108.3 -57.4 34.6 -86.8 155.5 98.4 48 Security credit 61.4 -.1 26.7 52.4 111.0 128.0 159.3 134.3 167.0 -27.2 -86.9 89.3 49 Life insurance reserves 37.1 35.5 45.8 44.5 54.3 37.4 49.3 53.3 51.7 59.0 40.8 65.9 SO 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 SI 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 52 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 2,337.6 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 -.2 -.3 1.1 -3.4 -1.5 -.4 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 Taxes payable 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 -41.4 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. El and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • January 2000 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1997 1998 1999 11999944 11999955 11999966 11999977 Q4 Qi Q2 Q3 Q4 Ql 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 y 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 n 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 lb 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 2b 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 market 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 4b 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 bl 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 b'2 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 bb U.S. government securities 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 b/ 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 b8 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 b9 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.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 9 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999955 11999966 11999977 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 7 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 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 P 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 N 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 ?N 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 71 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 ?? State and local government retirement funds 497.4 531.0 568.2 632.0 632.0 648.9 668.5 684.9 697.0 715.6 724.9 73 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 ?4 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 75 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 77 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 78 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 ?9 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 3? 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 5500..99 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 4? 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 2211..66 2200..77 2200..88 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 -6.7 -7.3 -7.3 -7.4 -7.4 -7.2 --88..00 -8.4 --88..55 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 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 L.l and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • January 2000 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1999 MMeeaassuurree 11999966rr 11999977rr 11999988rr Feb.r Mar.r Apr/ Mayr Juner Julyr Aug.r Sept.r Oct. 1 Industrial production1 119.4r 127.1r 132.4r 134.5 135.1 135.5 136.2 136.6 137.4 137.6 137.6 138.5 Market groupings 2 Products, total 114.2r 119.6 123.7r 125.8 126.0 126.2 126.8 126.8 126.9 127.3 126.9 127.9 3 Final, total 115.3r 121.1 125.4 127.3 127.3 127.6 128.2 128.3 128.6 129.1 128.5 129.6 4 Consumer goods 112.4r 115.r 116.2r 117.2 116.7 116.5 116.8 117.0 116.8 117.4 116.5 118.2 5 Equipment 120.4r i32.r 142.7r 144.9 145.9 147.0 148.4 148.3 149.3 149.8 149.6 149.7 6 Intermediate 110.8r 115.3r 118.8r 121.3 121.6 121.7 122.3 121.7 121.5 121.6 122.1 122.6 7 Materials 127.8 139.0r 146.5r 148.7 150.3 150.8 151.7 153.1 155.0 154.8 155.7 156.2 Industry groupings 8 Manufacturing 121.3r 130.1r 136.4r 139.3 139.7 140.2 141.0 141.4 142.0 142.4 142.6 143.4 9 Capacity utilization, manufacturing (percent)2.. 81.5r 82.4r 80.9r 79.7 79.6 79.5 79.7 79.6 79.7 79.7 79.5 79.7 10 Construction contracts3 131.0r 143.3r 157.5r 168.0 166.0 171.0 172.0 177.0 171.0 162.0 165.0 165.0 11 Nonagricultural employment, total4 117.3 120.3 123.4 125.3 125.4 125.7 125.7 126.0 126.3 126.5 126.5 126.8 12 Goods-producing, total 2.4 2.4 2.3 102.7 102.5 102.5 102.1 102.1 102.3 101.9 102.0 102.1 13 Manufacturing, total 97.4 98.2 98.5 97.6 97.4 97.2 97.0 96.8 97.1 96.7 96.7 96.6 14 Manufacturing, production workers 98.6 99.6 99.6 98.3 98.2 98.0 97.8 97.5 98.0 97.4 97.4 97.4 15 Service-producing 123.1 126.5 130.1 132.5 132.7 133.1 133.2 133.6 134.0 134.3 134.3 134.7 16 Personal income, total 165.2r 175.4r 185.7r 192.7 193.2 194.1 194.9 196.4 197.0 197.8 197.9 200.4 17 Wages and salary disbursements 159.7r 171.3r 184.4r 192.8 193.2 194.3 195.2 196.3 197.8 198.6 199.4 200.7 18 Manufacturing 135.6r 144.6r 152.4r 154.4 154.4 155.1 155.9 156.8 158.2 158.0 159.1 159.5 19 Disposable personal income5 164.1r 172.9r 181.7r 188.1 188.8 189.7 190.3 191.8 192.1 193.3 192.8 195.6 20 Retail sales5 162.5 170.1 178.5 190.0 189.8 190.9 192.8 192.6 194.5 197.1 196.9 196.9 Prices6 21 Consumer (1982-84=100) 156.9 160.5 163.0 164.5 165.0 166.2 166.2 166.2 166.7 167.1 167.9 168.2 22 Producer finished goods (1982=100) 131.3 131.8 130.7 130.8 131.1 131.9 132.4 132.7 132.9 133.7 134.8 135.0 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 1999. The recent annual revision will be described in an article in 4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series the February 2000 issue of the Bulletin. For a description of the methods of estimating covers employees only, excluding personnel in the armed forces. industrial production and capacity utilization, see "Industrial Production and Capacity Utiliza- 5. Based on data from U.S. Department of Commerce, Survey of Current Business. tion: Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price (February 1997), pp. 67-92, and the references cited therein. For details about the construc- indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, tion of individual industrial production series, see "Industrial Production: 1989 Developments Monthly Labor Review. and 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 Mar. Apr. May June July Aug.r Sept.r Oct. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 133,943 136,297 137,673 138,816 139,091 139,019 139,408 139,254 139,264 139,386 139,662 Employment 2 Nonagricultural industries3 123,264 126,159 128,085 129,752 129,685 129,929 130,078 130,015 130,192 130,413 130,693 3 Agriculture 3,443 3,399 3,378 3,281 3,384 3,295 3,354 3,292 3,219 3,137 3,203 Unemployment 4 Number 7,236 6,739 6,210 5,783 6,022 5,795 5,975 5,947 5,853 5,836 5,766 5 Rate (percent of civilian labor force) 5.4 4.9 4.5 4.2 4.3 4.2 4.3 4.3 4.2 4.2 4.1 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 119,608 122,690 125,833 127,813 128,134 128,162 128,443 128,816 128,945 128,986 129,296 7 Manufacturing 18,495 18,657 18,716 18,503 18,473 18,429 18,396 18,449 18,378 18,364 18,349 8 Mining 580 592 575 550 538 531 526 528 524 525 529 9 Contract construction 5,418 5,686 5,965 6,232 6,277 6,239 6,258 6,270 6,246 6,274 6,302 10 Transportation and public utilities 6,253 6,395 6,551 6,732 6,750 6,758 6,781 6,799 6,813 6,837 6,854 11 Trade 28,079 28,659 29,299 29,558 29,689 29,725 29,789 29,915 29,919 29,891 29,881 12 Finance 6,911 7,091 7,341 7,595 7,611 7,621 7,636 7,647 7,650 7,643 7,661 13 Service 34,454 36,040 37,525 38,556 38,697 38,782 38,952 39,055 39,205 39,245 39,460 14 Government 19,419 19,570 19,862 20,087 20,099 20,077 20,105 20,153 20,210 20,207 20,260 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 1999r 1998 1999r SSeerriieess Q4r Ql Q2 Q3 Q4r Ql Q2 Q3 Q4r Ql Q2 Q3 Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 133.9 134.6 136.1 137.5 165.3 167.3 169.2 170.7 81.0 80.4 80.5 80.6 138.3 139.2 140.9 142.3 172.5 174.8 176.9 178.7 80.2 79.6 79.6 79.6 121.1 122.2 122.5 123.5 146.4 147.4 148.2 149.0 82.8 82.9 82.7 82.9 147.4 148.1 150.5 152.2 185.6 188.6 191.4 193.7 79.4 78.5 78.6 78.5 165.8 167.1 170.8 174.3 206.0 210.3 214.2 217.6 80.5 79.5 79.8 80.1 120.7 122.2 122.5 120.5 144.2 145.3 146.3 147.4 83.7 84.1 83.7 81.8 121.8 122.3 125.1 128.8 146.5 147.6 148.5 149.3 83.2 82.9 84.2 86.3 114.9 116.9 121.4 126.6 146.9 148.5 150.0 151.3 78.3 78.7 80.9 83.7 130.4 129.1 129.6 131.6 146.0 146.5 146.8 147.0 89.3 88.1 88.3 89.5 215.6 221.3 227.9 230.7 256.5 265.7 275.5 285.3 84.1 83.3 82.7 80.9 341.6 349.4 374.6 402.1 438.8 461.8 482.0 498.5 77.9 75.7 77.7 80.7 148.7 147.5 150.6 153.2 184.6 184.8 184.8 184.9 80.6 79.8 81.5 82.9 13 Aerospace and miscellaneous 110022..44 98.9 9955..99 9944..00 112266..66 112266..88 112266..66 126.2 8800..99 78.0 75.7 74.4 111.3 111.8 111.6 111.2 138.5 139.1 139.5 139.9 80.3 80.4 80.0 79.5 106.7 109.6 111.1 111.1 131.4 131.4 131.5 131.6 81.2 83.4 84.5 84.4 114.5 115.8 115.1 116.0 133.0 133.8 134.5 135.3 86.1 86.6 85.6 85.7 115.1 115.9 116.3 116.3 149.5 150.0 150.4 150.7 77.0 77.3 77.3 77.2 123.5 122.9 123.5 123.4 134.6 135.9 137.2 138.4 91.7 90.4 90.0 89.2 114.0 116.3 114.1 111144..99 121.1 121.8 122.2 122.7 94.1 95.6 93.3 93.7 100.4 97.6 97.1 9988..11 120.4 120.4 120.3 120.2 83.3 81.1 80.7 81.6 113.0 114.6 116.6 118.0 126.5 126.9 127.3 127.8 89.3 90.3 91.6 92.4 111166..55 111166..66 111188..99 112200..33 124.3 124.7 125.2 125.6 93.7 93.5 95.0 95.8 1973 1975 Previous cycle5 Latest cycle6 1998 1999 High Low High Low High Low Oct. May June Julyr Aug.1" Sept.r Oct.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 81.5 80.5r 80.5r 80.7 80.6 80.4 80.7 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 80.5 19.1' 19.6' 79.7 79.7 79.5 79.7 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 82.7 82.7r 9,2.7 82.9 82.9 82.9 83.1 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.9 78.7r 78.6r 78.6 78.6 78.4 78.6 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 81.1 19.1' 19.9' 80.3 80.1 79.9 79.8 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 83.3 84.7r 83.3r 82.7 81.6 81.1 80.8 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 83.9 83.5r 85.6r 85.9 87.1 85.8 87.2 9 8 I N ro o n n f a e n rr d o u s s te el 1 9 0 0 5 . . 8 8 6 59 6 . . 8 6 9 91 5 . . 1 8 6 3 0 7 . . 1 0 9 8 5 9 . . 2 3 7 74 1 . . 2 8 7 8 9 9 . . 4 4 8 8 7 0. . 6 lr r 8 89 2 . . 8 l r r 8 8 3 8 . . 7 6 9 8 0 4 . . 3 5 8 89 2 . . 6 9 8 8 5 9 . . 1 7 10 Industrial machinery and 11 Elect e ri q c u a i l p m m a e c n h t inery 9 8 6 9 . . 0 2 7 64 4 . . 7 3 9 89 3 . . 4 2 7 6 1 4 . . 6 0 8 8 5 4 . . 4 0 7 75 2 . . 0 3 7 8 8 4 . . 5 8 1821.9 A r ' 7 8 8 1 . . 7 8 r r 8 8 1 0 . . 5 9 8 8 0 1 . . 5 0 8 80 0 . . 1 6 8 80 0 . . 5 2 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 81.9 81.5r 82.7r 82.3 82.3 84.0 83.4 13 Aero t s r p a a n c s e p o a r n ta d t io m n i s e c q e u ll i a p n m eo e u n s t 78.4 67.6 81.9 66.6 87.3 79.2 81.9 75.8r 15.2' 74.9 75.0 73.4 71.9 14 Nondurable goods 87.8 71,7 87.5 76.4 87.3 80.7 80.4 80.2r 19.1' 79.4 79.6 79.5 80.1 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 81.2 84.4r 84.2r 85.3 84.6 83.4 83.9 1 1 6 7 P C a h p e e m r i a c n a d ls p a r n o d d u p c r t o s d ucts 9 8 7 7 . . 1 6 6 6 9 9 . . 7 2 9 8 6 4 . . 1 6 6 8 9 0 . . 9 6 9 8 3 6 . . 5 2 7 8 9 5 . . 3 0 7 8 6 7 . . 7 3 7 8 7 5 . . 8 2 r r 1 85 1 .9 . ' 3 ' 7 8 6 5 . . 9 2 7 8 7 5 . . 6 6 7 8 7 6 . . 1 5 7 8 8 6 . . 3 3 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 89.5 90.5r 89.5 90.9 87.8 88.9 90.6 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 93.0 93.4r 92.6r 93.9 93.4 93.8 94.3 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 84.3 81.0r 80.7r 81.3 81.8 81.6 81.7 21 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 91.5 91.lr 92.1r 93.9 92.2 91.1 92.7 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 95.9 94.6r 95.5r 97.7 95.5 94.2 96.2 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 1999. The recent annual revision will be described in an article in 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing the February 2000 issue of the Bulletin. For a description of the methods of estimating and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather industrial production and capacity utilization, see "Industrial Production and Capacity Utiliza- and products; machinery; transportation equipment; instruments; and miscellaneous manufaction: Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 tures. (February 1997), pp. 67-92, and the references cited therein. For details about the construc- 5. Monthly highs, 1978-80; monthly lows, 1982. tion of individual industrial production series, see "Industrial Production: 1989 Developments 6. Monthly highs, 1988-89; monthly lows, 1990-91. and 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 • January 2000 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1998r 1999 GGrroouupp p p r o o r - - 1 a 9 v 9 g 8 . tion Oct. Nov. Dec. Jan.r Feb/ Mar/ Apr/ Mayr Juner Julyr Aug/ Sept/ Oct.? Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 132.4 134.1 133.8 133.8 134.1 134.5 135.1 135.5 136.2 136.6 137.4 137.6 137.6 138.5 2 Products 60.5 123.7 125.8 125.1 124.9 125.4 125.8 126.0 126.2 126.8 126.8 126.9 127.3 126.9 127.9 Final products 46.3 125.4 127.5 126.8 126.0 126.6 127.3 127.3 127.6 128.2 128.3 128.6 129.1 128.5 129.6 4 Consumer goods, total 29.1 116.2 116.0 115.6 115.1 116.3 117.2 116.7 116.5 116.8 117.0 116.8 117.4 116.5 118.2 5 Durable consumer goods 6.1 142.7 146.2 145.4 146.0 149.1 150.9 149.9 152.0 152.8 154.0 153.4 155.7 152.7 155.3 6 Automotive products 2.6 134.7 143.4 142.0 141.7 143.7 142.0 140.0 142.0 145.4 147.4 143.7 150.6 145.5 146.5 7 Autos and trucks 1.7 138.4 151.4 150.2 148.2 149.4 148.7 147.0 149.0 153.2 157.5 148.9 162.9 152.8 154.4 8 Autos, consumer .9 109.2 119.9 113.7 115.5 111.7 109.0 110.8 112.8 108.8 112.4 107.2 115.9 9 Trucks, consumer .7 166.2 181.0 183.2 179.1 185.2 187.2 182.5 185.7 197.2 202.0 184.0 213.6 10 Auto parts and allied goods .... .9 128.6 131.5 129.9 131.8 134.8 131.8 129.3 131.4 133.6 132.5 135.3 132.8 134.1 134.4 11 Other 3.5 149.0 147.6 147.3 148.8 152.8 158.0 157.8 160.0 158.3 158.8 161.1 159.2 158.2 162.2 12 Appliances, televisions, and air conditioners 1.0 262.8 268.2 273.3 283.5 299.7 320.0 317.6 325.8 311.1 319.0 329.9 320.4 316.8 341.1 13 Carpeting and furniture .8 117.9 120.2 117.7 115.9 121.1 122.8 119.6 120.2 121.0 121.0 124.1 123.0 122.8 123.6 14 Miscellaneous home goods 1.6 115.2 110.5 110.1 111.0 111.0 113.6 115.7 116.9 117.2 116.2 115.9 115.4 114.7 115.6 15 Nondurable consumer goods 23.0 109.9 108.9 108.6 107.9 108.7 109.3 108.9 108.3 108.4 108.4 108.3 108.7 108.1 109.6 16 Foods and tobacco 10.3 108.6 108.0 108.4 107.2 108.4 109.4 108.4 107.8 107.7 107.3 106.7 106.5 106.2 107.0 17 Clothing 2.4 95.2 92.5 91.3 91.3 91.7 92.0 91.3 91.8 90.2 90.2 89.2 89.4 88.5 88.9 18 Chemical products 4.5 120.9 119.1 122.0 120.2 119.7 122.8 121.6 118.7 120.5 120.2 119.4 121.6 119.5 122.8 19 Paper products 2.9 105.6 104.4 103.4 102.8 101.5 100.4 98.8 99.9 100.3 101.5 102.0 103.2 104.6 105.9 20 Energy 2.9 112.6 113.8 106.3 108.6 113.1 109.9 115.4 115.1 114.7 115.3 118.6 116.6 116.1 118.5 21 Fuels .8 110.5 108.1 109.6 110.1 112.2 113.4 110.7 111.5 110.9 109.9 111.1 110.0 111.2 113.5 22 Residential utilities 2.1 113.1 116.0 104.7 107.6 113.3 108.2 117.2 116.4 116.1 117.4 121.7 119.3 117.9 120.4 23 Equipment 17.2 142.7 147.5 146.3 145.2 144.6 144.9 145.9 147.0 148.4 148.3 149.3 149.8 149.6 149.7 24 Business equipment 13.2 161.2 168.4 167.0 166.3 165.9 166.3 167.5 169.4 171.2 171.2 172.6 172.9 172.8 172.7 25 Information processing and related 5.4 205.7 220.1 219.4 220.9 223.0 224.5 229.2 236.9 244.3 248.2 253.8 257.0 257.7 260.5 26 Computer and office equipment 1.1 526.9 628.6 642.8 657.8 677.5 703.1 736.1 773.0 805.8 830.2 851.9 871.7 887.1 905.5 27 Industrial 4.0 139.0 139.7 138.1 138.6 137.0 135.8 135.2 136.0 135.3 133.7 135.4 133.5 134.0 134.5 28 Transit 2.5 130.0 138.7 137.2 134.8 132.8 131.2 129.5 129.4 128.9 128.2 127.5 128.0 124.3 121.0 29 Autos and trucks 1.2 123.3 134.9 133.8 131.0 130.9 128.9 129.0 130.7 131.2 132.2 131.2 135.3 131.2 130.1 30 Other 1.3 139.8 141.4 139.7 133.0 132.6 139.9 143.0 135.7 134.0 130.2 123.8 123.0 126.4 123.7 31 Defense and space equipment 3.3 75.4 76.3 75.8 75.2 75.0 75.4 75.6 75.1 75.2 74.6 74.5 74.7 73.7 73.9 32 Oil and gas well drilling .6 134.6 119.2 116.0 105.2 99.8 97.4 100.8 97.2 99.8 100.1 102.0 107.1 111.3 115.1 33 Manufactured homes .2 166.3 168.5 171.2 172.5 173.3 169.2 168.8 164.7 161.3 158.9 151.5 151.3 132.5 130.0 34 Intermediate products, total 14.2 118.8 120.4 120.0 121.1 121.4 121.3 121.6 121.7 122.3 121.7 121.5 121.6 122.1 122.6 35 Construction supplies 5.3 128.0 129.8 130.3 132.2 133.3 132.5 131.7 131.3 132.9 132.6 133.2 133.0 133.8 134.3 36 Business supplies 8.9 113.4 114.9 113.9 114.5 114.3 114.7 115.6 116.1 116.1 115.3 114.6 114.8 115.1 115.6 37 Materials 39.5 146.5 147.6 147.9 148.5 148.2 148.7 150.3 150.8 151.7 153.1 155.0 154.8 155.7 156.2 38 Durable goods materials 20.8 182.1 187.0 187.7 189.2 188.8 189.2 191.9 193.1 194.3 197.2 200.3 200.2 202.7 203.2 39 Durable consumer parts 4.0 146.2 147.4 145.5 147.2 145.4 148.4 149.9 147.7 148.4 150.5 153.9 147.4 156.3 154.9 40 Equipment parts 7.6 295.6 316.4 319.6 322.1 323.1 324.4 331.5 340.5 345.0 355.2 364.6 370.8 371.6 374.7 41 Other 9.2 130.2 129.5 130.3 131.2 130.8 129.8 130.9 130.4 130.4 130.6 131.1 131.5 131.5 131.8 42 Basic metal materials 3.1 122.8 119.5 118.6 119.3 119.1 116.8 119.8 120.1 119.9 122.6 122.8 123.7 122.4 124.4 43 Nondurable goods materials 8.9 112.7 111.3 111.8 111.7 111.3 112.4 112.7 112.8 113.8 114.2 114.5 114.4 114.5 115.0 44 Textile materials 1.1 106.9 100.6 102.7 101.8 96.5 100.2 101.2 101.8 101.8 101.2 101.2 101.0 100.1 100.2 45 Paper materials 1.8 115.7 115.3 112.8 114.4 116.1 115.6 116.3 116.5 115.3 117.7 116.3 116.2 118.8 119.0 46 Chemical materials 3.9 112.9 111.2 112.7 111.3 111.6 112.8 113.6 114.2 116.0 116.9 117.7 117.5 117.4 117.7 47 Other 2.1 112.4 113.0 113.7 114.6 113.4 114.4 113.3 111.9 114.2 112.0 113.0 113.2 111.9 113.3 48 Energy materials 9.7 103.1 103.2 102.1 101.6 101.8 101.7 102.4 102.2 102.2 101.6 102.9 102.4 101.5 102.1 49 Primary energy 6.3 101.0 101.5 100.4 98.8 99.1 99.1 99.1 97.3 98.3 98.9 100.2 100.4 98.9 99.2 50 Converted fuel materials 3.3 107.8 106.2 105.3 107.0 106.8 106.7 108.9 111.7 109.9 106.8 108.0 106.1 106.3 107.9 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 132.4 133.9 133.6 133.7 133.9 134.4 135.1 135.4 136.1 136.4 137.3 137.3 137.5 138.4 52 Total excluding motor vehicles and parts 95.1 131.9 133.3 133.1 133.2 133.5 133.9 134.6 134.9 135.6 135.9 136.7 136.9 136.8 137.8 53 Total excluding computer and office equipment 98.2 128.1 129.2 128.8 128.7 128.8 129.1 129.5 129.7 130.2 130.6 131.2 131.3 131.3 132.0 54 Consumer goods excluding autos and trucks . 27.4 115.0 114.2 113.8 113.4 114.6 115.5 115.1 114.8 114.8 114.8 115.0 115.1 114.6 116.3 55 Consumer goods excluding energy 26.2 116.7 116.3 116.7 115.9 116.7 118.0 116.9 116.7 117.0 117.2 116.6 117.6 116.6 118.2 56 Business equipment excluding autos and trucks 12.0 165.6 172.2 170.8 170.3 169.9 170.6 171.9 173.8 175.7 175.7 177.4 177.2 177.5 177.5 57 Business equipment excluding computer and office equipment 12.1 142.6 146.5 144.8 143.7 142.7 142.4 142.6 143.4 144.2 143.6 144.4 144.1 143.6 143.1 58 Materials excluding energy 29.8 160.2 161.7 162.4 163.3 162.9 163.6 165.5 166.3 167.4 169.5 171.6 171.5 173.1 173.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 1998r 1999 GGrroouupp c S o I d C e p p o ro r- - 1 av 99 g 8 . tion Oct. Nov. Dec. Jan.r Feb.r Mar.r Apr/ Mayr Juner Julyr Aug/ Sept/ Oct.p Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 132.4 134.1 133.8 133.8 134.1 134.5 135.1 135.5 136.2 136.6 137.4 137.6 137.6 138.5 60 Manufacturing 85.4 136.4 138.3 138.3 138.4 138.6 139.3 139.7 140.2 141.0 141.4 142.0 142.4 142.6 143.4 61 Primary processing 26.5 121.2 120.7 120.8 121.9 122.2 122.1 122.4 122.2 122.5 122.7 123.3 123.5 123.8 124.3 62 Advanced processing 58.9 144.0 147.5 147.5 147.2 147.2 148.4 148.8 149.6 150.7 151.2 151.8 152.3 152.4 153.4 63 Durable goods 45.0 160.7 165.8 165.4 166.2 166.3 166.8 168.1 169.4 170.8 172.2 173.8 174.3 174.8 175.5 64 Lumber and products 24 2.0 118.5 119.8 119.9 122.5 122.6 122.3 121.7 121.5 123.9 122.2 121.5 120.2 119.8 119.6 65 Furniture and fixtures 25 1.4 122.0 124.2 123.7 123.3 122.7 124.6 125.8 123.8 124.4 124.4 125.7 126.7 127.8 127.1 66 Stone, clay, and glass products 32 2.1 126.8 128.4 130.1 131.8 133.1 132.2 130.8 128.8 128.5 127.8 129.3 130.1 130.2 130.4 67 Primary metals 33 3.1 125.6 122.5 120.5 122.5 122.9 120.1 124.0 123.9 123.9 127.4 128.0 130.0 128.4 130.6 68 Iron and steel 331,2 1.7 122.6 116.2 112.1 116.5 118.1 114.6 118.1 119.4 120.1 124.5 126.2 127.9 125.7 129.5 69 Raw steel 331PT .1 115.3 110.0 101.6 102.7 106.8 106.8 108.3 109.3 111.4 110.7 111.1 115.9 112.4 118.4 70 Nonferrous 333-6,9 1.4 129.4 130.4 130.9 130.0 128.9 127.0 131.4 129.4 128.6 130.8 130.2 132.7 131.7 132.0 71 Fabricated metal products . . 34 5.0 128.8 128.1 128.6 129.8 129.0 128.4 128.5 128.0 127.2 128.3 128.6 128.8 129.0 129.7 72 Industrial machinery and equipment 35 8.0 206.4 215.0 215.3 216.6 217.5 221.7 224.6 227.0 228.4 228.2 230.0 229.7 232.5 234.2 73 Computer and office equipment 357 1.8 675.1 786.8 805.3 832.2 868.1 907.1 947.6 987.5 1,021.6 1,048.2 1,075.1 1,101.6 1,123.5 1,149.3 74 Electrical machinery 36 7.3 315.1 338.2 341.7 344.8 346.7 347.5 354.0 366.4 373.3 384.2 399.2 403.9 403.2 409.5 75 Transportation equipment. .. 37 9.5 121.6 127.1 124.9 123.9 122.7 123.2 122.6 122.1 122.8 123.5 122.9 122.9 123.2 121.7 76 Motor vehicles and parts . 371 4.9 141.7 151.1 148.0 147.1 146.5 147.8 148.1 148.4 150.6 152.9 152.2 152.2 155.4 154.3 77 Autos and light trucks . 371PT 2.6 127.8 139.9 138.1 136.4 136.5 135.0 134.0 135.7 138.3 142.0 135.8 146.9 139.5 140.2 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 101.7 103.6 102.3 101.2 99.4 99.3 97.9 96.5 96.0 95.2 94.7 94.7 92.5 90.5 79 Instruments 38 5.4 112.6 114.4 U 3.0 112.8 113.3 112.9 113.7 115.1 116.7 117.0 117.2 116.9 117.0 117.4 80 Miscellaneous 39 1.3 122.0 120.5 119.5 120.8 120.6 121.8 122.9 124.2 125.5 124.5 125.2 125.2 125.2 126.4 81 Nondurable goods 40.4 111.6 111.2 111.6 111.1 111.3 112.3 111.8 111.5 111.9 111.3 111.0 111.3 111.3 112.2 82 Foods "20 9.4 109.3 109.5 110.9 110.3 111.0 111.4 110.9 110.6 110.6 110.0 108.9 108.9 109.4 109.8 83 Tobacco products 21 1.6 106.2 100.7 96.0 91.1 94.8 99.2 95.4 94.1 95.4 94.5 96.0 94.8 91.0 92.8 84 Textile mill products 22 1.8 110.9 106.6 107.0 106.4 108.0 110.5 110.1 111.4 110.9 110.8 112.3 111.3 109.8 110.6 85 Apparel products 23 2.2 96.6 94.8 93.3 93.2 92.3 92.2 91.8 92.4 91.2 90.7 89.8 88.7 87.8 88.4 86 Paper and products 26 3.6 114.9 115.8 112.8 114.9 115.7 115.9 115.9 115.0 114.6 115.7 115.0 115.8 117.3 117.3 87 Printing and publishing .... 27 6.7 105.1 105.1 105.1 105.3 104.3 104.3 103.7 104.2 104.1 103.5 102.8 103.6 104.1 104.9 88 Chemicals and products .... 28 9.9 115.1 114.4 116.2 114.7 114.5 116.6 116.8 115.6 117.0 116.3 115.8 117.0 116.2 118.2 89 Petroleum products 29 1.4 113.3 112.5 114.8 114.8 117.2 117.0 114.9 114.6 114.2 113.4 115.1 114.5 115.1 115.9 90 Rubber and plastic products . 