Federal Reserve Bulletin, 2000-02

Volume 86 • Number 2 • February 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 81 U.S. BANK EXPOSURE TO EMERGING- ioi ANNOUNCEMENTS MARKET COUNTRIES DURING RECENT Directive of the Federal Open Market FINANCIAL CRISES Committee. Global financial markets have experienced sig- Appointments of new members and a new presinificant volatility in recent years, including dent and vice president of the Thrift Institutions financial crises in Asia in 1997 and in Russia in Advisory Council. 1998. Emerging-market countries, in particular, were subject to sharp downward market moves. Increase in the exemption threshold for deposi- U.S. banking supervisors monitored these events tory institutions reporting under HMDA. carefully to determine the potential effect on Extension of the comment period on proposals U.S. banking organizations and paid particular to allow electronic delivery of federally manattention to U.S. bank claims on emergingdated disclosures. market counterparties. Monitoring claims on Changes for 2000 in the fee schedules for priced emerging-market counterparties allows superservices of the Federal Reserve Banks. visors to identify any developing concentrations of risk that might warrant supervisory action Issuance of joint guidance on asset securitizaand, if necessary, to assess the effect that a tion activities. potential emerging-market crisis might have on Normal operations reported for financial institu- U.S. banks. tions after the century date change. This article focuses on the claims U.S. banks held on emerging-market counterparties during Survey of consumer confidence in Y2K preparathe two-year period from June 1997 to June tions of banks. 1999 and discusses the different ways that Publication of the December 1999 update to the emerging-market claims can be analyzed. In Bank Holding Company Supervision Manual. addition, the article provides a short analysis of the claims held by other developed country Enforcement actions and terminations of actions. banks on emerging-market countries to show the relative size of U.S. bank claims. Finally, the 106 MINUTES OF THE MEETING OF THE data from the 1997-99 period are discussed in FEDERAL OPEN MARKET COMMITTEE the broader historical context of U.S. banks' HELD ON NOVEMBER 16, 1999 country exposure dating back to 1982. At this meeting, the Committee adopted a directive that called for increasing the federal funds 97 INDUSTRIAL PRODUCTION AND CAPACITY rate by 25 basis points, to 5Vi percent, and that UTILIZATION FOR DECEMBER 1999 was symmetrical with regard to the outlook for policy over the near term. Industrial production increased 0.4 percent in December, the same rate as in November, to 113 LEGAL DEVELOPMENTS 140.5 percent of its 1992 average. The rate of capacity utilization for total industry edged up in Various bank holding company, bank service December, to 81.3 percent, a level 0.8 percent- corporation, and bank merger orders; and pendage point below its 1967-98 average. ing cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 FINANCIAL AND BUSINESS STATISTICS A76 INDEX TO STATISTICAL TABLES These tables reflect data available as of A78 BOARD OF GOVERNORS AND STAFF December 28, 1999. A80 FEDERAL OPEN MARKET COMMITTEE AND A3 GUIDE TO TABULAR PRESENTATION STAFF; ADVISORY COUNCILS A4 Domestic Financial Statistics A82 FEDERAL RESERVE BOARD PUBLICATIONS A42 Domestic Nonfinancial Statistics A50 International Statistics A84 MAPS OF THE FEDERAL RESERVE SYSTEM A63 GUIDE TO STATISTICAL RELEASES AND A86 FEDERAL RESERVE BANKS, BRANCHES, SPECIAL TABLES 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

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises David E. Palmer, of the Board's Division of Banking nomic or political disruptions; for example, a sharp Supervision and Regulation, prepared this article. recession in a foreign country might cause a foreign Peggy Wolffrum provided research assistance. counterparty to go bankrupt. Transfer risk arises when exchange-rate difficulties (such as a deprecia- Global financial markets have experienced signifi- tion or currency controls) impair those claims that are cant volatility in recent years. In two major cases, not offset by local liabilities; for example, a foreign actual financial crises arose—the first emanating from counterparty might have difficulty acquiring U.S. Asia in 1997 and the second from Russia in 1998. In dollars to repay an obligation that is not denomiboth crises, financial markets in almost every country nated in its home currency. Monitoring claims on were affected, some suffering considerable declines. emerging-market counterparties allows supervisors Emerging-market countries, in particular, were sub- to identify any developing concentrations of risk that ject to sharp downward market moves. might warrant supervisory action and, if necessary, to U.S. banking supervisors monitored these events assess the effect that a potential emerging-market carefully to determine the potential effect on U.S. crisis might have on U.S. banks.3 banking organizations.1 Supervisors analyze informa- This article focuses on the claims U.S. banks held tion on the amount and type of claims on for- on emerging-market counterparties during the twoeign counterparties held by U.S. banks to assess year period from June 1997 to June 1999 and disthe potential risks from lending, trading, and other cusses the different ways that emerging-market activities conducted by U.S. banks in foreign markets claims can be analyzed. In addition, the article pro- (see box "Types of Claims on Emerging-Market vides a short analysis of the claims held by other Counterparties ") .2 developed-country banks on emerging-market coun- Because emerging-market countries exhibited tries to show the relative size of U.S. bank claims. significant market volatility in the recent crises, Finally, the data from the 1997-99 period are dissupervisors paid additional attention to claims on cussed in the broader historical context of U.S. banks' counterparties in those areas. Furthermore, claims on country exposure dating back to 1982. emerging-market counterparties are concentrated at a small number of U.S. banks, which necessitates particular supervisory scrutiny of the international activi- U.S. BANK CLAIMS ON FOREIGN ties of those institutions. COUNTERPARTIES A major purpose of collecting country exposure Country exposure data for June 1997 to June 1999 data is to identify country risk—the potential for a reveal that the aggregate claims of U.S. banks on claim on a foreign counterparty held by a U.S. bank counterparties from all foreign countries rose 11 perto become impaired or eventually subject to losses. cent, reaching $756 billion (table l).4 Cross-border Country risk encompasses counterparty credit risk claims (including revaluation gains) stood at and transfer risk. Counterparty credit risk relates to $423 billion in June 1997 and rose to $461 billion in the inability of a counterparty to repay and may arise June 1999. Local country claims (including revaluafrom country-specific factors, such as general ecotion gains) also rose over the period, from $257 billion to $295 billion. Despite the overall increase in 1. Hereafter, U.S. banking organizations, which include U.S. banks and bank holding companies, will be referred to as "U.S. banks." 3. Supervisors from the Federal Reserve, the Office of the Comp- 2. US. banks report their claims on foreign counterparties quarterly troller of the Currency, and the Federal Deposit Insurance Corporation on the Country Exposure Report of the Federal Financial Institutions meet regularly within the framework of the Interagency Country Examination Council (FFIEC reporting form 009). These claims Exposure Review Committee (ICERC) to discuss transfer risk issues are aggregated by country and published by the FFTEC as the Coun- that affect U.S. banks. Examiners present ICERC's country assesstry Exposure Lending Survey (available at www.ffiec.gov/E16/ ments to U.S. banks to inform them of potentially risky conditions. default.htm). 4. Data on the claims of individual banks are not publicly available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • February 2000 total claims held by U.S. banks over this period, a Total claims on counterparties in developed counslight drop-off occurred in the first two quarters of tries and banking centers rose in the aggregate, from 1999. $485 billion to $572 billion (an increase of 18 per- Types of Claims on Emerging-Market Counterparties Data reported on the Country Exposure Lending Survey can Initial Claims versus Claims Adjusted for Guarantees be disaggregated by type of claim to provide a picture of the various types of exposure. Some claims initially booked by U.S. banks may be partially or wholly guaranteed by a counterparty in another foreign country (or in the United States). U.S. banks report Cross-Border versus Local Claims these initial claims plus any cases in which guarantees on those claims would shift the ultimate risk from the U.S. Cross-border claims are those booked outside the foreign bank to another counterparty. For example, a U.S. bank counterparty's home country, usually at a U.S. bank's head might extend a credit to a construction company domiciled office in the United States. A claim on a Korean bank in Thailand, but the claim might actually be guaranteed by a booked at the U.S. head office or at the Singapore office Japanese bank. After adjusting for the guarantee, the U.S. of a U.S. bank would in both cases be considered a cross- bank would report a claim on the Japanese bank and not on border claim. This type of claim is usually denominated in the Thai construction company. Aggregating data on claims U.S. dollars. by country reveals, on a net basis, the extent to which a Local claims on foreign counterparties are those booked country has extended guarantees on the initial claims of in the local offices of the reporting bank, that is, offices U.S. banks. For example, Japanese counterparties might located in the country of the counterparty. A claim on a guarantee a certain amount of claims that U.S. banks have Korean bank booked at the Seoul office of a U.S. bank is on other countries over and above the initial claims that U.S. considered a local claim. banks have on Japanese counterparties and, thus, as a group would be net guarantors. Revaluation Gains on Foreign Exchange and Derivatives Contracts Example of Types of Claims On the Country Exposure Report, off-balance-sheet claims The following example shows how different types of claims arising from foreign exchange and derivatives contracts are classified: Bank A has initiated a $400 million loan to a are recorded as revaluation gains.1 U.S. banks continually Taiwanese company that is booked in New York—a determine the market value of these off-balance-sheet $400 million cross-border claim. But if $100 million of that contracts—"revaluing" them—to see if a positive or nega- claim is guaranteed by a German bank, the adjusted claim is tive value results (based on movements in market factors or actually $300 million (the $100 million guaranteed by the other variables). If the contract has a positive market value German bank is added to Bank A's claims on German for the U.S. bank, that is considered a revaluation gain, counterparties). similar to a claim in that the counterparty owes a payment Bank A also has a $200 million loan outstanding to to the U.S. bank.2 For example, if a U.S. bank enters into a another Taiwanese company that is booked in Bank A's contract with a Latin American bank whereby the U.S. bank Taipei office—a $200 million local claim. These two benefits from a rise in the level of the Brazilian stock claims combined (cross-border and local), represent the market, a subsequent rise in the level of the stock market total on-balance-sheet claims of Bank A on Taiwanese would translate into a revaluation gain.3 counterparties—$500 million. Finally, Bank A has also entered into an off-balance-sheet contract, arranged in New 1. Technically, revaluation gains are carried on the balance sheet, even York, with a Taiwanese counterparty that has generated though they arise from off-balance-sheet contracts. For the purposes of this cross-border revaluation gains of $50 million. Total claims explanation, revaluation gains will be categorized as off-balance-sheet claims. now add up to $550 million, which can be viewed as either 2. Generally, if the contract has a negative value, the resulting revaluation the sum of cross-border and local claims ($350 million plus loss is similar to a liability in that the U.S. bank owes a payment to the $200 million) or the sum of on-balance-sheet claims and foreign counterparty. 3. In March 1997, the FFIEC amended the Country Exposure Report in revaluation gains ($500 million plus $50 million). two ways. For the first time, the FFIEC required the reporting of revaluation gains on off-balance-sheet contracts (Schedule 2). Also, the definition for local claims was altered so that instead of reporting local claims denominated portion of local transactions conducted in U.S. dollars, classifying claims in local currency, banks report local country claims (and no longer local associated with those transactions as local rather than cross-border was currency claims). This change expanded the definition of local claims to considered preferable because generally such claims were locally funded and include those cases in which local transactions in foreign countries were hence did not involve transfer risk. For most countries, this definitional conducted in non-local currency. If a foreign country had a significant change had little effect on the amounts reported. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises 83 1. Claims of U.S. banks on foreign counterparties, 1997:Q2-1999:Q2 Millions of dollars except as noted PPeerrcceenntt 1997, quarter ending 1998, quarter ending 1999, quarter ending cchhaannggee,, IItteemm JJuunnee 11999977 ttoo June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 JJuunnee 11999999 All countries 679,613 708,216 710,674 704,884 719,889 728,628 781,784 767,707 755,653 11.2 Cross-border1 422,493 435,861 446,619 427,900 438,186 440,663 467,733 461,028 460,797 9.1 Local2 257,120 272,355 264,055 276,984 281,703 287,965 314,051 306,679 294,856 14.7 Developed countries and banking centers3 484,503 500,508 507,950 501,105 522,162 543,236 596,662 581,699 572,427 18.1 Cross-border1 314,819 316,780 330,785 319,972 332,947 348,202 376,186 371,175 372,743 18.4 Local2 169,684 183,728 177,165 181,133 189,215 195,034 220,476 210,524 199,684 17.7 Emerging-market countries4 . 195,110 207,708 202,724 203,779 197,727 185,392 185.122 186,008 183,226 -6.1 Cross-border1 107,674 119,081 115,834 107,928 105,239 92,461 91,547 89,853 88,054 -18.2 Local2 87,436 88,627 86,890 95,851 92,488 92,931 93,575 96,155 95,172 8.8 MEMO: Emerging-market claims As a percentage of all claims . 28.7 29.3 28.5 28.9 27.5 25.4 23.7 24.2 24.2 Cross-border claims as a percentage of all cross-border claims 25.5 27.2 25.9 25.2 24.0 21.0 19.6 19.5 19.1 Local claims as a percentage of all local claims 34.0 32.5 32.9 34.6 32.8 32.3 29.8 31.4 32.3 1. Cross-border claims are those booked outside the foreign counterparty's 3. See text note 5. home country, usually at a U.S. bank's head office in the United States. 4. See table 2 for a list of emerging-market countries by region. 2. Local claims are those booked in the U.S. bank's local offices in the for- . . . Not applicable. eign counterparty's country. cent).5 Cross-border claims rose at about the same to U.S. and other developed-country banks in these pace as local claims and generally represented two- markets. thirds of total claims on developed countries and banking centers over the period. In contrast, combined cross-border and local claims Claims on Emerging-Market Counterparties on counterparties in emerging-market countries fell from $195 billion to $183 billion, a 6 percent drop.6 From June 1997 to June 1999, claims on counter- Cross-border claims fell significantly over the period, parties in the countries directly affected by the two from $108 billion to $88 billion, while local claims major crises registered serious declines (table 2). rose 9 percent, from $87 billion to $95 billion. By the Total claims on the five troubled countries in Asia— end of the period, cross-border claims had fallen to Indonesia, Korea, Malaysia, the Philippines, and less than half of total claims for emerging-market Thailand—fell from $55 billion in June 1997 to countries. Notably, by June 1999, local claims repre- $37 billion in June 1999, with claims on Indonesia sented a larger portion of total claims on emerging- and Thailand both dropping more than 40 percent. market countries (52 percent) than of total claims on Total claims on counterparties in Eastern Europe fell developed countries (35 percent). 42 percent, mainly because of a decline in the value Despite volatile conditions in many emerging mar- of claims on counterparties in Russia, which plumkets in recent years, U.S. banks continued to maintain meted from a peak of $9 billion in September 1997 to one-quarter of their total foreign claims and one-third $940 million in June 1999. of local claims on counterparties in these markets. By contrast, total claims on Latin American coun- Although there was a significant retreat from some terparties rose 13 percent over the period, driven by particularly troubled emerging-market countries, strong increases in Argentina and Mexico. Interestclaims on counterparties in others actually increased. ingly, while Latin American financial markets experi- These increases may have resulted because U.S. enced considerable volatility over the period, U.S. banks view local business in many emerging markets banks did not withdraw from that region. For several as a strategic growth area, largely as a result of recent decades, U.S. banks have maintained a sizable presmarket liberalization and the increased openness ence in Latin America, and two years of crisis in other emerging markets appears to have solidified 5. Banking centers are countries where international banks often that position. Thus, during the recent crisis period, book assets not associated with economic activity in that country, U.S. banks did not retreat from emerging markets mostly for tax reasons or to establish a regional headquarters. across the board, but only from certain regions; as a 6. Table 2 contains the list of emerging-market countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Federal Reserve Bulletin • February 2000 2. Total claims of U.S. banks on emerging-market counterparties, by country, 1997:Q2-1999:Q2 Millions of dollars except as noted PPeerrcceenntt 1997, quarter ending 1998, quarter ending 1999, quarter ending cchhaannggee,, RReeggiioonn aanndd ccoouunnttrryy JJuunnee 11999977 ttoo June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 JJuunnee 11999999 Africa 3,403 3,545 3,119 3,048 3,621 3,609 3,267 3,230 3,216 -5.5 Algeria 300 332 146 130 270 270 307 119 137 -54.3 Cameroon 0 0 0 0 0 4 7 8 9 Egypt 731 730 666 658 1,010 959 937 1,108 1,184 62.0 1 Ethiopia 1 0 1 0 0 1 2 1 2 100.0 Gabon 44 42 52 46 47 58 61 50 47 6.8 Ghana 147 173 228 205 204 48 56 76 82 -44.2 Ivory Coast 247 227 274 303 268 323 236 185 194 -21.5 Kenya 278 192 168 172 189 195 197 203 144 -48.2 Malawi 1 1 1 1 1 6 3 2 1 .0 Morocco 564 711 469 484 511 482 452 418 442 -21.6 Nigeria 375 380 303 406 453 401 398 511 412 9.9 Senegal 116 130 115 100 97 97 89 77 100 -13.8 Sudan 47 43 35 38 24 4 8 6 6 -87.2 Tunisia 344 344 329 300 328 515 307 261 301 -12.5 Zaire 6 4 6 5 11 32 12 9 8 33.3 Zambia 49 30 37 37 19 29 24 33 42 -14.3 Zimbabwe 50 33 54 45 37 32 28 6 7 -86.0 Other Africa 103 173 235 118 152 153 143 157 98 -4.9 Asia-Pacific 86,691 85,623 87,032 78,304 73,044 70,042 69,004 68,713 68,729 -20.7 China 3,437 3,565 3,488 2,978 2,967 2,644 2,340 2,453 3,340 -2.8 India 5,136 5,036 5.069 5,221 5,196 5,518 5,427 5,655 5,790 12.7 Indonesia 7,015 8,711 9,024 6,673 5,040 4,370 4,222 4,120 4.065 -42.1 Iran 1 29 0 0 1 3 0 0 0 Iraq 48 48 48 45 48 48 48 48 49 2.1 Israel 1,359 1,292 1,157 1,295 1,338 1,313 1,417 1,960 1,846 35.8 Jordan 166 193 168 160 157 167 205 190 203 22.3 Korea 23,397 22,939 25,270 22,192 20,202 18,211 17,335 18.006 17,027 -27.2 Kuwait 474 490 737 631 675 662 533 570 541 14.1 Macao 83 113 108 107 103 99 94 89 94 13.3 Malaysia 7,536 6,952 6,700 5,954 5,290 5,373 5,919 6,457 6,456 -14.3 Oman 145 297 245 238 285 269 291 341 299 106.2 Pakistan 2,062 2.075 2,123 2,037 1,808 1,768 1,504 1,528 1.366 -33.8 Philippines 6,023 5,247 4.899 4,794 4,659 4,557 4,822 4,151 4,518 -25.0 Qatar 121 139 169 147 168 185 148 157 222 83.5 Saudi Arabia 1,526 1,588 1,821 1,873 2,075 3,150 2,984 2,831 2,567 68.2 Sri Lanka 53 80 50 71 75 79 58 59 68 28.3 Syria 5 5 5 5 0 2 0 0 1 -80.0 Taiwan 13,307 12,596 12,821 12,413 12,667 12,175 12,883 12,085 12,561 -5.6 Thailand 10,845 10,357 9,350 8,072 6,874 6,616 5,567 5,123 4,770 -56.0 United Arab Emirates 1,265 1.139 1,014 1,115 975 1,079 1,456 1,287 1,271 .5 Other Asia-Pacific 2,687 2,732 2,766 2,283 2,441 1,754 1,751 1,603 1,675 -37.7 Eastern Europe 12,589 15,983 11,880 14,152 14,299 9,136 8,517 7,536 7,321 -41.8 Bulgaria 326 391 203 228 123 112 135 117 164 -49.7 Czech Republic 1,399 1,575 1,330 1,535 1.648 1,890 1,719 1,573 1,383 -1.1 Hungary 932 1,158 946 1,464 1,568 1,444 1,373 1,399 1,368 46.8 Poland 2,007 2,017 1,925 2,403 3,260 2,720 3,064 2,465 2,475 23.3 Romania 256 294 178 222 222 225 221 168 131 -48.8 Russia 6,773 9,307 6,156 7,266 6,621 1,822 1,047 881 940 -86.1 Slovakia 343 418 435 432 506 521 488 465 481 40.2 Other Eastern Europe 553 823 707 602 351 402 470 468 379 -31.5 Latin America and Caribbean 92,427 102,557 100,693 108,275 106,763 102,605 104,334 106,529 103,960 12.5 Argentina 17,018 20,422 20,033 22,571 22,869 22,405 23,620 24,792 23,975 40.9 Bolivia 202 184 262 276 356 562 569 559 574 184.2 Brazil 30,330 32,335 33,399 37,252 35,652 29,940 27,551 27,770 28,815 -5.0 Chile 10,566 11.178 11,705 11,692 11,731 11,115 10,889 10,771 8,614 -18.5 Colombia 4,813 4,909 5,024 4,389 5,198 4,832 5,078 4,957 4,651 -3.4 Costa Rica 120 133 140 165 176 174 238 239 274 128.3 Dominican Republic 401 451 484 479 467 559 549 469 531 32.4 Ecuador 1,068 1,321 905 949 912 867 956 732 656 -38.6 El Salvador 461 401 457 442 443 438 376 395 435 -5.6 Guatemala 326 437 370 387 446 723 634 509 483 48.2 Honduras 118 136 152 169 194 181 199 180 169 43.2 Jamaica 222 249 218 236 253 246 256 227 249 12.2 Mexico 19,486 21,020 18,801 20,088 19,069 22,108 24,145 26,079 25,227 29.5 Nicaragua 17 21 32 15 28 35 32 22 15 -11.8 Paraguay 353 421 461 472 438 445 484 552 456 29.2 Peru 1,289 1,611 1,893 2,053 2,146 1,912 2,121 2,126 2,319 79.9 Trinidad and Tobago 169 286 397 379 376 401 404 275 329 94.7 Uruguay 1,530 1,604 1,667 1,698 1,711 1,936 2,128 1,959 1,953 27.6 Venezuela 3.374 3.438 3,723 3,817 3,623 3,141 3,344 3,188 3,325 -1.5 Other Latin America and Caribbean 564 2.000 570 746 675 585 761 728 910 61.3 All 195,110 207,708 202,724 203,779 197,727 185,392 185,122 186,008 183,226 -6.1 . . . Not applicable. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises 85 3. Distribution of total claims of U.S. banks on emerging-market counterparties, by region, 1997:Q2-1999:Q2 Percent 1997, quarter ending 1998, quarter ending 1999. quarter ending RReeggiioonn June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Total 100 100 100 100 100 100 100 100 100 Africa 1.7 1.7 1.5 1.5 1.8 1.9 1.8 1.7 1.8 Asia-Pacific 44.4 41.2 42.9 38.4 36.9 37.8 37.3 36.9 37.5 Troubled Asia1 28.1 26.1 27.3 23.4 21.3 21.1 20.5 20.4 20.1 Eastern Europe 6.5 7.7 5.9 6.9 7.2 4.9 4.6 4.1 4.0 Russia 3.5 4.5 3.0 3.6 3.3 1.0 .6 .5 .5 Latin America and Caribbean 47.4 49.4 49.7 53.1 54.0 55.3 56.4 57.3 56.7 NOTE. See notes to table 1. In this and the following tables, percentage dis- 1. The troubled Asian countries are Indonesia, Korea, Malaysia, the Philipributions may not sum to 100 because of rounding. pines, and Thailand. result, the relative share of claims among regions local presence in many emerging-market countries, in shifted (table 3). part because of expections of higher profit margins from banks' local business.7 But establishing a profitable local business usually requires a long-term Cross-Border versus Local Claims commitment to local markets. As a result, banks have an incentive to maintain local market share and Over the June 1997-June 1999 period, cross-border stand by local counterparties in downturns. In addiclaims on emerging-market counterparties fell marktion, severe exchange-rate depreciation often accomedly, while local claims rose somewhat. Cross-border panies emerging-market crises, as occurred in Asia claims fell 18 percent as a result of declines in Asia and Russia, so that dollar-denominated claims (usu- (36 percent) and Eastern Europe (60 percent). Unlike ally in the form of cross-border claims) become more Asia and Eastern Europe, cross-border claims on expensive for emerging-market counterparties to Latin American counterparties rose slightly (table 4). repay, given the decline in local currency relative to In the aggregate, local claims in emerging-market the U.S. dollar. As a result, U.S. banks may have been countries grew 9 percent over the period (table 5). forced to write off more of these cross-border claims Although local claims in Asia declined 6 percent as losses, may have decided against extending new overall, only in Thailand did they fall consistently claims, or may have done both. Thus, supervisors over the period; in Korea, local claims actually rose have an interest in monitoring the growth of cross- 19 percent. The overall decrease in Asia was offset border versus local claims because in a crisis, these by strong increases in Latin America, led by Argentwo types of claims might be affected differently. tina (72 percent) and Mexico (96 percent). One explanation for the disparity between movements in cross-border and local claims is that U.S. 7. A number of recently liberalized emerging markets are considbanks have made significant efforts to establish a ered less competitive and may offer opportunities for higher profits. 4. Cross-border claims of U.S. banks on emerging-market counterparties, by region. 1997:Q2-1999:Q2 Millions of dollars except as noted PPeerrcceenntt 1997, quarter ending 1998, quarter ending 1999, quarter ending cchhaannggee,,** RReeggiioonn JJuunnee 11999977 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 JJuunnee tt oo 11 999999 Total 107,674 119,081 115,834 107,928 105,239 92,461 91,547 89,853 88,054 -18.2 Africa 1,661 1,979 1,543 1,413 1,719 1,369 1,411 1,210 1,193 -28.2 Asia-Pacific 43,092 45,783 47,839 37,145 33,701 30,872 28,480 28,516 27,651 -35.8 Troubled Asia1 30,018 32,803 34,658 25,555 21,877 18,736 16,757 16,367 14,758 -50.8 Eastern Europe 8,916 11,494 7,664 9,208 9,562 5,233 4,822 3,984 3,580 -59.8 Russia 5,359 7,202 4,434 5,204 5,031 1,624 909 737 699 -87.0 Latin America and Caribbean . 54,005 59,825 58,788 60,162 60,257 54,987 56,834 56,143 55,630 3.0 NOTE. See notes to table 1. 1. See note 1 to table 3. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • February 2000 5. Local claims of U.S. banks on emerging-market counterparties, by region, 1997:Q2-1999:Q2 Millions of dollars except as noted PPeerrcceenntt 1997, quarter ending 1998, quarter ending 1999, quarter ending cchhaannggee,, RReeggiioonn JJuunnee 11999977 ttoo June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 JJuunnee 11999999 Total 87,436 88,627 86,890 95,851 92,488 92,931 93,575 96,155 95,172 8.8 Africa 1,742 1,566 1,576 1,635 1,902 2,240 1,856 2,020 2,023 16.1 Asia-Pacific 43,599 39,840 39,193 41,159 39,343 39,170 40,524 40,197 41,078 -5.8 Troubled Asia1 24,798 21,403 20,585 22,130 20,188 20,391 21,108 21,490 22,078 -11.0 Eastern Europe 3,673 4,489 4,216 4,944 4,737 3,903 3,695 3,552 3,741 1.9 Russia 1,414 2,105 1,722 2,062 1,590 198 138 144 241 -83.0 Latin America and Caribbean . 38,422 42,732 41,905 48,113 46,506 47,618 47,500 50,386 48,330 25.8 NOTE. See notes to table 1. 1. See note 1 to table 3. Revaluation Gains on Foreign Exchange and Revaluation gains on foreign exchange and deriva- Derivatives Contracts tives contracts during 1997-99 exhibited large swings in value (table 6). For example, aggregate revaluation Over the past decade, off-balance-sheet transactions, gains jumped initially from $5 billion in June 1997 to such as derivatives, have played an increasingly $17 billion in December 1997, but fell back to inilarger role in U.S. banks' overall business. The value tial levels by June 1999. In troubled Asia, these value of derivatives contracts is based on—or "derived" swings were particularly pronounced: Year-end 1997 from—the value of other financial or economic vari- levels were nearly five times higher than levels just ables, such as an exchange rate or a stock market six months earlier. At the height of the Asian crisis, index. When these underlying variables exhibit strong claims stemming from off-balance-sheet contracts swings, the value of derivatives contracts can be represented 22 percent of total claims on counterparsubject to similar or even more volatile swings, ties in troubled Asian countries but by June 1999 had depending on the type of contract. As the Asian crisis declined to only 4 percent of total claims (chart 1). began to unfold in the second half of 1997, U.S. The drop occurred mostly for three reasons: The banks' derivatives contracts with Asian counter- underlying market factors recovered to some extent; parties rose in value, mostly because of sharp many of these contracts were short in duration; and declines in underlying variables in Asian economies.8 U.S. banks wrote off some of the contracts for which payment seemed unlikely. Similar volatility in revaluation gains occurred in Eastern Europe, although 8. For example, before the onset of the crisis a U.S. bank may have entered into a contract with a Thai bank in which the value of the contract depended on the level of the Thai baht relative to the U.S. dollar. The contract may have been structured such that it would have in value; any decline in the baht relative to the dollar would result in a a positive value from the U.S. bank's perspective if the Thai baht fell gain for the U.S. bank and a loss for the Thai bank. 6. Revaluation gains of U.S. banks on foreign exchange and derivatives contracts with emerging-market counterparties, by region, 1997:Q2-1999:Q2 Millions of dollars except as noted PPeerrcceenntt 1997, quarter ending 1998, quarter ending 1999, quarter ending cchhaannggee,, RReeggiioonn JJuunnee 11999977 ttoo June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 JJuunnee 11999999 Total 5,377 11,712 16,681 12,190 11,406 11,312 8,993 8,560 5,480 1.9 Africa 261 292 226 179 339 195 198 20 49 -81.2 Asia-Pacific 3,519 7,794 13,551 8,996 7,846 6,869 5,816 4,769 2,616 -25.7 Troubled Asia1 2,717 6,983 12,306 7,775 6,457 5,237 4,167 3,394 1,593 -41.4 Eastern Europe 346 1,282 492 597 709 965 601 387 207 -40.2 Russia 75 898 71 144 203 157 74 14 0 -100.0 Latin America and Caribbean . 1,251 2,344 2,412 2,418 2,512 3,283 2,378 3,384 2,608 108.5 NOTE. See notes to table 1. See box "Types of Claims on Emerging- 1. See note 1 to table 3. Market Counterparties," for a discussion of revaluation gains. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises 87 1. Revaluation gains of U.S. banks on foreign exchange and on a daily basis, so that losses create additional presderivatives contracts with counterparties in troubled Asia sure on foreign counterparties in the midst of a crisis. as a percentage of total claims on those counterparties, Banking supervisors view the increased impor- 1997:Q2-1999:Q2 tance of revaluation gains during the past several Percent years as evidence of change in the nature of country exposure. The increased use of, and broader markedto-market reporting of, derivatives contracts has high- — — 20 lighted the way that market risk and counterparty credit risk interact. In particular, counterparty credit — — 15 risk can be negatively correlated with market risk, so that a positive market move—from a U.S. bank's — — — 10 perspective—could quickly increase counterparty credit risk. One of the important lessons from the \— 5 Asian crisis is that a U.S. bank could have completely hedged its market risk and still faced significant 1 i i 1 1 ! 1 1 1 counterparty credit risk if a change in market prices 1997 1998 1999 affected the ability of the foreign counterparty to pay. NOTE. Data are quarterly. Revaluation gains represent the market value of In the Russian crisis, some U.S. banks' ability to foreign exchange and derivatives contracts. If the contract has a positive market value for the U.S. bank, that amount is considered a revaluation gain, similar to a hedge local currency exposure broke down because claim in that the counterparty owes a payment to the U.S. bank. Russian banks—suffering heavy losses from the ruble The troubled Asian countries are Indonesia, Korea, Malaysia, the Philippines, and Thailand. depreciation—were unable or unwilling to make payments owed to U.S. banks. quarterly swings were not as extreme as those in The fast-moving nature of derivatives markets Asia.9 Revaluation gains as a percentage of total means that exposure can change more quickly than in claims reached 10 percent for claims in Eastern the past. Thus banks must rely on even better risk- Europe in September 1998, the peak of the Russian management techniques to ensure that they can mancrisis. age latent counterparty credit risk that might arise Revaluation gains on contracts with counterparties rapidly. In turn, supervisors must caution banks when in Latin America doubled over the period—to nearly risk-management techniques do not appear to be fully $3 billion. But peak levels were only one-quarter of capturing the risks generated by derivatives contracts the peak levels reached in Asia, reflecting in part the with emerging-market counterparties. relatively less extreme movements in economic vari- The Asian and Russian crises provided lessons for ables in Latin America. In addition, U.S. banks were internationally active U.S. banks, and to some extent not as likely to engage in less-traditional, off-balancethe banks have been able to apply what they learned. sheet activities (such as derivatives contracts) with For example, a number of banks are integrating their Latin American counterparties as they were with market risk and counterparty credit risk functions to counterparties in other regions.10 better manage cases in which one risk arises from the Large market declines during the Asian crisis gen- other. In addition, more institutions are stress testing erated rapid increases in counterparty credit risk for their emerging-market portfolios—in effect "shock- U.S. banks. Essentially, U.S. banks were seeing the ing" their current portfolios with a range of possible market value of their contracts increase, but, in cer- outcomes.11 In the Asian crisis, more thorough stress tain cases, so much so that the ability of some Asian testing before the events in 1997 might have provided counterparties to make payments, given their large the banks with some warning about the negative losing positions in some contracts, came into ques- effects of severe exchange-rate depreciations. tion. These contracts are generally marked to market Distribution by Counterparty Sector 9. Contracts with Russian counterparties changed drastically in value in August 1998 but by September had largely been charged off. 10. The crisis in Mexico and Latin America in 1994-95 may have Starting in June 1997, cross-border claims on counled U.S. banks to be more cautious about their derivatives business terparties in all emerging-market countries were diswith Latin American counterparties. In that crisis, a sharp devaluation of the Mexican peso generated large derivatives (and other) losses for Latin American counterparties of U.S. banks. In contrast, before 1997 many U.S. banks, and banks from other countries as well, may 11. For example, a U.S. bank might revalue its existing portfolio have been less concerned about potential losses on contracts with based on a hypothetical increase in interest rates or a hypothetical Asian counterparties. decline in the exchange rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • February 2000 tributed evenly among banks, the public sector, and so that this region's increased share of the aggrenonbank private counterparties.12 By June 1999, the gate contributed to the overall sectoral pattern distribution had shifted away from banks and toward over the two years. In Russia, the precipitous fall in the nonbank private sector. Although claims on banks cross-border claims was driven largely by a 92 perrepresented 33 percent of all cross-border claims cent decline in claims on the public sector, reprein June 1997, the share had fallen to 25 percent by senting a default by the Russian government on its June 1999. At the same time, the share of claims foreign-currency bonds in August and September on the nonbank sector rose from 36 percent to 42 per- 1998. cent. This trend reflects to some extent the difficulties experienced by certain emerging-market banks over the period. Distribution by Maturity The shift in the distribution of claims among counterparty sectors varied across regions. Much of the On the whole, the maturity distribution of crossshift in aggregate numbers occurred because of border claims on counterparties in emerging-market changes in cross-border claims on Asian counterpar- countries indicates the continued prevalence of shortties. In June 1997, banks represented 50 percent of term credits.13 For example, the share of cross-border the total for Asia, the nonbank private sector 41 per- claims with a maturity of one year or less held steady cent, and the public sector 9 percent. By June 1999, over the period, accounting for two-thirds of crossthe distribution in Asia had shifted toward the public border claims. In June 1997, short-term claims on sector and away from banks (table 7). A large num- Asian counterparties accounted for about 75 percent ber of Asian banks were hindered in their ability to of total cross-border claims on counterparties in that make good on liabilities because of their financial region, with the share falling to 65 percent after the difficulties during the Asian crisis. As a result, U.S. crisis. At the beginning of the period, U.S. banks held banks wrote off some of their claims on Asian counter- many short-term claims on Asian banks but, in some parties or at least did not renew them once payment instances, did not roll over extensions of credit durwas received. A second factor affecting the aggregate ing and immediately after the crisis. sectoral distribution was the relative increase in In Latin America, the maturity distribution shifted claims on Latin American counterparties (as dis- slightly toward the short term, but the level of shortcussed previously). The cross-border claims on Latin term claims remained below that in emerging Asia. American counterparties were distributed more The lower percentage of short-term claims in Latin between the public sector and nonbank private sector, America may have resulted from a greater share 12. Breakdowns by counterparty sector are not reported for local 13. Maturity data are based on initial claims before adjustments for claims; they are available only for cross-border claims. guarantees and do not include revaluation gains. 7. Distribution of cross-border claims of U.S. banks on emerging-market counterparties, by region and counterparty sector, 1997:Q2-1999:Q2 Percent 1997, quarter ending 1998, quarter ending 1999, quarter ending RReeggiioonn aanndd ccoouunntteerrppaarrttyy sseeccttoorr June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Africa Banks 20.0 13.6 16.7 19.3 18.5 20.7 25.8 25.1 26.2 Public sector 72.7 67.6 69.1 69.2 65.7 64.0 58.7 55.3 52.3 Nonbank private sector 7.2 18.7 14.3 11.5 15.8 15.3 15.5 19.6 21.5 Asia-Pacific Banks 49.9 49.9 48.5 42.5 42.8 39.1 40.4 37.6 35.2 Public sector 8.9 10.2 11.1 13.8 15.8 19.0 19.7 19.5 22.8 Nonbank private sector 41.2 39.9 40.4 43.6 41.4 41.9 40.0 42.9 42.0 Eastern Europe Banks 11.9 9.4 13.3 13.8 17.1 23.1 22.4 24.9 17.6 Public sector 77.6 82.1 72.8 72.6 68.4 52.5 49.9 48.8 54.8 Nonbank private sector 10.6 8.4 14.0 13.7 14.5 24.4 27.7 26.3 27.7 Latin America and Caribbean Banks 22.2 21.4 24.7 25.1 26.3 26.3 21.2 20.4 20.3 Public sector 41.4 40.6 35.1 32.8 30.5 26.7 33.6 34.3 36.5 Nonbank private sector 36.5 38.0 40.2 42.2 43.2 47.0 45.3 45.3 43.2 NOTE. See notes to table 1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises 89 of loans to the public sector, which generally have a chaebols encountered financial difficulties, so that longer maturity. by 1998 counterparties in Asia, as a group, were net The share of short-term claims in cross-border receivers of credit guarantees on initial claims. claims on Eastern Europe fell from a peak of 78 per- Regarding other regions, Latin American countercent in June 1998 to 62 percent in June 1999. By this parties were net receivers of credit guarantees over time, most of the short-term speculative positions the entire period, with the amounts ranging between in Russian government debt had been closed out. In 15 percent and 18 percent of initial claims. The most general, the prevalence of short-term claims indicates drastic increase occurred in Eastern Europe, where that U.S. banks were cautious about extending matu- by June 1999, nearly half of all initial claims were rities of claims on emerging-market counterparties in guaranteed.16 order to have the ability to reduce exposure quickly if a crisis developed. Claims in Relation to Total Assets and to Tier 1 Capital Initial Claims and Adjustments for Guarantees Examined in isolation, the outstanding claims on As noted previously, U.S. banks report initial cross- emerging-market counterparties held by U.S. banks border claims before adjustments for guarantees. give only a partial view of the relative importance of Comparing initial claims and adjusted claims shows emerging-market activity for banks. For a more comthe extent to which the ultimate risk on those claims plete picture, supervisors must examine claims as a is being borne by counterparties outside the country percentage of assets and as a percentage of capital. of the initial borrower.14 Subtracting claims adjusted Claims as a percentage of capital, in particular, profor guarantees from initial claims provides a figure vide supervisors with an initial assessment of U.S. for net credit guarantees received (if positive) or net banks' ability to weather the potentially volatile credit guarantees extended by counterparties in those nature of emerging markets. countries (if negative) on initial claims held by U.S. Over the two-year period, emerging-market claims banks. In the aggregate, for claims initiated by U.S. as a percentage of U.S. bank assets (for those banks banks, counterparties in emerging-market countries reporting country exposure data) fell from 6.7 percent were net receivers of guarantees over the period, of total assets to 4.5 percent, a result more of the meaning that they received more guarantees than overall increase in total assets than of the decline in they offered. In addition, the percentage of initial claims (table 8). For example, even though total claims that received guarantees rose from 10 percent claims on counterparties in Latin America registered in 1997 to 18 percent in 1999. Not surprisingly, these double-digit growth, that growth rate was outpaced data indicate that initial claims on emerging-market by that of the reporting banks' total assets, thus counterparties held by U.S. banks were sometimes driving the percentage of claims-to-assets for that protected by guarantees from counterparties in devel- region lower. The decline in this percentage for Asian oped countries or from international development counterparties, for which claims fell, was even more banks. In fact, U.S. banks may have sought greater dramatic. protection on those initial claims, given the crises in Total claims as a percentage of tier 1 capital peaked emerging markets. in September 1997 at 105 percent (table 8).17 How- Interestingly, in 1997 counterparties in emerging ever, by June 1999 that percentage had fallen to Asia were net granters of credit guarantees on the 72 percent, a decline stemming mostly from a signifiinitial claims of U.S. banks because of roughly $3 bil- cant increase in tier 1 capital (chart 2). Total claims lion in guarantees extended by Korean counter- on Latin American counterparties as a percentage of parties, particularly large Korean conglomerates, or tier 1 capital fell slightly over the period, but never chaebols.15 That trend in Asia reversed as Korean 16. U.S. banks are increasingly involved with credit derivatives, 14. For example, if a U.S. bank held a claim on a Chinese firm in which transfer counterparty credit risk to a third party. As the credit the amount of $100 million, and if $20 million of that claim were derivatives market grows, there may be many more cases in which guaranteed by a French bank, then initial claims on China would be supervisors will want to examine shifts in counterparty credit risk $100 million, adjusted claims on China would be $80 million, and from the initial obligor to a third party, similar to the way guarantees adjusted claims on France would increase $20 million. transfer risk. 15. Guarantees extended by Korean counterparties were not 17. Tier 1 capital generally consists of common stockholders' restricted to claims on other Korean counterparties; some guarantees equity, noncumulative perpetual preferred stock and any related surapplied to initial claims held by U.S banks on other counterparties in plus, and minority interests in equity capital accounts of consolidated emerging Asia. subsidiaries Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Federal Reserve Bulletin • February 2000 8. Total claims of U.S. banks on emerging-market counterparties as a percentage of reporting banks' assets and reporting banks' tier 1 capital, 1997:Q2-1999:Q2 1997, quarter ending 1998, quarter ending 1999, quarter ending June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Percentage of reporting banks' total assets Total emerging-market claims 6.7 6.8 6.2 6.0 5.8 5.3 4.8 4.8 4.5 Africa .1 .1 .1 .1 .1 .1 .1 .1 .1 Asia-Pacific 3.0 2.8 2.7 2.3 2.1 2.0 1.8 1.8 1.7 Troubled Asia1 1.9 1.8 1.7 1.4 1.2 1.1 1.0 1.0 .9 Eastern Europe .4 .5 .4 .4 .4 .3 .2 .2 .2 Russia .2 .3 .2 .2 .2 .1 .0 .0 .0 Latin America and Caribbean 3.2 3.3 3.1 3.2 3.1 2.9 2.7 2.7 2.6 Percentage of reporting banks' tier 1 capital Total emerging-market claims 102.1 104.6 97.0 93.9 88.5 80.3 75.7 73.2 72 3 Africa 1.8 1.8 1.5 1.4 1.6 1.6 1.3 1.3 1.3 Asia-Pacific 45.4 43.1 41.6 36.1 32.7 30.3 28.2 27.0 27.1 Troubled Asia1 28.7 27.3 26.4 22.0 18.8 17.0 15.5 14.9 14.5 Eastern Europe 6.6 8.0 5.7 6.5 6.4 4.0 3.5 3.0 2.9 Russia 3.5 4.7 2.9 3.3 3.0 .8 .4 .3 .4 Latin America and Caribbean 48.4 51.6 48.2 49.9 47.8 44.5 42.7 41.9 41.0 NOTE. For a definition of tier 1 capital, see text note 17. 1. See note 1 to table 3. below 41 percent. In contrast, total claims on Asian their emerging-market portfolios. When viewed at counterparties fell from 45 percent of tier 1 capital to the level of the individual institution, these figures 27 percent. Total claims on Eastern European coun- allow supervisors to recognize those institutions with terparties peaked at 8 percent of tier 1 capital about high exposure relative to capital. Banks identified one year before the onset of the crisis in Russia. as having elevated claims-to-capital ratios receive Generally, internationally active U.S. banks reduced greater supervisory scrutiny in the area of country their exposure to emerging markets while bolstering risk. For example, supervisors would focus on a bank their capital. with a claims-to-capital ratio of more than 100 per- As discussed earlier, supervisors cannot assess cent, even if the amount of claims was small. But country risk by simply looking at the absolute levels claims-to-capital ratios, on their own, might not of claims. Claims-to-capital figures serve as a pre- always reflect the underlying riskiness of the claims liminary indicator of how much cushion U.S. banks or the ability of the banks to manage that risk, might have available to absorb potential losses in so supervisors conduct assessments of the riskmanagement systems of individual banks to achieve a more accurate picture of how country risk is affecting those institutions. 2. U.S. banks' emerging-market claims compared with For the most part, U.S. banks did not suffer large tier 1 capital, 1997:Q2-1999:Q2 losses stemming directly from emerging-market cri- Billions of dollars ses in recent years. When banks did suffer losses, they were generally able to offset them with earnings from other business segments.18 In fact, the ability of U.S. banks to charge their losses in Asia and Russia against income—rather than drawing down their capital—indicates both their high levels of overall profitability during this period and their low levels of exposure. It is possible, however, that a similar period of international crisis coinciding with a domestic downturn in the United States might have put pressure on U.S. banks' capital positions. 1997 1998 1999 NOTE. Tier 1 capital consists of common stockholders' equity, noncumulative perpetual preferred stock and any related surplus, and minority 18. See Antulio N. Bomfim and William R. Nelson, "Profits and interests in equity capital accounts of consolidated subsidiaries. Tier 1 capital Balance Sheet Developments at U.S. Commercial Banks in 1998," data cover only banks that file the Country Exposure Report. Federal Reserve Bulletin, vol. 85 (June 1999), pp. 369-95. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises 91 Concentrations among Reporting Banks EMERGING-MARKET EXPOSURE OF BANKS FROM OTHER DEVELOPED COUNTRIES The discussion thus far has centered on U.S. banks in the aggregate. However, because most of the claims Briefly comparing U.S. banks' exposure to emergingon emerging-market counterparties are concentrated market countries over 1997-99 with the exposure of at a small number of U.S. banks, a smaller capital banks from other developed countries provides some base is available to absorb their potential losses. overall context for assessing the relative role played Serious country exposure difficulties at just a few by U.S. banks. U.S. banks, along with banks from of these banks would have the potential to trigger other developed countries, report their country expobroader problems within the entire U.S. banking sys- sure data to the Bank for International Settlements tem. In general, supervisors focus on the riskiness of (BIS), which then compiles data for all of its memany U.S. bank's foreign claims but are particularly bers and reports the consolidated results.20 sensitive to the implications of exposure at large From June 1997 to June 1999, BIS reporting bank banks. claims on emerging-market counterparties fell in The U.S. banks that report in the "Money Center the aggregate from $829 billion to $782 billion Banks" category on the Country Exposure Report (table 10). Claims on Asian counterparties fell 20 pergenerally represent those with the largest claims on cent, while claims on Latin American and African counterparties in emerging-market countries.19 Over counterparties rose. By June 1999, claims on Asia the 1997-99 period, money center banks consistently still represented the largest share of total emergingaccounted for about 80 percent of total claims on market claims, but by a smaller margin because of an counterparties in emerging markets and more than increase in the share of claims on Latin American 40 percent of the total assets of all U.S. banks. counterparties. Compared with U.S. bank data on For the money center banks, the share of their emerging-market claims, the shifts for Asia and Latin emerging-market claims in total assets fell from America were relatively similar; however, claims 13 percent in 1997 to 6 percent in 1999 (table 9). on Eastern European counterparties fell only slightly Commensurate with that decline was a decrease for all BIS reporting banks, and claims on African in emerging-market claims as a percentage of tier 1 counterparties increased almost one-third. capital, from a peak of 232 percent in 1997 to 113 percent in 1999. Notably, the decrease in this BIS Reporting Bank Claims percentage stemmed largely from an 88 percent by Country of Origin increase in tier 1 capital. Analyzing the claims-to-capital ratio for money In June 1997, claims held by U.S. banks accounted center banks is especially important, given the confor 13 percent of the cross-border claims on centration of claims on emerging-market counteremerging-market counterparties held by all BIS parties at these banks. Whenever claims-to-capital ratios are identified as particularly high, supervisors may conduct a special analysis of the selected bank's 20. These data represent cross-border claims from individual country submissions of claims on non-BIS member countries. The data are ability to manage country risk in the context of consolidated at the BIS to eliminate any double counting and do not broader risk-management functions. include revaluation gains on off-balance-sheet contracts or adjustments for guarantees (for details on BIS data, see www.bis.org). BIS member countries include the Group of Ten, plus Austria, Denmark, Finland, Ireland, Luxembourg, Norway, and Spain. Because the BIS 19. Over time, this group has varied in size from six to nine banks does not collect capital figures for these countries, claims-to-capital (currently six). See the Country Exposure Lending Survey for details. ratios cannot be calculated. 9. Total claims of U.S. money center banks on emerging-market counterparties as a percentage of their total assets and tier 1 capital 1997:Q2-1999:Q2 1997, quarter ending 1998, quarter ending 1999, quarter ending IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Total emerging-market claims as a percentage of total assets 13.1 13.4 12.3 11.9 11.1 8.4 7.2 6.9 6.3 Total emerging-market claims as a percentage of tier 1 capital ... 225.7 232.2 205.9 204.4 190.0 144.4 121.8 113.0 112.6 NOTE. For a definition of tier 1 capital, see text note 17. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

92 Federal Reserve Bulletin • February 2000 10. Distribution of total claims of BIS reporting banks on emerging-market counterparties, by region, 1997:Q2-1999:Q2 1999, 1997, quarter ending 1998, quarter ending quarter ending PPPeeerrrccceeennnttt RReeggiioonn ccchhhaaannngggeee,,, June 30 Dec. 31 June 30 Dec. 31 June 30 JJJuuunnneee 111999999777 tttooo JJJuuunnneee 111999999999 Total claims on emerging-market counterparties (millions of dollars) AAllll eemmeerrggiinngg--mmaarrkkeett ccoouunnttrriieess 828.567 862,147 835,606 798,184 781,971 -5.6 AAffrriiccaa 34,179 35,637 41,536 41,911 45,028 31.7 AAssiiaa--PPaacciiffiicc 430.366 423,683 371,489 351,268 344,237 -20.0 EEaasstteerrnn EEuurrooppee 116,188 122,445 131,561 121,619 110,988 -4.5 LLaattiinn AAmmeerriiccaa aanndd CCaarriibbbbeeaann 247,834 280,382 291,020 283,386 281,718 13.7 Distribution of cross-border claims among emerging-market regions (percent) All emerging-market countries . 100 100 100 100 100 Africa 4.1 4.1 5.0 5.3 5.8 Asia-Pacific 51.9 49.1 44.5 44.0 44.0 Eastern Europe 14.0 14.2 15.7 15.2 14.2 Latin America and Caribbean 29.9 32.5 34.8 35.5 36.0 . Not applicable. reporting banks (table 11). Banks from Japan had the Japanese banks held nearly 30 percent of all claims highest share, with Germany a close second. Over the on Asian counterparties in June 1997, but that share two-year period, the share held by U.S. banks fell had fallen to 23 percent by June 1999. That decline slightly. The share of Japan's banks dropped signifi- can be compared with a slight increase in the portion cantly. Japanese banks were facing considerable of claims on Asian counterparties held by European domestic financial difficulties over this period, which banks (nearly 50 percent), while the share held by contributed to their retrenchment in emerging mar- U.S. banks remained relatively steady (7 percent). In kets. Most European reporting banks increased their Latin America, U.S. banks held a large share (25 perrelative positions. cent), while European banks, as a group, expanded their share of claims to more than 50 percent, led by a rise in the share of Spanish banks. German and BIS Reporting Bank Claims other European banks accounted for about two-thirds by Emerging-Market Region of all BIS reporting bank claims on Eastern Europe, A regional breakdown indicates that the relative while the share held by U.S. banks fell by half, to shares were not uniform by emerging-market regions. 5 percent. 11. Distribution of cross-border claims of BIS reporting banks on emerging-market counterparties, by lending country, 1997:Q2-1999:Q2 1999, 1997, quarter ending 1998, quarter ending quarter ending PPPeeerrrccceeennnttt CCoouunnttrryy ccchhhaaannngggeee,,, June 30 Dec. 31 June 30 Dec. 31 June 30 JJJuuunnneee 111999999777 tttooo JJJuuunnneee 111999999999 Total cross-border claims on emerging-market counterparties (millions of dollars) All reporting banks 828,567 862,147 835.606 798,184 781,971 -5.6 United States .. 109,462 107,770 103,685 94,299 96,539 -11.8 Japan 146,092 137,563 120,797 108,643 94,050 -35.6 Germany 139,626 147,911 147,484 154,347 155,079 11.1 France 82,824 95,683 92,090 87,750 91,054 9.9 United Kingdom 55,260 63,607 65,728 64,504 58,141 5.2 Other Europe .. 130,830 149,710 160,941 159,250 149,168 14.0 All others 164,473 159,904 144,881 129,392 137,940 -16.1 Distribution of cross-border claims amoung reporting banks from BIS-member countries (percent) All reporting banks 100 100 100 100 100 United States .. 13.2 12.5 12.4 11.8 12.3 Japan 17.6 16.0 14.5 13.6 12.0 Germany 16.9 17.2 17.6 19.3 19.8 France 10.0 11.1 11.0 11.0 11.6 United Kingdom 6.7 7.4 7.9 8.1 7.4 Other Europe ... 15.8 17.4 19.3 20.0 19.1 All others 19.9 18.5 17.3 16.2 17.6 NOTE. Data in this table do not include adjustments for guarantees; as a . . Not applicable. result, data for U.S. banks may differ from data reported in earlier tables. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises 93 Overall, the BIS data indicate that U.S. banks' underwent tremendous growth from 1982 to general reduction in claims on emerging-market 1998—an astounding 566 percent. The increasing counterparties contrasted with the rise in claims held importance of local claims during the 1997-99 period by most European banks. Banks from European is thus part of a long-term trend. In some sense, this countries appear to be expanding cross-border lend- trend reflects the market penetration achieved by U.S. ing to emerging-market counterparties, despite the banks in local banking markets during the past events of recent years, whereas U.S. banks have decade. In addition, the relatively larger portion of focused their efforts more on Latin America. Japa- local claims means that the transfer risk element of nese banks have had little choice but to scale back country risk is lessened insofar as more claims are their emerging-market business because of capital denominated and funded in local currency.24 Howpressures. ever, the counterparty credit risk element of country exposure may have increased because in the recent period, fewer claims have an explicit or implicit U.S. COUNTRY EXPOSURE DATA BEFORE 1997 public-sector guarantee than in the period before 1997.25 Supervisors still draw on valuable lessons from the past in evaluating recent country exposure data. While it is not within the scope of this article to Distribution by Counterparty Sector, conduct an extensive analysis of country exposure 1982 to 1998 data over several decades, a brief examination of trends since 1982 provides a necessary context for The composition, not just the levels, of emergingmore accurate analysis of the 1997-99 period.21 In market claims changed from the 1980s to the late particular, drawing comparisons with data from crises 1990s, particularly the distribution of claims by counin the 1980s, in which U.S. banks suffered siz- terparty sector.26 In 1986 and 1990, cross-border able losses on their developing-country portfolios, is claims on the public sector represented one-half of useful.22 total cross-border claims. Soon thereafter, the shift Despite some changes in how claims are reported, away from public-sector lending began; by 1998 the data from before and after 1997 are relatively com- distribution had changed markedly, with claims on parable.23 Therefore, it is possible to view the the nonbank private sector at nearly one-half of 1997-99 period in the context of broader trends in total claims. Although there was a general shift country exposure, including claims on emerging- toward the nonbank private sector, claims on publicmarket counterparties. sector counterparties in Latin America and claims on banks in Asia remained significant. Cross-Border and Local Claims, 1982 to 1998 Distribution by Maturity, 1982 to 1998 In examining country exposure data for selected years from 1982 to 1998, the first item of interest is that The maturity distribution has also shifted since the total claims on counterparties in emerging-market early 1980s, with more claims classified as shortcountries—in absolute terms—were nearly as high term (one year or less). In 1982, short-term claims in the 1980s as in 1998, with cross-border claims represented one-half of all claims but fell below in 1982 and 1986 actually exceeding cross-border 50 percent in 1986 and 1990. By 1994, short-term claims in 1998 (table 12). However, local claims claims had risen, to 60 percent of total claims. This 21. Data from 1998 are included to provide an overlapping comparison (at intervals of four years) of earlier data with the 1997-99 24. Transfer risk applies to cross-border claims and any local period. claims not funded by local liabilities. For the most part, growth in 22. U.S. banks began reporting on the Country Exposure Report in local liabilities has kept pace with growth in local claims. 1978, so the data series captures the entire period of crisis in develop- 25. The significance of this development became clear in both the ing countries during the 1980s. Asian and the Russian crises, as expectations that local country gov- 23. As discussed earlier, data on revaluation gains were not col- ernments would provide guarantees for banks and nonbank companies lected before June 1997. In addition, the definition of local claims was were not realized. altered slightly in June 1997. However, cross-border measures are 26. The same methodology used to examine data from the 1997-99 nearly identical before and after June 1997, and the definitional period fits this broader comparison as well, except that cross-border change in local claims affects only a few countries. (See note 3 in box revaluation gains were not reported before 1997 and thus are excluded "Types of Claims.") from the 1998 figures to ensure comparability. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

94 Federal Reserve Bulletin • February 2000 fluctuation in short-term claims as a percentage emerging-market counterparties encountered diffiof total claims may have been directly tied to culty in repaying debts, U.S. banks closed out many the developing-country debt crisis. Specifically, as of their short positions and ceased to roll over short- 12. Claims of U.S. banks on foreign counterparties, by type of claim and region, selected years, 1982-98 Item 1982 1986 1990 1994 1998 Total claims (millions of dollars) Developed countries and banking centers 278,948 286,671 269,235 280,718 466,965 Cross-border 213,478 185,713 152,314 160,218 259.314 Local 65,470 100,958 116,921 120,500 207,651 Emerging markets 150,925 132,988 85,281 122,724 176,129 Cross-border 137,040 116,072 61,938 79,876 83,629 Local 13,885 16,916 23,343 42,848 92.500 Africa 7,612 4,110 2,344 1,682 3,069 Cross-border 7,119 3,662 1,898 1,131 1,213 Local 493 448 446 551 1,856 Asia-Pacific 46,614 36,581 31,919 51,199 63.188 Cross-border 40,558 28,190 18,204 27,237 23,386 Local 6,056 8,391 13,715 23,962 39.802 Eastern Europe 5,876 3,710 2,086 4,551 7,916 Cross-border 5,876 3,585 1.830 2,424 4,292 Local 0 125 256 2,127 3,624 Latin America 90,823 88,587 48,932 65,292 101,956 Cross-border 83,487 80,635 40,006 49,084 54,738 Local 7,336 7,952 8,926 16,208 47,218 Total claims as a percentage of total assets Developed countries and banking centers 22.1 17.8 14.4 12.8 11.5 Cross-border 16.9 11.5 8.1 7.3 6.4 Local 5.2 6.3 6.2 5.5 5.1 Emerging markets 12.0 8.2 4.5 5.6 4.3 Cross-border 10.9 7.2 3.3 3.6 2.1 Local 1.1 1.0 1.2 2.0 2.3 Africa .6 .3 .1 .1 .1 Cross-border .6 .2 .1 .1 .0 Local .0 .0 .0 .0 .0 Asia-Pacific 3.7 2.3 1.7 2.3 1.6 Cross-border 3.2 1.7 1.0 1.2 .6 Local .5 .5 .7 1.1 1.0 Eastern Europe .5 .2 .1 .2 .2 Cross-border .5 .2 .1 .1 .1 Local .0 .0 .0 .1 .1 Latin America 7.2 5.5 2.6 3.0 2.5 Cross-border 6.6 5.0 2.1 2.2 1.4 Local .6 .5 .5 .7 1.2 Total claims as a percentage of total capital Developed countries and banking centers 395.1 246.7 166.5 125.3 110.2 Cross-border 302.4 159.8 94.2 71.5 61.2 Local 92.7 86.9 72.3 53.8 49.0 Emerging markets 213.8 114.4 52.7 54.8 41.6 Cross-border 194.1 99.9 38.3 35.7 19.7 Local 19.7 14.6 14.4 19.1 21.8 Africa 10.8 3.5 1.4 .8 .7 Cross-border 10.1 3.2 1.2 .5 .3 Local .7 .4 .3 .2 .4 Asia-Pacific 66.0 31.5 19.7 22.9 14.9 Cross-border 57.4 24.3 11.3 12.2 5.5 Local 8.6 7.2 8.5 10.7 9.4 Eastern Europe 8.3 3.2 1.3 2.0 1.9 Cross-border 8.3 3.1 1.1 1.1 1.0 Local .0 .1 .2 .9 .9 Latin America 128.6 76.2 30.3 29.2 24.1 Cross-border 118.3 69.4 24.7 21.9 12.9 Local 10.4 6.8 5.5 7.2 11.1 NOTE. In this table, figures for claims as a percentage of total assets and revaluation gains (see text note 26); also total capital is used in this table instead for claims as a percentage of total capital in 1998 are not consistent with of tier 1 capital (see text note 28). 1998 figures in table 8 for two reasons: The figures in this table do not include Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Bank Exposure to Emerging-Market Countries during Recent Financial Crises 95 term claims, leaving mostly longer-term claims.27 3. U.S. banks' emerging-market claims compared with So the percentage of short-term claims in the total total capital, selected years, 1982-98 fell. U.S. banks later became more comfortable Billions of dollars extending new credits to emerging markets, starting with short-term claims. The resumption of short-term Emerging-market claims Total capital lending was perhaps an indicator of U.S. banks' changed attitude toward lending to emerging-market counterparties. Claims Relative to Total Assets and Capital, 1982 to 1998 More revealing comparisons emerge from an examination of claims as a percentage of total assets and 1982 1986 1990 1994 1998 claims as a percentage of capital.28 Claims on coun- NOTE. Data for 1998 were included to provide an overlapping comparison (at intervals of four years) of earlier data with the data from 1997-99. However, terparties in emerging-market countries as a percent- data on revaluation gains were not collected before 1997, so revaluation gains age of total assets were as high as 12 percent in 1982 for 1998 were excluded from this chart to ensure comparability with data from earlier years. Total capital data cover only banks that file the Country Exposure but fell sharply, as banks reduced their emerging- Report. market portfolios during the debt crisis of the 1980s. Because tier 1 capital was not reported before 1990, capital figures used in these comparisons consist of equity capital, subordinated debentures, and Claims on emerging-market counterparties as a reserves for loan losses, or what is referred to as total capital. This measure of percentage of total capital in 1982 were well above capital was used in the Country Exposure Lending Survey until 1998, when tier 1 capital was adopted. 200 percent, much larger than the 42 percent recorded in 1998. The fallout from the debt crisis of the 1980s caused reported on a lagged basis. While the trend toward the major downward shift in claims as a percentage better disclosure is generally welcome, it does mean of total assets and claims as a percentage of capital. that any losses may have an immediate, and some- By 1990, US. banks had lowered their claims-to- times volatile, effect on banks' capital, forcing them capital ratios, primarily as a result of the decrease in to be more adept at managing risks in relation to their total claims as U.S. banks retrenched (chart 3). In capital. Indeed, U.S. banks today apply a number of 1994 and 1998, the reduction in the claims-to-capital risk-management techniques that were not widely percentages came as a result of improved capital used in the 1980s, such as measurements of potential positions and not from a reduction in claims. exposure, distributions of possible loss amounts, and In the 1980s, U.S. banks' emerging-market claims- estimates of capital at risk. to-capital ratios were much higher than current ratios. The overall decline in these ratios provides some assurance that emerging-market country exposure CONCLUSION poses less of a potential threat to U.S. banks today than a decade ago. However, the relative riskiness of U.S. banks continue to be active in emerging-market claims must be taken into account to develop a more countries despite the crises in recent years. Claims accurate overall picture of those risks. Also, there is held by U.S. banks on counterparties in Asia and an increasing trend toward marking claims to market, Eastern Europe declined over 1997-99, as U.S. banks meaning that a change in their value can have a direct either suffered losses on claims or actively reduced effect on a bank's reported income; in the 1980s, the their exposure to those regions. Claims on counterprocess of first provisioning for, and then writing off, parties in Latin America increased over the period, claims meant that losses in emerging markets were perhaps an indication that US. banks rely on their longer-standing, more entrenched ties to that region and likely view it as a strategic growth area. However, for all regions the claims-to-capital ratios 27. The short-term claims that were granted anew often came in the have fallen, a result of U.S. banks bolstering their form of trade credits, which were considered much less risky. capital over the entire period—international crises 28. Because tier 1 capital was not reported before 1990, capital figures used in the comparisons consist of equity capital, subordinated notwithstanding. debentures, and reserves for loan losses, or what is referred to as total Banking supervisors determine the potential threat capital. This measure of capital was used on the Country Exposure Lending Survey until 1998, when tier 1 capital was adopted. from international exposures by identifying risk areas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

96 Federal Reserve Bulletin • February 2000 among foreign claims, assessing the capital support- signal, in turn, may require a more detailed analysis ing those claims, and evaluating banks' ability to of country risk at the institutions in question. Finally, manage the risks associated with those claims. In supervisors evaluate the manner in which country particular, high claims-to-capital ratios for U.S. banks risk is being managed along with the other risks act as a signal for supervisors to focus on specific facing U.S. banks. • U.S. banks or, in some cases, groups of banks. Such a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

97 Industrial Production and Capacity Utilization for December 1999 Released for publication January 14 For the fourth quarter as a whole, the total index increased at an annual rate of 6.6 percent, up from Industrial production increased 0.4 percent in Decem- 4.8 percent in the third quarter. The rate of capacity ber, the same rate as in November. At 140.5 percent utilization for total industry edged up in December, to of its 1992 average, industrial production in Decem- 81.3 percent, a level 0.8 percentage point below its ber was 5.0 percent higher than in December 1998. 1967-98 average. Industrial production and capacity utilization Ratio scale, 1992 = 100 Percent of capacity _ Industrial production Capacity utilization 140 — 130 Manufacturing 85 A/\ Total industry 120 r ^ f^ Total industry 110 » Manufacturing Vv^jf 80 100 1 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 Durable / ^^ - Nondurable — i V i 1 1 1 1 1 I 1 Ratio scale, 1992 = 100 _ Equipment — Business 1 S. Defense and space 1 1 1 1 1 1 1 iH ^ J I L 1990 1992 1994 1996 1998 1990 1992 1994 1996 1998 All series are seasonally adjusted. Latest series, December. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

98 Federal Reserve Bulletin • February 2000 Industrial production and capacity utilization, December 1999 Industrial production, index, 1992= 100 Percentage change Category 1999 1999' Dec. 1998 to Sept. Oct/ Nov.' Dec. P Sept.r Oct.r Nov. Dec. P Dec. 1999 Total 138.1 139.4 139.9 140.5 .2 1.0 .4 .4 5.0 Previous estimate 138.0 139.1 139.5 .2 .8 .3 Major market groups Products, total2 127.6 129.0 129.2 129.4 -.1 1.1 .2 .2 3.6 Consumer goods 117.1 118.9 118.9 119.1 -.4 1.5 .0 .2 3.5 Business equipment 173.7 175.1 176.1 175.6 -.1 .8 .6 -.3 5.6 Construction supplies 134.1 135.3 135.7 136.2 .9 .9 .3 .4 3.0 Materials 155.7 156.8 158.0 159.2 .7 .7 .7 .8 7.3 Major industry groups Manufacturing 142.9 144.3 145.2 145.5 .3 1.0 .6 .2 5.1 Durable 175.0 176.4 177.7 177.9 .3 .8 .7 .1 7.0 Nondurable 111.8 113.1 113.6 114.0 .3 1.2 .5 .3 2.6 Mining 98.3 99.3 99.8 100.2 -.2 1.0 .5 .4 2.2 Utilities 117.7 118.6 115.5 119.5 -.1 .7 -2.6 3.5 6.2 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1998 1999 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, DDDeeeccc... 111999999888 11996677--9988 11998822 11998888--8899 Dec. Sept.' Oct.r Nov.r Dec.P tttooo DDDeeeccc... 111999999999 Total 82.1 71.1 85.4 80.6 80.6 81.2 81.2 81.3 4.1 Previous estimate 80.6 81.0 81.0 Manufacturing 81.1 69.0 85.7 79.9 79.7 80.2 80.4 80.3 4.6 Advanced processing 80.5 70.4 84.2 78.8 78.7 79.2 79.4 79.1 5.5 Primary processing . 82.4 66.2 88.9 83.1 82.8 83.3 83.7 83.7 2.3 Mining 87.5 80.3 88.0 81.4 81.8 82.6 83.1 83.4 -.3 Utilities 87.4 75.9 92.6 88.9 92.0 92.6 90.1 93.1 1.4 NOTE. Data seasonally adjusted or calculated from seasonally adjusted 2. Contains components in addition to those shown, monthly data. r Revised, 1. Change from preceding month. p Preliminary. MARKET GROUPS over the two preceding months; in December, the production indexes for foods and tobacco and for The output of consumer goods, which had been flat chemical products rose further but were mostly in November, increased 0.2 percent in December. offset by declines in the output of clothing and paper The output of durable consumer goods declined for products. a second month as the production of automotive The production of business equipment, which had products fell a cumulative total of 2lA percent over increased about IV2 percent over the preceding two the last two months of the year. The production of months, eased a bit in December. The uptrend was other durable consumer goods advanced, with interrupted by a drop of 4.4 percent in the output increases in the indexes for home electronics and of transit equipment and of 1.1 percent in the miscellaneous consumer durable goods more than production of the "other equipment" group, particuoffsetting a sharp decline in appliances. Although the larly farm machinery and equipment. The output of monthly fluctuations in appliance output have been industrial equipment remained weak, edging down volatile, production for the year as a whole was up in both November and December. The production quite sharply. The production of nondurable con- of information processing and related equipment sumer goods advanced 0.4 percent. Most of the gain rose more than 1 percent, bringing the gain over the came from a rebound in the output of energy prod- last 12 months to nearly 24 percent. The output of ucts after unusually mild weather in November had defense and space equipment fell more than 1 percent cut sales of residential gas and electricity nearly in December, to a level 4.2 percent below that in 4 percent. The output of non-energy consumer December 1998; the cumulative decline in this index products edged up after a rise of about 2 percent over the 1990s was about 40 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 99 The production of construction supplies rose industries, production gains were widespread; how- 0.4 percent further in December, to a level 3.0 per- ever, the output of leather and products and textile cent higher than in December 1998; from the third mill products declined for another month. In the quarter to the fourth quarter, this index increased fourth quarter, production rose substantially in the at an annual rate of about 7 percent. The output of foods, tobacco, chemicals, paper, and printing and materials increased 0.8 percent after an average publishing industries. monthly gain of 0.7 percent in the preceding three The factory operating rate edged down in Decemmonths. The output of durable goods materials ber, to 80.3 percent. Utilization in primary-processing increased 0.7 percent, a bit less than the average industries held at 83.7 percent, while that for monthly gain recorded over the past year. Another advanced-processing industries declined 0.3 percentstrong increase in equipment parts, particularly semi- age point, to 79.1 percent. conductors, was partly offset by a decline in the index Output at utilities, which had fallen back more than for original equipment parts used to make motor 2Vi percent in November, increased 3.5 percent; the vehicles. The output of nondurable goods materials operating rate at utilities rebounded 3 percentage edged up 0.2 percent. The output of energy materials, points, to 93.1 percent. Boosted by the continuing which had grown slowly over the year, jumped recovery in oil and gas extraction, mine production 1.8 percent in December after a 1 percent decline in increased 0.4 percent, about the same gain as in November. November; the utilization rate at mines, which increased to 83.4 percent, was still noticeably below its long-term average. While drilling and other oil INDUSTRY GROUPS and gas field activity has been recovering since June, the level of activity remains relatively low. Manufacturing output advanced 0.2 percent in December, one-third as much as in November. The declines in the production of motor vehicles and parts REVISION OF INDUSTRIAL PRODUCTION AND and aircraft and parts reduced growth in manufactur- CAPACITY UTILIZATION ing about 0.3 percentage point in December. For the fourth quarter, the annual rate of factory output accel- As previously announced, the Federal Reserve Board erated to more than 7 percent, with continued strength on November 30, 1999, published a revision to the in durables and a sharp step-up in the output of index of industrial production (IP) and the related nondurables, which had changed little, on balance, measures of capacity and capacity utilization for between mid-1998 and the third quarter of 1999. In the period from January 1992 to October 1999. The the fourth quarter, the overall factory operating rate updated measures reflect both the incorporation of increased 0.6 percentage point, to 80.3 percent. newly available, more comprehensive source data The output of durables, which increased 7 percent typical of annual revisions and, for some series, the over the year, edged up in December as the output of introduction of improved methods for compiling the motor vehicles and parts, which dropped 2.8 percent series. The new source data are for recent years, in December, reversed the gains made in the preced- primarily 1997 and 1998, and the modified methods ing three months. In addition, the production of iron affect data from 1992 onward. In addition, the suppleand steel edged down after a strong increase in mentary series on the gross value of products leaving November, and the output of aerospace and miscella- the industrial sector are now expressed in 1996 dolneous transportation fell another 1.5 percent, bring- lars; these series begin in 1977. ing the decline in this group to nearly 14 percent over The updated IP measures include some annual data 1999. In December, the computer and office equip- from the Census Bureau's 1997 Census of Manufacment industry again advanced less rapidly than in tures and from selected editions of its 1998 Current earlier months, while the output of semiconductors Industrial Reports. Annual data from the U.S. Geoand related electronic components rose 3.2 percent, logical Survey on metallic and nonmetallic minerals in line with the rapid growth of the past year. The (except fuels) for 1997 and 1998 are also introduced. recent recovery in the output of farm machinery, The updating includes revisions to the monthly indiwhich had erased only a small part of the earlier cator for each industry (either physical product data, severe decline, was interrupted in December. The production worker hours, or electric power usage) production in nondurable manufacturing increased and revised seasonal factors. 0.3 percent, to a level 2.6 percent higher than in The revision introduced improved measures of December 1998. Among nondurable manufacturing production for computers and office equipment Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

100 Federal Reserve Bulletin • February 2000 (SIC 357) and motor vehicles (SIC 3711, 3). The new Capacity and capacity utilization rates have been monthly measure for computers is derived from revised to incorporate preliminary data from the Cendetailed information on the major products produced sus Bureau's 1998 Survey of Plant Capacity, which by the industry. For example, from 1994 to 1998, covers manufacturing, along with other new data on quarterly data on the physical quantity and average capacity from the U.S. Geological Survey, the Departunit values of about 1,100 distinct models of personal ment of Energy, and other organizations. computers, notebooks, servers, and workstations are The revision is available on the Board's web site, used to construct the new IP index for computers; at www.federalreserve.gov/releases/gl7, and on previously, monthly electric power use by the indus- diskettes from Publications Services (telephone try was used as the within-year indicator of produc- 202-452-3245). The revised data are also available tion. The new measures of motor vehicle production through the STAT-USA web site of the Departincorporate price weights for the different models of ment of Commerce (www.stat-usa.gov). Further light vehicles; previously, all autos and light trucks information on these revisions is available from were weighted equally in compiling an aggregate the Board's Industrial Output Section (telephone figure. In addition, the monthly production indicators 202-452-3197). • for bolts and fasteners (SIC 345) and for metalworking machinery (SIC 354) were changed from electric power use to production worker hours. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

101 Announcements DIRECTIVE OF THE FEDERAL OPEN MARKET Bank, Falls Church, Virginia. The new vice president COMMITTEE is Thomas S. Johnson, Chairman and CEO, Green- Point Bank, New York, New York. The Federal Open Market Committee made no The four new members, named for two-year terms change on December 21, 1999, in its target for the beginning January 1, are the following: federal funds rate. Tom R. Dorety, President and CEO, Suncoast Schools Based on the available evidence, however, the Federal Credit Union, Tampa, Fla. Committee remains concerned with the possibility Cornelius D. Mahoney, Chairman, President, and CEO, that over time increases in demand will continue to Woronoco Savings Bank, Westfield, Mass. exceed the growth in potential supply, even after taking account of the remarkable rise in productivity Mark H. Wright, President and CEO, USAA Federal Savings Bank, San Antonio, Tex. growth. Such trends could foster inflationary imbalances that would undermine the economy's exem- Clarence Zugelter, President, CEO, and Chairman of the Board, First Federal Bank, F.S.B., Kansas City, Mo. plary performance. Nonetheless, in light of market uncertainties asso- Other TIAC members whose terms continue ciated with the century date change, the Committee through 2000 are the following: decided to adopt a symmetric directive in order to indicate that the focus of policy in the intermeeting James C. Blaine, President, State Employees' Credit period must be ensuring a smooth transition into the Union, Raleigh, N.C. Year 2000. At its next meeting the Committee will Lawrence L. Boudreaux III, President and CEO, Fidelity assess available information on the likely balance of Homestead Association, New Orleans, La. supply and demand, conditions in financial markets, Babette E. Heimbuch, President and CEO, First Federal and the possible need for adjustment in the stance of Bank of California, FSB, Santa Monica, Calif. policy to contain inflationary pressures. William A. Longbrake, Vice Chair and Chief Financial Officer, Washington Mutual Bank, Seattle, Wash. Kathleen E. Marinangel, Chairman, President, and CEO, APPOINTMENTS OF NEW MEMBERS AND A McHenry Savings Bank, McHenry, 111. NEW PRESIDENT AND VICE PRESIDENT OF THE Anthony J. Popp, President and CEO, Marietta Savings THRIFT INSTITUTIONS ADVISORY COUNCIL Bank, Marietta, Ohio. The Federal Reserve Board on December 10, 1999, announced the names of four new members of its INCREASE IN THE EXEMPTION THRESHOLD FOR Thrift Institutions Advisory Council (TIAC) and des- DEPOSITORY INSTITUTIONS REPORTING UNDER ignated a new president and vice president of the HMDA council for 2000. The council is an advisory group made up of The Federal Reserve Board on December 15, 1999, twelve representatives from thrift institutions. The announced that the exemption threshold for deposipanel was established by the Board in 1980 and tory institutions that are required to report data under includes savings and loan, savings bank, and credit the Home Mortgage Disclosure Act (HMDA) had union representatives. The council meets at least three been increased to $30 million. Under the revision to times each year with the Board of Governors to the Board's staff commentary to Regulation C (Home discuss developments related to thrift institutions, the Mortgage Disclosure), depository institutions with housing industry, mortgage finance, and certain regu- assets totaling $30 million or less as of December 31, latory issues. 1999, are not required to collect HMDA data in 2000. The new council president for 2000 is F. Weller The Board is required to adjust annually the asset- Meyer, President and CEO, Acacia Federal Savings size exemption threshold for depository institutions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

102 Federal Reserve Bulletin • February 2000 based on the annual percentage change in the con- In the aggregate, prices for Reserve Bank priced sumer price index for urban wage earners and cleri- services are projected to increase 1.3 percent in 2000. cal workers. The adjustment reflects changes for the The 2000 price increase is attributable to a 3.6 pertwelve-month period ending in November 1999. cent increase across paper payment services, reflecting higher fees for check products. For 2000, the Reserve Banks will reduce the basic fee for on-line Fedwire funds 11.9 percent and for EXTENSION OF COMMENT PERIOD ON book-entry securities transfers 17.6 percent. ACH PROPOSALS TO ALLOW ELECTRONIC DELIVERY origination fees will be reduced as much as 18.2 per- OF FEDERALLY MANDATED DISCLOSURES cent. Fees for paper check products will increase 3.3 percent, while fees for payer bank services will The Federal Reserve Board on December 9, 1999, increase 11 percent. The increase in check service announced the reopening and extension of the comfees reflects, in part, increased investments in check ment period on proposals to allow electronic delivery automation and electronic check technologies and of federally mandated disclosures. On September 14, national standardization of payer bank product and 1999, the Board published revised proposals for pubpricing structures. The priced services fee schedules lic comment under five consumer protection regufor 2000 are available from the Reserve Banks. lations: B (Equal Credit Opportunity), E (Electronic The Reserve Banks project that they will recover Fund Transfers), M (Consumer Leasing), Z (Truth in 99.0 percent of their priced services costs for 2000, Lending), and DD (Truth in Savings). including imputed expenses, leaving net income of The Board is reopening and extending the com- $88.7 million, compared with $98.4 million of tarment period to obtain views from individual consumgeted return on equity. The Reserve Banks estimate ers through focus group interviews. Although the that they will recover 102.8 percent of their costs in comment period is being extended primarily for the 1999. The Monetary Control Act of 1980 requires the purpose of conducting these focus groups, other Federal Reserve to recover the costs of providing members of the public may also submit comments certain payment services over the long term. During during this period, but they are encouraged to submit the 1989-98 period, the Reserve Banks recovered them as soon as possible. 99.9 percent of the costs of priced services, including Final action on the proposals is expected shortly targeted return on equity. after the deadline for public comment, which is On December 17, the Board also approved the March 3, 2000. 2000 private-sector adjustment factor (PSAF) for Reserve Bank priced services of $192.6 million, an increase of $76.8 million, or 66.3 percent, from the CHANGES FOR 2000 IN THE FEE SCHEDULES 1999 PSAF of $115.8 million. The large increase in FOR PRICED SERVICES OF THE FEDERAL the PSAF for 2000 is due mainly to including addi- RESERVE BANKS tional pension assets and benefit liabilities in the PSAF balance sheet. The PSAF is an allowance for Depository institutions that use the Federal Reserve taxes and other imputed expenses that would have Banks' electronic payment services will benefit from been paid and return on capital that would have been continued price reductions in 2000 under the fee earned had the Federal Reserve's priced services schedules approved on December 17, 1999, by the been provided by a private business firm. Federal Reserve Board. The effective date of all fees have been delayed until April 3, 2000, to minimize change during the period surrounding the rollover to ISSUANCE OF JOINT GUIDANCE ON ASSET 2000. SECURITIZATION ACTIVITIES Prices across all electronic payment services will decline nearly 5 percent in 2000, reflecting lower The four federal banking agencies (the Federal prices for Fedwire funds, book-entry securities, and Deposit Insurance Corporation, the Federal Reserve automated clearinghouse (ACH) transactions. The Board, the Office of the Comptroller of the Currency, savings reflect continued efficiencies gained from and the Office of Thrift Supervision) on Decemconsolidating the Federal Reserve's automated pro- ber 13, 1999, issued a joint statement addressing the cessing facilities. Since 1996, prices for all elec- agencies' supervisory approach to asset securitization tronic payment services have declined more than activities. The statement reminds financial institution 38 percent. management and examiners of fundamental risk- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 103 management practices that should be in place at The Federal Reserve reported that the nation's institutions that engage in securitization activities. payment systems were functioning well and that cur- The statement highlights the risks associated with rency supplies had been more than adequate to meet retained interests in securitization activities. It also demand. Credit cards, debit cards, checks, and autodetails current supervisory concerns about the valua- mated teller machines were all working normally. tion and reporting of these assets and concentrations For the past three years, federal financial instituof these assets relative to capital. tion regulators provided oversight of the efforts of Given the risks presented by these activities, the banks, thrifts, and credit unions as they prepared their bank regulatory agencies are actively considering the computer systems for the Year 2000 century date establishment of regulatory restrictions that would change. limit or eliminate the amount of certain retained interests that may be recognized in determining the adequacy of regulatory capital. Reported values for retained interests should be SURVEY OF CONSUMER CONFIDENCE reasonable, conservative, and supported by objective IN Y2K PREPARATIONS BY BANKS and verifiable documentation. Institutions should ensure that sufficient capital is held to support the risks U.S. bank customers remained confident that their associated with securitization activities and are banks were ready for the Year 2000, according to a expected to place concentration limits on retained report issued by the Gallup Organization. Nine out of interests relative to equity capital. The statement reit- ten bank customers continued to express confidence erates that institutions should establish and imple- in their bank's readiness. ment an adequate and independent audit function to The report was based on about 1,800 interviews effectively oversee securitization activities. completed between November 13, 1999, and Decem- The statement is issued as part of the agencies' ber 12, 1999, as part of an ongoing survey of adult ongoing review of securitization activities at insured Americans who have bank accounts. The ongoing depository institutions. The agencies continue to survey is being sponsored by the Board of Governors review banking institutions' valuation of retained of the Federal Reserve System and the Federal interests and the concentrations of these assets rela- Deposit Insurance Corporation (FDIC). tive to capital. As applicable, the agencies will pro- "The survey shows that as we move closer to vide further guidance on the liquidity risk associ- January 1, 2000, consumers are extremely confident ated with over-reliance on asset securitization as a that banks are prepared for Y2K," said FDIC Chairfunding source and on implicit recourse obligations. man Donna Tanoue. The statement is available on request to Publica- The survey results also indicated that the public tions Services, Mail Stop 127, Board of Governors remained confident that basic payment systems would of the Federal Reserve System, Washington, DC work properly during the century date change. Most 20551 and also on the Board's public web site at American adult depositors believed that they would www.federalreserve.gov/ have access to their money; that checks would continue to be processed accurately; and that automatic teller machines, credit card systems, and electronic NORMAL OPERATIONS REPORTED FOR direct deposits would function normally. FINANCIAL INSTITUTIONS AFTER THE "No one is predicting perfect performance for the CENTURY DATE CHANGE rollover period, but this data demonstrates that the public is heading confidently into the weekend, mak- On the first day of the Year 2000, the nation's banks, ing sensible and appropriate preparations," said thrift institutions, and credit unions conducted busi- Edward W. Kelley, Jr., a member of the Board of ness as usual, federal regulators said. No significant Governors of the Federal Reserve System. disruptions resulting from the century date change Over the past several years, FDIC-insured financial were detected, the regulators added. institutions identified and overhauled computer sys- The Federal Deposit Insurance Corporation, the tems to make them Year 2000-ready. At the same Federal Reserve Board, the Office of the Comptroller time, regulatory agencies closely monitored their of the Currency, the Office of Thrift Supervision, and efforts. Based on their findings, the regulators said the National Credit Union Administration closely that the banking industry would be prepared for the monitored financial institution operating performance Year 2000 and that it would be business as usual for during the first week of the Year 2000. bank customers on January 1, 2000, and thereafter. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

104 Federal Reserve Bulletin • February 2000 PUBLICATION OF THE DECEMBER 1999 and dramatic changes in the risk profiles of UPDATE TO THE BANK HOLDING COMPANY large complex banking organizations (LCBOs) SUPERVISION MANUAL and, thus, their financial condition. The Federal Reserve's ongoing supervision and monitoring The December 1999 update to the Bank Holding program portrays and uses a continuous portfolio Company Supervision Manual, Supplement No. 17, approach to supervision—the continuous assesshas been published and is now available. The Manual ment and evaluation of informational resources comprises the Federal Reserve System's bank hold- and banking practices across a group of instituing company supervisory and inspection guidance. tions with similar business lines, characteristics, The new supplement includes guidance to address the and risk profiles. Emphasis is placed on an organifollowing topics. zation's management of its internal systems and controls, including rating systems. 1. Supervisory concerns expressed about trends indi- Ongoing, risk-focused supervision requires cating weakened funding and compliance with revision of supervisory ratings when there exists loan underwriting standards, policies, internal strong evidence of a change in the financial concontrols, and loan review procedures, when there dition or risk profile of a banking organization. are favorable economic conditions and easy Such ratings are a continuum, not a point-in-time access to financial markets that may not continue. assessment. When one supervisory rating (for Funding and adherence to pre-established stan- example, CAMELS or BOPEC) component is dards, policies, and procedures provide protec- changed, the other components, management, and tions from concentrations of weakening credit composite ratings need to be reaffirmed or revised. risk. The use of meaningful stress tests are encour- 4. Evaluating and monitoring counterparty risk managed during the lending decision process, validatagement functions and systems. This guidance ing a borrower's financial capacity to repay over focuses on transaction testing that is to be applied the short and long terms, thus guarding against for those activities, business lines, and products increased loan losses in an economic downturn. experiencing significant growth, above-normal 2. The maintenance of the allowance for loan and profitability, or large future potential exposures. lease losses. Evolving examiner guidance is pro- Particular attention is placed on the following: vided to emphasize the need for banking organiza- (1) the standards, methodologies, and techniques tions to apply reserve practices that are balanced, used to measure and control counterparty credit yet conservative. Accounting guidance is pro- risk exposures; (2) the use and management of vided with respect to the Financial Accounting credit enhancements to mitigate counterparty Standards Board's Statements Nos. 5 and 114 and credit risks; and (3) the use of risk limits and the maintenance of loan-loss reserves. monitoring systems that are established to set meaningful limits on counterparty credit risk and 3. The Federal Reserve System's initial and ongoing to alert management when the credit risk expoprogram of risk-focused supervision framework sures exceed their established limits. for large and other complex banking organizations. Several sections of the update set forth the 5. Capital maintenance and management for LCBOs. initial and ongoing risk-focused supervision, Because of the growing scope and complexity of monitoring, and inspection/examination program. business activities and ongoing financial inno- The guidance details the key elements, institu- vation, simple ratios, including risk-based capital tions, and specialty areas that are encompassed ratios, may no longer suffice when assessing the by the risk-focused supervision framework. The overall capital adequacy of many banking organiprogram endorses the concept of conducting, zations. Examiners are to evaluate internal capiwhen appropriate, a series of targeted inspections/ tal management processes to judge whether they examinations during a supervisory cycle and meaningfully tie the identification, monitoring, focusing on a single activity, business line, legal and evaluation of risk to the determination of entity, and their associated risks. The program the banking organization's capital needs. Fundacenters on avoidance of duplication, sharing of mental elements of a sound and comprehensive information, and continued close coordination and analysis of internal capital adequacy are stated for cooperation with federal and state supervisors. the key areas of risk. The management of banking Concerns are further expressed regarding cer- organizations is encouraged to strengthen their tain environmental factors that could initiate swift risk measurement capabilities and to integrate Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 105 them more fully when evaluating their own capital The Federal Reserve Board on December 6, 1999, adequacy. announced the execution of a written agreement by and between the Foxdale Bank, South Elgin, Illinois, A more detailed summary of changes is included and the Federal Reserve Bank of Chicago. with the update package. The Manual and updates, including pricing information, are available from The federal banking agencies (the Federal Reserve Publications Services, Mail Stop 127, Board of Gov- Board, the Federal Deposit Insurance Corporation, ernors of the Federal Reserve System, Washington, the National Credit Union Administration, the Office DC 20551 (or charge by facsimile: 202-728-5886). of the Comptroller of the Currency, and the Office The Manual is also available on the Board's pub- of Thrift Supervision) announced on December 13. lic web site at www.federalreserve.gov/boarddocs/ 1999, the termination of the May 21, 1999, agreesupmanual/ ment with TransAlliance, L.P., Bellevue, Washington. The agreement addressed the Year 2000 readiness of TransAlliance's electronic funds transfer ENFORCEMENT ACTIONS AND TERMINATIONS services. OF ACTIONS The Federal Reserve Board on December 14, 1999, The Federal Reserve Board on December 6, 1999, announced the execution of a written agreement by announced the termination of the provision that and between the Arab American Bank, New York, addressed Year 2000 readiness of the written agree- New York, and the Federal Reserve Bank of ment by and among First Utah Bancorp, the First New York. • Utah Bank, and Premier Data Corporation, all of Salt Lake City, Utah, and the Federal Reserve Bank of San Francisco. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

106 Minutes of the Meeting of the Federal Open Market Committee Held on November 16,1999 A meeting of the Federal Open Market Committee Ms. Low, Open Market Secretariat Assistant, was held in the offices of the Board of Governors of Division of Monetary Affairs, Board of Governors the Federal Reserve System in Washington, D.C., on Tuesday, November 16, 1999, at 9:00 a.m. Messrs. Stewart and Stone, First Vice Presidents, Federal Reserve Banks of New York and Present: Philadelphia respectively Mr. Greenspan, Chairman Mr. McDonough, Vice Chairman Messrs. Beebe, Eisenbeis, Lacker, Rasche, and Mr. Boehne Sniderman, Senior Vice Presidents, Federal Mr. Ferguson Reserve Banks of San Francisco, Atlanta, Mr. Gramlich Richmond, St. Louis, and Cleveland respectively Mr. Kelley Mr. McTeer Messrs. Bentley, Fuhrer, and Kahn, Vice Presidents, Mr. Meyer Federal Reserve Banks of New York, Boston, Mr. Moskow and Kansas City respectively Mr. Stern Mr. Wynne, Research Officer, Federal Reserve Bank Messrs. Broaddus, Guynn, Jordan, and Parry, of Dallas Alternate Members of the Federal Open Market Committee By unanimous vote, the minutes of the meeting of the Federal Open Market Committee held on Octo- Mr. Hoenig, Ms. Minehan, and Mr. Poole, Presidents of the Federal Reserve Banks of Kansas City, ber 5, 1999, were approved. Boston, and St. Louis respectively The Manager of the System Open Market Account reported on recent developments in foreign exchange Mr. Kohn, Secretary and Economist markets. There were no open market transactions in Mr. Bernard, Deputy Secretary foreign currencies for the System's account in the Ms. Fox, Assistant Secretary Mr. Gillum, Assistant Secretary period since the previous meeting, and thus no vote Mr. Mattingly, General Counsel was required of the Committee. Ms. Johnson, Economist The Manager also reported on developments in Mr. Prell, Economist domestic financial markets and on System open market transactions in government securities and federal Ms. Cumming, Messrs. Howard, Hunter, Lang, Lindsey, Rolnick, Slifman, and Stockton, agency obligations during the period October 5,1999, Associate Economists through November 15, 1999. By unanimous vote, the Committee ratified these transactions. Mr. Fisher, Manager, System Open Market Account The Committee then turned to a discussion of recent and prospective economic and financial devel- Messrs. Ettin and Reinhart, Deputy Directors, opments, and the implementation of monetary policy Divisions of Research and Statistics and International Finance respectively, over the intermeeting period ahead. Board of Governors The information reviewed at this meeting suggested that economic activity continued to expand Messrs. Madigan and Simpson, Associate Directors, briskly. The limited data on aggregate demand that Divisions of Monetary Affairs and Research and had become available since the summer pointed to Statistics respectively, Board of Governors some moderation in the growth of consumer spend- Mr. Whitesell, Assistant Director, Division of ing and of business investment in capital equipment Monetary Affairs, Board of Governors and software. Residential construction appeared to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

107 have weakened somewhat. However, industrial pro- that the buoyancy in business spending for capital duction was trending up, job growth was still solid, equipment had continued into the fourth quarter. and the unemployment rate had edged down. Despite Weakness in nonresidential building activity in the tight job markets, labor compensation had been rising third quarter was widespread, though office construcmore slowly than last year. Inflation remained moder- tion remained on a solid upward trend. ate, though at a pace above that in 1998 because of a Business inventory investment in book value terms sharp rebound in energy prices. picked up somewhat in the third quarter, but with A large increase in nonfarm payroll employment in sales increasing rapidly stock-sales ratios generally October followed a small rise in September; the remained quite low. Manufacturers added slightly to average gain for the two months was appreciable but their stocks after two quarters of inventory liquidasomewhat below the pace of earlier in the year. Job tion. However, the buildup of stocks in the third growth rebounded strongly in most employment cate- quarter did not keep pace with the rise in shipments, gories, but further small losses were posted in manu- and the sector's stock-shipments ratio was near the facturing and retail trade. The robust expansion in the bottom of its range over the preceding twelve months. demand for workers in October led to a small decline Wholesalers also added to their inventories in the in the civilian unemployment rate, to 4.1 percent, a third quarter, and with stockbuilding keeping pace new low for the year. with sales, the inventory-sales ratio for the sector Industrial production recorded a strong gain in remained in the lower portion of its range over the October after having fallen slightly in September as past year. In the retail sector, the pace of inventory a result of the adverse effects of Hurricane Floyd. accumulation slowed noticeably in the third quarter, Manufacturing and utilities output advanced strongly reflecting a runoff of stocks at auto dealerships. in October, while mining activity edged up. The Excluding autos, the rate of retail inventory accumuincreases in manufacturing were widespread; how- lation changed little from that of the second quarter, ever, production of transit equipment, particularly and with sales rising rapidly the aggregate inventoryaircraft and parts, and farm equipment continued to sales ratio fell to its lowest quarterly level since 1980. decline. The utilization of total industrial capacity The deficit in U.S. trade in goods and services rebounded in October from the hurricane-related pro- widened on balance over July and August from its duction losses of the previous month but remained average for the second quarter. The value of exports somewhat below its long-run average level. picked up considerably over the two months, with Growth of consumer spending apparently had mod- gains widely spread across major trade categories. erated somewhat further recently, but surveys indi- The value of imports surged, with large increases cated that consumer confidence continued to be high recorded in all the major trade categories except and personal income rose briskly in the third quarter. food. The available information indicated that eco- Total nominal retail sales changed little in September nomic expansion in the foreign industrial countries and October, with purchases at auto dealerships fall- strengthened further in the third quarter. Economic ing in both months and sales at other stores growing recovery continued in Japan, though there were signs less rapidly on balance. Housing activity weakened that consumer demand was lagging somewhat. In the somewhat over the summer but was still at a high euro area, the United Kingdom, and Canada, ecolevel. Some of the drop in housing starts in Septem- nomic activity appeared to have accelerated in the ber probably was attributable to unusually heavy third quarter. Among the developing countries, ecorains in parts of the South and Northeast. In addition, nomic activity continued to expand in emerging Asia sales of both new and existing homes declined appre- and parts of Latin America. ciably in September. Consumer prices increased at a slightly faster rate The expansion of business fixed investment picked in September, with a further large rise in energy up sharply in the third quarter, as a marked accelera- prices a contributing factor. Core consumer inflation tion in outlays for durable equipment and computer also picked up in September, in part because of a software more than offset a further weakening of sharp jump in tobacco prices. Nonetheless, core connonresidential construction activity. The strength in sumer prices rose less over the twelve months ended spending for durable equipment was concentrated in in September than over the preceding twelve-month computer hardware and transportation equipment; the period. At the producer level, price inflation for finlatter included medium and heavy trucks, fleet sales ished goods other than food and energy items slowed of light vehicles, and commercial aircraft. Outlays for appreciably in October from the elevated September computer software and communications equipment rate, which had been boosted by the tobacco price also were up appreciably. Trends in orders suggested increase. For the year ended in October, core pro- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

108 Federal Reserve Bulletin • February 2000 ducer prices rose appreciably more than in the pre- Among the major currencies, the dollar rose against ceding year. Measured on a year-over-year basis, the euro and the pound sterling despite a tightening of labor compensation rose more slowly in the year European monetary policy in response to the implicaending in the third quarter than it had in the preced- tions for future inflation of indications of a strong ing year. However, the gain in the third quarter was a pickup in economic activity. The dollar fell further little larger than the subdued average pace for the first against the yen, whose strength presumably reflected half of the year; the step-up was entirely attributable evidence of continued economic recovery in Japan to larger increases in benefits. Average hourly earn- and the prospect of another substantial fiscal stimulus ings edged up in October after a large rise in Septem- package. The dollar's drop in terms of the currencies ber. For the twelve months ended in October, average of other important trading partners reflected in part hourly earnings decelerated slightly from the previ- optimism about continued recovery in Asian emergous twelve months. ing economies as well as signs of renewed politi- At its meeting on October 5, the Committee cal stability in some Latin American and Asian adopted a directive that called for maintaining condi- countries. tions in reserve markets consistent with an unchanged M2 continued to grow at a moderate rate in Octofederal funds rate of around 5lA percent. The mem- ber. The recent performance of this aggregate likely bers noted that the behavior of prices had continued was associated, at least in part, with the rise in market to be relatively subdued and that the risk of a substan- interest rates earlier in the year that boosted the tial worsening in inflation and inflation expectations opportunity cost of holding liquid balances. The over coming months seemed to be small. Nonethe- expansion of M3 picked up over September and less, they saw some pickup in inflation as a distinct October, reflecting a strong acceleration in its non-M2 possibility under anticipated economic conditions and component that was associated with strong inflows concluded that the directive should indicate that pro- to institutional money market funds and stepped-up spective developments were more likely to warrant issuance of large time deposits to meet credit an increase than a decrease in the funds rate objective demands. For the year through October, M2 and M3 in the near term. were estimated to have increased at rates somewhat Open market operations throughout the intermeet- above their annual ranges for 1999. Total domestic ing period were directed toward maintaining the fed- nonfinancial debt continued to expand at a pace eral funds rate at around 5'A percent, and the rate somewhat above the middle of its range. averaged close to the Committee's target. On bal- The staff forecast prepared for this meeting sugance, most market interest rates posted small mixed gested that the expansion would moderate gradually changes over the intermeeting interval. The Commit- to a rate around, or perhaps a little below, the growth tee's announcement of a bias toward tightening sur- of the economy's estimated potential. The expansion prised many market participants, and interest rates of domestic final demand increasingly would be held rose somewhat after the meeting. Yields climbed back by the anticipated waning of positive wealth further in response to incoming data on producer effects associated with earlier large gains in equity prices and retail sales that boosted market concerns prices; the slower growth of spending on consumer about unsustainable growth, higher inflation, and fur- durables, houses, and business equipment and softther monetary tightening. Over the second half of the ware in the wake of the prolonged buildup in the intermeeting period, however, rates largely retraced stocks of these items; and the higher intermediatetheir increases in reaction to the release of data indi- and longer-term interest rates that had evolved as cating low wage and consumer price inflation. Most markets came to expect that a rise in short-term measures of share prices in equity markets registered interest rates would be needed to achieve sustainable, sizable gains over the intermeeting period, apparently noninflationary growth. The lagged effects of the reflecting stronger-than-expected earnings reports earlier rise in the foreign exchange value of the dollar and greater optimism about the prospects for contin- were expected to place continuing, though substanued robust output growth and low inflation. tially diminishing, restraint on U.S. exports for some In foreign exchange markets, the trade-weighted period ahead. Core price inflation was projected to value of the dollar changed little over the period in rise somewhat over the forecast horizon, partly as a relation to the currencies of a broad group of impor- result of the pass-through of higher non-oil import tant U.S. trading partners. A small appreciation prices and some firming of gains in nominal labor against the currencies of the major foreign industrial compensation in persistently tight labor markets that countries offset a comparable depreciation in relation would not be fully offset by rising productivity to the currencies of other important trading partners. growth. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 109 In the Committee's discussion of current and pro- ing the holiday season and recent surveys suggested a spective economic developments, members com- very high level of consumer confidence. Retail sales mented that the statistical and anecdotal information might be also augmented during the closing weeks that had become available since the October meeting of the year by precautionary purchases related to continued to point to robust growth in overall eco- century date change concerns. Looking ahead, and nomic activity, despite some indications of softening abstracting from the unwinding in the early part of in interest-sensitive sectors of the economy. Although 2000 of some transitory stockpiling of consumer productivity developments remained quite favorable, goods, growth in consumer spending seemed likely the faster rise in productivity itself apparently had to moderate over time. In part, forecasts of a less tended to bolster demand more than supply through ebullient consumer sector reflected expectations of its effects on equity prices and consumption and on reduced demand for household goods associated with the demand for capital equipment. While real interest a mild downturn in housing activity and the previous rates had increased to some extent to restore balance slowdown in mortgage refinancings that had lowered between supply and demand, they evidently had not household debt-servicing burdens and frequently had risen enough or had not been high for long enough, made accumulated housing equity available for conand growth at an unsustainable pace continued to sumer expenditures. A potentially more important ratchet up pressures in labor markets. Abstracting factor in the outlook for consumer spending, howfrom possible temporary fluctuations associated with ever, was the prospect that the wealth effects from the upcoming century date change, the members saw sharp earlier increases in the value of stock market few signs of significant slowing in aggregate demand holdings would wane in the absence of a new upsurge over the next few months. Over a somewhat longer in stock market prices. horizon, however, they believed that growth in aggre- Growth of business spending for equipment and gate demand was likely to moderate to a more sus- software was expected to moderate in the current tainable pace that would bring it into closer balance quarter, largely in conjunction with what was seen as with the expansion in aggregate supply. Key factors a temporary slowdown in purchases of computers in cited by the members in support of their expectations the period before the century date change. However, of slower growth in overall domestic spending were the members saw no significant evidence that the the lagged and to some extent already evident effects strong uptrend in spending on capital equipment of the rise that had occurred in long-term interest might otherwise be weakening. In contrast to the rates, including mortgage rates, and the effects on pattern for business fixed investment, nonfarm invenbusiness and consumer sentiment of a less buoyant tory investment was projected to rise in the current stock market, should the latter persist. However, the quarter in connection with a temporary bulge related recent depreciation of the dollar and the ongoing to the century date change but also to bring lean strengthening of many foreign economies would inventories into better alignment with anticipated stimulate rising export demand and perhaps substan- sales. Once the perturbations related to the century tially reduce the drag exerted on the economy by the date change had run their course, inventory growth foreign trade sector. The members acknowledged that was expected to return to a more normal pace during their forecasts were subject to a substantial degree 2000. of uncertainty, but the risks on balance were seen In the housing market, rising mortgage rates had as tilted toward growth strong enough to put added fostered some declines from recent peaks in starts pressures on already tight labor markets. Greater and sales, and persisting softness in housing activity pressures on labor resources, should they materialize, was anticipated. This expectation tended to be supwould at some point foster larger increases in labor ported by anecdotal reports of moderating homecosts, with potentially adverse implications for price building activity in several parts of the country. inflation over time. Nonetheless, the members cited a number of factors With regard to the prospective performance of key that should tend to sustain overall housing activity at sectors of the economy, forecasts of somewhat slower a fairly elevated level. These included continuing growth in consumer spending appeared to be sup- though diminishing backlogs of unbuilt homes, rising ported by recent reports of some moderation in sales incomes, and high levels of consumer confidence. In of motor vehicles from extraordinarily high levels. any event, the outlook for housing was subject to Anecdotal reports relating to recent retail sales considerable uncertainty as reflected in recent suraround the country were mixed, but members indi- veys that had produced mixed results with regard to cated that their contacts in the retail industry were the near-term prospects for housing activity. uniformly optimistic about the outlook for sales dur- Members anticipated that the dollar's recent depre- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

110 Federal Reserve Bulletin • February 2000 ciation and the strengthening of foreign economies petitive pressures to hold down prices. Strengthening would foster a significant further pickup in exports. demand around the world already seemed to be con- Indeed, available data and anecdotal reports from tributing to higher prices of materials and other nonaround the country indicated that foreign demand labor inputs in the production "pipeline." In general, already had improved markedly for some U.S. prod- however, the members anticipated that any pickup in ucts. In these circumstances, domestic demand would inflation was likely to be gradual, with cost pressures need to decelerate considerably for growth to proceed quite possibly continuing to be held largely in check at a sustainable pace. for some time by improving productivity trends. They Concerning the outlook for inflation, members recognized that forecasts of rising inflation had failed noted that despite the long duration of very tight to materialize in recent years, raising questions about labor markets across the nation, labor compensation their understanding of the empirical specification of had increased at a slightly lower rate this year while the relationships that currently underlie the inflation consumer price inflation had remained moderate, process. On balance, though, the unsustainable pace albeit above year-earlier levels owing to a sharp rise of economic expansion along with the reversal of in energy prices. The deceleration in labor compensa- factors that previously had held down overall price tion may have been induced in large measure by the increases suggested a significant risk that inflation low level of consumer price inflation in 1998. In would strengthen over time given prevailing financial addition, a major factor underlying the persistence of conditions. generally subdued price inflation in a period of robust Against this background, all the members supeconomic expansion was the continued acceleration ported raising the Committee's target for the federal in productivity, which clearly was holding down funds rate by 25 basis points at this meeting. Views increases in unit production costs. The latter contrib- differed to an extent on the outlook for inflation and uted to ongoing competitive pressures that severely policy going forward. However, with tightening limited the ability of firms to raise prices, helping to resource constraints indicating unsustainable growth, this point to keep inflation at a low level. only tentative signs that growth might be slowing, The members nonetheless remained concerned and various factors that had been damping prices now about the outlook for inflation. They continued to turning around, all the members agreed on the need focus especially on the possibility that the anticipated for a slight tightening at this meeting to raise the odds moderation in the growth of aggregate demand, tak- on containing inflation and forestalling the inflationing into account the outlook for rising foreign ary imbalances that would undercut the very favordemand for U.S. goods and services, might not be able performance of the economy. This view was sufficient to avoid added pressures on labor and other reinforced by the prospect that the Committee might resources. To be sure, the economy's potential output not find it desirable to adjust policy at its December appeared to be expanding briskly, with much of the meeting when a tightening action could add to the impetus provided by accelerating productivity. Even potential financial uncertainties and unsettlement surso, the pool of unemployed workers willing to take a rounding the century date change. Accordingly, any job had continued to be drawn down, and it seemed action might have to wait until the meeting in early likely to many members that prospective growth in February, and the members agreed that the risks of aggregate demand might generate increasing pres- waiting for such an extended period were unacceptsures on the economy's ability to produce goods and ably high. services and thus add to inflationary pressures over All the members accepted a proposal to adopt a time. This concern was heightened by the prospect symmetric directive. Such a directive was viewed as that a number of developments that had tended to consistent with the Committee's current expectation contain inflation in the last few years were now that no further policy move was likely to be considreversing. Members mentioned in particular the like- ered before the Committee's meeting in February. In lihood that increases in labor compensation might be the circumstances, a Committee decision to retain the headed higher in lagged response to the pickup in existing asymmetry toward tightening could well consumer price inflation this year. Also likely adding send a misleading signal about the probability of to labor cost pressures were relatively large advances near-term action and have an unsettling effect on in the cost of health care benefits and the possibility financial markets at a time when concerns relating to of a higher minimum wage. Moreover, the turn- the century date change might be adding to normal around in energy and import prices could tend to feed year-end pressures. As noted previously, however, through more directly into the prices of U.S.- views differed to some degree regarding the subseproduced goods by raising costs and reducing com- quent outlook for policy. On the basis of currently Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 111 available information, a number of members indi- M2 continued to grow at a moderate pace in October cated that they were quite uncertain about the pos- while M3 accelerated. For the year through October, M2 and M3 are estimated to have increased at rates somewhat sible need for further tightening action over coming above the Committee's annual ranges for 1999. Total months to keep inflation within acceptable limits. domestic nonfinancial debt has continued to expand at a Continued favorable price and unit cost data, driven pace somewhat above the middle of its range. in part by improving productivity, suggested that any The Federal Open Market Committee seeks monetary further action should depend on incoming informa- and financial conditions that will foster price stability and promote sustainable growth in output. In furtherance of tion about economic activity, pressures on resources, these objectives, the Committee reaffirmed at its meeting in and inflation. Other members, emphasizing the per- June the ranges it had established in February for growth sistently strong growth in economic activity and the of M2 and M3 of 1 to 5 percent and 2 to 6 percent unusually high level of labor resource utilization, respectively, measured from the fourth quarter of 1998 to suggested that additional firming of the stance of the fourth quarter of 1999. The range for growth of total domestic nonfinancial debt was maintained at 3 to 7 perpolicy probably would be necessary to keep inflation cent for the year. For 2000, the Committee agreed on a in check and hence maintain the favorable backdrop tentative basis in June to retain the same ranges for growth for maximum economic growth. However, in view of of the monetary aggregates and debt, measured from the the questions surrounding the outlook, the amount of fourth quarter of 1999 to the fourth quarter of 2000. The firming already undertaken by the Committee this behavior of the monetary aggregates will continue to be evaluated in the light of progress toward price level stabilyear including at this meeting and its uncertain ity, movements in their velocities, and developments in the effects, and the special situation in financial markets economy and financial markets. over the year-end, they supported the adoption of a To promote the Committee's long-run objectives of price symmetric directive. At the conclusion of this discus- stability and sustainable economic growth, the Committee sion, the Committee voted to authorize and direct the in the immediate future seeks conditions in reserve markets Federal Reserve Bank of New York, until it was consistent with increasing the federal funds rate to an average of around 5Vi percent. In view of the evidence instructed otherwise, to execute transactions in the currently available, the Committee believes that prospec- System Account in accordance with the following tive developments are equally likely to warrant an increase domestic directive: or a decrease in the federal funds rate operating objective during the intermeeting period. The information reviewed at this meeting suggests continued solid expansion of economic activity. Nonfarm pay- Votes for this action: Messrs. Greenspan, McDonough. roll employment increased appreciably on average over Boehne, Ferguson, Gramlich, Kelley, McTeer, Meyers, September and October, and the civilian unemployment Moskow, and Stern. Votes against this action: None. rate dropped to 4.1 percent in October, its low for the year. Industrial production recorded a strong gain in October At this meeting, the working group chaired by after having been depressed in September by the effects of Mr. Ferguson provided an interim report on its work hurricane Floyd. Total retail sales were flat in September to date concerning the wording of the Committee's and October owing to a drop in sales at auto dealers; sales at other stores were fairly robust. Housing activity softened directives, the Committee's announcements after somewhat over the summer but has remained at a high each meeting, and related issues. The members level. Trends in orders suggest that business spending on expressed broad agreement with the direction of the capital equipment has continued to increase. The Julyworking group's tentative recommendations and pro- August deficit in U.S. trade in goods and services was vided feedback on specific issues and wording. It was higher than its average in the second quarter, as further growth in imports exceeded the rise in exports. Inflation contemplated that the Committee would consider the has continued at a moderate pace, though above that in working group's final report at a meeting in the near 1998 owing to a sharp rebound in energy prices. Labor future. compensation rates have been rising more slowly than last It was agreed that the next meeting of the Commityear. tee would be held on Tuesday, December 21, 1999. Most market interest rates have posted small mixed The meeting adjourned at 1:40 p.m. changes since the meeting on October 5, 1999. However, measures of share prices in equity markets have registered sizable increases over the intermeeting period. In foreign Donald L. Kohn exchange markets, the trade-weighted value of the dollar Secretary has changed little over the period in relation to the currencies of a broad group of important U.S. trading partners. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

113 Legal Developments JOINT FINAL RULE—AMENDMENTS TO REGULATIONS Part 208—Membership of State Banking ON LOANS IN AREAS HAVING SPECIAL FLOOD Institutions in the Federal Reserve System HAZARDS (Regulation H) The Office of the Comptroller of the Currency (OCC), the 1. The authority citation for Part 208 continues to read as Board of Governors of the Federal Reserve System follows: (Board), the Federal Deposit Insurance Corporation (FDIC), the Farm Credit Administration (FCA), and the Authority: 12 U.S.C. 24, 36, 92(a), 93(a), 248(a), 248(c), National Credit Union Administration (NCUA) (collective- 321-338a, 371d, 461,481-486, 601, 611,1814, ly, the Agencies) are making technical amendments to their 1816,1818,1820(d)(9), 1823(j), 1828(o), 1831, regulations on loans in areas having special flood hazards. 1831o, 1831p-l, 183lr-1, 1835a, 1882, 2901- This action removes an outdated cross-reference to Federal 2907, 3105, 3310, 3331-3351, and 3906-3909; Emergency Management Agency (FEMA) regulations that 15 U.S.C. 78b, 781(b), 781(g), 781(i), 78ohad contained the text of the Standard Flood Hazard Deter- 4(c)(5), 78q, 78q-l, and 78w; 31 U.S.C. 5318; mination Form (Form). This action is intended to update 42 U.S.C. 4012a, 4104a, 4104b, 4106, and and make accurate the Agencies' regulations regarding 4128. loans in areas having special flood hazards. 2. In section 208.25, paragraph (f)(1) is revised to read as Effective December 21, 1999, 12 C.F.R. Parts 22, 208, follows: 339, 614, and 760 are amended as follows: Section 208.25—Loans in areas having special Part 22—Loans in Areas Having Special Flood flood hazards. Hazards (f) Required use of standard flood hazard determination 1. The authority citation for Part 22 continues to read as form. follows: (1) Use of form. A member bank shall use the standard flood hazard determination form developed Authority: 12 U.S.C. 93a; 42 U.S.C. 4012a, 4104a, 4104b, by the Director of FEMA when determining 4106, and 4128. whether the building or mobile home offered as collateral security for a loan is or will be located in a special flood hazard area in which flood 2. In section 22.6, paragraph (a) is revised to read as insurance is available under the Act. The standard follows: flood hazard determination form may be used in a printed, computerized, or electronic manner. A member bank may obtain the standard flood haz- Section 22.6—Required use of standard flood ard determination form by written request to hazard determination form. FEMA, P.O. Box 2012, Jessup, MD 20794-2012. (a) Use of form. A bank shall use the standard flood hazard determination form developed by the Director of FEMA when determining whether the building or mo- Part 339—Loans in Areas Having Special Flood bile home offered as collateral security for a loan is or Hazards will be located in a special flood hazard area in which flood insurance is available under the Act. The standard flood hazard determination form may be used in a 1. The authority citation for Part 339 continues to read as printed, computerized, or electronic manner. A bank follows: may obtain the standard flood hazard determination Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and form from FEMA, P.O. Box 2012, Jessup, MD 20794- 4128. 2012. 2. In section 339.6, paragraph (a) is revised to read as follows: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

114 Federal Reserve Bulletin • February 2000 Section 339.6—Required use of standard flood Part 760—Loans in Areas Having Special Flood hazard determination form. Hazards (a) Use of form. A bank shall use the standard flood hazard 1. The authority citation for Part 760 continues to read as determination form developed by the Director of follows: FEMA when determining whether the building or mobile home offered as collateral security for a loan is or Authority: 12 U.S.C. 1757, 1789; 42 U.S.C. 4012a, 4104a, will be located in a special flood hazard area in which 4104b, 4106, and 4128. flood insurance is available under the Act. The standard flood hazard determination form may be used in a 2. In section 760.6, paragraph (a) is revised to read as printed, computerized, or electronic manner. A non- follows: member bank may obtain the standard flood hazard determination form by written request to FEMA, P.O. Section 760.6—Required use of standard flood Box 2021, Jessup, MD 20794-2012. hazard determination form. (a) Use of form. A credit union shall use the standard flood hazard determination form developed by the Director Part 614—Loan Policies and Operations when determining whether the building or mobile home offered as collateral security for a loan is or will be 1. The authority citation for Part 614 continues to read as located in a special flood hazard area in which flood follows: insurance is available under the Act. The standard flood hazard determination form may be used in a Authority: 42 U.S.C. 4012a, 4104a, 4104b, 4106, and printed, computerized, or electronic manner. A credit 4128; sees. 1.3, 1.5, 1.6, 1.7, 1.9, 1.10, 1.11, union may obtain the standard flood hazard determina- 2.0, 2.2, 2.3, 2.4, 2.10, 2.12, 2.13, 2.15, 3.0, tion form from FEMA, P.O. Box 2012, Jessup, MD 3.1, 3.3, 3.7, 3.8, 3.10, 3.20, 3.28, 4.3A, 4.12, 20794-2012. 4.12A, 4.13, 4.13B, 4.14, 4.14A, 4.14C, 4.14D, 4.14E, 4.18, 4.18A, 4.19, 4.36, 4.37, 5.9, 5.10, 5.17, 7.0, 7.2, 7.6, 7.7, 7.8, 7.12, 7.13, 8.0, 8.5, 8.9 of the Farm Credit Act (12 U.S.C. 2011, 2013, 2014, 2015, 2017, 2018, 2019, 2071, FINAL RULE—AMENDMENT TO STAFF COMMENTARY 2073, 2074, 2075, 2091, 2093, 2094, 2096, INTERPRETING THE REQUIREMENTS OF REGULA- 2121, 2122, 2124, 2128, 2129, 2131, 2141, TION C 2149, 2154a, 2183, 2184, 2199, 2201, 2202, 2202a, 2202c, 2202d, 2202e, 2206, 2206a, The Board of Governors is amending 12 C.F.R. Part 203, 2207, 2219a, 2219b, 2243, 2244, 2252, 2279a, its Regulation C (Home Mortgage Disclosure). The Board 2279a-2, 2279b, 2279b-1, 2279b-2, 2279f, is required to adjust annually the asset-size exemption 2279f-l, 2279aa, 2279aa-5, 2279aa-9); sec. 413 threshold for depository institutions based on the annual of Pub. L. 100-233, 101 Stat. 1568, 1639. percentage change in the Consumer Price Index for Urban Wage Earners and Clerical Workers. The present adjust- 2. In section 614.490, paragraph (a) is revised to read as ment reflects changes for the 12-month period ending in follows: November 1999. During this period, the index increased by 2.1 percent; as a result, the threshold is increased to Section 614.490—Required use of standard flood $30 million. Thus, depository institutions with assets of $30 million or less as of December 31, 1999, are exempt hazard determination form. from data collection in 2000. Effective January 1, 2000, 12 C.F.R. Part 203 is amended (a) Use of form. System institutions must use the standard as follows: flood hazard determination form developed by the Director of FEMA when determining whether the build- Part 203—Home Mortgage Disclosure (Regulaing or mobile home offered as collateral security for a tion C) loan is or will be located in a special flood hazard area in which flood insurance is available under the 1968 1. The authority citation for Part 203 continues to read as Act. The standard flood hazard determination form follows: may be used in a printed, computerized, or electronic manner. A System institution may obtain the standard flood hazard determination form by written request to Authority: 12 U.S.C. 2801-2810. FEMA, P.O. Box 2012, Jessup, MD 20794- 2012. 2. In Supplement I to Part 203, under Section 203.3— Exempt Institutions, under 3(a) Exemption based on Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 115 location, asset size, or number of home-purchase loans, Section 6801.103—Prohibited financial interests. paragraph 2 is revised to read as follows: (a) Supplement I to Part 203—Stalf Commentary * * * (2) A primary government securities dealer or any of its affiliates, if such employee has regular, ongoing access to Class I Federal Open Market Section 203.3—Exempt Institutions Committee information. 3(a) Exemption based on location, asset size, or number of (c) ^ ^ home-purchase loans. * * * * * * 2. Adjustment of exemption threshold for depository insti- (i) Prior to Federal Reserve employment; tutions. For data collection in 2000, the asset-size exemption threshold is $30 million. Depository institutions with assets at or below $30 million are exempt from collecting data for 2000. ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT FINAL RULE—AMENDMENT TO SUPPLEMENTAL Orders Issued Under Section 3 of the Bank Holding STANDARDS OF ETHICAL CONDUCT FOR EMPLOYEES Company Act OF THE BOARD Exchange Bancshares of Moore, Inc. The Board of Governors, with the concurrence of the Moore, Oklahoma Office of Government Ethics (OGE), is amending 12 C.F.R. Part 6801, its Supplemental Standards of Ethical Conduct Order Approving the Formation of a Bank Holding for Employees of the Board. This amendment would elim- Company inate the general prohibition on ownership of stock in primary dealers for most Board employees and expand the Exchange Bancshares of Moore, Inc. ("Applicant") has availability of stock ownership waivers by allowing waivrequested the Board's approval under section 3 of the Bank ers to be granted permitting Board employees to retain Holding Company Act ("BHC Act") (12 U.S.C. § 1842) bank stock acquired prior to Federal Reserve employment to become a bank holding company by acquiring all the if the stock does not present a conflict of interest with the outstanding voting shares of Exchange National Bank of employees' duties. Moore, Moore, Oklahoma ("Bank"). Effective December 8, 1999, 12 C.F.R. Part 6801 is Notice of the proposal, affording interested persons an amended as follows: opportunity to submit comments, has been published (64 Federal Register 51,125 (1999)). The time for filing com- Part 6801—Supplemental Standards of Ethical ments has expired, and the Board has considered the pro- Conduct for Employees of the Board of Governors posal and all comments received in light of the factors set of the Federal Reserve System forth in section 3 of the BHC Act. Applicant is a newly organized corporation formed for the purpose of acquiring 1. The authority citation for Part 6801 continues to read as control of Bank. Bank is the 167th largest depository follows: institution in Oklahoma, controlling $37.4 million in deposits, representing less than 1 percent of total deposits in Authority: 5 U.S.C. 7301; 5 U.S.C. App. (Ethics in depository institutions in the state.1 Government Act of 1978); 12 U.S.C. 244, 248; As noted above, Applicant is a de novo corporation and E.O. 12674, 54 FR 15159, 3 C.F.R., 1989 does not control another depository institution. Accord- Comp, p. 215, as modified by E.O. 12731, ingly, based on all the facts of record, the Board concludes 55 FR 42547, 3 C.F.R., 1990 Comp, p. 306; that consummation of the proposal would not have a signif- 5 C.F.R. 2635.105, 2635.403(a), 2635.502, icantly adverse effect on competition or on the concentra- 2635.803. tion of banking resources in any relevant banking market, and that competitive considerations are consistent with approval. 2. Section 6801.103 is amended by: a. Revising paragraph (a)(2); b. Redesignating paragraphs (c)(l)(i) and (c)(l)(ii) as (c)(l)(ii) and (c)(l)(iii), respectively; and 1. Deposit data are as of June 30, 1998. In this context, depository c. Adding a new paragraph (c)(l)(i). The revision and institutions include commercial banks, savings associations, and savaddition read as follows: ings banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

116 Federal Reserve Bulletin • February 2000 The BHC Act also requires the Board to consider the supervisory factors the Board must consider under secfinancial and managerial resources and future prospects of tion 3 of the BHC Act, also are consistent with approval. the companies and banks involved in the proposal, the Based on the foregoing, and in light of all the facts of convenience and needs of the community to be served, and record, the Board has determined that the application certain other supervisory factors. The Board has carefully should be, and hereby is, approved. The Board's approval considered these factors in light of all the facts of record, is specifically conditioned on compliance by Applicant including comments from a Bank shareholder and director with all the commitments made in connection with the ("Protestant"), who contends that Applicant has underval- application. For the purpose of this action, the commitued his shares and, consequently, underestimated the cost ments and conditions relied on by the Board in reaching its of acquiring Bank.2 The Board has also carefully reviewed decision are deemed to be conditions imposed in writing all the financial and managerial information provided by by the Board in connection with its findings and decision Applicant and Protestant about the proposal, assessments and, as such, may be enforced in proceedings under appliof the financial resources of Bank contained in confidential cable law. reports of examination by the Office of the Comptroller of The proposed transaction shall not be consummated the Currency ("OCC"), and other supervisory information. before the fifteenth calendar day after the effective date of Because the resulting organization has total assets of less this order, or later than three months after the effective date than $150 million, the Board has reviewed the proposal in of this order, unless such period is extended for good cause light of its Policy Statement on the Formation of Small by the Board or by the Federal Reserve Bank of Kansas Bank Holding Companies.3 City, acting pursuant to delegated authority. The Board notes that Bank currently is well capitalized. By order of the Board of Governors, effective Decem- In addition, under the proposal submitted by Applicant, the ber 8, 1999. projected financial condition of Applicant and Bank and the projected debt-service obligation of Applicant are rea- Voting for this action: Chairman Greenspan, Vice Chairman Fergusonable and consistent with the Board's guidelines. The son, and Governors Kelley, Meyer, and Gramlich. Board also has reviewed Applicant's ability to service the debt if a court determines that a higher valuation of Protes- ROBERT DEV. FRIERSON tant's shares is appropriate, and concludes that Applicant Associate Secretary of the Board appears to have sufficient resources to service any increased debt likely to result from a larger payment to Protestant. BB&T Corporation The Board has also reviewed relevant reports of exami- Winston-Salem, North Carolina nation of Bank and the managerial resources of Applicant's organizers, all of whom currently are officers and directors of Bank. Based on these and all the other facts of Order Approving the Acquisition of a Bank Holding record, the Board concludes that financial and managerial Company considerations and future prospects of Applicant and Bank are consistent with approval.4 Considerations relating to the convenience and needs of the community, including the BB&T Corporation, Winston-Salem, North Carolina performance record of Bank under the Community Rein- ("BB&T"), a bank holding company within the meaning vestment Act (12 U.S.C. § 2901 et seq.), and the other of the Bank Holding Company Act ("BHC Act"), has requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire Premier Bancshares, Inc., Atlanta, Georgia ("Premier"), and its four wholly owned subsidiary depository institutions: Premier Bank, 2. Under state law, a shareholder dissenting from a share acquisition is entitled to fair market value for the shareholder's shares, as deter- Atlanta; Bank Atlanta, Decatur; Farmers and Merchants mined by a state district court. See Okla. Stat. Ann. tit. 18, § 1091 Bank, Summerville; and Milton National Bank, Roswell, (West 1999). Protestant argues that Applicant has not established its all in Georgia. ability to finance the proposal without adversely affecting the Bank's Notice of the proposal, affording interested persons an financial condition if fair market value of Protestant's shares exceeds opportunity to submit comments, has been published (64 the value assigned to the shares by Applicant's appraiser. 3. 12 C.F.R. 225, App. c. Federal Register 55,291 (1999)). The time for filing com- 4. Protestant maintains that actions taken by Applicant in connec- ments has expired, and the Board has considered the protion with the proposal raise adverse managerial considerations. Protes- posal and all comments received in light of the factors set tant alleges that Applicant's principals are in violation of the bank's forth in section 3 of the BHC Act. BB&T, with total shareholder and voting agreements. These questions involve the interconsolidated assets of $39.2 billion, operates depository pretation of state law and, as such, are matters appropriately adjudicated by the courts. Protestant also argues that the voting agreement institutions in North Carolina, Georgia, South Carolina, constitutes a voting trust that requires a notice to the OCC under the Maryland, Kentucky, Virginia, and West Virginia. BB&T Change in Bank Control Act, 12 U.S.C. § 1817(j), and that Applicant is the eighth largest depository institution in Georgia, conhas failed to file a notice with the OCC. The Board provided the OCC trolling deposits of $1.5 billion, representing approxiwith Protestant's comments, and the OCC did not file any comments with respect to this proposal. mately 1.7 percent of total deposits in insured depository Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 117 institutions in the state ("state deposits").1 Premier, with BB&T and Premier compete directly in the Atlanta6 and total consolidated assets of $1.5 billion, is the ninth largest Milledgeville7 banking markets, both in Georgia. The depository institution in Georgia, controlling deposits of Board has carefully reviewed the competitive effects of the $1.3 billion, representing approximately 1.6 percent of proposal in each of these banking markets in light of all the state deposits. After consummation of the proposal, BB&T facts of record, including the number of competitors that would remain the eighth largest depository institution in would remain in the market, the share of total deposits in Georgia, controlling deposits of $2.8 billion, representing depository institutions in the market ("market deposits") approximately 3.3 percent of state deposits. controlled by the companies involved in the proposal,8 the concentration level of market deposits in the market and Interstate Analysis the increase in this level as measured by the Herfindahl- Hirschman Index ("HHI") under the Department of Justice Section 3(d) of the BHC Act allows the Board to approve Merger Guidelines ("DOJ Guidelines"), and other characan application by a bank holding company to acquire teristics of the markets.9 Consummation of the proposal control of a bank located in a state other than the home without divestitures would be consistent with Board precestate of such bank holding company if certain conditions dent and the DOJ Guidelines in the Atlanta banking marare met.2 For purposes of the BHC Act, the home state of ket.10 This banking market would remain moderately con- BB&T is North Carolina, and Premier's subsidiary banks centrated after consummation of the proposal and are in Georgia.3 All of the conditions for an interstate numerous competitors would remain in the market. acquisition enumerated in section 3(d) of the BHC Act are Consummation of the proposal in the Milledgeville met in this case.4 In light of all the facts of record, the banking market would exceed the DOJ Guidelines. BB&T Board is permitted to approve the proposal under sec- is the sixth largest depository institution in the market, tion 3(d) of the BHC Act. controlling deposits of $45.7 million, representing approximately 8.9 percent of market deposits. Premier is the Competitive Considerations 6. The Atlanta banking market is defined as the counties of Bartow, Section 3 of the BHC Act prohibits the Board from approv- Cherokee, Clayton, Cobb, Coweta, DeKalb, Douglas, Fayette, Foring a proposal that would result in a monopoly or be in syth, Fulton, Gwinett, Hall (excluding the town of Clermont), Henry, furtherance of an attempt to monopolize the business of Newton, Paulding, Rockdale, and Walton, and the towns of Auburn banking. Section 3 also prohibits the Board from approving and Winder in Barrow County. 7. The Milledgeville banking market is defined as Baldwin and a proposal that would substantially lessen competition in Hancock Counties and the northern half of Wilkinson County. BB&T any relevant banking market unless the anticompetitive entered the Milledgeville banking market in November 1999, through effects of the proposal in that banking market are clearly the acquisition of First Liberty Financial Corp. and its subsidiary outweighed in the public interest by the probable effect of bank, First Liberty Bank, both in Macon, Georgia. the proposal in meeting the convenience and needs of the 8. Market share data for the Atlanta banking market are as of community to be served.5 June 30, 1998, and for the Milledgeville banking market as of June 30, 1999. These data are based on calculations that include the deposits of thrift institutions at 50 percent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See, e.g., Midwest Fi- 1. Asset data are as of June 30, 1999. Deposit data are as of June 30, nancial Group, 75 Federal Reserve Bulletin 386 (1989); National City 1999, and are adjusted to include acquisitions by BB&T after that Corporation, 70 Federal Reserve Bulletin 743 (1983). Thus, the date. In this context, depository institutions include commercial banks, Board has regularly included thrift deposits in the calculation of savings banks, and savings associations. market share on a 50-percent weighted basis. See, e.g., First Hawai- 2. See 12 U.S.C. § 1842(d). A bank holding company's home state ian, Inc., 11 Federal Reserve Bulletin 52 (1991). is the state in which the total deposits of all banking subsidiaries of 9. Under the DOJ Guidelines, 49 Federal Register 26,823 (June 29, such company were the largest on July 1, 1966, or the date on which 1984), a market is considered moderately concentrated when the postthe company became a bank holding company, whichever is later. merger HHI is between 1000 and 1800, and is considered highly 12 U.S.C. § 1841(o)(4)(c). concentrated when the post-merger HHI is more than 1800. The 3. For purposes of section 3(d) of the BHC Act, the Board considers Department of Justice has informed the Board that a bank merger or a bank to be located in the states in which the bank is chartered, acquisition generally will not be challenged (in the absence of other headquartered, or operates a branch. See 12 U.S.C. §§ 1841(o)(4)-(7) factors indicating anticompetitive effects) unless the post-merger HHI and 1842(d)(1)(A) and (2)(B). is at least 1800 and the merger increases the HHI by more than 4. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and 200 points. The Department of Justice has stated that the higher than (B). BB&T meets the capital and managerial requirements established normal HHI thresholds for screening bank mergers for anticompetiunder applicable law, and the subsidiary banks of Premier have been tive effects implicitly recognize the competitive effects of limitedin existence and operated for five years, as required by applicable state purpose lenders and other nondepository financial institutions. law. See Ga. Code Ann. § 7-l-622(b)(l) (Lexis 1999). After consum- 10. BB&T is the 14th largest depository institution in the market, mation of the proposal, BB&T would control less than 10 percent of controlling deposits of $327.1 million, representing less than 1 percent the total amount of deposits of insured depository institutions in the of market deposits. Premier is the eighth largest depository institution United States and less than 30 percent of total deposits held by insured in the market, controlling deposits of $1 billion, representing approxidepository institutions in Georgia, which is the percentage established mately 2.3 percent of market deposits. On consummation of the by state law. See Ga. Code Ann. § 7-l-622(b)(2)(B). All other require- proposal, BB&T would become the seventh largest depository instituments under section 3(d) of the BHC Act also would be met on tion in the market, controlling deposits of approximately $1.4 billion, consummation of the proposal. representing approximately 3 percent of market deposits. The HHI 5. See 12 U.S.C. § 1842(c). would increase 3 points to 1210. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

118 Federal Reserve Bulletin • February 2000 largest depository institution in the market, controlling and certain supervisory factors. The Board has reviewed deposits of $130.4 million, representing approximately these factors in light of the record, including supervisory 24 percent of market deposits. The HHI would increase reports of examination assessing the financial and manage- 430 points to 2002, and the market would become highly rial resources of the organizations and financial informaconcentrated. To mitigate the potential anticompetitive ef- tion provided by BB&T. Based on all the facts of record, fects of the proposal in the Milledgeville banking market, the Board concludes that the financial and managerial BB&T has committed to divest one branch that currently resources and the future prospects of BB&T, Premier, and controls approximately $19.3 million in deposits to a com- their respective subsidiary banks are consistent with apmercial banking organization that does not currently have a proval, as are the other supervisory factors the Board must presence in the market or to a suitable in-market competi- consider under the BHC Act. In addition, considerations tor.11 After the proposed merger and divestiture, BB&T related to the convenience and needs of the communities to would become the largest depository institution in the be served, including the records of performance of the banking market, controlling deposits of $158.2 million, institutions involved under the Community Reinvestment representing approximately 29.1 percent of market depos- Act (12 U.S.C. § 2901 et seq.), are consistent with approval its. In addition, the HHI in the Milledgeville banking of the proposal. market would increase not more than 240 points to 1812. At least eight competitors would remain in the banking Conclusion market, including four competitors other than BB&T that each would control 10 percent or more of market deposits. Based on the foregoing, and in light of all the facts of The Board has considered the views of the Department record, the Board has determined that the application of Justice and the other banking agencies on the competi- should be, and hereby is, approved. The Board's approval tive effects of the proposal in each relevant banking mar- is specifically conditioned on compliance by BB&T with ket. The Department of Justice has advised the Board that, all the commitments made in connection with the proposal in light of the proposed divestiture, consummation of the and with the conditions stated or referred to in this order, proposal likely would not have a significantly adverse including BB&T's divestiture commitments. For the pureffect on competition in any relevant banking market. The pose of this action, the commitments and conditions re- Office of the Comptroller of the Currency and the Federal ferred to above are deemed to be conditions imposed in Deposit Insurance Corporation have been afforded an op- writing by the Board in connection with its findings and portunity to comment and have not objected to consumma- decision and, as such, may be enforced in proceedings tion of the proposal. under applicable law. Based on all the facts of record, including the proposed The proposed transaction shall not be consummated divestiture in the Milledgeville banking market and the before the fifteenth calendar day following the effective number and size of competitors remaining in the market, date of this order, or later than three months after the the Board concludes that consummation of the proposal effective date of this order, unless such period is extended would not result in any significantly adverse effects on for good cause by the Board or by the Federal Reserve competition or on the concentration of banking resources Bank of Richmond, acting pursuant to delegated authority. in the banking markets in which BB&T and Premier di- By order of the Board of Governors, effective Decemrectly compete or in any other relevant banking market. ber 17, 1999. Other Considerations Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich. The BHC Act requires the Board, in acting on an application, to consider the financial and managerial resources and ROBERT DEV. FRIERSON future prospects of the companies and banks involved, the Associate Secretary of the Board convenience and needs of the communities to be served, Banque Nationale de Paris Paris, France 11. BB&T has committed to execute, before consummation of the Paribas proposal, a sales agreement for the proposed divestiture with a purchaser determined by the Board to be competitively suitable, and to Paris, France complete the divestiture within 180 days of consummation of the proposal. BB&T also has committed that, if it is unsuccessful in Order Approving Notice to Engage in Nonbanking completing the divestiture within the 180-day period, it will transfer Activities the unsold branch to an independent trustee that is acceptable to the Board and will instruct the trustee to sell the branch promptly to an alternative purchaser acceptable to the Board. See BankAmerica Cor- Banque Nationale de Paris ("BNP"), a bank holding comporation, 78 Federal Reserve Bulletin 338 (1992); United New Mex- pany within the meaning of the Bank Holding Company ico Financial Corporation, 77 Federal Reserve Bulletin 484 (1991). Act ("BHC Act"), and Paribas, a foreign banking organi- BB&T also has committed to submit to the Board, within 120 days after consummation of the proposal, an executed trust agreement zation subject to the BHC Act (collectively, "Notifiacceptable to the Board stating the terms of the proposed divestiture. cants"), have requested the Board's approval under sec- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 119 tion 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and under section 8(c) of the IBA terminated on consummation section 225.24 of the Board's Regulation Y (12 C.F.R. of BNP's acquisition of Paribas.2 BNP and Paribas have 225.24) to retain their ownership interest in Paribas Corpo- not merged with each other and remain separate foreign ration, Paribas Asset Management, Inc., and Paribas banking organizations. Futures, Inc., all in New York, New York (collectively, Paribas, with consolidated total assets of approximately "Companies"), and thereby engage in the following activ- $299 billion, is the fifth largest banking organization headities: quartered in France and the 27th largest in the world. (1) Extending credit and servicing loans, in accordance Paribas operates branches in New York, New York, and with section 225.28(b)(1) of Regulation Y (12 C.F.R. Chicago, Illinois; agencies in Los Angeles, California, and 225.28(b)(1)); Houston, Texas; and representative offices in San Fran- (2) Asset management, servicing, and collection activities cisco, California; Atlanta, Georgia; and Dallas, Texas.3 related to extending credit, and acquiring debt in de- Before its acquisition of Paribas, BNP had consolidated fault, in accordance with section 225.28(b)(2) of Regu- total assets of approximately $365 billion, and was the lation Y (12 C.F.R. 225.28(b)(2)); third largest banking organization headquartered in France (3) Providing financial and investment advisory services, and the 22nd largest banking organization in the world.4 In in accordance with section 225.28(b)(6) of Regula- light of its acquisition of Paribas, BNP has consolidated tion Y (12 C.F.R. 225.28(b)(6)); total assets of approximately $655 billion and is the fourth (4) Providing securities brokerage, riskless principal, pri- largest banking organization in the world. BNP directly vate placement, futures commission merchant, and operates branches in New York, New York; Los Angeles other agency transactional services, in accordance with and San Francisco, California; and Chicago, Illinois; agensection 225.28(b)(7) of Regulation Y (12 C.F.R. cies in Miami, Florida, and Houston, Texas; and a represen- 225.28(b)(7)); tative office in Dallas, Texas. BNP also controls BancWest (5) Underwriting and dealing in government obligations Corporation, San Francisco, California, which itself conand money market instruments that state member banks trols Bank of the West, San Francisco, California, and First may underwrite or deal in under 12 U.S.C. §§ 24 and Hawaiian Bank, Honolulu, Hawaii. 335 ("bank-eligible securities"), and engaging as prin- Paribas Corporation currently engages in bank-ineligible cipal in investing and trading activities, in accordance securities activities in the United States. BNP also engages with section 225.28(b)(8) of Regulation Y (12 C.F.R. in bank-ineligible securities activities in the United States 225.28(b)(8)); through its section 20 subsidiary, BNP Capital Markets, (6) Underwriting and dealing in, to a limited extent, all LLC, New York, New York ("BNP Capital"). BNP has types of debt and equity securities that a member bank stated that it currently intends to operate BNP Capital and may not underwrite or deal in, except for ownership Paribas Corporation as separate corporate entities, although interests in open-end investment companies ("bank- it may decide to merge the two entities at some point in the ineligible securities"); and future. Accordingly, Notificants have applied to hold Pari- (7) Acting as the general partner of certain private invest- bas Corporation pursuant to section 4(c)(8) of the BHC ment funds that invest only in assets in which a bank Act. BNP Capital and Paribas Corporation are, and would holding company is permitted to invest. continue to be, registered as broker-dealers with the Securities and Exchange Commission ("SEC") under the Securi- Notice of the proposal, affording interested persons an ties Exchange Act of 1934 (15 U.S.C. § 78a et seq.). opportunity to submit comments, has been published (64 Accordingly, both are, and would continue to be, subject to Federal Register 59,772 (1999)). The time for filing com- the recordkeeping and reporting obligations, fiduciary stanments has expired, and the Board has considered the proposal and all comments received in light of the factors set forth in section 4(c)(8) of the BHC Act. exercise its rights under French law to acquire the remaining Companies are wholly owned subsidiaries of Paribas. 3.7 percent of Paribas' voting shares and thereby acquire all of Paribas previously controlled Companies in reliance on Paribas' voting shares. grandfather rights established by section 8(c) of the Inter- 2. Paribas also controls several other subsidiaries that engaged in nonbanking activities in the United States pursuant to grandfather national Banking Act. BNP acquired its indirect ownership rights established by section 8(c) of the IBA. BNP and Paribas must interest in Companies in August 1999, as a result of its conform all the activities currently conducted by Paribas in reliance acquisition through a public tender offer of 65.2 percent of on section 8(c)of the IBA to the requirements of the BHC Act within the voting shares of Paribas.1 Paribas's grandfather rights two years of the date that BNP acquired control of Paribas. See 12 U.S.C. § 3106(c)(2). 3. Because BNP and Paribas continue to operate in the same corporate form, BNP's acquisition of Paribas did not result in the 1. BNP received the Board's approval under section 4(c)(9) of the establishment by BNP of any additional branches, agencies or repre- BHC Act to retain temporarily its indirect ownership interest in sentative offices in the United States for purposes of section 211.24 of Companies pending submission of this notice. See Letter from Robert the Board's Regulation K (12 C.F.R. 211.24). BNP has provided the deV. Frierson, Associate Secretary of the Board, to Paul E. Glotzer, Board notice of its acquisition of control of Paribas as required by Esq., dated July 28, 1999. After August 1999, BNP acquired an section 211.24(a)(4)(i) of Regulation K (12 C.F.R. 211.24(a)(4)(i)). additional 31.1 percent of the voting shares of Paribas through a 4. Asset data are as of June 30, 1999, and ranking data are as of second public tender oifer. BNP has indicated that it intends to December 31, 1998, and reflect exchange rates then in eifect. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

120 Federal Reserve Bulletin • February 2000 dards, and other requirements of the Securities Exchange the BHC Act.8 In addition, the Board previously has deter- Act of 1934 and the SEC. mined by order that private investment fund activities are permissible for bank holding companies when conducted Underwriting and Dealing in Bank-Ineligible Securities within certain limits.9 Notificants have committed that these activities will be conducted in accordance with the The Board has determined that, subject to the prudential Board's regulations and prior Board decisions relating to framework of limitations established in previous decisions these activities. to address the potential for conflicts of interests, unsound banking practices, or other adverse effects, underwriting Proper Incident to Banking Standard and dealing in bank-ineligible securities are so closely related to banking as to be a proper incident thereto within In order to approve the proposal, the Board also must the meaning of section 4(c)(8) of the BHC Act.5 The Board determine that the proposed activities are a proper incident also has determined that underwriting and dealing in bank- to banking, that is, that performance of the proposed activineligible securities is consistent with section 20 of the ities by Notificants "can reasonably be expected to pro- Glass-Steagall Act (12 U.S.C. § 377), provided that the duce benefits to the public . . . that outweigh possible company engaged in the activities derives no more than adverse effects, such as undue concentration of resources, 25 percent of its gross revenues from underwriting and decreased or unfair competition, conflicts of interests, or dealing in bank-ineligible securities over a two-year peri- unsound banking practices."10 As a part of its evaluation of od.6 Notificants have committed that they will conduct these factors, the Board considers the financial condition their bank-ineligible securities underwriting and dealing and managerial resources of the notificants and their subactivities subject to the 25-percent revenue limitation and sidiaries and the effect the transaction would have on those the prudential limitations previously established by the resources.11 Board. As long as BNP Capital and Paribas Corporation The Board has carefully considered the financial reremain separate corporate entities, each will be indepen- sources of BNP and Paribas and notes that the capital ratios dently subject to the 25-percent revenue limit on underwrit- of both satisfy applicable risk-based standards under the ing and dealing in bank-ineligible securities. As a condi- Basle Capital Accord, and are considered equivalent to the tion of this order, BNP, Paribas, and Paribas Corporation capital levels that would be required of a United States are required to conduct their bank-ineligible securities ac- banking organization. The Board also has reviewed the tivities subject to the Operating Standards for section 20 capitalization of BNP, Paribas, and Paribas Corporation in subsidiaries.7 accordance with the standards set forth in the Section 20 Orders and finds the capitalization of each to be consistent Other Activities Approved by Regulation or Order with approval. The Board's determination is based on all the facts of record, including Notificants' projections of the The Board previously has determined by regulation or volume of bank-ineligible securities underwriting and dealorder that engaging in credit and credit-related activities; ing activities proposed to be conducted by Paribas Corporafinancial and investment advisory activities; securities bro- tion. kerage, riskless principal, private placement, futures com- The Board also has carefully reviewed the managerial mission merchant, and other agency transactional services; resources of the organizations involved in light of all the and bank-eligible securities underwriting and dealing, are facts of record, including confidential examination reports closely related to banking for purposes of section 4(c)(8) of concerning BNP Capital and Paribas Corporation, and the Board's supervisory experience with both BNP and Paribas. As noted above, BNP currently controls BNP Capital, which engages in underwriting and dealing in bank- 5. See Canadian Imperial Bank of Commerce, et al., 76 Federal ineligible securities pursuant to the Board's Section 20 Reserve Bulletin 158 (1990); J.P. Morgan & Co. Incorporated, et al, 75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities Orders. The Board previously has determined that BNP Industry Ass 'n v. Board of Governors of the Federal Reserve System, 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al, 73 Federal Reserve Bulletin 473 (1987), aff'd sub nom. Securities Industry Ass'n v. Board 8. See 12 C.F.R. 225.28(b)(1), (2), (6), (7), and (8). of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 9. See Dresdner Bank AG, 84 Federal Reserve Bulletin 361 (1998). 1988), cert, denied, 486 U.S. 1059 (1988) (collectively, "Section 20 The private investment fund activities in which Notificants propose to Orders"). engage consist of serving as the investment adviser to and the general 6. See Section 20 Orders. Compliance with the revenue limitation partner of, and holding and placing equity interests in, certain investshall be calculated in accordance with the method stated in the Section ment funds that invest only in securities and other instruments that 20 Orders, as modified by the Order Approving Modifications to the Notificants would be permitted to hold directly under the BHC Act Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989), and 10 ("private investment funds"). The investment funds would include Percent Revenue Limit on Bank-Ineligible Activities of Subsidiaries of limited partnerships and similar investment vehicles such as limited Bank Holding Companies Engaged in Underwriting and Dealing in liability companies. Notificants also propose to act as a commodity Securities, 61 Federal Register 48,953 (1996); and Revenue Limit on pool operator for private investment funds organized as commodity Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies pools that invest in assets which BNP would be permitted to hold Engaged in Underwriting and Dealing in Securities, 61 Federal directly under the BHC Act. Register 68,750 (1996) (collectively, "Modification Orders"). 10. See 12 U.S.C. § 1843(c)(8). 7. 12 C.F.R. 225.200. 11 .See 12 C.F.R. 225.26. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 121 and BNP Capital have established appropriate policies and resources in the manner they consider to be most efficient procedures to ensure compliance with the Board's Sec- when such investments are consistent, as in this case, with tion 20 Orders, including computer, audit, and accounting the relevant considerations under the BHC Act. systems, internal risk management controls, and the neces- Based on all the facts of record, the Board has detersary operational and managerial infrastructure.12 Notifi- mined that performance of the proposed activities by Noticants have stated that the policies and procedures in place ficants, under the framework established in this and prior at BNP and BNP Capital to ensure compliance with the decisions, can reasonably be expected to produce public Board's Section 20 Orders and Operating Standards will be benefits that outweigh any reasonably expected adverse implemented at Paribas Corporation. On the basis of these effects of the proposal. Accordingly, the Board has deterand all other facts of record, including the commitments mined that performance of the proposed activities by Notiprovided in this case and the proposed managerial structure ficants is a proper incident to banking for purposes of and risk management systems of Paribas Corporation, the section 4(c)(8) of the BHC Act. Board has concluded that financial and managerial considerations are consistent with approval. Conclusion The Board also has carefully considered the competitive effects of the proposed transaction under section 4 of the BHC Act. As noted above, Paribas currently controls Com- Based on all the facts of record, the Board has determined panies. To the extent that BNP and Companies offer differ- that the notice should be, and hereby is, approved, subject ent types of nonbanking products, the proposed acquisition to all the terms and conditions in this order and the Secwould result in no loss of competition. In those markets in tion 20 Orders, as modified by the Modification Orders. which the nonbanking product offerings of BNP and Com- The Board's approval of this proposal extends only to panies overlap, such as securities brokerage, underwriting activities conducted within the limitations of those orders and dealing in bank-eligible and bank-ineligible securities, and this order, including the Board's reservation of authorand investment advisory activities, there are numerous ity to establish additional limitations to ensure that the existing and potential competitors. Consummation of the activities of Notificants are consistent with safety and proposal, therefore, would have a de minimis effect on soundness, avoidance of conflicts of interests, and other competition in the market for those services. Based on all relevant considerations under the BHC Act. Underwriting the facts of record, the Board has concluded that the and dealing in any manner other than as approved in this proposal would not result in any significantly adverse order and the Section 20 Orders (as modified by the Modicompetitive effects in any relevant market. fication Orders) is not within the scope of the Board's As noted above, Notificants have committed that Paribas approval and is not authorized for Notificants or Paribas Corporation will conduct its bank-ineligible securities un- Corporation. derwriting and dealing activities in accordance with the In reaching its conclusion, the Board has considered all prudential framework established by the Board's Sec- the facts of record in light of the factors that the Board is tion 20 Orders. Under the framework and conditions estab- required to consider under the BHC Act and other applicalished in this order and the Section 20 Orders, and based on ble statutes. The Board's approval is specifically condiall the facts of record, the Board concludes that the pro- tioned on compliance by Notificants with all the commitposed bank-ineligible underwriting and dealing activities ments made in connection with this notice, and on the are not likely to result in significantly adverse effects. Board's receiving access to information on the activities or Similarly, the Board concludes that the conduct of the other operations of Notificants and any of their affiliates that the proposed nonbanking activities by Notificants under the Board determines to be appropriate to determine and enframework and conditions established in this order, prior force compliance by Notificants and their affiliates with orders, and Regulation Y is not likely to result in any applicable federal statutes. The Board's approval also is significantly adverse effects. subject to all the conditions set forth in this order and in The Board also expects that the proposed acquisition Regulation Y, including those in sections 225.7 and would provide added convenience to the customers of BNP 225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)), and Paribas. Notificants have indicated that the transaction and to the Board's authority to require such modification or would strengthen the position of the combined organiza- termination of the activities of a bank holding company or tion in French, European, and international financial mar- any of its subsidiaries as the Board finds necessary to kets, and would allow the combined organization to diver- ensure compliance with, and to prevent evasion of, the sify its sources of revenue. In addition, there are public provisions of the BHC Act and the Board's regulations and benefits to be derived from permitting capital markets to orders issued thereunder. These commitments and condioperate so that bank holding companies can make poten- tions are deemed to be conditions imposed in writing by tially profitable investments in nonbanking companies and the Board in connection with its findings and decision and, from permitting banking organizations to allocate their as such, may be enforced in proceedings under applicable law. This transaction shall not be consummated later than three months after the effective date of this order unless 12. See Letter from Kenneth R. Binning, Federal Reserve Bank of San Francisco, to Larry B. Sobin, dated December 2, 1998. such period is extended for good cause by the Board or by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