30 3.5 133.2 133.6 134.9 135.6 135.4 135.6 135.8 136.2 137.4 136.4 138.0 137.6 139.3 138.7 91 Leather and products 31 .3 77.1 75.0 75.1 73.2 71.9 71.5 71.3 70.6 70.9 71.3 69.1 70.2 70.1 69.0 92 Mining 6.9 103.8 101.6 101.5 98.1 98.0 97.4 97.5 96.7 97.4 97.1 97.8 98.4 98.1 98.2 93 Metal 10 .5 109.1 106.5 109.4 106.6 102.9 101.3 98.5 100.5 100.2 98.9 96.2 93.3 93.6 95.0 94 Coal 12 1.0 109.7 110.9 112.4 109.2 107.7 108.9 103.9 107.3 106.1 107.0 110.0 110.7 109.5 108.9 95 Oil and gas extraction 13 4.8 99.5 96.4 94.7 91.5 91.2 90.7 92.1 90.8 91.8 91.4 92.3 93.3 93.1 93.4 96 Stone and earth minerals 14 .6 123.4 122.6 128.9 124.1 129.4 127.1 126.6 121.8 123.9 123.3 120.5 120.2 120.7 118.9 97 Utilities 7.7 114.4 115.6 110.8 112.5 114.5 112.6 116.8 116.3 116.1 117.4 119.8 117.8 116.5 118.7 98 Electric 491.493PT 6.2 116.9 119.0 114.7 115.9 115.8 114.9 119.1 118.6 118.4 119.6 122.6 120.0 118.4 121.1 99 Gas 492.493PT 1.6 103.2 100.1 93.3 97.5 108.8 102.5 106.4 105.7 105.8 107.5 107.4 108.2 108.0 108.0 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 136.1 137.6 137.8 138.0 138.2 138.9 139.3 139.8 140.5 140.8 141.4 141.9 141.9 142.8 101 Manufacturing excluding computer and office equipment 83.6 131.4 132.5 132.5 132.5 132.4 133.0 133.1 133.4 134.1 134.3 134.8 135.0 135.1 135.8 102 Computers, communications equipment, and semiconductors 5.9 563.8 633.9 645.5 656.4 665.0 676.0 700.3 731.6 753.3 780.5 812.1 830.0 836.3 849.8 103 Manufacturing excluding computers and semiconductors 81.1 120.4 121.0 120.7 120.7 120.6 121.1 121.0 120.9 121.3 121.2 121.3 121.5 121.5 122.1 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 118.5 119.0 118.8 118.7 118.6 119.1 118.9 118.7 119.1 118.9 118.9 118.9 119.0 119.5 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total 2,001.9 2,642.2 2,690.7 2,677.2 2,674.9 2,693.7 2,699.9 2,701.8 2,710.2 2,721.9 2,723.6 2,726.1 2,736.6 2,727.1 2,746.7 106 Final 1,552.1 2,036.5 2,074.6 2,064.3 2,056.0 2,072.5 2,079.5 2,080.1 2,087.2 2,095.3 2,100.3 2,102.8 2,113.6 2,101.0 2,118.7 107 Consumer goods 1,049.6 1,271.0 1,274.9 1,270.5 1,267.6 1,286.4 1,292.3 1,287.9 1,288.4 1,290.1 1,295.1 1,292.4 1,300.3 1,289.8 1,307.3 108 Equipment 502.5 767.9 801.1 795.1 789.6 787.0 788.1 793.3 800.1 806.7 806.7 812.3 815.1 813.2 812.8 109 Intermediate 449.9 606.1 614.8 611.7 617.5 619.9 619.1 620.4 621.7 625.2 622.1 622.0 621.8 624.8 626.7 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data tion: Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The (February 1997), pp. 67-92, and the references cited therein. For details about the construclatest historical revision of the industrial production index and the capacity utilization rates tion of individual industrial production series, see "Industrial Production: 1989 Developments was released in November 1999. The recent annual revision will be described in an article in and Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. the February 2000 issue of the Bulletin. For a description of the methods of estimating 2. Standard industrial classification. industrial production and capacity utilization, see "Industrial Production and Capacity Utiliza- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • January 2000 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1998 1999 item 11999966 11999977 11999988 Dec. Jan. Feb. Mar. Apr. May June Julyr Aug.r Sept. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,426 1,441 1,604 1,708 1,778 1,738 1,654 1,572 1,591 1,641 1,641 1,619 1,506 2 One-family 1,070 1,062 1,184 1,296 1,275 1,306 1,242 1,214 1,243 1,241 1,247 1,210 1,171 3 Two-family or more 356 379 421 412 503 432 412 358 348 400 394 409 335 4 Started 1,477 1,474 1.617 1,750 1,820 1,752 1,746 1,577 1,668 1,607 1,680 1,655 1,626 5 One-family 1,161 1,134 1,271 1,383 1,393 1,380 1,394 1,260 1,389 1,305 1,332 1,289 1,289 6 Two-family or more 316 340 346 367 427 372 352 317 279 302 348 366 337 7 Under construction at end of period1 819 834 935 999 1,011 1,032 1,036 1,031 1,029 1,017 1,021 1,028 1,024 8 One-family 584 570 638 688 697 712 714 708 708 702 704 706 703 9 Two-family or more 235 264 297 311 314 320 322 323 321 315 317 322 321 10 Completed 1,406 1,406 1,473 1,440 1,648 1,528 1,700 1,633 1,650 1,674 1,609 1,580 1,671 11 One-family 1,123 1,120 1,158 1,150 1,292 1,246 1,357 1,324 l,334r 1,346 1,263 1,255 1,311 12 Two-family or more 283 285 315 290 356 282 343 309 316r 328 346 325 360 13 Mobile homes shipped 361 354 372 382 390 381 383 368 365 355 336 340 320 Merchant builder activity in one-family units 14 Number sold 757 804 886 958 908 909 885 952 914 932 929 923 848 15 Number for sale at end of period1 326 287 300 295 295 297 300 300 304 306 305 307 310 Price of units sold (thousands of dollars)2 16 Median 140.0 146.0 152.5 152.5 152.5 159.9 155.0 160.0 154.8 158.3 157.9 155.0 159.9 17 Average 166.4 176.2 181.9 183.3 182.8 191.4 189.4 191.4 188.2 193.4 188.8 193.5 193.9 EXISTING UNITS (one-family) 18 Number sold 4,196 4,381 4,970 5,340 5,060 5,140 5,420 5,250 5,000 5,630 5,400 5,240 5,130 Price of units sold (thousands of dollars)2 19 Median 115.8 121.8 128.4 128.5 130.3 128.1 129.6 130.7 132.8 136.9 136.0 137.4 134.4 20 Average 141.8 150.5 159.1 159.6 162.8 159.6 162.3 163.8 167.4 174.2 171.9 174.3 170.2 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 581,920 617,877 664,451 690,462 697,858 710,657 715,396 704,582 698,461 698,852 702,517 698,381 697,450 22 Private 447,593 474,842 518,987 541,591 543,471 548,682 555,362 547,885 546,880 546,931 546,375 541,690 539,767 23 Residential 255,577 265,908 293,569 310,261 315,828 318,483 323,133 322,213 321,803 320,913 320,352 318,816 318,838 24 Nonresidential 192,017 208,933 225,418 231,330 227,643 230,199 232,229 225,672 225,077 226,018 226,023 222,874 220,929 2b Industrial buildings 32,644 31,355 32,308 30,327 29,895 28,967 29,052 26,217 24,975 25,465 26,246 25,679 23,772 26 Commercial buildings 75,829 86,190 95,252 101,605 100,164 102,802 103,983 102,180 104,134 104,457 103,441 102,498 103,920 27 Other buildings 30,648 37,198 39,438 42,354 38,833 40,449 39,840 39,737 38,876 38,592 38,365 37,735 37,323 28 Public utilities and other 52,896 54,190 58,421 57,044 58,751 57,981 59,354 57,538 57,092 57,504 57,971 56,962 55,914 29 Public 134,326 143,035 145,464 148,871 154,387 161,975 160,033 156,697 151,581 151,921 156,142 156,691 157,682 30 Military 2,604 2,559 2,588 2,306 1,881 2,636 2,223 2,268 2,128 2,137 2,305 1,679 1,941 31 Highway 39,883 44,295 45,067 44,583 50,538 54,880 53,099 50,897 48,542 45,518 47,747 48,148 49,087 32 Conservation and development 5,827 5,576 5,487 5,406 6,018 6,271 6,194 6,016 5,101 5,845 5,810 6,581 6,277 33 Other 86,012 90,605 92,322 96,576 95,950 98,188 98,517 97,516 95,810 98,421 100,280 100,283 100,377 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) IIInnndddeeexxx llleeevvveeelll,,, IIIttteeemmm 1998 1999r 1999 OOOcccttt... 11999988 11999999 111999999999 OOcctt.. OOcctt.. Dec.r Mar. June Sept. June July Aug. Sept. Oct. CONSUMER PRICES2 (1982-84=100) 1 All items 1.5 2.6 2.0 1.5 2.9 4.2 .0 .3 .3 .4 .2 168.2 2 Food 2.4 1.9 2.8 1.7 1.7 2.5 .0 .2 .2 .2 .2 165.1 Energy items -9.1 10.2 -5.1 5.8 14.2 29.4 -1.2 2.1 2.7 1.7 -.1 111.6 4 All items less food and energy 2.3 2.1 2.5 .9 2.3 2.5 .1 .2 .1 .3 .2 178.3 5 Commodities .8 1.0 2.5 -3.0 2.0 2.5 .0 .1 -.1 .7 .1 145.3 6 Services 3.0 2.5 2.5 2.7 2.5 2.3 .1 .3 .2 .2 .3 197.2 PRODUCER PRICES (1982=100) 7 Finished goods -.7 2.7 2.2 .6 2.8 7.1 .(F .2 .5 1.1 -.1 135.0 8 Consumer foods .3 .1 .3 2.1 .0 2.4 .3r -.8r .4 1.0 -.7 135.6 9 Consumer energy -10.3 12.1 -8.9 5.7 23.2 42.4 — .4r 3.1r 3.7 2.2 -1.0 83.6 10 Other consumer goods 2.1 3.0 8.3 -1.3 .8 3.8 ,lr ,0r -.1 1.1 .3 153.5 11 Capital equipment -.3 .3 .3 -.6 -.3 .6 -,2r -.1 .0 .2 .3 138.5 Intermediate materials 12 Excluding foods and feeds -2.3 2.6 -4.5 .3 6.1 6.6 ,3r .6 .7 .3 .3 125.9 13 Excluding energy -1.1 1.1 -2.7 -.9 3.1 2.7 .3 .4 .2 .1 .4 134.2 Crude materials 14 Foods -5.8 -4.0 -7.0 4.1 -.8 1.2 ,3r —4.6r 3.8 1.3 -.1 99.6 IS Energy -29.3 36.6 13.5 -21.1 163.8 121.9 ,0r 3.1R 7.2 10.4 -4.8 89.6 16 Other -14.1 7.0 -24.3 .9 8.6 26.6 .8r 2.0r 1.8 2.2 2.4 142.5 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • January 2000 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 Q3 Q4 Ql Q2 Q3 GROSS DOMESTIC PRODUCT 1 Total 7,813.2 8,300.8 8,759.9 8,797.9 8,947.6 9,072.7 9,146.2 9,295.3 By source 2 Personal consumption expenditures 5,237.5 5,524.4 5,848.6 5,889.6 5,973.7 6,090.8 6,200.8 6,299.6 3 Durable goods 616.5 642.9 698.2 696.9 722.8 739.0 751.6 761.8 4 Nondurable goods 1,574.1 1,641.7 1,708.9 1,716.6 1,742.9 1,787.8 1,824.8 1,853.5 5 Services 3,047.0 3,239.8 3,441.5 3,476.1 3,508.0 3,564.0 3,624.3 3,684.3 6 Gross private domestic investment 1,242.7 1,383.7 1,531.2 1,535.3 1,580.3 1,594.3 1,585.4 1,636.0 V Fixed investment 1,212.7 1,315.4 1,460.0 1,461.7 1,508.9 1,543.3 1,567.8 1,599.1 8 Nonresidential 899.4 986.1 1,091.3 1,087.2 1,121.4 1,139.9 1,155.4 1,187.9 9 Structures 225.0 254.1 272.8 271.7 278.0 274.7 272.5 273.7 10 Producers' durable equipment 674.4 732.1 818.5 815.4 843.4 865.2 882.9 914.3 11 Residential structures 313.3 329.2 368.7 374.5 387.5 403.4 412.4 411.2 12 Change in business inventories 30.0 68.3 71.2 73.7 71.4 51.0 17.6 36.9 13 Nonfarm 22.2 65.6 70.9 74.7 56.2 40.9 12.8 36.1 14 Net exports of goods and services -89.0 -88.3 -149.6 -165.7 -161.2 -201.6 -245.8 -276.7 15 Exports 874.2 968.0 966.3 949.1 981.8 966.9 978.2 1,008.7 16 Imports 963.1 1,056.3 1,115.9 1,114.8 1,143.1 1,168.5 1,224.0 1,285.4 17 Government consumption expenditures and gross investment 1,421.9 1,481.0 1,529.7 1,538.7 1,554.8 1,589.1 1,605.9 1,636.4 18 Federal 531.6 537.8 538.7 539.7 546.7 557.4 561.6 569.5 19 State and local 890.4 943.2 991.0 999.0 1,008.1 1,031.8 1,044.3 1,067.0 By major type of product 20 Final sales, total 7,783.2 8,232.4 8,688.7 8,724.2 8,876.2 9,021.6 9,128.6 9,258.4 21 Goods 2,921.3 3,074.1 3,239.1 3,231.9 3,318.4 3,365.6 3,406.6 3,455.6 22 Durable 1,331.9 1,424.8 1,528.9 1,519.9 1,571.4 1,584.3 1,601.7 1,634.3 23 Nondurable 1,589.4 1,649.3 1,710.3 1,712.1 1,747.0 1,781.3 1,804.9 1,821.3 24 Services 4,191.0 4,434.7 4,664.6 4,700.4 4,747.9 4,820.7 4,885.5 4,962.8 25 Structures 670.9 723.7 785.1 791.9 809.9 835.3 836.5 839.9 26 Change in business inventories 30.0 68.3 71.2 73.7 71.4 51.0 17.6 36.9 21 Durable goods 19.1 35.6 39.0 39.8 38.6 24.1 6.3 21.4 28 Nondurable goods 10.9 32.8 32.3 33.9 32.8 27.0 11.4 15.4 MEMO 29 Total GDP in chained 1992 dollars 7,813.2 8,165.1 8,516.3 8,536.0 8,659.2 8,737.9 8,778.6 8,897.7 NATIONAL INCOME 30 Total 6,210.2 6,634.9 7,036.4 7,087.1 7,193.8 7,334.5 7,423.1 7,522.4 31 Compensation of employees 4,395.6 4,675.7 5,011.2 5,053.6 5,134.7 5,217.7 5,287.1 5,373.1 32 Wages and salaries 3,630.1 3,884.7 4,189.5 4,227.9 4,300.8 4,371.5 4,432.6 4,508.9 33 Government and government enterprises 641.0 664.4 692.8 696.7 702.8 715.8 721.3 730.6 34 Other 2,989.1 3,220.3 3,496.7 3,531.2 3,598.0 3,655.7 3,711.3 3,778.3 35 Supplement to wages and salaries 765.4 791.0 821.7 825.7 833.9 846.2 854.5 864.2 36 Employer contributions for social insurance 275.4 290.1 306.0 308.1 311.8 318.3 321.5 325.6 37 Other labor income 490.0 500.9 515.7 517.7 522.1 528.0 533.0 538.6 38 Proprietors' income1 544.7 578.6 606.1 606.4 637.1 639.9 655.3 653.6 39 Business and professional1 510.5 549.1 581.0 583.6 596.0 607.5 621.2 632.2 40 Farm1 34.3 29.5 25.1 22.9 41.1 32.5 34.1 21.4 41 Rental income of persons2 129.7 130.2 137.4 139.3 147.0 148.6 148.8 140.9 42 Corporate profits1 753.9 837.9 846.1 843.8 834.3 882.0 875.5 883.7 43 Profits before tax3 726.3 795.9 781.9 780.1 766.7 818.1 835.8 857.8 44 Inventory valuation adjustment 3.1 7.4 20.9 19.8 20.8 13.3 -13.6 -26.5 45 Capital consumption adjustment 24.4 34.6 43.3 43.9 46.9 50.6 53.2 52.4 46 Net interest 386.3 412.5 435.7 444.0 440.8 446.3 456.4 471.1 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 Q3 Q4 Ql Q2 Q3 PERSONAL INCOME AND SAVING 1 Total personal income 6,547.4 6,951.1 7,358.9 7,413.6 7,530.8 7,630.2 7,732.6 7,827.5 ?. Wage and salary disbursements 3,626.5 3,888.9 4,186.0 4,224.4 4,297.3 4,371.5 4,432.6 4,508.9 Commodity-producing industries 908.2 975.5 1,038.7 1,045.6 1,056.6 1,062.9 1,075.1 1,091.0 4 Manufacturing 673.7 718.8 757.5 762.3 765.6 767.0 774.8 787.2 Distributive industries 822.4 879.1 944.6 953.5 969.9 986.3 997.6 1,012.6 6 Service industries 1,254.9 1,369.8 1,509.9 1,528.6 1,568.0 1,606.6 1,638.5 1,674.7 7 Government and government enterprises 641.0 664.4 692.8 696.7 702.8 715.8 721.3 730.6 8 Other labor income 490.0 500.9 515.7 517.7 522.1 528.0 533.0 538.6 9 Proprietors' income1 544.7 578.6 606.1 606.4 637.1 639.9 655.3 653.6 in Business and professional1 510.5 549.1 581.0 583.6 596.0 607.5 621.2 632.2 n Farm1 34.3 29.5 25.1 22.9 41.1 32.5 34.1 21.4 17 Rental income of persons2 129.7 130.2 137.4 139.3 147.0 148.6 148.8 140.9 n Dividends 297.4 333.4 348.3 348.0 351.9 356.1 361.2 367.0 14 Personal interest income 810.6 854.9 897.8 909.3 906.4 907.4 920.5 933.4 15 Transfer payments 928.8 962.4 983.6 986.5 991.0 1,007.8 1,013.6 1,021.8 16 Old-age survivors, disability, and health insurance benefits 537.6 565.8 578.1 579.6 581.1 588.9 593.0 599.0 17 LESS: Personal contributions for social insurance 280.4 298.1 315.9 318.0 322.0 328.9 332.3 336.7 18 EQUALS: Personal income 6,547.4 6,951.1 7,358.9 7,413.6 7,530.8 7,630.2 7,732.6 7,827.5 19 LESS: Personal tax and nontax payments 869.7 968.3 1,072.6 1,088.3 1,113.0 1,124.8 1,139.4 1,160.2 20 EQUALS: Disposable personal income 5,677.7 5,982.8 6,286.2 6,325.3 6,417.8 6,505.4 6,593.2 6,667.3 21 LESS: Personal outlays 5,405.6 5,711.7 6,056.6 6,100.5 6,190.3 6,310.3 6,425.2 6,527.9 22 EQUALS: Personal saving 272.1 271.1 229.7 224.8 227.5 195.1 168.0 139.4 MEMO Per capita (chained 1992 dollars) Gross domestic product 29,428.2 30,466.8 31,471.9 31,509.8 31,882.2 32,112.8 3322,,117799..66 3322,,553322..77 24 Personal consumption expenditures 19,726.9 20,275.0 21,059.1 21,154.3 21,339.5 21,640.6 21,854.1 22,043.1 25 Disposable personal income 21,385.0 21,954.0 22,636.0 22,715.0 22,924.0 23,110.0 23,239.0 23,328.0 26 Saving rate (percent) 4.8 4.5 3.7 3.6 3.5 3.0 2.5 2.1 GROSS SAVING 27 Gross saving 1,349.3 1,521.3 1,646.0 1,664.1 1,685.4 1,727.8 1,709.5 1,739.3 28 Gross private saving 1,290.4 1,362.0 1,371.2 1,367.7 1,382.3 1,389.4 1,359.3 1,359.1 79 Personal saving 272.1 271.1 229.7 224.8 227.5 195.1 168.0 139.4 30 Undistributed corporate profits1 232.5 265.9 257.2 251.1 246.5 277.6 259.5 257.2 31 Corporate inventory valuation adjustment 3.1 7.4 20.9 19.8 20.8 13.3 -13.6 -26.5 Capital consumption allowances 3? Corporate 543.6 579.4 619.2 625.0 637.1 664455..88 665577..22 667755..44 33 Noncorporate 238.5 249.8 261.5 263.3 267.7 271.0 274.6 287.0 34 Gross government saving 58.9 159.3 274.8 296.4 303.0 338.3 350.2 380.1 35 Federal -51.5 37.7 134.3 147.1 147.8 187.2 208.3 225.9 36 Consumption of fixed capital 85.3 86.6 87.4 87.5 88.1 89.6 90.2 91.2 37 Current surplus or deficit (-), national accounts -136.8 -48.8 46.9 59.6 59.7 97.6 118.1 134.7 38 State and local 110.4 121.5 140.5 149.3 155.2 151.1 141.9 154.2 39 Consumption of fixed capital 88.9 94.0 98.8 99.4 101.1 102.4 104.3 106.0 40 Current surplus or deficit (—), national accounts 21.4 27.5 41.7 49.9 54.2 48.7 37.6 48.3 41 Gross investment 1,382.1 1,518.1 1,598.4 1,576.2 1,623.0 1,628.4 1,574.0 1,594.4 4? Gross private domestic investment 1,242.7 1,383.7 1,531.2 1,535.3 1,580.3 1,594.3 1,585.4 1,636.0 43 Gross government investment 250.2 258.1 268.7 273.5 272.6 289.8 292.2 294.8 44 Net foreign investment -110.7 -123.7 -201.5 -232.6 -229.9 -255.7 -303.7 -336.4 45 Statistical discrepancy 32.8 -3.2 -47.6 -87.9 -62.4 -99.4 -135.5 -144.8 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current Business. 