122 Federal Reserve Bulletin • February 2000 the Federal Reserve Bank of San Francisco, acting pursu- comments has expired, and the Board has considered the ant to delegated authority. proposal and all comments received in light of the factors By order of the Board of Governors, effective Decem- set forth in sections 3 and 4 of the BHC Act.4 ber 20, 1999. First Security, with total consolidated assets of $22.1 billion, is the 39th largest commercial banking orga- Voting for this action: Chairman Greenspan, Vice Chairman Fergu- nization in the United States, controlling less than 1 person, and Governors Kelley, Meyer, and Gramlich. cent of the total assets of insured commercial banks in the United States ("total U.S. banking assets").5 First Securi- ROBERT DEV. FRIERSON ty's subsidiary banks operate in California, Idaho, Nevada, Associate Secretary of the Board New Mexico, Oregon, Utah, and Wyoming. First Security is the largest commercial banking organization in Utah, Orders Issued Under Sections 3 and 4 of the Bank controlling deposits of $5.0 billion, representing approxi- Holding Company Act mately 28.9 percent of total deposits in insured depository institutions in the state ("state deposits").6 First Security First Security Corporation also engages in a broad range of permissible nonbanking Salt Lake City, Utah activities in the United States, including underwriting and dealing in debt and equity securities to a limited extent. Zions Bancorporation Zions, with total consolidated assets of $17.6 billion, is Salt Lake City, Utah the 47th largest commercial banking organization in the United States, controlling less than 1 percent of total U.S. Order Approving the Merger of Bank Holding banking assets. The subsidiary banks of Zions operate in Companies Arizona, California, Colorado, Idaho, Nevada, New Mexico, Utah, and Washington. Zions is the second largest First Security Corporation ("First Security"), a bank holdcommercial banking organization in Utah, controlling deing company within the meaning of the Bank Holding posits of approximately $3.4 billion, representing approxi- Company Act ("BHC Act"), has requested the Board's mately 20 percent of state deposits. Zions also engages in a approval under section 3 of the BHC Act (12 U.S.C. range of permissible nonbanking activities in the United § 1842) to merge with Zions Bancorporation ("Zions") States. and thereby acquire the subsidiary banks of Zions.1 First After consummation of the proposal, and after account- Security also has requested the Board's approval under ing for the proposed divestitures discussed in this order, section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) First Security would become the 24th largest commercial and section 225.24 of the Board's Regulation Y (12 C.F.R. banking organization in the United States, with total con- 225.24) to acquire the nonbanking subsidiaries of Zions solidated assets of approximately $38 billion, representing and thereby engage in certain permissible nonbanking acless than 1 percent of total U.S. banking assets, and First tivities.2 Security's subsidiary banks would operate in ten states. Notice of the proposal, affording interested persons an First Security also would remain the largest commercial opportunity to submit comments, has been published banking organization in Utah, controlling deposits of (64 Federal Register 48,839 (1999)).3 The time for filing $6.4 billion, representing approximately 44 percent of state deposits. 1. Zions controls the following subsidiary banks: Zions First Factors Governing Board Review of Transaction National Bank, Salt Lake City, Utah; National Bank of Arizona, Phoenix, Arizona; California Bank & Trust, La Jolla, California The BHC Act sets forth the factors that the Board must ("Zions Bank-CA"); Vectra Bank Colorado, N.A., Denver, Colorado; consider when reviewing the formation of a bank holding Nevada State Bank, Las Vegas, Nevada; and The Commerce Bank of Washington, N.A., Seattle, Washington. First Security proposes to company or the acquisition of banks. These factors are the acquire Zions by merging Zions with and into First Security. competitive effects of the proposal in the relevant geo- 2. The nonbanking activities in which Zions engages and for which graphic markets; the financial and managerial resources First Security has sought Board approval under section 4 of the BHC and future prospects of the companies and banks involved Act are listed in Appendix A. in the proposal; the convenience and needs of the commu- 3. Several commenters contend that First Security provided insufficient notice of the proposed transaction to the residents of certain Utah nity to be served, including the records of performance towns; residents of rural Arizona, Colorado, Nevada, and Washington; and residents of the states of Idaho and New Mexico. One commenter asks the Board to require First Security to publish notice of the 4. First Security and Zions also have acquired an option to acquire transaction in every banking market affected by the transaction. The up to 19.9 percent of each other's voting shares. The options would Board requires a bank holding company that proposes to merge with expire on consummation of the proposal and would not be exercisable another bank holding company to publish notice of the proposal in a by First Security or Zions without Board approval. newspaper of general circulation in the communities containing the 5. Asset data are as of June 30, 1999, and ranking data are as of head office of the largest subsidiary bank of the applicant and the head December 31, 1998. office of each bank to be acquired by the applicant. 12 C.F.R. 6. Deposit data are as of June 30, 1998, adjusted to reflect subse- 262.3(b)(l)(ii)(E). The record indicates that First Security has com- quent mergers and acquisitions. In this context, depository institutions plied with the Board's rules relating to publication. include commercial banks, savings banks, and savings associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 123 under the Community Reinvestment Act (12 U.S.C. Board is permitted to approve the proposal under sec- § 2901 et seq.) ("CRA") of the insured depository institu- tion 3(d) of the BHC Act. tions involved in the transaction; and the availability of information needed to determine and enforce compliance Competitive Considerations with the BHC Act.7 In cases involving interstate bank acquisitions, the Board also must consider the concentra- Section 3 of the BHC Act prohibits the Board from approvtion of deposits in the nation and relevant individual states ing a proposal that would result in a monopoly or would be on consummation of the proposal, as well as compliance in furtherance of any attempt to monopolize the business of with other provisions of section 3(d) of the BHC Act. banking in any relevant banking market. The BHC Act also The Board has considered these factors in light of a prohibits the Board from approving a proposed bank acquicomprehensive record that includes information provided sition that would substantially lessen competition in any by First Security, confidential supervisory and examination relevant banking market, unless the Board finds that the information, and publicly reported financial and other in- anticompetitive effects of the proposal are clearly outformation. The Board also has considered information pro- weighed in the public interest by the probable effect of the vided by public commenters in connection with the pro- proposal in meeting the convenience and needs of the posal.8 community to be served.12 The proposed merger of First Security and Zions would Interstate Analysis combine two banking organizations that are among the largest providers of banking services in a number of mar- Section 3(d) of the BHC Act allows the Board to approve kets in the western United States. The Board has carefully an application by a bank holding company to acquire analyzed the likely effect of the transaction on competition control of a bank located in a state other than the home in each relevant banking market in light of all the facts of state of the bank holding company if certain conditions are record, including information collected by the Federal Remet. For purposes of the BHC Act, the home state of First serve System, information provided by First Security and Security is Utah,9 and the subsidiary banks of Zions are other competitors in the relevant markets, information prolocated in Arizona, California, Colorado, Idaho, Nevada, vided by the Department of Justice and other relevant New Mexico, Utah, and Washington.10 All the conditions agencies, and public information. The Board also has carefor an interstate acquisition enumerated in section 3(d) are fully considered public comments submitted on the commet in this case.11 In light of all the facts of record, the petitive effects of the proposal. In particular, commenters contend that the merger would reduce competition for banking services and result in higher fees and reduced 7. In cases involving a foreign bank, the Board also must consider customer convenience. In addition, commenters claim that whether the foreign bank is subject to comprehensive supervision and the merger would have substantial anticompetitive effects regulation on a consolidated basis by its home country supervisor. in the Salt Lake market, in other portions of Utah, and in 8. The Board received comments from 17 public commenters. other states. 9. A bank holding company's home state is that state in which the 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 A. Definition of Banking Markets bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). In addition to the interstate aspects of this proposal, this transaction In order to determine the effect of a particular transaction involves the acquisition by First Security, whose home state is Utah, on competition, it is necessary to designate the area of of a bank whose home state also is Utah. The Board does not believe that section 3(d) of the BHC Act applies to the acquisition by a bank effective competition between the parties, which the courts holding company of a bank with the same home state as the bank have held is decided by reference to the relevant "line of holding company, except to the extent that the bank operates branches commerce," or product market, and geographic market. outside its home state. In this case, Utah law expressly states that bank Some commenters contend that the competitive analysis affiliation transactions are not subject to any state-imposed deposit should focus on the impact of the merger on the markets caps. The transaction in Utah also appears otherwise to comply with applicable Utah state law. for consumer credit, small business loans, and large-scale 10. For purposes of section 3(d), the Board considers a bank to be commercial banking. Commenters also suggest that the located in the states in which the bank is chartered, headquartered, or relevant geographic market for analyzing the merger operates a branch. should be regional or statewide. 11. First Security is adequately capitalized and adequately managed, as defined by applicable law. 12 U.S.C. § 1842(d)(1)(A). Each subsidiary bank of Zions has been in existence and operated continuously for at least the period of time required by applicable state law. See 12 U.S.C. § 1842(d)(1)(B). On consummation of the proposal, First insured depository institutions in Idaho. The state deposit cap con- Security and its affiliates would control less than 10 percent of the tained in section 3(d) does not apply, however, if a transaction that total amount of deposits of insured depository institutions in the exceeds the cap is approved by the appropriate state bank supervisor. United States, and less than 30 percent, or the appropriate percentage In this case, the Idaho state bank supervisor has approved the transacestablished by applicable state law, of total deposits held by insured tion, and, consequently, the state deposit cap contained in section 3(d) depository institutions in the states (other than Utah, the home state of does not prevent the Board from approving the transaction. All other First Security, and Idaho) in which the insured depository institutions requirements of section 3(d) of the BHC Act would be met on of First Security and Zions both operate. 12 U.S.C. § 1842(d)(2). First consummation of the proposal. Security would control more than 30 percent of total deposits held by 12. 12 U.S.C. § 1842(c)(1). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

124 Federal Reserve Bulletin • February 2000 Product Market. The Board and the courts consistently In applying these factors and principles, the Board has have recognized that the appropriate product market for employed a methodology that defines a retail banking analyzing the competitive effects of bank mergers and market by identifying a market core as cities or counties acquisitions is the cluster of products (various kinds of that contain substantial employment opportunities and then credit) and services (such as checking accounts and trust grouping surrounding areas with significant patterns of administration) offered by banking institutions.13 Accord- commuting to and other indicia of economic integration ing to the Supreme Court, the clustering of banking prod- with the market core. The criteria for adding communities ucts and services facilitates convenient access to these to the market delineation become more stringent as the products and services, and vests the cluster with economic counties become more remote from the core. Following significance beyond the individual products and services this approach, the Board has identified 32 local banking that constitute the cluster.14 Several studies support the markets in four states in which First Security and Zions conclusion that both businesses and households continue to compete.19 As noted above, several commenters and the seek this cluster of services.15 Consistent with these prece- applicant question the appropriate definition of the Salt dents and studies, and on the basis of the facts of record in Lake City banking market. The definition of the approprithis case, the Board concludes that the cluster of banking ate market is not contested by commenters or the applicant products and services represents the appropriate product in the other markets in which First Security and Zions market for analyzing the competitive effects of this pro- compete. The Board has, therefore, paid special attention posal. to defining the relevant geographic banking market in the Geographic Market. In defining the relevant geographic Salt Lake City area. market, the Board consistently has sought to identify the area in which the cluster of banking products and services B. Relevant Geographic Banking Market for the is provided by competing institutions and in which pur- Salt Lake City Area chasers of the products and services seek to obtain these products and services.16 In applying these standards to The three metropolitan areas of Salt Lake City, Ogden, and bank acquisition proposals, the Board and the courts re- Provo-Orem are located in a corridor known as the Wapeatedly have held that the geographic market for the satch Front in north-central Utah. First Security contends cluster of banking products and services is local in na- that the appropriate geographic market for analyzing comture.17 In delineating the relevant geographic market in petition for banking services along the Wasatch Front is a which to assess the competitive effects of a bank merger or single market that combines the Salt Lake City, Ogden, and acquisition, the Board reviews population density; worker Provo-Orem Ranally Metropolitan Areas ("RMA"s).2° The commuting patterns; the usage and availability of banking Board has concluded, however, that there are three separate products; advertising patterns of financial institutions; the banking markets along the Wasatch Front: presence of shopping, employment, healthcare, and other (i) The Salt Lake City banking market (which comnecessities; and other indicia of economic integration and prises the Salt Lake RMA and the towns of Fruit the transmission of competitive forces among banks.18 Heights, Grantsville, Kaysville, and Tooele); (ii) The Ogden banking market (which comprises the Ogden RMA, excluding the towns of Fruit Heights and Kaysville); and 13. See Chemical Banking Corporation, 82 Federal Reserve Bulle- (iii) The Provo-Orem banking market (which comprises tin 239 (1996) ("Chemical"), and the cases and studies cited therein. the Provo-Orem RMA).21 The Supreme Court has emphasized that it is the cluster of products and services that, as a matter of trade reality, makes banking a distinct line of commerce. See United States v. Philadelphia National Bank, 374 U.S. 321, 357 (1963) ("Philadelphia National"); accord United States v. Connecticut National Bank, 418 U.S. 656 (1974); United States v. Phillipsburg National Bank, 399 U.S. 350 (1969) ("Phillips- 19. A commenter argues that First Security and Zions have a burg National"). monopoly on automated teller machines at the Salt Lake airport and in 14. See Phillipsburg National, 399 U.S. at 361. shopping malls in northern Utah. As discussed above, consistent with 15. Elliehausen and Wolken, Banking Markets and the Use of past practices and legal precedents, the Board defines the relevant Financial Services by Households, 78 Federal Reserve Bulletin 169 product market to be the entire cluster of banking products and (1992); Elliehausen and Wolken, Banking Markets and the Use of services and defines the relevant geographic market more broadly than Financial Services by Small- and Medium-Sized Businesses, 76 Fed- a single building or commercial location. eral Reserve Bulletin 726 (1990). 20. An RMA is a privately defined compact geographic area with 16. See, e.g., Sunwest Financial Services, Inc., 73 Federal Reserve relatively high population density that is linked by commuting, retail, Bulletin 463 (1987); Pikeville National Corporation, 71 Federal Re- and wholesale trade patterns. serve Bulletin 240 (1985); Wyoming Bancorporation, 68 Federal First Security also argues that, if the Board determines not to Reserve Bulletin 313 (1982), aff'd 729 F.2d 687 (10th Cir. 1984). combine the Salt Lake, Ogden, and Provo-Orem RMAs, the Board 17. See Philadelphia National, 374 U.S. at 357; Phillipsburg should, at a minimum, combine the Salt Lake and Ogden RMAs for National; First Union Corporation, 84 Federal Reserve Bulletin 489 purposes of its competitive analysis. A commenter requests that the (1998); Chemical; St. Joseph Valley Bank, 68 Federal Reserve Bulle- Board treat the Salt Lake City, Ogden, and Provo-Orem RMAs as tin 673 (1982) ("St. Joseph"). separate banking markets. 18. See Chemical; Crestar Bank, 81 Federal Reserve Bulletin 200, 21. Rand McNally's forthcoming Commercial Atlas and Marketing 201 n.5 (1995); Pennbancorp, 69 Federal Reserve Bulletin 548 Guide will exclude the towns of Fruit Heights and Kaysville from the (1983); St. Joseph. Ogden RMA and include them in the Salt Lake City RMA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 125 Numerous factors suggest that the Salt Lake City, Og- the proposed divestitures, consummation of the proposal den, and Provo-Orem RMAs constitute separate banking would be consistent with Board precedent and the Departmarkets. First, large distances and lack of continuous eco- ment of Justice Merger Guidelines ("DOJ Guidelines")23 nomic development separate the cities in the three RMAs. in at least 16 of the 21 markets: Bonners Ferry, Burley, Ogden is approximately 36 miles north of Salt Lake City Montpelier, and Twin Falls, Idaho; and Box Elder, Cedar and 16 miles from the boundary of the Salt Lake market. City, Delta, Ephraim, Logan, Moab, Monticello, Park City, Provo is approximately 46 miles south of Salt Lake City Price, Richfield, Roosevelt, and Vernal, Utah.24 In light of and 22 miles from the boundary of the Salt Lake market. these divestitures, the transaction would result in no in- Orem is approximately 38 miles south of Salt Lake City crease in the HHI in the Bonners Ferry and Montpelier, and 14 miles from the boundary of the Salt Lake market. Idaho; and Delta, Ephraim, Moab, Monticello, Price, Rich- The Board also notes that development between the Provo- field, Roosevelt, and Vernal, Utah, banking markets. In Orem and Salt Lake RMAs is not continuous. Population addition, numerous competitors would remain in most of density and commercial development is low along the these banking markets after consummation of the proposal. interstate that connects Provo-Orem to Salt Lake, from In the five remaining banking markets involving divesti- Lehi, about seven miles south of the border between the tures, including the Salt Lake City market, consummation Provo-Orem and Salt Lake RMAs, to Draper, about six of the proposal could increase the level of market concenmiles north of the border. Although the development be- tration to levels that exceed the DOJ Guidelines. The tween the Ogden and Salt Lake RMAs is more continuous, Board has conducted a careful review of the competitive the development is predominantly residential for several effects of the proposal in these markets, and considered miles on either side of the border between the two RMAs. whether other factors either mitigate the competitive ef- Moreover, although the amount of commuting between fects of the proposal in the markets or indicate that the the Salt Lake City RMA and the two other RMAs is proposal would have a significantly adverse effect on comincreasing, overall commuting levels remain low. Commut- petition in any of the markets. The number and strength of ing data for 1990 from the U.S. Bureau of the Census factors necessary to mitigate the competitive effects of a ("Census Bureau") indicate that 10.8 percent of workers proposal depend on the level of concentration and size of residing in the Ogden RMA, and 7.2 percent of workers increase in market concentration.25 residing in the Provo-Orem RMA, commute to jobs in the Salt Lake City, Utah. First Security operates the largest Salt Lake market. More recent data on traffic flows be- of 21 depository institutions in the Salt Lake banking tween Ogden and Salt Lake and Provo-Orem and Salt Lake market, and controls $2.7 billion in deposits, representing indicate that the commuting rates between the RMAs have 33.6 percent of total deposits in depository institutions in increased since 1990. These more recent data suggest that the market ("market deposits").26 Zions operates the secapproximately 13 percent of workers residing in the Ogden RMA and less than 10 percent of workers residing in the Provo-Orem RMA commuted to jobs in the Salt Lake committed that, if it is unsuccessful in completing any divestiture within 180 days of consummation, it will transfer the unsold branchmarket in 1998. es) to an independent trustee that is acceptable to the Board and will Other facts do not indicate that banking forces are trans- instruct the trustee to sell the branch(es) promptly to one or more mitted throughout the Wasatch Front at this time. Rather, alternative purchasers acceptable to the Board. See BankAmerica the three RMAs appear to function as separate banking Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 11 Federal Reserve Bulletin 484 markets. Based on all the facts of record, the Board be- (1991). First Security also has committed to submit to the Board, lieves that the relevant banking markets for considering the before consummation of the acquisition of Zions, an executed trust effects of the proposal along the Wasatch Front are the agreement acceptable to the Board stating the terms of these divestithree separate banking markets surrounding the Salt Lake tures. City, Ogden, and Provo-Orem RMAs. 23. See 49 Federal Register 26,823 (June 29, 1984). Under the DOJ Guidelines, a market in which the post-merger Herfindahl-Hirschman Index ("HHI") is less than 1000 points is considered to be unconcen- C. Competitive Analysis in Salt Lake City and trated. The Department of Justice has informed the Board that a bank Other Banking Markets with Divestitures merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the postmerger HHI is at least 1800 and the merger increases the HHI by more As part of the proposal, First Security has committed to than 200 points. The Department of Justice has stated that the higher divest 64 branches, which account for more than $2 billion than normal HHI thresholds for screening bank mergers for anticomin deposits, in 21 markets in order to reduce the potential petitive effects implicitly recognize the competitive effects of limitedfor adverse effects on competition.22 After accounting for purpose lenders and other nondepository financial entities. 24. These banking markets are discussed in Appendix D. 25. See NationsBank Corporation, 84 Federal Reserve Bulletin 129 (1998). 22. With respect to each market in which First Security has commit- 26. Market concentration calculations include deposits of thrift ted to divest offices to mitigate the anticompetitive effects of the institutions at 50 percent, except as discussed in the order. The Board proposal, First Security has committed to execute, before consumma- previously has indicated that thrift institutions have become, or have tion of the acquisition of Zions, sales agreements for the proposed the potential to become, significant competitors of commercial banks. divestitures with a purchaser determined by the Board to be competi- See Midwest Financial Group, 75 Federal Reserve Bulletin 386 tively suitable, and to complete the divestitures within 180 days of (1989); National City Corporation, 70 Federal Reserve Bulletin 143 consummation of the acquisition of Zions. First Security also has (1984). Thus, the Board has regularly included thrift deposits in the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

126 Federal Reserve Bulletin • February 2000 ond largest depository institution in the market, and con- Significantly, these credit unions operate through streettrols $1.7 billion in deposits, representing 20.6 percent of level branches accessible to the public. On the basis of the market deposits. On a combined basis, First Security and activities, open membership, branch operations, size, num- Zions would control approximately 54.2 percent of market ber, and market shares of credit unions in the market,29 the deposits, and the HHI would increase approximately 1388 Board concludes that credit unions exert a competitive points to 3204, an amount that would exceed the DOJ influence that mitigates in part the potential anticompeti- Guidelines in a highly concentrated market. tive effects of the proposal.30 In order to address the potential anticompetitive effects First Security argues that, for purposes of evaluating the of the proposal in the Salt Lake banking market, First competitive factors in the Salt Lake market, the Board Security proposes to divest 17 branches in the market, with should exclude certain categories of deposits that First $682 million in deposits (representing 8.4 percent of mar- Security and Zions contend overstate their competitive ket deposits), to an out-of-market banking organization or strength in the Salt Lake market.31 First Security contends an in-market banking organization that currently controls that these deposits either are unavailable for lending in the less than 6 percent of market deposits. This divestiture Salt Lake market or represent deposits that are raised represents almost one-half of the originally proposed in- outside the market or in a national market and are available crease in market share and would allow a new entrant to to support out-of-market banking activities. On this basis, become immediately competitive in the market or signifi- First Security argues that inclusion of these deposits in cantly enhance the market share of a small in-market calculations of the market share indices for First Security competitor. and Zions in Salt Lake distorts the indices.32 In reviewing the competitive effects of the proposal in The Board generally has not adjusted its market share the Salt Lake banking market and the adequacy of the calculations in previous cases to exclude out-of-market proposed divestiture, the Board also has taken into account deposits because of the difficulty of making comparable the structure of the market. In particular, the Board has adjustments for other firms in the market and because considered that one savings association operating in the out-of-market deposits are typically available to support market provides a range of consumer, mortgage, and other lending and other banking activities at any location. The banking products and services and, through an affiliate, Board has under very limited circumstances adjusted marserves as a significant source of commercial loans in the ket indices to account for certain types of government market. Competition from this savings association closely deposits, however, where special conditions limited the use approximates competition from a commercial bank. On of the deposits. In this case, the Board continues to believe, this basis, the Board concludes that deposits controlled by for the same reasons, that it is generally not appropriate to this organization should be weighted at 100 percent in exclude categories of deposits. calculating market concentration under the DOJ Guide- This case has unique circumstances, however, that relines.27 duce the difficulties of making an adjustment for a limited Credit unions also are particularly active competitors in number of out-of-market deposits. The comparability probthe Salt Lake market.28 Although Utah credit unions are lem is less severe in this case than in past cases reviewed membership organizations, numerous credit unions in the by the Board because First Security and Zions are the only Salt Lake market are open to all persons in the market or to two large banking organizations headquartered in the Salt a substantial majority of the population of the market. Lake market that appear to have generated significant outof-market deposits.33 calculation of market share on a 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991). 27. The Board previously has indicated that it may consider the 29. Credit unions account for approximately 21 percent of total competitiveness of a savings association at a level greater than deposits in the market. 50 percent of the savings association's deposits, if appropriate. See 30. Thirty-four credit unions compete with banks in the market. Banknorth Group, Inc., 75 Federal Reserve Bulletin 703 (1989). After Although these credit unions are a competitive force, the Board has the proposed merger and divestiture, and after taking into account the not considered them to be full competitors of banks because they do deposits controlled by this thrift, First Security would control not provide the full range of banking products and services. If the 45.9 percent of market deposits, and the HHI would increase by no Board were to include the deposits of these 34 credit unions in the more than 713 points to a level that would not exceed 2529 points. market and weight them at 50 percent, the HHI for the Salt Lake 28. A commenter contends that the Board should not include the market would increase by no more than 571 points to 2036, and First deposits of any credit union in its antitrust analysis. Security would have a post-merger market share of approximately First Security also contends that the Board should include certain 41 percent. Utah-chartered industrial loan companies in the Board's structural 31. One commenter contends that the Board should not exclude any analysis of the Salt Lake market. A commenter argues that the Board such deposits. should not include these companies in its analysis. The Board's use of 32. The categories of deposits that First Security proposes to exa 200-point increase in the HHI as a threshold in its competitive clude are deposits relating to mortgage escrow accounts, corresponanalysis, rather than a lower level, reflects in part the competitive dent banking accounts, certificates of deposit ("CD"s) in amounts influence of financial institutions other than banks. Because industrial greater than $100,000, brokered CDs, trust accounts, and out-ofloan companies in Utah are primarily credit card institutions, take few market commercial and retail accounts. demand deposits, and generally do little lending in the local market, 33. Firms ranked third through seventh in the market are large the Board has determined not to include these companies more specif- organizations headquartered in other states that would be unlikely to ically in calculating market concentration in this case. have any out-of-market deposits booked in the Salt Lake market. The Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 127 The Board continues to believe that deposits maintained market, the strong presence of bank-like credit unions, the by a banking organization in a specific market, including distortional effects of out-of-market deposits, the attractivedeposits generated outside the market, represent an impor- ness of the market for entry by out-of-market competitors, tant measure of the banking organization's capacity to and other factors mitigate the potentially adverse competicompete in that market.34 First Security and Zions have tive effects in the Salt Lake City banking market. generated some deposits from out-of-market sources, how- Ogden, Utah. First Security operates the largest of ever, that are subject to legal or other restrictions that 13 depository institutions in the Ogden banking market, constrain the organizations' ability to use the deposits to and controls $450 million in deposits, representing 36.8 support their general banking activities. These deposits percent of market deposits. Zions operates the fourth larghave been generated from various governments and munic- est depository institution in the market, and controls $116 ipalities outside Utah, involve escrow accounts for mort- million in deposits, representing 9.5 percent of market gages made outside Utah, or represent correspondent bank- deposits. First Security proposes to divest three branches in ing accounts with institutions outside Utah. With each of the market, with $77 million in deposits (representing these deposit types, First Security and Zions are limited by approximately 6.3 percent of market deposits). After the law, contract, or duration of relationship in their ability to proposed merger and divestiture, First Security would conuse the deposits for any activity other than supporting the tinue to Operate the largest depository institution in the deposit account. Because of the limited availability of market, controlling 39.9 percent of market deposits, and these deposits and because the data suggest that making the HHI would increase by less than 393 points to a level adjustments for First Security and Zions would not distort that does not exceed 2382.36 market calculations for other competitors in the Salt Lake Several factors suggest that the increase in market conmarket, the Board has taken into account as a mitigating centration in the Ogden market, as measured by the HHI, factor this limited set of out-of-market deposits in this does not reflect a significantly adverse effect on competicase.35 tion in the market. At least twelve depository institutions The presence of other bank competitors also is an impor- would remain in the market after consummation of the tant factor in this market. At least 20 depository institutions proposal, including four large multistate banking organizawould remain in the market after consummation of the tions other than First Security. In addition, at least two proposal, including four bank holding companies and one banking organizations other than First Security would each savings association holding company that each have more control more than 10 percent of market deposits, and five than $80 billion in assets. The second and third largest banking organizations other than First Security would each depository institutions in the market are among the largest control more than 5 percent of market deposits, after concommercial banking organizations in the United States. summation. As noted above, First Security has committed These organizations would control approximately 10.2 per- to divest branches controlling 6.3 percent of market deposcent and 8.2 percent, respectively, of market deposits. its. The proposed divestiture would either add a new com- In addition, the Salt Lake market is attractive for entry petitor or would enhance the competitive presence of a by out-of-market competitors. According to the Census smaller competitor. Bureau, the population of the Salt Lake City RMA in- In addition, the Ogden banking market has characteriscreased 14.5 percent from 1990 to 1998, which was signif- tics that make it attractive for entry. The population of the icantly higher than the national rate. The increase in em- market increased by 16 percent from 1990 to 1998, which ployment between 1990 and 1998 was 28 percent, which was almost double the national rate. Employment in the was over twice the national rate. Moreover, in 1998, the market increased by 27 percent during the same time Salt Lake City unemployment rate was 3.9 percent, which period, more than double the national rate. One firm enwas below the national rate of 4.5 percent. tered the Ogden market de novo in 1997. Based on all the facts of record, the Board concludes that Moreover, as in the case of the Salt Lake banking the considerations discussed above, including the proposed market, credit unions have a significant presence in the divestitures, the number and strength of competitors in the Ogden market, and many credit unions are uniquely open and accessible to all or almost all persons in the market. In particular, eight credit unions have membership rules based largest firm, other than First Security and Zions, with its headquarters on geography or other characteristics that allow a substanin the market controls only 2.5 percent of market deposits. tial majority of the residents in the market to be members, 34. Exclusion of out-of-market deposits from an analysis of the competitive strength of an organization in the market where the deposits are maintained would incorrectly suggest that these deposits are unavailable to support the organization's activities in the market. It would also lead to the anomaly that certain types of out-of-market deposits are not counted in any part of the competitive analysis even though these deposits are available to support banking activities anywhere. 36. As in the Salt Lake market and for the same reasons, competi- 35. If government trust, mortgage escrow, and correspondent bank- tion from one savings association operating in the Ogden market ing deposits originated by First Security and Zions outside Utah but closely approximates competition from commercial banks in the marheld in the Salt Lake market were excluded from market calculations, ket. Accordingly, the Board has weighted deposits controlled by this the HHI for the market would increase by no more than 523 points to organization at 100 percent in calculating market concentration under a level that does not exceed 1927. the DOJ Guidelines. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

128 Federal Reserve Bulletin • February 2000 and maintain street-level branches that are accessible to the In addition, the Provo-Orem banking market has characpublic.37 teristics that make it attractive for entry. The population of Provo-Orem, Utah. First Security operates the second the market increased by 21 percent from 1990 to 1998. largest of 14 depository institutions in the Provo-Orem Recent entries by depository institutions also confirm that banking market, and controls $535 million in deposits, the Provo-Orem banking market is attractive for entry. representing 29.9 percent of market deposits. Zions oper- Three firms have entered the market de novo since 1993. ates the largest depository institution in the market, and Moreover, as in the case of the Salt Lake banking controls $536 million in deposits, representing 30 percent market, credit unions have a significant presence in the of market deposits. First Security proposes to divest eight Provo-Orem market, and many credit unions are uniquely branches in the market, with $359 million in deposits open and accessible to all or almost all persons in the (representing approximately 20.1 percent of market depos- market. In particular, ten credit unions have membership its) to an out-of-market banking organization or an rules based on geography or other characteristics that allow in-market banking organization that currently controls a substantial majority of the residents in the market to be 2.4 percent or less of market deposits. After the proposed members, and maintain street-level branches that are accesmerger and divestiture, First Security would operate the sible to the public.40 largest depository institution in the market, controlling St. George, Utah. First Security operates the second 39.8 percent of market deposits, and the HHI would in- largest of 11 depository institutions in the St. George crease by less than 292 points to a level that does not banking market, and controls $241 million in deposits, exceed 2383.38 representing 39 percent of market deposits. Zions operates In reviewing the competitive effects of the proposal in the largest depository institution in the market, and conthis market, the Board has considered that a significant trols $245 million in deposits, representing 39.6 percent of portion of the HHI increase resulting from the proposed market deposits. First Security proposes to divest four transaction is caused by the fact that the divested branches branches in the market, with $221 million in deposits control a large amount of deposits. If First Security were to (representing approximately 35.7 percent of market deposdivest the branches, which represent approximately its). After the proposed merger and divestiture, First Secu- 20 percent of market deposits and two-thirds of the depos- rity would operate the largest depository institution in the its being acquired by First Security in the market, as a unit market, controlling 42.8 percent of market deposits, and to an out-of-market firm, the proposal would be consistent the HHI would increase by less than 325 points to a level with the DO J Guidelines.39 The Board believes that sale of that does not exceed 3471. these branches substantially mitigates the potential anti- As in the Provo-Orem market, the Board has considered competitive effects of the proposal by helping to create a that a significant portion of the HHI increase in the St. viable competitor to First Security in the market. Sale of George market is caused by the fact that the divested these branches to an in-market competitor that currently branches control a large amount of deposits. In fact, in this has only a nominal market share would have similar bene- market, First Security proposes to divest almost all of the fits to an out-of-market sale. deposits held by Zions in the market, with the result that At least 13 depository institutions would remain in the the market share controlled by First Security would inmarket after consummation of the proposal, including four crease by less than 4 percent as a result of the proposed large multistate banking organizations other than First Se- merger and divestiture. If First Security were to divest the curity. At least three banking organizations other than First branches, which represent approximately 36 percent of the Security would control more than 10 percent of market market, as a unit to an out-of-market firm, the proposal deposits after consummation. As noted above, First Securi- would be consistent with the DOJ Guidelines 41 The Board ty's proposed divestiture of approximately 20 percent of believes that sale of these branches substantially mitigates market deposits would either add a strong new competitor the potential anticompetitive effects of the proposal by or would enhance substantially the competitive presence of helping to create a viable competitor to First Security in the a smaller competitor. market. The sale of these branches to an in-market competitor that currently has only a nominal market share would have benefits similar to an out-of-market sale. At least ten depository institutions would remain in the market after consummation of the proposal, including two 37. If the deposits of these credit unions were included in market share calculations at 50 percent, the HHI for the Ogden market would large multistate banking organizations other than First Seincrease by no more than 207 points to a level that does not exceed 1612. 38. As in the Salt Lake market and for the same reasons, competition from one savings association operating in the Provo-Orem market 40. If the deposits of these credit unions were included in market closely approximates competition from commercial banks in the mar- share calculations at 50 percent, the HHI for the Provo-Orem market ket. Accordingly, the Board has weighted deposits controlled by this would increase by no more than 254 points to a level that does not organization at 100 percent in calculating market concentration under exceed 2082. Credit unions without the characteristics discussed above the DOJ Guidelines. control approximately 12 percent of market deposits. 39. If First Security were to divest the relevant Provo-Orem 41. If First Security were to divest the relevant St. George branches branches to an out-of-market firm, the HHI would increase by 195 to an out-of-market firm, the HHI would increase by 25 points to points to 2286. 3171. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 129 curity. In addition, the St. George banking market has D. Competitive Analysis of Banking Markets characteristics that make it attractive for entry. The popula- without Divestitures tion of the market increased by 69 percent from 1990 to 1998, making the St. George area one of the fastest- Consummation of the proposal without divestitures would growing regions by population in Utah. Recent entries by be consistent with Board precedent and the DOJ Guidedepository institutions also confirm that the St. George lines in ten of the remaining 11 banking markets: Los banking market is attractive for entry. Five firms have Angeles and Riverside-San Bernardino, California; Blackentered the market de novo since 1993. foot, Boise, Idaho Falls, Moscow-Pullman, Ontario, and Moreover, as in the case of the Salt Lake banking Pocatello, Idaho; and Carson City and Reno, Nevada 43 market, credit unions have a significant presence in the St. Las Vegas, Nevada. Consummation of the proposal George market, and many credit unions are uniquely open would exceed the DOJ Guidelines as measured by the HHI and accessible to all or almost all persons in the market. In in the Las Vegas, Nevada, banking market. First Security particular, five credit unions have membership rules based operates the fourth largest of 19 depository institutions in on geography or other characteristics that allow a substan- the Las Vegas banking market, and controls $879 million tial majority of the residents in the market to be members, in deposits, representing 9.1 percent of market deposits. and maintain street-level branches that are accessible to the Zions operates the third largest depository institution in the public.42 market, and controls $1.1 billion in deposits, representing Lewiston, Idaho. First Security operates the largest of 11.2 percent of market deposits. After consummation of eight depository institutions in the Lewiston banking mar- the proposal, First Security would operate the third largest ket, and controls $115 million in deposits, representing depository institution in the market, controlling 20.3 per- 27.4 percent of market deposits. Zions operates the seventh cent of market deposits, and the HHI would increase by largest depository institution in the market, and controls 203 points to 2096. $17 million in deposits, representing 4.1 percent of market Numerous mitigating factors suggest that the increase in deposits. First Security proposes to divest one branch in the market concentration in the Las Vegas market, as measured market, with $9.7 million in deposits (representing approx- by the HHI, does not reflect a significantly adverse effect imately 2.3 percent of market deposits). After the proposed on competition in the market. At least 18 depository instimerger and divestiture, First Security would continue to tutions would remain in the market after consummation of operate the largest depository institution in the market, the proposal. Several large multistate banking organizacontrolling 29.1 percent of market deposits, and the HHI tions, other than First Security, would compete in this would increase by less than 214 points to a level that does market, including one organization that would remain the not exceed 2128. largest depository institution in the market with 30.2 per- Several mitigating factors suggest that the increase in cent of market deposits, and another organization that market concentration in the Lewiston market, as measured would remain the second largest depository institution in by the HHI, does not reflect a significantly adverse effect the market with 26.5 percent of market deposits. on competition in the market. At least seven depository In addition, the Las Vegas banking market has characterinstitutions would remain in the market after consumma- istics that make it attractive for entry. The population of tion of the proposal, including two large multistate banking Las Vegas increased 56 percent from 1990 to 1998, which organizations other than First Security. In addition, at least was more than six times the national rate. Employment two banking organizations other than First Security would increased 51 percent between 1990 and 1998, which was control more than 10 percent of market deposits and at more than four times the national rate of 12 percent. least five banking organizations other than First Security During the last decade, the Las Vegas unemployment rate would control more than 5 percent of market deposits after has been consistently low compared with the national rate. consummation. As noted above, First Security has commit- Recent entries by depository institutions also confirm that ted to divest one branch controlling 2.3 percent of market the Las Vegas banking market is attractive for entry. Eight deposits. The proposed divestiture would either add a new of the 19 depository institutions in the market entered competitor or would enhance the competitive presence of a de novo since 1994. Three depository institutions have smaller competitor. entered by acquisition in the past five years, and another In addition, the Lewiston banking market has character- group has an application to organize a de novo bank istics that make it attractive for entry. The population of the pending before the state banking authority. market increased by 13 percent from 1990 to 1998. More- The Board believes that these considerations and other over, two firms have entered the Lewiston market de novo factors mitigate the potentially adverse competitive effects since 1995. of the proposal in the Las Vegas banking market. 42. If the deposits of these credit unions were included in market share calculations at 50 percent, the HHI for the St. George market would increase by no more than 250 points to a level that does not exceed 2709. 43. These banking markets are discussed in Appendix C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

130 Federal Reserve Bulletin • February 2000 E. Views of Other Agencies and Conclusion Adequacy Guidelines. The Board notes that First Security and Zions and their subsidiary banks are well capitalized The Department of Justice also has conducted a detailed and would remain so on consummation of the proposal. review of the expected competitive effects of the proposal. The Board has considered that the proposed merger is The Department of Justice has advised the Board that, in structured as a stock-for-stock transaction and would not light of the proposed divestitures, consummation of the increase the debt service requirements of the combined proposal would not be likely to have a significantly adverse organization. effect on competition in any relevant banking market. The The Board also has carefully considered the managerial Office of the Comptroller of the Currency ("OCC") and resources of First Security and Zions and the record of the the Federal Deposit Insurance Corporation ("FDIC") have federal banking agencies in supervising these organizations been afforded an opportunity to comment and have not in light of all the facts of record, including confidential objected to consummation of the proposal. examination and other supervisory information.46 Based on After carefully reviewing all the facts of record, includ- all the facts of record, the Board concludes that considering public comments on the competitive effects of the ations relating to the financial and managerial resources proposal, and for the reasons discussed in the order and and future prospects of the organizations involved are appendices, the Board concludes that consummation of the consistent with approval, as are the other supervisory facproposal would not be likely to result in a significantly tors that the Board must consider under section 3 of the adverse effect on competition or on the concentration of BHC Act.47 banking resources in any of the 32 markets in which First Security and Zions both compete, or in any other relevant Convenience and Needs Factor banking market. Accordingly, based on all the facts of record and subject to completion of the proposed divesti- The Board also has carefully considered the effect of the tures, the Board has determined that competitive factors proposal on the convenience and needs of the communities are consistent with approval of the proposal. to be served in light of all the facts of record, including comments received on the effect the proposal would have Financial, Managerial and Other Supervisory Factors on the communities to be served by the combined organization.48 The Board has carefully considered the financial and managerial resources and future prospects of the companies A. CRA Performance Examinations and banks involved in the proposal and other supervisory factors in light of all the facts of record, including public The Board has long held that consideration of the convecomments.44 In evaluating the financial and managerial nience and needs factor includes a review of the records of factors, the Board has reviewed relevant reports of exami- the relevant depository institutions under the CRA. As nation and other supervisory information prepared by the provided in the CRA, the Board evaluates the record of Federal Reserve Bank of San Francisco ("Reserve Bank") performance of an institution in light of examinations by and other federal financial supervisory agencies. The Board the appropriate federal supervisors of the CRA perforalso has reviewed information submitted by First Security mance records of the relevant institutions. An institution's about the programs that First Security and Zions have most recent CRA performance evaluation is a particularly implemented to prepare their systems for the Year 2000, important consideration in the applications process because and confidential examination and supervisory information it represents a detailed, on-site evaluation of the instituassessing the efforts of the two banking organizations to ensure Year 2000 readiness, both before and after consummation of the proposed transaction. In evaluating financial factors in expansion proposals by banking organizations, the Board consistently has considered capital adequacy to be especially important.45 The 46. Commenters express dissatisfaction with an alleged lack of Board expects banking organizations contemplating expan- diversity in the current staff and management of First Security and sion to maintain strong capital levels substantially in ex- Zions. The racial and gender composition of staff and management are not factors the Board is authorized to consider under the BHC Act. cess of the minimum levels specified in the Board's Capital 47. Commenters note that First Security and Zions are defendants in several pending judicial proceedings. There has been no adjudication of wrongdoing by First Security or Zions in any of these matters, and 44. Several commenters express concerns about the financial and each matter currently is pending before a forum that can provide the managerial resources of First Security and Zions. The comments plaintiffs adequate redress if their allegations can be sustained. include contentions that the financial strength of Vectra Bank Colo- 48. One commenter opposes the proposal based in part on an rado, N.A., has declined since its acquisition by Zions and that the unfavorable experience with First Security Bank in a particular busimerger would add an unresponsive layer of management above Vectra ness dealing and on a belief that the merger would reduce the amount Bank. Another commenter alleges that an officer of Zions may have of capital available to small businesses. The Board has reviewed this violated the insider trading rules of the Securities and Exchange comment in light of all the facts of record, including the records of Commission ("SEC"), and that comment was sent to the SEC. First Security and Zions of assisting to meet the credit needs of small 45. See Banc One Corporation, 84 Federal Reserve Bulletin 961 businesses. The Board also has provided a copy of this comment to (1998). the OCC, the primary federal supervisor of First Security Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 131 tion's overall record of performance under the CRA by its B. First Security's CRA Performance Record appropriate federal supervisor.49 All of First Security's subsidiary banks received either In the First Security Examination, examiners found that the "outstanding" or "satisfactory" ratings at the most recent bank demonstrated an excellent response to the primary examinations of their CRA performance. In particular, First credit needs of its communities.52 Examiners noted that the Security Bank, N.A., Ogden, Utah ("First Security Bank"), bank responded to its communities' credit needs by providwhich represents approximately 76 percent of the assets ing conventional and government-insured real estate mortcontrolled by First Security and is First Security's lead gages, home improvement loans, farm loans, small busibank, received an "outstanding" rating from the OCC, as ness loans, and government-guaranteed student loans. of June 30, 1996 (the "First Security Examination").50 All Examiners also concluded that the bank originated a high the subsidiary banks of Zions also received either "out- volume of loans in its delineated communities. From Janustanding" or "satisfactory" ratings at their most recent ary 1, 1995, through June 30, 1996, the period covered by CRA examinations. In particular, Zions First National the examination ("assessment period"), First Security Bank, Salt Lake City, Utah ("Zions Bank"), which is Bank extended 93 percent (by dollar) of its mortgage loans Zions' lead bank and represents approximately 37 percent and 82 percent (by dollar) of its small business and farm of the assets controlled by Zions, received an "outstand- loans in its delineated communities. ing" rating from the OCC at its most recent examination, Moreover, examiners noted that the bank's loan-toas of July 25, 1997 (the "Zions Examination").51 deposit ratio was 106 percent, as of June 30, 1996, which Examiners found no evidence of prohibited discrimina- was substantially above the peer bank's average of tion or other illegal credit practices at First Security Bank 90 percent; and that the bank extended a significant volume or Zions Bank and identified no violations of fair lending of mortgage loans relative to the bank's resources, market laws. Examiners also reviewed the assessment areas delin- competition, and the credit needs of the community. Exameated by the depository institutions and found that these iners indicated that the bank originated more than assessment areas were reasonable and did not arbitrarily $275 million of government-insured mortgages in Utah exclude low- to moderate-income ("LMI") areas. and Idaho during the assessment period.53 In addition, during 1997 and 1998, First Security Bank made more than 2,160 HMDA-reportable loans, totaling approximately $117 million, to LMI borrowers in the Metropolitan Statistical Area ("MSA") portions of its Utah assessment areas, representing approximately 27 percent of all HMDAreportable loans made by First Security in such areas. 49. See Interagency Questions and Answers Regarding Community Examiners also noted that the bank's volume of small Reinvestment, 64 Federal Register 23,618 and 23,641 (1999). business and farm loans originated during the assessment 50. First Security Bank of New Mexico, N.A., Albuquerque, New period was high. As of June 30, 1996, the bank had Mexico, received an "outstanding" CRA performance rating from the outstanding $700 million in small business loans; small OCC, as of December 6, 1995; and First Security Bank of Nevada, Las Vegas, Nevada, received a "satisfactory" CRA rating from the business and farm loans represented more than 10 percent Reserve Bank, as of January 11, 1999. Although First Security Bank of the bank's total outstanding loan portfolio. The bank of California, N.A., West Covina, California, has not yet been exam- also made 385 Small Business Administration ("SBA") ined for CRA performance, its two predecessor banks received "satis- loans, totaling $53.2 million, during the assessment period, factory" CRA performance ratings from their appropriate federal and had preferred lender status with the SBA. In addition, financial supervisory agency: California State Bank, West Covina, California, received a "satisfactory" CRA performance rating from during 1997 and 1998, First Security Bank originated the FDIC, as of July 22, 1996; and Marine National Bank, Irvine, approximately 5,800 small business and small farm loans, California, received a "satisfactory" CRA performance rating from totaling approximately $560 million, in its Utah assessthe OCC, as of September 6, 1996. ment areas; and more than 80 percent of the small business 51. Nevada State Bank received an "outstanding" CRA performance rating from the FDIC, as of May 17, 1999; National Bank of loans of First Security Bank were made to businesses with Arizona received a "satisfactory" rating from the OCC, as of May 3, less than $1 million in annual revenues, and approximately 1999; Vectra Bank received an "outstanding" CRA rating from the 22 percent were made to businesses in LMI census tracts. Federal Reserve Bank of Kansas City, as of September 30, 1996; and The First Security Examination also indicated that the The Commerce Bank of Washington, N.A., received a "satisfactory" bank demonstrated a strong commitment to direct and CRA rating from the OCC, as of June 25, 1996. Although Zions Bank-CA has not yet been examined for CRA performance, all its indirect community development. Examiners stated that predecessor banks received "satisfactory" CRA performance ratings from their appropriate federal financial supervisory agency: Grossmont Bank, San Francisco, California, received a "satisfactory" CRA 52. In the First Security Examination, examiners also considered the performance rating from the FDIC, as of August 28, 1996; First loan originations of Crossland Mortgage Company, a subsidiary of Pacific National Bank, Escondido, California, received a "satisfacto- First Security Bank. ry" CRA performance rating from the OCC, as of October 31, 1996; 53. First Security Bank is an active participant in the Utah and Sumitomo Bank of California, San Francisco, California, received a Idaho Housing Finance Agency programs. In both states, the bank is "satisfactory" CRA performance rating from the FDIC, as of Septem- the largest participating lender by dollar and number of loans. During ber 12, 1996; and Regency Bank, Fresno, California, received a the assessment period, the bank originated $85 million through the "satisfactory" CRA performance rating from the Reserve Bank, as of Utah Housing Finance Agency and $42 million through the Idaho February 16, 1999. Housing Finance Agency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

132 Federal Reserve Bulletin • February 2000 the bank had taken a leadership role in 19 community Zions Bank has remained an active mortgage lender to development projects from September 1994 to June 1996, LMI individuals since the Zions Examination. During 1997 which resulted in the construction of 706 new LMI housing and 1998, Zions Bank made more than 2,140 HMDAunits in Idaho and Utah. In Idaho, the bank was one of ten reportable loans, totaling approximately $146 million, to financial institutions participating in the Idaho Community LMI borrowers in the MSA portions of the bank's Utah Reinvestment Corporation ("ICRC"), a statewide organi- assessment area, representing approximately 23 percent of zation providing housing for LMI persons. Through the all HMDA-reportable loans made by Zions Bank in such ICRC, the bank participated in nine housing projects, areas. which provided a total of 478 new housing units for LMI In 1996, Zions Bank originated approximately 1,960 persons, and provided $2.9 million in loans. The bank also small business loans, totaling $199 million. Small business made $3.4 million of debt and equity investments in an loans represented 26 percent (by number) and 46 percent 80-unit, low-income housing complex for elderly residents (by dollar volume) of the total commercial loans originated of Salt Lake City and $1.8 million in debt and equity by the bank during 1996. Seventy-eight percent of the investments in the Oak Park Project, which was developing bank's 1996 small business loans were in amounts of less 142 affordable housing units in Boise, Idaho, in coopera- than $100,000. In addition, more than 98 percent of the tion with the Idaho Housing Agency and the City of Boise. bank's small business loans in 1996 were originated in its delineated community. In 1996, Zions Bank originated 583 C. Zions' CRA Performance Record farm loans, totaling $27.4 million. Of these loans, 542 (93 percent by number) and $24.4 million (89 percent by dollar The Zions Examination reported that Zions Bank had a volume) were to small farms. The bank also was an active strong record of ascertaining the credit needs of its commu- participant in SBA lending programs. Examiners noted that nities, including LMI neighborhoods, and had implemented the percentage of the bank's small business loans in LMI an effective program to meet those credit needs. Examiners census tracts compared favorably with the distribution of noted that the bank had originated a significant volume of LMI census tracts in the bank's community. mortgage, consumer, and small business loans in its delin- Zions Bank also has extended a significant number of eated community.54 small business and small farm loans since the Zions Exam- Zions Bank originated more than 11,500 HMDA- ination. First Security has indicated that, during 1997 and reportable loans, totaling approximately $1 billion, in its 1998, Zions Bank originated approximately 13,500 small delineated community during the assessment period.55 In business and small farm loans, totaling $1.38 billion; and 1996, 89 percent of its mortgage loans (88 percent by from August 1, 1997, to December 31, 1998, more than volume) were originated in the bank's delineated commu- 76 percent of the small business loans of the bank were in nity. Examiners indicated that the bank also offered afford- amounts of $100,000 or less, and approximately 26 percent able housing products to help meet the needs of LMI were made to businesses in LMI census tracts. individuals, including the Federal National Mortgage Asso- The Zions Examination also concluded that Zions Bank ciation ("FNMA")'s "Good Neighbor" Loan Program, was a leader in providing community development loans, several Department of Housing and Urban Development investments, grants, and services to its delineated commu- Native American loan programs, the FNMA Rural Hous- nity. Examiners noted, in particular, that the bank made ing Direct Leveraging Program, the FNMA Fixed Term approximately $800,000 in loans and committed more than Community Home Improvement Loan, and the FNMA $700,000 in low-income housing tax credits to Blue Moun- Fixed Term Home Improvement Loan. Down payments tain Dine, a project designed to build 20 modular housing and underwriting criteria for these programs were gener- units for elderly low-income Native Americans not residally more flexible than for conventional mortgage prod- ing on the reservation. The bank also invested $389,000 in ucts.56 Examiners further noted that Zions Bank was an Crimson Court and $468,000 in Washington Mill, two active participant in Federal Housing Administration, Vet- low-income housing projects in Provo and Park City, Utah, erans Administration, Utah Housing Finance Authority, respectively. In addition, the bank had invested $4 million and other government-insured real estate lending pro- through mid-1997 in Wasatch Venture Capital Corporagrams. In addition, examiners indicated that the bank had tion, a small business investment company formed by the been a significant provider of mortgage loans to LMI bank to provide loans to start-up companies. individuals. First Security and Zions have banks that operate in various other states, including Arizona, California, Colorado, Nevada, New Mexico, Oregon, Washington, and Wyoming. The banking assets of First Security and Zions 54. The lending activities of Zions Mortgage Company, at the time a in these states are small compared to their total banking subsidiary of Zions Bank, were also considered by the examiners who assets.57 Examinations of the CRA performance of the conducted the Zions Examination. 55. The Zions Examination reviewed Zions Bank's activities during 1995, 1996, and through July 25, 1997. During this period, the bank's assessment area consisted of the entire state of Utah. 56. Zions Bank also initiated a consumer loan program designed for 57. Although First Security and Zions have a sizable presence in LMI persons. The program extends loan maturities by up to California, both companies are relatively new entrants to the state. 12 months and employs more flexible underwriting standards. First Security entered the state in 1998, and Zions entered the state in Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 133 subsidiary banks of First Security and Zions operating in have limitations that make them an inadequate basis, abthese states found no evidence of prohibited discrimination sent other information, for concluding that an institution or other illegal credit practices.58 has not adequately assisted in meeting its community's credit needs or has engaged in illegal lending discrimina- D. HMDA Data tion. Because of the limitations of HMDA data, the Board has The Board also has considered First Security's and Zions' considered these data carefully in light of other informalending record in light of comments regarding the HMDA tion. As noted above, examiners found no evidence of data of the organizations' subsidiaries.59 The 1997 and prohibited discrimination or other illegal credit practices at 1998 data indicate that First Security Bank originated a the subsidiary banks of First Security and Zions at their larger percentage of its housing-related loans in the MSA most recent completed examinations. Examiners reviewed portions of its Utah assessment area to LMI individuals the fair lending policies and procedures of the banks and and residents of minority census tracts than did Utah found the policies and procedures to be comprehensive and lenders in the aggregate.60 The 1997 and 1998 data also appropriate for monitoring compliance with fair lending indicate that Zions Bank denied a smaller percentage of laws. The Board also has considered the HMDA data in housing-related applications received from African Ameri- light of First Security's and Zions' lending records, which cans, LMI individuals, and residents of LMI census tracts show that the organizations' subsidiary banks assist signifthan did lenders in the aggregate in Utah. The 1998 data icantly in helping to meet the credit needs of their commufurther demonstrate that Zions Bank-CA originated a larger nities, including LMI areas. percentage of its housing-related loans in its assessment area to LMI individuals than did California lenders in the E. Branch Closings aggregate. In other respects, however, the data may reflect certain A commenter expresses concern about branch closings in disparities in the rates of loan applications, originations, connection with the proposal. First Security has indicated and denials by racial group and income level.61 The Board that there may be some branch closings as a result of the is concerned when the record of an institution indicates proposed merger, which it expects to be limited to locadisparities in lending, and believes that all banks are obli- tions in California, Idaho, Nevada, and Utah where both gated to ensure that their lending practices are based on First Security and Zions currently operate branches. First criteria that ensure not only safe and sound lending, but Security has submitted preliminary and confidential inforalso equal access to credit by creditworthy applicants re- mation concerning branches that are under consideration gardless of their race or income level. The Board recog- for closure in the four states, but has indicated that the nizes that HMDA data alone provide an incomplete mea- plans are subject to change. sure of an institution's lending in its community because The Board has carefully considered the public comments these data cover only a few categories of housing-related regarding the potential branch closings in light of all the lending. HMDA data, moreover, provide only limited infor- facts of record, including the preliminary branch closing mation about the covered loans.62 HMDA data, therefore, information provided by First Security. The Board also has carefully considered the branch closing policies of First Security and Zions and the record of the institutions in opening and closing branches, as well as the review by 1997. Their California bank subsidiaries have not yet been examined examiners of the organizations' implementation of their for CRA performance. 58. Examiners found substantive violations of HMDA's reporting policies. provisions at Sumitomo Bank of California in 1996, but Zions did not The branch closing policies of First Security Bank and acquire Sumitomo Bank until 1998. Zions Bank require that the bank's board of directors 59. Some commenters note that First Security made a lower percentapprove all branch closings. Both branch closing policies age of its home purchase and refinance loans in minority census tracts than did Utah lenders in the aggregate. Another commenter states that also require that the bank, before any decision to close a the disparity ratios for home purchase loan denials of Zions Bank-CA branch, consider whether the closing would have an adwith respect to low-income and minority applicants in one particular verse impact on the community and explore alternative county significantly exceeded those of its competitors. solutions to the branch closing. The policies also require 60. The aggregate represents the cumulative lending for all instituthe bank to solicit the views of community leaders to the tions that have reported HMDA data in a given market. 61. For instance, First Security Bank's housing-related loans to extent that the closing may have an adverse community African Americans in its Utah assessment area in 1998, as a percent- impact. age of its total mortgage lending in such area, was slightly below the Examiners reviewed the branch closing policies and aggregate, and the percentage of Zions Bank's housing-related loans records of opening and closing branches of First Security originated in minority and LMI census tracts in its Utah assessment area in 1998 also was below the aggregate. Bank and Zions Bank during the First Security Examina- 62. The data, for example, do not account for the possibility that an tion and the Zions Examination. Examiners of First Secuinstitution's outreach efforts may attract a larger proportion of marginally qualified applicants than other institutions attract and do not provide a basis for an independent assessment of whether an applicant who was denied credit was, in fact, creditworthy. Credit history frequently cited for a credit denial) are not available from HMDA problems and excessive debt levels relative to income (reasons most data. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

134 Federal Reserve Bulletin • February 2000 rity Bank found that the bank had a good record of opening In connection with the proposal, First Security has indiand closing branches in Idaho and Utah. Examiners of cated that it does not intend to make any changes in the Zions Bank noted that the bank had not closed an office CRA policies or programs of either organization's banks. since 1990 and concluded that the bank had a very good Based on a review of the entire record, and for the record of opening offices, and that the bank's branches reasons discussed above, the Board concludes that convewere readily accessible to all segments of its delineated nience and needs considerations, including the CRA perforcommunity. mance records of the subsidiary banks of First Security and The Board also notes that federal banking law provides a Zions, are consistent with approval of the proposal.66 specific mechanism for addressing branch closings. Federal law requires an insured depository institution to pro- Nonbanking Activities vide notice to the public and to the appropriate federal regulatory agency at least 30 days before closing a First Security also has filed notice under section 4(c)(8) of branch.63 The law does not authorize federal regulators to the BHC Act to acquire the nonbank subsidiaries of Zions. prevent the closing of any branch. Any branch closings Through these subsidiaries, First Security would engage in resulting from the proposed transaction will be considered a number of nonbanking activities, including acting as a by the appropriate federal supervisor at the next CRA general insurance agent; acting as a principal, agent, or examination of the relevant subsidiary bank. broker for credit-related insurance; and data processing and To permit the Board to monitor the effectiveness of the transmission activities.67 The Board has determined by branch closing policies of First Security and Zions, the regulation or order that the types of activities for which Board conditions its action on this proposal on the require- notice has been provided are closely related to banking for ment that First Security report to the Federal Reserve purposes of section 4(c)(8) of the BHC Act.68 System semiannually during the two-year period after con- In order to approve a notice under section 4(c)(8) of the summation all branch closings, including consolidations, BHC Act, the Board also must determine that the acquisithat occur as a result of this proposal. For branches closed tion of the nonbank subsidiaries of Zions and the perforin LMI census tracts, First Security should indicate the mance of the proposed activities by First Security are a proximity of the closed branch to the closest branch of proper incident to banking; that is, the Board must deter- First Security and the steps that First Security took to mine that the proposed transaction "can reasonably be mitigate the impact of the branch closure. expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentra- F. Conclusion on Convenience and Needs tion of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices."69 The Board has carefully considered all the facts of record,64 As part of its evaluation of these factors, the Board including the public comments received, responses to the considers the financial condition and managerial resources comments, and the CRA performance records of the sub- of the notificant and its subsidiaries, including the compasidiary banks of First Security and Zions, in reviewing the nies to be acquired, and the effect of the proposed transacproposal's effect on the convenience and needs of the tion on those resources. For the reasons noted above, and communities to be served by the combined organization.65 based on all the facts of record, the Board has concluded 63. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. § 1831r-l), as implemented by the Interagency Policy Statement on factors included in the BHC Act, and the convenience and needs Branch Closings (64 Federal Register 34,844 (1999)), requires that a factor has been consistently interpreted by the federal banking agenbank provide the public with at least 30 days notice and the appropri- cies, the courts, and the Congress to relate to the effect of a proposal ate federal supervisory agency with at least 90 days notice before the on the availability and quality of banking services in the community. date of the proposed branch closing. The bank also is required to See Wells Fargo & Company, 82 Federal Reserve Bulletin 445, 457 provide reasons and other supporting data for the closure, consistent (1996). with the institution's written policy for branch closings. 66. A few commenters express concern that the proposal would 64. One commenter requests that the Board condition its approval of result in the loss of jobs. The elfect of a proposed transaction on the proposal on First Security's making certain community reinvest- employment in a community is not among the factors included in the ment and other commitments. The Board notes that the CRA requires BHC Act, and the convenience and needs factor has been consistently only that, in considering an acquisition proposal, the Board carefully interpreted by the federal banking agencies, the courts, and Congress review the actual record of performance of the relevant depository to relate to the effect of a proposal on the availability and quality of institutions in helping to meet the credit needs of their communities. banking services in the community. See Wells Fargo & Company, 82 The CRA does not require depository institutions to make pledges as Federal Reserve Bulletin 445, 457 (1996). to future performance under the CRA. The Board also notes that the 67. First Security currently engages in insurance activities grandfafuture activities of First Security's subsidiary banks will be reviewed thered under section 4(c)(8)(G) of the BHC Act (12 U.S.C. by the appropriate federal supervisors in future performance examina- § 1843(c)(8)(G)) ("Exemption G"). First Security would be the legal tions, and such CRA performance records will be considered by the entity surviving the merger with Zions and, based on the structure of Board in any subsequent applications by First Security to acquire a the transaction and all of the other facts of this case, the Board has depository institution. determined that First Security would retain its exemption to engage in 65. Several commenters express concern that the merger of First Exemption G activities after consummation of the proposed merger. Security and Zions would result in the loss of jobs. The effect of a 68. See 12 C.F.R. 225.28(b)(ll)(i) and (vii) and (14). proposed transaction on employment in a community is not among the 69. 12 U.S.C. § 1843(c)(8). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 135 that financial and managerial considerations are consistent ing its conclusion, the Board has considered all the facts of with approval of the notice. record in light of the factors that it is required to consider The Board also has considered the competitive effects of under the BHC Act and other applicable statutes.71 The the proposed acquisition by First Security of the nonbank- Board's approval is specifically conditioned on compliance ing subsidiaries of Zions. Each of the markets in which the by First Security with all the commitments made in connonbanking subsidiaries of First Security and Zions com- nection with this application and notice, including the pete is unconcentrated, and there are numerous providers commitments discussed in this order, and the conditions set of each of these services. As a result, the Board expects forth in this order and the above-noted Board regulations that consummation of the proposal would have a de mini- and orders. The Board's approval of the nonbanking asmus effect on competition for these services. Based on all pects of the proposal also is subject to all the conditions set the facts of record, the Board concludes that it is unlikely forth in Regulation Y, including those in sections 225.7 and that significantly adverse competitive effects would result 225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)), from the nonbanking acquisitions proposed in this transac- and to the Board's authority to require such modification or tion. termination of the activities of a bank holding company or First Security has indicated that the proposed transaction any of its subsidiaries as the Board finds necessary to would create a stronger organization with enhanced earn- ensure compliance with, and to prevent evasion of, the ings potential. First Security also has represented that the provisions of the BHC Act and the Board's regulations and combined organization would have an increased capacity orders issued thereunder. These commitments and condito serve its customers' credit needs and would be able to tions are deemed to be conditions imposed in writing by provide retail and business customers a broader range of the Board in connection with its findings and decision and, products and services with a more efficient and comprehen- as such, may be enforced in proceedings under applicable sive delivery system. In addition, there are public benefits law. to be derived from permitting capital markets to operate so The acquisition of the subsidiary banks of Zions may not that bank holding companies can make potentially profit- be consummated before the fifteenth calendar day after the able investments in nonbanking companies and from per- effective date of this order, and the proposal may not be mitting banking organizations to allocate their resources in consummated later than three months after the effective the manner they consider to be most efficient when such date of this order, unless such period is extended for good investments and actions are consistent, as in this case, with cause by the Board or by the Reserve Bank, acting pursuthe relevant considerations under the BHC Act. ant to delegated authority. The Board also believes that the conduct of the proposed By order of the Board of Governors, effective Decemnonbanking activities within the framework of Regula- ber 13, 1999. tion Y and Board precedent is not likely to result in any significant adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of provide for a hearing on a notice to acquire nonbanking companies if interests, or unsound banking practices, and that any adthere are disputed issues of material fact that cannot be resolved in verse effects would be outweighed by the public benefits of some other manner. 12 U.S.C. § 1843(c)(8); 12 C.F.R. 225.25(a)(2). the proposal, such as increased customer convenience and The Board has considered carefully these commenters' requests in gains in efficiency. Accordingly, based on all the facts of light of all the facts of record. In the Board's view, commenters have had ample opportunity to submit their views, and they submitted record, the Board has determined that the balance of public written comments that have been considered carefully by the Board in interest factors that the Board must consider under the acting on the proposal. The commenters' requests fail to demonstrate proper incident to banking standard of section 4(c)(8) of why their written comments do not present their evidence adequately the BHC Act is favorable and consistent with approval. and fail to identify disputed issues of fact that are material to the Board's decision that would be clarified by a public meeting or hearing. For these reasons, and based on all the facts of record, the Conclusion Board has determined that a public meeting or hearing is not required or warranted in this case. Accordingly, the requests for a public Based on the foregoing, the Board has determined that the meeting on the proposal are denied. transaction should be, and hereby is, approved.70 In reach- 71. A number of commenters have requested that the Board delay action or extend the comment period on the proposal. The Board has accumulated a significant record in this case, including reports of examination, supervisory information, public reports and information, 70. Several commenters requested that the Board hold a public and considerable public comment. In the Board's view, for the reasons meeting or hearing on the proposal. Section 3(b) of the BHC Act does discussed above, commenters have had ample opportunity to submit not require the Board to hold a public hearing on an application unless their views and, in fact, have provided substantial written submissions the appropriate supervisory authority for the bank to be acquired that have been considered carefully by the Board in acting on the makes a timely written recommendation of denial of the application. proposal. Moreover, the BHC Act and Regulation Y require the Board The Board has not received such a recommendation from the appropri- to act on proposals submitted under those provisions within certain ate supervisory authorities. time periods. Based on a review of all the facts of record, the Board Under its rules, the Board also may, in its discretion, hold a public concludes that the record in this case is sufficient to warrant Board meeting or hearing on an application to acquire a bank if a meeting or action at this time, and that further delay of consideration of the hearing is necessary or appropriate to clarify factual issues related to proposal, extension of the comment period, or denial of the proposal the application and to provide an opportunity for testimony. 12 C.F.R. on the grounds discussed above or on the basis of informational 225.16(e). Section 4 of the BHC Act and the Board's rules thereunder insufficiency is not warranted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

136 Federal Reserve Bulletin • February 2000 Voting for this action: Chairman Greenspan and Governors Kelley, Montpelier: The towns of Montpelier and Paris. Meyer, and Gramlich. Absent and not voting: Vice Chairman Ferguson. Moscow-Pullman: The town of Moscow, Idaho; and the towns of Colfax, Palouse, and Pullman, ROBERT DEV. FRIERSON Washington. Associate Secretary of the Board Ontario: The towns of Fruitland, New Plymouth, Appendix A Payette, and Weiser, Idaho; and the towns of Nyssa, Ontario, and Vale, Oregon. Nonbanking Subsidiaries of Zions Bancorporation Pocatello: Pocatello RMA. (1) Zions Life Insurance Company, Salt Lake City, Utah, and thereby engage in underwriting credit-related in- Twin Falls: The towns of Buhl, Filer, Gooding, Hagerman, surance, in accordance with section 225.28(b)(ll)(i) of Hazelton, Jerome, Kimberly, Richfield, Sho- Regulation Y (12 C.F.R. 225.28(b)(ll)(i)); shone, Twin Falls, and Wendell. (2) Zions Insurance Agency, Inc., Salt Lake City, Utah, and thereby engage in insurance agency activities, in C. Nevada Banking Markets accordance with section 225.28(b)(ll)(vii) of Regulation Y (12 C.F.R. 225.28(b)(ll)(vii)); and (3) Cash Access, Inc., Salt Lake City, Utah, and thereby Carson City: The towns of Carson City, Dayton, Gardnerengage in data processing and transmission activities ville, Minden, and Virginia City. through the leasing, installing, and servicing of automated teller machines, in accordance with section Las Vegas: Las Vegas RMA. 225.28(b)(14) of Regulation Y (12 C.F.R. 225.28(b)(14)). Reno: Reno RMA and the town of Fernley. Appendix B D. Utah Banking Markets Banking Markets in which First Security and Zions Directly Compete Box Elder: The towns of Brigham City and Trementon. A. California Banking Markets Cedar City: The towns of Cedar City and Parowan. Los Angeles: Los Angeles Ranally Metropolitan Area Delta: The towns of Delta and Fillmore. ("RMA") and the towns of Rancho Santa Margarita and Rosamond. Ephraim: The towns of Ephraim, Gunnison, Manti, Mt. Pleasant, and Moroni. Riverside-San Bernardino: Riverside-San Bernardino RMA and the towns of Ban- Logan: Logan RMA and the towns of Lewiston and Richning, Beaumont, and Nuevo. mond, Utah; and the town of Preston, Idaho. B. Idaho Banking Markets Moab: The town of Moab. Monticello: The towns of Blanding and Monticello, Utah; Blackfoot: The town of Blackfoot. and the town of Dove Creek, Colorado. Boise: Boise RMA and the towns of Emmett, Homedale, Ogden: Ogden RMA, excluding the towns of Kaysville Marsing, Parma, and Wilder. and Fruit Heights. Bonners Ferry: The town of Bonners Ferry. Park City: The towns of Coalville, Heber City, Kamas, and Park City. Burley: The towns of Albion, Burley, Paul, and Rupert. Price: The towns of Castle Dale, Helper, Huntington, and Price. Idaho Falls: Idaho Falls RMA and the towns of Shelley and Ririe. Provo-Orem: Provo-Orem RMA. Lewiston: Lewiston RMA. Richfield: The towns of Monroe, Richfield, and Salina. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 137 Roosevelt: The towns of Altamont, Duchesne, and Roos- the market, controlling deposits of $9 million, representing evelt. less than 1 percent of market deposits. On consummation of the proposal, First Security would remain the second Salt Lake City: Salt Lake City RMA and the towns of largest depository institution in the market, controlling Fruit Heights, Grantsville, Kaysville, and deposits of $864 million, representing 28.1 percent of Tooele. market deposits. The HHI would increase 17 points to 2671. St. George: The towns of Hildale, Hurricane, Santa Clara, Idaho Falls - First Security is the second largest depository Springdale, St. George, and Washington, institution in the market, controlling deposits of $196 mil- Utah; and the towns of Mesquite and Overton, lion, representing approximately 25.4 percent of market Nevada. deposits. Zions is the tenth largest depository institution in the market, controlling deposits of $6 million, representing Vernal: The town of Vernal. less than 1 percent of market deposits. On consummation of the proposal, First Security would remain the second Appendix C largest depository institution in the market, controlling deposits of $202 million, representing 26.2 percent of Certain Banking Markets with No Divestitures market deposits. The HHI would increase 39 points to 2022. A. California Banking Markets Moscow-Pullman - First Security is the second largest depository institution in the market, controlling deposits of Los Angeles - First Security is the 25th largest depository $85 million, representing approximately 20.7 percent of institution in the market, controlling deposits of $838 mil- market deposits. Zions is the tenth largest depository instilion, representing less than 1 percent of market deposits. tution in the market, controlling deposits of $9 million, Zions is the tenth largest depository institution in the representing approximately 2.3 percent of market deposits. market, controlling deposits of $2.1 billion, representing On consummation of the proposal, First Security would approximately 1.5 percent of market deposits. On consum- remain the second largest depository institution in the mation of the proposal, First Security would become the market, controlling deposits of $94 million, representing ninth largest depository institution in the market, control- 23 percent of market deposits. The HHI would increase ling deposits of $3 billion, representing 2.1 percent of 94 points to 1575. market deposits. The HHI would increase 1 point to 1028. Ontario - First Security is the second largest depository Riverside-San Bernardino - First Security is the 23rd larg- institution in the market, controlling deposits of $78 milest depository institution in the market, controlling depos- lion, representing approximately 16.6 percent of market its of $32 million, representing less than 1 percent of deposits. Zions is the seventh largest depository institution market deposits. Zions is the 28th largest depository insti- in the market, controlling deposits of $26 million, repretution in the market, controlling deposits of $23 million, senting 5.6 percent of market deposits. On consummation representing less than 1 percent of market deposits. On of the proposal, First Security would remain the second consummation of the proposal, First Security would be- largest depository institution in the market, controlling come the 19th largest depository institution in the market, deposits of $105 million, representing 22.2 percent of controlling deposits of $55 million, representing less than 1 market deposits. The HHI would increase 185 points to percent of market deposits. The HHI would increase less 1747. than 1 point to 1610. Pocatello - First Security is the largest depository institution in the market, controlling deposits of $129 million, B. Idaho Banking Markets representing approximately 36.1 percent of market deposits. Zions is the tenth largest depository institution in the Blackfoot - First Security is the second largest depository market, controlling deposits of $2 million, representing institution in the market, controlling deposits of $38 mil- less than 1 percent of market deposits. On consummation lion, representing approximately 26.9 percent of market of the proposal, First Security would remain the largest deposits. Zions is the sixth largest depository institution in depository institution in the market, controlling deposits of the market, controlling deposits of $4 million, representing $131 million, representing 36.5 percent of market deposits. approximately 2.5 percent of market deposits. On consum- The HHI would increase 32 points to 2523. mation of the proposal, First Security would remain the second largest depository institution in the market, control- C. Nevada Banking Markets ling deposits of $42 million, representing 29.4 percent of market deposits. The HHI would increase 135 points to Carson City - First Security is the third largest depository 3254. institution in the market, controlling deposits of $109 mil- Boise - First Security is the second largest depository lion, representing approximately 12.6 percent of market institution in the market, controlling deposits of $855 mil- deposits. Zions is the seventh largest depository institution lion, representing approximately 27.8 percent of market in the market, controlling deposits of $62 million, repredeposits. Zions is the 13th largest depository institution in senting approximately 7.1 percent of market deposits. On Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

138 Federal Reserve Bulletin • February 2000 consummation of the proposal, First Security would re- Security would remain the largest depository institution in main the third largest depository institution in the market, the market, controlling deposits of $36 million, representcontrolling deposits of $171 million, representing ing 53.6 percent of market deposits. The HHI would re- 19.7 percent of market deposits. The HHI would increase main unchanged at 4164. 179 points to 2024. Twin Falls - First Security is the largest depository institu- Reno - First Security is the seventh largest depository tion in the market, controlling deposits of $369 million, institution in the market, controlling deposits of $105 mil- representing approximately 40.1 percent of market deposlion, representing approximately 3.5 percent of market its. Zions is the seventh largest depository institution in the deposits. Zions is the fourth largest depository institution market, controlling deposits of $18 million, representing in the market, controlling deposits of $395 million, repre- approximately 2 percent of market deposits. First Security senting approximately 13.2 percent of market deposits. On proposes to divest one branch, controlling deposits of consummation of the proposal, First Security would be- $5 million, to an out-of-market firm or a competitively come the fourth largest depository institution in the market, suitable in-market firm. On consummation of the proposal, controlling deposits of $500 million, representing and after accounting for the proposed divestiture, First 16.7 percent of market deposits. The HHI would increase Security would remain the largest depository institution in 93 points to 2095. the market, controlling deposits of $382 million, representing 41.5 percent of market deposits. The HHI would in- Appendix D crease no more than 131 points to no more than 2487. Certain Banking Markets with Divestitures B. Utah Banking Markets A. Idaho Banking Markets Box Elder - First Security is the largest depository institution in the market, controlling deposits of $123 million, Bonners Ferry - First Security is the largest depository representing approximately 54 percent of market deposits. institution in the market, controlling deposits of $40 mil- Zions is the fourth largest depository institution in the lion, representing approximately 50.2 percent of market market, controlling deposits of $19 million, representing deposits. Zions is the third largest depository institution in 8.5 percent of market deposits. First Security proposes to the market, controlling deposits of $18 million, represent- divest one branch, controlling deposits of $19 million, to ing approximately 22.7 percent of market deposits. First an out-of-market firm or a competitively suitable in-market Security proposes to divest one branch, controlling depos- firm. On consummation of the proposal, and after accountits of $18 million, to an out-of-market firm. On consumma- ing for the proposed divestitures, First Security would tion of the proposal, and after accounting for the proposed remain the largest depository institution in the market, divestitures, First Security would remain the largest depos- controlling deposits of $123 million, representing itory institution in the market, controlling deposits of 54 percent of market deposits. The HHI would increase no $40 million, representing 50.2 percent of market deposits. more than 162 points to no more than 3553. The HHI would remain unchanged at 3769. Cedar City - First Security is the second largest depository Burley - First Security is the second largest depository institution in the market, controlling deposits of $76 milinstitution in the market, controlling deposits of $83 mil- lion, representing approximately 34.5 percent of market lion, representing approximately 23 percent of market de- deposits. Zions is the third largest depository institution in posits. Zions is the fifth largest depository institution in the the market, controlling deposits of $46 million, representmarket, controlling deposits of $31 million, representing ing 20.8 percent of market deposits. First Security pro- 8.6 percent of market deposits. First Security proposes to poses to divest one branch, controlling deposits of divest one branch, controlling deposits of $31 million, to $39 million, to an out-of-market firm. On consummation of an out-of-market firm or a competitively suitable in-market the proposal, and after accounting for the proposed divestifirm. On consummation of the proposal, and after account- tures, First Security would remain the second largest deing for the proposed divestitures, First Security would pository institution in the market, controlling deposits of remain the second largest depository institution in the $84 million, representing 37.9 percent of market deposits. market, controlling deposits of $83 million, representing The HHI would increase 118 points to 3739. 23 percent of market deposits. The HHI would increase by Delta - First Security is the largest depository institution in no more than 93 to no more than 2149. the market, controlling deposits of $54 million, represent- Montpelier - First Security is the largest depository institu- ing approximately 66.3 percent of market deposits. Zions tion in the market, controlling deposits of $36 million, is the second largest depository institution in the market, representing approximately 53.6 percent of market depos- controlling deposits of $28 million, representing 33.7 perits. Zions is the second largest depository institution in the cent of market deposits. First Security proposes to divest market, controlling deposits of $22 million, representing one branch, controlling deposits of $28 million, to an 33.6 percent of market deposits. First Security proposes to out-of-market firm. On consummation of the proposal, and divest two branches, controlling deposits of $22 million, to after accounting for the proposed divestitures, First Secuan out-of-market firm. On consummation of the proposal, rity would remain the largest depository institution in the and after accounting for the proposed divestitures, First market, controlling deposits of $54 million, representing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 139 66.3 percent of market deposits. The HHI would remain market, controlling deposits of $111 million, representing unchanged at 5529. 30 percent of market deposits. First Security proposes to Ephraim - First Security is the largest depository institu- divest four branches, controlling deposits of $106.6 miltion in the market, controlling deposits of $29 million, lion, to an out-of-market firm or a competitively suitable representing approximately 24.7 percent of market depos- in-market firm. On consummation of the proposal, and its. Zions is the third largest depository institution in the after accounting for the proposed divestitures, First Secumarket, controlling deposits of $27 million, representing rity would remain the largest depository institution in the 23.4 percent of market deposits. First Security proposes to market, controlling deposits of $161 million, representing divest two branches, controlling deposits of $29 million, to 43.5 percent of market deposits. The HHI would increase an out-of-market firm. On consummation of the proposal, no more than 176 points to no more than 3095. and after accounting for the proposed divestitures, First Price - First Security is the second largest depository Security would become the third largest depository institu- institution in the market, controlling deposits of $57 miltion in the market, controlling deposits of $27 million, lion, representing approximately 24.8 percent of market representing 23.4 percent of market deposits. The HHI deposits. Zions is the largest depository institution in the would remain unchanged at 2213. market, controlling deposits of $105 million, representing Logan - First Security is the largest depository institution 45.8 percent of market deposits. First Security proposes to in the market, controlling deposits of $224 million, repre- divest three branches, controlling deposits of $57 million, senting approximately 34.1 percent of market deposits. to an out-of-market firm. On consummation of the pro- Zions is the second largest depository institution in the posal, and after accounting for the proposed divestitures, market, controlling deposits of $204 million, representing First Security would become the largest depository institu- 31 percent of market deposits. First Security proposes to tion in the market, controlling deposits of $105 million, divest five branches, controlling deposits of $177.8 mil- representing 45.8 percent of market deposits. The HHI lion, to an out-of-market firm or a competitively suitable would remain unchanged at 3054. in-market firm. On consummation of the proposal, and Richfield - First Security is the second largest depository after accounting for the proposed divestitures, First Secu- institution in the market, controlling deposits of $37 milrity would remain the largest depository institution in the lion, representing approximately 24.9 percent of market market, controlling deposits of $250 million, representing deposits. Zions is the largest depository institution in the 38.1 percent of market deposits. The HHI would increase market, controlling deposits of $85 million, representing no more than 172 points to no more than 2564. 56.6 percent of market deposits. First Security proposes to Moab - First Security is the largest depository institution in divest two branches, controlling deposits of $37 million, to the market, controlling deposits of $50 million, represent- an out-of-market firm. On consummation of the proposal, ing approximately 70.3 percent of market deposits. Zions and after accounting for the proposed divestitures, First is the second largest depository institution in the market, Security would become the largest depository institution in controlling deposits of $21 million, representing 29.7 per- the market, controlling deposits of $85 million, representcent of market deposits. First Security proposes to divest ing 56.6 percent of market deposits. The HHI would retwo branches, controlling deposits of $21 million, to an main unchanged at 4007. out-of-market firm. On consummation of the proposal, and Roosevelt - First Security is the largest depository instituafter accounting for the proposed divestitures, First Secu- tion in the market, controlling deposits of $61 million, rity would remain the largest depository institution in the representing approximately 60.5 percent of market deposmarket, controlling deposits of $50 million, representing its. Zions is the second largest depository institution in the 70.3 percent of market deposits. The HHI would remain market, controlling deposits of $40 million, representing unchanged at 5826. 39.5 percent of market deposits. First Security proposes to Monticello - First Security is the largest depository institu- divest 2 branches, controlling deposits of $40 million, to an tion in the market, controlling deposits of $36 million, out-of-market firm. On consummation of the proposal, and representing approximately 55.9 percent of market depos- after accounting for the proposed divestitures, First Secuits. Zions is the third largest depository institution in the rity would remain the largest depository institution in the market, controlling deposits of $14 million, representing market, controlling deposits of $61 million, representing 21.7 percent of market deposits. First Security proposes to 60.5 percent of market deposits. The HHI would remain divest two branches, controlling deposits of $14 million, to unchanged at 5220. an out-of-market firm. On consummation of the proposal, Vernal - First Security is the largest depository institution and after accounting for the proposed divestitures, First in the market, controlling deposits of $65 million, repre- Security would remain the largest depository institution in senting approximately 50.5 percent of market deposits. the market, controlling deposits of $36 million, represent- Zions is the second largest depository institution in the ing 55.9 percent of market deposits. The HHI would re- market, controlling deposits of $64 million, representing main unchanged at 4096. 49.5 percent of market deposits. First Security proposes to Park City - First Security is the largest depository institu- divest one branch, controlling deposits of $65 million, to tion in the market, controlling deposits of $156 million, an out-of-market firm. On consummation of the proposal, representing approximately 42.4 percent of market depos- and after accounting for the proposed divestitures, First its. Zions is the second largest depository institution in the Security would become the second largest depository insti- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

140 Federal Reserve Bulletin • February 2000 tution in the market, controlling deposits of $64 million, banking subsidiary of HSBC.3 In addition, HSBC proposes representing 49.5 percent of market deposits. The HHI to acquire the foreign operations and Edge corporations would remain unchanged at 5001. of RNYC pursuant to section 4(c)(13) of the BHC Act (12 U.S.C. § 1843(c)(13)) and section 25A of the Federal HSBC Holdings pic Reserve Act (12 U.S.C. § 611 et seq.) and the Board's London, United Kingdom Regulation K (12 C.F.R. 211), and Republic Bank proposes to acquire the Agreement corporation subsidiary of HSBC HSBC Finance Netherlands Bank pursuant to section 25 of the Federal Reserve Act London, United Kingdom (12 U.S.C. § 601 et seq.) and Regulation K.4 Notice of the proposal, affording interested persons an HSBC Holdings BV opportunity to submit comments, has been published (64 Amsterdam, Netherlands Federal Register 35,660 (1999); 64 Federal Register 36,876 (1999)). The time for filing comments has expired, Republic New York Corporation and the Board has considered the proposal and all com- New York, New York ments received in light of the factors set forth in sections 3 and 4 of the BHC Act, the Federal Reserve Act, and the Republic National Bank of New York Bank Merger Act. New York, New York HSBC, with total consolidated assets of $497 billion is the largest banking organization headquartered in the Order Approving Applications to Acquire a Bank United Kingdom and is the eighth largest banking organi- Holding Company and to Merge Banks, and Notice to zation in the world.5 HSBC operates subsidiary banks in Acquire Nonbanking Companies New York State and California that control deposits of $22.1 billion.6 Three of HSBC's non-U.S. subsidiary banks HSBC Holdings pic ("HSBC"), HSBC Finance Nether- also maintain branches in the U.S.7 HSBC, HFN, and lands ("HFN"), and HSBC Holdings BV ("HHBV"), all HHBV also engage in a broad range of permissible nonbank holding companies within the meaning of the Bank banking activities in the United States through subsidiaries, Holding Company Act ("BHC Act"), have requested the including underwriting and dealing in debt and equity Board's approval under section 3 of the BHC Act securities to a limited extent. (12 U.S.C. § 1842) to acquire all the voting shares of RNYC, with total consolidated assets of $51.2 billion, is Republic New York Corporation ("RNYC"), and its the 19th largest commercial banking organization in the wholly owned subsidiary banks, Republic National Bank United States and the sixth largest commercial banking of New York ("Republic Bank") and Republic Bank Cali- organization in New York State. RNYC operates subsidfornia National Association, Beverly Hills, California iary banks in New York State and California that control ("Republic California").1 HSBC, HFN, and HHBV also aggregate deposits of $13.6 billion. RNYC and its subsidhave requested the Board's approval under section 4(c)(8) iaries also engage in certain permissible nonbanking activof the BHC Act (12 U.S.C. § 1843(c)(8)) and section ities in the United States, including dealing in debt and 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to equity securities to a limited extent. acquire the nonbanking subsidiaries of RNYC and thereby engage in permissible nonbanking activities.2 Republic Bank has applied under section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. § 1828(c)) (the "Bank Merger Act") to merge with HSBC Bank USA ("HSBC Bank"), a state member bank that is the primary U.S. 3. Republic Bank has applied to the New York State Banking Department to convert from a national to a New York State charter, and to the Board under section 9 of the Federal Reserve Act (12 U.S.C. § 321 et seq.) for membership of the converted bank in the 1. HSBC proposes to acquire RNYC by merging an indirect, wholly Federal Reserve System. On completion of the merger of Republic owned acquisition subsidiary with and into RNYC, with RNYC as the Bank and HSBC Bank, Republic Bank would change its name to surviving corporation. HSBC proposes to hold the corporation result- HSBC Bank USA ("New HSBC Bank"). ing from the merger of RNYC with HSBC USA, Inc. through an 4. HSBC also has requested the Board's approval to hold and intermediate holding company in the United States, HSBC North exercise an option to acquire up to 19.9 percent of the shares of America, Inc. Because this intermediate company would indirectly RNYC's common stock. control a U.S. bank, it would be a bank holding company for purposes 5. Asset data are as of June 30, 1999, and ranking data are as of of the BHC Act. December 31, 1998, and are based on exchange rates then applicable. 2. The nonbanking activities in which RNYC engages and for which 6. Deposit data are as of June 30, 1999. HSBC, HFN, and HHBV have sought Board approval under section 4 7. The Hongkong and Shanghai Banking Corporation Limited, of the BHC Act include factoring, in accordance with section Hong Kong Special Administrative Region, People's Republic of 225.28(b)(1) of Regulation Y (12 C.F.R. 225.28(b)(1)); trust company China ("HSBL"), and Midland Bank pic, London, United Kingdom, functions, in accordance with section 225.28(b)(5) of Regulation Y each maintain a branch in New York, New York; and Hongkong Bank (12 C.F.R. 225.28(b)(5)); agency transactional services, in accordance of Canada, Vancouver, Canada, maintains branches in Portland, Orewith section 225.28(b)(7) of Regulation Y (12 C.F.R. 225.28(b)(7)); gon, and Seattle, Washington. In addition, HSBC Equator Bank pic, and investment transactions as a principal, in accordance with section London, United Kingdom, has a representative office in Washington, 225.28(b)(8) of Regulation Y (12 C.F.R. 225.28(b)(8)). D.C. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 141 Factors Governing Board Review of Transaction States.11 In addition, the Board may not approve a proposal if, on consummation of the proposal, the applicant would The BHC Act sets forth the factors that the Board must control 30 percent or more of the total deposits of insured consider when reviewing the formation of a bank holding depository institutions in any state in which both the applicompany or the acquisition of banks. These factors are the cant and the organization to be acquired operate an insured competitive elfects of the proposal in the relevant geo- depository institution, or such higher or lower percentage graphic markets; the financial and managerial resources established by state law.12 and future prospects of the companies and banks involved On consummation of the proposal, HSBC would control in the proposal; the convenience and needs of the commu- approximately 1 percent of the total amount of deposits of nity to be served, including the records of performance insured depository institutions in the United States. HSBC under the Community Reinvestment Act (12 U.S.C. would control less than 30 percent or the appropriate § 2901 et seq.) ("CRA") of the insured depository institu- percentage established by applicable state law of total tions involved in the transaction; the availability of infor- deposits held by insured depository institutions in the states mation needed to determine and enforce compliance with in which HSBC and RNYC both operate an insured deposthe BHC Act and other applicable federal banking law; itory institution. All other requirements of section 3(d) of and, in the case of applications involving a foreign bank, the BHC Act also would be met after consummation of the whether the foreign bank is subject to comprehensive su- proposal.13 In light of all the facts of record, the Board is pervision or regulation on a consolidated basis by its home permitted to approve the proposal under section 3(d) of the country supervisor. In cases involving interstate bank ac- BHC Act. quisitions, the Board also must consider the concentration of deposits in the nation and relevant individual states, and Competitive Considerations compliance with other provisions of section 3(d) of the BHC Act. Section 3 of the BHC Act prohibits the Board from approv- The Board has considered these factors in light of a ing a proposal that would result in a monopoly. The BHC comprehensive record that includes information provided Act also prohibits the Board from approving a proposed by HSBC, confidential supervisory and examination infor- bank acquisition that would substantially lessen competimation, and publicly reported financial and other informa- tion in any relevant banking market unless the anticompetition. The Board also has considered information collected tive elfects of the proposal are clearly outweighed in the from the primary home country supervisor of HSBC and public interest by the probable effect of the proposal in various federal and state agencies, including the New York meeting the convenience and needs of the community to be State Banking Department, and other relevant agencies. In served.14 addition, the Board has considered information provided HSBC and RNYC control banking operations that comby public commenters in connection with the proposal.8 pete directly in the New York/New Jersey Metropolitan banking market ("New York banking market").15 HSBC is Interstate Analysis the ninth largest depository institution in the New York banking market, controlling deposits of $10 billion, repre- Section 3(d) of the BHC Act allows the Board to approve senting approximately 2.4 percent of total deposits in dean application by a bank holding company to acquire pository institutions in the New York banking market control of a bank located in a state other than the home ("market deposits"). RNYC is the eighth largest deposistate of the bank holding company if certain conditions are met. For purposes of the BHC Act, the home state of HSBC is New York,9 and the subsidiary banks of RNYC 11.12 U.S.C. § 1842(d)(2)(A). For this purpose, insured depository are located in New York, Florida, and California.10 institutions include all insured banks, savings banks, and savings associations. HSBC's U.S. subsidiary banks maintain branches in New 12. 12 U.S.C. § 1842(d)(2)(B)-(D). York, Pennsylvania, and California. 13. HSBC is adequately capitalized and adequately managed, as Section 3(d) of the BHC Act provides that the Board defined by applicable law. 12 U.S.C. § 1842(d)(1)(A). Republic may not approve a proposal if, after consummation, the California has been in existence and operated continuously for at least applicant would control more than 10 percent of the total the period of time required by applicable state laws. See 12 U.S.C. § 1842(d)(1)(B); Cal. Fin. Code § 3825 (1999) (5 years). Additiondeposits of insured depository institutions in the United ally, Pennsylvania law authorizes an out-of-state bank to establish and maintain branches acquired from a predecessor in a merger, on condition of reciprocity with the laws of the state where the acquiring bank is chartered. 7 P.S. § 904(a) (1999). New York law provides such reciprocity. N.Y. Banking Law § 225.1 (1999). 8. The Board received comments from 12 public commenters. 14. 12 U.S.C. § 1842(c)(1). 9. A bank holding company's home state is that state in which the 15. The New York banking market includes Bronx, Dutchess, total deposits of all banking subsidiaries of such company were the Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, largest on July 1, 1966, or the date on which the company became a Rockland, Suffolk, Sullivan, Ulster, and Westchester Counties in New bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). York; Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, 10. For purposes of section 3(d), the Board considers a bank to be Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren, and a located in the states in which the bank is chartered, headquartered, or portion of Mercer Counties in New Jersey; Pike County in Pennsylvaoperates a branch. nia; and portions of Fairfield and Litchfield Counties in Connecticut. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

142 Federal Reserve Bulletin • February 2000 tory institution in the New York banking market, control- In evaluating financial factors in expansion proposals by ling deposits of $13.6 billion, representing approximately banking organizations, the Board consistently has consid- 3.2 percent of market deposits.16 On consummation of the ered capital adequacy to be especially important.18 The proposal, New HSBC Bank would become the fifth largest Board expects banking organizations contemplating expandepository institution in the New York banking market, sion to maintain strong capital levels substantially in exand HSBC would control total deposits of approximately cess of the minimum levels specified in the Board's Capital $23.7 billion in the market, including deposits in the New Adequacy Guidelines. HSBC's capital ratios exceed the York branches of HSBC's foreign banking subsidiaries, minimum levels that would be required under the Basle HSBL and Midland Bank pic. After the transaction, the Capital Accord and are considered equivalent to the capital market would remain unconcentrated, as measured by the that would be required of a U.S. banking organization. Herfindahl-Hirschman Index ("HHI") under the Depart- Moreover, the proposed transaction would not materially ment of Justice Merger Guidelines ("DOJ Guidelines").17 affect the capital position of HSBC or RNYC and is not In addition, numerous competitors would remain in the expected to have a significantly adverse effect on the New York banking market. Based on these and all other financial resources of HSBC. Other financial factors are facts of record, the Board concludes that consummation of consistent with approval. the proposal would not result in any significantly adverse The Board has also considered the managerial resources effects on competition or on the concentration of banking of HSBC and RNYC in light of all the facts of record, resources in the New York banking market or any other including confidential examination and other supervisory relevant banking market. information.19 In particular, the Board has taken into account the record of operation by HSBC of banks, branches, Financial and Managerial Resources and representative offices in the United States. Based on all the facts of record, the Board concludes that considerations The Board has carefully considered the financial and man- relating to the financial and managerial resources and fuagerial resources and future prospects of the companies ture prospects of the organizations involved are consistent and banks involved in the proposal, the effect the proposed with approval.20 transaction would have on such resources, and other supervisory factors in light of all the facts of record, including Convenience and Needs Factor public comments. In evaluating the financial and managerial factors, the In acting on this proposal, the Board also must consider the Board has considered the terms of the merger, including convenience and needs of the communities to be served the proposed financing arrangements for the transaction. and take into account the records of the relevant depository The Board also has reviewed the proposed structure of the institutions under the CRA. The CRA requires the federal combined organization, and various commitments made by financial supervisory agencies to encourage financial insti- HSBC regarding the proposal. In addition, the Board has tutions to help meet the credit needs of local communities reviewed confidential examination and other supervisory in which they operate, consistent with their safe and sound information assessing the financial and managerial strength operation, and requires the appropriate federal supervisory of HSBC and its subsidiaries and of RNYC and its subsid- authority to take into account an institution's record of iaries. Moreover, the Board has reviewed information sub- meeting the credit needs of its entire community, including mitted by HSBC about the programs that HSBC and RNYC have implemented to prepare their systems for the year 2000 changeover and confidential examination and super- 18. See Chemical Banking Corporation, 82 Federal Reserve Bullevisory information assessing the organizations' efforts to tin 239 (1996). ensure Year 2000 readiness, both before and after the 19. One commenter expressed concerns about the managerial resources of Republic Bank, contending that its purchase of mortgageproposed transaction. backed securities issued by a subprime lender, Delta Funding Corporation, Woodbury, New York ("Delta"), reflected poorly on its fair lending safeguards. The Board has also considered these comments in 16. Deposit and ranking data for the New York banking market are reviewing the convenience and needs factors in this case. as of June 30, 1998. 20. In reviewing the managerial resources factor, the Board has 17. The HHI in the New York banking market would increase from considered available information, including confidential and supervi- 771 to 786 as a result of the proposed transaction. See 49 Federal sory information, regarding the charges of securities fraud filed against Register 26,823 (June 29, 1984). Under the DOJ Guidelines, a market the owner and founder of Princeton Global Management Limited, a in which the post-merger HHI is less than 1000 points is considered to customer of Republic New York Securities Corporation ("RNYSC"), be unconcentrated. The Department of Justice has informed the Board a subsidiary of RNYC. Neither RNYC nor RNYSC has been charged that a bank merger or acquisition generally will not be challenged (in with wrongdoing by any government authority in connection with this the absence of other factors indicating anticompetitive effects) unless matter, and RNYC has suspended the chief executive officer of the post-merger HHI is at least 1800 and the merger increases the HHI RNYSC and replaced the management of RNYSC's Futures Division. by more than 200 points. The Department of Justice has stated that the In addition, the Board notes that HSBC has reviewed the activities of higher than normal HHI thresholds for screening bank mergers for RNYSC, and the Board has taken account of plans by HSBC to anticompetitive effects implicitly recognize the competitive effects of address potential effects that might result from the Princeton matter. limited purpose lenders and other nondepository financial entities. As The Board is coordinating its review of this matter with the functional noted, the HHI in the New York banking market would remain less regulators of RNYSC and other appropriate law enforcement authorithan 1000 points after consummation of the proposal. ties. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 143 low- and moderate-income ("LMI") neighborhoods, in cent examinations of their CRA performance.23 Republic evaluating bank expansion proposals. The Board has care- Bank, RNYC's lead bank, received its "satisfactory" ratfully considered the convenience and needs factor and the ing from the Office of the Comptroller of the Currency CRA performance records of the subsidiary depository ("OCC"), as of May 15, 1997. institutions of HSBC and RNYC in light of all the facts of HSBC represents that it has no immediate plans to alter record, including public comments on the proposal. materially Republic Bank's CRA program, and that it will Twelve persons submitted written comments on various continue the principal features of the program until 2001. aspects of the proposal and, in particular, the effect of the HSBC has also said that it will honor all outstanding loan, proposal on the convenience and needs of the affected investment, and contribution commitments that have been communities and the CRA performance records of the made by Republic Bank through the year 2000, and that a depository institutions involved. Several commenters op- significant portion of the CRA investment initiatives of posed the proposal, alleging that HSBC and, to a lesser Republic Bank will be continued beyond 2000. HSBC has extent, RNYC have inadequate records of meeting the indicated that it intends to use Republic Bank's retail banking and credit needs of the communities they serve lending operations to increase HSBC's lending to LMI and, in particular, of communities with predominantly LMI individuals in the New York City metropolitan area. Conseand minority populations. Other commenters expressed the quently, the Board has taken into account the CRA perforview that the proposal should not be approved absent mance records of both HSBC and RNYC in evaluating this certain specific commitments from HSBC to improve vari- proposal.24 ous aspects of its CRA-related programs. Some commenters praised the community reinvestment programs of B. HSBC's CRA Performance Record Republic Bank in New York City, in particular its community development lending and affordable mortgage and HSBC Bank. Examiners concluded that HSBC Bank's consumer banking products, and expressed concern that lending activity had been responsive to the credit needs of these products or programs would not be continued after its assessment areas, and commended the geographic distrithe banks merge. bution of HSBC Bank's lending within its assessment areas as well as its penetration among borrowers of differ- A. CRA Performance Examinations ent income levels.25 Examiners described HSBC Bank's community lending performance as excellent. During the As provided in the CRA, the Board has evaluated the examination period, HSBC Bank had $137.7 million in convenience and needs factor in light of examinations by community development loan commitments, $82.4 million the appropriate federal supervisors of the CRA perfor- (60 percent) of which supported affordable housing initiamance records of the relevant institutions. An institution's tives that provided for the construction or rehabilitation of most recent CRA performance review is a particularly 3,517 affordable housing units in its assessment area. Loans important consideration in the applications process because for economic development activity totaled $44 million, and it represents a detailed on-site evaluation of the institu- community service lending accounted for $11.2 million. tion's overall record of performance under the CRA by the Examiners characterized as excellent the geographic disappropriate federal financial supervisory agency.21 tribution of home improvement and small business loans Both of HSBC's subsidiary banks have been examined for CRA performance and received "satisfactory" ratings in the most recent CRA examinations.22 In particular, 23. Republic Bank Delaware National Association, Wilmington, HSBC's lead bank, HSBC Bank, received "satisfactory" Delaware, is an uninsured limited purpose trust company and, thus, is performance ratings from the Federal Reserve Bank of not subject to the CRA. New York ("Reserve Bank"), as of October 5, 1998, and 24. One commenter expressed concern that the proposed transaction might result in job losses in the New York City area, and that the from the New York State Banking Department, on June 30, proposal could result in increased fees for banking products and 1998. services. The effect of a proposed acquisition on employment in a Both of RNYC's subsidiary banks that are subject to the community is not among the factors included in the BHC Act, and the CRA also received "satisfactory" ratings in the most re- convenience and needs factor has been interpreted consistently by the federal banking agencies, the courts, and Congress to relate to the effect of a proposal on the availability and quality of banking services in the community. See Wells Fargo & Company, 82 Federal Reserve Bulletin 445, 457 (1996). 21. The Interagency Questions and Answers Regarding Community HSBC Bank and Republic Bank offer a full range of banking Reinvestment provide that a CRA examination is an important and products and services, including low-fee bank accounts, and New often controlling factor in the consideration of an institution's CRA HSBC Bank intends to continue to offer affordable basic checking and record. See 64 Federal Register 23,641 (1999). savings accounts. Moreover, although the Board has recognized that 22. In addition to HSBC Bank (formerly Marine Midland Bank), banks help to serve the banking needs of communities by making HSBC also owns, through HSBC USA, Inc., 40 percent of the equity basic services available at nominal or no charge, the CRA does not of Wells Fargo HSBC Trade Bank N.A., San Francisco, California require an institution to limit the fees charged for its services or ("Trade Bank"), a national bank joint venture with Wells Fargo & provide any specific types of credit products. Company. For CRA purposes, Trade Bank is evaluated as a wholesale 25. Examiners also considered the lending activity of HSBC Bank's financial institution because it is devoted solely to international trade affiliated mortgage company HSBC Mortgage Corporation ("HSBC finance and international banking services. Mortgage"). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

144 Federal Reserve Bulletin • February 2000 made by HSBC Bank. Examiners found that the number of aggregate balance of $16.5 million to smaller businesses; small business loans made by HSBC Bank in LMI census the New York Business Development Corporation, through tracts was approximately 30 times greater than the number which HSBC Bank provides $7.5 million for lending and of loans it made in non-LMI census tracts, and that the with which HSBC Bank has entered into four participalevel of home improvement loan originations in LMI cen- tions totaling $8.1 million; and the Community Preservasus tracts was the same as the level of such originations in tion Corporation ("CPC") and the Community Lending non-LMI tracts. In addition, examiners characterized Corporation, to which HSBC Bank has contributed a total HSBC's geographic distribution of home purchase and of $9.5 million for construction lines of credit and refinance loans as adequate. HSBC's Home Mortgage Dis- $12.4 million for long-term loans aimed at financing afclosure Act (12 U.S.C. § 2801 et seq.) ("HMDA") lending fordable housing for LMI families in downstate and upto moderate-income borrowers was described as good, and state New York, respectively.28 such lending to low-income borrowers was found to be The CRA performance examination concluded that adequate. Examiners found HSBC Bank's small business HSBC Bank had an adequate level of qualified community lending to reflect good penetration among small and large development investments and grants, and exhibited an adebusinesses. Between September 1, 1996, and June 30, quate responsiveness to the credit and community develop- 1998, 74 percent of HSBC Bank's small business loans in ment needs of its assessment areas.29 At the time of the its assessment area were for $100,000 or less, and examination, HSBC Bank had $14.9 million in investments 47 percent of those loans were to businesses with report- and deposits in various community development entities, able gross annual revenues of $1 million or less. and $639,000 in charitable grants and contributions to HSBC has indicated that HSBC Bank and HSBC Mort- organizations supporting community development projects gage have a variety of products and programs intended for and programs. A total of $14.2 million in investments and LMI individuals and small businesses, including mortgage grants were targeted for affordable housing. HSBC Develproducts from the Veterans Administration, Federal Hous- opment, which was acquired by HSBC Bank as part of its ing Administration, Freddie Mac, and the State of New 1997 acquisition of First Federal Savings and Loan of York Mortgage Agency ("SONYMA"), as well as its own Rochester, New York, specializes in building and rehabililow-down payment mortgage products.26 From 1997 to tating affordable housing in the Buffalo and Rochester 1998, HSBC Bank made 419 loans under the SONYMA areas. In 1998, HSBC Development was involved in six Low Interest Rate Program, which provides below-market projects which, when completed, will have constructed or interest rate loans for first-time homebuyers with higher rehabilitated 81 homes in Rochester and 54 homes in than usual debt levels. Additionally, in the last two years, Buffalo. HSBC Bank has made more than $11 million in loans Examiners rated HSBC Bank's performance on the serthrough the Fannie Mae Community Home Buyer pro- vice test portion of the CRA examination as outstanding, gram, which focuses on LMI borrowers.27 Examiners finding that HSBC Bank provided a very high level of found no evidence of prohibited discriminatory or other banking services in its assessment area. HSBC Bank operillegal credit practices by HSBC Bank. ates 374 branches, 92 of which are in LMI census tracts.30 HSBC Bank participates in several small business initia- Examiners also noted that HSBC Bank offered a variety of tives including the Business Consortium Fund, which pro- alternative delivery systems, including automatic teller mavides contract financing to certified minority businesses chines ("ATMs") and banking by phone and home comacross the United States; the Buffalo and Erie County puter. In the New York City area, Spanish- and Chinese- Regional Development Corporation, under which HSBC speaking representatives were available to help telephone Bank has extended $1.5 million in loans to women- and banking customers, and 57 of HSBC Bank's ATMs in the minority-owned businesses; the Excelsior Link Deposit New York City area were programmed in Spanish, Chiprogram, run by the Empire State Development Corpora- nese, or both. Additionally, HSBC Mortgage operated nine tion, through which HSBC has approved loans with an mortgage loan production offices in New York State, including one in an LMI area. The CRA performance examination also concluded that HSBC Bank's record of opening 26. A number of commenters expressed concern that HSBC Bank's and closing branches during the examination period immortgage products are more standardized, and thus potentially less proved the accessibility of its service delivery systems, able to meet the credit needs of particular communities, than those of especially in LMI areas. Republic Bank. One commenter suggested that in general HSBC Bank did not provide adequate affordable lending products or homeowner education programs for LMI communities. 27. HSBC Bank also provides grants to assist first-time homebuyers 28. One commenter urged that HSBC offer construction lending, in in meeting down payment requirements through a program sponsored particular, for affordable housing projects. The CRA does not require by the Federal Home Loan Bank of New York ("FHLBNY"). HSBC an institution to offer any specific credit products but allows an Bank also participates in the FHLB System's Affordable Housing institution to help serve the credit needs of the institution's commu- Program, which provides subsidized funds to finance the purchase, nity by providing credit of the types consistent with the institution's construction, and rehabilitation of owner-occupied and rental housing overall business strategy and expertise. for LMI households. One commenter requested that HSBC Bank 29. One commenter called for HSBC to expand its community commit to remaining a member of FHLBNY. HSBC indicated that it development grant program. has not decided whether to continue its membership after consumma- 30. This information is based upon branch data provided by HSBC, tion of the proposal. as of June 11, 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 145 Examiners also noted that HSBC Bank offers no- or those needs. Republic Bank's board of directors was found low-minimum balance savings accounts for all its custom- actively to support the Bank's CRA programs and to ers and commended HSBC Bank's community develop- oversee them effectively, and examiners deemed satisfacment services, such as home buyer and home improvement tory Republic Bank's marketing efforts to inform its comseminars, credit counseling workshops, and small business munities of available credit products and services. financing seminars.31 The CRA performance examination found that Republic Trade Bank. Trade Bank received a "satisfactory" rating Bank had a satisfactory overall record of originating loan from the OCC in its most recent CRA performance evalua- products that addressed the credit needs of its communition. Examiners concluded that it had an effective program ties.32 The examiners' analysis of lending patterns for for ascertaining community credit needs, which was car- mortgage, consumer, and small business loans indicated ried out in conjunction with Wells Fargo Bank, N.A. reasonable penetration in all segments of Republic Bank's ("Wells Fargo"), and used information from Wells Fargo's delineated communities, including LMI areas. Using 1995 Corporate Community Development Group, which worked HMDA data, examiners found that for loans to LMI census with elected officials, public advocates, private nonprofit tracts in the New York City market, Republic Bank ranked agencies and for- profit developers to identify community seventh in number of loans approved and fourth in dollar credit needs, especially in LMI areas. Additionally, in amount out of 210 lenders, originating 241 loans totaling 1996, Trade Bank conducted a credit needs survey that $33.5 million. This represented 3.3 percent of the number focused on credit availability in Trade Bank's particular of originations and 3.1 percent of the total dollar amount market of international trade finance and banking services. lent by all lenders in those LMI tracts in 1995. Regarding Examiners also found that Trade Bank's board of directors loans to LMI applicants in the New York City market, the is generally involved in CRA activities through its examiners found that Republic Bank ranked seventh out of Compliance/CRA Committee. 177 lenders with 2.3 percent of the number of LMI loans The CRA performance examination found that Trade and 2.6 percent of the dollar amount. In 1996, Republic Bank used specialized marketing media, such as trade Bank originated 183 loans worth $11.1 million to LMI journals, trade shows, conferences, and seminars to com- borrowers in New York City, Westchester, and Long municate with the business community that needed the Island, and 79 loans totaling $3.9 million to LMI borrowservices it provided. Examiners found that Trade Bank's ers in Florida, which examiners concluded was reasonable level of lending was responsive to the specialized credit relative to its presence in the market, competitive factors, needs of its delineated community, and that Trade Bank and demographic characteristics. The CRA performance had addressed a significant portion of the identified need examination concluded that loan applications were refor international trade finance in that community. As of ceived from all segments of the community, including LMI September 30, 1996, Trade Bank had total loans outstand- areas, and that Republic Bank was in substantial compliing of $254 million. Examiners further found that the ance with the various fair lending laws. geographic distribution of Trade Bank's wholesale credit The CRA performance examination noted that Republic extensions was reasonable, and that there was no evidence Bank had offered special mortgages for LMI borrowers of prohibited or illegal credit practices. through FNMA's Community Home Buyer Program since Trade Bank's community development activities were 1990. Examiners also noted Republic Bank's program for found to be appropriately responsive to credit and eco- low-cost, below market rate mortgages for homebuyers in nomic development needs in its delineated community. For New York City Housing Partnership ("NYCHP") projects. example, during the examination period Wells Fargo com- According to Republic Bank, in 1998, the program was mitted to loans totaling $2 million on behalf of Trade Bank offered at two NYCHP projects in Brooklyn, two in the to develop five affordable housing projects with 189 units Bronx, and one in Manhattan. Republic Bank is also a of multifamily, low-income rental housing. All the units founding member of the New York Mortgage Coalition were to be available to families with incomes of 60 percent ("NYMC"), which helps LMI individuals and families or less of the area's median family income, and all the purchase homes. Through the NYMC program, community projects were in Trade Bank's delineated community. groups provide mortgage and credit education, counseling, Trade Bank's other current community development in- and application assistance, while the NYMC member vestments totaled more than $3 million. banks provide specialized mortgage products that include lower down payments and fees. According to Republic C. RNYC's CRA Performance Record Bank, since 1993 the NYMC has originated approximately $110 million in home loans in the New York City market. Republic Bank. Examiners found that Republic Bank's Examiners found that in 1996 Republic Bank originated efforts to ascertain the credit needs of its communities were 517 loans to small businesses in LMI census tracts in the strong and identified several products designed to meet New York City area, representing 27 percent of all its small 31. One commenter urged HSBC to focus on African-Americans 32. Examiners also considered the home mortgage lending activity and Hispanics for its credit counseling and homebuyer education of Republic Bank's subsidiary, Republic Consumer Lending Group, services. Inc. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

146 Federal Reserve Bulletin • February 2000 business loans in the region. In Florida, 31 percent of its policy was consistent with regulatory guidelines. It noted small business loans were made in LMI tracts. According that Republic Bank provided alternative delivery systems, to Republic Bank, in 1998 it originated or renewed approx- including automatic teller machines ("ATMs"), and 24imately $180 million in loans to 1,758 borrowers, and hour banking by phone and home computer. Additionally, 78 percent of those loans were for less than $100,000. Republic Bank has indicated that it uses Spanish and Republic Bank is also a preferred Small Business Adminis- Chinese language advertising, in addition to advertising tration ("SBA") lender, and in 1998, made $1.3 million in that focuses on Hispanic and African-American communinew SBA loans. Since 1993, Republic Bank has had a ties. micro-financing program in the New York City area that Republic California. Republic California received a provides lines of credit and short-term loans of up to "satisfactory" rating from the OCC in its most recent CRA $50,000 to nonprofit organizations, start-up enterprises, performance evaluation. Examiners concluded that Repuband small businesses with less than $1 million in annual lic California's lending activity adequately addressed the sales that do not meet its normal credit criteria. In 1998, community's credit needs, based on an evaluation of Republic Bank made $374,000 in micro-loans under the the volume and patterns of lending, inside and outside the program and originated almost $2 million in micro-lines of assessment area. Examiners also concluded that Republic credit. California's trade finance program was focused on se- The CRA performance examination commended Repub- verely underserved communities, and that a majority of lic Bank's Community Affairs Department as a leader in Republic California's letter of credit financing was in low developing programs to promote affordable housing and income areas that had no nearby banking offices. A subeconomic development. It found the overall level of partic- stantial majority of lending by Republic California was ipation in community development activities to be reason- found to be in the assessment area, and geographic loan able and consistent with available opportunities. Examin- distribution was determined to be good. Republic Califorers determined that from April 1995 to March 1997, nia also has a micro-loan program similar to the one Republic Bank made $13.5 million in community develop- offered by Republic Bank. Republic California participates ment loans and $43.4 million in community development in a number of affordable housing programs that include investments. Republic Bank has indicated that in 1998 it below-market interest rates, reduced costs, and other feaoriginated more than $25 million in community develop- tures designed to respond to the needs of LMI families. ment loans, with more than one-half of that amount for Examiners also conducted a fair lending review of Repubconstruction and rehabilitation projects. lic California's consumer lending portfolio and found no Examiners took note of several of Republic Bank's violations of the substantive provisions of the antidiscrimicommunity development efforts, including the New York nation laws and regulations. Equity Fund ("NYEF"), an investment pool formed to Examiners concluded that Republic California is active rehabilitate New York City buildings to provide rental in community development lending, given its size and housing to low- and very-low-income families; Global business focus. From January 1995 through June 1997, Resources for Affordable Neighborhood Development Republic California originated 10 community development ("GRAND"), which provides loans to build the new loans totaling $925,000 throughout its assessment area. homes projects of NYCHP; Primary Care Development The CRA performance examination also concluded that Corporation ("PCDC"), which provides loans to support Republic California had a good record of providing comthe development of primary care programs in New York munity development investments in its assessment area and City; and the CPC. Republic Bank has indicated that it is throughout Los Angeles County. At the time of the examistill involved with all these programs, and that it has made nation, Republic California had investments of $9.2 miltotal loans to NYEF since 1989 of more than $35 million, lion, primarily in bonds and other securities that funded total investments of $43.5 million, and an investment com- housing for LMI families and in LMI census tracts. Acmitment for 1999 of $15 million. In addition, in 1999, cording to Republic California, its current community de- Republic Bank has committed to lend $5 million to velopment investment portfolio in its assessment area is GRAND, and $5 million to support PCDC's lending pro- $28.8 million, $27.7 million of which is invested in bonds, gram. Republic Bank has provided CPC with a $10 million securities, and federal low-income tax credits serving LMI revolving line of credit, plus commitments of $4 million in communities. 1999 for a non-recourse program and $17 million to purchase collateralized trust notes issued by CPC.33 D. HMDA Data The CRA performance examination found that Republic Bank provided services in response to special community The Board has also carefully considered the lending credit needs, that its offices provided reasonable access to records of HSBC and RNYC in light of comments on the all members of its communities, and that its branch closing 1997 and 1998 HMDA data of the organizations' subsidiaries.34 The data reflect certain disparities and weaknesses in 33. Several commenters praised Republic Bank's community development lending, calling it "a significant source of support for commu- 34. Several commenters were critical of HSBC Bank's lending nity revitalization" in New York City. record as reflected in its 1997 and 1998 HMDA data. Among the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 147 the rates of loan applications, originations, and denials by in LMI and minority census tracts,38 and that the overall racial group and income level.35 The Board is concerned proportion of loans by HSBC to LMI applicants was only when the record of an institution indicates such disparities slightly lower than the aggregate. HMDA data for 1998 in lending, and believes that all banks are obligated to show that RNYC significantly increased its overall volume ensure that their lending practices are based on criteria that of HMDA-related loans from 1997, including increases in ensure not only safe and sound lending but also equal the number of loans to African-American and LMI appliaccess to credit by creditworthy applicants regardless of cants and to borrowers in LMI and minority census tracts.39 their race or income level. The Board recognizes that Importantly, the information collected in the examination HMDA data alone provide an incomplete measure of an process does not indicate that HSBC engaged in any proinstitution's lending in its community because these data hibited discriminatory practices. In addition, although cover only a few categories of housing-related lending. HSBC received a lower percentage of loan applications HMDA data, moreover, provide only limited information from African-Americans than the aggregate, HSBC origiabout the covered loans.36 HMDA data, therefore, have nated loans to a higher percentage of its African-American limitations that make them an inadequate basis, absent applicants than did the aggregate. In its most recent CRA other information, for concluding that an institution has not examination, HSBC received a "high satisfactory" rating adequately assisted in meeting its community's credit for its overall lending performance. As noted above, HSBC needs or has engaged in illegal lending discrimination. has a number of lending programs that benefit LMI com- Because of the limitations of HMDA data, the Board has munities and individuals that are not reflected in HMDA considered these data carefully in light of other informa- data. These programs include HSBC's community develtion, including examination reports that provide an on-site opment lending, much of which finances affordable housevaluation of the compliance by the subsidiary banks of ing, and its small business lending. HSBC and RNYC with fair lending laws and the overall The Board notes that HSBC has provided projections to lending and community development activities of the the New York State Banking Department ("NYSBD") that banks. In particular, examiners have found substantial com- it would increase the dispersion of its applications in pliance with fair lending laws at the most recent examina- majority minority census tracts40 of New York State by the tions of the subsidiary depository institutions of HSBC and end of 2000 and has undertaken a variety of initiatives to RNYC. The Board also has considered the HMDA data in increase its lending in predominantly minority and LMI light of HSBC's and RNYC's overall lending records, areas. The Board encourages HSBC to continue to pursue which show that the organizations' subsidiary depository these initiatives and, as a condition to approval of the institutions assist significantly in helping to meet the credit proposal, requires HSBC to provide the Reserve Bank with needs of their communities, including LMI areas, through a copy of the semiannual reports that HSBC files with the a variety of forms of lending, including small business NYSBD concerning its efforts to achieve the projections. loans and community development lending. In addition, the Board expects HSBC to address any weak- The data for 1998 generally show that HSBC37 increased nesses in its CRA record noted at the most recent CRA the number of HMDA-related loans it made to African- examinations. American, Hispanic, and LMI applicants and to applicants Branch Closings criticisms made by the commenters were that HSBC Bank makes too HSBC Bank and Republic Bank together operate 456 few of its HMDA- related loans to minority applicants and in predombranches in New York State, including 103 in LMI census inantly minority areas; that the disparity between the denial rates for white and minority loan applicants is too large; that HSBC Bank's tracts.41 HSBC has indicated that it has not yet made any overall market share of loans in LMI areas is too small; and that decisions on possible branch closures or consolidations as HSBC Bank attracts too few minority and LMI loan applicants. One a result of the proposed transaction, although HSBC has commenter identified the level of HSBC Bank's single-family housing indicated that it is evaluating for possible consolidation lending as requiring improvement. fewer than 20 pairs of HSBC Bank and Republic Bank 35. For example, HSBC's mortgage originations in LMI and minority census tracts and to African-American and Hispanic applicants, as branches that have offices that are in close proximity to a percentage of its total mortgage lending, are lower relative to the each other. According to HSBC, six of the branch pairs aggregate and relative to the demographics of the markets in which under review for possible consolidation involve locations HSBC operates. In this context, the aggregate means the cumulative that could affect LMI areas. Five of the six branch pairs lending for all institutions that have reported HMDA data in a given market. 36. The data, for example, do not account for the possibility that an institution's outreach efforts may attract a larger proportion of margin- 38. In this case, minority tracts are those in which 80 percent or ally qualified applicants than other institutions attract and do not more of the population are minorities. provide a basis for an independent assessment of whether an applicant 39. HMDA data for RNYC represent the combined lending of who was denied credit was, in fact, creditworthy. Credit history Republic Bank and its subsidiary, Republic Consumer Lending Group, problems and excessive debt levels relative to income (reasons most Inc., in Republic Bank's New York assessment area. frequently cited for a credit denial) are not available from HMDA 40. Majority minority tracts are those in which more than 50 percent data. of the population are minorities. 37. HMDA data for HSBC represent the combined lending of 41. This total includes branches in block numbering areas, where HSBC Bank and HSBC Mortgage in the MSA portions of HSBC the branch is located outside a MSA, and is based on branch data Bank's New York assessment area. provided by HSBC, as of June 11, 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

148 Federal Reserve Bulletin • February 2000 that might affect LMI areas involve branches that are the subsidiary depository institutions of HSBC and RNYC, within 500 feet of each other. Examiners found that HSBC are consistent with approval.45 Bank's branch closure policy conforms to the Joint Interagency Policy Statement Regarding Branch Closings.42 Other Considerations HSBC Bank's policy requires consideration of the impact of a branch closure on the branch's neighborhood and that Under section 3 of the BHC Act, the Board may not requires advance written notice of any branch closure be approve any application by a company that involves a provided to the community. The examination found that foreign bank unless the bank is "subject to comprehensive past branch closures by HSBC Bank were conducted in supervision or regulation on a consolidated basis by the accordance with its branch closure policy, and that HSBC appropriate authorities in the bank's home country."46 Bank provided reasons for closings and timely advance HSBC is the parent company for various banking and notification to customers and regulatory authorities. nonbanking companies ("HSBC Group"), including subsidiary banks located in the United Kingdom and else- F. Conclusion on Convenience and Needs where. The Financial Services Authority ("FSA") is the consolidated supervisor for the HSBC Group.47 The Board has carefully considered all the facts of record 43 The Board previously has determined, in other applicaincluding public comments received, responses to the com- tions under the International Banking Act (12 U.S.C. ments, and reports of examinations of CRA performance of § 3101 et seq.) ("IBA") and the BHC Act involving the institutions involved, in reviewing the proposal's effect United Kingdom banks, that those banks were subject to on the convenience and needs of the communities to be home country supervision on a consolidated basis 48 The served by the combined organization.44 Based on a review Board also previously has determined that the HSBC of the entire record, and for the reasons discussed in this Group is supervised on substantially the same terms and order, the Board has concluded that convenience and needs conditions as those United Kingdom banks. Moreover, the considerations, including the CRA performance records of Board previously determined that the requirements of section 3(c)(3)(B) of the BHC Act regarding comprehensive, consolidated supervision were met in connection with an application involving HSBC.49 Based on all the facts of record, the Board has concluded that the requirements of section 3(c)(3)(B) of the BHC Act regarding comprehen- 42. 64 Federal Register 34,844 (1999). sive, consolidated supervision are met in this case. 43. Several commenters urged the Board to condition approval of The BHC Act also requires the Board to determine that the proposal on HSBC's making certain community reinvestment and other commitments. The CRA requires the Board, in considering the foreign bank has provided adequate assurances that it HSBC's application to acquire RNYC and RNYC's subsidiaries, to will make available to the Board such information on its review carefully the actual record of past performance of the insured depository institutions controlled by HSBC and RNYC in helping to meet the credit needs of their communities. Consistent with this mandate, the Board previously has held that, to gain approval of a 45. One commenter raised an issue concerning a labor dispute proposal to acquire an insured depository institution, an applicant between Republic Bank and a union representing some of the bank's must demonstrate a satisfactory record of performance under the CRA support personnel. Several claims resulting from this dispute have at the time an application is filed with the Board without reliance on been filed with the National Labor Relations Board, which has jurisplans or commitments for future action. See Totalbank Corporation of diction over such matters. Florida, 81 Federal Reserve Bulletin 876 (1995); First Interstate 46. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the Bank Systems of Montana, Inc., 11 Federal Reserve Bulletin 1007 Board determines whether a foreign bank is subject to consolidated (1991). The Board notes that the future activities of HSBC's subsid- home country supervision under the standards set forth in Regulation iary banks will be reviewed by the appropriate federal supervisors in K. 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign bank future performance examinations, and such CRA performance records may be considered subject to consolidated supervision if the Board will be considered by the Board in any subsequent applications by determines that the bank is supervised or regulated in such a manner HSBC to acquire a depository institution. that its home country supervisor receives sufficient information on the 44. One commenter maintained that the purchase by Republic Bank worldwide operations of the foreign bank, including the relationships of mortgage-backed securities ("MBSs") issued by Delta, which of the bank to its affiliates, to assess the foreign bank's overall recently reached a settlement with New York State authorities regard- financial condition and compliance with law and regulation. 12 C.F.R. ing its lending practices, suggests that Republic Bank lacks fair 211.24(c)(l)(ii). lending compliance safeguards and might constitute a discriminatory 47. In June 1998, the FSA assumed the bank supervisory functions lending practice. Republic Bank purchased MBSs issued by Delta on formerly exercised by the Bank of England. This transfer of supervi- 10 occasions between July 1997 and June 1999. The Board has sory responsibilities has not resulted in any substantial changes in the reviewed Republic Bank's standards for investing in MBSs and has scope or nature of the supervision of U.K. banks. found nothing to suggest that its decisions to invest in particular 48. See Bank of Scotland, 84 Federal Reserve Bulletin 230 (1998); MBSs are based on any prohibited criteria. Moreover, RNYC has West Merchant Bank Limited, 81 Federal Reserve Bulletin 519 (1995). indicated that it was not involved in originating the underlying loans The Board has previously determined that HSBL and HSBC Equator that were securitized or in developing the criteria governing the types Bank pic, members of the HSBC Group, are subject to comprehenof loans that were securitized. The Board has forwarded a copy of all sive, consolidated supervision. HSBC Equator Bank pic, 84 Federal comments on Delta to the Department of Justice, the Department of Reserve Bulletin 564 (1998); The Hongkong and Shanghai Banking Housing and Urban Development, and the Federal Trade Commis- Corporation Limited, 81 Federal Reserve Bulletin 902 (1995). sion, which have responsibility for reviewing compliance with the fair 49. Wells Fargo & Company, HSBC Holdings pic, et al, 81 Federal lending laws by nonbanking companies. Reserve Bulletin 1037 (1995). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 149 operations and activities and those of its affiliates that the decreased or unfair competition, conflicts of interests, or Board deems appropriate to determine and enforce compli- unsound banking practices."53 ance with the BHC Act. HSBC has committed that, to the As part of its evaluation of these factors, the Board extent not prohibited by applicable law, it will make avail- considers the financial condition and managerial resources able to the Board such information on the operations of of HSBC and its subsidiaries, including the companies to HSBC and any of its affiliates that the Board deems neces- be acquired, and the effect of the proposed transaction on sary to determine and enforce compliance with the BHC those resources. For the reasons noted above, and based on Act, the IBA, and other applicable federal law. HSBC has all the facts of record, the Board has concluded that finanalso committed to cooperate with the Board to obtain any cial and managerial resources are consistent with approval waivers or exemptions that may be necessary in order to of this notice. enable HSBC to make any such information available to The Board also has considered the competitive effects of the Board. In light of these commitments and other facts of the proposed acquisition by HSBC of the nonbanking record,50 the Board has concluded that HSBC has provided subsidiaries of RNYC in light of all the facts of record, adequate assurances of access to any appropriate informa- including the public comments received. The markets in tion the Board may request. For these reasons, and based which the nonbanking subsidiaries of HSBC and RNYC on all the facts of record, the Board has concluded that the compete are national or regional and are unconcentrated. supervisory factors it is required to consider under section The Board concludes that consummation of this proposal 3(c)(3) of the BHC Act are consistent with approval. would have a de minimis effect on the markets for lending and trust company and agency transactional services. The Nonbanking Activities Board notes that numerous competitors would remain in each of these markets. Based on all the facts of record, the HSBC has also filed a notice under section 4(c)(8) of the Board concludes that it is unlikely that significantly ad- BHC Act to acquire RNYC's nonbanking subsidiaries and verse competitive effects would result from the nonbanking thereby to engage in factoring, trust company functions, acquisitions proposed in this transaction. agency transactional services for customer investments, HSBC has indicated that the proposed transaction would and investment transactions as principal. The Board has increase the financial stability of the combined organizadetermined by regulation or order that the activities for tion by assisting it in maintaining a well-balanced revenue which notice has been provided are closely related to stream and a broad capital base, and would also allow it to banking for purposes of section 4(c)(8) of the BHC Act.51 realize significant cost savings. In addition, as the Board HSBC has committed to conduct these activities in con- has previously noted, there are public benefits to be derived formance with Regulation Y and all applicable regulations from permitting capital markets to operate so that bank and orders governing each activity.52 holding companies can make potentially profitable invest- In order to approve HSBC's notice to engage in non- ments in nonbanking companies and from permitting bankbanking activities, the Board must determine that the acqui- ing organizations to allocate their resources in the manner sition of the nonbanking subsidiaries of RNYC and the they consider to be most efficient when such investments performance of those activities by HSBC is a proper inci- and actions are consistent, as in this case, with the relevant dent to banking. That is, the Board must determine that the considerations under the BHC Act.54 proposed transaction "can reasonably be expected to pro- The Board also believes that the conduct of the proposed duce benefits to the public . . . that outweigh possible nonbanking activities within the framework of Regulation adverse effects, such as undue concentration of resources, Y and Board precedent is not likely to result in adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices, that would outweigh the public benefits of the proposal, such as increased customer conve- 50. The Board notes that it previously has reviewed relevant provi- nience and gains in efficiency. Accordingly, based on all sions of confidentiality, secrecy, and other laws in the jurisdictions in the facts of record, the Board has determined that the which HSBC has material operations. See HSBC Equator Bank pic, 84 balance of public interest factors that the Board must Federal Reserve Bulletin 564 (1998); The Hongkong and Shanghai consider under the proper incident to banking standard of Banking Corporation Limited, 81 Federal Reserve Bulletin 902 section 4(c)(8) of the BHC Act is favorable and consistent (1995). 51. See 12 C.F.R. 225.28(b)(1), (5), (7), and (8). with approval. 52. HSBC has applied to acquire Republic New York Securities HSBC has requested approval under section 4(c)(13) of Corporation ("RNYSC"), a subsidiary of RNYC that currently is the BHC Act and section 211.5(c) of the Board's Regulaengaged in underwriting and dealing in bank-ineligible securities, to a tion K (12 C.F.R. 211.5(c)) to acquire the non-U.S. operalimited extent, pursuant to section 20 of the Glass-Steagall Act tions of RNYC. HSBC also has applied under section (12 U.S.C. § 377). However, HSBC and RNYC have committed that on or before consummation of the proposal, RNYC will cease underwriting and dealing in bank-ineligible securities or performing any other activity restricted by section 20 of the Glass-Steagall Act. 53. 12 U.S.C. § 1843(c)(8). HSBC has indicated that all section 20 activities performed by HSBC 54. See, e.g., Norwest Corporation, 84 Federal Reserve Bulletin will be conducted solely through HSBC Securities, Inc. See HSBC 1088 (1998); Deutsche Bank AG, 85 Federal Reserve Bulletin 509 Holdings pic, et al, 82 Federal Reserve Bulletin 356 (1996). (1999). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

150 Federal Reserve Bulletin • February 2000 25 A of the Federal Reserve Act and section 211.4 of applicable statutes. The Board's approval is specifically Regulation K (12 C.F.R. 211.4) to acquire Republic Inter- conditioned on compliance by HSBC with all the commitnational Bank of New York (Miami), Miami, Florida, and ments made in connection with this application and notice, Republic International Bank of New York (Delaware), and on the Board's receiving access to information on the Wilmington, Delaware. In addition, Republic Bank has activities or operations of HSBC and any of its affiliates applied under sections 9 and 25 of the Federal Reserve Act that the Board determines to be appropriate to determine (12 U.S.C. §§ 321 et seq. and 601 et seq.) to establish the and enforce compliance by HSBC and its affiliates with Nassau, Bahamas branch of HSBC Bank as a branch of applicable federal statutes. The Board's approval of the Republic Bank, and has applied under section 25 of the nonbanking aspects of the proposal also is subject to all the Federal Reserve Act and section 211.4 of Regulation K to conditions set forth in this order and in Regulation Y, acquire HSBC Bank's subsidiary, Marine Midland Over- including those in sections 225.7 and 225.25(c) of Regulaseas Corporation, an Agreement corporation. The Board tion Y (12 C.F.R. 225.7 and 225.25(c)), and to the Board's concludes that all the factors required to be considered authority to require such modification or termination of the under the Federal Reserve Act, the BHC Act, and Regula- activities of a bank holding company or any of its subsidtion K are consistent with approval of the proposal. iaries as the Board finds necessary to ensure compliance In addition, Republic Bank has applied under section 9 with, and to prevent evasion of, the provisions of the BHC of the Federal Reserve Act to become a member of the Act and the Board's regulations and orders issued thereun- Federal Reserve System after its conversion to a New York der. These commitments and conditions are deemed to be State charter. The Board has considered the factors it is conditions imposed in writing by the Board in connection required to consider when reviewing applications pursuant with its findings and decision and, as such, may be ento section 9 of the Federal Reserve Act and finds those forced in proceedings under applicable law. factors to be consistent with approval. The acquisition of RNYC's subsidiary banks may not be consummated before the fifteenth calendar day after the Conclusion effective date of this order, and the proposal may not be consummated later than three months after the effective Based on the foregoing, the Board has determined that the date of this order, unless such period is extended for good applications and notices should be, and hereby are, ap- cause by the Board or by the Reserve Bank, acting pursuproved.55 In reaching its conclusion, the Board has consid- ant to delegated authority. ered all the facts of record in light of the factors that the By order of the Board of Governors, effective Decem- Board is required to consider under the BHC Act and other ber 6, 1999. Voting for this action: Chairman Greenspan, Vice Chairman Fergu- 55. Three commenters requested that the Board hold a public son, and Governors Kelley, Meyer, and Gramlich. meeting or hearing on the proposal. Section 3(b) of the BHC Act does not require the Board to hold a public hearing on an application unless the appropriate supervisory authority for the bank to be acquired ROBERT DEV. FRIERSON makes a timely written recommendation of denial of the application. Associate Secretary of the Board The Board has not received such a recommendation from the appropriate supervisory authorities. Under its rules, the Board also may, in its discretion, hold a public meeting or hearing on an application to acquire a bank if a meeting or hearing is necessary or appropriate to clarify factual issues related to comments that have been considered carefully by the Board in acting the application and to provide an opportunity for testimony. 12 C.F.R. on the proposal. The commenters' requests fail to demonstrate why 225.16(e). Section 4 of the BHC Act and the Board's rules thereunder their written comments do not present their views adequately and fail provide for a hearing on a notice to acquire nonbanking companies if to identify disputed issues of fact that are material to the Board's there are disputed issues of material fact that cannot be resolved in decision that would be clarified by a public meeting or hearing. For some other manner. 12 U.S.C. § 1843(c)(8); 12 C.F.R. 225.25(a)(2). these reasons, and based on all the facts of record, the Board has The Board has considered carefully these commenters' requests in determined that a public meeting or hearing is not required or warlight of all the facts of record. In the Board's view, commenters have ranted in this case. Accordingly, the requests for a public meeting on had ample opportunity to submit their views, and did submit written the proposal are denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 151 APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 4 Applicant(s) Bank(s) Effective Date The Chase Manhattan Corporation, Hambrecht & Quist Group, December 2, 1999 New York, New York San Francisco, California First National of Nebraska, Inc., Networking and Information Consulting, December 8, 1999 Omaha, Nebraska Inc., West Des Moines, Iowa The Fuji Bank, Limited, Heller Financial, Inc., December 9, 1999 Tokyo, Japan Chicago, Illinois SFS Holding Corp, Park Ridge, New Jersey 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 BancFirst Corporation, First State Bank, Kansas City November 30, 1999 Oklahoma City, Oklahoma Oklahoma City, Oklahoma Banknorth Group, Inc., BNG Interim Bank, N.A., Boston December 24, 1999 Burlington, Vermont Glen Falls, New York Chesapeake Bancorp Employee Chesapeake Bancorp, Richmond December 13, 1999 Stock Ownership Plan with Chestertown, Maryland 401(k) Provisions, Chestertown, Maryland China Trust Holdings N.V, China Trust Capital AJS, New York December 13, 1999 Curacao, Netherlands Antilles Denmark China Trust Capital BV, Amsterdam, The Netherlands China Trust Holdings Corporation, New York, New York China Trust Bank (USA), Torrance, California Cleveland Holding Company, Heritage Bancorp, Inc., Kansas City December 23, 1999 Cleveland, Oklahoma Cleveland, Oklahoma First Bank of Cleveland, Cleveland, Oklahoma Coastal Banking Company, Inc. Lowcountry National Bank, Richmond December 6, 1999 Beaufort, South Carolina Beaufort, South Carolina Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

152 Federal Reserve Bulletin • February 2000 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Community Bancshares, Inc., Edna Bancshares,Inc., Kansas City November 29, 1999 Chanute, Kansas Edna, Kansas First State Bank, Edna, Kansas Country Banc Holding Company, American Heritage Bancorp, Inc., Kansas City December 10, 1999 Edmond, Oklahoma El Reno, Oklahoma CSB Bancshares, Inc.'s Amended CSB Bancshares, Inc., Kansas City December 2, 1999 Employee Stock Ownership Plan, Ellsworth, Kansas Ellsworth, Kansas Cumberland Bancorp, Inc., Bancshares of Dyer, Inc., Atlanta December 10, 1999 Nashville, Tennessee Dyer, Tennessee Exchange National Bancshares, Inc. Mid Central Bancorp, Inc., St. Louis December 2, 1999 Jefferson City, Missouri Warsaw, Missouri Osage Valley Bank, Warsaw, Missouri F&M National Corporation, The State Bank of the Alleghenies, Richmond December 16, 1999 Winchester, Virginia Covington, Virginia Fentura Bancorp, Inc., Davison State Bank, Chicago December 8, 1999 Fenton, Michigan Davison, Michigan First Ada Bancshares, Inc., Prague Bancorp, Inc., Kansas City December 8, 1999 Ada, Oklahoma Prague, Oklahoma The Prague National Bank, Prague, Oklahoma First Pryor Bancorp, Inc., Locust Grove Bancshares, Inc., Kansas City December 9, 1999 Pryor, Oklahoma Locust Grove, Oklahoma Bank of Locust Grove, Locust Grove, Oklahoma Lakeside Bank of Salina, Salina, Oklahoma GB&T Bancshares, Inc., UB&T Financial Services Corporation, Atlanta December 2, 1999 Gainesville, Georgia Rockmart, Georgia General Savings Bank of General Bank, San Francisco November 18, 1999 Washington, Los Angeles, California Bellevue, Washington GBC Bancorp, Los Angeles, California Glacier Bancorp, Inc., Mountain West Bank, Minneapolis December 3, 1999 Kalispell, Montana Coeur d'Alene, Idaho Gold Banc Corporation, Inc., American Bancshares, Inc., Kansas City December 15, 1999 Leawood, Kansas Bradenton, Florida Gold Banc Acquisition Corp. XI, Inc., Leawood, Kansas Gold Banc Corporation, Inc., DSP Investments, Limited, Kansas City December 16, 1999 Leawood, Kansas La Cygne, Kansas Gold Banc Acquisition Corp. XIII, Inc., Leawood, Kansas Grain Valley Bancshares, Inc., The Bank of Grain Valley, Kansas City December 3, 1999 Grain Valley, Missouri Grain Valley, Missouri Greater Bay Bancorp, Mt. Diablo Bancshares, San Francisco December 22, 1999 Palo Alto, California Danville, California Mt. Diablo National Bank, Danville, California Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 153 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Heritage Bancshares, Inc., The Heritage Bank, Richmond December 10, 1999 Lucama, North Carolina Lucama, North Carolina LandMark Financial Holding Landmark Bank of Florida, Atlanta December 9, 1999 Company, Sarasota, Florida Sarasota, Florida Marion Bancshares, Inc., Marion National Bank, Kansas City December 3, 1999 Marion, Kansas Marion, Kansas MBT Bancshares, Inc., Whiting Bankshares, Inc., Kansas City November 23, 1999 Kansas City, Missouri Whiting, Kansas Network Bancorp USA, Network Bank USA, San Francisco December 21, 1999 Ontario, California Ontario, California Norton Bancshares, Inc., Consolidated Insurance, Inc., Kansas City December 16, 1999 Norton, Kansas Hill City, Kansas Overton Merger Corporation, Overton Financial Corporation, Atlanta November 26, 1999 Livingston, Tennessee Livingston, Tennessee Union Bank and Trust, Livingston, Tennessee Peoples Bancshares of Tallassee, The Peoples Bank, Atlanta December 22, 1999 Inc., Tallassee, Alabama Tallassee, Alabama Peregrine Corporation, Community Bank of Chaska, Minneapolis December 1, 1999 Chaska, Minnesota Chaska, Minnesota Praesidium Capital Corporation, First National Bank, Dallas December 23, 1999 Purchase, New York Uvalde, Texas Bob S. Prince Insurance Agency, Market Street Bancshares, Inc., St. Louis December 13, 1999 Inc., Mt. Vernon, Illinois McLeansboro, Illinois Rockhold-Brown Bancshares, Inc., The Rockhold, Brown & Company Cleveland December 1, 1999 Bainbridge, Ohio Bank, Bainbridge, Ohio Ruff Partners, Ltd., The First State Bank, Dallas December 2, 1999 Long view, Texas Hallsville, Texas Smith River Bankshares, Inc., Smith River Community Bank, N.A. Richmond December 10, 1999 Martinsville, Virginia Martinsville, Virginia South Branch Valley Bancorp, Inc. Potomac Valley Bank, Richmond November 26 1999 : Moorefield, West Virginia Petersburg, West Virginia Steinauer Bancorp, Bank of Steinauer, Kansas City December 15, 1999 Steinauer, Nebraska Steinauer, Nebraska Truman Bancshares, Inc., Martin County Fidelity Bancshares Minneapolis November 23, 1999 Truman, Minnesota Company, Fairmont, Minnesota Martin County National Bank, Fairmont, Minnesota Twenty-First Century Financial Oklahoma National Bank, Kansas City December 23, 1999 Services Company, Tulsa, Oklahoma Tulsa, Oklahoma Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

154 Federal Reserve Bulletin • February 2000 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date UBS AG, UBS (USA) Inc., New York November 29, 1999 Zurich and Basel, Switzerland Stamford, Connecticut ARI Acquisition Corporation, Boston, Massachusetts Allegis Realty Investors, LLC, Hartford, Connecticut AgriVest LLC, Boston, Massachusetts Allegis Capital LLC, Hartford, Connecticut United Bancshares, Inc., Bank of Leipsic Company, Cleveland December 1, 1999 Columbus Grove, Ohio Leipsic, Ohio United Financial Corp., Valley Bancorp., Minneapolis December 8, 1999 Great Falls, Montana Phoenix, Arizona Wells Fargo & Company, North County Bancorp, San Francisco December 15, 1999 San Francisco, California Escondido, California North County Bank, Escondido, California Wells Fargo & Company, Prime Bancshares, Inc., San Francisco December 10, 1999 San Francisco, California Houston, Texas Prime Bank, Houston, Texas Wells Fargo & Company, Texas Bancshares, Inc., San Francisco November 24, 1999 San Francisco, California San Antonio, Texas First National Bank of South Texas, San Antonio, Texas Bank of South Texas, Corpus Christi, Texas Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Bank of America Corporation, Signio, Inc., Richmond December 14, 1999 Charlotte, North Carolina Redwood City, California Bank of Montreal, Burke, Christensen, and Lewis Chicago December 1, 1999 Montreal, Canada Securities, Inc., Bankmont Financial Corp., Chicago, Chicago, Illinois Illinois The Bank of New York Company, BNY ESI & Co., Inc., New York December 1, 1999 Inc., New York, New York New York, New York Institutional Securities Trading, LLC, Savannah, Georgia Deutsche Bank AG, DB Advisors L.L.C., New York December 1, 1999 Frankfurt am Main, Federal New York, New York Republic of Germany Fidelity D & D Bancorp, Inc., The Fidelity Deposit and Discount Philadelphia December 7, 1999 Dunmore, Pennsylvania Bank, Dunmore, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 155 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date First Citizens Bancorporation of Great Pee Dee Bancorp, Inc., Richmond December 15, 1999 South Carolina, Inc., Cheraw, South Carolina Columbia, South Carolina First Federal Savings and Loan Association of Cheraw, Cheraw, South Carolina First Citizens Bancorporation of Heritage Bancorp, Inc., Richmond December 15, 1999 South Carolina, Inc., Laurens, South Carolina Columbia, South Carolina Heritage Federal Bank, Laurens, South Carolina First National of Nebraska, Inc., Mountain States Micrographics, Inc., Kansas City December 24, 1999 Omaha, Nebraska Englewood, Colorado Insync Investments, Ltd, Omaha, Nebraska Futura Banc Corp., Vernon, Shall, Morgan & Company, Cleveland December 7, 1999 Urbana, Ohio Akron, Ohio Hometown Banc Corp, Security State Bank, Kansas City December 22, 1999 Grand Island, Nebraska Sumner, Nebraska Marshall & Ilsley Corporation, M&I Bank FSB, Chicago December 20, 1999 Milwaukee, Wisconsin Las Vegas, Nevada Pleasantview Limited Partnership, Des Moines, Iowa Mid State Banks, Inc., Taylor & Towson Insurance Agency, Atlanta December 21, 1999 Cordele, Georgia Ocilla, Georgia Taylor & Towson Insurance Finance Company, Ocilla, Georgia National Westminster Bank pic, NatWest Group Holdings Corporation, New York November 30, 1999. London, England New York, New York Identrus, LLC, New York, New York Skandinaviska Enskilda Banken AB, Enskilda Securities, Inc., New York November 29, 1999 Stockholm, Sweden Stockholm, Sweden Southern Financial Bancorp, Inc., Darien Consulting Group, Richmond December 7, 1999 Warrenton, Virginia Deluth, Georgia Synovus Financial Corp., Prepaid Technologies, LLC, Atlanta November 29, 1999 Columbus, Georgia Birmingham, Alabama UBS AG, Global Asset Management Limited, New York November 29, 1999 Zurich, Switzerland Hamilton, Bermuda Umpqua Holdings Corporation, Strand, Atkinson, Williams and York, San Francisco November 24, 1999 Roseburg, Oregon Inc., Portland, Oregon Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

156 Federal Reserve Bulletin • February 2000 Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Main Street Trust, Inc. Banklllinois Financial Corporation, Chicago December 9, 1999 Champaign, Illinois Champaign, Illinois First Decatur Bancshares, Inc., Decatur, Illinois Banklllinois, Champaign, Illinois The First National Bank of Decatur, Decatur, Illinois First Trust Bank of Shelbyville, Shelbyville, Illinois FirsTech, Inc., Decatur, Illinois Walden Financial Group, Inc. Rainbow Investment Company, Inc., St. Louis December 15, 1999 Pocahontas, Arkansas Tuckerman, Arkansas Wells Fargo & Company, First Place Financial Corporation, San Francisco December 17, 1999 San Francisco, California Farmington, New Mexico First National Bank of Farmington, Farmington, New Mexico Capital Bank, Albuquerque, New Mexico Western Bank, Gallup, New Mexico Burns National Bank of Durango, Durango, Colorado FPFC Management LLC, Farmington, New Mexico APPLICATIONS APPROVED UNDER BANK MERGER ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Applicant(s) Bank(s) Reserve Bank Effective Date AmTrade International Bank of AmTrade International Bank of Florida, Atlanta November 29, 1999 Georgia, Miami, Florida Atlanta, Georgia Columbia Bank, Southern Exchange Bank, Atlanta December 8, 1999 Tampa, Florida Tampa, Florida Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 157 Applications Approved Under Bank Merger Act 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date F&M Bank-Northeast, F&M Merger Corporation, Chicago December 2, 1999 Pulaski, Wisconsin Kaukauna, Wisconsin F&M Bank-Grant County, Fennimore, Wisconsin F&M Bank-Lakeland, Woodrulf, Wisconsin F&M Bank-Central, Stevens Point, Wisconsin F&M Bank-Superior, Superior, Wisconsin F&M Bank Landmark, Hudson, Wisconsin F&M Bank-Kiel, Kiel, Wisconsin F&M Bank-East Troy, East Troy, Wisconsin F&M Bank-Prairie du Chien, Prairie du Chien, Wisconsin F&M Bank-Winnebago County, Omro, Wisconsin F&M Bank-Jefferson, Jefferson, Wisconsin F&M Bank-Elkhorn, Elkhorn, Wisconsin F&M Bank-Kaukuana, F&M Bancorporation, Inc., Chicago December 2, 1999 Kaukauna, Wisconsin Kaukauna, Wisconsin F&M Bank-Hilbert, Hilbert, Wisconsin F&M Bank-Appleton, Appleton, Wisconsin F&M Bank-Algoma, Algoma, Wisconsin F&M Bank-New London, New London, Wisconsin F&M Bank-Darlington, Darlington, Wisconsin F&M Bank-Waushara County, Wautoma, Wisconsin F&M Bank-Brodhead, Brodhead, Wisconsin F&M Bank-Northeast, F&M Bank-Kaukauna, Chicago December 2, 1999 Pulaski, Wisconsin Kaukauna, Wisconsin Gold Bank, Gold Banc Corporation, Kansas City December 22, 1999 Leawood, Kansas Leawood, Kansas Grant County Bank, First Capital Bank, Kansas City December 22, 1999 Medford, Oklahoma Guthrie, Oklahoma Midwest Bank of Western Illinois, Associated Bank Illinois, NA, Chicago December 3, 1999 Monmouth, Illinois Rockford, Illinois Potomac Valley Bank, Potomac Interim Bank, Inc., Richmond November 26, 1999 Petersburg, West Virginia Petersburg, West Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