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • January 2000 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 7 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 111199 --338800 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 11,,115599 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 12,124r -11,499 —657r — ll,642r 2,057r 22,,005588 11,,777744 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 Mar. Apr. May June July Aug/ Sept.p 1 Goods and services, balance -104,318 -104,731 -164,282 -19,311 -18,787 -21,390 -24,604 -24,886 -23,549 -24,408 2 Merchandise -191,270 -196,652 -246,932 -25,680 -25,334 -27,899 -31,179 -31,422 -30,132 -30,591 3 Services 86,952 91,921 82,650 6,369 6,547 6,509 6,575 6,536 6,583 6,183 4 Goods and services, exports 849,806 938,543 933,907 77,047 78,113 77,978 78,623 79,122 82,443 81,705 5 Merchandise 612,057 679,715 670,246 54,326 55,269 55,121 55,472 55,890 59,139 58,549 6 Services 237,749 258,828 263,661 22,721 22,844 22,857 23,151 23,232 23,304 23,156 7 Goods and services, imports -954,124 -1,043,273 -1,098,189 -96,358 -96,900 -99,368 -103,227 -104,008 -105,992 -106,113 8 Merchandise -803,327 -876,366 -917,178 -80,006 -80,603 -83,020 -86,651 -87,312 -89,271 -89,140 9 Services -150,797 -166,907 -181,011 -16,352 -16,297 -16,348 -16,576 -16,696 -16,721 -16,973 1. Data show monthly values consistent with quarterly figures in the U.S. balance of SOURCE. FT900, U.S. Department of Commerce, Bureau of the Census and Bureau of payments accounts. Economic Analysis. 3.12 U.S. RESERVE ASSETS Millions of dollars, end of period 1999 AAsssseett 11999966 11999977 11999988 Apr. May June July Aug. Sept. Oct. Nov.p 1 Total 75,090 69,954 81,755 73,694 72,121 71,689 73,305 72,649r 73,414 73,230 72,318 2 Gold stock, including Exchange Stabilization Fund1 11,049 11,050 11,041 11,049 11,049 11,046 11,048 11,046r 11,047 11,049 11,049 3 Special drawing rights2'3 10,312 10,027 10,603 9,634 9,784 9,719 9,925 10,152 10,284 10,232 10,326 4 Reserve position in International Monetary Fund2 15,435 18,071 24,111 23,054 21,689 21,462 21,462 19,885 19,978 19,571 18,707 5 Foreign currencies4 38,294 30,809 36,001 29,957 29,599 29,462 30,870 31,566 32,105 32,378 32,236 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 Apr. May June July Aug. Sept. Oct. Nov.p 1 Deposits 167 457 167 260 157 409 257 166 243 189 500 Held in custody 2 U.S. Treasury securities2 638,049 620,885 607,574 606,662 606,579 611,372 619,004 626,669 634,086 621,351 629,430 3 Earmarked gold3 11,197 10,763 10,343 10,340 10,340 10,329 10,329 10,271 10,155 10,114 10,015 1. Excludes deposits and U.S. Treasury securities held for international and regional 3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not organizations. included in the gold stock of the United States. 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury securities, in each case measured at face (not market) value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 International Statistics • January 2000 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1999 IItteemm 11999977 11999988 Mar. Apr. May June July Aug. Sept.p 1 Total1 776,505 759,933r 765,689 766,509r 760,410 765,708 773,494 782,508r 778,976 By type 2 Liabilities reported by banks in the United States 135,384 125,878r 124,743 135,731r 124,270 126,180 125,873 126,220r 124,348 3 U.S. Treasury bills and certificates3 148,301 134,177 141,941 135,765 136,199 138,518 147,492 153,499 152,457 U.S. Treasury bonds and notes 4 Marketable 428,004 432,127 425,046 418,350 421,573 421,970 420,197 422,590 420,794 5 Nonmarketable4 5,994 6,074 6,191 6,231 6,143 5,982 6,022 6,060 6,098 6 U.S. securities other than U.S. Treasury securities5 58,822 61,677 67,768 70,432 72,225 73,058 73,910 74,139 75,279 By area 1 Europe1 252,289 256,026 253,970 245,500 242,386 241,989 240,546 243,334 241,233 8 Canada 36,177 36,715 39,611 38,563 38,181 39,001 39,147 39,342 39,337 9 Latin America and Caribbean 96,942 79,498r 72,828 81,379 81,075 76,828 77,832 75,339r 74,475 10 400,144 400,64 r 412,353 413,991r 411,739 421,282 430,050 438,300 437,957 11 Africa 9,981 10,059 9,906 9,656 9,326 8,378 8,376 8,122 8,314 12 Other countries 7,058 3,080 3,107 3,506 3,789 4,316 3,629 4,157 3,746 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 Mar. Apr. May June July Aug.r Sept.? BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,162,148 1,283,027 l,347,771r l,337,872r l,334,719r 1,352,678r l,382,649r l,339,888r 1,385,668 1,387,565 2 Banks' own liabilities 758,998 882,980 884,873r 872,957r 880,209r 900,891r 920,125r 889,66 lr 908,116 927,332 3 Demand deposits 27,034 31,344 29,556 30,913 31,180 32,184 36,322 43,183 44,940 44,596 4 Time deposits2 186,910 198,546 152,226r 152,158r 157,680r 156,515r 156,677 156,891 155,199 156,435 5 Other1 143,510 168,011 140,245 157,083 160,670r 160,800r 152,683r 151,819r 152,163 161,587 6 Own foreign offices4 401,544 485,079 562,846 532,803r 530,679r 551,392 574,443 537,768r 555,814 564,714 7 Banks' custodial liabilities5 403,150 400,047 462,898r 464,915r 454,510r 451,787 462,524 450,227 477,552 460,233 8 U.S. Treasury bills and certificates6 236,874 193,239 183,494 192,838r 178,514r 177,768 179,351 187,872 192,096 189,030 9 Other negotiable and readily transferable instruments7 72,011 93,641 141,699r 133,311 129,051 124,100 123,246 121,567 132,405 128,914 10 Other 94,265 113,167 137,705 138,766 146,945 149,919 159,927 140,788 153,051 142,289 11 Nonmonetary international and regional organizations8 . . 13,972 11,690 1 l,883r 15,337 15,921r 14,067r 17,987 18,463 18,468 18,646 12 Banks' own liabilities 13,355 11,486 10,850 14,621 15,184r 13,320r 16,002 16,964 17,056 17,726 13 Demand deposits 29 16 172 194 13 25 49 66 31 21 14 Time deposits2 5,784 5,466 5,793 6,856 6,324 5,840 7,231 7,380 6,419 7,370 15 Other' 7,542 6,004 4,885 7,571 8,847r 7,455r 8,722 9,518 10,606 10,335 16 Banks' custodial liabilities5 617 204 l,033r 716 737 747 1,985 1,499 1,412 920 17 U.S. Treasury bills and certificates6 352 69 636 548 555 616 956 953 896 661 18 Other negotiable and readily transferable instruments7 265 133 397r 168 182 131 1,029 533 516 259 19 Other 0 2 0 0 0 0 0 13 0 0 20 Official institutions9 312,019 283,685 260,055r 266,684 271,496r 260,469 264,698 273,365 279,719 276,805 21 Banks' own liabilities 79,406 102,028 80,251 76,996 86,00 lr 79,452 78,445 80,400 77,801 76,980 22 Demand deposits 1,511 2,314 3,003 3,393 3,599 2,789 2,952 2,652 2,537 2,932 23 Time deposits2 33,336 41,396 29,602 23,840 29,049r 27,372 26,643 26,845 24,856 25,301 24 Other3 44,559 58,318 47,646 49,763 53,353 49,291 48,850 50,903 50,408 48,747 25 Banks' custodial liabilities5 232,613 181,657 179,804r 189,688 185,495 181,017 186,253 192,965 201,918 199,825 26 U.S. Treasury bills and certificates6 198,921 148,301 134,177 141,941 135,765 136,199 138,518 147,492 153,499 152,457 27 Other negotiable and readily transferable instruments7 33,266 33,151 44,953r 47,174 49,443 44,586 47,582 45,094 48,297 46,633 28 Other 426 205 674 573 287 232 153 379 122 735 29 Banks10 694,835 815,247 885,047 851,791r 848,313r 881,368 910,025r 853,184 888,328 881,993 30 Banks' own liabilities 562,898 641,447 675,998 648,795r 646,602r 676,341 695,25 lr 656,403 676,931 692,334 31 Unaffiliated foreign banks 161,354 156,368 113,152 115,992 115,923r 124,949 120,808r 118,635r 121,117 127,620 32 Demand deposits 13,692 16,767 14,071 13,985 13,344 15,957 15,812 14,086 15,436 14,087 33 Time deposits2 89,765 83,433 46,219 49,101 50,206 49,217r 47,998 49,540 49,872 49,667 34 Other3 57,897 56,168 52,862 52,906 52,373r 59,775r 56,998r 55,009r 55,809 63,866 35 Own foreign offices4 401,544 485,079 562,846 532,803r 530,679r 551,392 574,443 537,768r 555,814 564,714 36 Banks' custodial liabilities5 131,937 173,800 209,049 202,996 201,711 205,027 214,774 196,781 211,397 189,659 37 U.S. Treasury bills and certificates6 23,106 31,915 35,359 36,737 29,636 28,323 27,757 28,284 26,314 24,749 38 Other negotiable and readily transferable instruments7 17,027 35,393 45,102 37,304 34,959 35,580 36,983 37,459 41,541 40,370 39 Other 91,804 106,492 128,588 128,955 137,116 141,124 150,034 131,038 143,542 124,540 40 Other foreigners 141,322 172,405 190,786r 204,060r 198,989r 196,774 189,939r 194,876r 199,153 210,121 41 Banks' own liabilities 103,339 128,019 117,774r 132,545r 132,422r 131,778 130,427r 135,894r 136,328 140,292 42 Demand deposits 11,802 12,247 12,310 13,341 14,224 13,413 17,509 26,379 26,936 27,556 43 Time deposits2 58,025 68,251 70,612r 72,36 lr 72,101r 74,086 74,805 73,126 74,052 74,097 44 Other3 33,512 47,521 34,852 46,843 46,097r 44,279 3 8,113r 36,389r 35,340 38,639 45 Banks' custodial liabilities5 37,983 44,386 73,012 71,515r 66,567r 64,996 59,512 58,982 62,825 69,829 46 U.S. Treasury bills and certificates6 14,495 12,954 13,322 13,612r 12,558r 12,630 12,120 11,143 11,387 11,163 47 Other negotiable and readily transferable instruments7 21,453 24,964 51,247 48,665 44,467 43,803 37,652 38,481 42,051 41,652 48 Other 2,035 6,468 8,443 9,238 9,542 8,563 9,740 9,358 9,387 17,014 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 14,573 16,083 27,026 23,035 21,718 24,141 22,569 21,811 22,565 24,367 1. Reporting banks include all types of depository institutions as well as some brokers and 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official dealers. Excludes bonds and notes of maturities longer than one year. institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in "Other negotia- 7. Principally bankers acceptances, commercial paper, and negotiable time certificates of ble and readily transferable instruments." deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the Inter- 4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiar- American Development Bank, and the Asian Development Bank. Excludes "holdings of ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory dollars" of the International Monetary Fund. agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists 9. Foreign central banks, foreign central governments, and the Bank for International principally of amounts owed to the head office or parent foreign bank, and to foreign Settlements. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. 10. Excludes central banks, which are included in "Official institutions." 