158 Federal Reserve Bulletin • February 2000 Applications Approved Under Bank Merger Act—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Wesbanco Bank Wheeling, Wesbanco Bank Charleston, Inc., Cleveland December 7, 1999 Wheeling, West Virginia Charleston, West Virginia Wesbanco Bank Fairmont, Inc., Fairmont, West Virginia Wesbanco Bank Parkersburg, Inc., Parkersburg, West Virginia PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Independent Community Bankers of America v. Board of Gov- Federal Reserve Banks in which the Board of Governors is not ernors, No. 98- 1482 (D.C. Cir., filed October 21, 1998). named a party. Petition for review of a Board order dated September 23, 1998, conditionally approving the applications of Travelers Group, Inc., New York, New York, to become a bank Irontown Housing Corp. v. Board of Governors, No. 99-9549 holding company by acquiring Citicorp, New York, New (10th Cir., filed December 27, 1999). Petition for review of York, and its bank and nonbank subsidiaries. On Novem- Board order dated December 13, 1999, approving the ber 2, 1999, the court affirmed the Board's order. merger of Zions Bancorporation with First Security Corpo- Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK) ration. (S.D.N.Y., filed May 15, 1998). Action to freeze assets of Wasserman v. Federal Reserve Bank, No. 99-6280 (2d Cir., individual pending administrative adjudication of civil filed August 26, 1999). Appeal of district court dismissal of money penalty assessment by the Board. On May 26, 1998, case challenging refusal by the Board and the Federal the court issued a preliminary injunction restraining the Reserve Bank of New York to investigate certain matters. transfer or disposition of the individual's assets and appoint- Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed ing the Federal Reserve Bank of New York as receiver for August 3, 1999). Employment discrimination action. those assets. Sheriff Gerry Ali v. U.S. State Department, No. 99-7438 (C.D. Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed Cal., filed July 21, 1999). Action relating to impounded May 4, 1998). Appeal and cross-appeal of district court bank drafts. order granting in part and denying in part the Board's Sedgwick v. Board of Governors, No. Civ. 99 0702 (D. Ari- motion for summary judgment seeking prejudgment interest zona, filed April 14, 1999). Action under Federal Tort and a statutory surcharge in connection with a civil money Claims Act alleging violation of bank supervision require- penalty assessed by the Board. On February 24, 1999, the ments. The Board filed a motion to dismiss on June 15, court granted the Board's appeal and denied the cross- 1999. appeal, and remanded the matter to the district court for Hunter v. Board of Governors, No. 1:98CV02994 (ESH) determination of prejudgment interest due to the Board. (D.D.C., filed December 9, 1998). Action under the Free- Fenili v. Davidson, No. C-98-01568-CW (N.D. California, dom of Information Act and the Privacy Act. The Board filed April 17, 1998). Tort and constitutional claim arising filed a motion to dismiss or for summary judgment on out of return of a check. On June 5, 1998, the Board filed its July 22, 1999. motion to dismiss. Folstad v. Board of Governors, No. 1:99 CV 124 (W.D. Mich., Goldman v. Department of the Treasury, No. 98-9451 (11th filed February 17, 1999). Freedom of Information Act com- Circuit, filed November 10, 1998). Appeal from a District plaint. On November 16, 1999, the district court granted the Court order dismissing an action challenging Federal Re- Board's motion for summary judgment and dismissed the serve notes as lawful money. action. Kerr v. Department of the Treasury, No. CV-S-97-01877- Nelson v. Greenspan, No. 1:99CV00215 (EGS) (D.D.C., filed DWH (D. Nev., filed December 22, 1997). Challenge to January 28, 1999). Employment discrimination complaint. income taxation and Federal Reserve notes. On Septem- On March 29, 1999, the Board filed a motion to dismiss the ber 3, 1998, a motion to dismiss was filed on behalf of all action. federal defendants. The court dismissed the action on Fraternal Order of Police v. Board of Governors, No. March 31, 1999, and on April 28, 1999, the plaintiff filed a 1:98CV03116 (WBB) (D.D.C., filed December 22, 1998). notice of appeal. Declaratory judgment action challenging Board labor prac- Bettersworth v. Board of Governors, No. 97-CA-624 (W.D. tices. On February 26, 1999, the Board filed a motion to Tex., filed August 21, 1997). Privacy Act case. On June 1, dismiss the action. 1999, the Board filed a motion for summary judgment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 159 TERMINATION OF ENFORCEMENT ACTIONS dressed the Year 2000 readiness of TransAlliance's electronic funds transfer services. First Utah Bancorp, First Utah Bank, Premier Data Corporation Salt Lake City, Utah WRITTEN AGREEMENTS APPROVED BY FEDERAL RESERVE BANKS The Federal Reserve Board announced on December 6, the termination of the provision that addressed Year 2000 Arab American Bank readiness of the Written Agreement by and among First New York, New York Utah Bancorp, the First Utah Bank, and Premier Data Corporation, all of Salt Lake City, Utah, and the Federal The Federal Reserve Board announced on December 14, Reserve Bank of San Francisco. 1999, the execution of a Written Agreement by and between the Arab American Bank, New York, New York, Trans Alliance, L.P. and the Federal Reserve Bank of New York. Bellevue, Washington Foxdale Bank The Federal Reserve Board, the Federal Deposit Insurance South Elgin, Illinois Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of The Federal Reserve Board announced on December 6, Thrift Supervision announced on December 13, 1999, the 1999, the execution of a Written Agreement by and betermination of the May 21, 1999, Agreement with Trans- tween the Foxdale Bank, South Elgin, Illinois, and the Alliance, L.P., Bellevue, Washington. The Agreement ad- Federal Reserve Bank of Chicago. 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 All Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, 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 A35 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit A3 6 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A23 Interest rates—Money and capital markets A42 Nonfinancial business activity A24 Stock market—Selected statistics A42 Labor force, employment, and unemployment A43 Output, capacity, and capacity utilization A44 Industrial production—Indexes and gross value Federal Finance A46 Housing and construction A25 Federal fiscal and financing operations A47 Consumer and producer prices A26 U.S. budget receipts and outlays A48 Gross domestic product and income A27 Federal debt subject to statutory limitation A49 Personal income and saving Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • February 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 U.S. reserve assets Interest and Exchange Rates A51 Foreign official assets held at Federal Reserve A62 Foreign exchange rates Banks A52 Selected U.S. liabilities to foreign official A63 GUIDE TO STATISTICAL RELEASES AND institutions SPECIAL TABLES Reported by Banks in the United States SPECIAL TABLES A52 Liabilities to, and claims on, foreigners A64 Assets and liabilities of commercial banks, A53 Liabilities to foreigners A55 Banks' own claims on foreigners September 30, 1999 A56 Banks' own and domestic customers' claims on A66 Terms of lending at commercial banks, foreigners November 1999 A56 Banks' own claims on unaffiliated foreigners A72 Assets and liabilities of U.S. branches and A57 Claims on foreign countries—Combined agencies of foreign banks, September 30, 1999 domestic offices and foreign branches A76 INDEX TO STATISTICAL TABLES 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 • February 2000 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted' 1998 1999 1999 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q4 Q1 Q2 Q3r Julyr Aug/ Sept.1" Oct/ Nov. Reserves of depository institutions2 1 Total -1.8 -1.2 -6.6 — 15.4 -24.9 2.5 1.3 -33.3 8.1 2 Required -2.5 1.0 -5.6 -15.0 -20.3 1.1 -.6 -33.0 2.9 3 Nonborrowed -.6 -1.3 -6.7 -17.1 -29.6 1.6 1.5 -32.0 9.5 4 Monetary base3 8.7 9.1 10.1 8.5 8.0 7.1 11.3 16.6 26.3 Concepts of money and debt4 5 Ml 5.0 2.8 3.5 -2.2 -1.6 3.2 -9.7 5.6 10.4 6 M2 11.0 7.2 5.8r 5.3 5.7 5.8 5.1 5.2 5.5 7 M3 12.9 7.6 5.8r 5.5 5.1 4.7 6.0 9.5 16.9 8 Debt 6.3 6.71 7.0r 6.0 5.6 6.7 7.1 6.6 n.a. Nontransaction components 9 In M25 13.0 8.7 6.5r 7.8 8.0 6.7 9.8 5.1 4.0 10 In M3 only6 18.3r 8.7r 5.8r 6.0 3.4 1.5 8.5 21.4 48.0 Time and savings deposits Commercial banks 11 Savings, including MMDAs 17.6 11.6 9.7 11.7 14.0 8.0 14.4 4.2 -1.3 12 Small time7 .3 -5.5 -3.3 1.8 1.6 4.3 8.2 7.2 9.8 13 Large time8'9 3.5r ,0r -3.1r 3.2 17.4 -13.4 20.3 54.1 65.4 Thrift institutions 14 Savings, including MMDAs 10.1 12.8 14.6 15.0 19.0 4.2 4.5 -3.4 -6.3 15 Small time7 -6.7 -6.5 -7.r -3.9 -3.1 1.9 4.2 5.3 9.1 16 Large time8 10.4 7.6 -7.0 4.2 10.9 6.8 9.4 -8.0 10.8 Money market mutual funds 17 Retail 28.5 20.5 10.7 6.9 1.9 9.9 8.7 9.6 11.7 18 Institution-only 41.8 17.9 14.5 7.5 -4.6 22.9 6.3 25.1 37.4 Repurchase agreements and Eurodollars 19 Repurchase agreements10 18.9 14.1 -2.9r 16.2 1.9 7.0 -1.2 -11.6 39.0 20 Eurodollars10 3.2 -.8 32.0 -7.7 -17.1 -33.3 -6.0 -21.7 63.3 Debt components4 21 Federal -2.8 -3.1 -2.3 -.3 1.4 1.0 -4.2 -5.8 n.a. 22 Nonfederal 9.2 9.6r 9.7r 7.8 6.8 8.3 10.2 10.0 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 Sept. Oct. Nov. Oct. 13 Oct. 20 Oct. 27 Nov. 3 Nov. 10 Nov. 17 Nov. 24 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 536,558 542,985 561,178 541,218 544,464 543,573 550,730 552,242 561,722 562,828 U.S. government securities 2 Bought outright—System account' 490,477 490,849 492,811 491,044 490,907 490,711 490,916 491,960 492,677 494,001 3 Held under repurchase agreements 2,373 428 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 238 206 183 219 198 194 188 187 181 181 5 Held under repurchase agreements 9,515 1,916 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 0 14,248 33,382 14,659 18,123 17,061 23,800 24,151 33,669 35,095 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 57 35 172 26 15 40 104 91 435 69 9 Seasonal credit 283 224 65 263 224 191 115 64 59 59 10 Special Liquidity Facility credit 0 3 12 0 1 7 36 5 4 6 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float 288 482 416 781 553 324 277 521 415 329 13 Other Federal Reserve assets 33,328 34,594 34,138 34,225 34,444 35,047 35,294 35,262 34,280 33,088 14 Gold stock 11,046 11,050 11,049 11,051 11,050 11,050 11,049 11,049 11,049 11,049 15 Special drawing rights certificate account 7,667 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 16 Treasury currency outstanding 27,381 27,546 27,667 27,513 27,554 27,595 27,636 27,650 27,664 27,678 ABSORBING RESERVE FUNDS 17 Currency in circulation . . . . 542,365 550,941 569,575 549,939 551,699 553,281 557,187 562,862 568,272 573,167 18 Reverse repurchase agreements—triparty . . . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 89 94 93 97 94 92 94 95 95 95 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 6,389 5,179 5,055 5,235 5,421 5,206 4,968 4,814 4,726 5,340 21 Foreign 226 182 213 202 187 180 177 187 264 203 22 Service-related balances and adjustments . 7,100 7,165 7,176 7,080 7,097 7,062 7,276 7,136 7,085 7,162 23 Other 248 278 252 319 291 260 230 246 256 255 24 Other Federal Reserve liabilities and capital 18,524 18,362 18,384 18,195 18,332 18,242 18,324 18,313 18,369 18,437 25 Reserve balances with Federal Reserve Banks 7,712 6,580 6,346 5,916 7,146 5,095 8,359 4,488 8,568 4,096 End-of-month figures Wednesday figures Sept. Oct. Nov. Oct. 13 Oct. 20 Oct. 27 Nov. 3 Nov. 10 Nov. 17 Nov. 24 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 546,150 548,919 575,843 544,224 550,310 548,132 554,921 555,322 564,024 570,798 U.S. government securities2 2 Bought outright—System account3 489,037 490,738 492,910 491,282 491,367 492,051 491.529 491,928 493,096 494,529 3 Held under repurchase agreements 7,607 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 238 188 181 198 198 188 188 181 181 181 5 Held under repurchase agreements 14,456 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 0 22,560 49,440 15,520 23,550 20,065 26,580 27,820 35,320 41,455 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 179 41 8 16 14 27 533 27 2,115 299 9 Seasonal credit 300 123 65 245 209 174 81 58 64 64 10 Special Liquidity Facility credit 0 10 5 0 6 10 210 7 5 9 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float 65 -297 122 2,543 353 277 669 -160 570 939 13 Other Federal Reserve assets 34,268 35,556 33,111 34,420 34,614 35,340 35,131 35,459 32,671 33,321 14 Gold stock 11,047 11,049 11,049 11,051 11,050 11,050 11,049 11,049 11,049 11,049 15 Special drawing rights certificate account 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 16 Treasury currency outstanding 27,457 27,636 27,692 27,513 27,554 27,595 27,636 27,650 27,664 27,678 ABSORBING RESERVE FUNDS 17 Currency in circulation . . . . 544,101 555,720 582,964 551,657 553,072 555,633 560,960 567,290 571,225 578,669 18 Reverse repurchase agreements—triparty . . . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 93 94 85 95 92 94 95 95 97 85 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 6,641 4,527 5,025 4,948 4,925 4,363 5,610 4,870 5,228 4,525 21 Foreign 243 189 501 284 167 172 162 161 171 171 22 Service-related balances and adjustments . 7,392 7,276 7,294 7,080 7,097 7,062 7,276 7,136 7,085 7,162 23 Other 191 202 221 270 311 223 258 242 247 253 24 Other Federal Reserve liabilities and capital 19,105 18,401 18,618 17,775 17,991 17,951 18,040 17,943 18,141 18,196 25 Reserve balances with Federal Reserve Banks" 14,088 8,395 7,075 7,879 12,459 8,479 8,404 3,483 7,743r 7,662 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 • February 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. May June July Aug. Sept. Oct. Nov. 1 Reserve balances with Reserve Banks2 13,330 10,664 9,021 10,070 8,539 7,797 7,802 7,698 6,768r 6,288 2 Total vault cash3 44,525 44,740 44,305 42,459 42,632 44,059 44,664 44,519 47,019 50,742 3 Applied vault cash4 37,844 37,255 35,997 34,805 33,856 34,005 34,069 34,089 33,933 34,677 4 Surplus vault cash5 6,681 7,485 8,308 7,654 8,776 10,054 10,595 10,430 13,086 16,065 5 Total reserves6 51,174 47,920 45,018 44,875 42,394 41,802 41,871 41,787 40,702 40,965 6 Required reserves 49,758 46,235 43,435 43,619 41,133 40,726 40,742 40,590 39,549r 39,631 7 Excess reserve balances at Reserve Banks7 1,416 1,685 1,583 1,256 1,261 1,076 1,129 1,197 l,153r 1,334 8 Total borrowing at Reserve Banks 155 324 117 127 145 309 344 338 281 236 9 Adjustment 87 245 101 39 18 83 72 56 52 157 10 Seasonal 68 79 15 89 127 226 271 282 221 71 11 Special Liquidity Facility8 0 8 7 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 July 28 Aug. 11 Aug. 25 Sept. 8 Sept. 22 Oct. 6 Oct. 20 Nov. 3 Nov. 17 Dec. 1 1 Reserve balances with Reserve Banks2 8,041 7,923 7,421 8,470 7,440 7,380 6,544 6,721r 6,524 5,934 2 Total vault cash3 43,899 44,994 44,786 43,774 44,556 45,199 47,350 47,593 49,510 52,797 3 Applied vault cash4 34,198 34,123 34,003 34,126 34,327 33,636 33,998 34,014r 34,046 35,510 4 Surplus vault cash5 9,702 10,871 10,783 9,648 10,229 11,563 13,352 13,579r 15,464 17,287 5 Total reserves6 42,238 42,046 41,423 42,596 41,766 41,016 40,542 40,735 40,569 41,444 6 Required reserves 41,098 40,967 40,289 41,388 40,744 39,524 39,408 39,742r 39,196 40,075 7 Excess reserve balances at Reserve Banks7 1,140 1,078 1,134 1,207 1,022 1,491 1,133 993r 1,373 1,369 8 Total borrowing at Reserve Banks 266 409 304 318 323 385 265 246 329 133 9 Adjustment 17 146 31 35 48 91 21 72 263 64 10 Seasonal 249 263 273 284 276 294 244 153 62 62 11 Special Liquidity Facility8 1 1 22 5 7 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 credit1 Seasonal credit Extended credit Special Liquidity Facility credit4 On Effective Previous On Effective Previous On Effective Previous On Effective Previous 1/14/00 date rate 1/14/00 date rate 1/14/00 date rate 1/14/00 date rate 11/16/99 11/18/99 11/18/99 11/16/99 11/16/99 11/17/99 11/18/99 11/18/99 11/18/99 11/16/99 11/17/99 11/16/99 Range of rates for adjustment credit in recent years Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank level)—All of level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1977 1982—July 20 11.5-12 11.5 1990—Dec. 19 6.5 6.5 23 11.5 11.5 1978—Jan. 9 6-6.5 6.5 Aug. 2 11-11.5 11 1991—Feb. 1 6-6.5 6 20 6.5 6.5 3 11 11 4 6 6 May 11 6.5-7 7 16 10.5 10.5 Apr. 30 5.5-6 5.5 12 7 7 27 10-10.5 10 May 2 5.5 5.5 July 3 7-7.25 7.25 30 10 10 Sept. 13 5-5.5 5 10 7.25 7.25 Oct. 12 9.5-10 9.5 17 5 5 Aug. 21 7.75 7.75 13 9.5 9.5 Nov. 6 4.5-5 4.5 Sept. 22 8 8 Nov. 22 9-9.5 9 7 4.5 4.5 Oct. 16 8-8.5 8.5 26 9 9 Dec. 20 3.5-4.5 3.5 20 8.5 8.5 Dec. 14 8.5-9 9 24 3.5 3.5 Nov. 1 8.5-9.5 9.5 15 8.5-9 8.5 3 9.5 9.5 17 8.5 8.5 1992—July 2 3-3.5 3 7 3 3 1979—July 20 10 10 1984—Apr. 9 8.5-9 9 Aug. 17 10-10.5 10.5 13 9 9 1994—May 17 3-3.5 3.5 20 10.5 10.5 Nov. 21 8.5-9 8.5 18 3.5 3.5 Sept. 19 10.5-11 11 26 8.5 8.5 Aug. 16 3.5^1 4 21 11 11 Dec. 24 8 8 18 4 4 Oct. 8 11-12 12 Nov. 15 4-4.75 4.75 10 12 12 1985—May 20 7.5-8 7.5 17 4.75 4.75 24 7.5 7.5 1980—Feb. 15 12-13 13 1995—Feb. 1 4.75-5.25 5.25 19 13 13 1986—Mar. 7 7-7.5 7 9 5.25 5.25 May 29 12-13 13 10 7 7 30 12 12 Apr. 21 6.5-7 6.5 1996—Jan. 31 5.00-5.25 5.00 June 13 11-12 11 23 6.5 6.5 Feb. 5 5.00 5.00 16 11 11 July 11 6 6 July 28 10-11 10 Aug. 21 5.5-6 5.5 1998—Oct. 15 4.75-5.00 4.75 29 10 10 22 5.5 5.5 16 4.75 4.75 Sept. 26 11 11 Nov. 17 4.50-4.75 4.50 Nov. 17 12 12 1987—Sept. 4 5.5-6 6 19 4.50 4.50 Dec. 5 12-13 13 11 6 6 8 13 13 1999—Aug. 24 4.50-4.75 4.75 1981—May 5 13-14 14 1988—Aug. 9 6-6.5 6.5 26 4.75 4.75 8 14 14 11 6.5 6.5 Nov. 16 4.75-5.00 4.75 Nov. 2 13-14 13 18 5.00 5.00 6 13 13 1989—Feb. 24 6.5-7 7 Dec. 4 12 12 27 7 7 In effect Jan. 14, 2000 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 NonfinancialS tatistics • February 2000 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit Net transaction accounts2 1 $0 million-$44.3 million3 . 12/30/99 2 More than $44.3 million4 . 12/30/99 3 Nonpersonal time deposits^ 12/27/90 4 Eurocurrency liabilities6. . . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve Banks succeeding calendar year by 80 percent of the percentage increase in the total reservable or vault cash. Nonmember institutions may maintain reserve balances with a Federal liabilities of all depository institutions, measured on an annual basis as of June 30. No Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For corresponding adjustment is made in the event of a decrease. The exemption applies only to previous reserve requirements, see earlier editions of the Annual Report or the Federal accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions maintenance period beginning 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 instalments, payment orders of with- Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that drawal, or telephone or preauthorized transfers for the purpose of making payments to third report quarterly. persons or others. However, accounts subject to the rules that permit no more than six 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits preauthorized, automatic, or other transfers per month (of which no more than three may be with an original maturity of less than 1 Vi years was reduced from 3 percent to 1 l/l percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1 l/l years was reduced from 3 against which the 3 percent reserve requirement applies be modified annually by 80 percent of percent to zero on Jan. 17, 1991. the percentage change in transaction accounts held by all depository institutions, determined The reserve requirement on nonpersonal time deposits with an original maturity of l'/2 as of June 30 of each year. Effective with the reserve maintenance period beginning 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 11/2 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 aanndd mmaattuurriittyy 11999966 11999977 11999988 Apr. May June July Aug. Sept. Oct. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 9,901 9,147 3,550 0 0 0 00 00 00 00 ? Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 426,928 436,257 450,835 48,142 37,107 35,045 42,037 37,052 42,643 35,844 4 For new bills 426,928 435,907 450,835 48,142 37,107 35,045 42,037 37,052 42,643 35,844 5 Redemptions 0 0 2,000 0 0 0 0 0 0 0 Others within one year 6 Gross purchases 524 5,549 6,297 1,677 1,421 880 951 429 996600 0 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 30,512 41,716 46,062 3,768 3,768 2,740 3,279 7,669 3,468 3,831 9 Exchanges -41,394 -27,499 -49,434 -3,370 -4,607 -5,540 -368 -10,798 -2,125 -368 10 Redemptions 2,015 1,996 2,676 726 0 0 41 0 0 170 One to five years 11 Gross purchases 3,898 20,080 12,901 3,362 4,442 948 0 1,272 00 00 1? Gross sales 0 0 0 0 0 0 0 0 0 0 N Maturity shifts -25,022 -37,987 -37,777 -3,768 -3,768 -2,740 -3,279 -4,751 -3,468 -3,831 14 Exchanges 31,459 20,274 37,154 3,020 2,562 5,540 0 8,433 2,125 0 Five to ten years 15 Gross purchases 1,116 3,449 2,294 945 1,584 65 0 447 00 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 -2,918 0 0 18 Exchanges 6,666 5,215 7,439 0 2,045 0 373 1,290 0 0 More than ten years 19 Gross purchases 1,655 5,897 4,884 262 2,890 0 0 1,075 00 00 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts —20 -1,775 -2,377 0 0 0 0 0 0 0 22 Exchanges 3,270 2,360 4,842 350 0 0 0 1,075 0 374 All maturities 23 Gross purchases 17,094 44,122 29,926 6,246 10,337 1,893 951 3,223 960 0 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 2,015 1,996 4,676 726 0 0 41 0 0 170 Matched transactions 26 Gross purchases 3,092,399 3,577,954 4,395,430 366,838 356,960 380,872 347,067 374,032 348,014 332,708 27 Gross sales 3,094,769 3,580,274 4,399,330 364,476 358,362 380,464 346,747 373,159 350,151 330,856 Repurchase agreements 28 Gross purchases 457,568 810,485 512,671 45,067 27,605 17,710 2277,,770077 2233,,009977 2299,,336699 110000 29 Gross sales 450,359 809,268 514,186 48,867 30,531 14,614 33,612 23,717 24,337 7,707 30 Net change in U.S. Treasury securities 19,919 41,022 19,835 4,082 6,008 5,397 -4,675 3,476 3,855 -5,924 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 00 00 00 00 3? Gross sales 0 0 25 0 0 0 0 0 0 0 33 Redemptions 409 1,540 322 0 0 52 10 11 0 50 Repurchase agreements 34 Gross purchases 75,354 160,409 284,316 20,623 38,167 32,786 46,941 6611,,996688 5533,,222244 99,,663366 35 Gross sales 74,842 159,369 276,266 22,937 36,962 32,104 48,840 56,053 47,963 24,092 36 Net change in federal agency obligations 103 -500 7,703 -2,314 1,205 630 -1,909 5,904 5,261 -14,506 Reverse repurchase agreements 37 Gross purchases 0 0 0 0 0 00 00 00 00 00 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 0 0 0 00 00 00 00 00 00 6688,,006611 40 Gross sales 0 0 0 0 0 0 0 0 0 45,501 41 Net change in triparty obligations 0 0 0 0 0 0 0 0 0 22,560 42 Total net change in System Open Market Account. . . 20,021 40,522 27,538 1,768 7,213 6,028 -6,584 9,380 9,116 2,130 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 • February 2000 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 1999 1999 Oct. 27 Nov. 3 Nov. 10 Nov. 17 Nov. 24 Sept. 30 Oct. 31 Nov. 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,050 11,049 11,049 11,049 11,049 11,047 11,049 11,049 2 Special drawing rights certificate account 7.200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 3 317 305 289 272 261 298 331 237 Loans 4 To depository institutions 211 824 92 2,184 372 480 173 78 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 20,065 26,580 27,820 35,320 41,455 0 22,560 49,440 Federal agency obligations3 8 Bought outright 188 188 181 181 181 238 188 181 9 Held under repurchase agreements 0 0 0 0 0 14,456 0 0 10 Total U.S. Treasury securities3 492,051 491,529 491,928 493,096 494,529 496,644 490,738 492,910 11 Bought outright4 492,051 491,529 491,928 493,096 494,529 489,037 490,738 492,910 17 Bills 200,350 199,823 200,217 200,414 199,902 197,183 199,035 198,278 13 Notes 211,272 211,275 211,279 212,248 213,266 211,801 211,273 213,270 14 Bonds 80,429 80,430 80,432 80,434 81,361 80,053 80,430 81,362 15 Held under repurchase agreements 0 0 0 0 0 7,607 0 0 16 Total loans and securities 512,515 519,120 520,021 530,782 536,538 511,817 513,659 542,609 17 Items in process of collection 6,656 8,434 6,984 8,857 8,204 5,649 4,726 9,245 18 Bank premises 1,341 1,346 1,347 1,347 1,348 1,336 1,344 1,353 Other assets 19 Denominated in foreign currencies5 16,120 16,254 16,258 16,262 16,266 16,105 16,251 16,292 20 All other6 17,464 17,264 17,661 14,861 15,518 16,864 17,678 15,297 21 Total assets 572,664 580,970 580,809 590,629 596,384 570,317 572,239 603,282 LIABILITIES 22 Federal Reserve notes 528,449 533,724 540,025 543,930 551,338 517,035 528,509 555,595 23 Reverse repurchase agreements—triparty2 0 0 0 0 0 0 0 0 24 Total deposits 19,533 21,511 15,551 20,536 19,673 28,759 20,420 20,517 25 Depository institutions 14,775 15,480 10,277 14,889 14,723 21,684 15,502 14,771 26 U.S. Treasury—General account 4,363 5,610 4,870 5,228 4,525 6,641 4,527 5,025 27 Foreign—Official accounts 172 162 161 171 171 243 189 501 28 Other 223 258 242 247 253 191 202 221 29 Deferred credit items 6,730 7,696 7,291 8,022 7,178 5,418 4,909 8,552 30 Other liabilities and accrued dividends7 4,444 4,360 4,343 4,518 4,583 5,323 4,455 4,600 31 Total liabilities 559,156 567,291 567,209 577,006 582,771 556,535 558,293 589,265 CAPITAL ACCOUNTS 32 Capital paid in 6,354 6,361 6,372 6,378 6,374 6,330 6,355 6,372 33 Surplus 5,952 5,952 5,952 5,952 5,952 5,952 5,952 5,952 34 Other capital accounts 1,201 1,366 1,276 1,294 1,287 1,499 1,639 1,694 35 Total liabilities and capital accounts 572,664 580,970 580,809 590,629 596,384 570,317 572,239 603,282 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) 827,758 826,931 826,244 825,430 825,190 827,075 827,249 825,379 38 LESS: Held by Federal Reserve Banks 299,309 293,208 286,220 281,501 273,852 310,040 298,740 269,785 39 Federal Reserve notes, net 528,449 533,724 540,025 543,930 551,338 517,035 528,509 555,595 Collateral held against notes, net 40 Gold certificate account 11,050 11,049 11,049 11,049 11,049 11,047 11,049 11,049 41 Special drawing rights certificate account 7,200 7,200 7,200 7,200 7,200 7,200 7,200 7,200 42 Other eligible assets 0 0 1,847 0 0 0 0 0 43 U.S. Treasury and agency securities 510,199 515,475 519,929 525,681 533,089 498,788 510,261 537,346 44 Total collateral 528,449 533,724 540,025 543,930 551,338 517,035 528,509 555,595 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 Oct. 27 Nov. 3 Nov. 10 Nov. 17 Nov. 24 Sept. 30 Oct. 31 Nov. 30 1 Total loans 211 824 92 2,184 372 480 173 78 2 Within fifteen days1 181 766 43 2,177 359 330 106 46 3. Sixteen days to ninety days 29 58 47 5 12 150 66 31 4 Total U.S. Treasury securities2 492,051 491,529 491,928 493,096 494,529 496,644 490,738 492,910 5 Within fifteen days' 10,377 17,543 18,076 11,795 16,011 10,704 7,085 8,277 6 Sixteen days to ninety days 103,172 96,798 102,309 104,149 99,625 96,836 105,645 102,802 7 Ninety-one days to one year 141,937 141,595 135,945 140,438 140,233 152,924 141,442 143,889 8 One year to five years 121,200 120,225 120,226 122,120 123,135 121,199 121,201 122,413 9 Five years to ten years 50,211 50,213 50,216 50,513 50,517 50,204 50,212 50,520 10 More than ten years 65,153 65,154 65,156 64,082 65,009 64,777 65,153 65,010 11 Total federal agency obligations 188 188 181 181 181 14,694 188 181 12 Within fifteen days' 7 7 0 0 0 14,496 7 0 13 Sixteen days to ninety days 6 6 6 31 31 17 6 31 14 Ninety-one days to one year 45 45 45 20 20 51 45 20 15 One year to five years 10 10 10 10 10 10 10 10 16 Five years to ten years 120 120 120 120 120 120 120 120 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 • February 2000 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1999 1995 1996 1997 1998 IItteemm Dec. Dec. Dec. Dec. Apr. May June July Aug. Sept. Oct. Nov. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 56.45 50.16 46.86 44.90 43.98 44.36 42.87 41.98 42.07 42.11 40.94r 41.22 2 Nonborrowed reserves4 56.20 50.01 46.54 44.79 43.81 44.23 42.72 41.67 41.72 41.77 40.66 40.98 3 Nonborrowed reserves plus extended credit5 56.20 50.01 46.54 44.79 43.81 44.23 42.72 41.67 41.72 41.77 40.66 40.98 4 Required reserves 55.16 48.75 45.18 43.32 42.82 43.11 41.61 40.90 40.94 40.92 39.79 39.89 5 Monetary base6 434.10 451.37 478.88 512.32 528.74 534.86 537.63 541.20 544.42 549.56 557.16r 569.35 Not seasonally adjusted 6 Total reserves7 58.02 51.45 48.01 45.12 43.67 44.91 42.43 41.85 41.92 41.85 40.77 41.04 7 Nonborrowed reserves 57.76 51.30 47.69 45.00 43.50 44.78 42.29 41.54 41.58 41.51 40.49 40.80 8 Nonborrowed reserves plus extended credit5 57.76 51.30 47.69 45.00 43.50 44.78 42.29 41.54 41.58 41.51 40.49 40.80 9 Required reserves8 56.73 50.04 46.33 43.54 42.51 43.65 41.17 40.77 40.79 40.65 39.62 39.70 10 Monetary base9 439.03 456.63 484.98 518.28 526.77 533.12 535.88 540.98 543.87 548.13 555.51r 571.82 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves11 57.90 51.17 47.92 45.02 43.65 44.88 42.39 41.80 41.87 41.79 40.70 40.97 12 Nonborrowed reserves 57.64 51.02 47.60 44.90 43.48 44.75 42.25 41.49 41.53 41.45 40.42 40.73 13 Nonborrowed reserves plus extended credit5 57.64 51.02 47.60 44.90 43.48 44.75 42.25 41.49 41.53 41.45 40.42 40.73 14 Required reserves 56.61 49.76 46.24 43.44 42.49 43.62 41.13 40.73 40.74 40.59 39.55 39.63 15 Monetary base12 444.45 463.40 491.79 525.06 533.49 539.98 542.82 548.07 550.86 555.19 562.64r 578.94 16 Excess reserves'3 1.29 1.42 1.69 1.58 1.16 1.26 1.26 1.08 1.13 1.20 1.15r 1.33 17 Borrowings from the Federal Reserve .26 .16 .32 .12 .17 .13 .15 .31 .34 .34 .28 .24 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 1995 1996 1997 1998 IItteemm Dec. Dec. Dec. Dec. Aug.' Sept.' Oct.' Nov. Seasonally adjusted Measures2 1 Ml l,126.9r l,081.6r l,075.2r 1,093.7' 1,102.9 1,094.0 1,099.1 1,108.6 2 M2 3,649.3r 3,824.2r 4,046.7' 4,401.4' 4,567.2 4,586.5 4,606.4 4,627.7 3 M3 4,618.6r 4,955.8r 5,403.4 5,995.7' 6,216.5 6,247.5 6,297.0 6,385.8 4 Debt 13,716.6r 14,463.6r 15,227.9' 16,250.4' 16,971.3 17,071.1 17,164.4 n.a. Ml components 5 Currency3 372.3 394.1 424.5 459.2 490.9 495.0 499.2 550055..22 6 Travelers checks4 8.5r 8.3r 8.1' 8.2' 9.0 8.7 8.5 8.2 7 Demand deposits5 389.4 403.0 396.5 377.5 363.4 352.9 354.6 357.5 8 Other checkable deposits6 356.7 276.2 246.2 248.8 239.6 237.4 236.8 237.7 Nontransaction components 9 In M27 2,522.4 2,742.6 2,971.5 3,307.6 3,464.3 3,492.5 3,507.3 3,519.1 10 In M3 only8 969.3r 1,131.6r 1,356.7' 1,594.3' 1,649.3 1,661.0 1,690.6 1,758.2 Commercial banks 11 Savings deposits, including MMDAs 775.3 905.2 1,022.9 1,189.8 1,269.2 1,284.4 1,288.9 1,287.5 12 Small time deposits9 575.0 593.7 626.1 626.0 615.5 619.7 623.4 628.5 13 Large time deposits10' 11 346.5r 414.7r 489.9' 540.4' 532.0 541.0 565.4 596.2 Thrift institutions 14 Savings deposits, including MMDAs 359.8 367.1 377.3 415.2 456.6 458.3 457.0 454.6 15 Small time deposits9 356.7 353.8 343.2 325.9 313.6 314.7 316.1 318.5 16 Large time deposits10 74.5 78.4 85.9 89.1 89.2 89.9 89.3 90.1 Money market mutual funds 17 Retail 455.5 522.8 602.0 750.7 809.5 815.4 821.9 829.9 18 Institution-only 255.9 313.3 379.9 516.2 556.4 559.3 571.0 588.8 Repurchase agreements and Eurodollars 19 Repurchase agreements12 198.7 211.3 251.7 297.8 310.7 310.4 307.4 317.4 20 Eurodollars12 93.7 113.9 149.3 150.7 161.1 160.3 157.4 165.7 Debt components 21 Federal debt 3,639.1 3,781.3 3,800.3 3,750.8 3,711.0 3,698.1 3,680.1 n.a. 22 Nonfederal debt 10,077.5r 10,682.3r 11,427.6' 12,499.6' 13,260.3 13,373.0 13,484.3 n.a. Not seasonally adjusted Measures2 23 Ml l,152.6r l,105.1r 1,097.8' 1,115.7' 1,098.1 1,088.6 1,096.4 1,113.0 24 M2 3,671.9r 3,844.0r 4,064.9' 4,418.2' 4,561.6 4,572.2 4,590.9 4,626.6 25 M3 4,638.2r 4,972.7r 5,419.6 6,011.8' 6,199.5 6,219.3 6,280.1 6,390.8 26 Debt 13,716.2r 14,460.3' 15,224.9' 16,247.2' 16,910.6 17,016.8 17,107.9 n.a. Ml components 27 Currency3 376.2 397.9 428.9 464.2 490.2 493.4 499.0 506.4 28 Travelers checks4 8.8r 8.6r 8.3' 8.4r 8.6 8.5 8.4 8.3 29 Demand deposits5 407.2 419.9 412.3 392.4 362.0 351.0 354.1 361.2 30 Other checkable deposits6 360.5 278.8 248.3 250.7 237.3 235.7 234.9 237.1 Nontransaction components 31 In M27 2,519.3 2,738.9 2,967.2 3,302.5 3,463.5 3,483.6 3,494.6 3,513.6 32 In M3 only8 966.3r l,128.7r 1,354.7' 1,593.6' 1,638.0 1,647.1 1,689.1 1,764.2 Commercial banks 33 Savings deposits, including MMDAs 774.1 903.3 1,020.4 1,186.8 1,268.4 1,277.5 1,279.5 1,283.4 34 Small time deposits9 573.8 592.7 625.3 625.4 615.1 619.3 624.2 628.9 35 Large time deposits10' 11 345.7r 413.2r 487.3' 536.8' 532.2 541.5 568.4 598.1 Thrift institutions 36 Savings deposits, including MMDAs 359.2 366.3 376.4 414.1 456.3 455.8 453.6 453.2 37 Small time deposits9 355.9 353.2 342.8 325.6 313.4 314.5 316.5 318.7 38 Large time deposits10 74.3 78.1 85.4 88.5 89.2 90.0 89.8 90.4 Money market mutual funds 39 Retail 456.1 523.2 602.3 750.6 810.4 816.4 820.7 829.4 40 Institution-only 257.7 316.0 384.5 523.3 548.0 547.5 566.7 591.0 Repurchase agreements and Eurodollars 41 Repurchase agreements12 193.8 205.7 245.1 290.5 308.9 309.1 306.0 318.3 42 Eurodollars12 94.9 115.7 152.3 154.5 159.7 159.1 158.2 166.4 Debt components 43 Federal debt 3,645.9 3,787.9 3,805.8 3,754.9 3,665.8 3,655.8 3,635.4 n.a. 44 Nonfederal debt 10,070.3r 10,672.-4r 11,419.2' 12,492.3' 13,244.8 13,361.0 13,472.5 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • February 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 19991 1999 Nov. May June July Aug. Sept. Oct. Nov. Nov. 3 Nov. 10 Nov. 17 Nov. 24 Seasonally adjusted Assets 1 Bank credit 4,529.6r 4,516.8 4,553.1 4,547.6 4,582.5 4,607.0 4,626.3 4,696.6 4,639.2 4,668.5 4,682.0 4,720.9 2 Securities in bank credit 1,222.0' 1,192.7 1,211.2 1,226.4 1,242.4 1,246.3 1,246.9 1,245.3 1,230.8 1,234.7 1,236.6 1,258.9 3 U.S. government securities 790.0 799.9 812.8 814.0 820.0 817.4 809.9 796.6 796.5 794.0 792.8 801.9 4 Other securities 432.0r 392.8 398.3 412.4 422.4 428.9 437.0 448.7 434.3 440.8 443.8 457.0 5 Loans and leases in bank credit2 . . . 3,307.6r 3,324.1 3,341.9 3,321.2 3,340.2 3,360.6 3,379.4 3,451.4 3,408.4 3,433.8 3,445.4 3,461.9 6 Commercial and industrial 955.0r 957.3 963.3 964.5 972.6 980.4 984.6 1,003.8 995.8 1,001.9 1,003.8 1,004.6 7 Real estate 1,323.7 1,360.4 1,366.0 1,367.4 1,379.8 1,396.8 1,421.4 1,436.0 1,427.2 1,430.4 1,435.5 1,437.1 8 Revolving home equity 102.6 104.3 103.7 97.9 98.5 106.4 115.2 116.7 116.0 116.3 116.7 117.1 9 Other 1,221.1 1,256.2 1,262.4 1,269.5 1,281.3 1,290.4 1,306.1 1,319.3 1,311.2 1,314.1 1,318.8 1,319.9 10 Consumer :.... 496.0 495.8 491.0 481.1 480.1 481.0 481.1 484.9 480.8 481.2 484.6 488.1 11 Security3 150.0 126.8 131.0 122.2 122.4 116.0 107.9 130.8 114.7 129.3 127.4 132.1 12 Other loans and leases 382.9 383.8 390.5 385.9 385.3 386.4 384.5 395.7 389.8 391.0 394.1 400.0 13 Interbank loans 217.8r 227.4 224.4 223.9 214.7 207.5 218.2 213.7 220.1 209.8 209.1 219.7 14 Cash assets4 251.2 259.9 261.0 258.2 253.5 263.7 271.1 277.5 269.0 271.9 267.3 297.9 15 Other assets5 339.9" 344.1 345.5 348.0 344.9 355.2 358.4 365.8 356.1 360.5 364.2 373.1 16 Total assets6 5,280.6r 5,289.4 5,325.4 5,319.4 5337.0 53743 5,414.7 5,494.0 5,424.7 5,4513 5,463.2 5,552.0 Liabilities 17 Deposits 3,322.7 3,374.9 3,377.2 3,392.4 3,385.4 3,395.9 3,435.1 3,480.1 3,456.4 3,458.5 3,460.0 3,503.2 18 Transaction 670.2 649.6 655.7 650.0 636.8 634.9 632.3 624.9 618.9 617.0 613.8 647.3 19 Nontransaction 2,652.5 2,725.2 2,721.5 2,742.4 2,748.7 2,761.0 2,802.8 2,855.2 2,837.5 2,841.5 2,846.2 2,856.0 20 Large time 726.1 723.6 718.8 722.5 720.4 728.6 765.7 803.9 783.0 794.2 802.8 812.2 21 Other 1,926.4 2,001.7 2,002.7 2,019.9 2,028.3 2,032.5 2,037.1 2,051.3 2,054.5 2,047.3 2,043.4 2,043.8 22 Borrowings l,016.6r 994.4 1,017.0 1,018.5 1,025.5 1,044.8 1,042.9 1,059.0 1,044.5 1,041.8 1,047.7 1,078.8 23 From banks in the U.S 321.4r 321.5 335.5 337.2 336.5 340.5 350.0 352.0 357.0 348.1 344.7 361.0 24 From others 695.2r 672.9 681.4 681.3 689.0 704.3 692.9 707.0 687.6 693.7 703.0 717.9 25 Net due to related foreign oflices 214.5 203.9 215.1 212.5 222.4 218.3 219.6 226.0 219.8 224.7 231.8 221.5 26 Other liabilities 303.2 271.1 275.5 274.3 279.7 282.5 286.8 294.0 284.5 289.0 293.9 301.1 27 Total liabilities 4,857.0r 4,844.2 4,884.7 4,897.7 4,913.0 4,941.5 4,984.4 5,059.0 5,005.2 5,014.0 5,033.4 5,104.7 28 Residual (assets less liabilities)7 423.6r 445.2 440.7 421.8 423.9 432.8 430.2 435.0 419.5 437.3 429.7 447.3 Not seasonally adjusted Assets 29 Bank credit 4,543.1/ 4,519.5 4,546.9 4,531.6 4,561.5 4,597.1 4,630.8 4,710.6 4,664.0 4,683.1 4,695.3 4,727.4 30 Securities in bank credit l,228.2r 1,198.2 1,207.9 1,215.2 1,229.5 1,235.2 1,243.4 1,251.6 1,237.9 1,240.5 1,242.1 1,263.6 31 U.S. government securities 792.4 808.1 812.3 806.1 808.2 807.3 m.2 798.7 798.5 796.6 794.0 802.0 32 Other securities 435.8r 390.1 395.6 409.1 421.3 427.9 439.2 452.9 439.4 443.9 448.1 461.6 33 Loans and leases in bank credit2 . . . 3,314.8r 3,321.3 3,339.0 3,316.4 3,332.0 3,361.9 3,387.5 3,459.0 3,426.0 3,442.6 3,453.2 3,463.8 34 Commercial and industrial 954.5r 961.7 963.6 962.1 963.9 976.5 985.6 1,003.9 1,000.4 1,001.9 1,004.3 1,003.3 35 Real estate 1,327.7 1,359.8 1,366.6 1,368.4 1,382.4 1,400.5 1,425.1 1,440.8 1,432.5 1,438.4 1,439.7 1,440.1 36 Revolving home equity 103.4 103.9 103.3 97.7 98.7 107.2 116.1 117.7 117.0 117.4 117.8 118.1 37 Other 1,224.3 1,256.0 1,263.3 1,270.7 1,283.7 1,293.3 1,309.0 1,323.1 1,315.6 1,321.1 1,321.9 1,322.0 38 Consumer 496.4 493.4 488.3 478.7 481.2 483.9 481.8 485.2 481.4 481.2 484.5 488.5 39 Security3 152.5r 126.6 130.4 120.2 118.7 112.7 108.7 132.2 118.3 130.2 128.5 133.4 40 Other loans and leases 383.7 379.8 390.1 386.9 385.8 388.3 386.2 396.9 393.4 390.9 396.0 398.5 41 Interbank loans 227.3r 223.2 221.7 217.6 206.9 204.0 214.7 220.4 227.8 215.8 217.8 221.0 42 Cash assets4 257.9 257.6 256.6 250.4 243.1 261.0 271.4 284.7 271.4 272.0 282.1 293.6 43 Other assets5 338.3r 345.6 351.4 350.6 347.7 357.2 355.8 364.3 358.9 360.8 361.3 365.7 44 Total assets6 5308.4r 5,287.1 5317.8 5,292.0 53003 5360.0 5,413.4 5,520.4 5,4625 5,472.1 5,497.0 5,548.1 Liabilities 45 Deposits 3,348.5 3,365.5 3,375.2 3,376.1 3,371.5 3,394.5 3,437.6 3,506.5 3,481.4 3,486.8 3,494.3 3,508.1 46 Transaction 680.5 640.6 650.8 639.3 620.4 629.0 624.1 634.6 624.7 618.1 630.9 643.3 47 Nontransaction 2,668.0 2,724.9 2,724.4 2,736.8 2,751.1 2,765.5 2,813.5 2,871.9 2,856.7 2,868.7 2,863.4 2,864.7 48 Large time 731.0 724.8 716.1 715.8 717.7 730.0 767.3 809.0 785.7 799.7 806.2 818.7 49 Other 1,937.0 2,000.1 2,008.3 2,021.0 2,033.3 2,035.4 2,046.2 2,062.8 2,071.0 2,069.0 2,057.2 2,046.0 50 Borrowings 1,022. lr 1,002.5 1,020.5 1,009.2 1,002.0 1,039.7 1,045.7 1,066.0 1,056.0 1,046.4 1,057.1 1,078.9 51 From banks in the U.S 325.1r 322.4 335.4 332.6 329.4 336.8 347.7 356.4 358.9 350.9 350.0 363.6 52 From others (91.Cf 680.1 685.1 676.5 672.7 702.9 698.0 709.6 697.0 695.6 707.1 715.3 53 Net due to related foreign offices .... 216.4 210.1 209.3 204.7 217.4 214.3 221.3 227.7 217.9 225.8 225.7 231.7 54 Other liabilities 303.6 270.8 274.8 273.5 279.6 281.4 285.3 294.1 283.7 289.0 294.1 301.5 55 Total liabilities 4^905r 4,848.8 4,879.8 4,863.4 4,870.5 4,929.9 4,989.9 5,094-3 5,039.0 5,047.9 5,071.1 5,120.2 56 Residual (assets less liabilities)7 417.8r 438.3 438.0 428.6 429.8 430.1 423.5 426.1 423.5 424.2 425.9 427.9 MEMO 57 Revaluation gains on oif-balance-sheet items8 114.2 89.5 89.5 91.8 96.5 98.4 96.5 98.2 89.8 93.5 92.0 104.5 58 Revaluation losses on off-balancesheet items8 113.0 91.0 91.2 92.6 98.8 97.1 95.2 97.6 90.7 93.8 92.4 102.8 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • February 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 1999r 1999 Nov. May June July Aug. Sept. Oct. Nov. Nov. 3 Nov. 10 Nov. 17 Nov. 24 Seasonally adjusted Assets 1 Bank credit 3,918.7r 3,976.9 4,020.6 4,027.0 4,058.8 4,088.4 4,108.6 4,155.4 4,120.4 4,142.2 4,149.5 4,165.1 2 Securities in bank credit 1,006.4 996.6 1,015.1 1,036.7 1,052.5 1,057.2 1,060.3 1,051.5 1,046.9 1,050.2 1,049.4 1,053.0 3 U.S. government securities 708.0 712.6 724.5 728.1 736.0 735.8 730.2 718.3 719.2 718.5 718.0 718.3 4 Other securities 298.4 284.0 290.7 308.6 316.5 321.4 330.1 333.2 327.6 331.7 331.4 334.7 5 Loans and leases in bank credit2 2,912.3r 2,980.2 3,005.5 2,990.2 3,006.4 3,031.2 3,048.3 3,104.0 3,073.5 3,091.9 3,100.2 3,112.1 6 Commercial and industrial 730.8 755.3 766.6 771.9 777.1 783.2 785.6 802.9 797.6 800.0 801.2 803.9 7 Real estate l,301.1r 1,340.6 1,346.8 1,349.0 1,362.2 1,379.2 1,403.6 1,418.6 1,409.6 1,412.9 1,418.0 1,419.8 8 Revolving home equity 102.6 104.3 103.7 97.9 98.5 106.4 115.2 116.7 116.0 116.3 116.7 117.1 9 Other l,198.5r 1,236.4 1,243.2 1,251.0 1,263.7 1,272.8 1,288.3 1,301.9 1,293.5 1,296.6 1,301.3 1,302.7 10 Consumer 496.0 495.8 491.0 481.1 480.1 481.0 481.1 484.9 480.8 481.2 484.6 488.1 11 Security3 84.8 73.4 79.0 69.6 67.4 64.8 56.2 68.7 59.0 71.2 67.9 68.9 12 Other loans and leases 299.5' 315.0 322.0 318.7 319.5 323.0 321.8 328.8 326.6 326.6 328.4 331.4 13 Interbank loans 190.7r 200.8 199.9 196.4 188.9 184.7 195.3 190.9 195.6 189.7 184.9 197.5 14 Cash assets4 216.4 223.9 227.5 223.2 215.5 222.9 227.0 227.1 221.6 222.7 216.9 246.0 15 Other assets5 303.0r 308.2 312.1 315.8 315.9 325.9 326.6 331.0 323.3 327.6 329.7 337.4 16 Total assets6 4,571.1r 4,651.4 4,701.7 4,704.5 4,720.8 4,763.0 4,798.5 4,845.1 4,801.5 4,822.9 4,821.9 4,886.7 Liabilities 17 Deposits 3,007.4 3,064.4 3,071.5 3,081.9 3,076.2 3,084.8 3,104.1 3,122.0 3,115.1 3,109.0 3,102.6 3,138.4 18 Transaction 657.4 639.1 644.8 639.1 625.8 624.0 620.8 613.6 608.2 606.2 601.7 636.0 19 Nontransaction 2,350.0 2,425.3 2,426.6 2,442.8 2,450.5 2,460.8 2,483.2 2,508.3 2,507.0 2,502.9 2,500.8 2,502.4 20 Large time 425.2 425.6 426.2 425.8 426.2 433.5 447.9 458.9 453.2 457.0 459.2 461.1 21 Other 1,924.8 1,999.7 2,000.5 2,017.1 2,024.3 2,027.3 2,035.3 2,049.5 2,053.7 2,045.9 2,041.7 2,041.3 22 Borrowings 801.8r 821.7 836.0 846.1 853.3 875.9 873.3 879.8 868.6 872.2 872.6 894.3 23 From banks in the U.S 289.2r 300.1 309.0 312.7 312.9 315.3 327.2 325.1 329.3 327.8 320.3 330.4 24 From others 512.6r 521.6 527.1 533.5 540.5 560.6 546.0 554.7 539.3 544.5 552.3 563.9 25 Net due to related foreign offices .... 115.3 118.7 145.6 145.2 150.5 152.2 166.2 182.0 169.5 179.3 186.1 182.1 26 Other liabilities 227.2 211.1 214.1 211.0 218.0 218.0 224.0 228.3 221.8 225.9 231.3 232.6 27 Total liabilities 4,151.6r 4,215.9 4,267.2 4,284.2 4,298.0 4,330.9 4,367.5 4,412.1 4,375.1 4,386.5 4,392.5 4,447.4 28 Residual (assets less liabilities)7 419.5' 435.4 434.5 420.3 422.8 432.2 431.0 433.0 426.4 436.4 429.3 439.3 Not seasonally adjusted Assets 29 Bank credit 3,928.8r 3,984.8 4,017.6 4,014.2 4,041.5 4,079.5 4,109.2 4,166.4 4,136.8 4,153.0 4,160.0 4,171.0 30 Securities in bank credit 1,009.4 1,003.8 1,012.7 1,027.2 1,040.8 1,046.7 1,054.1 1,054.8 1,048.5 1,052.1 1,051.9 1,056.2 31 U.S. government securities 710.0 720.0 723.6 720.8 725.2 726.6 724.6 720.0 720.3 719.9 719.2 719.1 32 Other securities 299.4 283.8 289.2 306.4 315.6 320.2 329.5 334.8 328.2 332.2 332.7 337.1 33 Loans and leases in bank credit2 2,919.4r 2,981.0 3,004.8 2,987.0 3,000.7 3,032.8 3,055.1 3,111.6 3,088.3 3,100.9 3,108.2 3,114.8 34 Commercial and industrial 729.1 762.5 768.6 770.3 770.1 779.6 785.6 801.7 799.7 798.9 800.5 801.5 35 Real estate 1,304.9r 1,340.3 1,347.6 1,350.2 1,364.9 1,382.9 1,407.2 1,423.2 1,414.7 1,420.8 1,422.1 1,422.7 36 Revolving home equity 103.4 103.9 103.3 97.7 98.7 107.2 116.1 117.7 117.0 117.4 117.8 118.1 37 Other 1,201.5 1,236.4 1,244.4 1,252.4 1,266.2 1,275.7 1,291.1 1,305.5 1,297.7 1,303.4 1,304.3 1,304.6 38 Consumer 496.4 493.4 488.3 478.7 481.2 483.9 481.8 485.2 481.4 481.2 484.5 488.5 39 Security3 87.8 73.5 78.2 68.0 63.7 61.3 57.3 70.9 62.7 73.0 70.2 71.0 40 Other loans and leases 301.2r 311.4 322.1 319.9 320.8 325.0 323.2 330.6 329.9 327.0 330.9 331.1 41 Interbank loans 200.2r 196.6 197.2 190.1 181.2 181.1 191.8 197.6 203.3 195.7 193.6 198.8 42 Cash assets4 222.5 222.0 222.2 215.4 205.4 220.4 226.7 233.6 223.1 222.4 230.9 241.6 43 Other assets5 301.2r 310.5 319.0 319.3 318.1 327.6 324.1 329.3 326.1 327.8 327.0 329.7 44 Total assets6 4,595.0r 4,655.4 4,697.4 4,681.1 4,687.6 4,749.5 4,792.8 4,867.5 4,830.0 4,839.6 4,852.3 4,881.9 Liabilities 45 Deposits 3,033.6 3,052.7 3,068.8 3,068.0 3,064.9 3,083.9 3,106.5 3,148.9 3,140.7 3,137.3 3,138.8 3,143.7 46 Transaction 667.8 630.3 640.1 628.4 609.5 617.7 612.6 623.4 613.8 607.5 618.8 632.4 47 Nontransaction 2,365.8 2,422.4 2,428.6 2,439.6 2,455.4 2,466.2 2,493.9 2,525.5 2,526.9 2,529.8 2,520.0 2,511.3 48 Large time 430.7 424.5 422.6 420.9 424.3 433.1 450.0 464.9 458.2 463.0 465.0 467.5 49 Other 1,935.1 1,997.9 2,006.0 2,018.7 2,031.1 2,033.2 2,044.0 2,060.6 2,068.7 2,066.8 2,054.9 2,043.8 50 Borrowings 807.3r 829.8 839.6 836.8 829.9 870.8 876.0 886.8 880.1 876.8 882.0 894.3 51 From banks in the U.S 292.8r 301.0 308.8 308.1 305.8 311.6 324.9 329.5 331.3 330.6 325.6 333.0 52 From others 514.5r 528.8 530.8 528.7 524.1 559.2 551.1 557.3 548.8 546.3 556.3 561.3 53 Net due to related foreign offices .... 113.7 126.7 141.2 139.9 147.5 149.8 166.1 181.0 166.9 178.4 178.2 187.2 54 Other liabilities 226.6 211.3 213.9 211.1 217.8 217.3 223.1 227.6 221.2 225.4 230.6 231.6 55 Total liabiUties 4,181.2r 4,220.6 4,263.4 4,255.8 4,260.1 4,321.7 4,371.8 4,444.3 4,408.9 4,417.9 4,429.6 4,456.8 56 Residual (assets less liabilities)7 413.8r 434.8 434.0 425.2 427.6 427.8 421.0 423.2 421.1 421.7 422.7 425.0 MEMO 57 Revaluation gains on off-balance-sheet items8 65.6 54.2 54.6 54.4 58.4 60.1 60.9 59.8 54.8 58.3 56.9 61.8 58 Revaluation losses on off-balancesheet items8 68.1 56.1 57.1 56.3 62.5 59.8 60.0 59.8 55.6 58.7 57.5 61.7 59 Mortgage-backed securities9 346.0 335.4 334.0 339.3 343.3 346.0 346.4 347.3 345.9 348.1 347.3 346.7 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities All 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 1998 1999r 1999 Nov. May June July Aug. Sept. Oct. Nov. Nov. 3 Nov. 10 Nov. 17 Nov. 24 Seasonally adjusted Assets 1 Bank credit 2,451.6 2,438.0 2,465.7 2,457.5 2,475.2 2,490.5 2,489.3 2,530.4 2,500.3 2,520.3 2,522.7 2,540.1 7 Securities in bank credit 582.3 548.5 559.4 577.0 590.6 593.6 594.5 590.6 584.6 588.1 587.5 593.7 3 U.S. government securities 386.5 378.0 384.2 384.5 392.1 390.3 383.9 377.4 376.1 376.0 376.3 379.0 4 Trading account 22.3 22.3 25.1 22.7 23.3 20.9 20.0 18.0 19.2 19.2 16.4 18.3 Investment account 364.2 355.7 359.1 361.7 368.8 369.4 363.9 359.4 356.9 356.9 359.9 360.7 6 Other securities 195.9 170.5 175.1 192.6 198.5 203.3 210.6 213.2 208.5 212.0 211.2 214.7 7 Trading account 99.7 71.9 71.1 73.6 77.5 78.1 81.7 82.4 76.9 80.1 80.2 84.5 8 Investment account 96.1 98.6 104.0 119.0 121.0 125.2 128.9 130.8 131.5 131.9 130.9 130.2 9 State and local government . 24.5 24.8 25.3 25.4 25.7 25.7 26.1 27.3 27.2 27.3 27.3 27.3 in Other 71.7 73.8 78.7 93.5 95.3 99.5 102.7 103.5 104.4 104.7 103.6 102.8 11 Loans and leases in bank credit2 . . . 1,869.3 1,889.5 1,906.4 1,880.4 1,884.6 1,896.9 1,894.7 1,939.9 1,915.7 1,932.3 1,935.2 1,946.4 17 Commercial and industrial 540.2 553.5 561.9 564.4 567.9 571.0 567.6 581.9 577.3 579.5 579.8 582.6 H Bankers acceptances 1.3 1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.2 14 Other 538.9 552.5 561.0 563.4 566.8 569.9 566.4 580.8 576.2 578.4 578.7 581.5 15 Real estate 721.3 723.8 723.2 717.9 722.9 734.4 747.0 755.5 750.3 752.2 753.9 756.4 16 Revolving home equity 74.0 75.1 74.2 68.2 68.8 76.7 85.0 86.2 85.7 86.0 86.2 86.5 17 Other 647.3 648.7 649.1 649.7 654.2 657.7 662.1 669.3 664.6 666.1 667.8 669.9 18 Consumer 302.3 297.8 292.8 283.4 281.0 279.1 277.6 281.7 279.1 279.8 281.4 283.6 19 Security3 78.4 68.3 73.9 64.3 62.2 59.5 51.0 62.9 53.2 65.4 62.2 63.1 20 Federal funds sold to and repurchase agreements with broker-dealers 62.1 51.5 55.7 46.9 45.3 42.2 34.2 4455..11 3377..33 4477..44 4444..77 4444..11 71 Other 16.3 16.9 18.2 17.5 16.9 17.3 16.8 17.8 16.0 18.0 17.6 19.1 22 State and local government 11.6 11.4 11.4 11.7 11.9 11.9 12.0 11.8 11.8 11.8 11.8 11.8 23 Agricultural 8.9 8.6 8.6 8.5 8.8 8.8 8.9 8.8 8.9 8.8 8.8 8.8 24 Federal funds sold to and repurchase agreements with others 12.9 10.7 15.6 4.3 7.7 11.0 9.8 12.0 11.0 1111..22 1122..33 1111..99 75 All other loans 89.9 96.0 99.0 104.1 99.1 96.8 94.2 96.3 95.9 95.0 96.0 99.0 76 Lease-financing receivables 103.6 119.3 120.0 121.7 123.1 124.4 126.7 128.9 128.2 128.5 128.8 129.1 27 Interbank loans 124.1 143.6 145.0 139.9 134.7 132.8 146.0 137.5 142.4 136.9 134.1 142.4 28 Federal funds sold to and repurchase agreements with commercial banks 78.0 88.4 87.4 89.8 86.2 83.6 90.8 72.6 84.7 7722..99 6677..66 7766..33 79 Other 46.0 55.2 57.6 50.1 48.5 49.2 55.2 64.9 57.8 64.0 66.5 66.1 30 Cash assets4 148.2 153.2 156.3 150.7 143.3 150.0 154.2 153.2 148.3 150.8 145.4 168.4 31 Other assets5 236.8 234.1 237.4 238.0 235.7 245.8 242.4 247.8 240.1 243.9 248.2 252.5 32 Total assets6 2,922.3 2,930.3 2,965.9 2,947.9 2,950.6 2,980.4 2,993.2 3,030.2 2,992.2 3,0133 3,011.9 3,064.7 Liabilities 33 Deposits 1,696.1 1,697.0 1,697.2 1,695.7 1,682.4 1,688.2 1,689.6 1,696.5 1,692.5 1,690.1 1,683.0 1,706.7 34 Transaction 374.6 355.8 357.6 352.4 337.7 338.5 335.4 330.7 326.4 326.2 322.6 342.9 35 Nontransaction 1,321.5 1.341.2 1,339.6 1,343.3 1,344.7 1,349.7 1,354.2 1,365.8 1,366.1 1,363.9 1,360.4 1,363.8 36 Large time 234.3 226.2 228.2 229.7 227.3 233.0 242.9 249.8 245.5 248.3 250.4 251.3 37 Other 1,087.2 1.115.0 1,111.5 1,113.6 1,117.4 1,116.8 1,111.2 1,116.0 1,120.7 1,115.6 1,110.0 1,112.5 38 Borrowings 627.0 630.2 639.9 639.2 644.7 661.8 658.9 666.5 656.9 657.9 660.0 681.2 39 From banks in the U.S 206.8 213.7 218.7 215.5 217.1 219.1 234.6 234.4 238.5 235.0 230.3 239.8 40 From others 420.1 416.5 421.2 423.7 427.6 442.7 424.3 432.1 418.4 422.8 429.7 441.4 41 Net due to related foreign offices 111.7 113.6 141.5 140.9 147.0 148.8 161.9 177.5 165.3 174.8 181.4 177.5 42 Other liabilities 198.0 180.0 182.0 179.7 184.9 183.9 189.6 194.1 188.2 192.0 197.2 197.9 43 Total liabilities 2,632.8 2,620.8 2,660.6 2,655.5 2,659.0 2,682.7 2,699.9 2,734.7 2,703.0 2,714.8 2,721.5 2,763.2 ' 44 Residual (assets less liabilities)7 289.5 309.4 305.3 292.4 291.6 297.7 293.3 295.6 289.2 298.4 290.4 301.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • February 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 Nov. May June July Aug. Sept. Oct. Nov. Nov. 3 Nov. 10 Nov. 17 Nov. 24 Not seasonally adjusted Assets 45 Bank credit 2,464.5 2,435.7 2,455.6 2,443.4 2,455.7 2,478.3 2,491.1 2,544.4 2,519.0 2,532.7 2,537.3 2,548.5 46 Securities in bank credit 587.6 550.2 555.1 569.2 580.5 585.5 591.5 596.1 589.4 592.0 593.0 598.4 47 U.S. government securities 390.8 380.8 381.4 378.6 383.1 382.9 381.3 381.4 380.4 379.7 380.5 381.5 48 Trading account 24.6 20.8 23.5 20.9 22.2 20.7 20.8 19.9 21.3 20.6 18.7 19.7 49 Investment account 366.2 360.1 357.9 357.7 360.9 362.2 360.5 361.5 359.1 359.0 361.8 361.8 50 Mortgage-backed securities .. 262.5 239.5 235.2 233.9 237.6 240.7 238.5 238.3 238.5 238.2 237.9 237.8 51 Other 103.7 120.5 122.8 123.8 123.3 121.5 122.0 123.1 120.7 120.9 123.9 123.9 52 One year or less 28.0 24.3 25.3 25.2 24.9 24.4 25.2 23.6 24.3 23.5 23.0 23.5 53 One to five years 39.3 55.9 57.7 58.8 59.0 58.2 59.0 59.7 58.5 57.6 60.8 60.3 54 More than five years . . . 36.4 40.4 39.9 39.7 39.5 38.8 37.7 39.8 37.9 39.8 40.1 40.2 55 Other securities 196.8 169.4 173.7 190.6 197.4 202.6 210.1 214.7 209.0 ' 212.3 212.5 216.9 56 Trading account 99.7 71.9 71.1 73.6 77.5 78.1 81.7 82.4 76.9 80.1 80.2 84.5 57 Investment account 97.1 97.5 102.6 117.0 120.0 124.5 128.4 132.3 132.0 132.2 132.3 132.4 58 State and local government . . 24.6 24.9 25.1 25.0 25.4 25.6 26.2 27.4 27.2 27.4 27.4 27.6 59 Other 72.5 72.6 77.5 92.0 94.6 98.9 102.2 104.9 104.8 104.9 104.9 104.9 60 Loans and leases in bank credit2 .. 1,876.9 1,885.5 1,900.5 1,874.2 1,875.2 1,892.9 1,899.6 1,948.3 1,929.7 1,940.7 1,944.3 1,950.1 61 Commercial and industrial 539.8 558.0 562.0 563.0 562.1 568.6 569.0 582.2 580.9 579.8 580.8 581.9 62 Bankers acceptances 1.3 1.0 1.0 1.0 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.2 63 Other 538.5 557.0 561.0 562.0 561.1 567.4 567.9 581.1 579.7 578.7 579.7 580.7 64 Real estate 724.7 721.1 721.2 717.1 723.5 734.7 749.2 759.7 754.2 758.4 757.6 758.9 65 Revolving home equity 74.6 74.8 73.9 68.3 69.1 77.2 85.6 86.9 86.4 86.7 87.0 87.2 66 Other 406.4 392.0 392.7 394.0 398.5 400.0 404.3 410.5 407.0 410.0 408.3 408.8 67 Commercial 243.7 254.3 254.6 254.8 255.9 257.5 259.2 262.2 260.9 261.6 262.3 262.8 68 Consumer 302.0 295.6 290.8 281.6 281.6 280.9 277.6 281.4 279.1 279.5 281.0 283.2 69 Security3 81.5 68.4 73.1 62.7 58.4 56.0 52.1 65.1 56.9 67.2 64.5 65.2 70 Federal funds sold to and repurchase agreements with broker-dealers .... 65.3 51.2 54.1 45.3 41.8 38.8 35.2 47.4 40.7 50.0 47.3 45.7 71 Other 16.2 17.2 19.0 17.4 16.6 17.1 16.8 17.7 16.2 17.2 17.2 19.6 72 State and local government .... 11.7 11.3 11.3 11.6 11.9 12.0 12.0 11.9 11.9 12.0 12.0 12.0 73 Agricultural 9.0 8.6 8.7 8.8 9.0 9.0 9.0 8.9 9.0 8.9 8.9 8.9 74 Federal funds sold to and repurchase agreements with others 12.9 10.7 15.6 4.3 7.7 11.0 9.8 12.0 11.0 11.2 12.3 11.9 75 All other loans 92.8 92.6 97.6 103.9 98.3 97.4 95.2 99.4 99.6 96.4 99.8 100.6 76 Lease-financing receivables .... 102.6 119.2 120.2 121.3 122.5 123.3 125.8 127.6 127.0 127.3 127.4 127.6 77 Interbank loans 125.5 143.7 145.4 137.8 129.5 130.4 141.4 138.3 144.1 135.8 136.4 140.0 78 Federal funds sold to and repurchase agreements with commercial banks 80.8 87.5 86.5 86.2 81.2 81.6 87.0 75.5 88.3 74.0 71.5 76.2 79 Other 44.7 56.3 58.8 51.5 48.3 48.9 54.4 62.9 55.8 61.7 64.9 63.8 80 Cash assets4 152.2 151.7 152.1 144.8 136.4 148.8 154.6 157.4 149.4 149.8 155.6 163.9 81 Other assets5 233.6 236.4 242.7 240.2 237.2 247.0 239.9 244.4 240.2 241.5 243.9 245.5 82 Total assets6 2,937.4 2,928.8 2,957.1 2,927.9 2,920.3 2,965.7 2,988.5 3,045.7 3,014.0 3,021.0 3,034.6 3,0593 Liabilities 83 Deposits 1,710.2 1,682.6 1,691.2 1,684.4 1,672.4 1,684.2 1,688.2 1,710.8 1,705.3 1,701.2 1,704.1 1,706.7 84 Transaction 381.3 349.4 354.0 345.6 328.3 335.1 330.2 336.8 329.5 324.7 334.6 340.4 85 Nontransaction 1,328.8 1,333.3 1,337.2 1,338.8 1,344.1 1,349.1 1,357.9 1,374.0 1,375.8 1,376.5 1,369.5 1,366.4 86 Large time 239.8 225.1 224.6 224.8 225.4 232.5 245.0 255.9 250.5 254.3 256.3 257.7 87 Other 1,089.0 1,108.2 1,112.6 1,113.9 1,118.6 1,116.6 1,113.0 1,118.2 1,125.3 1,122.2 1,113.3 1,108.6 88 Borrowings 630.4 637.9 642.3 630.1 621.2 654.1 658.8 671.2 665.9 662.0 667.0 677.7 89 From banks in the U.S 208.8 214.7 218.3 211.8 210.7 215.0 230.4 237.0 238.7 236.9 233.8 240.1 90 From nonbanks in the U.S 421.6 423.2 424.0 418.3 410.5 439.1 428.4 434.2 427.2 425.1 433.3 437.6 91 Net due to related foreign offices . . . 110.1 121.7 137.1 135.7 144.0 146.4 161.8 176.5 162.7 173.9 173.5 182.6 92 Other liabilities 198.0 180.0 182.0 179.7 184.9 183.9 189.6 194.1 188.2 192.0 197.2 197.9 93 Total liabilities 2,648.7 2,622J 2,652.5 2,629.8 2,622.6 2,668.5 2,698.4 2,752.6 2,722.1 2,729.2 2,741.7 2,764.9 94 Residual (assets less liabilities)7 .... 288.7 306.6 304.6 298.1 297.7 297.2 290.1 293.1 291.9 291.8 292.9 294.4 MEMO 95 Revaluation gains on off-balancesheet items8 65.6 54.2 54.6 54.4 58.4 60.1 60.9 59.8 54.8 58.3 56.9 61.8 96 Revaluation losses on off-balancesheet items8 68.1 56.1 57.1 56.3 62.5 59.8 60.0 59.8 55.6 58.7 57.5 61.7 97 Mortgage-backed securities9 291.0 266.8 264.2 268.9 273.3 275.5 273.6 275.8 273.7 276.0 275.7 275.7 98 Pass-through securities 200.2 177.9 176.5 182.6 186.2 184.8 183.8 186.3 183.4 185.9 186.4 186.7 99 CMOs, REMICs, and other mortgage-backed securities .. 90.8 88.9 87.6 86.4 87.1 90.7 89.8 89.4 90.3 90.1 89.3 89.1 100 Net unrealized gains (losses) on available-for-sale securities10 . . . 3.1 .6 .0 -3.3 -4.2 -4.9 -5.6 -5.8 -5.7 -5.7 -5.8 -5.8 101 Offshore credit to U.S. residents" . . . 39.1 37.7 37.0 36.3 32.2 27.8 26.7 24.8 24.9 24.3 24.7 25.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 Nov. May June July Aug. Sept. Oct. Nov. Nov. 3 Nov. 10 Nov. 17 Nov. 24 Seasonally adjusted Assets 1 Bank credit 1,467.1 1,538.9 1,554.9 1,569.5 1,583.7 1,597.9 1,619.4 1,625.0 1,620.1 1,621.8 1,626.8 1,625.0 2 Securities in bank credit 424.1 448.2 455.7 459.7 461.9 463.6 465.8 460.9 462.3 462.1 461.9 459.3 3 U.S. government securities 321.6 334.6 340.2 343.6 343.9 345.5 346.2 340.9 343.1 342.5 341.6 339.3 4 Other securities 102.5 113.5 115.5 116.0 118.0 118.1 119.5 120.0 119.2 119.7 120.2 120.0 5 Loans and leases in bank credit2 1,043.0 1,090.7 1,099.1 1,109.8 1,121.8 1,134.3 1,153.6 1,164.1 1,157.8 1,159.7 1,165.0 1,165.7 6 Commercial and industrial 190.6 201.9 204.7 207.4 209.2 212.2 218.0 221.0 220.3 220.5 221.4 221.2 7 Real estate 579.8 616.8 623.6 631.0 639.3 644.9 656.5 663.1 659.3 660.7 664.1 663.4 8 Revolving home equity 28.6 29.2 29.5 29.7 29.8 29.7 30.3 30.5 30.4 30.3 30.5 30.6 9 Other 551.2 587.6 594.1 601.3 609.5 615.1 626.3 632.5 628.9 630.4 633.6 632.8 10 Consumer 193.7 198.0 198.3 197.7 199.0 201.9 203.6 203.2 201.6 201.4 203.2 204.5 11 Security3 6.3 5.1 5.1 5.3 5.2 5.3 5.3 5.8 5.8 5.8 5.7 5.8 12 Other loans and leases 72.5 68.9 67.4 68.4 69.0 70.1 70.2 71.0 70.8 71.3 70.6 70.7 13 Interbank loans 66.7 57.2 54.9 56.5 54.2 51.9 49.3 53.4 53.2 52.8 50.8 55.1 14 Cash assets4 68.2 70.8 71.2 72.5 72.2 73.0 72.8 73.9 73.3 71.9 71.5 77.7 15 Other assets5 66.2 74.1 74.7 77.8 80.2 80.2 84.2 83.2 83.3 83.6 81.4 84.9 16 Total assets6 1,648.8 1,721.1 1,735.8 1,756.6 1,770.2 1,782.7 1,805.2 1,814.9 1,8093 1,809.7 1,809.9 1,821.9 Liabilities 17 Deposits 1,311.3 1,367.4 1,374.2 1,386.2 1,393.9 1,396.6 1,414.5 1,425.4 1,422.6 1,418.9 1,419.6 1,431.7 18 Transaction 282.8 283.3 287.2 286.7 288.1 285.5 285.4 282.9 281.7 280.0 279.2 293.2 19 Nontransaction 1,028.5 1,084.1 1,087.0 1,099.5 1,105.8 1,111.1 1,129.1 1,142.5 1,140.8 1,138.9 1,140.4 1,138.6 20 Large time 190.9 199.4 198.0 196.0 198.9 200.6 205.0 209.0 207.8 208.7 208.8 209.8 21 Other 837.6 884.7 889.0 903.5 906.9 910.5 924.1 933.5 933.1 930.2 931.6 928.8 22 Borrowings 174.8 191.5 196.2 207.0 208.6 214.0 214.3 213.3 211.7 214.4 212.6 213.1 23 From banks in the U.S 82.3 86.5 90.3 97.2 95.8 96.1 92.6 90.7 90.8 92.7 90.1 90.6 24 From others 92.4 105.1 105.9 109.8 112.8 117.9 121.7 122.6 120.9 121.6 122.6 122.5 25 Net due to related foreign offices .... 3.6 5.0 4.1 4.3 3.5 3.4 4.3 4.5 4.2 4.5 4.7 4.6 26 Other liabilities 29.2 31.1 32.1 31.3 33.1 34.2 34.4 34.2 33.7 33.9 34.1 34.7 27 Total liabilities 1,518.8 1,595.1 1,606.6 1,628.7 1,639.0 1,648.2 1,667.6 1,677.5 1,672.1 1,671.7 1,671.0 1,684.2 28 Residual (assets less liabilities)7 130.0 126.0 129.2 127.9 131.2 134.5 137.7 137.5 137.2 138.0 138.9 137.8 Not seasonally adjusted Assets 29 Bank credit 1,464.3 1,549.0 1,562.0 1,570.8 1,585.8 1,601.2 1,618.1 1,622.0 1,617.8 1,620.3 1,622.7 1,622.5 30 Securities in bank credit 421.8 453.5 457.6 458.0 460.3 461.3 462.7 458.7 459.1 460.1 458.9 457.8 31 U.S. government securities 319.3 339.2 342.1 342.1 342.1 343.7 343.3 338.6 339.9 340.2 338.7 337.6 32 Other securities 102.5 114.3 115.5 115.8 118.2 117.6 119.4 120.0 119.2 119.9 120.2 120.2 33 Loans and leases in bank credit2 1,042.5 1,095.5 1,104.4 1,112.8 1,125.5 1,139.9 1,155.5 1,163.3 1,158.6 1,160.2 1,163.8 1,164.7 34 Commercial and industrial 189.3 204.5 206.6 207.3 208.0 211.1 216.5 219.5 218.9 219.1 219.6 219.6 35 Real estate 580.2 619.2 626.4 633.1 641.4 648.2 658.0 663.5 660.4 662.4 664.5 663.8 36 Revolving home equity 28.8 29.1 29.4 29.5 29.6 30.0 30.5 30.8 30.6 30.7 30.8 30.9 37 Other 551.4 590.1 597.1 603.6 611.8 618.2 627.5 632.7 629.8 631.7 633.7 632.9 38 Consumer 194.5 197.7 197.5 197.1 199.6 203.0 204.2 203.7 202.3 201.7 203.6 205.3 39 Security3 6.3 5.1 5.1 5.3 5.2 5.3 5.3 5.8 5.8 5.8 5.7 5.8 40 Other loans and leases 72.2 68.9 68.7 70.0 71.3 72.3 71.4 70.8 71.3 71.2 70.5 70.2 41 Interbank loans 74.7 52.9 51.8 52.4 51.7 50.7 50.4 59.3 59.2 60.0 57.2 58.8 42 Cash assets4 70.3 70.3 70.1 70.6 69.0 71.7 72.0 76.2 73.7 72.5 75.2 77.7 43 Other assets5 67.6 74.1 76.3 79.0 80.9 80.5 84.2 84.9 85.9 86.3 83.1 84.2 44 Total assets6 1,657.6 1,726.5 1,7403 1,753.2 1,7673 1,783.8 1,8043 1,821.8 1,816.0 1^185 1,817.7 1,822.6 Liabilities 45 Deposits 1,323.5 1,370.1 1,377.6 1,383.6 1,392.5 1,399.6 1,418.4 1,438.0 1,435.4 1,436.0 1,434.7 1,437.0 46 Transaction 286.4 280.9 286.2 282.8 281.2 282.5 282.4 286.6 284.2 282.8 284.3 292.0 47 Nontransaction 1,037.0 1,089.1 1,091.4 1,100.8 1,111.3 1,117.1 1,136.0 1,151.5 1,151.1 1,153.2 1,150.5 1,144.9 48 Large time 190.9 199.4 198.0 196.0 198.9 200.6 205.0 209.0 207.8 208.7 208.8 209.8 49 Other 846.1 889.7 893.4 904.8 912.4 916.5 931.0 942.4 943.4 944.6 941.7 935.1 50 Borrowings 176.9 191.9 197.3 206.8 208.6 216.7 217.2 215.6 214.2 214.8 214.9 216.6 51 From banks in the U.S 84.0 86.3 90.5 96.3 95.1 96.6 94.5 92.5 92.6 93.6 91.9 92.9 52 From others 92.8 105.6 106.8 110.4 113.6 120.1 122.7 123.1 121.6 121.2 123.1 123.7 53 Net due to related foreign offices .... 3.6 5.0 4.1 4.3 3.5 3.4 4.3 4.5 4.2 4.5 4.7 4.6 54 Other liabilities 28.6 31.3 31.9 31.3 32.8 33.5 33.5 33.5 33.1 33.3 33.5 33.7 55 Total liabilities 1,532.5 1,5983 1,610.9 1,626.0 1,637.5 1,653.2 1,673.4 1,691.7 1,686.8 1,688.7 1,687.8 1,692.0 56 Residual (assets less liabilities)7 125.1 128.2 129.4 127.2 129.9 130.6 130.9 130.1 129.2 129.8 129.9 130.6 MEMO 57 Mortgage-backed securities9 55.0 68.6 69.8 70.3 70.0 70.5 72.8 71.5 72.2 72.1 71.6 71.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • February 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 1999r 1999 Nov. May June July Aug. Sept. Oct. Nov. Nov. 3 Nov. 10 Nov. 10 Nov. 24 Seasonally adjusted Assets 1 Bank credit 610.9 539.9 532.5 520.6 523.7 518.5 517.7 541.2 518.8 526.4 532.5 555.8 2 Securities in bank credit 215.6 196.0 196.1 189.7 189.9 189.1 186.5 193.8 183.9 184.5 187.2 205.9 3 U.S. government securities 82.0 87.3 88.4 85.9 84.0 81.6 79.7 78.3 77.3 75.5 74.8 83.6 4 Other securities 133.6 108.8 107.7 103.8 105.9 107.5 106.9 115.5 106.7 109.0 112.4 122.3 5 Loans and leases in bank credit2 . . . 395.4 343.9 336.4 330.9 333.8 329.4 331.1 347.4 334.9 341.8 345.3 349.9 6 Commercial and industrial 224.2 201.9 196.7 192.6 195.4 197.2 198.9 200.9 198.2 201.9 202.6 200.7 7 Real estate 22.5 19.8 19.2 18.5 17.6 17.6 17.8 17.4 17.7 17.5 17.5 17.3 8 Security3 65.3 53.3 52.0 52.6 54.9 51.3 51.6 62.2 55.7 58.1 59.5 63.2 9 Other loans and leases 83.3 68.8 68.5 67.2 65.8 63.4 62.8 66.9 63.2 64.3 65.7 68.6 10 Interbank loans 27.1 26.6 24.5 27.4 25.7 22.9 22.9 22.8 24.5 20.1 24.2 22.2 11 Cash assets4 34.8 35.9 33.5 35.0 38.0 40.8 44.1 50.4 47.4 49.2 50.3 51.9 12 Other assets5 36.9 35.9 33.4 32.1 29.0 29.3 31.8 34.8 32.8 33.0 34.5 35.7 13 Total assets6 709.5 638.0 623.7 614.9 616.2 611.2 616.2 648.9 623.2 6283 6413 6653 Liabilities 14 Deposits 315.3 310.4 305.7 310.5 309.2 311.1 331.0 358.1 341.3 349.5 357.5 364.8 15 Transaction 12.8 10.5 10.9 10.9 11.0 10.9 11.5 11.3 10.8 10.8 12.0 11.2 16 Nontransaction 302.5 299.9 294.8 299.6 298.2 300.2 319.6 346.9 330.5 338.6 345.4 353.6 17 Borrowings 214.8 172.7 180.9 172.3 172.1 168.9 169.7 179.2 175.9 169.6 175.1 184.6 18 From banks in the U.S 32.3 21.4 26.6 24.5 23.6 25.3 22.8 26.9 27.7 20.3 24.4 30.6 19 From others 182.6 151.3 154.4 147.8 148.6 143.7 146.9 152.3 148.2 149.3 150.7 154.0 20 Net due to related foreign offices 99.3 85.2 69.4 67.3 72.0 66.1 53.4 44.0 50.3 45.4 45.7 39.3 21 Other liabilities 76.0 59.9 61.4 63.3 61.7 64.5 62.8 65.6 62.6 63.0 62.6 68.6 22 Total liabilities 705.4 6283 6175 613.5 615.0 610.6 616.9 646.9 630.1 627.5 640.9 6573 23 Residual (assets less liabilities)7 4.1 9.8 6.2 1.4 1.2 .6 -.7 2.0 -6.9 .9 .4 8.0 Not seasonally adjusted Assets 24 Bank credit 614.1 534.7 529.4 517.4 520.0 517.7 521.6 544.2 527.1 530.1 535.3 556.4 25 Securities in bank credit 218.8 194.4 195.2 188.1 188.7 188.5 189.2 196.8 189.4 188.4 190.3 207.4 26 U.S. government securities 82.4 88.0 88.8 85.4 83.0 80.7 79.6 78.7 78.2 76.7 74.9 83.0 27 Trading account 14.9 20.0 21.6 19.9 17.3 15.6 14.6 9.0 11.3 9.5 6.9 11.0 28 Investment account 67.5 68.1 67.2 65.5 65.7 65.1 65.0 69.7 66.9 67.2 68.0 72.0 29 Other securities 136.4 106.3 106.4 102.7 105.7 107.8 109.6 118.1 111.2 111.7 115.4 124.4 30 Trading account 84.4 64.5 63.0 60.6 64.8 69.6 71.4 78.7 72.7 72.9 76.6 84.1 31 Investment account 52.0 41.9 43.4 42.1 40.9 38.2 38.2 39.4 38.5 38.8 38.8 40.4 32 Loans and leases in bank credit2 . . . 395.4 340.3 334.2 329.4 331.3 329.2 332.4 347.4 337.7 341.7 345.0 349.0 33 Commercial and industrial 225.4 199.3 195.0 191.8 193.8 196.8 200.0 202.2 200.7 203.0 203.9 201.8 34 Real estate 22.8 19.6 19.0 18.3 17.5 17.6 18.0 17.6 17.9 17.7 17.6 17.4 35 Security3 64.6 53.0 52.2 52.2 55.0 51.4 51.4 61.4 55.6 57.1 58.3 62.4 36 Other loans and leases 82.5 68.5 68.0 67.0 65.0 63.3 63.0 66.3 63.5 63.9 65.1 67.4 37 Interbank loans 27.1 26.6 24.5 27.4 25.7 22.9 22.9 22.8 24.5 20.1 24.2 22.2 38 Cash assets4 35.3 35.6 34.3 34.9 37.7 40.6 44.7 51.1 48.3 49.6 51.2 52.0 39 Other assets5 37.0 35.2 32.4 31.4 29.6 29.7 31.7 35.0 32.8 33.0 34.3 36.0 40 Total assets6 713.4 631.8 620.4 610.9 612.7 610.5 620.6 652.9 632.5 632.5 644.7 6663 Liabilities 41 Deposits 314.9 312.8 306.4 308.1 306.6 310.6 331.1 357.6 340.7 349.5 355.5 364.4 42 Transaction 12.7 10.3 10.7 10.8 10.9 11.4 11.5 11.2 10.9 10.6 12.1 10.9 43 Nontransaction 302.1 302.5 295.7 297.2 295.7 299.2 319.6 346.4 329.8 338.9 343.4 353.5 44 Borrowings 214.8 172.7 180.9 172.3 172.1 168.9 169.7 179.2 175.9 169.6 175.1 184.6 45 From banks in the U.S 32.3 21.4 26.6 24.5 23.6 25.3 22.8 26.9 27.7 20.3 24.4 30.6 46 From others 182.6 151.3 154.4 147.8 148.6 143.7 146.9 152.3 148.2 149.3 150.7 154.0 47 Net due to related foreign offices .... 102.7 83.4 68.1 64.8 69.8 64.5 55.2 46.7 51.0 47.4 47.5 44.5 48 Other liabilities 77.0 59.4 61.0 62.4 61.8 64.1 62.2 66.5 62.5 63.6 63.5 69.9 49 Total liabilities 709.4 628.2 616.4 607.6 610.4 608.2 618.1 650.0 630.0 630.0 641.6 663.4 50 Residual (assets less liabilities)7 4.0 3.5 4.0 3.3 2.2 2.3 2.5 2.9 2.4 2.5 3.2 2.9 MEMO 51 Revaluation gains on off-balance-sheet items8 48.6 35.3 34.9 37.4 38.1 38.3 35.7 38.4 35.0 35.2 35.1 42.8 52 Revaluation losses on off-balancesheet items8 44.9 34.8 34.1 36.2 36.3 37.3 35.2 37.8 35.1 35.1 34.9 41.2 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A22 Domestic Nonfinancial Statistics • February 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 May June July Aug. Sept. Oct. 1 All issuers 595,382 674,904 775,371 966,699 1,163,303 1,230,009 1,221,020 1,242,107 1,257,658 1,274,726 1,321,163 Financial companies1 2 Dealer-placed paper, total' 223,038 275,815 361,147 513,307 614,142 710,857 705,603 712,718 710,320 718,380 751,245 3 Directly placed paper, total3 207,701 210,829 229,662 252,536 322,030 268,129 272,014 277,570 290,228 293,381 296,998 4 Nonfinancial companies4 164,643 188,260 184,563 200,857 227,132 251,023 243,404 251,819 257,110 262,965 272,920 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 1996 1997 1998 1999 1 Total amount of reporting banks' acceptances in existence 25,832 25,774 14,363 10,094 2 Amount of other banks' eligible acceptances held by reporting banks 709 736 523 461 3 Amount of own eligible acceptances held by reporting banks (included in item 1) 7,770 6,862 4,884 4,261 4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries (included in item 1) 9,361 10,467 5,413 3,498 1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United 2. Data on bankers dollar acceptances are gathered from approximately 55 institutions; States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks; includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal agencies of foreign banks, and Edge and agreement corporations. The reporting group is Reserve Act (12 U.S.C. §372). revised every year. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Date of change Rate Period Av r e a r t a e g e Period Av r e a r t a e ge Period Av r e a r t a e g e 1997—Jan. 1 88..2255 11999977 88..4444 1998—Jan 88..5500 1999—Jan 77..7755 Mar. 26 88..5500 11999988 88..3355 Feb 88..5500 Feb 77..7755 1998—Sept. 30 8.25 1999 8.00 Mar. 8.50 Mar. 7.75 Oct. 16 8.00 Apr. 8.50 Apr 7.75 Nov. 18 7.75 1997--Jan 8.25 May 8.50 Mav 7.75 1999—July 1 8.00 Feb 8.25 June 8.50 June 7.75 Aug. 25 8.25 Mar. 8.30 July 8.50 July 8.00 Nov. 17 8.50 Apr. 8.50 Aug 8.50 Aug 8.06 May 8.50 Sept 8.49 Sept 8.25 June 8.50 Ocl 8.12 Oct 8.25 July 8.50 Nov 7.89 Nov 8.37 Aug 8.50 Dec- 7.75 Dec 8.50 Sept 8.50 Oct 8.50 Nov 8.50 Dec 8.50 1. The prime rate is one of several base rates that banks use to price short-term business Report. Data in this table also appear in the Board's H.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 Aug. Sept. Oct. Nov. Oct. 29 Nov. 5 Nov. 12 Nov. 19 Nov. 26 MONEY MARKET INSTRUMENTS 1 Federal funds1'2,3 5.30 5.46 5.35 5.07 5.22 5.20 5.42 5.18 5.27 5.20 5.44 5.52 2 Discount window borrowing2,4 5.02 5.00 4.92 4.56 4.75 4.75 4.86 4.75 4.75 4.75 4.75 5.00 Commercial paper*5,6 Nonfinancial 3 1-month n.a. 5.57 5.40 5.18 5.28 5.28 5.37 5.27 5.27 5.26 5.42 5.47 4 2-month n.a. 5.57 5.38 5.23 5.29 5.30 5.82 5.30 5.78 5.83 5.82 5.82 5 3-month n.a. 5.56 5.34 5.25 5.32 5.88 5.81 5.90 5.88 5.78 5.79 5.78 Financial 6 1-month n.a. 5.59 5.42 5.20 5.29 5.29 5.38 5.28 5.29 5.28 5.43 5.48 7 2-month n.a. 5.59 5.40 5.24 5.31 5.32 5.85 5.31 5.85 5.83 5.84 5.84 8 3-month n.a. 5.60 5.37 5.28 5.32 5.93 5.85 5.97 5.92 5.82 5.83 5.82 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. 13 3-month 5.29 5.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 6-month 5.21 5.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Bankers acceptances3,5,9 15 3-month 5.31 5.54 5.39 5.30 5.37 6.02 5.94 6.06 6.04 5.88 5.91 5.91 16 6-month 5.31 5.57 5.30 5.64 5.75 5.89 5.83 5.95 5.93 5.76 5.82 5.80 Certificates of deposit, secondary market3,10 17 1-month 5.35 5.54 5.49 5.25 5.34 5.36 5.50 5.36 5.36 5.37 5.51 5.56 18 3-month 5.39 5.62 5.47 5.41 5.50 6.13 6.00 6.14 6.07 5.96 5.97 5.96 19 6-month 5.47 5.73 5.44 5.83 5.89 6.04 5.97 6.07 6.03 5.94 5.94 5.93 20 Eurodollar deposits, 3-month3,11 5.38 5.61 5.45 5.36 5.48 6.09 5.97 6.12 6.04 5.94 5.94 5.95 US. Treasury bills Secondary market3,5 21 3-month 5.01 5.06 4.78 4.72 4.68 4.86 5.07 4.96 4.98 5.05 5.10 5.12 22 6-month 5.08 5.18 4.83 4.87 4.88 4.98 5.20 5.10 5.10 5.16 5.22 5.27 23 1-year 5.22 5.32 4.80 4.91 4.96 5.12 5.24 5.20 5.15 5.19 5.25 5.33 Auction high3,5,12 24 3-month 5.02 5.07 4.81 4.76 4.73 4.88 5.07 5.00 5.00 5.03 5.12 5.11 25 6-month 5.09 5.18 4.85 4.88 4.91 4.98 5.17 5.12 5.09 5.12 5.22 5.24 26 1-year 5.23 5.36 4.85 4.95 5.00 5.12 5.17 n.a. n.a. 5.17 n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities13 27 1-year 5.52 5.63 5.05 5.20 5.25 5.43 5.55 5.51 5.45 5.50 5.56 5.65 28 2-year 5.84 5.99 5.13 5.68 5.66 5.86 5.86 5.92 5.78 5.78 5.87 5.96 29 3-year 5.99 6.10 5.14 5.77 5.75 5.94 5.92 6.01 5.87 5.83 5.91 6.00 30 5-year 6.18 6.22 5.15 5.84 5.80 6.03 5.97 6.09 5.95 5.88 5.95 6.03 31 7-year 6.34 6.33 5.28 6.15 6.12 6.33 6.17 6.36 6.16 6.10 6.15 6.23 32 10-year 6.44 6.35 5.26 5.94 5.92 6.11 6.03 6.16 6.00 5.96 6.02 6.10 33 20-year 6.83 6.69 5.72 6.43 6.50 6.66 6.48 6.68 6.48 6.42 6.44 6.53 34 30-year 6.71 6.61 5.58 6.07 6.07 6.26 6.15 6.30 6.12 6.06 6.11 6.22 Composite 35 More than 10 years (long-term) 6.80 6.67 5.69 6.37 6.43 6.60 6.42 6.61 6.42 6.35 6.38 6.48 STATE AND LOCAL NOTES AND BONDS Moody's series14 36 Aaa 5.52 5.32 4.93 5.47 5.56 5.78 5.77 5.85 5.79 5.81 5.73 5.73 37 Baa 5.79 5.50 5.14 5.93 6.06 6.23 6.23 6.31 6.24 6.26 6.21 6.21 38 Bond Buyer series15 5.76 5.52 5.09 5.58 5.69 5.92 5.86 5.99 5.88 5.83 5.84 5.87 CORPORATE BONDS 39 Seasoned issues, all industries16 7.66 7.54 6.87 7.77 7.78 7.93 7.73 7.95 7.76 7.68 7.69 7.76 Rating group 40 Aaa 7.37 7.27 6.53 7.40 7.39 7.55 7.36 7.55 7.34 7.29 7.34 7.41 41 Aa 7.55 7.48 6.80 7.68 7.68 7.79 7.62 7.83 7.64 7.57 7.58 7.65 42 A 7.69 7.54 6.93 7.84 7.84 7.99 7.79 8.01 7.82 7.74 7.76 7.83 43 Baa 8.05 7.87 7.22 8.15 8.20 8.38 8.15 8.42 8.27 8.13 8.06 8.12 MEMO Dividend-price ratio17 44 Common stocks 2.19 1.77 1.49 1.25 1.27 1.28 1.21 1.29 1.24 1.22 1.19 1.18 1. The daily effective federal funds rate is a weighted average of rates on trades through 11. Bid rates for Eurodollar deposits collected around 9:30 a.m. Eastern time. Data are for New York brokers. indication purposes only. 2. Weekly figures are averages of seven calendar days ending on Wednesday of the 12. Auction date for daily data; weekly and monthly averages computed on an issue-date current week; monthly figures include each calendar day in the month. basis. On or after October 28, 1998, data are stop yields from uniform-price auctions. Before 3. Annualized using a 360-day year or bank interest. that, they are weighted average yields from multiple-price auctions. 4. Rate for the Federal Reserve Bank of New York. 13. Yields on actively traded issues adjusted to constant maturities. Source: U.S. Depart- 5. Quoted on a discount basis. ment of the Treasury. 6. Interest rates interpolated from data on certain commercial paper trades settled by the 14. General obligation bonds based on Thursday figures; Moody's Investors Service. Depository Trust Company. The trades represent sales of commercial paper by dealers or 15. State and local government general obligation bonds maturing in twenty years are used direct issuers to investors (that is, the offer side). See Board's Commercial Paper Web pages in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys' (http://www.federalreserve.gov/releases/cp) for more information. A1 rating. Based on Thursday figures. 7. An average of offering rates on commercial paper for firms whose bond rating is AA or 16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected the equivalent. Series ended August 29, 1997. long-term bonds. 8. An average of offering rates on paper directly placed by finance companies. Series 17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in ended August 29, 1997. the price index. 9. Representative closing yields for acceptances of the highest-rated money center banks. NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and 10. An average of dealer offering rates on nationally traded certificates of deposit. G.13 (415) monthly statistical releases. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • February 2000 1.36 STOCK MARKET Selected Statistics 1999 IInnddiiccaattoorr 11999966 11999977 11999988 Mar. Apr. May June July Aug. Sept. Oct. Nov. Prices and trading volume (averages of daily figures)1 Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 357.98 456.99 550.65 603.69 627.75 635.62 629.53 648.83 621.03 607.87 599.04 634.22 2 Industrial 453.57 574.97 684.35 751.93 780.84 791.72 783.96 809.33 778.82 769.47 753.94 791.41 3 Transportation 327.30 415.08 468.61 491.25 523.08 537.88 520.66 528.72 492.13 462.33 450.13 474.78 4 Utility 126.36 143.87 190.52 218.11 228.48 242.98 241.36 250.50 241.84 237.71 285.16 502.58 5 Finance 303.94 424.84 516.65 544.08 564.99 562.66 546.43 557.92 521.59 493.37 490.92 539.20 6 Standard & Poor's Corporation (1941-43 = 10)2 670.49 873.43 1,085.50 1,281.66 1,334.76 1,332.07 1,322.55 1,380.99 1,327.49 1,318.17 1,300.01 1,390.99 7 American Stock Exchange (Aug. 31, 1973 = 50)3 570.86 628.34 682.69 711.08 748.29 787.02 772.01 803.75 781.33 788.74 786.96 819.60 Volume of trading (thousands of shares) 8 New York Stock Exchange 409,740 523,254 666,534 776,538 874,818 785,778 723,025 721,294 709,569 772,627 882,422 866,281 9 American Stock Exchange 22,567 24,390 28,870 29,563 38,895 35,241 28,806 25,754 27,795 32,540 35,762 33,330 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers' 97,400 126,090 140,980 156,440 172,880 177,984 176,930 178,360 176,390 179,316 182,272 206,280 Free credit balances at brokers5 11 Margin accounts6 22,540 31,410 40,250 40,120 41,200 41,250 42,865 44,330 44,230 47,125 51,040 49,480 12 Cash accounts 40,430 52,160 62,450 59,435 60,870 61,665 64,100 60,000 62,600 62,810 61,085 68,200 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 1,827,285 199,507 121,923 126,324 200,396 121,035 121,375 2 On-budget 1,187,302 1,305,999 1,382,817 156,929 87,959 91,554 161,304 89,009 86,909 3 Off-budget 391,990 415,799 444,468 42,578 33,964 34,770 39,092 32,026 34,466 4 Outlays, total 1,601,235 1,652,552 1,703,639 145,939 147,086 129,127 143,427 147,701 149,011 5 On-budget 1,290,609 1,335,948 1,382,861 136,141 117,652 97,984 108,308 119,506 116,991 6 Off-budget 310,626 316,604 320,778 9,799 29,434 31,143 35,119 28,196 32,020 7 Surplus or deficit (—), total -21,943 69,246 123,646 53,568 -25,164 -2,803 56,969 -26,667 -27,635 8 On-budget -103,307 -29,949 -45 20,788 -29,693 -6,430 52,996 -30,497 -30,082 9 Off-budget 81,364 99,195 123,691 32,779 4,530 3,627 3,973 3,830 2,446 Source of financing (total) 10 Borrowing from the public 38,171 -51,211 -88,304 -22,246 1,193 26,470 -47,718 5,754 6,132 11 Operating cash (decrease, or increase (—)) 604 4,743 -17,580 -27,459 13,553 3,160 -20,069 8,891 41,488 12 Other2 -16,832 -22,778 -17,762 -3,863 10,418 -26,827 10,818 12,022 -19,985 MEMO 13 Treasury operating balance (level, end of period) 43,621 38,878 56,458 53,102 39,549 36,389 56,458 47,567 6,079 14 Federal Reserve Banks 7,692 4,952 6,641 6,720 4,984 5,559 6,641 4,527 5,025 15 Tax and loan accounts 35,930 33,926 49,817 46,382 34,565 30,831 49,817 43,040 1,054 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 • February 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 Sept. Oct. Nov. RECEIPTS 1 All sources 1,721,798 1,827,285 773,810 922,630 825,057 966,045 200,396 121,035 121,375 2 Individual income taxes, net 828,586 879,480 354,072 447,514 392,332 481,527 89,250 63,505 57,477 3 Withheld 646,483 693,940 306,865 316,309 339,144 351,068 49,244 57,596 59,668 4 Nonwithheld 281,527 308,185 58,069 219,136 65,204 240,278 43,077 7,129 2,298 5 Refunds 99,476 122,706 10,869 87,989 12,032 109,467 3,072 1,221 4,490 Corporation income taxes 6 Gross receipts 213,249 216,325 104,659 109,353 104,163 106,861 42,571 7,175 3,461 7 Refunds 24,593 31,645 10,135 14,220 14,250 17,092 2,336 4,995 1,809 8 Social insurance taxes and contributions, net . .. 571,831 611,832 260,795 312,713 268,466 324,831 55,481 43,879 49,013 9 Employment taxes and contributions2 540,014 580,880 247,794 293,520 256,142 306.235 54,794 42,412 45,759 10 Unemployment insurance 27,484 26,480 10,724 17,080 10,121 16,378 332 1,049 2,868 11 Other net receipts3 4,333 4,472 2,280 2,112 2,202 2,216 356 418 386 12 Excise taxes 57,673 70,399 31,133 29,922 33,366 31,015 7,167 4,181 6,072 13 Customs deposits 18,297 18,336 9,679 8,546 9,838 8,440 1,727 1,788 1,621 14 Estate and gift taxes 24,076 27,782 10,262 12,971 12,359 14,915 2,294 2,554 2,465 15 Miscellaneous receipts4 32,658 34,777 13,348 15,829 18,735 15,140 4,242 2,948 3,075 OUTLAYS 16 All types 1,652,552 l,703,639r 824,368 815,884 877,414 817,235 143,427r 147,701 149,011 17 National defense 268,456 276,792 140,873 129,351 140,196 134,414 24,279 24,036 23,224 18 International affairs 13,109 15,264 9,420 4,610 8,297 6,879 1,382 1,000 1,522 19 General science, space, and technology 18,219 19,397 10,040 9,426 10,142 9,319 1,773 1,524 1,661 20 Energy 1,270 981 411 957 699 797 375 -311 -199 21 Natural resources and environment 22,396 22,303 11,106 10,051 12,671 10,351 2,246 1,528 2,078 22 Agriculture 12,206 24,359 10,590 2,387 16,757 9,803 1,150 6,759 7,401 23 Commerce and housing credit 1,014 2,966 -3,526 -2,483 4,046 -1,629 6,877r 1,698 1,108 24 Transportation 40,332 38,856 20,414 16,196 20,836 17,082 4,260 3,750 3,890 25 Community and regional development 9,720 12,791 5,749 4,863 6,972 5,368 1,330 1,627 1,244 26 Education, training, employment, and social services 54,919 57,438 26,851 25,928 27,762 29,003 5,437 5,175 4,070 27 Health 131,440 140,803 63,552 65,053 67,838 69,320 13,031 12,229 12,124 28 Social security and Medicare 572,047 580,491 283,109 286,305 316,809 261,146 48,681 48,179 48,686 29 Income security 233,202 237,180 106,353 125,196 109,481 126,552 16,897 17,607 18,216 30 Veterans benefits and services 41,781 43,210 22,077 19,615 22,750 20,105 3,615 3,657 3,795 31 Administration of justice 22,832 25,837 10,212 11,287 12,041 13,149 2,306 2,127 2,579 32 General government 13,444 16,058 7,302 6,139 9,136 6,650 1,696 1,117 646 33 Net interest5 243,359 230,265 122,620 122,345 116,954 116,655 15,259 18,894 20,410 34 Undistributed offsetting receipts6 -47,194 -40,445 -22,795 -21,340 -25,793 -17,724 -7,164 -2,896 -3,441 1. Functional details do not sum to total outlays for calendar year data because revisions to 4. Deposits of earnings by Federal Reserve Banks and other miscellaneous receipts. monthly totals have not been distributed among functions. Fiscal year total for receipts and 5. Includes interest received by trust funds. outlays do not correspond to calendar year data because revisions from the Budget have not 6. Rents and royalties for the outer continental shelf, U.S. government contributions for been fully distributed across months. employee retirement, and certain asset sales. 2. Old-age, disability, and hospital insurance, and railroad retirement accounts. SOURCE. Fiscal year totals: U.S. Office of Management and Budget, Budget of the U.S. 3. Federal employee retirement contributions and civil service retirement and Government, Fiscal Year 2000\ monthly and half-year totals: U.S. Department of the Treadisability fund. sury, Monthly Treasury Statement of Receipts and Outlays of the U.S. Government. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A27 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1997 1998 1999 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 5,446 5,536 5,573 5,578 5,556 5,643 5,681 5,668 5,685r 2 Public debt securities 5,413 5,502 5,542 5,548 5,526 5,614 5,652 5,639 5,656 3 Held by public 3,815 3,847 3,872 3,790 3,761 3,787 3,795 3,685 3,667r 4 Held by agencies 1,599 1,656 1,670 1,758 1,766 1,827 1,857 1,954 l,989r 5 Agency securities 33 34 31 30 29 29 29 29 29r 6 Held by public 26 27 26 26 26 29 28 28 28r 7 Held by agencies 7 7 5 4 4 1 1 1 lr 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 Q1 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 1,828.8 6 Bonds 521.2 555.0 587.3 621.2 621.2 632.5 632.5 643.7 7 Inflation-indexed notes and bonds1 n.a. n.a. 33.0 50.6 50.6 59.2 59.9 67.6 8 Nonmarketable2 1,657.2 1,857.5 2,038.1 2,249.9 2,249.9 2,281.8 2,381.0 2,414.2 9 State and local government series 104.5 101.3 124.1 165.3 165.3 167.5 172.6 168.1 10 Foreign issues3 40.8 37.4 36.2 34.3 34.3 33.5 30.9 31.0 11 Government 40.8 47.4 36.2 34.3 34.3 33.5 30.9 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 1,989.1 17 Federal Reserve Banks 391.0 410.9 451.9 471.7 471.7 464.5 493.8 496.5 18 Private investors 3,307.7 3,431.2 3,414.6 3,334.0 3,334.0 3,327.6 3,199.3 3,175.6 19 Depository institutions 315.4 296.6 300.3 237.3r 237.3r 241.1' 243.0 n.a. 20 Mutual funds 286.5 315.8 321.5r 343.2r 343.2r 351.lr 328.1 n.a. 21 Insurance companies 241.5 214.1 176.6 144.6 144.6 143.8r 141.8 n.a. 22 State and local treasuries6 289.8 257.0 239.3 269.3 269.3 272.5r 279.1 n.a. Individuals 23 Savings bonds 185.0 187.0 186.5 186.7 186.7 186.6 186.6 186.3 24 Pension funds 368.2r 392.7r 421,0r 434.7r 434.7r 437.2r 439.5 n.a. 25 Private 176.5r 189.2r 204. lr 218. lr 218.lr 220.0r 226.6 n.a. 26 State and Local 191.7r 203.5r 216.9r 216.6r 216.6r 217.2r 212.9 n.a. 27 Foreign and international7 835.2 1,102.1 1,241.6 1,278.7 1,278.7 l,272.1r l,258.6r 1,281.3 28 Other miscellaneous investors6,8 786. lr 665.9r 527.9r 439.6r 439.6r 416.6r 322.6 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 NonfinancialS tatistics • February 2000 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1999 1999, week ending IItteemm Aug. Sept. Oct. Sept. 29 Oct. 6 Oct. 13 Oct. 20 Oct. 27 Nov. 3 Nov. 10 Nov. 17 Nov. 24 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 2266,,332233 27,445 23,806 24,693 26,101 23,011 24,314 22,047 24,326 37,437 35,985 23,983 Coupon securities, by maturity 2 Five years or less 9999,,118866 82,426 90,839 95,035 103,945 86,924 82,519 90,643 95,703 114,337 110,793 90,562 3 More than five years 68,592 54,516 57,462 62,209 55,369 53,537 61,196 55,937 65,940 73,508 66,208 55,396 4 Inflation-indexed 826 586 1,096 629 2,314 562 1,499 506 460 989 722 782 Federal agency 5 Discount notes 45,889 46,570 45,499 47,373 52,951 46,227 42,441 42,844 43,062 44,939 57,105 47,022 Coupon securities, by maturity 6 One year or less 111111 1,018 884477 11,,227799 939 968 849 790 498 314 818 1,229 7 More than one year, but less than or equal to five years 5,126 5,858 6,420 9,346 4,810 9,770 5,901 4,641 7,009 7,963 5,719 4,170 8 More than five years 4,832 4,593 3,874 4,149 3,479 3,856 3,737 3,006 7,220 2,895 3,474 5,246 9 Mortgage-backed 66,417 64,305 63,248 44,491 68,329 102,275 46,148 44,349 45,512 101,830 53,088 33,059 By type of counterparty With interdealer broker 10 U.S. Treasury 105,210 88,466 93,305 100,747 100,831 85,585 92,226 93,708 99,241 124,018 111,932 91,447 11 Federal agency 4,070 4,534 4,969 4,507 4,023 5,426 5,662 4,720 4,606 5,295 5,922 4,356 12 Mortgage-backed 25,261 23,835 21,540 20,472 21,249 30,508 18,721 17,042 17,991 33,378 19,791 12,852 With other 13 U.S. Treasury 89,717 76,506 79,898 81,819 86,898 78,448 77,302 75,426 87,188 102,253 101,777 79,276 14 Federal agency 52,553 53,504 51,671 57,639 58,157 55,394 47,267 46,560 53,183 50,816 61,193 53,311 15 Mortgage-backed 41,156 40,469 41,708 24,019 47,080 71,768 27,427 27,307 27,521 68,452 33,298 20,207 FUTURES TRANSACTIONS3 By type of deliverable security 16 U.S. Treasury bills 0 0 n.a. 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coupon securities, by maturity 17 Five years or less 4,701 2,226 2,543 1,819 3,354 2,186 3,050 1,862 2,247 4,375 2,016 2,451 18 More than five years 14,980 13,642 12,576 14,028 12,564 10,767 14,003 12,112 14,719 14,753 12,676 16,092 19 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 0 Federal agency 20 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 21 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 22 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 0 23 More than five years 0 0 0 0 0 0 0 0 0 0 0 0 24 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 0 OPTIONS TRANSACTIONS4 By type of underlying security 25 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 26 Five years or less 1,197 842 1,039 645 1,110 1,244 996 . 591 1,617 1,943 2,692 1,316 27 More than five years 4,480 3,440 3,802 0 0 0 0 0 0 0 0 0 28 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 0 Federal agency 29 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 30 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 31 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 0 32 More than five years 0 0 0 0 0 0 0 0 0 0 0 0 33 Mortgage-backed 1,033 917 498 0 0 0 0 0 0 0 0 0 1. Transactions are market purchases and sales of securities as reported to the Federal Forward transactions are agreements made in the over-the-counter market that specify Reserve Bank of New York by the U.S. government securities dealers on its published list of delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt primary dealers. Monthly averages are based on the number of trading days in the month. securities are included when the time to delivery is more than five business days. Forward Transactions are assumed to be evenly distributed among the trading days of the report week. contracts for mortgage-backed agency securities are included when the time to delivery is Immediate, forward, and futures transactions are reported at principal value, which does not more than thirty business days. include accrued interest; options transactions are reported at the face value of the underlying 3. Futures transactions are standardized agreements arranged on an exchange. All futures securities. transactions are included regardless of time to delivery. Dealers report cumulative transactions for each week ending Wednesday. 4. Options transactions are purchases or sales of put and call options, whether arranged on 2. Outright transactions include immediate and forward transactions. Immediate delivery an organized exchange or in the over-the-counter market, and include options on futures refers to purchases or sales of securities (other than mortgage-backed federal agency securi- contracts on U.S. Treasury and federal agency securities. ties) for which delivery is scheduled in five business days or less and "when-issued" NOTE, "n.a." indicates that data are not published because of insufficient activity. securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 1999 1999, week ending IItteemm Aug. Sept. Oct. Sept. 29 Oct. 6 Oct. 13 Oct. 20 Oct. 27 Nov. 3 Nov. 10 Nov. 17 Positions'* NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 165 1,862 7,071 -341 1,598 8,456 8,929 8,872 6,450 18,382 -107 Coupon securities, by maturity 2 Five years or less -31,236 -33,167 -33,679 -30,337 -33,225 -35,289 -39,504 -26,047 -34,706 -31,322 -29,763 3 More than five years -7,689 -14,651 -22,651 -15,694 -19,135 -21,983 -22,914 -24,494 -25,412 -22,166 -24,574 4 Inflation-indexed 3,370 3,758 3,781 3,531 4,161 4,035 3,528 3,622 3,489 3,421 3.201 Federal agency 5 Discount notes : . .. 29,448 38,620 40,900 37,279 40,332 39,198 35,664 44,242 48,044 49,010 40,261 Coupon securities, by maturity 6 One year or less 4,065 5,158 6,085 5,246 7,256 5,764 5,706 5,925 5,837 5,310 5,385 7 More than one year, but less than or equal to five years 6,923 6,989 4,438 7,430 4,438 5,018 4,406 3,714 4,749 5,362 4,505 8 More than five years 1,023 2,346 2.913 2,615 1.664 2,981 3,119 3,071 4,028 3,958 3,010 9 Mortgage-backed 17,990 18,585 20,356 15,596 16,636 22.120 22,955 17,281 23,680 26,743 27,531 NET FUTURES POSITIONS4 By type of deliverable security 10 U.S. Treasury bills 00 00 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coupon securities, by maturity 11 Five years or less 10,940 7,803 10,122 6,301 10,411 12,073 9,928 9,652 7,435 2,222 2,345 12 More than five years -5,879 -420 9,652 1,302 4,912 9,957 11,952 13,256 5,893 284 484 13 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 14 Discount notes 00 00 00 00 00 00 00 00 00 00 00 Coupon securities, by maturity 15 One year or less 00 00 00 00 00 00 00 00 00 00 00 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 00 0 0 0 0 0 0 00 00 Coupon securities, by maturity 20 Five years or less --11,,666611 -57 -1,669 445566 --661144 -1,441 -2,486 -2,542 --669922 148 119933 21 More than five years -553 -1,552 -3,571 -1,483 -4,075 -4,888 -2,656 -3,140 -2,863 -587 -1,132 22 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 23 Discount notes 00 00 00 00 00 00 00 00 00 00 00 Coupon securities, by maturity 24 One year or less 00 00 00 00 00 00 00 00 00 00 00 25 More than one year, but less than or equal to five years n.a. n.a. 6699 n.a. n.a. n.a. n.a. 6688 7700 n.a. n.a. 26 More than five years n.a. n.a. 28 n.a. n.a. 32 32 3322 6 n.a. 39 27 Mortgage-backed 3,540 2,105 1,011 2,103 1,728 1,053 826 509 1,062 -726 -880 Financing5 Reverse repurchase agreements 78 Overnight and continuing 273.639 290,610 288,446 303,871 295,403 289,515 293,341 268,989 301,622 259,922 313,198 29 Term 780,367 792,662 806,146 810,388 765,661 792,836 810,239 831,878 837,974 894,097 727,327 Securities borrowed 10 Overnight and continuing 254,149 250,667 255,880 243,384 260,255 254,576 257,963 252,632 253,642 239,261 246,802 31 Term 87,850 91,796 96,565 95,524 93,727 93,874 98,054 98,817 98,985 103,531 91,623 Securities received as pledge 32 Overnight and continuing n.a. n.a. 2,395 n.a. n.a. 2,583 2,393 2,235 2,351 n.a. 1,907 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 694,296 692,032 694,423 668844,,883377 689,566 691,509 695,993 689,536 712,610 647,053 711,383 35 Term 650,774 680,923 683,085 724,393 640,089 660,904 693,946 709.638 720,925 811,122 628,116 Securities loaned 36 Overnight and continuing 9,885 9,063 9,040 9,006 9,019 9,106 8,814 9,051 9,329 9,454 9,199 37 Term 7,269 7,026 7,090 6,689 6,916 6,671 7,412 7,368 7,032 7,005 6,743 Securities pledged 38 Overnight and continuing 53,526 53,966 54,712 54,502 57,870 57,441 52,812 53,435 50,756 50,163 49,651 39 Term 8,213 8,116 8,382 8,354 8,370 8,276 8,383 8,499 8,379 7,927 6,116 Collateralized loans 40 Total 18,826 23,284 25,763 24,024 25,111 20,695 27,676 26,642 30,725 25,868 23,329 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 • February 2000 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1999 AAggeennccyy 11999955 11999966 11999977 11999988 May June July Aug. Sept. 1 Federal and federally sponsored agencies 844,611 925,823 1,022,609 1,296,477 1,404,576 1,425,396 l,457,925r 1,491,900 2 Federal agencies 37,347 29,380 27,792 26,502 26,094 26,370 26,204 26,107 3 Defense Department1 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 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. / Postal Service6 5,765 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 26,088 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. 10 Federally sponsored agencies7 807,264 896,443 994,817 1,269,975 1,378,482 1,399,026 1,431,721 1,465,793 1,499,532 11 Federal Home Loan Banks 243,194 263,404 313,919 382,131 421,655 437,109 444,775 458,320 481,639 12 Federal Home Loan Mortgage Corporation 119,961 156,980 169,200 287,396 317,533 314,412 334,575 340,972 341,144 13 Federal National Mortgage Association 299,174 331,270 369,774 460,291 492,913 499,897 502,653 517,200 524,880 14 Farm Credit Banks8 57,379 60,053 63,517 63,488 66,608 67,749 66,922 67,269 67,938 15 Student Loan Marketing Association9 47,529 44,763 37,717 35,399 38,129 37,959 40,843 40,310 41,921 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 170 17 Farm Credit Financial Assistance Corporation11 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 78,681 58,172 49,090 44,129 41,131 40,585 39,901 39,341 Lending to federal and federally sponsored agencies + 20 Export-Import Bank3 2,044 1,431 552 f f f f 21 Postal Service6 5,765 n.a. n.a. 1 1 1 1 1 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2 2 3 4 T U e n n it n e e d s s S e t e a t V es a l R le a y i l A w u a t y h o A r s it s y o ciation6 n 3 . , a 2 . 0 0 n n . . a a . . n n . . a a . . t1 t I t1 1 I t I n a. Other lending14 25 Farmers Home Administration 21,015 18,325 13,530 9,500 8,275 7,935 7,445 7,270 26 Rural Electrification Administration 17,144 16,702 14,898 14,091 13,997 13,877 13,944 13,969 27 Other 29,513 21,714 20,110 20,538 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 ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11999966 11999977 11999988 Apr. May June July Aug. Sept. Oct. Nov. 1 All issues, new and refunding1 171,222 214,694 262,342 15,758 16,234 23,428 18,671 15,746 18,433 17,497 17,428 By type of issue 2 General obligation 60,409 69,934 87,015 6,443 5,294 10,997 6,206 4,268 5,171 4,183 4,996 3 Revenue 110,813 134,989 175,327 9,315 10,941 12,431 12,465 11,478 13,262 13,314 12,433 By type of issuer 4 State 13,651 18,237 23,506 907 1,220 1,236 2,194 911 2,341 1,753 929 5 Special district or statutory authority2 113,228 134,919 178,421 10,010 11,279 18,414 13,572 11,578 13,449 12,186 12,613 6 Municipality, county, or township 44,343 70,558 60,173 4,841 3,735 3,779 2,906 3,257 2,642 3,557 3,886 7 Issues for new capital 112,298 135,519 160,568 10,474 12,149 19,509 12,172 12,530 14,973 14,908 14,084 By use of proceeds 8 Education 26,851 31,860 36,904 2,734 2,795 3,793 3,415 2,842 2,885 2,049 2,732 9 Transportation 12,324 13,951 19,926 1,107 1,791 1,650 1,264 1,955 1,886 1,674 892 10 Utilities and conservation 9,791 12,219 21,037 1,372 603 1,594 535 1,038 1,976 1,176 1,893 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 8,594 618 1,058 739 850 585 1,271 726 668 13 Other purposes 32,462 35,095 42,450 2,592 3,760 7,195 2,729 3,255 3,941 4,509 5,213 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 oo rr iiss ss ii uu ssss ee uu ,, ee oo rr ffffeerriinngg,, 11999966 11999977 11999988 Mar. Apr. May June July Aug. Sept/ Oct. 1 All issues1 773,110 929,256 1,128,491 126,161 85,862 110,475 96,608 96,608 83,466 82,414 58,176 2 Bonds2 651,104 811,376 1,001,736 116,440 76,721 94,713 88,338 83,546 75,708 75,807 47,102 By type of offering 3 Sold in the United States 567,671 708,188 923,771 101,024 65,886 86,730 79,031 69,451 63,383 65,679 37,721 4 Sold abroad 83,433 103,188 77,965 15,416 10,834 7,983 9,306 14,095 12,325 10,128 9,382 MEMO 5 Private placements, domestic 43,688' 54,990r 37,845r 1,224 2,935r 5,022r 6,44 lr 2,133r 1,670r 1,372 1,467 By industry group 6 Nonfinancial 167,904 222,603 307,935 39,818 30,676 32,843 24,531 25,526 22,704 20,655 13,990 7 Financial 483,200 588,773 693,801 76,623 46,045 61,870 63,807 58,020 53,005 55,151 33,112 8 Stocks3 122,006 117,880 126,755 9,721 9,141 15,762 8,270 13,062 7,758 6,607 11,074 By type of offering 9 Public 122,006 117,880 126,755 9,721 9,141 15,762 8,270 13,062 7,758 6,607 11,074 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 8,534 7,640 10,425 6,436 11,589 6,379 5,647 10,717 12 Financial 41,546 57,494 52,642 1,187 1,501 5,337 1,834 1,473 1,379 960 357 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 • February 2000 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1999 IItteemm 11999977 11999988 Apr. May June July Aug. Sept. Oct. Nov. 1 Sales of own shares2 1,190,900 1,461,430 166,324 140,422 138,502 140,926 132,991 132,226 140,738 158,574 2 Redemptions of own shares 918,728 1,217,022 139,035 127,800 117,953 128,173 125,908 126,207 124,052 146,716 3 Net sales3 272,172 244,408 27,288 12,622 20,550 12,754 7,084 6,019 16,686 11,858 4 Assets4 3,409,315 4,173,531 4,505,237 4,442,880 4,650,385 4,585,131 4,548,784 4,498,964 4,705,746 4,874,572 5 Cash5 174,154 191,393 211,243 211,580 214,779 209,061 209,349 209,709 225,762 215,395 6 Other 3,235,161 3,982,138 4,293,994 4,231,300 4,435,607 4,376,070 4,339,435 4,289,255 4,479,985 4,659,177 1. Data include stock, hybrid, and bond mutual funds and exclude money market mutual 4. Market value at end of period, less current liabilities. funds. 5. Includes all U.S. Treasury securities and other short-term debt securities. 2. Excludes reinvestment of net income dividends and capital gains distributions and share SOURCE. Investment Company Institute. Data based on reports of membership, which issue of conversions from one fund to another in the same group. comprises substantially all open-end investment companies registered with the Securities and 3. Excludes sales and redemptions resulting from transfers of shares into or out of money Exchange Commission. Data reflect underwritings of newly formed companies after their market mutual funds within the same fund family. initial offering of securities. 1.48 CORPORATE PROFITS AND THEIR DISTRIBUTION Billions of dollars; quarterly data at seasonally adjusted annual rates 1997 1998 1999 AAccccoouunntt 11999966 11999977 11999988 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 Profits with inventory valuation and capital consumption adjustment 753.9 837.9 846.1 853.5 858.3 847.9 843.8 834.3 882.0 875.5 879.2 2 Profits before taxes 726.3 795.9 781.9 811.6 788.9 792.0 780.1 766.7 818.1 835.8 853.8 3 Profits-tax liability 223.6 238.3 240.2 244.1 239.9 241.1 244.3 235.6 248.0 254.4 259.4 4 Profits after taxes 502.7 557.6 541.7 567.4 548.9 550.9 535.8 531.0 570.1 581.4 594.3 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 205.0 223.9 193.1 222.6 202.5 203.6 187.4 178.8 213.7 219.9 227.0 7 Inventory valuation 3.1 7.4 20.9 4.0 29.5 13.6 19.8 20.8 13.3 -13.6 -26.7 8 Capital consumption adjustment 24.4 34.6 43.3 38.0 39.9 42.4 43.9 46.9 50.6 53.2 52.1 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 May June July Aug. Sept. Oct. Seasonally adjusted 1 Total 762.4 810.5 875.8 931.9 938.1 954.7 967.4 972.8 978.4 2 Consumer 307.6 327.9 352.8 369.5 372.4 375.9 380.8 381.9 384.1 3 Real estate 111.9 121.1 131.4 142.8 141.2 144.2 146.7 148.9 149.3 4 Business 342.9 361.5 391.6 419.5 424.5 434.6 439.9 442.0 445.0 Not seasonally adjusted 5 Total 769.7 818.1 884.0 931.6 942.9 948.9 962.2 968.4 976.7 6 Consumer 310.6 330.9 356.1 368.3 374.6 378.1 382.0 383.1 384.6 7 Motor vehicles loans 86.7 87.0 103.1 105.1 108.6 108.5 112.7 109.5 110.3 8 Motor vehicle leases 92.5 96.8 93.3 95.3 95.6 97.0 98.3 98.1 98.4 9 Revolving2 32.5 38.6 32.3 31.3 32.4 32.8 33.0 30.7 31.5 10 Other3 33.2 34.4 33.1 32.0 32.6 32.0 31.6 32.8 32.4 Securitized assets4 11 Motor vehicle loans 36.8 44.3 54.8 65.8 65.3 68.3 68.0 73.5 74.1 12 Motor vehicle leases 8.7 10.8 12.7 11.6 11.3 11.1 10.8 10.6 10.3 13 Revolving .0 .0 8.7 8.7 9.7 9.9 9.4 10.2 10.1 14 Other 20.1 19.0 18.1 18.3 19.0 18.4 18.1 17.8 17.6 15 Real estate 111.9 121.1 131.4 142.8 141.2 144.2 146.7 148.9 149.3 16 One- to four-family 52.1 59.0 75.7 83.6 80.5 83.6 86.0 87.7 87.7 17 Other 30.5 28.9 26.6 31.5 33.0 33.1 33.7 34.6 35.1 Securitized real estate assets4 18 One- to four-family 28.9 33.0 29.0 27.4 27.5 27.2 26.8 26.5 26.2 19 Other .4 .2 .1 .3 .2 .2 .2 .2 .2 20 Business 347.2 366.1 396.5 420.5 427.1 426.7 433.5 436.3 442.8 21 Motor vehicles 67.1 63.5 79.6 84.4 82.8 78.8 78.6 80.3 84.3 22 Retail loans 25.1 25.6 28.1 31.6 30.9 31.7 33.3 34.5 34.9 23 Wholesale loans5 33.0 27.7 32.8 33.8 32.7 27.9 26.8 26.8 30.3 24 Leases 9.0 10.2 18.7 19.0 19.2 19.3 18.5 19.0 19.1 25 Equipment 194.8 203.9 198.0 203.8 208.3 208.5 210.5 208.0 210.5 26 Loans 59.9 51.5 50.4 51.7 53.3 52.9 53.1 48.2 49.4 27 Leases 134.9 152.3 147.6 152.1 155.1 155.6 157.4 159.8 161.1 28 Other business receivables6 47.6 51.1 69.9 78.9 82.6 89.2 92.7 94.7 97.1 Securitized assets4 29 Motor vehicles 24.0 33.0 29.2 32.0 32.1 28.4 30.4 31.0 28.8 30 Retail loans 2.7 2.4 2.6 2.2 2.9 2.8 2.7 2.6 2.5 31 Wholesale loans 21.3 30.5 24.7 27.8 27.2 23.5 25.7 26.4 24.3 32 Leases .0 .0 1.9 1.9 2.0 2.0 2.0 2.0 2.0 33 Equipment 11.3 10.7 13.0 13.2 13.3 13.8 13.5 14.6 14.3 34 Loans 4.7 4.2 6.6 6.5 6.7 7.1 6.9 7.7 7.6 35 Leases 6.6 6.5 6.4 6.6 6.6 6.7 6.6 6.9 6.8 36 Other business receivables6 2.4 4.0 6.8 8.3 8.0 7.9 7.8 7.7 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 • February 2000 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1999 IItteemm 11999966 11999977 11999988 May June July Aug. Sept. Oct. Nov. Terms and yields in primary and secondary markets PRIMARY MARKETS Termsx 1 Purchase price (thousands of dollars) 182.4 180.1 195.2 207.5 211.0 207.6 213.8 210.3 214.4 220.8 2 Amount of loan (thousands of dollars) 139.2 140.3 151.1 161.6 162.0 158.2 163.1 161.8 165.1 167.0 3 Loan-to-price ratio (percent) 78.2 80.4 80.0 79.8 79.0 78.6 78.3 78.8 79.0 77.4 4 Maturity (years) 27.2 28.2 28.4 28.7 28.6 28.5 28.5 29.1 29.1 29.0 5 Fees and charges (percent of loan amount)2 1.21 1.02 .89 .69 .72 .83 .68 .64 .71 .73 Yield (percent per year) 6 Contract rate1 7.56 7.57 6.95 6.78 6.92 7.16 6.99 6.99 7.06 7.13 7 Effective rate1'3 7.77 7.73 7.08 6.89 7.03 7.29 7.09 7.09 7.17 7.24 8 Contract rate (HUD series)4 8.03 7.76 7.00 7.17 7.59 7.75 7.87 7.76 7.77 7.79 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 8.19 7.89 7.04 7.58 8.13 8.00 8.10 8.05 8.02 8.06 10 GNMA securities6 7.48 7.26 6.43 6.79 7.21 7.28 7.53 7.42 7.52 7.37 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 287,052 316,678 414,515 464,530 473,315 480,651 495,302 504,938 509,990 518,337 12 FHA/VA insured 30,592 31,925 33,770 38,938 41,143 44,132 47,846 49,456 50,639 52,632 13 Conventional 256,460 284,753 380,745 425,592 432,172 436,519 447,456 455,482 459,351 465,705 14 Mortgage transactions purchased (during period) 68,618 70,465 188,448 25,640 15,934 14,004 21,094 15,200 10,057 14,683 Mortgage commitments (during period) 15 Issued7 65,859 69,965 193,795 12,517 19,507 12,966 18,153 7,998 10,480 12,050 16 To sell8 130 1,298 1,880 178 351 260 478 609 1,710 381 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 137,755 164,421 255,010 285,881 299,184 300,093 306,214 315,968 318,682 323,027 18 FHA/VA insured 220 177 785 1,610 1,726 1,735 1,708 l,689r 1,744 1,744 19 Conventional 137,535 164,244 254,225 284,271 297,458 298,358 304,506 314,279r 316,938 321,283 Mortgage transactions (during period) 20 Purchases 125,103 117,401 267,402 22,503 21,950 17,602 18,674 15,238 13,323 11,869 21 Sales 119,702 114,258 250,565 21,972 20,349 16,835 17,468 14,153 12,671 11,129 22 Mortgage commitments contracted (during period)9 128,995 120,089 281,899 20,052 21,610 14,988 18,951 14,608 10,810 10,501 1. Weighted averages based on sample surveys of mortgages originated by major institu- 6. Average net yields to investors on fully modified pass-through securities backed by tional lender groups for purchase of newly built homes; compiled by the Federal Housing mortgages and guaranteed by the Government National Mortgage Association (GNMA), Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points'' paid (by the borrower or the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mortgages; from U.S. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Department of Housing and Urban Development (HUD). Based on transactions on the first Mortgage Corporation's mortgage commitments and mortgage transactions include activity day of the subsequent month. under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured exclude swap activity. by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A35 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1998 1999 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999955 11999966 11999977 Q3 Q4 Ql Q2' Q3P 1 All holders 4,603,981r 4,901,568r 5,216,785r 5,574,398r 5,728,167r 5,867,271r 6,019,110 6,181,073 By type of property 2 One- to four-family residences 3,510,319r 3,721,917r 3,959,565' 4,223,398' 4,328,434' 4,420,931' 4,533,159 4,647,881 3 Multifamily residences 277,002 294,783 310,456 330,595 340,773' 351,643' 359,275 372,474 4 Nonfarm, nonresidential 732,100 797,734 856,464 926,039 962,454' 997,294' 1,027,022 1,058,954 5 84,561 87,134 90,299 94,366' 96,506 97,404' 99,655 101,764 By type of holder 6 Major financial institutions 1,900,089 1,981,885 2,083,978 2,137,438 2,194,814' 2,202,241' 2,242,515 2,321,982 7 Commercial banks2 1,090,189 1,145,389 1,245,315 1,295,828 1,337,217' 1,336,669' 1,361,355 1,418,510 8 One- to four-family 646,545 677,603 745,510 770,340 797,196' 782,128' 790,125 824,677 9 Multifamily 42,521 45,451 49,670 52,205 52,871 56,170 58,572 63,130 10 Nonfarm, nonresidential 377,293 397,452 423,148 444,596 458,115' 468,859' 482,115 499,327 11 Farm 23,830 24,883 26,986 28,688 29,035 29,512 30,544 31,377 12 Savings institutions^ 596,763 628,335 631,822 634,251 643,957' 646,510' 656,518 676,260 13 One- to four-family 482,353 513,712 520,672 525,844 533,792 534,772' 544,832 560,447 14 Multifamily 61,987 61,570 59,543 56,696 56,825 56,763 55,020 57,285 1.*) Nonfarm, nonresidential 52,135 52,723 51,252 51,312 52,923' 54,539' 56,222 58,070 16 Farm 288 331 354 399 417 435 443 459 17 Life insurance companies 213,137 208,161 206,841 207,359 213,640 219,063 224,642 227,212 18 One- to four-family 8,890 6,977 7,187 6,594 6,590 6,956 7,295 7,548 19 Multifamily 28,714 30,750 30,402 30,565 31,522 31,528 31,813 32,120 20 Nonfarm, nonresidential 165,876 160,314 158,780 159,189 164,004 168,862 173,568 175,242 21 Farm 9,657 10,120 10,472 11,011 11,524 11,717 11,966 12,302 22 Federal and related agencies 308,757 295,192 286,167 287,125 292,636 288,216' 288,038 289,159 23 Government National Mortgage Association 2 2 8 7 7 6 8 8 24 One- to four-family 2 2 8 7 7 6 8 8 25 Multifamily 0 0 0 0 0 0 0 0 26 Farmers Home Administration4 41,791 41,596 41,195 40,907 40,851 40,691 40,766 40,766 27 One- to four-family 17,705 17,303 17,253 17,025 16,895 16,777 16,653 16,653 28 Multifamily 11,617 11,685 11,720 11,736 11,739 11,731 11,735 11,735 29 Nonfarm, nonresidential 6,248 6,841 7,370 7,566 7,705 7,769 7,943 7,943 30 Farm 6,221 5,768 4,852 4,579 4,513 4,413 4,435 4,435 31 Federal Housing and Veterans' Administrations 9,809 6,244 3,821 3,405 3,674 3,578' 3,490 3,889 32 One- to four-family 5,180 3,524 1,767 1,550 1,849 1,753' 1,623 2,013 33 Multifamily 4,629 2,719 2,054 1,855 1,825 1,825 1,867 1,876 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 2,431 724 482 361 315 189 163 40 One- to four-family 492 365 109 72 54 47 28 24 41 Multifamily 428 413 123 82 61 54 32 28 42 Nonfarm, nonresidential 3,383 1,653 492 328 245 214 129 111 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 178,807 168,813 161,308 159,104 157,675 157,185 155,637 154,420 45 One- to four-family 163,648 155,008 149,831 149,069 147,594 147,063 145,033 142,982 46 Multifamily 15,159 13,805 11,477 10,035 10,081 10,122 10,604 11,438 47 Federal Land Banks 28,428 29,602 30,657 32,009 32,983 33,128 33,666 34,218 48 One- to four-family 1,673 1,742 1,804 1,883 1,941 1,949 1,981 2,013 49 Farm 26,755 27,860 28,853 30,126 31,042 31,179 31,685 32,205 50 Federal Home Loan Mortgage Corporation 43,753 46,504 48,454 51,211 57,085 53,313 54,282 55,695 51 One- to four-family 39,901 41,758 42,629 44,254 49,106 44,140 43,574 44,010 52 Multifamily 3,852 4,746 5,825 6,957 7,979 9,173 10,708 11,685 53 Mortgage pools or trusts5 1,863,210 2,064,882 2,273,022 2,548,301 2,632,829' 2,762,733' 2,861,115 2,928,475 54 Government National Mortgage Association 472,283 506,340 536,879 541,540 537,446 543,280' 553,242 569,155 55 One- to four-family 461,438 494,158 523,225 527,043 522,498 527,886' 537,333 552,787 56 Multifamily 10,845 12,182 13,654 14,497 14,948 15,395 15,909 16,368 57 Federal Home Loan Mortgage Corporation 515,051 554,260 579,385 635,726 646,459 687,179 718,085 738,581 58 One- to four-family 512,238 551,513 576,846 633,124 643,465 684,240 714,844 735,088 59 Multifamily 2,813 2,747 2,539 2,602 2,994 2,939 3,241 3,493 60 Federal National Mortgage Association 582,959 650,780 709,582 798,460 834,518 881,815 911,435 938,484 61 One- to four-family 569,724 633,210 687,981 770,979 804,205 849,513 877,863 903,531 62 Multifamily 13,235 17,570 21,601 27,481 30,313 32,302 33,572 34,953 63 Farmers Home Administration4 11 3 2 2 1 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 1 1 1 1 68 Private mortgage conduits 292,906 353,499 447,173 572,573 614,405' 650,459' 678,353 682,254 69 One- to four-family6 227,800 261,900 318,000 391,736 410,900 430,653 447,938 438,676 70 Multifamily 15,584 21,967 29,218 40,895 44,644' 48,393' 50,679 52,851 71 Nonfarm, nonresidential 49,522 69,633 99,955 139,942 158,861' 171,413 179,736 190,727 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 531,926r 559,609r 573,619' 601,534' 607,888' 614,081' 627,442 641,457 74 One- to four-family 372,037r 363,143r 366,744' 383,877' 392,343' 393,047' 404,028 417,424 75 Multifamily 64,970 69,179 72,629 74,987 74,971 75,249 75,524 75,512 76 Nonfarm, nonresidential 77,112 109,119 115,467 123,107 120,600 125,638' 127,310 127,536 77 Farm 17,806 18,169 18,779 19,562 19,974 20,147 20,580 20,985 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • February 2000 1.55 CONSUMER CREDIT' Millions of dollars, amounts outstanding, end of period 1999 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999966 11999977 11999988 May June July1" Aug.r Sept.r Oct. Seasonally adjusted 1 Total 1,182,439 1,234,122 1,300,491 1,343,427 1,347,831 1,356,404 1,363,184 1,366,678 1,370,880 2 Revolving 499,532 531,295 560,653 571,957 578,530 583,309 584,523 584,588 584,285 3 Nonrevolving2 682,907 702,828 739,838 771,470 769,301 773,096 778,661 782,090 786,595 Not seasonally adjusted 4 Total 1,211,590 1,264,103 1,331,742 1,331,267 1,340,414 1,349,610 1,364,404 1,370,182 1,375,989 By major holder 5 Commercial banks 526,769 512,563 508,932 492,852 477.774 477,908 476,561 472,524 472,230 6 Finance companies 152,391 160,022 168,491 168,490 173,617 173,374 177,331 172,956 174,159 7 Credit unions 144,148 152,362 155,406 158,102 158,177 159,920 162,412 164,055 165,947 8 Savings institutions 44,711 47,172 51,611 55,982 57,161 58,126 59,091 60,055 61,020 9 Nonfinancial business 77,745 78,927 74,877 68.051 68,042 68,235 68,896 67,559 68,148 10 Pools of securitized assets3 265.826 313,057 372,425 387,790 405,643 412,047 420,113 433,033 434,485 By major type of credit4 11 Revolving 522,860 555,858 586,528 566.019 572,463 575,499 580,691 581,437 583,053 12 Commercial banks 228,615 219,826 210,346 190.216 178,031 175,928 170,272 168,882 167,325 13 Finance companies 32,493 38,608 32,309 31,296 32,408 32,846 33,014 30.731 31,453 14 Credit unions 17,826 19,552 19,930 18.732 18,856 19,054 19,335 19,489 19,454 15 Savings institutions 10,313 11,441 12,450 12.641 12,775 13,004 13,233 13,461 13,690 16 Nonfinancial business 44,901 44,966 39,166 34.446 34.618 34,830 35,421 34,232 34,681 17 Pools of securitized assets3 188,712 221,465 272,327 278,688 295,775 299,837 309,416 314,642 316,450 18 Nonrevolving 688.730 708,245 745,214 765.248 767,951 774,111 783,713 788,745 792,936 19 Commercial banks 298.154 292,737 298,586 302,636 299,743 301,980 306,289 303,642 304,905 20 Finance companies 119,898 121,414 136,182 137,194 141,209 140,528 144,317 142,225 142.706 21 Credit unions 126.322 132,810 135,476 139,370 139,321 140,866 143,077 144,566 146,493 22 Savings institutions 34,398 35,731 39,161 43,341 44,386 45,122 45.858 46,594 47,330 23 Nonfinancial business 32,844 33,961 35,711 33,605 33,424 33,405 33,475 33,327 33,467 24 Pools of securitized assets3 77.114 91,592 100,098 109,102 109,868 112,210 110,697 118,391 118,035 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 Apr. May June July Aug. Sept. Oct. INTEREST RATES Commercial banks2 1 48-month new car 9.05 9.02 8.72 n.a. 8.30 n.a. n.a. 8.44 n.a. n.a. 2 24-month personal 13.54 13.90 13.74 n.a. 13.26 n.a. n.a. 13.38 n.a. n.a. Credit card plan 3 All accounts 15.63 15.77 15.71 n.a. 15.21 n.a. n.a. 15.08 n.a. n.a. 4 Accounts assessed interest 15.50 15.57 15.59 n.a. 14.94 n.a. n.a. 14.79 n.a. n.a. Auto finance companies 5 New car 9.84 7.12 6.30 6.52 6.57 6.60 6.68r 6.28 6.47 7.07 6 Used car 13.53 13.27 12.64 12.17 12.16 12.31 12.67r 12.96 13.13 13.28 OTHER TERMS3 Maturity (months) 7 New car 51.6 54.1 52.1 52.8 52.4 52.3 52.0 51.7 52.1 53.2 8 Used car 51.4 51.0 53.5 56.0 56.1 56.0 56.1 55.8 55.9 55.8 Loan-to-value ratio 9 New car 91 92 92 92 92 92 92 92 92 92 10 Used car 100 99 99 99 99 99 99 100 100 100 Amount financed (dollars) 11 New car 16,987 18,077 19,083 19,435 19,539 19,722 19,873 20,012 20,154 20,335 12 Used car 12,182 12,281 12,691 13,647 13,700 13,816 13,609 13,374 13,449 13,613 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A37 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999933 11999944 11999955 Q4 Ql Q2 Q3 Q4 QI Q2r Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors . . . 584.4 575.8 721.0r 745.4r 787. lr 913.7r l,077.3r l,044.2r 900.6r l,074.2r l,288.1r 886.6 By sector and instrument 7 Federal government 256.1 155.8 144.4 145.0 23.1 -5.5 -14.5 -28.4 -113.5 -54.1 -75.2 --111122..22 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 328.3 420.0 576.6r 600.3r 764.0r 919.3r 1,091.8r l,072.6r i,oi4.r l,128.3r 1,363.3' 998.7 By instrument 6 Commercial paper 10.0 21.4 18.1 -.9 13.7 12.8 51.1 3.8 85.6 -43.0 6644..44 33..44 7 Municipal securities and loans 74.8 -35.9 -48.2 2.6 71.4 99.9 113.5 101.3 82.9 89.6 100.7 48.0 8 Corporate bonds 75.2 23.3 91.1 116.3 150.5 163.6 278.8 294.8 108.0 193.2 274.0 287.6 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 22.2 in Other loans and advances -18.9 34.0 67.2 33.5 69.1 141.4 76.3 40.8 77.7 102.5 151,0r -16.7 11 Mortgages 122.4 177.0 205.7r 289.7r 300.2r 280.4r 478.2r 400.7r 472.6r 595. r 573.9r 594.1 1? 160.1 183.4 180.4r 245.3r 237.6r 190.6r 378.3r 289. r 375.2r 429. lr 415.r 422.9 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 34.7 14 Commercial -33.6 -6.5 16.2 30.4 48.7 68.6 74.1 83.8 75.9 126.8 119.3 127.5 15 1.0 2.2 1.6 2.6 3.2 2.9 4.1 6.7 5.5 8.6 3.6 9.0 16 Consumer credit 58.4 124.9 138.9 88.8 52.5 43.1 58.9 62.1 79.6 69.9 129.2r 60.1 By borrowing sector 17 209.4 316.3 350.9r 354.0r 327.3r 312.8r 465. r 420.3r 473.4r 552288..66rr 555566..44rr 551177..11 18 Nonfinancial business 52.7 150.0 277.2 253.2 380.6 520.3 532.5 570.3 470.7 524.6 719.5r 445.9 19 Corporate 46.9 142.3 243.7 164.6 297.0 425.0 426.9 467.4 365.8 413.7 611.2r 332.6 20 Nonfarm noncorporate 3.2 3.3 30.6 83.8 77.4 86.6 97.1 95.4 97.6 103.3 101.6 114.2 •>1 2.6 4.4 2.9 4.8 6.2 8.6 8.4 7.5 7.3 7.5 6.6 -.9 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 -36.4 74 Commercial paper -9.6 -26.1 13.5 11.3 3.7 .7 55.3 -25.5 6.2 -4.7 18.3 -27.1 82.9 12.2 49.7 55.8 47.2 34.2 42.5 119.2 -27.2 -34.2 .9 -12.6 76 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 5.6 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 -2.3 28 Total domestic plus foreign 654.2 561.9 792.1r 822.6r 844.7r 958.5r l,172.3r l,142.1r 881.0r l,035.3r l,305.4r 850.1 Financial sectors 29 Total net borrowing by financial sectors 294.4 468.4 453.9 548.9 652.2 961.6r 931.3 988.9 1,056.3 1,298.7 l,214.2r 1,042.9 By instrument 30 Federal government-related 165.3 287.5 204.1 231.5 212.8 290.9 249.2 405.4 555.8 673.3 592.2r 557799..11 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 98.2 141.1 114.5 133.0 106.7 239.0 261.7 162.8 399.2r 274.4 33 Loans from U.S. government .0 -4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 129.1 180.9 249.8 317.5 439.4 670.7 682.1 583.5 500.5 625.4 622.0r 463.8 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 123.1 121.8 195.9 176.9 209.0 348.8 346.3 361.8 177.4 281.9 490.8r 289.8 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 6611..77 6666..33 3311..11 7722..77 41 Savings institutions 11.3 12.8 2.6 25.5 19.7 41.7 10.6 31.2 63.7 103.2 58.0 58.6 47 Credit unions .2 .2 -.1 .1 .1 .3 .5 1.0 .4 1.5 1.4 43 Life insurance companies .2 .3 -.1 1.1 .2 -.3 .0 -.6 1.6 11..88 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 551100..55 193.0 304.7 45 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.5 133.0 106.7 239.0 261.7 162.8 399.2r 274.4 46 Issuers of asset-backed securities (ABSs) 85.4 76.5 142.4 153.9 200.7 374.8 283.0 352.4 294.2 335.7 300.5r 335.8 47 Finance companies -1.4 48.7 50.2 45.9 48.7 70.7 74.6 91.9 -12.0 17.8 71.2 88.4 48 Mortgage companies .0 -11.5 -2.2 4.1 -4.6 -46.8 29.4 -28.2 2.3 3.0 -4.6 5.1 49 Real estate investment trusts (REITs) 1.7 10.2 4.5 11.9 39.6 66.0 63.1 64.4 79.3 44.0 25.6 -19.7 50 Brokers and dealers 12.0 .5 -5.0 -2.0 8.1 7.0 -1.0 20.0 -2.6 12.4 -31.1 -17.4 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 -63.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • February 2000 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1997 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 Q4 Ql Q2 Q3 Q4 Ql Q2r All sectors 52 Total net borrowing, all sectors 948.6 1,030.3 l,246.0r l,371.5r l,496.9r l,920.1r 2,103.6r 2,131.0r l,937.3r 2,334.0r 2,519.6r 1,893.0 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 421.4 448.1 348.5 376.5 235.9 285.3 234.7 377.1 442.3 619.1 517.0r 467.0 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 281.2 157.3 336.7 348.9 406.7 546.5 667.6 775.8 258.2 440.9 765.7r 564.8 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 38.3 58 Other loans and advances -.8 50.4 70.1 62.5 102.8 197.4 101.0 112.5 157.8 262.7 189.8r 98.9 59 Mortgages 126.0 186.8 211.0r 297.6r 315.lr 300.5r 487.3r 420.5r 512.2r 625.7r 594.0r 581.8 60 Consumer credit 58.4 124.9 138.9 88.8 52.5 43.1 58.9 62.1 79.6 69.9 129.2r 60.1 Funds raised through mutual funds and corporate equities 61 Total net issues 425.0r 113.4r 131.5r 209.1r 165.6r 116.8r 215.2r 262.0r — 166.7r —9.8r 121.3r 113.2 62 Corporate equities 133.0r 12.8r -16.0r —28.5r -99.6r -144.1r -107.1r -115.8r -340.1r -234.6r - 132.0r -94.9 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 -374.0 6 6 4 5 F F i o n r a e n ig c n ia l s h c a o r r e p s o r p a u t r io ch n a s sed by U.S. residents 6 48 3 . .4 3 r 48 9 . . 1 6 r - 5 8 0 . . 1 4 r - 6 1 0 9 . . 0 0 r — 4 2 2 7 . . 0 l r — 1 2 . . 7 5 r 1 1 4 8 . . 0 lr 121..30 r -32 l . . 8 C — 31 6 7 0 . . 4 8 r - — 3 3 3 2 . . 4 9 r 270 8 . . 9 2 66 Mutual fund shares 292.0 100.6 147.4 237.6 265.1 260.9 322.3 377.8 173.4 224.8 253.3r 208.2 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 1999r Transaction category or sector 11999933 11999944 11999955 11999966 11999977 Q4 Ql Q2 Q3 Q4 Ql Q2 NET LENDING IN CREDIT MARKETS^ 1 Total net lending in credit markets 948.6 1,030.3 l,246.0r l,371.5r l,496.9r l,920.1r 2,103.6r 2,131.0r l,937.3r 2,334.0r 2,519.6 1,893.0 2 Domestic nonfederal nonfinancial sectors 30.0 231.2 - 89.4r 24.8r -67.9r 36.0r -39.5r 521.8r m.r — 300.4r 310.0 346.5 4 3 N H o o n u f s i e n h a o n l c d i al corporate business -10 9 . . 6 1 26 1 8 7 . . 0 7 -8 6 . . 8 1 r 6 - 3 .8 .7 r -6 - 5 2 . .3 2 r -1 -4 3 . .0 6 r —5 8 4 . . 4 0 r — 39 4 5 7 . . 4 9 r r -2 1 8 3 . . 3 7 r r —4 3 2 3 5 . . 3 5 r r 2 - 6 3 1 . . 6 1 288 4. . 5 9 5 Nonfarm noncorporate business -1.1 .6 4.7 -4.3 -.6 -.6 .0 .0 .0 .0 .4 -.2 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 17.1 6.7 9 8 R Fi e n s a t n o c f i a t l h e s e w ct o o r r l s d 8 1 0 2 7 9 . . 8 3 6 1 9 3 4 2 . . 1 3 1, 2 0 7 6 3 1. . 7 9 9 4 3 1 9 4 . . 7 4 l,2 3 4 1 9 0 . . 0 7 r l,6 2 7 0 0 3 . . 9 9 r l,9 2 0 2 3 3 . . 6 8 r l,2 3 7 2 4 1 . . 6 8 r 1,7 6 51 0 . .8 5 r 2,2 3 3 9 2 0 . . 7 l r 1, 2 9 5 4 0 2 . . 2 2 1,5 3 0 5 4 . . 1 8 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 68.9 135.4 12 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 -105.7 14 Bank holding companies .0 .9 -.3 3.9 5.4 19.4 15.3 -17.6 6.0 -7.4 -6.0 .4 15 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 9.2 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 34.7 32.1 1 1 8 9 B L a if n e k i n p s e u r r s a o n n c a e l t c r o u m st p s a a n n ie d s estates 10 9 0 . . 5 4 7 7 2 . . 1 0 1 - 0 8 0 .3 .0 - 6 7 9 . . 7 6 — 10 2 4 5 . . 8 0 r r — 7 2 6 5 . . 2 2 r r —9102.5. r 5' - 6 U 3 . .4 3 r - 6 1 5 6 . . 6 0 r — 8 1 6 3 . . 0 5 r - 8 7 2 .6 .2 - 8 8 4 .4 .0 20 Other insurance companies 27.7 24.9 21.5 22.5 25.2 36.3r 23.4 -1.5 -7.7 67.6r -19.7 26.7 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 77.2 40.7 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 24 Mutual funds 159.5 -7.1 52.5 48.9 80.9 64.8 156.4 146.4 92.9 103.5 103.0 121.0 25 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 94.3 158.1 198.3 150.6 264.7 429.5 157.2 259.2 27 Federally related mortgage pools 84.7 115.4 98.2 141.1 114.5 133.0 106.7 239.0 261.7 162.8 399.2 274.4 28 Asset-backed securities issuers (ABSs) 82.8 69.4 120.6 123.6 162.3 321.9 223.9 321.4 248.7 312.7 282.9 319.0 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 3 2 3 F B u ro n k d e in rs g a c n o d rp d o e r a a l t e io rs n s -3 1 1 4 . . 0 8 - - 1 4 7 4 . . 8 2 -2 9 1 0 . . 2 1 -1 1 5 4 . . 7 0 5 1 5 4 . . 6 9 r 1 7 3 1 0 . . 7 4 ' 24 8 5 6 . . 8 0 r -1 - 8 1 3 4 .1 .3 r -6 7 o 7. . 0 r -2091.1. 2' 1 2 8 7 4 . . 9 5 -1 1 9 1 1 1 . . 0 0 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 948.6 1,030.3 l,246.0r l,371.5r l,496.9r l,920.1r 2,103.6r 2,131.0r l,937.3r 2,334.0r 2,519.6 1,893.0 Other financial sources 35 Officii foreign exchange .8 -5.8 8.8 -6.3 .7 17.5 1.0 8.1 8.9 8.6 -14.0 -5.4 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 2.1 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 99.3 39 Net interbank transactions 50.5 89.8 10.0 -51.6 -19.7 54.3 -95.2 40. lr 43.9r — 122.8r 48.5 90.2 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 61.1 10.1 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 -68.0 100.0 42 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 4 4 4 5 S C e o c r u p r o i r ty a te r e e p q u u r i c t h ie a s s e agreements 1 7 3 1 3 . . 3 0 r 7 1 8 2 . . 2 8 r —110 I.56 .(f - 2 4 8 1 . . 5 4 r - 1 9 2 9 0 . . 6 9 r -1 1 4 0 4 3 . . 1 3 r -1 2 0 5 7 0 . . 1 3 r - — 1 0 1 0 1 . 5 8 . 8r -3 2 4 3 0 1 . . 1 1 r - -2 1 3 7 4 0 . .3 6 1 -1 4 3 0 2 8 . . 0 2 - - 1 9 4 4 . . 5 9 4 4 6 7 M Tr u a t d u e a l p a fu y n a d b le s s h ares 29 7 2 6. .0 8 r 1 12 0 0 0 . .6 0 r 1 12 4 8 7 . .4 9 r 2 1 3 1 7 4 . . 6 8 r 2 1 6 2 5 5 . . 1 9 r 2 1 6 5 0 2 . . 9 5 r 3 1 2 3 2 8 . . 3 6 r —3772.87 .9' 1 6 7 3 3 . . 8 4 r - 2 4 2 8 4 . . 3 8 r 2 1 5 7 3 5 . . 3 1 2 2 0 3 8 5 . . 2 6 48 Security credit 61.4 -.1 26.7 52.4 111.0 128.0 159.3 134.3 167.0 -27.2 -86.9 134.1 49 Life insurance reserves 37.1 35.5 45.8 44.5 59.3r 57.4r 49,3 53.3 51.7 59.0 40.8 59.6 5 5 5 5 0 1 2 3 N P I T n e a o v n x n e s e c s i s o t o m r n p p e a o f n y u r t a a n b t i d e n l e r p b e r a s o n e p r k v r i e p e s e t o rs r o s' n a e l q u tr i u ty s ts 26 2 1 8 8 1 . . . . 0 3 4 9 r 25 5 1 4 8 2 7 . . . . 7 6 8 2 ' 23 6 5 4 5 6 . . . . 1 0 2 2 r 2 - 4 1 8 6 3 6 . . . 6 . 9 4 0 r — 30 1 1 5 4 6 6 1 . . . . 0 8 3 lr r — — 30 5 4 4 3 6 0 . . . . 1 9 5 1 r r — 2 - 9 1 4 8 4 2 5 . . . . 6 7 2 7 r r — - 2 1 7 4 3 2 1 6 . . . . 9 9 5 8 r r r - - 2 5 6 729 1 0 7.5 . . . 2 9 5 ' ' ' — 31 1 4 3 8 9 8 . . . . 8 8 4 8 r r r - 2 3 - 8 1 8 2 5 4 . . . . 2 0 7 1 - 3 2 2 3 2 5 2 4 9 . . . . 9 1 5 4 54 Miscellaneous 356.0 245.6 444.6 498.3 516.2r 226.4r l,069.4r 295.6r 731.2r 580.7r 216.5 1,114.3 55 Total financial sources 2,361.7r 2,107.1r 2,793.1r 2,990.3r 3,377.4r 3,504.2r 4,650.8r 3,519.8r 3,919.2r 3,534.2r 4,004.6 4,334.9 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.2 -.5 -.9 -.6 -2.4 -.2 -.3 1.1 -3.4 -1.5 .6 57 Foreign deposits -5.7 43.0 25.1 59.6 106.8 145.5 -95.7 149.9r 69.9 -156.5 62.7 84.4 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 ,0r 364.1 80.0 6 6 0 1 T M a i x s e c s e l p la a n y e a o b u le s -12 1 9 5 . . 8 6 r r — 1 1 2 6 8 .6 .0 r -18 2 8 1 . . 5 1 ' -3 2 7 2 . . 6 8 r r ~22 2 5 6 . . 9 8 r r —56 1 3 9 . . 7 8 r r 1 1 2 4 5 . . 2 l r r —24 9 5 . . 1 6 r r -8 2 1 8 . .l2rr 7 1 8 9 . . 6 6 r r -4 -1 8 5 9 . . 6 5 -550 2 . . 9 5 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 6 6 4 3 T O r t a h d er e c c h re e d c i k t able deposits - 2 1 0 . . 3 6 r - 2 2 7 . . 8 4 r - 1 3 5 . . 8 6 r — - 2 4 1 . . 0 2 r - 3 3 3 . . 9 2 r - 4 5 5 . . 0 5 r - 7 4 2 . . 0 2 r — - 1 2 10 .9 . 5r -6 - 4 3 . .6 4 r -2 -1 1 . . 8 l r - 6 1 7 . . 9 1 -2 - 0 1 . . 7 0 65 Total identified to sectors as assets 2,409.2r 2,090.9r 2,913.1r 2,970.0r 3,401.3r 3,727.5r 4,375.1r 3,925.7r 3,804.2r 3,657.5r 3,962.4 4,783.1 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F.l and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Financial Statistics • February 2000 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1997 1998 1999 I9y4 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 / 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 15 Farm 83.0 84.6 87.1 90.3 90.3 91.3 93.0 94.4 96.5 97.4 99.7 16 Consumer credit 983.9 1,122.8 1,211.6 1,264.1 1,264.1 1,236.0 1,256.8 1,286.6 1,331.7 1,318.6 1,338.0 By borrowing sector 1/ Household 4,427.0 4,782.2 5,105.1 5,433.3 5,433.3 5,494.5 5,613.2 5,746.1 5,903.6 5,985.9 6,128.1 18 Nonfinancial business 3,972.9 4,245.2 4,527.1 4,903.5 4,903.5 5,052.6 5,209.2 5,311.1 5,428.0 5,619.2 5,740.7 19 Corporate 2,708.9 2,947.7 3,141.0 3,433.8 3,433.8 3,559.4 3,686.4 3,762.5 3,852.2 4,019.2 4,107.9 20 Nonfarm noncorporate 1,121.8 1,152.4 1,236.1 1,313.6 1,313.6 1,337.9 1,361.8 1,385.5 1,411.9 1,437.6 1,466.7 21 Farm 142.2 145.1 149.9 156.1 156.1 155.3 161.0 163.1 163.8 162.4 166.2 22 State and local government 1,121.7 1,070.2 1,063.4 1,119.5 1,119.5 1,144.3 1,170.8 1,178.8 1,199.8 1,223.2 1,238.2 23 Foreign credit market debt held in United States 370.3 441.4 518.7 570.1 570.1 591.6 617.1 612.8 603.7 607.8 596.5 24 Commercial paper 42.7 56.2 67.5 65.1 65.1 76.7 71.4 74.0 72.9 77.2 70.1 25 242.3 291.9 347.7 394.9 394.9 405.6 435.4 428.6 420.0 420.2 415.4 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 3b 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 3/ Bank loans n.e.c 48.9 51.4 64.0 77.2 77.2 90.6 88.2 103.2 107.2 104.1 106.8 38 Other loans and advances 131.6 135.0 162.9 198.5 198.5 206.6 225.6 246.2 288.7 299.1 328.6 39 Mortgages 18.7 24.1 31.9 46.8 46.8 49.1 54.1 64.0 71.6 76.6 73.6 By borrowing sector 40 Commercial banks 94.5 102.6 113.6 140.6 140.6 148.7 159.6 169.6 188.6 187.5 202.7 41 Bank holding companies 133.6 148.0 150.0 168.6 168.6 181.2 190.5 196.1 193.5 202.6 202.7 42 Savings institutions 112.4 115.0 140.5 160.3 160.3 162.9 170.7 186.6 212.4 226.9 241.6 43 Credit unions .5 .4 .4 .6 .6 .7 .8 1.0 1.1 1.5 1.8 44 Life insurance companies .6 .5 1.6 1.8 1.8 1.8 1.6 2.0 2.5 3.3 4.0 45 Government-sponsored enterprises 700.6 806.5 896.9 995.3 995.3 1,030.9 1,072.5 1,146.0 1,273.6 1,321.8 1,398.0 46 Federally related mortgage pools 1,472.1 1,570.3 1,711.4 1,825.8 1,825.8 1,847.1 1,908.9 1,975.7 2,018.4 2,112.3 2,182.8 47 Issuers of asset-backed securities (ABSs) 570.1 712.5 866.4 1,078.2 1,078.2 1,142.9 1,230.4 1,307.0 1,394.6 1,463.8 1,542.9 48 Brokers and dealers 34.3 29.3 27.3 35.3 35.3 35.1 40.1 39.4 42.5 34.8 30.2 49 Finance companies 433.7 483.9 529.8 554.5 554.5 571.9 596.9 589.4 597.5 614.4 639.2 50 Mortgage companies 18.7 16.5 20.6 16.0 16.0 23.4 16.3 16.9 17.7 16.5 17.8 51 Real estate investment trusts (REITs) 40.0 44.6 56.5 96.1 96.1 111.9 128.0 147.8 158.8 165.2 160.3 52 Funding corporations 211.0 248.6 312.7 373.7 373.7 411.6 410.5 417.9 414.4 459.1 449.6 All sectors 53 Total credit market debt, domestic and foreign . . . 17,206.4 18,454.5 19,823.7 21,278.1 21,278.1 21,783.9 22,286.0 22,764.5 23,402.9 24,005.5 24,428.7 54 Open market paper 623.5 700.4 803.0 979.4 979.4 1,074.8 1,112.7 1,165.1 1,172.6 1,227.6 1,243.3 55 U.S. government 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 57 Corporate and foreign bonds 2,504.0 2,840.7 3,189.6 3,563.3 3,563.3 3,727.0 3,928.3 3,996.0 4,098.9 4,287.6 4,421.6 58 Bank loans n.e.c 834.9 949.6 1,041.7 1,169.8 1,169.8 1,191.9 1,241.3 1,280.3 1,314.9 1,328.3 1,345.6 59 Other loans and advances 860.5 930.6 993.1 1,095.9 1,095.9 1,126.1 1,153.6 1,186.8 1,254.4 1,297.8 1,324.8 60 Mortgages 4,393.0 4,603.4 4,898.7 5,212.0 5,212.0 5,322.4 5,433.7 5,568.0 5,721.9 5,860.7 6,012.7 61 Consumer credit 983.9 1,122.8 1,211.6 1,264.1 1,264.1 1,236.0 1,256.8 1,286.6 1,331.7 1,318.6 1,338.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1997 1998 1999r 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 18,455.1r 19,826.6r 21,282.8r 21,282.8r 21,789.0r 22,291.6r 22,770.5r 23,409.3r 24,021.3 24,458.8 ? Domestic nonfederal nonfinancial sectors 2,988.8 2,857.4r 2,927.5r 2,815.9r 2,815.9r 2,798.2r 2,886.3r 2,919.9r 2,860.8r 2,926.3 2,966.3 Household 1,932.1 1,896.LR 2,014.5r l,905.6r l,905.6r l,905.2r l,958.8r 1,957.LR l,849.2r 1,924.7 1,947.1 4 Nonfinancial corporate business 289.2 280.4 270.2 268.0 268.0 249.6 238.5r 244.4r 269.8r 247.0 249.2 Nonfarm noncorporate business 37.6 42.3 38.0 37.4 37.4 37.4 37.4 37.4 37.4 37.5 37.7 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 202.9 202.7 195.3 200.4 200.4 204.3 207.5 210.9 213.9 218.2 219.8 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 2,601.0 2,608.4 9 Financial sectors 12,798.8 13,863.9 14,777.2 16,009.8r 16,009.8r 16,469.4r 16,801.8r 17,227.5r 17,800.2r 18,275.9 18,664.2 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 4,383.4 12 U.S.-chartered banks 2,869.6 3,056.1 3,175.8 3,450.7 3,450.7 3,505.1 3,543.6 3,616.2 3,761.2 3,782.9 3,847.6 13 Foreign banking offices in United States 337.1 412.6 475.8 516.1 516.1 517.9 525.6 510.1 504.2 487.8 465.7 14 Bank holding companies 18.4 18.0 22.0 27.4 27.4 31.2 26.8 28.3 26.5 25.0 25.1 N 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 246.8 263.0 288.5 305.3 305.3 306.7 315.1 320.5 324.2 330.2 341.0 18 Bank personal trusts and estates 248.0 239.7 232.0 207.0r 207.0r 204.3r 201.5r 197.5r 194.1r 192.2 190.1 19 Life insurance companies 1,487.5 1,587.5 1,657.0 l,751.1r l,751.1r 1,777.3 1,793.2 1,810.6 1,828.0 1,853.7 1,874.7 20 Other insurance companies 446.4 468.7 491.2 515.3 515.3 521.1 520.8 518.8r 535.7 530.8 537.5 ?L 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 497.4 531.0 568.2 632.0 632.0 648.9 668.5 684.9 697.0 716.3 726.5 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 1,050.8 1,084.0 ?5 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 1,267.0 71 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 1,280.4 1,359.7 29 Finance companies 476.2 526.2 544.5 566.4 566.4 572.0 579.0 592.7 618.4 639.9 660.9 30 Mortgage companies 36.5 33.0 41.2 32.1 32.1 46.8 32.7 33.8 35.3 33.0 35.6 31 Real estate investment trusts (REITs) 24.6 26.0 30.4 50.6 50.6 57.0 58.5 55.7 45.5 45.9 45.3 3? Brokers and dealers 93.3 183.4 167.7 182.6 182.6 244.0 198.3 217.5 165.2 211.4 163.6 33 Funding corporations 106.0 87.4 101.4 152.3r 152.3r 177.5r 178.3r 161.6r 158.5r 173.3 202.7 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 17,206.4 18,455.1r 19,826.6r 21,282.8r 21,282.8r 21,789.0r 22,291.6r 22,770.5r 23,409.3r 24,021.3 24,458.8 Other liabilities 35 Official foreign exchange 53.2 63.7 53.7 48.9 48.9 48.2 50.1 54.5 60.1 53.6 50.9 36 Special drawing rights certificates 8.0 10.2 9.7 9.2 9.2 9.2 9.2 9.2 9.2 8.2 8.2 37 Treasury currency 17.6 18.2 18.3 18.3 18.3 18.4 18.4 18.8 18.3 18.3 18.8 38 Foreign deposits 373.9 418.8 516.1 618.8 618.8 607.2 630.4 651.7 639.9 671.8 696.6 39 Net interbank liabilities 280.1 290.7 240.8 219.4 219.4 179.6 189.2r 198.7 187.7 180.4 201.7 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 1,311.4 1,354.1 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 2,637.6 2,644.6 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,J30.7 1,153.7 1,249.7 1,334.2 1,416.0 1,398.1 44 Security repurchase agreements 549.5 660.0 701.5 822.4 822.4 889.3 861.5 918.9 875.0 980.3 974.2 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 3,758.4 4,049.4 46 Security credit 279.0 305.7 358.1 469.1 469.1 505.3 540.6 579.0 577.4 552.7 587.9 47 Life insurance reserves 520.3 566.2 610.6 665.0 665.0 677.3 690.6 703.5 718.3 730.9 745.8 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 9,258.8 9,711.7 49 Trade payables 1,569. lr l,698.0r L,812.8r l,938.6r l,938.6r l,940.8r l,933.9r l,954.5r l,970.2r 1,981.2 2,039.6 50 Taxes payable 101.4 107.6 123.6 140.4 140.4 151.7 144.6r 155.0r 152.9r 159.7 161.5 51 Investment in bank personal trusts 699.4 803.0 871.7 942.5r 942.5r l,002.7r 999.8r 908.6r l,001.0r 1,012.5 1,059.8 52 Miscellaneous 5,287.2 5,634.7 6,098.8 6,666.5r 6,666.5r 6,741.0r 6,791.2r 7,013.LR 7,053.7r 7,074.2 7,158.2 5533 37,810.1r 4411,,338833..66rr 4455,,333311..11rr 5500,,224488..33rr 50,248.3r 5522,,115588..33rr 5533,,007799..88rr 5533,,113300..22rr 5555,,554444..55rr 5566,,663311..77 5588,,112288..99 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights 21.1 22.1 21.4 21.1 21.1 21.2 21.0 21.2 21.6 20.7 20.8 55 Corporate equities 6,333.3r 8,495.7r 10,255.8r 13,181.4r 13,181 -4r 14,842. LR 14,987.0r 13,121.2r 15,413.4r 15,893.6 17,018.0 56 Household equity in noncorporate business 3,404.9r 3,640.4r 3,833.3r 4,171.8r 4,17I.8r 4,213.6r 4,284.7r 4,331.3r 4,395.3r 4,405.1 4,489.9 Liabilities not identified as assets (—) 57 Treasury currency -5.4 -5.8 -6.7 -7.3 -7.3 -7.4 -7.4 -7.2 -8.0 -8.4 -8.2 58 Foreign deposits 325.4 360.2 431.4 534.0 534.0 510.1 547.6r 565. lr 547.2r 562.8 583.9 59 Net interbank transactions -6.5 -9.0 -10.6 -32.2 -32.2 -21.2 -17.1 -15.4 -27.0 -11.3 -10.6 60 Security repurchase agreements 66.2 86.4 90.9 153.1 153.1 187.4 140.9 175.2 168.4 263.5 279.8 61 Taxes payable 48.8 62.4 76.7 93.5 93.5 89.6 95.8r 102.2r 103.5r 90.7 111.3 62 Miscellaneous -641.61 —1,011.4r -1,339.6r -1,668.9r —1,668.9r -1,868.2r —1,929.2r —2,015.4r —2,319.9r -2,436.0 -2,588.2 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 182.6r 198.2r 176.7r 199.5r 199.5r 163.5r 119.4r 99. lr 168.0r 129.2 108.7 66 Total identified to sectors as assets 47,558.3"" 53,823.6r 59,994.4r 68,332.7r 68,332.7r 72,170.3r 73,414.4r 71,696.7r 76,723.3r 78,348.9 81,171.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. L.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 • February 2000 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1999 MMeeaassuurree 11999966 11999977 11999988 Mar. Apr. May June July Aug.r Sept.r Oct/ Nov.p 1 Industrial production1 119.4 127.1 132.4 135.1 135.5 136.2 136.6 137.4 137.7 138.0 139.1 139.5 Market groupings 2 Products, total 114.2 119.6 123.7 126.0 126.2 126.8 126.8 126.9 127.6 127.5 128.8 129.0 3 Final, total 115.3 121.1 125.4 127.3 127.6 128.2 128.3 128.6 129.5 129.0 130.6 130.8 4 Consumer goods 112.4 115.1 116.2 116.7 116.5 116.8 117.0 116.8 117.6 116.9 118.8 118.9 5 Equipment 120.4 132.1 142.7 145.9 147.0 148.4 148.3 149.3 150.5 150.3 151.3 151.7 6 Intermediate 110.8 115.3 118.8 121.6 121.7 122.3 121.7 121.5 121.7 122.6 123.4 123.4 7 Materials 127.8 139.0 146.5 150.3 150.8 151.7 153.1 155.0 154.6 155.6 156.3 157.3 Industry groupings 8 Manufacturing 121.3 130.1 136.4 139.7 140.2 141.0 141.4 142.0 142.5 142.9 144.0 144.6 9 Capacity utilization, manufacturing (percent)2. . 81.5 82.4 80.9 79.6 79.5 79.7 79.6 79.7 79.7 79.7 80.0 80.1 10 Construction contracts3 130.9r 143.3 157.5 167.0r 173.01 176.0r 179.0r 175.0r 161.0 167.0 168.0 162.0 11 Nonagricultural employment, total4 117.3 120.3 123.4 125.4 125.7 125.7 126.0 126.3 126.5 126.6 126.8 127.1 12 Goods-producing, total 2.4 2.4 2.3 102.5 102.5 102.1 102.1 102.3 101.9 102.1 102.1 102.3 13 Manufacturing, total 97.4 98.2 98.5 97.4 97.2 97.0 96.8 97.1 96.7 96.7 96.6 96.6 14 Manufacturing, production workers 98.6 99.6 99.6 98.2 98.0 97.8 97.5 98.0 97.4 97.4 97.4 97.4 15 Service-producing 123.1 126.5 130.1 132.7 133.1 133.2 133.6 134.0 134.3 134.4 134.7 135.0 16 Personal income, total 165.2 175.4 185.7 193.2 194.1 194.9 196.4 197.0 197.9 198.1 200.6 201.5 17 Wages and salary disbursements 159.7 171.3 184.4 193.2 194.3 195.2 196.3 197.8 198.6 199.5 200.7 201.3 18 Manufacturing 135.6 144.6 152.4 154.4 155.1 155.9 156.8 158.2 158.0 158.6 159.5 158.3 19 Disposable personal income5 164.1 172.9 181.7 188.8 189.7 190.3 191.8 192.1 193.4 193.0 195.8 196.6 20 Retail sales5 162.5 170.1 178.5 189.8 190.9 192.8 192.6 194.5 197.1 197.1 197.8 199.5 Prices6 21 Consumer (1982-84=100) 156.9 160.5 163.0 165.0 166.2 166.2 166.2 166.7 167.1 167.9 168.2 168.3 22 Producer finished goods (1982=100) 131.3 131.8 130.7 131.1 131.9 132.4 132.7 132.9 133.7 134.8 135.0 135.0 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 Apr. May June July Aug. Sept.1 Oct.r Nov. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 133,943 136,297 137,673 139,091 139,019 139,408 139,254 139,264 139,386 139,662 139,827 Employment 2 Nonagricultural industries3 123,264 126,159 128,085 129,685 129,929 130,078 130,015 130,192 130,413 130,693 130,781 3 Agriculture 3,443 3,399 3,378 3,384 3,295 3,354 3,292 3,219 3,137 3,203 3,304 Unemployment 4 Number 7,236 6,739 6,210 6,022 5,795 5,975 5,947 5,853 5,836 5,766 5,743 5 Rate (percent of civilian labor force) 5.4 4.9 4.5 4.3 4.2 4.3 4.3 4.2 4.2 4.1 4.1 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 119,608 122,690 125,833 128,134 128,162 128,443 128,816 128,945 129,048 129,311 129,545 7 Manufacturing 18,495 18,657 18,716 18,473 18,429 18,396 18,449 18,378 18,366 18,352 18,350 8 Mining 580 592 575 538 531 526 528 524 527 528 528 9 Contract construction 5,418 5,686 5,965 6,277 6,239 6,258 6,270 6,246 6,293 6,313 6,368 10 Transportation and public utilities 6,253 6,395 6,551 6,750 6,758 6,781 6,799 6,813 6,831 6,840 6,855 11 Trade 28,079 28,659 29,299 29,689 29,725 29,789 29,915 29,919 29,903 29,940 29,947 12 Finance 6,911 7,091 7,341 7,611 7,621 7,636 7,647 7,650 7,653 7,667 7,675 13 Service 34,454 36,040 37,525 38,697 38,782 38,952 39,055 39,205 39,257 39,429 39,549 14 Government 19,419 19,570 19,862 20,099 20,077 20,105 20,153 20,210 20,218 20,242 20,273 1. Beginning January 1994, reflects redesign of current population survey and population 4. Includes all full- and part-time employees who worked during, or received pay for, the controls from the 1990 census. pay period that includes the twelfth day of the month; excludes proprietors, self-employed 2. Persons sixteen years of age and older, including Resident Armed Forces. Monthly persons, household and unpaid family workers, and members of the armed forces. Data are figures are based on sample data collected during the calendar week that contains the twelfth adjusted to the March 1992 benchmark, and only seasonally adjusted data are available at this day; annual data are averages of monthly figures. By definition, seasonality does not exist in time. population figures. SOURCE. Based on data from U.S. Department of Labor, Employment and Earnings. 3. Includes self-employed, unpaid family, and domestic service workers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A43 2.12 OUTPUT, CAPACITY, AND CAPACITY UTILIZATION1 Seasonally adjusted 1998 1999 1998 1999 1998 1999 SSeerriieess Q4 Q1 Q2 Q3r Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3r Output (1992 = 100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 133.9 134.6 136.1 137.7 165.3 167.3 169.2 170.7 81.0 80.4 80.5 80.7 2 Manufacturing 138.3 139.2 140.9 142.5 172.5 174.8 176.9 178.7 80.2 79.6 79.6 79.7 3 Primary processing3 121.1 122.2 122.5 123.4 146.4 147.4 148.2 149.0 82.8 82.9 82.7 82.8 4 Advanced processing4 147.4 148.1 150.5 152.5 185.6 188.6 191.4 193.7 79.4 78.5 78.6 78.7 5 Durable goods 165.8 167.1 170.8 174.4 206.0 210.3 214.2 217.6 80.5 79.5 79.8 80.2 6 Lumber and products 120.7 122.2 122.5 120.4 144.2 145.3 146.3 147.4 83.7 84.1 83.7 81.7 7 Primary metals 121.8 122.3 125.1 128.5 146.5 147.6 148.5 149.3 83.2 82.9 84.2 86.1 8 Iron and steel 114.9 116.9 121.4 126.4 146.9 148.5 150.0 151.3 78.3 78.7 80.9 83.5 9 Nonferrous 130.4 129.1 129.6 131.2 146.0 146.5 146.8 147.0 89.3 88.1 88.3 89.3 10 Industrial machinery and equipment 215.6 221.3 227.9 232.3 256.5 265.7 275.5 285.3 84.1 83.3 82.7 81.4 11 Electrical machinery 341.6 349.4 374.6 400.7 438.8 461.8 482.0 498.5 77.9 75.7 77.7 80.4 12 Motor vehicles and parts 148.7 147.5 150.6 153.3 184.6 184.8 184.8 184.9 80.6 79.8 81.5 82.9 13 Aerospace and miscellaneous transportation equipment 102.4 98.9 95.9 94.0 126.6 126.8 126.6 126.2 80.9 78.0 75.7 74.5 14 Nondurable goods 111.3 111.8 111.6 111.5 138.5 139.1 139.5 139.9 80.3 80.4 80.0 79.7 15 Textile mill products 106.7 109.6 111.1 111.7 131.4 131.4 131.5 131.6 81.2 83.4 84.5 84.9 16 Paper and products 114.5 115.8 115.1 116.1 133.0 133.8 134.5 135.3 86.1 86.6 85.6 85.8 17 Chemicals and products 115.1 115.9 116.3 117.0 149.5 150.0 150.4 150.7 77.0 77.3 77.3 77.6 18 Plastics materials 123.5 122.9 123.5 124.2 134.6 135.9 137.2 138.4 91.7 90.4 90.0 89.7 19 Petroleum products 114.0 116.3 114.1 114.6 121.1 121.8 122.2 122.7 94.1 95.6 93.3 93.4 20 Mining 100.4 97.6 97.1 98.2 120.4 120.4 120.3 120.2 83.3 81.1 80.7 81.7 21 Utilities 113.0 114.6 116.6 118.2 126.5 126.9 127.3 127.8 89.3 90.3 91.6 92.5 22 Electric 116.5 116.6 118.9 120.5 124.3 124.7 125.2 125.6 93.7 93.5 95.0 95.9 1973 1975 Previous cycle5 Latest cycle6 1998 1999 High Low High Low High Low Nov. June July Aug.r Sept.r Oct. Nov.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 80.9 80.5 80.7 80.7 80.6 81.0 81.0 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 80.2 79.6 79.7 79.7 79.7 80.0 80.1 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 82.6 82.7 82.9 82.8 82.8 83.0 83.3 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.4 78.6 78.6 78.8 78.7 79.1 79.1 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 80.3 79.9 80.3 80.2 80.0 80.1 80.1 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 83.1 83.3 82.7 81.6 80.9 81.4 81.6 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 82.2 85.6 85.9 86.8 85.6 86.2 88.1 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 76.3 82.8 83.7 84.4 82.6 83.3 87.0 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 89.6 89.1 88.6 89.9 89.3 89.8 89.5 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 84.0 81.8 81.5 81.1 81.6 81.8 81.2 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 77.9 78.7 80.9 80.5 79.7 80.2 80.2 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 80.1 82.7 82.3 82.3 84.1 83.7 84.6 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 80.8 75.2 74.9 75.0 73.4 71.9 70.7 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 80.5 79.7 79.4 79.7 79.9 80.5 80.7 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 81.5 84.2 85.3 84.8 84.4 86.7 85.8 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 84.8 85.9 85.2 85.6 86.6 86.5 86.5 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 77.7 77.3 76.9 78.1 77.8 78.5 79.1 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 93.9 89.5 90.9 87.8 90.5 90.9 91.1 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 94.8 92.6 93.9 93.0 93.3 94.6 92.6 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 84.2 80.7 81.3 81.9 81.9 82.6 83.2 71 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 87.6 92.1 93.9 92.2 91.4 93.0 90.8 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 92.2 95.5 97.7 95.5 94.5 96.6 94.9 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; latest historical revision of the industrial production index and the capacity utilization rates primary metals; and fabricated metals. was released in November 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 • February 2000 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1998 1999 pro- 1998 GGrroouupp por- avg. tion Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug.r Sept.r Oct. Nov.p Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 132.4 133.8 133.8 134.1 134.5 135.1 135.5 136.2 136.6 137.4 137.7 138.0 139.1 139.5 2 Products 60.5 123.7 125.1 124.9 125.4 125.8 126.0 126.2 126.8 126.8 126.9 127.6 127.5 128.8 129.0 3 Final products 46.3 125.4 126.8 126.0 126.6 127.3 127.3 127.6 128.2 128.3 128.6 129.5 129.0 130.6 130.8 4 Consumer goods, total 29.1 116.2 115.6 115.1 116.3 117.2 116.7 116.5 116.8 117.0 116.8 117.6 116.9 118.8 118.9 5 Durable consumer goods 6.1 142.7 145.4 146.0 149.1 150.9 149.9 152.0 152.8 154.0 153.4 155.5 153.5 156.4 156.0 6 Automotive products 2.6 134.7 142.0 141.7 143.7 142.0 140.0 142.0 145.4 147.4 143.7 150.6 145.5 147.4 147.4 7 Autos and trucks 1.7 138.4 150.2 148.2 149.4 148.7 147.0 149.0 153.2 157.5 148.9 162.9 152.8 155.1 154.4 8 Autos, consumer .9 109.7 113.7 115.5 111.7 109.0 110.8 112.8 108.8 112.4 107.2 114.2 114.3 114.7 107.4 9 Trucks, consumer .7 167.4 183.2 179.1 185.2 187.2 182.5 185.7 197.2 202.0 184.0 208.9 189.8 196.8 203.5 10 Auto parts and allied goods .... .9 128.6 129.9 131.8 134.8 131.8 129.3 131.4 133.6 132.5 135.3 132.8 134.4 135.7 136.6 11 Other 3.5 149.0 147.3 148.8 152.8 158.0 157.8 160.0 158.3 158.8 161.1 158.7 159.6 163.5 162.6 12 Appliances, televisions, and air conditioners 1.0 262.8 273.3 283.5 299.7 320.0 317.6 325.8 311.1 319.0 329.9 319.0 326.3 353.8 345.4 13 Carpeting and furniture .8 117.9 117.7 115.9 121.1 122.8 119.6 120.2 121.0 121.0 124.1 122.1 124.0 124.4 124.5 14 Miscellaneous home goods 1.6 115.2 110.1 111.0 111.0 113.6 115.7 116.9 117.2 116.2 115.9 115.4 114.3 114.6 114.9 15 Nondurable consumer goods 23.0 109.9 108.6 107.9 108.7 109.3 108.9 108.3 108.4 108.4 108.3 108.9 108.5 110.1 110.3 16 Foods and tobacco 10.3 108.6 108.4 107.2 108.4 109.4 108.4 107.8 107.7 107.3 106.7 106.5 106.1 107.5 108.8 17 Clothing 2.4 95.2 91.3 91.3 91.7 92.0 91.3 91.8 90.2 90.2 89.2 90.1 90.1 90.7 90.4 18 Chemical products 4.5 120.9 122.0 120.2 119.7 122.8 121.6 118.7 120.5 120.2 119.4 122.7 120.9 122.7 124.0 19 Paper products 2.9 105.6 103.4 102.8 101.5 100.4 98.8 99.9 100.3 101.5 102.0 103.2 104.5 106.2 105.2 20 Energy 2.9 112.6 106.3 108.6 113.1 109.9 115.4 115.1 114.7 115.3 118.6 116.6 116.4 118.8 114.5 21 Fuels .8 110.5 109.6 110.1 112.2 113.4 110.7 111.5 110.9 109.9 111.1 110.0 112.0 114.3 110.1 22 Residential utilities 2.1 113.1 104.7 107.6 113.3 108.2 117.2 116.4 116.1 117.4 121.7 119.3 117.9 120.4 116.1 23 Equipment 17.2 142.7 146.3 145.2 144.6 144.9 145.9 147.0 148.4 148.3 149.3 150.5 150.3 151.3 151.7 24 Business equipment 13.2 161.2 167.0 166.3 165.9 166.3 167.5 169.4 171.2 171.2 172.6 173.9 173.8 174.9 175.4 25 Information processing and related 5.4 205.7 219.4 220.9 223.0 224.5 229.2 236.9 244.3 248.2 253.8 259.9 261.0 266.3 268.8 26 Computer and office equipment 1.1 526.9 642.8 657.8 677.5 703.1 736.1 773.0 805.8 830.2 851.9 892.8 926.9 957.0 977.1 27 Industrial 4.0 139.0 138.1 138.6 137.0 135.8 135.2 136.0 135.3 133.7 135.4 133.6 133.8 135.3 134.4 28 Transit 2.5 130.0 137.2 134.8 132.8 131.2 129.5 129.4 128.9 128.2 127.5 128.1 124.6 121.0 120.3 29 Autos and trucks 1.2 123.3 133.8 131.0 130.9 128.9 129.0 130.7 131.2 132.2 131.2 135.3 132.0 130.6 133.4 30 Other 1.3 139.8 139.7 133.0 132.6 139.9 143.0 135.7 134.0 130.2 123.8 123.2 126.3 125.3 128.0 31 Defense and space equipment 3.3 75.4 75.8 75.2 75.0 75.4 75.6 75.1 75.2 74.6 74.5 74.7 73.6 73.8 72.9 32 Oil and gas well drilling .6 134.6 116.0 105.2 99.8 97.4 100.8 97.2 99.8 100.1 102.0 107.1 111.3 115.7 120.8 33 Manufactured homes .2 166.3 171.2 172.5 173.3 169.2 168.8 164.7 161.3 158.9 151.5 151.3 144.4 145.0 147.0 34 Intermediate products, total 14.2 118.8 120.0 121.1 121.4 121.3 121.6 121.7 122.3 121.7 121.5 121.7 122.6 123.4 123.4 35 Construction supplies 5.3 128.0 130.3 132.2 133.3 132.5 131.7 131.3 132.9 132.6 133.2 132.9 134.0 135.0 136.0 36 Business supplies 8.9 113.4 113.9 114.5 114.3 114.7 115.6 116.1 116.1 115.3 114.6 115.1 115.8 116.4 115.8 37 Materials 39.5 146.5 147.9 148.5 148.2 148.7 150.3 150.8 151.7 153.1 155.0 154.6 155.6 156.3 157.3 38 Durable goods materials 20.8 182.1 187.7 189.2 188.8 189.2 191.9 193.1 194.3 197.2 200.3 199.9 202.2 202.5 204.9 39 Durable consumer parts 4.0 146.2 145.5 147.2 145.4 148.4 149.9 147.7 148.4 150.5 153.9 147.2 155.8 153.8 155.7 40 Equipment parts 7.6 295.6 319.6 322.1 323.1 324.4 331.5 340.5 345.0 355.2 364.6 369.0 371.0 374.8 379.8 41 Other 9.2 130.2 130.3 131.2 130.8 129.8 130.9 130.4 130.4 130.6 131.1 131.6 131.1 131.2 132.5 42 Basic metal materials 3.1 122.8 118.6 119.3 119.1 116.8 119.8 120.1 119.9 122.6 122.8 123.3 121.9 123.4 126.1 43 Nondurable goods materials 8.9 112.7 111.8 111.7 111.3 112.4 112.7 112.8 113.8 114.2 114.5 114.4 114.8 115.7 115.9 44 Textile materials 1.1 106.9 102.7 101.8 96.5 100.2 101.2 101.8 101.8 101.2 101.2 101.1 100.4 102.2 100.8 45 Paper materials 1.8 115.7 112.8 114.4 116.1 115.6 116.3 116.5 115.3 117.7 116.3 116.3 118.9 118.5 118.5 46 Chemical materials 3.9 112.9 112.7 111.3 111.6 112.8 113.6 114.2 116.0 116.9 117.7 117.4 117.6 118.5 119.1 47 Other 2.1 112.4 113.7 114.6 113.4 114.4 113.3 111.9 114.2 112.0 113.0 113.2 112.5 114.5 114.5 48 Energy materials 9.7 103.1 102.1 101.6 101.8 101.7 102.4 102.2 102.2 101.6 102.9 102.3 101.7 102.7 102.0 49 Primary energy 6.3 101.0 100.4 98.8 99.1 99.1 99.1 97.3 98.3 98.9 100.2 100.3 99.6 100.3 99.9 50 Converted fuel materials 3.3 107.8 105.3 107.0 106.8 106.7 108.9 111.7 109.9 106.8 108.0 106.1 105.7 107.3 106.0 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 132.4 133.6 133.7 133.9 134.4 135.1 135.4 136.1 136.4 137.3 137.4 137.9 139.0 139.4 52 Total excluding motor vehicles and parts 95.1 131.9 133.1 133.2 133.5 133.9 134.6 134.9 135.6 135.9 136.7 137.1 137.1 138.4 138.7 53 Total excluding computer and office equipment 98.2 128.1 128.8 128.7 128.8 129.1 129.5 129.7 130.2 130.6 131.2 131.4 131.4 132.4 132.7 54 Consumer goods excluding autos and trucks . 27.4 115.0 113.8 113.4 114.6 115.5 115.1 114.8 114.8 114.8 115.0 115.2 115.0 116.8 117.0 55 Consumer goods excluding energy 26.2 116.7 116.7 115.9 116.7 118.0 116.9 116.7 117.0 117.2 116.6 117.7 117.0 118.8 119.4 56 Business equipment excluding autos and trucks 12.0 165.6 170.8 170.3 169.9 170.6 171.9 173.8 175.7 175.7 177.4 178.3 178.5 180.0 180.2 57 Business equipment excluding computer and office equipment 12.1 142.6 144.8 143.7 142.7 142.4 142.6 143.4 144.2 143.6 144.4 144.6 143.6 143.9 143.9 58 Materials excluding energy 29.8 160.2 162.4 163.3 162.9 163.6 165.5 166.3 167.4 169.5 171.6 171.3 172.9 173.5 175.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 1998 1999 SIC pro- 1998 GGrroouupp code por- avg. tion Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug.r Sept.1 Oct. Nov.P Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 132.4 133.8 133.8 134.1 134.5 135.1 135.5 136.2 136.6 137.4 137.7 138.0 139.1 139.5 60 Manufacturing 85.4 136.4 138.3 138.4 138.6 139.3 139.7 140.2 141.0 141.4 142.0 142.5 142.9 144.0 144.6 61 Primary processing 26.5 121.2 120.8 121.9 122.2 122.1 122.4 122.2 122.5 122.7 123.3 123.4 123.6 124.2 124.8 62 Advanced processing 58.9 144.0 147.5 147.2 147.2 148.4 148.8 149.6 150.7 151.2 151.8 152.6 153.0 154.4 155.1 63 Durable goods 45.0 160.7 165.4 166.2 166.3 166.8 168.1 169.4 170.8 172.2 173.8 174.4 174.9 176.1 177.0 64 Lumber and products 24 2.0 118.5 119.9 122.5 122.6 122.3 121.7 121.5 123.9 122.2 121.5 120.2 119.6 120.5 121.1 65 Furniture and fixtures 25 1.4 122.0 123.7 123.3 122.7 124.6 125.8 123.8 124.4 124.4 125.7 126.4 127.9 126.8 126.2 66 Stone, clay, and glass products 32 2.1 126.8 130.1 131.8 133.1 132.2 130.8 128.8 128.5 127.8 129.3 130.2 129.7 130.6 132.3 67 Primary metals 33 3.1 125.6 120.5 122.5 122.9 120.1 124.0 123.9 123.9 127.4 128.0 129.6 128.0 129.1 132.3 68 Iron and steel 331,2 1.7 122.6 112.1 116.5 118.1 114.6 118.1 119.4 120.1 124.5 126.2 127.6 125.3 126.7 132.7 69 Raw steel 331PT .1 115.3 101.6 102.7 106.8 106.8 108.3 109.3 111.4 110.7 111.1 115.9 112.4 121.8 127.2 70 Nonferrous 333-6,9 1.4 129.4 130.9 130.0 128.9 127.0 131.4 129.4 128.6 130.8 130.2 132.1 131.3 132.1 131.8 71 Fabricated metal products . . 34 5.0 128.8 128.6 129.8 129.0 128.4 128.5 128.0 127.2 128.3 128.6 128.5 128.3 128.4 128.7 72 Industrial machinery and equipment 35 8.0 206.4 215.3 216.6 217.5 221.7 224.6 227.0 228.4 228.2 230.0 231.4 235.4 239.0 240.3 73 Computer and office equipment 357 1.8 675.1 805.3 832.2 868.1 907.1 947.6 987.5 1,021.6 1,048.2 1,075.1 1,123.7 1,167.5 1,206.7 1,232.9 74 Electrical machinery 36 7.3 315.1 341.7 344.8 346.7 347.5 354.0 366.4 373.3 384.2 399.2 401.3 401.5 408.2 412.8 75 Transportation equipment. . . 37 9.5 121.6 124.9 123.9 122.7 123.2 122.6 122.1 122.8 123.5 122.9 122.9 123.3 121.9 121.9 76 Motor vehicles and parts . 371 4.9 141.7 148.0 147.1 146.5 147.8 148.1 148.4 150.6 152.9 152.2 152.2 155.6 154.9 156.6 77 Autos and light trucks . 371PT 2.6 127.8 138.1 136.4 136.5 135.0 134.0 135.7 138.3 142.0 135.8 146.8 139.4 140.7 141.1 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 101.7 102.3 101.2 99.4 99.3 97.9 96.5 96.0 95.2 94.7 94.7 92.6 9900..55 89.0 79 Instruments 38 5.4 112.6 113.0 112.8 113.3 112.9 113.7 115.1 116.7 117.0 117.2 117.7 116.9 118.5 118.5 80 Miscellaneous 39 1.3 122.0 119.5 120.8 120.6 121.8 122.9 124.2 125.5 124.5 125.2 125.2 125.1 125.5 124.7 81 Nondurable goods 40.4 111.6 111.6 111.1 111.3 112.3 111.8 111.5 111.9 111.3 111.0 111.5 111.8 112.8 113.2 82 Foods 20 9.4 109.3 110.9 110.3 111.0 111.4 110.9 110.6 110.6 110.0 108.9 108.9 109.4 110.4 111.4 83 Tobacco products 21 1.6 106.2 96.0 91.1 94.8 99.2 95.4 94.1 95.4 94.5 96.0 94.8 90.9 93.6 95.9 84 Textile mill products 22 1.8 110.9 107.0 106.4 108.0 110.5 110.1 111.4 110.9 110.8 112.3 111.7 111.2 114.3 113.0 85 Apparel products 23 2.2 96.6 93.3 93.2 92.3 92.2 91.8 92.4 91.2 90.7 89.8 89.2 89.0 89.4 89.0 86 Paper and products 26 3.6 114.9 112.8 114.9 115.7 115.9 115.9 115.0 114.6 115.7 115.0 115.8 117.4 117.6 117.8 87 Printing and publishing .... 27 6.7 105.1 105.1 105.3 104.3 104.3 103.7 104.2 104.1 103.5 102.8 103.6 104.7 106.0 105.4 88 Chemicals and products .... 28 9.9 115.1 116.2 114.7 114.5 116.6 116.8 115.6 117.0 116.3 115.8 117.7 117.3 118.5 119.5 89 Petroleum products 29 1.4 113.3 114.8 114.8 117.2 117.0 114.9 114.6 114.2 113.4 115.1 114.1 114.6 116.2 113.9 90 Rubber and plastic products . 30 3.5 133.2 134.9 135.6 135.4 135.6 135.8 136.2 137.4 136.4 138.0 137.6 139.2 137.9 138.6 91 Leather and products 31 .3 77.1 75.1 73.2 71.9 71.5 71.3 70.6 70.9 71.3 69.1 70.2 69.4 68.6 68.9 92 Mining 6.9 103.8 101.5 98.1 98.0 97.4 97.5 96.7 97.4 97.1 97.8 98.5 98.4 99.2 99.9 93 Metal 10 .5 109.1 109.4 106.6 102.9 101.3 98.5 100.5 100.2 98.9 96.2 93.0 92.8 93.1 95.8 94 Coal 12 1.0 109.7 112.4 109.2 107.7 108.9 103.9 107.3 106.1 107.0 110.0 110.7 109.4 108.8 110.0 95 Oil and gas extraction 13 4.8 99.5 94.7 91.5 91.2 90.7 92.1 90.8 91.8 91.4 92.3 93.2 93.0 93.9 94.2 96 Stone and earth minerals 14 .6 123.4 128.9 124.1 129.4 127.1 126.6 121.8 123.9 123.3 120.5 123.0 125.5 127.6 129.4 97 Utilities 7.7 114.4 110.8 112.5 114.5 112.6 116.8 116.3 116.1 117.4 119.8 117.8 116.9 119.2 116.4 98 Electric 491.493PT 6.2 116.9 114.7 115.9 115.8 114.9 119.1 118.6 118.4 119.6 122.6 120.0 118.9 121.6 119.7 99 Gas 492.493PT 1.6 103.2 93.3 97.5 108.8 102.5 106.4 105.7 105.8 107.5 107.4 108.2 108.0 108.0 101.4 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 136.1 137.8 138.0 138.2 138.9 139.3 139.8 140.5 140.8 141.4 142.0 142.2 143.4 144.0 101 Manufacturing excluding computer and office equipment 83.6 131.4 132.5 132.5 132.4 133.0 133.1 133.4 134.1 134.3 134.8 135.1 135.3 136.2 136.7 102 Computers, communications equipment, and semiconductors 5.9 563.8 645.5 656.4 665.0 676.0 700.3 731.6 753.3 780.5 812.1 830.4 842.3 858.9 876.6 103 Manufacturing excluding computers and semiconductors 81.1 120.4 120.7 120.7 120.6 121.1 121.0 120.9 121.3 121.2 121.3 112211..66 121.7 122.4 122.8 104 Manufacturing excluding computers, communications equipment and semiconductors 79.5 118.5 118.8 118.7 118.6 119.1 118.9 118.7 119.1 118.9 118.9 119.1 119.2 120.0 120.3 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total 2,001.9 2,644.3 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 2,742.0 2,738.4 2,768.8 2,764.3 106 Final 1,552.1 2,037.0 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 2,118.5 2,110.8 2,137.4 2,133.1 107 Consumer goods 1,049.6 1,271.0 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 1,301.3 1,295.2 1,316.9 1,309.8 108 Equipment 502.5 767.0 795.1 789.6 787.0 788.1 793.3 800.1 806.7 806.7 812.3 819.0 817.7 822.1 825.3 109 Intermediate 449.9 606.1 611.7 617.5 619.9 619.1 620.4 621.7 625.2 622.1 622.0 622.4 626.3 630.3 630.0 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 • February 2000 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1999 Item 11999988 Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,426 1,441 1,604 1,778 1,738 1,654 1,572 1,591 1,641 1,641 1,619 1,506 1,594 2 One-family 1,070 1,062 1,184 1,275 1,306 1,242 1,214 1,243 1,241 1,247 1,210 1,171 1,178 3 Two-family or more 356 379 421 503 432 412 358 348 400 394 409 335 416 4 Started 1,477 1,474 1,617 1,820 1,752 1,746 1,577 1,668 1,607 1,680 1,655 l,637r 1,637 One-family 1,161 1,134 1,271 1,393 1,380 1,394 1,260 1,389 1,305 1,332 1,289 l,295r 1,340 6 a 1 Un T de w r o c - o f n a s m tr i u ly c ti o o r n m at o e r n e d of period1 3 8 1 1 6 9 3 8 4 3 0 4 3 9 4 3 6 5 1, 4 0 2 1 7 1 1, 3 0 7 3 2 2 1, 3 0 5 3 2 6 1, 3 0 1 3 7 1 1, 2 0 7 2 9 9 1, 3 0 0 1 2 7 1, 3 0 4 2 8 1 l,0 3 2 66 6 r l,0 3 2 4 3 2 r r 1, 2 0 9 2 7 0 One-family 584 570 638 697 712 714 708 708 702 704 704r 701r 704 9 Two-family or more 235 264 297 314 320 322 323 321 315 317 322 322r 316 10 Completed 1,406 1,406 1,473 1,648 1,528 1,700 1,633 1,650 1,674 1,609 1,594r l,652r 1,637 ii One-family 1,123 1,120 1,158 1,292 1,246 1,357 1,324 1,334 1,346 1,263 l,267r 1,313r 1,296 12 Two-familv or more 283 285 315 356 282 343 309 316 328 346 327r 339r 341 13 Mobile homes shipped 361 354 372 390 381 383 368 365 355 336 340 320 321 Merchant builder activity in one-family units 14 Number sold 757 804 886 908 909 885 952 914 932 929 923 848 986 15 Number for sale at end of period1 326 287 300 295 297 300 300 304 306 305 307 310 312 Price of units sold (thousands of dollars)2 16 Median 140.0 146.0 152.5 152.5 159.9 155.0 160.0 154.8 158.3 157.9 155.0 159.9 159.0 1/ Average 166.4 176.2 181.9 182.8 191.4 189.4 191.4 188.2 193.4 188.8 193.5 193.9 198.9 EXISTING UNITS (one-family) 18 Number sold 4,196 4,381 4,970 5,060 5,140 5,420 5,250 5,000 5,630 5,400 5,240 5,130 4,790 Price of units sold (thousands of dollars)2 19 Median 115.8 121.8 128.4 130.3 128.1 129.6 130.7 132.8 136.9 136.0 137.4 134.4 133.1 20 Average 141.8 150.5 159.1 162.8 159.6 162.3 163.8 167.4 174.2 171.9 174.3 170.2 167.3 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 581,920 617,877 664,451 697,858 710,657 715,396 704,582 698,461 698,852 702,517 698,381 697,450 699,268 22 Private 447,593 474,842 518,987 543,471 548,682 555,362 547,885 546,880 546,931 546,375 541,690 539,767 537,633 23 Residential 255,577 265,908 293,569 315,828 318,483 323,133 322,213 321,803 320,913 320,352 318,816 318,838 319,906 24 Nonresidential 192,017 208,933 225,418 227,643 230,199 232,229 225,672 225,077 226,018 226,023 222,874 220,929 217,727 25 Industrial buildings 32,644 31,355 32,308 29,895 28,967 29,052 26,217 24,975 25,465 26,246 25,679 23,772 22,416 2261 Commercial buildings 75,829 86,190 95,252 100,164 102,802 103,983 102,180 104,134 104,457 103,441 102,498 103,920 102,203 Other buildings 30,648 37,198 39,438 38,833 40,449 39,840 39,737 38,876 38,592 38,365 37,735 37,323 37,659 28 Public utilities and other 52,896 54,190 58,421 58,751 57,981 59,354 57,538 57,092 57,504 57,971 56,962 55,914 55,449 29 Public 134,326 143,035 145,464 154,387 161,975 160,033 156,697 151,581 151,921 156,142 156,691 157,682 161,635 30 Military 2,604 2,559 2,588 1,881 2,636 2,223 2,268 2,128 2,137 2,305 1,679 1,941 2,264 31 Highway 39,883 44,295 45,067 50,538 54,880 53,099 50,897 48,542 45,518 47,747 48,148 49,087 46,766 32 Conservation and development 5,827 5,576 5,487 6,018 6,271 6,194 6,016 5,101 5,845 5,810 6,581 6,277 6,174 33 Other 86,012 90,605 92,322 95,950 98,188 98,517 97,516 95,810 98,421 100,280 100,283 100,377 106,431 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) IIInnndddeeexxx llleeevvveeelll,,, IIIttteeemmm 1998 1999 1999 NNNooovvv... 11999988 11999999 111999999999 NNoovv.. NNoovv.. Dec. Mar. June Sept. July Aug. Sept. Oct. Nov. CONSUMER PRICES2 (1982-84=100) 1 All items 1.5 2.6 2.0 1.5 2.9 4.2 .3 .3 .4 .2 .1 168.3 -> Food 2.3 1.9 2.8 1.7 1.7 2.5 .2 .2 .2 .2 .1 165.2 3 Energy items -9.2 10.6 -5.1 5.8 14.2 29.4 2.1 2.7 1.7 -.1 .0 111.2 4 All items less food and energy 2.3 2.1 2.5 .9 2.3 2.5 .2 .1 .3 .2 .2 178.4 Commodities .7 .8 2.5 -3.0 2.0 2.5 .1 -.1 .7 .1 -.2 145.0 6 Services 3.1 2.7 2.5 2.7 2.5 2.3 .3 .2 .2 .3 .4 197.5 PRODUCER PRICES (1982=100) 7 Finished goods -.6 3.1 2.2 .6 2.8 7.1 .2 .5 1.1 -.1 .2 135.0 Consumer foods .2 .4 .3 2.1 .0 2.4 -,6r ,lr 1.0 -.7 .1 135.4 9 Consumer energy -11.1 15.4 -8.9 5.7 23.2 42.4 3.0" 3.8r 2.2 -1.0 1.4 84.0 10 Other consumer goods 2.3 3.0 8.3 -1.3 .8 3.8 .0 -.1 1.1 .3 .1 153.5 11 Capital equipment -.1 .1 .3 -.6 -.3 .6 -.1 .0 .2 .3 -.1 138.3 Intermediate materials 12 Excluding foods and feeds -2.7 3.3 -4.5 .3 6.1 6.6 ,8r ,5r .3 ..33 ..33 112266..22 13 Excluding energy -1.5 1.5 -2.7 -.9 3.1 2.7 .4 .2 .1 .4 .1 134.4 Crude materials 14 Foods -7.2 -2.8 -7.0 4.1 -.8 1.2 -4.3r 3.5r 1.3 -.1 1.0 99.5 15 Energy -31.1 45.7 13.5 -21.1 163.8 121.9 4.3r 6.0r 10.4 -4.8 8.8 97.5 16 Other -15.6 9.7 -24.3 .9 8.6 26.6 1.8r 1.9r 2.2 2.4 .3 142.8 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 • February 2000 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates Q3 Q4 Ql Q2 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 By source 2 3 4 Per D N s u o o n r n a d a b l u l r e c a o b g n l o s e u o d m g s o p o t d io s n expenditures 5 1 , , 2 6 5 3 1 7 7 6 4 . . . 5 5 1 5 1 , . 5 6 6 2 4 4 4 2 1 . . . 4 9 7 5 1 . , 8 6 7 4 9 0 8 8 8 . . . 6 2 9 5 1 , . 8 6 7 8 9 1 9 6 6 . . . 6 9 6 5 1 . , 9 7 7 7 2 4 3 2 2 . . . 7 8 9 6 1 , . 0 7 7 9 3 8 0 9 7 . . . 8 0 8 6 1 , , 2 7 8 0 5 2 0 1 4 . . . 8 6 8 5 Services 3,047.0 3.239.8 3,441.5 3.476.1 3.508.0 3.564.0 3.624.3 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 7 Fixed investment 1,212.7 1,315.4 1,460.0 1.461.7 1,508.9 1,543.3 1.567.8 8 Nonresidential 899.4 986.1 1.091.3 1.087.2 1.121.4 1.139.9 1,155.4 9 Structures 225.0 254.1 272.8 271.7 278.0 274.7 272.5 10 Producers' durable equipment 674.4 732.1 818.5 815.4 843.4 865.2 882.9 11 Residential structures 313.3 329.2 368.7 374.5 387.5 403.4 412.4 12 Change in business inventories 30.0 68.3 71.2 73.7 71.4 51.0 17.6 13 Nonfarm 22.2 65.6 70.9 74.7 56.2 40.9 12.8 14 Net exports of goods and services -89.0 -88.3 -149.6 -165.7 -161.2 -201.6 -245.8 15 Exports 874.2 968.0 966.3 949.1 981.8 966.9 978.2 16 Imports 963.1 1,056.3 1,115.9 1.114.8 1.143.1 1,168.5 1,224.0 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 18 Federal 531.6 537.8 538.7 539.7 546.7 557.4 561.6 19 State and local 890.4 943.2 991.0 999.0 1,008.1 1,031.8 1,044.3 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 21 Goods 2.921.3 3,074.1 3,239.1 3,231.9 3,318.4 3.365.6 3.406.6 22 Durable 1,331.9 1,424.8 1,528.9 1,519.9 1,571.4 1,584.3 1.601.7 23 Nondurable 1.589.4 1,649.3 1,710.3 1,712.1 1,747.0 1,781.3 1,804.9 24 Services 4,191.0 4,434.7 4,664.6 4,700.4 4,747.9 4.820.7 4,885.5 25 Structures 670.9 723.7 785.1 791.9 809.9 835.3 836.5 26 Change in business inventories 30.0 68.3 71.2 73.7 71.4 51.0 17.6 27 Durable goods 19.1 35.6 39.0 39.8 38.6 24.1 6.3 28 Nondurable goods 10.9 32.8 32.3 33.9 32.8 27.0 11.4 MEMO 7,813.2 8,165.1 8,516.3 8,536.0 8,659.2 8,737.9 8,778.6 29 Total GDP in chained 1992 dollars NATIONAL INCOME 6,210.2 6,634.9 7.036.4 7.087.1 7,193.8 7,334.5 7,423.1 30 Total 4,395.6 4,675.7 5,011.2 5,053.6 5.134.7 5,217.7 5,287.1 31 Compensation of employees 3,630.1 3,884.7 4.189.5 4,227.9 4.300.8 4,371.5 4,432.6 32 Wages and salaries 641.0 664.4 692.8 696.7 702.8 715.8 721.3 33 Government and government enterprises 2,989.1 3,220.3 3,496.7 3.531.2 3,598.0 3,655.7 3,711.3 34 Other 765.4 791.0 821.7 825.7 833.9 846.2 854.5 35 Supplement to wages and salaries 275.4 290.1 306.0 308.1 311.8 318.3 321.5 36 Employer contributions for social insurance 490.0 500.9 515.7 517.7 522.1 528.0 533.0 37 Other labor income 38 Proprietors' income1 544.7 578.6 606.1 606.4 637.1 639.9 655.3 39 Business and professional1 510.5 549.1 581.0 583.6 596.0 607.5 621.2 40 Farm1 34.3 29.5 25.1 22.9 41.1 32.5 34.1 41 Rental income of persons2 129.7 130.2 137.4 139.3 147.0 148.6 148.8 42 Corporate profits1 753.9 837.9 846.1 843.8 834.3 882.0 875.5 43 Profits before tax3 726.3 795.9 781.9 780.1 766.7 818.1 835.8 44 Inventory valuation adjustment 3.1 7.4 20.9 19.8 20.8 13.3 -13.6 45 Capital consumption adjustment 24.4 34.6 43.3 43.9 46.9 50.6 53.2 46 Net interest 386.3 412.5 435.7 440.8 446.3 456.4 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 Q3r 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 7,831.4 2 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 4,509.4 3 Commodity-producing industries 908.2 975.5 1,038.7 1,045.6 1,056.6 1,062.9 1,075.1 1,090.2 4 Manufacturing 673.7 718.8 757.5 762.3 765.6 767.0 774.8 786.4 5 Distributive industries 822.4 879.1 944.6 953.5 969.9 986.3 997.6 1,013.4 6 Service industries 1,254.9 1,369.8 1,509.9 1,528.6 1,568.0 1,606.6 1,638.5 1,675.5 7 Government and government enterprises 641.0 664.4 692.8 696.7 702.8 715.8 721.3 730.3 8 Other labor income 490.0 500.9 515.7 517.7 522.1 528.0 533.0 538.5 i9n Pro B p u r s ie in to e r s s s ' a i n n d c o p m r e o 1 f essional' 5 5 4 1 4 0 . . 7 5 5 5 7 4 8 9 . . 6 1 6 5 0 8 6 1 . . 1 0 6 5 0 8 6 3 . . 4 6 6 5 3 9 7 6 . . 1 0 6 6 3 0 9 7 . . 9 5 6 6 5 2 5 1 . . 3 2 6 6 5 3 4 3 . . 0 0 11 Farm' 34.3 29.5 25.1 22.9 41.1 32.5 34.1 21.0 1n2 R D e iv n i t d a e l n i d n s c ome of persons2 2 1 9 2 7 9 . . 4 7 3 1 3 3 3 0 . . 4 2 3 1 4 3 8 7 . . 3 4 3 1 4 3 8 9 . . 0 3 3 1 5 4 1 7 . . 9 0 3 1 5 4 6 8 . . 1 6 3 1 6 4 1 8 . . 2 8 3 1 6 3 7 9 . . 0 0 n14 T Pe r r a s n o s n fe a r l p in a t y e m re e s n t t i s n come 9 8 2 1 8 0 . . 8 6 9 8 6 5 2 4 . . 4 9 9 89 8 7 3 . . 8 6 9 9 8 0 6 9 . . 5 3 9 9 9 0 1 6 . . 0 4 1, 9 0 0 0 7 7 . . 4 8 1, 9 0 2 1 0 3 . . 5 6 1, 9 0 3 2 8 1 . . 8 3 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 7,831.4 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 1,160.4 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 6,671.0 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 6,531.5 22 EQUALS: Personal saving 272.1 271.1 229.7 224.8 227.5 195.1 168.0 139.5 MEMO Per capita (chained 1992 dollars) 23 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,,554433..33 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 22,059.6 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 23,343.0 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 1,735.6 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 1,355.7 79 Personal saving 272.1 271.1 229.7 224.8 227.5 195.1 168.0 139.5 .30 Undistributed corporate profits' 232.5 265.9 257.2 251.1 246.5 277.6 259.5 252.4 31 Corporate inventory valuation adjustment 3.1 7.4 20.9 19.8 20.8 13.3 -13.6 -26.7 Capital consumption allowances 39 Corporate 543.6 579.4 619.2 625.0 637.1 645.8 665577..22 667766..55 33 Noncorporate 238.5 249.8 261.5 263.3 267.7 271.0 274.6 287.2 34 Gross government saving 58.9 159.3 274.8 296.4 303.0 338.3 350.2 379.9 35 Federal -51.5 37.7 134.3 147.1 147.8 187.2 208.3 225.1 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 97.6 118.1 133.8 38 State and local 110.4 121.5 140.5 149.3 155.2 151.1 141.9 154.8 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 48.9 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 42 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 1,635.0 43 Gross government investment 250.2 258.1 268.7 273.5 272.6 289.8 292.2 295.7 44 Net foreign investment -110.7 -123.7 -201.5 -232.6 -229.9 -255.7 -303.7 -336.3 45 Statistical discrepancy 32.8 -3.2 -47.6 -87.9 -62.4 -99.4 -135.5 -141.2 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 • February 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 Q3 Q4 Ql Q2r Q3P 1 Balance on current account -129,295 -143,465 -220,562 -63,476 -61,669 -68,654 -80,909 -89,949 2 Balance on goods and services -104,318 -104,730 -164,282 -45,724 -43,262 -53,974 -65,085 -73,825 3 Exports 849,806 938,543 933,907 229,284 236,904 231,904 234,512 242,626 4 Imports -954,124 -1,043,273 -1,098,189 -275,008 -280,166 -285,878 -299,597 -316,451 5 Income, net 17,210 3,231 -12,205 -6,965 -4,933 -4,340 -4,612 -4,920 6 Investment, net 21,754 8,185 -6,956 -5,637 -3,571 -2,946 -3,225 -3,520 7 Direct 67,746 69,220 59,405 11,834 14,558 14,834 13,990 15,657 8 Portfolio -45,992 -61,035 -66,361 -17,471 -18,129 -17,780 -17,215 -19,177 9 Compensation of employees -4,544 -4,954 -5,249 -1,328 -1,362 -1,394 -1,387 -1,400 10 Unilateral current transfers, net -42,187 -41,966 -44,075 -10,787 -13,474 -10,340 -11,212 -11,204 11 Change in U.S. government assets other than official reserve assets, net (increase, -) -989 68 -429 185 -50 119 -392 -673 12 Change in U.S. official reserve assets (increase, -) 6,668 -1,010 -6,784 -2,026 -2,369 4,068 1,159 1,950 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) 370 -350 -149 188 -227 563 -190 -185 15 Reserve position in International Monetary Fund -1,280 -3,575 -5,118 -2,078 -1,924 3 1,413 2,268 16 Foreign currencies 7,578 2,915 -1,517 -136 -218 3,502 -64 -133 17 Change in U.S. private assets abroad (increase, —) -386,441 -464,354 -285,605 -60,256 -48,188 -19,335 -155,480 -102,760 18 Bank-reported claims3 -91,555 -144,822 -24,918 -33,344 37,192 27,771 -42,519 384 19 Nonbank-reported claims -86,333 -120,403 -25,041 -20,320 16,202 -13,853 -16,816 -32,098 20 U.S. purchases of foreign securities, net -115,859 -89,174 -102,817 14,994 -70,809 8,132 -64,579 -26,511 21 U.S. direct investments abroad, net -92,694 -109,955 -132,829 -21,586 -30,773 -41,385 -31,566 -44,535 22 Change in foreign official assets in United States (increase, +) 127,390 18,119 -21,684 -46,489 24,352 4,708 -628 12,106 23 U.S. Treasury securities 115,671 -6,690 -9,957 -32,811 31,836 800 -6,708 12,880 24 Other U.S. government obligations 5,008 4,529 6,332 1,906 1,562 5,993 5,792 1,932 25 Other U.S. government liabilities" -316 -1,798 -3,113 -224 -1,054 -1,594 -647 -1,163 26 Other U.S. liabilities reported by U.S. banks3 5,704 22,286 -11,469 -12,866 -7,133 -589 1,437 -1,832 27 Other foreign official assets4 1,323 -208 -3,477 -2,494 -859 98 -502 289 28 Change in foreign private assets in United States (increase, +) 447,457 733,542 524,321 140,036 125,453 84,152 274,899 195,047 29 U.S. bank-reported liabilities2 16,478 149,026 40,731 77,313 -21,811 -14,184 34,938 30,965 30 U.S. nonbank-reported liabilities 39,404 107,779 9,412 11,875 -53,210 20,188 8,871 12,136 31 Foreign private purchases of U.S. Treasury securities, net 154,996 146,433 46,155 -1,438 24,391 -8,781 -5,407 9,713 32 U.S. currency flows 17,362 24,782 16,622 7,277 6,250 2,440 3,057 4,697 33 Foreign purchases of other U.S. securities, net 130,240 196,258 218,026 20,103 49,328 61,540 79,067 93,062 34 Foreign direct investments in United States, net 88,977 109,264 193,375 24,906 120,505 22,949 154,373 44,474 35 Capital account transactions, net5 672 292 617 148 166 166 178 166 36 Discrepancy -65,462 -143,192 10,126 31,878 -37,695 -5,224 -38,827 -15,887 37 Due to seasonal adjustment -10,582 4,144 5,264 276 -10,209 38 Before seasonal adjustment -65,462 -143,192 10,126 42,460 -41,839 -10,488 -39,103 -5,678 MEMO Changes in official assets 39 U.S. official reserve assets (increase, —) 6,668 -1,010 -6,784 -2,026 -2,369 4,068 1,159 1,950 40 Foreign official assets in United States, excluding line 25 (increase, +) 127,706 19,917 -18,571 -46,265 25,406 6,302 19 13,269 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 14,911 12,124r -11,499 -ll,642r 2,057r 2,058 1,966 -1,047 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 Apr. May June July Aug.r Sept.r Oct.p 1 Goods and services, balance -104,318 -104,731 -164,282 -18,787 -21,390 -24,604 -24,886 -23,953 -24,152 -25,937 2 Merchandise -191,270 -196,652 -246,932 -25,334 -27,899 -31,179 -31,422 -30,132 -30,211 -31,996 3 Services 86,952 91,921 82,650 6,547 6,509 6,575 6,536 6,179 6,059 6,059 4 Goods and services, exports 849,806 938,543 933,907 78,113 77,978 78,623 79,122 82,171 82,025 81,920 5 Merchandise 612,057 679,715 670,246 55,269 55,121 55,472 55,890 59,139 58,934 58,702 6 Services 237,749 258,828 263,661 22,844 22,857 23,151 23,232 23,032 23,091 23,218 7 Goods and services, imports -954,124 -1,043,273 -1,098,189 -96,900 -99,368 -103,227 -104,008 -106,124 -106,177 -107,857 8 Merchandise -803,327 -876,366 -917,178 -80,603 -83,020 -86,651 -87,312 -89,271 -89,145 -90,698 9 Services -150,797 -166,907 -181,011 -16,297 -16,348 -16,576 -16,696 -16,853 -17,032 -17,159 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 May June July Aug. Sept. Oct. Nov. Dec.p 1 Total 75,090 69,954 81,755 72,121 71,689 73,305 72,649r 73,414 73,230 72,318 71,517 2 Gold stock, including Exchange Stabilization Fund1 11,049 11,050 11,041 11,049 11,046 11,048 11,046r 11,047 11,049 11,049 11,049 3 Special drawing rights2,3 10,312 10,027 10,603 9,784 9,719 9,925 10,152 10,284 10,232 10,326 10,336 4 Reserve position in International Monetary Fund2 15,435 18,071 24,111 21,689 21,462 21,462 19,885 19,978 19,571 18,707 17,950 5 Foreign currencies4 38,294 30,809 36,001 29,599 29,462 30,870 31,566 32,105 32,378 32,236 32,182 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 May June July Aug. Sept. Oct. Nov. Dec.p 1 Deposits 167 457 167 157 409 257 166 243 189 501 71 Held in custody 2 U.S. Treasury securities2 638,049 620,885 607,574 606,579 611,372 619,004 626,669 634,086 621,351 629,430 632,482 3 Earmarked gold3 11,197 10,763 10,343 10,340 10,329 10,329 10,271 10,155 10,114 10,015 9,933 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 • February 2000 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1999 IItteemm 11999977 11999988 Apr. May June July Aug. Sept. Oct.P 1 Total1 776,505 759,933r 766,509 760,410 765,708 773,494 782,505r 778,681 782,881 By type 2 Liabilities reported by banks in the United States 135,384 125,878r 135,731 124,270 126,180 125,873 126,220 124,148 124,509 3 U.S. Treasury bills and certificates3 148,301 134,177 135,765 136,199 138,518 147,492 153,499 152,457 154,582 U.S. Treasury bonds and notes 4 Marketable 428,004 432,127 418,350 421,573 421,970 420,197 422,591r 420,877 419,629 5 Nonmarketable4 5,994 6,074 6,231 6,143 5,982 6,022 6,060 6,098 6,139 6 U.S. securities other than U.S. Treasury securities5 58,822 61,677 70,432 72,225 73,058 73,910 74,135r 75,101 78,022 By area 7 Europe1 252,289 256,026 245,500 242,386 241,989 240,546 243,334 241,233 243,412 8 Canada 36,177 36,715 38,563 38,181 39,001 39,147 39,342 39,337 39,682 9 Latin America and Caribbean 96,942 79,498r 81,379 81,075 76,828 77,832 75,339 74,279 73,613 10 Asia 400,144 400,64 r 413,991 411,739 421,282 430,050 438,300 437,957 439,862 11 Africa 9,981 10,059 9,656 9,326 8,378 8,376 8,119r 8,215 7,847 12 Other countries 7,058 3,080 3,506 3,789 4,316 3,629 4,157 3,746 4,551 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 Dec. Mar. June Sept. 1 Banks' liabilities 109,713 103,383 117,524 101,125 101,359 97,751 110,322 2 Banks' claims 74,016 66,018 83,038 78,152 80,642 67,864 77,946 3 Deposits 22,696 22,467 28,661 45,985 42,147 41,895 48,719 4 Other claims 51,320 43,551 54,377 32,167 38,495 25,969 29,227 5 Claims of banks' domestic customers2 6,145 10,978 8,191 20,718 11,039 23,474 11,534 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

Bank-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 Apr. May June July Aug. Sept. Oct.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,162,148 1,283,027 1,347,771 1,334,719 1,352,678 1,382,649 1,339,888 l,385,468r 1,375,439 1,373,322 2 Banks' own liabilities 758,998 882,980 884,873 880,209 900,891 920,125 889,661 907,916 927,045 931,126 3 Demand deposits 27,034 31,344 29,556 31,180 32,184 36,322 43,183 44,940 44,594 39,451 4 Time deposits2 186,910 198,546 152,226 157,680 156,515 156,677 156,891 154,299R 156,330 160,423 Other3 143,510 168,011 140,245 160,670 160,800 152,683 151,819 152,863R 160,871 157,276 6 Own foreign offices4 401,544 485,079 562,846 530,679 551,392 574,443 537,768 555,814 565,250 573,976 7 Banks' custodial liabilities5 403,150 400,047 462,898 454,510 451,787 462,524 450,227 477,552 448,394 442,196 8 U.S. Treasury bills and certificates6 236,874 193,239 183,494 178,514 177,768 179,351 187,872 192,096 189,030 188,486 9 Other negotiable and readily transferable instruments7 72,011 93,641 141,699 129,051 124,100 123,246 121,567 132,405 128,914 129,252 10 Other 94,265 113,167 137,705 146,945 149,919 159,927 140,788 153,051 130,450 124,458 11 Nonmonetary international and regional organizations8 . . 13,972 11,690 11,883 15,921 14,067 17,987 18,463 18,268R 18,646 17,823 12 Banks' own liabilities 13,355 11,486 10,850 15,184 13,320 16,002 16,964 16,856R 17,726 16,982 1.3 Demand deposits 29 16 172 13 25 49 66 31 21 187 14 Time deposits2 5,784 5,466 5,793 6,324 5,840 7,231 7,380 6,419 7,370 8,712 15 Other3 7,542 6,004 4,885 8,847 7,455 8,722 9,518 10,406R 10,335 8,083 16 Banks' custodial liabilities5 617 204 1,033 737 747 1,985 1,499 1,412 920 841 17 U.S. Treasury bills and certificates6 352 69 636 555 616 956 953 896 661 628 18 Other negotiable and readily transferable instruments7 265 133 397 182 131 1,029 533 516 259 213 19 Other 0 2 0 0 0 0 13 0 0 0 20 Official institutions' 312,019 283,685 260,055 271,496 260,469 264,698 273,365 279,719 276,605 279,091 21 Banks' own liabilities 79,406 102,028 80,251 86,001 79,452 78,445 80,400 77,801 76,780 79,362 72 Demand deposits 1,511 2,314 3,003 3,599 2,789 2,952 2,652 2,537 2,932 2,314 23 Time deposits2 33,336 41,396 29,602 29,049 27,372 26,643 26,845 24,407r 25,301 29,141 24 Other3 44,559 58,318 47,646 53,353 49,291 48,850 50,903 50,857r 48,547 47,907 25 Banks' custodial liabilities5 232,613 181,657 179,804 185,495 181,017 186,253 192,965 201,918 199,825 199,729 26 U.S. Treasury bills and certificates6 198,921 148,301 134,177 135,765 136,199 138,518 147,492 153,499 152,457 154,582 27 Other negotiable and readily transferable instruments7 33,266 33,151 44,953 49,443 44,586 47,582 45,094 48,297 46,633 44,804 28 Other 426 205 674 287 232 153 379 122 735 343 29 Banks10 694,835 815,247 885,047 848,313 881,368 910,025 853,184 888,328 877,876 873,070 30 Banks' own liabilities 562,898 641,447 675,998 646,602 676,341 695,251 656,403 676,931 692,246 697,493 31 Unaffiliated foreign banks 161,354 156,368 113,152 115,923 124,949 120,808 118,635 121,117 126,996 123,517 32 Demand deposits 13,692 16,767 14,071 13,344 15,957 15,812 14,086 15,436 14,084 17,111 33 Time deposits2 89,765 83,433 46,219 50,206 49,217 47,998 49,540 49,444r 49,585 46,864 34 Other3 57,897 56,168 52,862 52,373 59,775 56,998 55,009 56,237r 63,327 59,542 35 Own foreign offices4 401,544 485,079 562,846 530,679 551,392 574,443 537,768 555,814 565,250 573,976 36 Banks' custodial liabilities5 131,937 173,800 209,049 201,711 205,027 214,774 196,781 211,397 185,630 175,577 37 U.S. Treasury bills and certificates6 23,106 31,915 35,359 29,636 28,323 27,757 28,284 26,314 24,749 22,203 38 Other negotiable and readily transferable instruments7 17,027 35,393 45,102 34,959 35,580 36,983 37,459 41,541 40,370 41,241 39 Other 91,804 106,492 128,588 137,116 141,124 150,034 131,038 143,542 120,511 112,133 40 Other foreigners 141,322 172,405 190,786 198,989 196,774 189,939 194,876 199,153 202,312 203,338 41 Banks' own liabilities 103,339 128,019 117,774 132,422 131,778 130,427 135,894 136,328 140,293 137,289 42 Demand deposits 11,802 12,247 12,310 14,224 13,413 17,509 26,379 26,936 27,557 19,839 43 Time deposits2 58,025 68,251 70,612 72,101 74,086 74,805 73,126 74,029r 74,074 75,706 44 Other3 33,512 47,521 34,852 46,097 44,279 38,113 36,389 35,363r 38,662 41,744 45 Banks' custodial liabilities5 37,983 44,386 73,012 66,567 64,996 59,512 58,982 62,825 62,019 66,049 46 U.S. Treasury bills and certificates6 14,495 12,954 13,322 12,558 12,630 12,120 11,143 11,387 11,163 11,073 47 Other negotiable and readily transferable instruments7 21,453 24,964 51,247 44,467 43,803 37,652 38,481 42,051 41,652 42,994 48 Other 2,035 6,468 8,443 9,542 8,563 9,740 9,358 9,387 9,204 11,982 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 14,573 16,083 27,026 21,718 24,141 22,569 21,811 22,565 24,367 26,340 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 • February 2000 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1999 IItteemm 11999966 11999977 11999988 Apr. May June July Aug. Sept. Oct.p AREA 50 Total, all foreigners 1,162,148 1,283,027 1,347,771 1,334,719 1,352,678 1,382,649 1,339,888 l,385,468r 1,375,439 1,373,322 51 Foreign countries 1,148,176 1,271,337 1,335,888 1,318,798 1,338,611 1,364,662 1,321,425 1,367,200 1,356,793 1,355,499 52 Europe 376,590 419,672 427,367 409,543 434,124 430,580 438,232 450,827 453,747 442,594 53 Austria 5,128 2,717 3,178 2,428 2,224 2,678 2,770 3,210 3,205 3,299 54 Belgium and Luxembourg 24,084 41,007 42,818 37,991 39,227 31,298 31,242 34,834 33,688 38,663 5B Denmark 2,565 1,514 1,437 1,300 1,267 961 1,143 1,811 1,903 2,658 56 Finland 1,958 2,246 1,862 1,655 1,645 1,384 1,358 1,335 1,222 1,269 57 France 35,078 46,607 44,616 49,097 48,328 45,235 42,622 42,424 45,809 45,761 58 Germany 24,660 23,737 21,357 18,575 24,689 21,999 23,950 23,719 24,478 25,471 59 Greece 1,835 1,552 2,066 2,237 2,691 2,737 3,168 3,121 3,358 3,322 60 Italy 10,946 11,378 7,103 5,910 5,943 6,192 6,426 5,840 6,231 6,306 61 Netherlands 11,110 7,385 10,793 11,037 11,752 12,152 12,206 11,292 11,634 13,882 62 Norway 1,288 317 710 1,181 1,210 1,049 1,184 1,333 1,225 951 63 Portugal 3,562 2,262 3,235 2,277 2,461 2,439 2,237 1,912 1,976 1,875 64 Russia 7,623 7,968 2,439 2,693 2,794 2,871 2,756 2,665 2,816 3,713 65 Spain 17,707 18,989 15,775 11,075 8,083 8,678 7,700 8,194 9,479 9,294 66 Sweden 1,623 1,628 3,027 1,974 3,429 2,966 3,851 3,779 4,571 5,381 67 Switzerland 44,538 39,023 50,654 54,551 66,214 65,967 60,758 76,176 69,338 65,971 68 Turkey 6,738 4,054 4,286 5,783 5,810 5,914 7,786 7,883 8,368 8,253 69 United Kingdom 153,420 181,904 ' 181,554 169,826 178,015 187,310 200,038 192,431 196,490 178,019 70 Yugoslavia11 206 239 233 221 242 254 289 270 266 267 71 Other Europe and other former U.S.S.R.12 22,521 25,145 30,224 29,732 28,100 28,496 26,748 28,598 27,690 28,239 72 Canada 38,920 28,341 30,212 28,360 28,543 30,416 29,862 30,409 29,728 34,959 73 Latin America and Caribbean .-.• 467,529 536,393 554,808 578,156 591,047 610,201 554,346 581,338 570,200 572,510 74 Argentina 13,877 20,199 19,013 18,349 16,428 17,804 17,202 17,061 15,544 17,545 /5 Bahamas 88,895 112,217 118,085 118,648 118,122 123,549 122,465 132,442 139,101 134,111 76 Bermuda 5,527 6,911 6,846 6,957 7,951 9,168 9,410 9,319 8,747 10,902 77 Brazil 27,701 31,037 15,800 17,128 17,295 14,696 15,389 15,399 16,208 13,223 78 British West Indies 251,465 276,418 302,472 322,011 334,386 347,368 294,208 315,799 299,601 307,939 79 Chile 2,915 4,072 5,010 6,805 7,236 5,918 6,744 5,805 6,601 6,559 80 Colombia 3,256 3,652 4,616 4,710 4,861 4,615 4,634 4,452 4,708 5,008 81 Cuba 21 66 62 64 64 70 70 72 76 72 82 Ecuador 1,767 2,078 1,572 1,688 1,800 1,930 1,975 1,724 1,792 1,831 83 Guatemala 1,282 1,494 1,333 1,386 1,449 1,468 1,425 1,521 1,471 1,484 84 Jamaica 628 450 577 534 547 527 471 533 550 549 85 Mexico 31,240 33,972 37,148 36,004 37,588 37,920 39,024 36,301 35,028 32,208 86 Netherlands Antilles 6,099 5,085 5,010 5,633 3,853 5,662 3,012 3,408 2,927 2,688 87 Panama 4,099 4,241 3,864 3,974 3,984 4,130 3,844 3,816 4,029 4,007 88 Peru 834 893 840 819 854 816 836 994 1,041 957 89 Uruguay 1,890 2,382 2,486 2,345 2,331 2,552 2,319 2,147 2,175 2,217 90 Venezuela 17,363 21,601 19,894 20,512 21,204 20,393 20,437 19,796 19,451 19,900 91 Other 8,670 9,625 10,180 10,589 11,094 11,615 10,881 10,749 11,150 11,310 92 249,083 269,379 307,960 287,723 269,026 276,917 228833,,221188 228888,,997744 228877,,222277 228877,,995500 China 93 Mainland 30,438 18,252 13,441 16,350 14,753 13,366 10,872 12,359 11,914 10,460 94 Taiwan 15,995 11,840 12,708 12,641 10,795 11,408 12,482 12,678 12,514 12,023 95 Hong Kong 18,789 17,722 20,900 26,338 25,728 24,575 24,200 24,149 23,368 24,316 96 India 3,930 4,567 5,250 5,979 5,520 5,421 5,864 5,408 5,625 5,659 97 Indonesia 2,298 3,554 8,282 7,434 6,211 6,530 7,309 6,633 6,468 6,037 98 Israel 6,051 6,281 7,749 7,037 7,004 6,144 5,076 5,059 5,688 5,158 99 Japan 117,316 143,401 168,563 142,326 132,605 143,635 145,652 145,403 149,578 151,632 100 Korea (South) 5,949 13,060 12,524 10,003 11,387 12,901 12,792 12,723 11,903 9,935 101 Philippines 3,378 3,250 3,324 2,440 2,492 2,273 2,177 2,189 2,414 2,134 102 Thailand 10,912 6,501 7,359 6,296 5,739 5,296 6,054 5,809 5,281 4,983 103 Middle Eastern oil-exporting countries13 16,285 14,959 15,609 14,497 15,453 15,168 15,581 15,942 14,367 16,825 104 Other 17,742 25,992 32,251 36,382 31,339 30,200 35,159 40,622 38,107 38,788 105 Africa 8,116 10,347 8,905 7,874 7,713 7,485 7,508 7,660 8,064 8,037 106 Egypt 2,012 1,663 1,339 1,599 1,339 1,576 1,566 1,851 1,852 1,364 107 Morocco 112 138 97 90 72 101 116 108 118 174 108 South Africa 458 2,158 1,522 1,165 1,132 1,091 1,049 885 753 828 109 Zaire 10 10 5 4 12 16 13 13 13 14 110 Oil-exporting countries14 2,626 3,060 3,088 2,534 2,508 2,247 2,281 2,510 2,807 2,912 111 Other 2,898 3,318 2,854 2,482 2,650 2,454 2,483 2,293 2,521 2,745 112 Other 7,938 7,205 6,636 7,142 8,158 9,063 8,259 7,992 7,827 9,449 113 Australia 6,479 6,304 5,495 5,987 6,820 7,624 7,252 6,963 6,788 8,199 114 Other 1,459 901 1,141 1,155 1,338 1,439 1,007 1,029 1,039 1,250 115 Nonmonetary international and regional organizations .. 13,972 11,690 11,883 15,921 14,067 17,987 18,463 18,268 18,646 17,823 116 International15 12,099 10,517 10,221 13,494 11,759 14,987 15,822 16,112R 16,570 15,939 117 Latin American regional16 1,339 424 594 1,304 653 898 819 725 662 960 118 Other regional17 534 749 1,068 1,123 1,655 2,102 1,822 1,431 1,414 924 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