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks for foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • January 2000 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1999 IItteemm 11999966 11999977 11999988 Mar. Apr. May June July Aug. Sept.p AREA 50 Total, all foreigners 1,162,148 1,283,027 l,347,771r 1,337,872r l,334,719r l,352,678r l,382,649r l,339,888r l,385,668r 1,387,565 51 Foreign countries 1,148,176 1,271,337 l,335,888r 1,322,535r l,318,798r 1,338,611 l,364,662r l,321,425r l,367,200r 1,368,919 52 Europe 376,590 419,672 427,367 418,437' 409,543' 434,124 430,580 438,232 450,827' 454,733 53 Austria 5,128 2,717 3,178 3,274 2,428 2,224 2,678 2,770 3,210 3,459 54 Belgium and Luxembourg 24,084 41,007 42,818 41,468 37,991 39,227 31,298 31,242 34,834 33,434 55 Denmark 2,565 1,514 1,437 1,992 1,300 1,267 961 1,143 1,811 1,903 56 Finland 1,958 2,246 1,862 1,800 1,655 1,645 1,384 1,358 1,335 1,222 57 France 35,078 46,607 44,616 47,937 49,097 48,328 45,235 42,622 42,424 45,808 58 Germany 24,660 23,737 21,357 23,747 18,575 24,689 21,999 23,950 23,719 24,477 59 Greece 1,835 1,552 2,066 2,447 2,237 2,691 2,737 3,168 3,121 3,358 60 Italy 10,946 11,378 7,103 5,744 5,910 5,943 6,192 6,426 5,840 6,231 61 Netherlands 11,110 7,385 10,793 12,273 11,037 11,752 12,152 12,206 11,292 11,638 62 Norway 1,288 317 710 1,022 1,181 1,210 1,049 1,184 1,333 1,225 63 Portugal 3,562 2,262 3,235 2,237 2,277 2,461 2,439 2,237 1,912 1,976 64 Russia 7,623 7,968 2,439 2,500 2,693 2,794 2,871 2,756 2,665 2,816 65 Spain 17,707 18,989 15,775 9,336 11,075 8,083 8,678 7,700 8,194 9,479 66 Sweden 1,623 1,628 3,027 2,193 1,974 3,429 2,966 3,851 3,779 4,571 67 Switzerland 44,538 39,023 50,654 47,874 54,551' 66,214 65,967 60,758 76,176' 70,353 68 Turkey 6,738 4,054 4,286 5,639 5,783' 5,810 5,914 7,786 7,883 8,368 69 United Kingdom 153,420 181,904 181,554 175,303' 169,826' 178,015 187,310 200,038 192,431 196,459 70 Yugoslavia11 206 239 233 274 221 242 254 289 270 266 71 Other Europe and other former U.S.S.R.12 22,521 25,145 30,224 31,377 29,732 28,100 28,496 26,748 28,598 27,690 72 Canada 38,920 28,341 30,212 31,788 28,360 28,543 30,416' 29,862' 30,409' 29,698 73 Latin America and Caribbean 467,529 536,393 554,808r 551,709' 578,156' 591,047 610,201' 554,346 581,338' 581,398 74 Argentina 13,877 20,199 19,013 16,891 18,349 16,428 17,804 17,202 17,061 15,544 75 Bahamas 88,895 112,217 118,085 119,206' 118,648' 118,122 123,549' 122,465 132,442 139,101 76 Bermuda 5,527 6,911 6,846r 7,514 6,957 7,951 9,168 9,410 9,319 8,747 77 Brazil 27,701 31,037 15,800 13,841 17,128 17,295 14,696 15,389 15,399' 16,208 78 British West Indies 251,465 276,418 302,472 300,109 322,011 334,386 347,368 294,208 315,799 310,904 79 Chile 2,915 4,072 5,010 5,057 6,805 7,236 5,918 6,744 5,805 6,601 80 Colombia 3,256 3,652 4,616 4,636 4,710 4,861 4,615 4,634 4,452' 4,708 81 Cuba 21 66 62 63 64 64 70 70 72 76 82 Ecuador 1,767 2,078 1,572 1,606 1,688 1,800 1,930 1,975 1,724 1,792 83 Guatemala 1,282 1,494 1,333 1,392 1,386 1,449 1,468 1,425 1,521 1,471 84 Jamaica 628 450 577' 551 534 547 527 471 533 550 85 Mexico 31,240 33,972 37,148 36,621' 36,004 37,588 37,920 39,024 36,301' 35,028 86 Netherlands Antilles 6,099 5,085 5,010 7,256 5,633 3,853 5,662 3,012 3,408 2,927 87 Panama 4,099 4,241 3,864 4,196 3,974 3,984 4,130 3,844 3,816 4,029 88 Peru 834 893 840 810 819 854 816 836 994' 1,041 89 Uruguay 1,890 2,382 2,486 2,378 2,345 2,331 2,552 2,319 2,147' 2,175 90 Venezuela 17,363 21,601 19,894 19,149 20,512 21,204 20,393 20,437 19,796 19,446 91 Other 8,670 9,625 10,180r 10,433 10,589' 11,094 11,615 10,881 10,749' 11,050 92 249,083 269,379 307,960r 305,525' 228877,,772233'' 226699,,002266 227766,,991177 228833,,221188 228888,,997744'' 228877,,119977 China 93 Mainland 30,438 18,252 13,441' 13,996 16,350 14,753 13,366 10,872 12,359 11,914 94 Taiwan 15,995 11,840 12,708 13,183 12,641 10,795 11,408 12,482 12,678 12,544 95 Hong Kong 18,789 17,722 20,900 27,631' 26,338' 25,728 24,575 24,200 24,149' 23,368 96 India 3,930 4,567 5,250 6,189 5,979 5,520 5,421 5,864 5,408 5,625 97 Indonesia 2,298 3,554 8,282 6,675 7,434 6,211 6,530 7,309 6,633 6,468 98 Israel 6,051 6,281 7,749 8,246 7,037 7,004 6,144 5,076 5,059 5,688 99 Japan 117,316 143,401 168,563 161,887 142,326 132,605 143,635 145,652 145,403' 149,518 100 Korea (South) 5,949 13,060 12,524' 11,141 10,003' 11,387 12,901 12,792 12,723' 11,903 101 Philippines 3,378 3,250 3,324 2,362 2,440 2,492 2,273 2,177 2,189 2,414 102 Thailand 10,912 6,501 7,359 6,588 6,296 5,739 5,296 6,054 5,809 5,281 103 Middle Eastern oil-exporting countries13 16,285 14,959 15,609 15,433 14,497 15,453 15,168 15,581 15,942' 14,367 104 Other 17,742 25,992 32,251 32,194 36,382 31,339 30,200 35,159 40,622' 38,107 105 Africa 8,116 10,347 8,905 8,463 7,874 7,713 7,485 7,508 7,660 8,065 106 Egypt 2,012 1,663 1,339 1,758 1,599 1,339 1,576 1,566 1,851 1,852 107 Morocco 112 138 97 85 90 72 101 116 108 118 108 South Africa 458 2,158 1,522 1,258 1,165 1,132 1,091 1,049 885' 753 109 Zaire 10 10 5 9 4 12 16 13 13 13 110 Oil-exporting countries14 2,626 3,060 3,088 2,772 2,534 2,508 2,247 2,281 2,510' 2,808 ill Other 2,898 3,318 2,854 2,581 2,482 2,650 2,454 2,483 2,293' 2,521 112 Other 7,938 7,205 6,636 6,613 7,142 8,158 9,063 8,259 7,992' 7,828 113 Australia 6,479 6,304 5,495 5,582 5,987 6,820 7,624 7,252 6,963 6,789 114 Other 1,459 901 1,141 1,031 1,155 1,338 1,439 1,007 1,029' 1,039 115 Nonmonetary international and regional organizations . . 13,972 11,690 11,883' 15,337 15,921' 14,067' 17,987 18,463 18,468' 18,646 116 International15 12,099 10,517 10,221 12,845 13,494' 11,759' 1144,,998877 15,822 16,312' 16,570 117 Latin American regional16 1,339 424 594 1,394 1,304 653 889988 819 725' 662 118 Other regional17 534 749 1,068' 1,098 1,123 1,655 2,102 1,822 1,431 1,414 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 Mar. Apr.r Mayr Juner Julyr Aug.r Sept.p 1 Total, all foreigners 599,925 708,225 735,058r 710,938r 735,992 750,581 750,859 720,597 730,753 757,702 2 Foreign countries 597,321 705,762 731,441r 706,318r 730,739 746,094 746,786 716,190 727,597 754,112 3 Europe 165,769 199,880 233,320r 226,489r 236,299 265,789 299,977 292,697 305,072 316,073 4 Austria 1,662 1,354 1,043 2,759 2,389 2,902 2,514 3,855 3,080 2,335 5 Belgium and Luxembourg 6,727 6,641 7,187 5,451 7,533 9,811 10,028 9,214 7,463 7,229 6 Denmark 492 980 2,383 1,619 2,297 2,141 1,901 1,763 1,442 1,756 7 Finland 971 1,233 1,070 1,351 1,349 1,480 1,730 2,197 1,915 1,855 8 France 15,246 16,239 15,251 15,227r 15,942 15,800 18,253 19,944 18,969 19,128 9 Germany 8,472 12,676 15,923r 16,873r 17,188 18,367 20,793 23,965 23,558 22,996 in Greece 568 402 575 554 651 585 551 628 659 662 11 Italy 6,457 6,230 7,283 6,045r 6,727 6,434 6,783 7,451 7,747 7,957 1? Netherlands 77,,111177 6,141 5,697' 6,690 7,251 8,588 8,724 9,334 10,132 9,425 1 1 3 4 N Po o r r t w ug ay al 4 88 1 00 8 88 51515 1 8 6 2 6 7 9 1, 5 2 9 0 6 5 1, 9 0 7 6 0 0 1, 7 1 5 3 3 4 1, 7 1 1 2 7 2 1, 8 0 2 5 1 6 1, 5 2 8 2 3 2 1 1 , , 2 3 5 4 2 2 15 Russia 1,669 1,248 789 971 787 1,016 768 831 782 814 16 Spain 3,211 2,942 5,735 3,041 2,949 4,516 6,178 4,606 3,700 5,107 17 Sweden 1,739 1,854 4,223 4,439 4,141 2,950 3,005 3,199 4,082 4,184 18 Switzerland 19,798 -28,846 46,874r 51,670r 48,468 65,488 75,544 66,927 71,866 90,187 19 Turkey 1,109 1,558 1,982 2,078 1,943 1,918 2,288 2,219 2,268 2,383 ?n United Kingdom 85,234 103,143 106,349 97,286r 105,248 112,946 130,859 125,262 137,636 129,293 21 Yugoslavia2 115 52 53 54 55 54 54 50 49 50 22 Other Europe and other former U.S.S.R.3 3,956 7,009 9,407 8,580 9,351 8,906 8,165 9,375 7,919 8,118 23 Canada 26,436 27,189 47,036r 41,245r 40,726 41,116 37,454 31,957 32,109 36,460 ?4 Latin America and Caribbean 274,153 343,730 342,720r 341,482r 365,185 352,496 326,063 311,721 310,159 320,973 75 Argentina 7,400 8,924 9,553 10,399 10,075 10,318 10,776 10,482 10,257 10,274 76 Bahamas 71,871 89,379 96,455 88,657r 84,023 78,480 71,996 77,049 77,674 85,403 27 Bermuda 4,129 8,782 5,01 lr 4,096 4,426 6,276 6,111 7,813 9,747 8,481 78 Brazil 17,259 21,696 16,213r 15,165r 14,803 14,893 14,870 14,629 13,844 14,010 79 British West Indies 105,510 145,471 153,749r 162,891r 193,351 184,978 166,508 146,859 137,212 142,502 3n Chile 5,136 7,913 8,255r 8,082 7,810 7,545 7,531 7,153 6,900 6,808 31 Colombia 6,247 6,945 6,523 6,223r 6,106 5,877 5,570 5,590 5,046 4,818 37 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 1,031 1,311 1,400 1,219 1,135 1,104 1,069 993 889 844 34 Guatemala 620 886 1,127 1,052 1,062 1,157 1,033 1,075 1,053 1,064 35 Jamaica 345 424 239 318 326 327 303 311 322 330 36 Mexico 18,425 19,428 21,227r 20,568r 19,470 19,316 18,638 18,978 17,819 18,248 37 Netherlands Antilles 25,209 17,838 6,779 6,661 5,711 5,867 5,484 5,101 14,032 13,298 38 Panama 2,786 4,364 3,584 3,320 4,329 3,298 3,353 3,064 2,898 2,940 39 Peru 2,720 3,491 3,275r 3,232 3,111 3,053 2,975 2,710 2,516 2,531 40 Uruguay 589 629 1,126 838 772 724 1,050 1,105 1,049 946 41 Venezuela 1,702 2,129 3,089 3,506 3,138 3,245 3,479 3,501 3,460 3,330 42 Other 3,174 4,120 5,115r 5,255r 5,537 6,038 5,317 5,308 5,441 5,146 43 122,478 125.092 98,606r 88,119r 79,297 77,699 74,693 72,240 72,942 72,326 China 44 Mainland 1,401 1,579 l,261r 3,348r 3,421 3,006 3,745 3,144 2,758 2,032 45 Taiwan 1,894 922 1,041 1,331 866 763 870 904 937 790 46 Hong Kong 12,802 13,991 9,080 8,024r 6,309 4,977 7,102 5,333 4,969 5,224 47 India 1,946 2,200 1,440 1,701 1,703 1,458 1,569 1,708 1,728 1,736 48 Indonesia 1,762 2,651 l,942r 1,897 1,911 2,061 1,760 1,791 1,711 1,689 49 Israel 633 768 1,166 1,082 803 1,236 1,955 1,433 1,669 951 5n Japan 59,967 59,549 46,712 40,03 r 32,703 30,664 27,093 25,900 26,226 27,978 51 Korea (South) 18,901 18,162 8,289r 9,170r 11,160 12,326 11,317 12,753 12,194 11,064 52 Philippines 1,697 1,689 1,465 1,540 1,546 1,808 1,669 1,380 1,279 1,491 53 Thailand 2,679 2,259 l,807r 1,720 1,732 1,623 1,850 1,683 1,549 1,467 54 Middle Eastern oil-exporting countries4 10,424 10,790 16,130 12,151 11,669 10,569 10,127 9,396 10,906 11,250 55 Other 8,372 10,532 8,273 6,124 5,474 7,208 5,636 6,815 7,016 6,654 5161 A frica 2, 2 7 4 7 7 6 3, 2 5 4 3 7 0 3,1 2 2 5 2 7 2,9 2 3 60 8 2,6 22 8 8 8 2,4 22 4 1 8 2,6 2 2 4 9 1 2, 2 4 5 9 2 9 2,1 2 7 0 8 9 2, 2 2 2 9 5 3 58 Morocco 524 511 372 422 463 444 454 431 444 437 59 South Africa 584 805 643 798 567 640 724 598 449 506 60 Zaire 0 0 0 0 0 0 0 0 0 0 61 Oil-exporting countries5 420 1,212 936 325 257 288 340 297 280 323 62 Other 1,001 755 914 1,133 1,173 855 870 921 796 802 6 6 4 3 Ot A he u r s tralia A5,7,0591 1 5 6 , , 3 3 0 4 0 1 6 6 , , 1 6 7 3 3 7 r r 5 6 , , 6 0 3 4 8 5 6 6 , , 0 5 6 4 0 4 6 6 , , 0 5 9 4 3 6 5 5 , , 6 9 3 7 6 0 4 5 , , 8 0 1 7 1 6 4 5 , , 9 1 0 3 7 7 5 5 , , 7 9 7 8 0 7 65 Other 1,132 1,041 464 407 484 453 334 265 230 217 66 Nonmonetary international and regional organizations6. . . 2,604 2,463 3,617 4,620 5,253 4,487 4,073 4,407 3,156 3,590 1. Reporting banks include all types of depository institutions as well as some brokers and 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab dealers. Emirates (Trucial States). 2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 5. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Includes the Bank for International Settlements. Since December 1992, has included all 6. Excludes the Bank for International Settlements, which is included in "Other Europe." parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • January 2000 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 11999988RR Mar.r Apr/ Mayr Juner July' Aug/ Sept.p 1 Total 743,919 852,852 875,920 862,902 898,428 2 Banks' claims 599,925 708,225 735,058 710,938 735,992 750,581 750,859 720,597 730,753 757,702 3 Foreign public borrowers 22,216 20,581 23,540 34,752 35,787 36,616 37,344 38,465 35,689 34,997 4 Own foreign offices2 341,574 431,685 484,525 468,018 485,425 492,192 488,803 460,268 457,574 487,456 5 Unaffiliated foreign banks 113,682 109,230 106,281 94,029 93,733 99,864 104,102 99,715 108,931 102,017 6 Deposits 33,826 30,995 27,196 25,040 23,938 25,234 24,164 24,859 23,915 24,556 7 Other 79,856 78,235 79,085 68,989 69,795 74,630 79,938 74,856 85,016 77,461 8 All other foreigners 122,453 146,729 120,712 114,139 121,047 121,909 120,610 122,149 128,559 133,232 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 33,038 33,474 31,210 29,165 32,857 32,336 27,750 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 281342 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 17 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 Asia 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 20 Spain 11.6 13.2 15.4 13.9 11.7 16.5 15.2 17.5 13.6 14.3 15.8 71 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 7.3 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 25 OPEC2 22.1 19.7 22.3 22.9 26.0 25.7 25.3 25.9 27.1 26.0 25.9 7.6 Ecuador .7 1.1 .9 1.2 1.3 1.3 1.2 1.2 1.2 1.1 1.0 27 Venezuela 2.7 2.4 2.1 2.2 2.5 3.3 3.2 3.1 3.2 3.4 3.1 7.8 Indonesia 4.8 5.2 5.6 6.5 6.7 5.5 5.1 4.7 4.8 4.5 4.9 29 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 Oifshore 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 67 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 • January 2000 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 11,,335511 1,495 11,,552288 11,,336699 21 Bahamas 59 236 141 17 6 11 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 33,,333377 3,035 29 Middle Eastern oil-exporting countries1 27 25 27 18 0 0 0 11 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 countries1 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 J. 