Bank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1999 AArreeaa oorr ccoouunnttrryy 11999966 11999977 11999988 Apr. May June July Aug. Sept. Oct." 1 Total, all foreigners 599,925 708,225 735,058 735,992 750,581 750,859 720,597 731,139r 758,600 750,179 2 Foreign countries 597,321 705,762 731,441 730,739 746,094 746,786 716,190 727,983r 755,010 745,255 3 Europe 165,769 199,880 233,320 236,299 265,789 299,977 292,697 305,153r 316,097 293,346 4 Austria 1,662 1,354 1,043 2,389 2,902 2,514 3,855 3,080 2,335 2,633 5 Belgium and Luxembourg 6,727 6,641 7,187 7,533 9,811 10,028 9,214 7,463 7,229 9,575 6 Denmark 492 980 2,383 2,297 2,141 1,901 1,763 1,442 1,756 2,352 7 Finland 971 1,233 1,070 1,349 1,480 1,730 2,197 1,915 1,855 1,669 8 France 15,246 16,239 15,251 15,942 15,800 18,253 19,944 19,040r 19,253 21,527 9 Germany 8,472 12,676 15,923 17,188 18,367 20,793 23,965 23,558r 22,995 23,616 in Greece 568 402 575 651 585 551 628 659 663 743 ii Italy 6,457 6,230 7,283 6,727 6,434 6,783 7,451 7,747 7,957 6,670 17. Netherlands 7,117 6,141 5,697 7,251 8,588 8,724 9,334 10,132 9,425 8,940 13 Norway 808 555 827 970 753 717 821 583 1,252 949 14 Portugal 418 777 669 1,060 1,134 1,122 1,056 1,222 1,342 1,691 15 Russia 1,669 1,248 789 787 1,016 768 831 782 814 871 16 Spain 3,211 2,942 5,735 2,949 4,516 6,178 4,606 3,700 5,104 4,073 17 Sweden 1,739 1,854 4,223 4,141 2,950 3,005 3,199 4,082 4,184 4,292 18 Switzerland 19,798 28,846 46,874 48,468 65,488 75,544 66,927 71,866 90,187 78,448 19 Turkey 1,109 1,558 1,982 1,943 1,918 2,288 2,219 2,268 2,383 2,390 70 United Kingdom 85,234 103,143 106,349 105,248 112,946 130,859 125,262 137,646r 129,305 114,182 71 Yugoslavia2 115 52 53 55 54 54 50 49 50 51 22 Other Europe and other former U.S.S.R.3 3,956 7,009 9,407 9,351 8,906 8,165 9,375 7,919 8,008 8,674 23 Canada 26,436 27,189 47,036 40,726 41,116 37,454 31,957 32,109 37,197 35,761 74 Latin America and Caribbean 274,153 343,730 342,720 365,185 352,496 326,063 311,721 310,159 320,987 334,078 75 Argentina 7,400 8,924 9,553 10,075 10,318 10,776 10,482 10,257 10,296 10,142 76 Bahamas 71,871 89,379 96,455 84,023 78,480 71,996 77,049 77,674 85,386 87,085 77 Bermuda 4,129 8,782 5,011 4,426 6,276 6,111 7,813 9,747 8,481 9,815 78 Brazil 17,259 21,696 16,213 14,803 14,893 14,870 14,629 13,844 14,010 14,216 79 British West Indies . . 105,510 145,471 153,749 193,351 184,978 166,508 146,859 137,214r 142,500 158,298 30 Chile 5,136 7,913 8,255 7,810 7,545 7,531 7,153 6,900 6,810 6,846 31 Colombia 6,247 6,945 6,523 6,106 5,877 5,570 5,590 5,046 4,821 4,791 37 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 1,031 1,311 1,400 1,135 1,104 1,069 993 889 844 793 34 Guatemala 620 886 1,127 1,062 1,157 1,033 1,075 1,053 1,064 1,084 35 Jamaica 345 424 239 326 327 303 311 322 330 318 36 Mexico 18,425 19,428 21,227 19,470 19,316 18,638 18,978 17,819 18,255 17,780 37 Netherlands Antilles 25,209 17,838 6,779 5,711 5,867 5,484 5,101 14,032 13,298 7,497 38 Panama 2,786 4,364 3,584 4,329 3,298 3,353 3,064 2,898 2,941 2,904 39 2,720 3,491 3,275 3,111 3,053 2,975 2,710 2,516 2,534 2,442 40 Uruguay 589 629 1,126 772 724 1,050 1,105 1,049 946 778 41 Venezuela 1,702 2,129 3,089 3,138 3,245 3,479 3,501 3,460 3,325 4,096 42 Other 3,174 4,120 5,115 5,537 6,038 5,317 5,308 5,439r 5,146 5,193 43 122,478 125,092 98,606 79,297 77,699 74,693 72,240 73,247r 72,449 72,861 China 44 Mainland 1,401 1,579 1,261 3,421 3,006 3,745 3,144 2,758 2,032 1,841 45 Taiwan 1,894 922 1,041 866 763 870 904 937 790 802 46 Hong Kong 12,802 13,991 9,080 6,309 4,977 7,102 5,333 4,969 5,224 4,740 47 India 1,946 2,200 1,440 1,703 1,458 1,569 1,708 1,728 1,736 1,856 48 Indonesia 1,762 2,651 1,942 1,911 2,061 1,760 1,791 1,711 1,689 1,636 49 Israel 633 768 1,166 803 1,236 1,955 1,433 1,669 951 857 5n Japan 59,967 59,549 46,712 32,703 30,664 27,093 25,900 26,226 27,978 28,339 51 Korea (South) 18,901 18,162 8,289 11,160 12,326 11,317 12,753 12,194 11,093 12,432 57 Philippines 1,697 1,689 1,465 1,546 1,808 1,669 1,380 1,279 1,491 1,562 53 Thailand 2,679 2,259 1,807 1,732 1,623 1,850 1,683 1,549 1,432 1,373 54 Middle Eastern oil-exporting countries4 10,424 10,790 16,130 11,669 10,569 10,127 9,396 11,21 r 11,379 10,665 55 Other 8,372 10,532 8,273 5,474 7,208 5,636 6,815 7,016 6,654 6,758 56 2,776 3,530 3,122 2,688 2,448 2,629 2,499 2,178 2,293 2,299 57 247 247 257 228 221 241 252 209 225 251 58 Morocco 524 511 372 463 444 454 431 444 437 439 59 South Africa 584 805 643 567 640 724 598 449 506 589 6n Zaire 0 0 0 0 0 0 0 0 0 0 61 Oil-exporting countries5 420 1,212 936 257 288 340 297 280 323 253 62 Other 1,001 755 914 1,173 855 870 921 796 802 767 63 Other 5,709 6,341 6,637 6,544 6,546 5,970 5,076 5,137 5,987 6,910 64 Australia 4,577 5,300 6,173 6,060 6,093 5,636 4,811 4,907 5,770 6,659 65 Other 1,132 1,041 464 484 453 334 265 230 217 251 66 Nonmonetary international and regional organizations6 . . . 2,604 2,463 3,617 5,253 4,487 4,073 4,407 3,156 3,590 4,924 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 • February 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 11999988 Apr. May June July Aug.r Sept. Oct.p 1 Total 743,919 852,852 875,954r 898,460r 900,562 2 Banks' claims 599,925 708,225 735,058 735,992 750,581 750,859 720,597 731,139 758,600 750,179 3 Foreign public borrowers 22,216 20,581 23,540 35,787 36,616 37,344 38,465 35,689 34,995 40,833 4 Own foreign offices2 341,574 431,685 484,525 485,425 492,192 488,803 460,268 457,930 488,320 486,674 5 Unaffiliated foreign banks 113,682 109,230 106,281 93,733 99,864 104,102 99,715 108,961 102,051 96,945 6 Deposits 33,826 30,995 27,196 23,938 25,234 24,164 24,859 23,716 24,407 24,791 7 Other 79,856 78,235 79,085 69,795 74,630 79,938 74,856 85,245 77,644 72,154 8 All other foreigners 122,453 146,729 120,712 121,047 121,909 120,610 122,149 128,559 133,234 125,727 9 Claims of banks' domestic customers3 143,994 144,627 140,896R 147,601R 141,962 10 Deposits 77,657 73,110 79,363R 94,575R 87,222 11 Negotiable and readily transferable instruments4 51,207 53,967 47,914R 42,670R 40,604 12 Outstanding collections and other claims 15,130 17,550 13,619 10,356 14,136 MEMO 13 Customer liability on acceptances 10,388 9,624 4,519 4,450R 4,614 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 39,661 33,816 39,978 33,474 31,210 29,165 32,857 32,336 27,750 33,827 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 Dec. Mar. June Sept.p 1 Total 224,932 258,106 276,550 250,479r 242,360 259,215 270,119 By borrower 2 Maturity of one year or less 178,857 211,859 205,781 186,585r 175,402 186,861 198,303 3 Foreign public borrowers 14,995 15,411 12,081 13,669r 20,902 24,656 22,809 4 All other foreigners 163,862 196,448 193,700 172,916r 154,500 162,205 175,494 5 Maturity of more than one year 46,075 46,247 70,769 63,894 66,958 72,354 71,816 6 Foreign public borrowers 7,522 6,790 8,499 9,840 13,290 11,667 11,980 7 All other foreigners 38,553 39,457 62,270 54,054 53,668 60,687 59.836 By area Maturity of one year or less 8 Europe 55,622 55,690 58,294 68,679r 66,875 84,721 82,744 9 Canada 6,751 8,339 9,917 10,948r 7,832 6,705 8,598 10 Latin America and Caribbean 72,504 103,254 97,207 81,846r 71,122 65,821 79,202 11 40,296 38,078 33,964 18,006r 21,347 21,977 20,844 12 Africa 1,295 1,316 2,211 1,835 1,571 1,543 1,119 13 All other3 2,389 5,182 4,188 5,271 6,655 6,094 5,796 Maturity of more than one year 14 Europe 4,995 6,965 13,240 14,923 16,949 18,764 18,440 15 Canada 2,751 2,645 2,525 3,140 2,766 3,261 3,139 16 Latin America and Caribbean 27,681 24,943 42,049 33,443 33,539 36,910 37,046 17 7,941 9,392 10,235 10,018 10,972 10,471 10,644 18 Africa 1,421 1,361 1,236 1,233 1,160 1,105 1,087 19 All other3 1,286 941 1,484 1,137 1,572 1,843 1,460 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