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 countries' 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 countries2 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 • January 2000 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1999 1999 Transaction, and area or country 1997 1998 Jan.- Sept. Mar. Apr. May' June' July' Aug.' Sept.P U.S. corporate securities STOCKS 1 Foreign purchases 1,097,958 1,574,185 1,626,045 179,801' 222,900' 185,646 179,785 188,099 178,428 175,555 2 Foreign sales 1,028,361 1,524,189 1,553,504 176,840' 205,307' 177,108 167,878 179,783 166,212 172,173 3 Net purchases, or sales (—) 69,597 49,996 72,541 2,961r 17,593r 8,538 11,907 8,316 12,216 3,382 4 Foreign countries 69,754 50,376 72,547 2,961r 17,577r 8,549 11,893 8,361 12,225 3,367 5 Europe 62,688 68,124 66,412 6,563 11,493 5,260 7,663 6,171 9,568 7,243 6 France 6,641 5,672 3,168 1,199 534 -206 919 -55 269 146 7 Germany 9,059 9,195 7,627 480 1,814 971 1,376 -354 1,322 111 8 Netherlands 3,831 8,249 4,914 1,103 417 738 1,181 404 566 -537 9 Switzerland 7,848 5,001 5,180 1,551 1,934 481 1,452 -2,822 827 1,185 10 United Kingdom 22,478 23,952 32,036 575 3,758 1,822 1,300 8,498 4,578 4,779 11 Canada -1,406 -4,689 988 723 -129 -159 401 153 -50 -927 12 Latin America and Caribbean 5,203 760 5,356 -1,341' 5,596' 2,049 2,474 2,935 846 -4,687 13 Middle East1 383 -1,449 -319 298 -355 419 64 -273 174 -26 14 Other Asia 2,072 -12,347 -985 -3,257 905 574 1,271 -671 1,666 1,463 lb Japan 4,787 -1,171 3,187 -1,925 1,458 464 681 -452 1,269 2,652 16 Africa 472 639 412 87 37 138 81 14 -39 61 17 Other countries 342 -662 683 -112 30 268 -61 32 60 240 18 Nonmonetary international and regional organizations -157 -380 -6 0 16 -11 14 -45 -9 15 BONDS2 19 Foreign purchases 610,116 905,782 641,321 77,101 70,044 66,558 67,569 75,778 64,113 76,270 20 Foreign sales 475,958 727,044 454,837 52,331 47,516 49,145 52,197 47,984 46,667 48,902 21 Net purchases, or sales (—) 134,158 178,738 186,484 24,770 22,528 17,413 15,372 27,794 17,446 27,368 22 Foreign countries 133,595 179,081 185,932 24,974 22,468 17,326 15,383 27,520 17,473 27,037 23 Europe 71,631 130,057 105,118 12,832 10,527 10,911 9,553 18,196 10,208 13,724 24 France 3,300 3,386 1,496 22 -36 352 258 447 160 24 25 Germany 2,742 4,369 5,313 190 -43 797 321 1,707 -77 752 26 Netherlands 3,576 3,443 2,027 418 106 168 187 336 144 279 2/ Switzerland 187 4,826 3,302 272 467 128 -26 705 322 496 28 United Kingdom 54,134 99,637 78,568 9,268 8,617 8,310 7,651 13,582 7,960 99,,776666 29 Canada 6,264 6,121 3,302 640 319 413 184 -23 286 990088 30 Latin America and Caribbean 34,733 23,938 43,730 5,203 5,967 3,382 4,603 5,088 5,558 5,490 31 Middle East1 2,155 4,997 1,998 859 364 -717 -114 -182 -219 257 32 Other Asia 16,996 12,662 30,174 5,132 4,904 3,224 1,458 4,031 1,179 6,698 33 Japan 9,357 8,384 11,062 589 1,215 0 310 3,020 827 4,375 34 Africa 1,005 190 665 261 331 82 -307 122 59 -189 35 Other countries 811 1,116 945 47 56 31 6 288 402 149 36 Nonmonetary international and regional organizations 563 -343 552 -204 60 87 -11 274 -27 331 Foreign securities 37 Stocks, net purchases, or sales (—) -40,942 6,227 21,728 1,783' 5,503' 2,455 6,220 -2,236 594 1,058 38 Foreign purchases 756,015 929,923 825,442 95,302' 98,607' 86,345 97,622 106,264 91,851 97,463 39 Foreign sales 796,957 923,696 803,714 93,519' 93,104' 83,890 91,402 108,500 91,257 96,405 40 Bonds, net purchases, or sales (—) -48,171 -17,350 -7,592 1,710 -5,147 -499 8,969 -4,777 -6,421 1,132 41 Foreign purchases 1,451,704 1,328,281 623,857 76,129 73,376 72,372 79,013 63,975 70,061 66,661 42 Foreign sales 1,499,875 1,345,631 631,449 74,419 78,523 72,871 70,044 68,752 76,482 65,529 43 Net purchases, or sales (—), of stocks and bonds .... -89,113 -11,123 14,136 3,493r 356r 1,956 15,189 -7,013 -5,827 2,190 44 Foreign countries -88,921 -10,778 13,823 3,533r 474r 2,056 15,219 -7,104 -6,010 2,260 45 Europe -29,874 12,632 49,796 14,026' 9,710 5,845 16,749 -3,759 -1,829 2,217 46 Canada -3,085 -1,901 -1,003 -131 -449 -537 1,202 -1,055 525 303 47 Latin America and Caribbean -25,258 -13,798 -9,678 -3,660' -4,433' -2,351 -2,785 445 -299 601 48 Asia -25,123 -3,992 -24,146 -7,155 -3,946 -494 194 -3,330 -4,303 -210 49 Japan -10,001 -1,742 -25,582 -7,250 -3,445 -704 -1,241 -4,323 -4,805 -565 50 Africa -3,293 -1,225 -45 -16 20 112 -25 -21 4 -116 51 Other countries -2,288 -2,494 -1,101 469 -428 -519 -116 616 -108 -535 52 Nonmonetary international and regional organizations -192 -345 313 -40 -118 -100 -30 91 183 -70 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 Jan.- Mar. Apr. May June July Aug. Sept.p Sept. 1 Total estimated 184,171 49,039 -1,256 1,532 -3,271 5,638 -609 -6,242 19,118 87 2 Foreign countries 183,688 46,570 -1,387 1,762 -3,257 5,316 -815 -6,226 18,847 -4 3 Europe 144,921 23,797 -40,937 1,342 -15,394 -3,997 -5,796 -5,740 1,771 -9,268 4 Belgium and Luxembourg 3,427 3,805 1,425 -54 476 121 753 37 105 12 5 Germany 22,471 144 1,090 428 -653 -290 538 643 1,438 -963 6 Netherlands 1,746 -5,533 1,364 197 -256 797 -77 -1,224 453 -423 7 Sweden -465 1,486 1,019 386 -462 -21 579 -229 876 -45 8 Switzerland 6,028 5,240 -3,677 -1,457 -302 -121 971 -216 -714 234 9 United Kingdom 98,253 14,384 -20,734 1,129 -6.672 -4,528 -7,215 1,385 1,934 -3,534 10 Other Europe and former U.S.S.R 13,461 4,271 -21,424 713 -7,525 45 -1,345 -6,136 -2,321 -4,549 11 Canada -811 615 8,336 213 1,205 2,580 460 1,382 1,339 1,459 12 Latin America and Caribbean -2,554 -3,662 6,994 1,100 5,200 1,364 -1,403 693 8,695 3,003 13 Venezuela 655 59 216 -445 2 88 -31 131 15 10 14 Other Latin America and Caribbean -549 9,523 1,495 -2,570 3,654 -123 -52 -43 1,650 2,982 15 Netherlands Antilles -2,660 -13,244 5,283 4,115 1,544 1,399 -1,320 605 7,030 11 16 39,567 27,433 25,329 -1,714 5,973 5,631 6,489 -2,319 6,832 5,344 17 Japan 20,360 13,048 15,873 -1,311 6,475 1,284 4,905 -394 2,913 5,259 18 Africa 1,524 751 -1,598 -52 -11 -198 -246 -178 -622 -302 19 Other 1,041 -2,364 489 873 -230 -64 -319 -64 832 -240 20 Nonmonetary international and regional organizations 483 2,469 131 -230 -14 322 206 -16 271 91 21 International 621 1,502 -194 -206 15 223 -8 -101 233 98 22 Latin American regional 170 199 670 -5 0 122 192 191 175 -9 MEMO 23 Foreign countries 183,688 46,570 -1,387 1,762 -3,257 5,316 -815 -6,226 18,847 -4 24 Official institutions 43,959 4,123 -11,333 -4,845 -6,696 3,223 397 -1,773 2,393 -1,796 25 Other foreign 139,729 42,447 9,946 6,607 3,439 2,093 -1,212 -4,453 16,454 1,792 Oil-exporting countries 26 Middle East2 7,636 -16,554 7,612 1,478 65 2,887 238 -38 130 401 27 -12 2 1 0 0 0 0 0 1 0 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • January 2000 3.28 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE US. DOLLAR1 Currency units per dollar except as noted 1999 Item June July Aug. Sept. Oct. Nov. Exchange Rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 78.28 74.37 62.91 65.63 65.62 64.46 64.95 65.09 63.88 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 1.7669 1.8023 1.8859 1.8987 1.9688 1.9314 5 Canada/dollar 1.3638 1.3849 1.4836 1.4695 1.4890 1.4932 1.4771 1.4776 1.4674 6 China, P.R./yuan 8.3389 8.3193 8.3008 8.2780 8.2776 8.2772 8.2774 8.2775 8.2782 7 Denmark/krone 5.8003 6.6092 6.7030 7.1643 7.1792 7.0144 7.0828 6.9450 7.2019 8 European Monetary Union/euro' n.a. n.a. n.a. 1.0377 1.0370 1.0605 1.0497 1.0706 1.0328 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 240.82 273.28 295.70 312.49 313.52 307.84 311.68 307.71 318.24 13 Hong Kong/dollar 7.7345 7.7431 7.7467 7.7575 7.7603 7.7638 7.7665 7.7696 7.7718 14 India/rupee 35.51 36.36 41.36 43.21 43.36 43.50 43.60 43.55 43.46 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 108.78 121.06 130.99 120.72 119.33 113.23 106.88 105.97 104.65 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 9.515 9.370 9.398 9.341 9.575 9.416 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 53.25 52.61 52.59 52.30 51.42 51.22 22 Norway/krone 6.4594 7.0857 7.5521 7.8749 7.9029 7.8036 7.8361 7.7402 7.9367 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 1.7107 1.6958 1.6787 1.6965 1.6757 1.6699 25 South Africa/rand 4.3011 4.6072 5.5417 6.0880 6.1182 6.1302 6.0563 6.1029 6.1424 26 South Korea/won 805.00 947.65 1,400.40 1,168.91 1,189.10 1,198.31 1,201.00 1,205.29 1,176.98 27 Spain/peseta 126.68 146.53 149.41 n.a. n.a. n.a. n.a. n.a. n.a. 28 Sri Lanka/rupee 55.289 59.026 65.006 71.211 71.912 71.868 71.942 71.747 72.040 29 Sweden/krona 6.7082 7.6446 7.9522 8.5065 8.4431 8.2589 8.2264 8.1492 8.3586 30 Switzerland/franc 1.2361 1.4514 1.4506 1.5374 1.5474 1.5093 1.5262 1.4896 1.5543 31 Taiwan/dollar 27.468 28.775 33.547 32.525 32.338 32.076 31.848 31.828 31.794 32 Thailand/baht 25.359 31.072 41.262 36.926 37.143 38.060 40.060 39.416 38.749 33 United Kingdom/pound2 156.07 163.76 165.73 159.50 157.51 160.58 162.47 165.72 162.05 34 Venezuela/bolivar 417.19 488.39 548.39 603.29 611.17 615.95 625.41 630.75 634.80 Indexes4 NOMINAL 35 Broad (January 1997 = 100)5 97.40 104.44 116.48 117.93 117.97 117.00 116.38 115.88 116.08 36 Major currencies (March 1973 = 100)6 84.60 91.24 95.79 96.07 96.31 94.31 92.92 91.94 92.87 H Other important trading partners (January 1997= 100)7 98.26 104.67 126.03 129.03 128.73 129.73 130.60 131.06 129.93 REAL 38 Broad (March 1973 = 100)5 86.72 91.33r 99.35r 99.61 99.91 99.04 98.49r 97.91' 97.76 39 Major currencies (March 1973= 100)6 84.95r 92.25r 97.25r 98.61 99.19 97.13r 95.91 94.93r 95.89 40 Other important trading partners (March 1973 = 100)7 94.69 95.87 108.50 107.25 107.18 107.90 108.25r 108.20r 106.46 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 4. The December 1999 Bulletin contains 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 1999 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 All March 31, 1999 August 1999 A72 June 30, 1999 November 1999 A72 Pro forma balance sheet and income statements for priced service operations March 31, 1999 July 1999 A64 June 30, 1999 October 1999 A64 September 30, 1999 January 2000 A64 Residential lending reported under the Home Mortgage Disclosure Act 1997 September 1998 A64 1998 September 1999 A64 Disposition of applications for private mortgage insurance 1997 September 1998 A72 1998 September 1999 A73 Small loans to businesses and farms 1997 September 1998 A76 1998 September 1999 A76 Community development lending reported under the Community Reinvestment Act 1997 September 1998 A79 1998 September 1999 A79 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Special Tables • January 2000 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES A. Pro forma balance sheet Millions of dollars Item Sept. 30, 1999 Sept. 30, 1998 Short-term assets (Note 1) Imputed reserve requirement on clearing balances 680.5 655.7 Investment in marketable securities 6.124.5 5,901.3 Receivables 70.7 68.6 Materials and supplies 4.3 4.5 Prepaid expenses 21.0 17.1 Items in process of collection 3.532.6 4,169.0 Total short-term assets 10,433.7 10,816.4 Long-term assets (Note 2) Premises 418.8 396.4 Furniture and equipment 145.7 126.0 Leases and leasehold improvements 40.9 22.9 Prepaid pension costs 516.4 415.5 Total long-term assets 1,121.8 960.9 Total assets 11,555.5 11,777.3 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 7.076.8 6,146.8 Deferred-availability items 3.260.9 4,579.2 Short-term debt 96.0 90.4 Total short-term liabilities 10,433.7 10,816.4 Long-term liabilities Obligations under capital leases 0.0 0.0 Long-term debt 225.2 190.9 Postretirement/postemployment benefits obligation 215.9 214.6 Total long-term liabilities 441.1 405.5 Total liabilities 10,874.7 11,221.9 Equity 680.7 555.5 Total liabilities and equity (Note 3) 11,555.5 11,777.3 NOTE. Components may not sum to totals because of rounding. The priced services (2) LONG-TERM ASSETS financial statements consist of these tables and the accompanying notes. Consists of long-term assets used solely in priced services, the priced-services portion of (L) SHORT-TERM ASSETS long-term assets shared with nonpriced services, and an estimate of the assets of the Board of Governors used in the development of priced services. Effective Jan. 1, 1987, the Reserve The imputed reserve requirement on clearing balances held at Reserve Banks by depository Banks implemented the Financial Accounting Standards Board's Statement of Financial institutions reflects a treatment comparable to that of compensating balances held at corre- Accounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly, spondent banks by respondent institutions. The reserve requirement imposed on respondent the Federal Reserve Banks recognized credits to expenses of $24.9 million in the third quarter balances must be held as vault cash or as nonearning balances maintained at a Reserve Bank; of 1999, $32.3 million in the second quarter of 1999, $21.9 million in the first quarter of 1999, thus, a portion of priced services clearing balances held with the Federal Reserve is shown as $20.4 million in the third quarter of 1998, $28.7 million in the second quarter of 1998, and required reserves on the asset side of the balance sheet. The remainder of clearing balances is $16.2 million in the first quarter of 1998, and corresponding increases in this asset account. assumed to be invested in three-month Treasury bills, shown as investment in marketable securities. Receivables are (1) amounts due the Reserve Banks for priced services and (2) the share of (3) LIABILITIES AND EQUITY suspense-account and difference-account balances related to priced services. Under the matched-book capital structure for assets that are not "self-financing," short-term Materials and supplies are the inventory value of short-term assets. assets are financed with short-term debt. Long-term assets are financed with long-term debt Prepaid expenses include salary advances and travel advances for priced-service personnel. and equity in a proportion equal to the ratio of long-term debt to equity for the fifty largest Items in process of collection is gross Federal Reserve cash items in process of collection bank holding companies, which are used in the model for the private-sector adjustment factor (CIPC) stated on a basis comparable to that of a commercial bank. It reflects adjustments for (PSAF). The PSAF consists of the taxes that would have been paid and the return on capital intra-System items that would otherwise be double-counted on a consolidated Federal that would have been provided had priced services been furnished by a private-sector firm. Reserve balance sheet; adjustments for items associated with non-priced items, such as those Other short-term liabilities include clearing balances maintained at Reserve Banks and collected for government agencies; and adjustments for items associated with providing fixed deposit balances arising from float. Other long-term liabilities consist of obligations on capital availability or credit before items are received and processed. Among the costs to be leases. recovered under the Monetary Control Act is the cost of float, or net CIPC during the period (the difference between gross CIPC and deferred-availability items which is the portion of gross CIPC that involves a financing cost), valued at the federal funds rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A65 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES B. Pro forma income statement Millions of dollars Item Quarter ending Sept. 30, 1999 Quarter ending Sept. 30, 1998 Revenue from services provided to depository institutions (Note 4) 210.9 205.5 Operating expenses (Note 5) 173.6 167.0 Income from operations 37.3 38.4 Inputed costs (Note 6) Interest on float 1.0 1.8 Interest on debt 4.6 4.3 Sales taxes 2.3 2.4 FDIC insurance 0.9 8.8 0.7 9.1 Income from operations after imputed costs 28.5 29.3 Other income and expenses (Note 7) Investment income on clearing balances 84.6 89.8 Earnings credits (79.2) 5.4 (85.6) 4.2 Income before income taxes 33.9 33.5 Inputed income taxes (Note 8) 10.9 10.7 Net income 23.1 22.7 MEMO Targeted return on equity (Note 9) 14.3 17.1 Nine months ending Sept. 30, 1999 Nine months ending Sept. 30, 1998 Revenue from services provided to depository institutions (Note 4) 619.3 602.5 Operating expenses (Note 5) 508.5 483.9 Income from operations 110.8 118.6 Imputed costs (Note 6) Interest on float 6.9 11.1 Interest on debt 13.8 12.8 Sales taxes 6.9 6.1 FDIC insurance 2.5 30.2 0.7 30.7 Income from operations after imputed costs 80.7 88.0 Other income and expenses (Note 7) Investment income on clearing balances 243.8 271.3 Earnings credits (220.2) 23.6 (251.2) 20.2 Income before income taxes 104.3 108.1 Imputed income taxes (Note 8) 33.4 34.7 Net income 70.9 73.4 MEMO Targeted return on equity (Note 9) 45.8 49.9 NOTE. Components may not sum to totals because of rounding. The priced services Unrecovered float includes float generated by services to government agencies and by other financial statements consist of these tables and the accompanying notes. central bank services. Float recovered through income on clearing balances is the result of the increase in investable clearing balances; the increase is produced by a deduction for float for cash items in process of collection, which reduces imputed reserve requirements. The income (4) REVENUE on clearing balances reduces the float to be recovered through other means. As-of adjustments Revenue represents charges to depository institutions for priced services and is realized from are memorandum adjustments to an institution's reserve or clearing position to recover float each institution through one of two methods: direct charges to an institution's account or incurred by the institution. Direct charges are billed to the institution for float incurred when charges against its accumulated earnings credits. an institution chooses to close on a normal business day and for float incurred on interterritory check transportation. Float recovered through direct charges is valued at cost using the federal funds rate and charged directly to an institution's account. Float recovered through per-item (5) OPERATING EXPENSES fees is valued at the federal funds rate and has been added to the cost base subject to recovery Operating expenses consist of the direct, indirect, and other general administrative expenses in the second quarters of 1999 and 1998. of the Reserve Banks for priced services plus the expenses for staff members of the Board of Governors working directly on the development of priced services. The expenses for Board (7) OTHER INCOME AND EXPENSES staff members were $.85 million in the first three quarters of 1999 and $0.7 million in the first three quarters of 1998. The credit to expenses under SFAS 87 (see note 2) is reflected in Consists of imputed investment income on clearing balances and the actual cost of earnings operating expenses. credits. Investment income on clearing balances represents the average coupon-equivalent yield on three-month Treasury bills applied to the total clearing balance maintained, adjusted for the effect of reserve requirements on clearing balances. Expenses for earnings credits (6) IMPUTED COSTS granted to depository institutions on their clearing balances are derived by applying the Imputed costs consist of interest on float, interest on debt, sales taxes, and the FDIC average federal funds rate to the required portion of the clearing balances, adjusted for the net assessment. Interest on float is derived from the value of float to be recovered, either effect of reserve requirements on clearing balances. explicitly or through per-item fees, during the period. Float costs include costs for checks, book-entry securities, noncash collection, ACH, and funds transfers. (8) INCOME TAXES Interest is imputed on the debt assumed necessary to finance priced-service assets. The sales taxes and FDIC assessment that the Federal Reserve would have paid had it been a Imputed income taxes are calculated at the effective tax rate derived from the PSAF model private-sector firm are among the components of the PSAF (see note 3). (see note 3). Float costs are based on the actual float incurred for each priced service, multiplied by the appropriate federal funds rate. Other imputed costs are allocated among priced services (9) RETURN ON EQUITY according to the ratio of operating expenses less shipping expenses for each service to the total expenses for all services less the total shipping expenses for all services. Represents the after-tax rate of return on equity that the Federal Reserve would have earned The following list shows the daily average recovery of float (before converting to float had it been a private business firm, as derived from the PSAF model (see note 3). This amount costs) by the Reserve Banks for the third quarter of 1999 and 1998 in millions of dollars: is adjusted to reflect the recovery of automation consolidation costs of $.3 million for the third quarter of 1999, $.2 million for the second quarter of 1999, $.4 million for first quarter of 1999 1998 1999, $4.0 million for the third quarter of 1998, $4.1 million in the second quarter of 1998, and $2.6 million for the first quarter of 1998. The Reserve Banks plan to recover these Total float 437.1 386.2 amounts, along with a finance charge, by the end of 1999. Unrecovered float (148.5) 19.7 Float subject to recovery 585.6 366.5 Sources of float recovery Income on clearing balances 44.3 36.6 As-of adjustments 352.0 240.2 Direct charges 100.2 113.7 Per-item fees 89.0 (23.9) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 Index to Statistical Tables References are to pages A3-A65 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Federal agency obligations, 5, 9, 10, 11, 28, 29 Assets and liabilities (See also Foreigners) Federal credit agencies, 30 Commercial banks, 15-21 Federal finance Domestic finance companies, 32, 33 Debt subject to statutory limitation, and types and ownership Federal Reserve Banks, 10 of gross debt, 27 Foreign-related institutions, 20 Receipts and outlays, 25, 26 Automobiles Treasury financing of surplus, or deficit, 25 Consumer credit, 36 Treasury operating balance, 25 Production, 44,45 Federal Financing Bank, 30 Federal funds, 23, 25 Federal Home Loan Banks, 30 BANKERS acceptances, 5, 10, 22, 23 Federal Home Loan Mortgage Corporation, 30, 34, 35 Bankers balances, 15-21. (See also Foreigners) Federal Housing Administration, 30, 34, 35 Bonds (See also U.S. government securities) Federal Land Banks, 35 New issues, 31 Federal National Mortgage Association, 30, 34, 35 Rates, 23 Federal Reserve Banks Business activity, nonfinancial, 42 Condition statement, 10 Business loans (See Commercial and industrial loans) Discount rates (See Interest rates) U.S. government securities held, 5, 10, 11, 27 CAPACITY utilization, 43 Federal Reserve credit, 5, 6, 10, 12 Capital accounts Federal Reserve notes, 10 Commercial banks, 15-21 Federal Reserve System Federal Reserve Banks, 10 Balance sheet for priced services, 64, 65 Certificates of deposit, 23 Condition statement for priced services, 64, 65 Commercial and industrial loans Federally sponsored credit agencies, 30 Commercial banks, 15-21 Finance companies Weekly reporting banks, 17, 18 Assets and liabilities, 32 Commercial banks Business credit, 33 Assets and liabilities, 15-21 Loans, 36 Commercial and industrial loans, 15-21 Paper, 22, 23 Consumer loans held, by type and terms, 36 Float, 5 Real estate mortgages held, by holder and property, 35 Flow of funds, 37-41 Time and savings deposits, 4 Foreign currency operations, 10 Commercial paper, 22, 23, 32 Foreign deposits in U.S. banks, 5 Condition statements (See Assets and liabilities) Foreign exchange rates, 62 Construction, 42, 46 Foreign-related institutions, 20 Consumer credit, 36 Foreign trade, 51 Consumer prices, 42 Foreigners Consumption expenditures, 48, 49 Claims on, 52, 55, 56, 57, 59 Corporations Liabilities to, 51, 52, 53, 58, 60, 61 Profits and their distribution, 32 Security issues, 31,61 GOLD Cost of living {See Consumer prices) Certificate account, 10 Credit unions, 36 Stock, 5, 51 Currency in circulation, 5, 13 Government National Mortgage Association, 30, 34, 35 Customer credit, stock market, 24 Gross domestic product, 48, 49 DEBT (See specific types of debt or securities) HOUSING, new and existing units, 46 Demand deposits, 15-21 Depository institutions Reserve requirements, 8 INCOME and expenses, Federal Reserve System, 64, 65 Reserves and related items, 4, 5, 6, 12 Income, personal and national, 42,48, 49 Deposits (See also specific types) Industrial production, 42, 44 Commercial banks, 4, 15-21 Insurance companies, 27, 35 Federal Reserve Banks, 5, 10 Interest rates Discount rates at Reserve Banks and at foreign central banks and Bonds, 23 foreign countries (See Interest rates) Consumer credit, 36 Discounts and advances by Reserve Banks (See Loans) Federal Reserve Banks, 7 Dividends, corporate, 32 Money and capital markets, 23 Mortgages, 34 Prime rate, 22 EMPLOYMENT, 42 International capital transactions of United States, 50-61 Euro, 62 International organizations, 52, 53, 55, 58, 59 Inventories, 48 FARM mortgage loans, 35 Investment companies, issues and assets, 32 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A67 Investments (See also specific types) SAVING Commercial banks, 4, 15-21 Flow of funds, 37^11 Federal Reserve Banks, 10, 11 National income accounts, 48 Financial institutions, 35 Savings institutions, 35, 36, 37^1 Savings deposits (See Time and savings deposits) LABOR force, 42 Securities (See also specific types) Life insurance companies (See Insurance companies) Federal and federally sponsored credit agencies, 30 Loans (See also specific types) Foreign transactions, 60 Commercial banks, 15-21 New issues, 31 Federal Reserve Banks, 5, 6,1, 10, 11 Prices, 24 Federal Reserve System, 64, 65 Special drawing rights, 5, 10, 50, 51 Financial institutions, 35 State and local governments Insured or guaranteed by United States, 34, 35 Holdings of U.S. government securities, 27 New security issues, 31 MANUFACTURING Rates on securities, 23 Capacity utilization, 43 Stock market, selected statistics, 24 Production, 43, 45 Stocks (See also Securities) Margin requirements, 24 New issues, 31 Member banks, reserve requirements, 8 Prices, 24 Mining production, 45 Mobile homes shipped, 46 Student Loan Marketing Association, 30 Monetary and credit aggregates, 4, 12 Money and capital market rates, 23 TAX receipts, federal, 26 Money stock measures and components, 4, 13 Thrift institutions, 4. (See also Credit unions and Savings Mortgages (See Real estate loans) institutions) Mutual funds, 13, 32 Time and savings deposits, 4, 13, 15-21 Mutual savings banks (See Thrift institutions) Trade, foreign, 51 Treasury cash, Treasury currency, 5 NATIONAL defense outlays, 26 Treasury deposits, 5, 10, 25 National income, 48 Treasury operating balance, 25 OPEN market transactions, 9 UNEMPLOYMENT, 42 U.S. government balances PERSONAL income, 49 Commercial bank holdings, 15-21 Prices Treasury deposits at Reserve Banks, 5, 10, 25 Consumer and producer, 42, 47 U.S. government securities Stock market, 24 Bank holdings, 15-21, 27 Prime rate, 22 Dealer transactions, positions, and financing, 29 Producer prices, 42, 47 Federal Reserve Bank holdings, 5, 10, 11, 27 Production, 42, 44 Foreign and international holdings and Profits, corporate, 32 transactions, 10, 27, 61 Open market transactions, 9 REAL estate loans Outstanding, by type and holder, 27, 28 Banks, 15-21, 35 Rates, 23 Terms, yields, and activity, 34 US. international transactions, 50-62 Type of holder and property mortgaged, 35 Utilities, production, 45 Reserve requirements, 8 Reserves VETERANS Administration, 34, 35 Commercial banks, 15-21 Depository institutions, 4, 5, 6, 12 Federal Reserve Banks, 10 WEEKLY reporting banks, 17, 18 U.S. reserve assets, 51 Wholesale (producer) prices, 42, 47 Residential mortgage loans, 34, 35 Retail credit and retail sales, 36, 42 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 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 WILLIAM R. JONES, Associate Director OFFICE OF THE SECRETARY MYRON L. KWAST, Associate Director JENNIFER J. JOHNSON, Secretary PATRICK M. PARKINSON, Associate Director ROBERT DEV. FRIERSON, Associate Secretary THOMAS D. SIMPSON, Associate Director BARBARA R. LOWREY, Associate Secretary and Ombudsman LAWRENCE SLIFMAN, Associate Director MARTHA S. SCANLON, Deputy Associate Director DIVISION OF BANKING STEPHEN D. OLINER, Assistant Director 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

A69 EDWARD M. GRAMLICH OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS STEPHEN R. MALPHRUS, Staff Director LOUISE L. ROSEMAN, Director PAUL W. BETTGE, Assistant Director MANAGEMENT DIVISION KENNETH D. BUCKLEY, Assistant Director STEPHEN J. CLARK, Associate Director, Finance Function JACK DENNIS, JR., Assistant Director DARRELL R. PAULEY, Associate Director, Human Resources JOSEPH H. HAYES, JR., Assistant Director Function JEFFREY C. MARQUARDT, Assistant Director SHEILA CLARK, EEO Programs Director MARSHA REIDHILL, Assistant Director JEFF STEHM, Assistant Director DIVISION OF SUPPORT SERVICES OFFICE OF THE INSPECTOR GENERAL ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director BARRY R- SNYDER, Inspector General DAVID L. WILLIAMS, Assistant Director DONALD L. ROBINSON, Deputy Inspector General DIVISION OF INFORMATION TECHNOLOGY RICHARD C. STEVENS, Director MARIANNE M. EMERSON, Deputy Director TILLENA G. CLARK, Assistant Director MAUREEN HANNAN, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director EDWARD T. MULRENIN, Assistant Director DAY W. RADEBAUGH, JR., Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman J. ALFRED BROADDUS, JR. JACK GUYNN LAURENCE H. MEYER ROGER W. FERGUSON, JR. JERRY L. JORDAN ROBERT T. PARRY EDWARD M. GRAMLICH EDWARD W. KELLEY, JR. ALTERNATE MEMBERS THOMAS M. HOENIG MICHAEL H. MOSKOW JAMIE B. STEWART, JR. CATHY E. MINEHAN WILLIAM POOLE 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

A71 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

A66 Federal Reserve Bulletin • January 2000 Federal Reserve Board Publications For ordering assistance, write PUBLICATIONS SERVICES, Rates for subscribers outside the United States are as follows MS-127, Board of Governors of the Federal Reserve System, and include additional air mail costs: Washington, DC 20551, or telephone (202) 452-3244, or FAX Federal Reserve Regulatory Service, $250.00 per year. (202) 728-5886. You may also use the publications order Each Handbook, $90.00 per year. form available on the Board's World Wide Web site FEDERAL RESERVE REGULATORY SERVICE FOR PERSONAL (http://www.federalreserve.gov). When a charge is indicated, pay- COMPUTERS. CD-ROM; updated monthly. ment should accompany request and be made payable to the Standalone PC. $300 per year. Board of Governors of the Federal Reserve System or may be Network, maximum 1 concurrent user. $300 per year. ordered via Mastercard, Visa, or American Express. Payment from Network, maximum 10 concurrent users. $750 per year. foreign residents should be drawn on a U.S. bank. Network, maximum 50 concurrent users. $2,000 per year. Network, maximum 100 concurrent users. $3,000 per year. Subscribers outside the United States should add $50 to cover BOOKS AND MISCELLANEOUS PUBLICATIONS additional airmail costs. THE FEDERAL RESERVE SYSTEM—PURPOSES AND FUNCTIONS. THE FEDERAL RESERVE ACT AND OTHER STATUTORY PROVISIONS 1994. 157 pp. AFFECTING THE FEDERAL RESERVE SYSTEM, as amended ANNUAL REPORT, 1998. through October 1998. 723 pp. $20.00 each. ANNUAL REPORT: BUDGET REVIEW, 1999. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 COUNTRY MODEL, May 1984. 590 pp. $14.50 each. each in the United States, its possessions, Canada, and INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. Mexico. Elsewhere, $35.00 per year or $3.00 each. 440 pp. $9.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, num- FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. ber of pages, and price. December 1986. 264 pp. $10.00 each. 1981 October 1982 239 pp. $ 6.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1982 December 1983 266 pp. $ 7.50 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1983 October 1984 264 pp. $11.50 RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A 1984 October 1985 254 pp. $12.50 JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996. 1985 October 1986 231 pp. $15.00 578 pp. $25.00 each. 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 EDUCATION PAMPHLETS 1980-89 March 1991 712 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1990 November 1991 185 pp. $25.00 available without charge. 1991 November 1992 215 pp. $25.00 1992 December 1993 215 pp. $25.00 1993 December 1994 281 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1994 December 1995 190 pp. $25.00 Consumer Handbook to Credit Protection Laws 1990-95 November 1996 404 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small Businesses Series on the Structure of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF The Board of Governors of the Federal Reserve System CHARTS. Weekly. $30.00 per year or $.70 each in the United The Federal Open Market Committee States, its possessions, Canada, and Mexico. Elsewhere, $35.00 per year or $.80 each. Federal Reserve Bank Board of Directors Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL A Consumer's Guide to Mortgage Lock-Ins RESERVE SYSTEM. A Consumer's Guide to Mortgage Settlement Costs ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Refinancings Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Home Mortgages: Understanding the Process and Your Right Vol. II (Irregular Transactions). 1969. 116 pp. Each volume to Fair Lending $5.00. How to File a Consumer Complaint 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

A73 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

A66 Federal Reserve Bulletin • January 2000 Maps of the Federal Reserve System LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city S3 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 Pittsburgh Baltimore MD NY • [ / V 1 T cinnati Buffalo N t Y / CF - RI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H KY MI / \VI It ) IN - M. Detroit® Lounville IA ASs r ir — ,N • Memphis II. New Orleans IN Little Rock ( MS ATLANTA CHICAGO ST. LOUIS 9-1 M'l jjl|BjjHBB Ml MM • Helena ••••H• WHY ssfcs. ' MHHBIH• ffW SBBBHP^.* MINNEAPOLIS 10-J 12-L WY •M CO Omaha* • •8s • Denver NM / Oklahoma Cit\ • OK KANSAS CITY 11-K IX NM ' . V , • H• p p i 11 • HI Paso A r-1 Y Houston jPgj • S # S.in Antonio AZ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Federal Reserve Bulletin • January 2000 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 Peter G. Peterson William J. McDonough Charles A. Heimbold, Jr. 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 David H. Hoag Jerry L. Jordan To be announced Sandra Pianalto Cincinnati 45201 George C. Juilfs Barbara B.Henshaw Pittsburgh 15230 JohnT. Ryan, III Robert B. Schaub RICHMOND* 23219 Jeremiah J. Sheehan J. Alfred Broaddus, Jr. Wesley S. Williams, Jr. Walter A. Varvel Baltimore 21203 To be announced William J. Tignanelli1 Charlotte 28230 To be announced Dan M. Bechter1 ATLANTA 30303 John F. Wieland Jack Guynn Paula Lovell Patrick K. Barron James M. McKee Birmingham 35283 To be announced Andre T. Anderson Jacksonville 32231 To be announced Robert J. Slack Miami 33152 To be announced James T. Curry III Nashville 37203 To be announced Melvyn K. Purcell1 New Orleans 70161 To be announced Robert J. Musso1 CHICAGO* 60690 Arthur C. Martinez Michael H. Moskow Robert J. Darnall William C. Conrad Detroit 48231 Timothy D. Leuliette David R. Allardice1 ST. LOUIS 63166 Susan S. Elliott William Poole Charles W. Mueller W. LeGrande Rives Little Rock 72203 To be announced Robert A. Hopkins Louisville 40232 To be announced Thomas A. Boone Memphis 38101 To be announced Martha Perine Beard MINNEAPOLIS 55480 James J. Howard Gary H. Stern Ronald N. Zwieg Colleen K. Strand Helena 59601 William P. Underriner 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. H. B. Zachry, Jr. Helen E. Holcomb El Paso 79999 To be announced Sammie C. Clay Houston 77252 To be announced Robert Smith, III1 San Antonio 78295 To be announced James L. Stull1 SAN FRANCISCO 94120 Gary G. Michael Robert T. Parry 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