Bank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 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 21 Turkey 1.9 2.7 3.4 4.4 4.5 4.9 6.5 5.2 4.8 5.0 4.7 22 Other Western Europe 4.7 4.7 5.5 6.1 8.2 9.9 9.6 10.3 10.6 10.1 10.1 23 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 2.6 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 2.8 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 42 Israel .5 .5 .8 1.0 .7 .7 .9 .9 1.1 1.1 2.0 43 Korea (South) 19.1 21.5 16.3 16.2 15.6 16.2 14.5 12.9 13.7 13.3 14.9 44 Malaysia 4.4 6.0 6.4 5.6 5.1 4.5 4.7 5.1 5.7 5.9 5.9 45 Philippines 4.1 5.8 7.0 5.7 5.7 5.0 5.4 4.7 5.1 5.3 5.6 46 Thailand 4.9 5.7 7.3 6.2 5.4 5.5 4.9 5.3 4.6 4.5 4.1 47 Other Asia 4.5 4.1 4.7 4.5 4.3 4.2 3.7 3.1 2.9 3.0 2.8 Africa 48 Egypt .4 .7 1.1 .9 .9 1.0 1.5 1.7 1.3 1.4 1.4 49 Morocco .7 .7 .7 .7 .6 .6 .6 .5 .5 .5 .5 50 Zaire .0 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .9 .9 .9 .9 .8 1.1 .8 1.1 1.0 1.2 .9 52 Eastern Europe 4.2 6.9 7.1 9.8 9.1 12.0 10.9 6.0 5.2 6.1 5.1 53 Russia4 1.0 3.7 4.2 5.1 5.1 7.5 6.8 2.8 2.2 2.2 1.9 54 Other 3.2 3.2 2.9 4.7 4.0 4.6 4.1 3.2 3.1 3.9 3.2 55 Offshore banking centers 99.2 134.7 129.6 138.9 139.0 129.3 125.8 121.9 94.1 83.0 70.6 56 Bahamas 11.0 20.3 16.1 19.8 23.3 29.2 24.7 29.0 33.0 30.2 16.1 57 Bermuda 6.3 4.5 7.9 9.8 9.8 9.0 9.3 10.4 4.6 3.8 5.6 58 Cayman Islands and other British West Indies 32.4 37.2 35.1 45.7 43.4 24.9 34.2 30.6 15.4 6.3 7.0 59 Netherlands Antilles 10.3 26.1 15.8 21.7 14.6 14.0 10.5 6.0 2.6 2.7 1.2 60 Panama5 1.4 2.0 2.6 2.1 3.1 3.2 3.3 4.0 3.9 3.9 3.9 61 Lebanon .1 .1 .1 .1 .1 .1 .1 .2 .1 .1 .1 62 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. Data after June 1999 are not available. 2. Organization of Petroleum Exporting Countries, shown individually; other members of The banking offices covered by these data include U.S. offices and foreign branches of U.S. OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). U.S. agencies and branches of foreign banks. Beginning March 1994, the data include large 3. Excludes Liberia. Beginning March 1994 includes Namibia. foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 4. As of December 1992, excludes other republics of the former Soviet Union. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 5. Includes Canal Zone. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 6. Foreign branch claims only. branch of the same banking institution. 7. Includes New Zealand, Liberia, and international and regional organizations. These data are on a gross claims basis and do not necessarily reflect the ultimate country 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 • February 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. June 1 Total 46,448 61,782 57,382 55,681 51,433 49,279 46,570 46,663 49,337 2 Payable in dollars 33,903 39,542 41,543 41,601 40,026 38,410 36,668 34,030 36,032 3 Payable in foreign currencies 12,545 22,240 15,839 14,080 11,407 10,869 9,902 12,633 13,305 By type 4 Financial liabilities 24,241 33,049 26,877 25,691 22,322 19,331 19,255 22,458 25,058 5 Payable in dollars 12,903 11,913 12,630 12,911 11,988 9,812 10,371 11,225 13,205 6 Payable in foreign currencies 11,338 21,136 14,247 12,780 10,334 9,519 8,884 11,233 11,853 7 Commercial liabilities 22,207 28,733 30,505 29,990 29,111 29,948 27,315 24,205 24,279 8 Trade payables 11,013 12,720 10,904 10,107 9,537 10,276 10,978 9,999 10,935 9 Advance receipts and other liabilities 11,194 16,013 19,601 19,883 19,574 19,672 16,337 14,206 13,344 10 Payable in dollars 21,000 27,629 28,913 28,690 28,038 28,598 26,297 22,805 22,827 11 Payable in foreign currencies 1,207 1,104 1,592 1,300 1,073 1,350 1,018 1,400 1,452 By area or country Financial liabilities 12 Europe 15,622 23,179 18,027 18,793 15,468 12,905 12,589 16,098 19,578 13 Belgium and Luxembourg 369 632 186 127 75 150 79 50 70 14 France 999 1,091 1,425 1,545 1,699 1,457 1,097 1,178 1,287 15 Germany 1,974 1,834 1,958 2,518 2,441 2,167 2,063 1,906 1,959 16 Netherlands 466 556 494 472 484 417 1,406 1,337 2,104 17 Switzerland 895 699 561 130 189 179 155 141 143 18 United Kingdom 10,138 17,161 11,667 12,185 8,765 6,610 5,980 9,729 13,097 19 Canada 632 1,401 2,374 1,027 539 389 693 781 320 20 Latin America and Caribbean 1,783 1,668 1,386 965 1,320 1,351 1,495 1,528 1,369 21 Bahamas 59 236 141 17 6 1 7 1 1 22 Bermuda 147 50 229 86 49 73 101 78 52 23 Brazil 57 78 143 91 76 154 152 137 131 24 British West Indies 866 1,030 604 517 845 834 957 1,064 944 25 Mexico 12 17 26 21 51 23 59 22 19 26 Venezuela 2 1 1 1 1 1 2 2 1 27 Asia 5,988 6,423 4,387 4,197 4,315 4,005 3,785 3,475 3,217 28 Japan 5,436 5,869 4,102 3,964 3,869 3,754 3,612 3,337 3,035 29 Middle Eastern oil-exporting countries1 27 25 27 18 0 0 0 1 2 30 Africa 150 38 60 33 29 31 28 31 29 31 Oil-exporting countries2 122 0 0 0 0 0 0 2 0 32 Allother3 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 10,421 13,422 14,966 14,672 13,611 13,539 12,342 10,428 10,039 49 Japan 3,315 4,614 4,500 4,372 3,995 3,779 3,827 2,715 2,753 50 Middle Eastern oil-exporting countries 1,912 2,168 3,111 3,138 3,194 3,582 2,852 2,479 2,209 51 Africa 619 1,040 874 833 921 810 794 727 832 52 Oil-exporting countries2 254 532 408 376 354 372 393 377 392 53 Other3 687 840 1,086 1,136 1,101 1,245 1,141 1,261 1,346 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 2. Comprises Algeria, Gabon, Libya, and Nigeria. Emirates (Trucial States). 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A59 3.23 CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1998 1999 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999955 11999966 11999977 Mar. June Sept. Dec. Mar. June 1 Total 52,509 65,897 68,128 71,004 63,188 67,976 77,462 68,973 63,804 2 Payable in dollars 48,711 59,156 62,173 65,359 57,587 62,034 72,171 63,988 56,968 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 3311,,887777 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 31,927 12 Trade receivables 22,998 25,751 27,536 26,888 26,764 26,330 27,202 26,724 27,791 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 30,570 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 countries 5 14 15 16 15 16 16 26 5 36 All other3 583 569 652 720 732 663 563 578 636 Commercial claims 37 Europe 9,824 10,443 12,120 12,854 12,882 13,029 13,246 12,782 12,961 38 Belgium and Luxembourg 231 226 328 232 216 219 238 281 286 39 France 1,830 1,644 1,796 1,939 1,955 2,098 2,171 2,173 2,094 40 Germany 1,070 1,337 1,614 1,670 1,757 1,502 1,822 1,599 1,660 41 Netherlands 452 562 597 534 492 463 467 415 389 42 Switzerland 520 642 554 476 418 546 483 367 385 43 United Kingdom 2,656 2,946 3,660 4,828 4,664 4,681 4,769 4,529 4,615 44 Canada 1,951 2,165 2,660 2,882 2,779 2,291 2,617 2,983 2,855 45 Latin America and Caribbean 4,364 5,276 5,750 5,481 6,082 5,773 6,296 5,930 6,278 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 1,024 936 887 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 1,478 51 Venezuela 285 357 576 441 585 566 401 361 384 52 Asia 7,312 8,376 8,713 7,638 7,367 7,190 7,192 7,080 7,690 53 Japan 1,870 2,003 1,976 1,713 1,757 1,789 1,681 1,486 1,511 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 countries 87 166 119 122 116 128 165 116 202 57 Other3 1,006 1,368 1,246 1,235 1,080 1,691 1,140 1,377 1,405 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 2. Comprises Algeria, Gabon, Libya, and Nigeria. Emirates (Trucial States). 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • February 2000 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 1999 1999 Transaction, and area or country 1997 1998 Jan.— Oct. Apr. May June July Aug. Sept. Oct." U.S. corporate securities STOCKS 1 Foreign purchases 1,097,958 1,574,185 1,845,350 222,900r 185,646r 179,785 188,099 178,428 175,565 219,295 2 Foreign sales 1,028,361 1,524,189 1,765,070 205,307r 177,108r 167,878 179,783 166,212 172,191 211,548 3 Net purchases, or sales (—) 69,597 49,996 80,280 17,593r 8,538r 11,907 8,316 12,216 3,374 7,747 4 Foreign countries 69,754 50,376 80,312 17,577r 8,549r 11,893 8,361 12,225 3,359 7,773 5 Europe 62,688 68,124 74,173 11,493 5,260 7,663 6,171 9,568 7,237 7,767 6 France 6,641 5,672 4,201 534 -206 919 -55 269 146 1,033 7 Germany 9,059 9,195 9,355 1,814 971 1,376 -354 1,322 111 1,728 8 Netherlands 3,831 8,249 5,077 417 738 1,181 404 566 -538 164 9 Switzerland 7,848 5,001 3,776 1,934 481 1,452 -2,822 827 1,185 -1,404 10 United Kingdom 22,478 23,952 35,810 3,758 1,822 1,300 8,498 4,578 4,775 3,778 11 Canada -1,406 -4,689 1,519 -129 -159 401 153 -50 -927 531 12 Latin America and Caribbean 5,203 760 2,192 5,596r 2,049r 2,474 2,935 846 -4,688 -3,163 13 Middle East1 383 -1,449 -334 -355 419 64 -273 174 -26 -15 14 Other Asia 2,072 -12,347 1,387 905 574 1.271 -671 1,666 1,463 2,372 15 Japan 4,787 -1,171 4,883 1,458 464 681 -452 1,269 2,652 1,696 16 Africa 472 639 389 37 138 81 14 -39 61 -23 17 Other countries 342 -662 986 30 268 -61 32 60 239 304 18 Nonmonetary international and regional organizations -157 -380 -32 16 -11 14 -45 -9 15 -26 BONDS2 19 Foreign purchases 610,116 905,782 722,223 70,044 66,558 67,569 75,778 64,64 lr 76,270 80,374 20 Foreign sales 475,958 727,044 509,968 47,516 49,145 52,197 47,984 46,667 48,902 55,131 21 Net purchases, or sales (-) 134,158 178,738 212,255 22,528 17,413 15,372 27,794 17,974r 27,368 25,243 22 Foreign countries 133,595 179,081 212,567 22,468 17,326 15,383 27,520 18,001r 27,037 26,107 23 Europe 71,631 130,057 119,465 10,527 10,911 9,553 18,196 10,736r 13,724 13,819 24 France 3,300 3.386 1,549 -36 352 258 447 160 24 53 25 Germany 2,742 4,369 6,623 -43 797 321 1,707 31r 752 1,202 26 Netherlands 3,576 3,443 2,130 106 168 187 336 144 279 103 27 Switzerland 187 4,826 3,662 467 128 -26 705 322 496 360 28 United Kingdom 54,134 99,637 88,993 8,617 8,310 7,651 13,582 8,273r 9,766 10,112 29 Canada 6,264 6,121 3,565 319 413 184 -23 286 908 263 30 Latin America and Caribbean 34,733 23,938 50,128 5,967 3,382 4,603 5,088 5,558 5,490 6,398 31 Middle East1 2,155 4,997 2,176 364 -717 -114 -182 -219 257 178 32 Other Asia 16,996 12,662 35,021 4,904 3,224 1,458 4,031 1,179 6,698 4,847 33 Japan 9,357 8,384 13,143 1,215 0 310 3,020 827 4,375 2,081 34 Africa 1,005 190 1,008 331 82 -307 122 59 -189 343 35 Other countries 811 1,116 1,204 56 31 6 288 402 149 259 36 Nonmonetary international and regional organizations 563 -343 -312 60 87 -11 274 -27 331 -864 Foreign securities 37 Stocks, net purchases, or sales ( —) -40,942 6,227 13,809 5,503r 2,455r 6,220 -2,236 594 1,069 -7,930 38 Foreign purchases 756,015 929,923 922,043 98,607r 86,345r 97,622 106,264 91,851 97,456 96,608 39 Foreign sales 796,957 923.696 908,234 93,104r 83,890r 91,402 108,500 91,257 96,387 104,538 40 Bonds, net purchases, or sales (—) -48,171 -17,350 -8,812 -5,147 -499 8,969 -4,777 -6,421 1,132 -1,220 41 Foreign purchases 1,451,704 1,328,281 686,390 73,376 72,372 79,013 63,975 70,061 66,661 62,533 42 Foreign sales 1,499,875 1,345,631 695,202 78,523 72,871 70,044 68,752 76,482 65,529 63,753 43 Net purchases, or sales (—), of stocks and bonds .... -89,113 -11,123 4,997 356r l,956r 15,189 -7,013 -5,827 2,201 -9,150 44 Foreign countries -88,921 -10,778 4,678 474r 2,056r 15,219 -7,104 -6,010 2,271 -9,156 45 Europe -29,874 12,632 52,136 9,710 5,845r 16,749 -3,759 -1,829 2,226 2,331 46 Canada -3,085 -1,901 -682 -449 -537 1,202 -1,055 525 303 321 47 Latin America and Caribbean -25,258 -13,798 -11,504 -4,433r -2,351r -2,785 445 -299 602 -1,827 48 Asia -25,123 -3,992 -33,631 -3,946 -494r 194 -3,330 -4,303 -210 -9,485 49 Japan -10,001 -1,742 -35,588 -3,445 -704 -1.241 -4,323 -4,805 -565 -10,006 50 Africa -3,293 -1,225 18 20 112 -25 -21 4 -116 63 51 Other countries -2,288 -2,494 -1,659 -428 -519 -116 616 -108 -534 -559 52 Nonmonetary international and regional organizations -192 -345 319 -118 -100 -30 91 183 -70 6 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, 2. Includes state and local government securities and securities of U.S. government Saudi Arabia, and United Arab Emirates (Trucial States). agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions A61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales (—) during period 1999 1999 AArreeaa oorr ccoouunnttrryy 11999977 11999988 J O an c .— t. Apr. May June July Aug. Sept. Oct." 1 Total estimated 184,171 49,039 -10,990 -3,271 5,638 -609 -6,242 19,118 87 -9,734 2 Foreign countries 183,688 46,570 -11,292 -3,257 5,316 -815 -6,226 18,847 -4 -9,905 3 Europe 144,921 23,797 -41,342 -15,394 -3,997 -5,796 -5,740 1,771 -9,268 -405 4 Belgium and Luxembourg 3,427 3,805 1,074 476 121 753 37 105 12 -351 Germany 22,471 144 1,168 -653 -290 538 643 1,438 -963 78 6 Netherlands 1,746 -5,533 1,494 -256 797 -77 -1,224 453 -423 130 1 Sweden -465 1,486 1,013 -462 -21 579 -229 876 -45 -6 8 Switzerland 6,028 5,240 -3,312 -302 -121 971 -216 -714 234 365 9 United Kingdom 98,253 14,384 -22,588 -6,672 -4,528 -7,215 1,385 1,934 -3,534 -1,854 10 Other Europe and former U.S.S.R 13,461 4,271 -20,191 -7,525 45 -1,345 -6,136 -2,321 -4,549 1,233 11 Canada -811 615 7,679 1,205 2,580 460 1,382 1,339 1,459 -657 17 Latin America and Caribbean -2,554 -3,662 -2,917 5,200 1,364 -1,403 693 8,695 3,003 -9,911 13 Venezuela 655 59 241 2 88 -31 131 15 10 25 14 Other Latin America and Caribbean -549 9,523 -282 3,654 -123 -52 -43 1,650 2,982 -1,777 15 Netherlands Antilles -2,660 -13,244 -2,876 1,544 1,399 -1,320 605 7,030 11 -8,159 16 39,567 27,433 26,271 5,973 5,631 6,489 -2,319 6,832 5,344 942 17 Japan 20,360 13,048 16,217 6,475 1,284 4,905 -394 2,913 5.259 344 18 Africa 1,524 751 -1,800 -11 -198 -246 -178 -622 -302 -202 19 Other 1,041 -2,364 817 -230 -64 -319 -64 832 -240 328 20 Nonmonetary international and regional organizations 483 2,469 302 -14 322 206 -16 271 91 171 71 International 621 1,502 -10 15 223 -8 -101 233 98 184 22 Latin American regional 170 199 669 0 122 192 191 175 -9 -1 MEMO 73 Foreign countries 183,688 46,570 -11,292 -3,257 5,316 -815 -6,226 18,847 -4 -9,905 74 Official institutions 43,959 4,123 -12,498 -6,696 3,223 397 -1,773 2,394r — 1,714r -1,248 25 Other foreign 139,729 42,447 1,206 3,439 2,093 -1,212 -4,453 16,453r l,710r -8,657 Oil-exporting countries 26 Middle East2 7,636 -16,554 7,813 65 2,887 238 -38 130 401 201 27 -12 2 1 0 0 0 0 1 0 0 1. Official and private transactions in marketable U.S. Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • February 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 11999977 11999999 July Aug. Sept. Oct. Nov. Dec. Exchange Rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 74.37 62.91 64.54 65.62 64.46 64.95 65.09 63.88 64.10 2 Austria/schilling 12.206 12.379 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 3 Belgium/franc 35.81 36.31 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4 Brazil/real 1.0779 1.1605 1.8207 1.8023 1.8859 1.8987 1.9688 1.9314 1.8442 5 Canada/dollar 1.3849 1.4836 1.4858 1.4890 1.4932 1.4771 1.4776 1.4674 1.4722 6 China, P.R./yuan 8.3193 8.3008 8.2781 8.2776 8.2772 8.2774 8.2775 8.2782 8.2794 7 Denmark/krone 6.6092 6.7030 6.9900 7.1792 7.0144 7.0828 6.9450 7.2019 7.3597 8 European Monetary Union/euro3 n.a. n.a. 1.0653 1.0370 1.0605 1.0497 1.0706 1.0328 1.0110 9 Finland/markka 5.1956 5.3473 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 France/franc 5.8393 5.8995 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 Germany/deutsche mark 1.7348 1.7597 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Greece/drachma 273.28 295.70 306.30 313.52 307.84 311.68 307.71 318.24 326.19 13 Hong Kong/dollar 7.7431 7.7467 7.7594 7.7603 7.7638 7.7665 7.7696 7.7718 7.7728 14 India/rupee 36.36 41.36 43.13 43.36 43.50 43.60 43.55 43.46 43.52 15 Ireland/pound2 151.63 142.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 Italy/lira 1,703.81 1,736.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 17 Japan/yen 121.06 130.99 113.73 119.33 113.23 106.88 105.97 104.65 102.58 18 Malaysia/ringgit 2.8173 3.9254 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 19 Mexico/peso 7.918 9.152 9.553 9.370 9.398 9.341 9.575 9.416 9.427 20 Netherlands/guilder 1.9525 1.9837 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 New Zealand/dollar 66.25 53.61 52.94 52.61 52.59 52.30 51.42 51.22 50.87 22 Norway/krone 7.0857 7.5521 7.8071 7.9029 7.8036 7.8361 7.7402 7.9367 8.0113 23 Portugal/escudo 175.44 180.25 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 Singapore/dollar 1.4857 1.6722 1.6951 1.6958 1.6787 1.6965 1.6757 1.6699 1.6745 25 South Africa/rand 4.6072 5.5417 6.1191 6.1182 6.1302 6.0563 6.1029 6.1424 6.1503 26 South Korea/won 947.65 1,400.40 1,189.84 1,189.10 1,198.31 1,201.00 1,205.29 1,176.98 1,136.80 27 Spain/peseta 146.53 149.41 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 28 Sri Lanka/rupee 59.026 65.006 70.868 71.912 71.868 71.942 71.747 72.040 72.018 29 Sweden/krona 7.6446 7.9522 8.2740 8.4431 8.2589 8.2264 8.1492 8.3586 8.4910 30 Switzerland/franc 1.4514 1.4506 1.5045 1.5474 1.5093 1.5262 1.4896 1.5543 1.5841 31 Taiwan/dollar 28.775 33.547 32.322 32.338 32.076 31.848 31.828 31.794 31.625 32 Thailand/baht 31.072 41.262 37.887 37.143 38.060 40.060 39.416 38.749 38.227 33 United Kingdom/pound" 163.76 165.73 161.72 157.51 160.58 162.47 165.72 162.05 161.32 34 Venezuela/bolivar 488.39 548.39 606.82 611.17 615.95 625.41 630.75 634.80 644.28 Indexes4 NOMINAL 35 Broad (January 1997= 100)5 104.44 116.48 116.87 117.97 117.00 116.38 115.88 116.08 116.09 36 Major currencies (March 1973 = 100)6 91.24 95.79 94.07 96.31 94.31 92.92 91.94 92.87 93.23 3/ Other important trading partners (January 1997 = 100)7 104.67 126.03 129.94 128.73 129.73 130.60 131.06 129.93 129.34 REAL 38 Broad (March 1973= 100)5 91.33 99.35 98.72 99.96r 99.08r 98.53r 98.00r 98.13 97.88 39 Major currencies (March 1973= 100)6 92.25 97.25 96.73 99.19 97.13 95.91 95.02r 96.11 96.33 40 Other important trading partners (March 1973 = 100)7 95.87 108.50 107.68 107.301" 108.00r 108.36r 108.31' 107.09 106.14 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 December 31, 1998 May 1999 A64 March 31, 1999 August 1999 A64 June 30, 1999 November 1999 A64 September 30, 1999 February 2000 A64 Terms of lending at commercial banks February 1999 May 1999 A66 May 1999 August 1999 A66 August 1999 November 1999 A66 November 1999 February 2000 A66 Assets and liabilities of U.S. branches and agencies of foreign banks December 31, 1998 May 1999 A72 March 31, 1999 August 1999 A72 June 30, 1999 November 1999 A72 September 30, 1999 February 2000 All 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 • February 1999 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities Consolidated Report of Condition, September 30, 1999 Millions of dollars except as noted Banks with domestic Banks with foreign offices' offices only2 DDoommeessttiicc IItteemm TToottaall ttoottaall Total Domestic Over 100 Under 100 1 Total assets3 5,449,834 4,763,210 3,742,628 3,056,003 1,431,665 275,541 2 Cash and balances due from depository institutions 319,723 230,416 249,680 160,373 56,680 13,363 3 Cash items in process of collection, unposted debits, and currency and coin < • 114,558 111,272 30,244 f 4 Cash items in process of collection and unposted debits n.a. 84,859 17,019 T 5 Currency and coin n.a. n.a. 26,413 13,225 n.a. 6 Balances due from depository institutions in the United States 32,002 24,052 17,726 1 7 Balances due from banks in foreign countries and foreign central banks n.a. 86,056 ,080 1,463 I 8 Balances due from Federal Reserve Banks • 1177,,006655 16,969 7,248 1 MEMO 9 Non-interest-bearing balances due from commercial banks in the United States (included in balances due from depository institutions in the United States) 29,949 n.a. 12,585 12,881 4,483 10 Total securities, held-to-maturity (amortized cost) and available-for-sale (fair value) 1,018,234 589,966 355,365 72,903 11 U.S. Treasury securities 112,492 71,137 33,140 8,216 12 U.S. government agency and corporation obligations (excludes mortgage-backed securities) 196,345 63,076 99,046 34,224 13 Issued by U.S. government agencies 4,707 2,119 1,885 703 14 Issued by U.S. government-sponsored agencies 191,638 60,957 97,160 33,520 15 Securities issued by states and political subdivisions in the United States 8 S, 131 27,293 47,907 12,931 16 General obligations 64,185 18,783 36,083 9,319 17 Revenue obligations 23,291 8,073 11,648 3,571 18 Industrial development and similar obligations 654 436 177 41 19 Mortgage-backed securities (MBS) 449,754 294,598 141,046 14,110 20 Pass-through securities 282,131 193,880 78,754 9,497 21 Guaranteed by GNMA 73,797 n.a. 44,014 n.a. 26,352 3,430 22 Issued by FNMA and FHLMC 207,297 149,210 52,070 6,016 23 Privately issued 1,037 655 331 51 24 Other mortgage-backed securities (includes CMOs, REMICs, and stripped MBS) 167,623 100,719 62,292 4,613 25 Issued or guaranteed by FNMA, FHLMC or GNMA 119,803 71,304 44,300 4,198 26 Collateralized by MBS issued or guaranteed by FNMA, FHLMC, or GNMA 3,280 2,132 992 156 27 All other mortgage-backed securities 44,540 27,282 17,000 259 28 Other debt securities 138,185 111,668 24,424 2,093 29 Other domestic debt securities n.a. 54,333 24,106 n.a. 30 Foreign debt securities n.a. 57,335 318 n.a. 31 Equity securities 33,326 22,195 9,802 1,329 32 Investments in mutual funds and other equity securities with readily determinable fair value 9,802 7,095 2,326 382 33 All other equity securities 23,524 15,101 7,477 947 34 Federal funds sold and securities purchased under agreements to resell 224,168 180,734 173,482 130,047 39,331 11,355 35 Total loans and lease-financing receivables, gross 3,328,120 3,038,425 2,239,813 1,950,118 919,614 168,693 36 LESS: Unearned income on loans 3,242 2,492 1,700 950 1,156 386 .37 Total loans and leases (net of unearned income) 3,324,878 3,035,933 2,238,113 1,949,168 918,459 168,306 38 LESS: Allowance for loan and lease losses 56,989 n.a. 39,021 n.a. 15,515 2,453 39 LESS: Allocated transfer risk reserves 110 n a. 108 n.a. 1 1 40 EQUALS: Total loans and leases, net 3,267,779 n.a. 2,198,984 n.a. 902,943 165,852 Total loans and leases, gross, by category 41 Loans secured by real estate 1,419,239 1,387,789 806,755 775,304 516,821 95,663 42 Construction and land development 122,654 f 62,200 52,534 7,921 43 Farmland 31,384 T 5,711 14,258 11,414 44 One- to four-family residential properties 780,963 1 481,647 252,771 46,545 45 Revolving, open-end loans, extended under lines of credit n.a. 97,284 n.a. 6 3,681 26,282 2,321 46 All other loans 683,679 1 412,966 226,490 44,223 47 Multifamily (five or more) residential properties 51,154 1 28,927 20,133 2,094 48 Nonfarm nonresidential properties 401,633 t 196,819 177,124 27,690 49 Loans to depository institutions 105,470 87,419 101,752 8 3,701 3,616 102 50 Commercial banks in the United States n.a. n.a. 53,141 52,718 3,305 n.a. 51 Other depository institutions in the United States n.a. n.a. 25,463 25,407 111 n.a. 52 Banks in foreign countries n.a. n.a. 23,147 5,575 200 n.a. 53 Loans to finance agricultural production and other loans to farmers 46,318 45,456 10,634 9,772 18,084 17,600 54 Commercial and industrial loans 941,992 782,777 747,881 58 3,666 165,407 28,704 55 U.S. addressees (domicile) n.a. n.a. 604,638 580,971 164,744 n.a. 56 Non-U.S. addressees (domicile) n.a. n.a. 143,243 7,695 663 n.a. 57 Acceptances of other banks .,438 652 1,333 547 92 13 58 U.S. banks n.a. n.a. 321 319 n.a. n.a. 59 Foreign banks n.a. n.a. 1,011 227 n.a. n.a. 60 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 515,113 472,425 299,560 256,871 191,150 24,403 61 Credit cards and related plans 178,673 n.a. 103,936 n.a. 72,206 2,531 62 Other (includes single payment and installment) 336,440 n.a. 195,624 n.a. 118,944 21,872 63 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 19,382 19,377 12,328 12,323 6,246 808 64 All other loans 135,081 103,318 126,054 94,291 8,218 810 65 Loans to foreign governments and official institutions n.a. n a. 9,188 1,749 19 n.a. 66 Other loans n.a. n a. 116,866 92,542 8,199 n.a. 67 Loans for purchasing and carrying securities n.a. n.a. n.a. 17,859 1,839 n.a. 68 All other loans (excludes consumer loans) n.a. n.a. n.a. 74,683 6,359 n.a. 69 Lease-financing receivables 144,088 139,212 133,518 128,642 9,982 589 70 Assets held in trading accounts 235,481 f 234,764 f 697 1 71 Premises and fixed assets (including capitalized leases) 71,774 1 44,353 F 22,063 5,358 72 Other real estate owned 3,179 n.a. 1,708 n.a. 1,160 312 7 7 4 3 C In u v s e t s o t m m e e r n s t ' s li in ab u il n it c y o n o s n o l a id cc a e te p d t a s n u c b es s id o i u a t r s i t e a s n d an in d g associated companies 7 8 , . 8 7 2 8 3 9 \ 7 8 , , 3 5 8 1 5 4 3 2 6 7 5 0 73 5 75 Net due from own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. 19,867 n.a. 19,867 n.a. n.a. / 6 Intangible assets 83,693 n.a. 69,545 n.a. 13,330 819 n All other assets 209,189 n.a. 164,247 n.a. 39,462 5,481 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A65 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities—Continued Consolidated Report of Condition, September 30, 1999 Millions of dollars except as noted Banks with domestic Banks with foreign offices' offices only2 DDoommeessttiicc IItteemm TToottaall ttoottaall Total Domestic Over 100 Under 100 78 Total liabilities, limited-life preferred stock, and equity capital 5,449,834 n.a. 3,742,628 n.a. 1,431,665 275,541 79 Total liabilities 4,989,919 4,303,295 3,442,599 2,755,975 1,301,001 246,318 80 Total deposits 3,68 3,293 3,077,723 2,400,590 1,798,019 1,046,196 233,507 81 Individuals, partnerships, and corporations 3,286,614 2,867,037 2,104,427 1,684,850 970,970 211,216 82 U.S. government n.a. 7,122 n.a. 6,265 713 144 83 States and political subdivisions in the United States n.a. 136,998 n.a. 61,362 57,651 17,985 84 Commercial banks in the United States 83,245 32,904 75,321 24,980 6,776 1,148 85 Other depository institutions in the United States n.a. 9,579 n.a. 4,539 3,509 1,530 86 Foreign banks, governments, and official institutions 130,483 8,133 129,991 7,641 485 7 87 Banks n.a. n.a. 8 ?,459 6,745 483 n.a. 88 Governments and official institutions n.a. n.a. 40,532 896 2 n.a. 89 Certified and official checks 17,037 15,950 9,469 8,382 6,092 1,476 90 Total transaction accounts 653,004 367,810 220,512 64,682 91 Individuals, partnerships, and corporations 561,708 313,284 192,151 56,273 92 U.S. government 2,542 2,124 346 72 93 States and political subdivisions in the United States 40,737 17,448 16,824 6,465 94 Commercial banks in the United States 22,203 17,858 4,039 306 95 Other depository institutions in the United States 3,064 2,345 638 82 96 Foreign banks, governments, and official institutions 6,798 6,368 424 7 97 Banks n.a. 5,783 422 n.a. 98 Governments and official institutions n.a. 584 2 n.a. 99 Certified and official checks 15,950 8,382 6,092 1,476 100 Demand deposits (included in total transaction accounts) 510,452 330,526 146,155 33,771 101 Individuals, partnerships, and corporations 444,252 283,785 129,855 30,612 102 U.S. government 2,358 2,013 287 57 103 States and political subdivisions in the United States 15,854 9,779 4,839 1,236 104 Commercial banks in the United States n.a. 22,192 n.a. 17,857 4,031 304 105 Other depository institutions in the United States 3,051 2,345 627 80 106 Foreign banks, governments, and official institutions 6,795 6,365 424 6 107 Banks n.a. 5,783 422 n.a. 108 Governments and official institutions n.a. 582 2 n.a. 109 Certified and official checks 15,950 8,382 6,092 1,476 1 10 Total nontransaction accounts 2,424,719 1,430,209 825,684 168,826 111 Individuals, partnerships, and corporations 2,305,328 1,371,566 778,819 154,943 112 U.S. government 4,579 4,141 367 71 113 States and political subdivisions in the United States 96,261 43,914 40,827 11,520 114 Commercial banks in the United States 10,701 7,122 2,737 842 115 Other depository institutions in the United States 6,514 2,194 2,872 1,449 116 Foreign banks, governments, and official institutions 1,335 1,273 61 1 117 Banks n.a. 962 61 n.a. 118 Governments and official institutions n.a. 311 0 n.a. 119 Federal funds purchased and securities sold under agreements to repurchase 420,179 392,808 323,976 296,605 92,518 3,685 120 Demand notes issued to the U.S. Treasury 44,689 44,689 40,951 40,951 3,573 165 121 Trading liabilities 177,966 n.a. 177,863 n.a. 99 4 122 Other borrowed money 440,057 401,745 303,075 264,762 130,472 6,510 123 Banks' liability on acceptances executed and outstanding i,827 6,472 ,552 6,197 270 5 124 Notes and debentures subordinated to deposits 75,091 n.a. 70,562 n.a. 4,510 19 125 Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. 115,648 n.a. 115,648 n.a. n.a. 126 All other liabilities 142,815 n.a. 117,029 n.a. 23,363 2,423 127 Total equity capital 459,915 n.a. 300,028 n.a. 130,664 29,223 MEMO 128 Trading assets at large banks4 235,317 105,232 234,742 104,658 574 129 U.S. Treasury securities (domestic offices) 11,929 11,872 57 130 U.S. government agency corporation obligations • 3,638 • 3,515 122 131 Securities issued by states and political subdivisions in the United States n.a. 1,005 n a. 958 47 n.a. 132 Mortgage-backed securities 7,532 7,436 96 133 Other debt securities 9,668 9,536 131 1.34 Other trading assets 6,542 6,491 51 135 Trading assets in foreign banks 130,084 0 130,084 0 0 136 Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity contracts 64,919 64,919 64,849 64,849 70 n.a. 1 1 3 3 8 7 T To o t t a a l l i b n r d o i k v e i r d e u d a l d r e e p t o ir s e it m s ent (IRA) and Keogh plan accounts • 1 8 5 3 0 , , 8 5 7 0 1 5 i 5 8 1 0, , 6 6 9 1 1 7 5 28 7 , , 8 7 1 6 5 9 1 3 2 , , 4 0 3 4 9 4 139 Fully insured brokered deposits 59,986 30,462 26,231 3,293 140 Issued in denominations of less than $100,000 10,788 4,688 4,864 1,235 141 Issued in denominations of $100,000, or in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less n.a. 49,198 n.a. 25,773 21,366 2,058 142 Money market deposit accounts (MMDAs) 824,205 577,860 219,217 27,129 143 Other savings deposits (excluding MMDAs) 424,409 257,161 144,669 22,579 144 Total time deposits of less than $100,000 736,178 341,627 309,461 85,091 145 Total time deposits of $100,000 or more 439,926 253,561 152,338 34,027 146 All negotiable order of withdrawal (NOW) accounts 139,495 36,320 72,977 30,198 147 Number of banks ,599 8,599 164 n.a. 2,976 5,459 NOTE. The notation "n.a." indicates the lesser detail available from banks that don't have were $100 million or more. (These banks file the FFIEC 032 or FFIEC 033 Call Report.) foreign offices, the inapplicability of certain items to banks that have only domestic offices or "Under 100" refers to banks whose assets, on June 30 of the preceding calendar year, were the absence of detail on a fully consolidated basis for banks that have foreign offices. less than $100 million. (These banks file the FFIEC 034 Call Report.) 1. All transactions between domestic and foreign offices of a bank are reported in "net due 3. Because the domestic portion of allowances for loan and lease losses and allocated from" and "net due to" lines. All other lines represent transactions with parties other than the transfer risk reserves are not reported for banks with foreign offices, the components of total domestic and foreign offices of each bank. Because these intraoffice transactions are nullified assets (domestic) do not sum to the actual total (domestic). by consolidation, total assets and total liabilities for the entire bank may not equal the sum of 4. Components of "Trading assets at large banks" are reported only by banks with either assets and liabilities respectively of the domestic and foreign offices. total assets of $1 billion or more or with $2 billion or more in the par/notional amount of their Foreign offices include branches in foreign countries, Puerto Rico, and U.S. territories and off-balance-sheet derivative contracts. possessions; subsidiaries in foreign countries; all offices of Edge Act and agreement corporations wherever located; and IBFs. 2. "Over 100" refers to banks whose assets, on June 30 of the preceding calendar year, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Special Tables • February 2000 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1999 E. Commercial and industrial loans made by U.S. branches and agencies of foreign banks1 Weighted- Weighted- Amount of loans (percent) e a f v f e e r c a ti g v e e Am l o o u an n s t of Avera si g z e e loan m a a v t e u r r a i g ty e 3 ( l p o e a r n c e r n a t t ) e 2 o ( f m d il o l l i l o a n r s s ) (tho d u o s ll a a n r d s s ) of Days S c e o c l u la r t e e d r a b l y p S r u p ep b en a je y a c m l t t y e t n o t c M om ad m e it u m nd en er t LOAN RISK3 1 All commercial and industrial loans 7.03 126,278 802 429 43.6 10.7 31.7 76.6 2 Minimal risk 6.01 22,136 3,742 311 64.7 4.2 83.2 96.2 3 Low risk 6.52 21,439 1,264 428 23.7 14.0 39.6 85.0 4 Moderate risk 7.22 36,213 630 538 40.6 12.6 19.7 74.1 5 Other 7.71 28,823 730 420 38.5 8.5 12.6 71.3 By maturity/repricing interval6 6 Zero interval 8.02 24,505 411 571 55.8 13.6 5.4 73.8 7 Minimal risk 8.17 586 469 812 62.4 56.3 3.5 88.4 8 Low risk 7.23 2,158 321 438 34.9 24.3 4.8 85.2 9 Moderate risk 8.21 8,354 334 618 61.2 12.4 2.4 92.3 10 Other 5,619 296 945 59.6 22.6 17.4 95.3 11 Daily 6.43 49,043 1,264 189 44.4 10.9 44.4 71.6 12 Minimal risk 5.71 13,985 25,363 53 83.9 1.7 95.8 96.5 13 Low risk 6.13 8,623 3,991 233 18.7 17.8 45.6 80.1 14 Moderate risk 6.59 12,401 1,116 273 25.2 15.2 21.7 54.5 15 Other 6.93 7,949 1,025 144 25.3 7.7 1.8 45.3 16 2 to 30 days 6.80 31,496 1,743 444 29.0 6.1 33.1 81.2 17 Minimal risk 6.19 5,367 4,884 691 15.2 3.6 61.1 96.5 18 Low risk 6.42 6,843 3,562 466 25.2 8.7 39.8 92.7 19 Moderate risk 6.84 8,853 1,390 535 34.8 9.1 31.0 82.7 20 Other 7.41 8,841 1,361 215 30.3 2.2 11.6 64.0 21 31 to 365 days 7.58 16,234 714 642 41.7 7.4 37.3 88.9 22 Minimal risk 7.01 1,812 939 852 73.4 5.4 83.1 96.0 23 Low risk 7.00 3,184 899 569 22.1 7.7 47.7 87.3 24 Moderate risk 7.48 4,830 550 682 40.4 10.5 29.8 25 Other 8.22 5,527 1,801 606 42.1 4.3 26.5 26 More than 365 days 8.02 3,300 220 72.1 8.1 10.5 56.5 27 Minimal risk . .. 6.51 375 353 13.0 17.1 4.0 89.9 28 Low risk 8.40 556 225 48.0 6.5 35.9 49.9 29 Moderate risk . . 8.47 1,357 284 87.8 3.6 4.8 34.3 30 Other 7.50 633 323 83.2 2.3 4.0 80.0 Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN (thousands of dollars) 31 1-99 9.26 2,720 3.2 168 87.8 32.6 2.2 75.8 32 100-999 8.44 11,020 3.2 125 74.6 22.3 7.9 84.7 33 1,000-9,999 7.43 35,279 2.9 61 45.1 11.9 23.8 78.9 34 10,000 or more 6.57 77,259 2.5 38 37.0 7.7 39.7 74.5 BASE RATE OF LOAN4 35 Prime7 25,481 3.3 61 71.0 22.8 5.2 82.4 36 Fed funds 6.16 26,493 3.1 12 22.6 11.8 12.1 44.5 37 Other domestic 6.25 12,241 2.3 26 17.1 22.3 65.0 74.0 38 Foreign 6.69 47,540 2.2 38 47.7 1.9 54.9 94.9 39 Other 7.11 14,522 3.0 202 42.8 6.1 8.4 67.7 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A67 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1999 B. Commercial and industrial loans made by all domestic banks' Weighted- Amount of loans (percent) W e a f e v f i e e g r c h a t t i g e v e d e - Am l o o u an n s t of Avera si g z e e loan m a a v t e u r r a i g t e y 3 ( l p o e a r n c e r n a t t ) e 2 o ( f m d il o l l i l o a n r s s ) (tho d u o s ll a a n r d s s ) of Days S c e o c l u la re te d r a b l y p S r u p ep b en a je y a c m l t t y e t n o t c M om ad m e it u m nd en er t LOAN RISK5 1 All commercial and industrial loans 7.30 75,031 504 608 44.0 15.1 20.9 78.1 2 Minimal risk 6.22 7,395 1,662 648 22.6 10.8 66.9 93.4 3 Low risk 6.49 14,603 917 528 26.3 18.8 35.2 81.9 4 Moderate risk 7.35 28,114 508 653 14.6 16.7 80.1 5 Other 8.23 12,401 340 658 15.9 6.9 83.7 By maturity/repricing interval6 6 Zero interval 8.14 20,953 536 54.1 15.3 1.5 69.5 7 Minimal risk 8.02 474 812 56.3 46.0 4.3 85.6 8 Low risk 7.23 2,142 322 442 35.0 24.3 4.2 85.8 9 Moderate risk 8.18 8,079 329 62.0 12.8 1.8 92.1 10 Other 8.71 4,444 242 71.6 28.6 .6 94.1 11 Daily 6.82 24,487 661 397 37.6 19.5 31.5 75.1 12 Minimal risk 5.88 2,064 7,774 353 33.9 10.5 79.9 93.2 13 Low risk 6.22 6,218 3,304 335 25.9 23.7 55.2 74.1 14 Moderate risk 6.68 8,912 834 396 34.8 19.8 27.7 67.0 15 Other 7.47 2,881 402 337 34.4 8.9 4.8 55.0 16 2 to 30 days 6.78 18,105 1,173 653 30.9 10.4 32.5 90.5 17 Minimal risk 6.13 3,825 5,897 787 7.5 5.0 69.4 95.4 18 Low risk 6.25 4,106 2,643 566 19.2 14.4 26.9 94.6 19 Moderate risk 6.92 6,599 1,175 672 39.6 12.1 23.3 20 Other 8.14 2,529 450 619 57.4 7.1 20.5 21 31 to 365 days 7.49 7,385 362 839 54.2 8.0 19.4 89.0 22 Minimal risk 6.30 646 436 233 55.1 14.9 70.1 89.6 23 Low risk 6.51 1,506 470 717 26.9 3.6 19.8 84.5 24 Moderate risk 7.53 2,779 337 914 56.5 7.1 17.6 90.2 25 Other 8.70 1,706 815 1,194 74.8 7.6 11.1 98.6 26 More than 365 days 8.04 3,222 215 73.8 8.3 10.8 57.9 27 Minimal risk . . . 6.51 375 353 13.0 17.1 4.0 89.9 28 Low risk 8.40 556 225 48.0 6.5 35.9 49.9 29 Moderate risk . . 8.49 1,327 278 3.7 4.9 35.1 30 Other 7.52 585 299 2.5 4.3 86.5 Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN (thousands of dollars) 31 1-99 9.26 2,673 171 32.7 32 100-999 8.55 9,745 3.2 137 78.6 23.1 3.8 33 1,000-9,999 7.61 24,119 3.0 52.8 13.4 16.8 34 10,000 or more 6.66 38,494 2.5 26.7 12.9 29.1 BASE RATE OF LOAN 35 Prime7 22,338 3.2 67 76.7 19.7 1.4 80.0 36 Fed funds 6.00 10,139 2.6 5 30.7 24.9 16.3 41.9 37 Other domestic 6.18 10,123 2.3 29 12.9 26.9 58.1 89.4 38 Foreign 6.93 19,876 2.6 58 34.2 4.1 32.9 90.0 39 Other 7.13 12,556 2.9 228 37.5 6.8 9.4 76.2 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • February 2000 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1999 E. Commercial and industrial loans made by U.S. branches and agencies of foreign banks1 Weighted- Amount of loans (percent) Item average loans size maturity3 common (millions (thousands of Subject to base pricing ((ppeerrcceenntt))22 of dollars) dollars) S c e o c l u la r t e e d r a b l y Callable prepayment Made under rate4 DDaayyss penalty LOAN RISK5 1 All commercial and industrial loans 7.18 62,682 894 600 36.6 9.9 24.1 80.9 Foreign 2 Minimal risk 6.21 6,883 7,228 651 18.9 8.5 70.2 96.7 Foreign 3 Low risk 6.30 11,865 3,111 487 14.2 11.6 43.1 91.1 Domestic 4 Moderate risk 7.26 23,059 955 642 41.8 8.9 19.0 84.4 Prime 5 Other 8.15 10,105 454 697 54.7 11.0 7.8 81.9 Prime By maturity/repricing interval6 6 Zero interval 7.99 16,995 699 536 47.8 8.2 1.5 66.5 Prime 7 Minimal risk 8.09 361 1,285 913 54.1 48.4 5.6 95.8 Prime 8 Low risk 6.82 1,261 1,217 307 21.2 8.6 5.6 91.7 Other 9 Moderate risk 8.02 6,552 611 600 56.5 7.3 1.8 95.2 Prime 10 Other 8.54 3,517 339 607 65.2 18.0 .7 93.5 Prime 11 Daily 6.77 20,916 719 387 28.8 12.0 36.4 82.1 Domestic 12 Minimal risk 5.88 2,062 8,619 353 33.8 10.5 79.9 93.2 Fed funds 13 Low risk 6.06 5,006 3,992 318 9.3 13.0 68.4 90.0 Domestic 14 Moderate risk 6.72 7,232 928 396 23.2 8.5 33.0 75.8 Domestic 15 Other 7.35 2,708 603 333 31.0 7.9 4.8 52.7 Fed funds 16 2 to 30 days 6.74 16,547 1,779 679 28.3 8.8 33.7 91.4 Foreign 17 Minimal risk 6.21 3,571 19,785 797 3.4 1.9 71.3 98.0 Foreign 18 Low risk 6.20 3,935 5,454 574 17.7 13.4 27.9 94.7 Foreign 19 Moderate risk 6.86 5,846 1,885 708 36.4 10.4 23.4 86.2 Foreign 20 Other 8.17 2,325 507 650 56.5 5.8 20.9 88.4 Prime 21 31 to 365 days 7.37 5,942 1,831 977 47.6 5.1 23.2 93.1 Foreign 22 Minimal risk 6.22 561 4,312 201 49.5 9.9 76.9 100.0 Foreign 23 Low risk 6.73 1,312 2,748 790 17.2 2.0 22.5 87.0 Foreign 24 Moderate risk 7.37 2,379 2,515 983 54.8 5.3 20.2 93.2 Foreign 25 Other 8.71 1,236 1,059 1,595 66.1 4.6 13.9 99.0 Foreign Months 26 More than 365 days 7.78 1,811 926 50 58.1 4.3 17.0 63.5 Other 27 Minimal risk 6.31 322 3,135 47 .6 19.3 2.1 99.5 Other 28 Low risk 7.50 286 1,425 52 .8 * 69.8 75.9 Foreign 29 Moderate risk 8.46 830 1,313 51 90.2 .9 5.1 34.2 Prime 30 Other 8.12 246 365 49 78.0 3.4 7.5 86.0 Other Weighted- Weighted- average average risk maturity/ rating5 repricing interval6 Days SIZE OF LOAN (thousands of dollars) 31 1-99 9.02 1,225 3.5 46 87.1 36.6 2.0 85.9 Prime 32 100-999 8.43 6,621 3.4 49 75.7 20.0 4.3 89.0 Prime 33 1,000-9,999 7.51 19,864 3.0 58 48.2 9.5 18.9 81.3 Prime 34 10,000 or more 6.70 34,972 2.5 59 20.9 7.3 31.6 79.0 Foreign Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 8.74 17,109 3.3 63 74.0 13.7 1.6 80.2 311 36 Fed funds 6.00 7,696 2.7 3 12.6 3.6 21.4 50.0 7,424 37 Other domestic 6.15 9,801 2.4 20 11.8 25.7 59.6 90.0 7,619 38 Foreign 6.91 17,641 2.5 43 30.1 3.8 34.5 90.8 3,194 39 Other 6.93 10,435 2.9 148 27.4 3.7 10.7 79.5 1,451 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A69 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1999 D. Commercial and industrial loans made by small domestic banks1 Weighted- Amount of loans (percent) W e a f e v f i e e g r c h a t t i g e v e d e - Am l o o u an n s t of Aver s a i g z e e loan m a a v t e u r r a i g ty e 3 ( l p o e a r n c e r n a t t ) e 2 o ( f m d il o l l i l o a n r s s ) (tho d u o s ll a a n r d s s ) of Days S c e o c l u la r t e e d r a b l y p S r u p ep b en a je y a c m l t t y e t n o t c M om ad m e it u m nd en er t LOAN RISK 1 All commercial and industrial loans 7.91 12,349 157 667 81.7 41.4 4.7 64.1 2 Minimal risk 6.29 513 147 606 72.5 41.9 25.5 49.0 3 Low risk 7.33 2,738 226 802 79.2 49.8 1.2 41.9 4 Moderate risk 7.75 5,055 162 736 80.5 40.9 6.3 60.9 5 Other 8.59 2,296 162 92.3 37.5 3.1 91.6 By maturity/repricing interval6 6 Zero interval 8.75 3,958 117 540 81.0 45.7 1.4 82.7 7 Minimal risk 7.77 113 164 231 63.5 38.2 .0 53.3 8 Low risk 7.82 881 157 658 54.7 46.7 2.2 77.3 9 Moderate risk 8.87 1,527 110 624 85.9 36.4 2.2 78.7 10 Other 9.34 927 116 374 96.0 68.9 .4 96.6 11 Daily 7.13 3,571 506 88.7 63.3 34.1 12 Minimal risk 8.82 2 228 100.0 .2 89.6 13 Low risk 6.87 1,211 1,929 547 94.4 67.7 .2 8.6 14 Moderate risk 6.50 1,679 579 396 84.8 68.4 5.1 29.4 15 Other 9.30 173 65 389 88.5 24.7 4.6 91.8 16 2 to 30 days 7.14 1,557 254 327 59.2 27.7 20.5 81.3 17 Minimal risk 5.15 254 543 589 65.8 49.0 41.7 58.6 18 Low risk 7.44 170 205 334 53.1 37.3 4.3 93.7 19 Moderate risk 7.36 753 299 330 64.6 25.1 22.5 94.7 20 Other 7.83 204 199 260 67.7 22.2 16.9 55.4 21 31 to 365 days 7.96 1,443 84 278 81.2 19.9 3.7 72.0 22 Minimal risk 6.80 85 63 455 92.4 47.5 25.2 21.1 23 Low risk 4.98 194 71 220 92.6 14.1 1.2 68.1 24 Moderate risk 8.47 400 55 504 67.1 17.8 1.8 72.8 25 Other 8.67 470 507 170 97.9 15.3 3.8 97.5 26 More than 365 days 8.37 1,411 108 94.0 13.3 4.0 50.6 27 Minimal risk . . . 7.72 53 56 87.8 3.5 6.2 32.0 28 Low risk 9.36 270 119 98.0 13.5 22.4 29 Moderate risk . . 8.53 496 120 89.1 8.3 4.6 36.6 30 Other 7.09 340 265 98.5 1.9 2.1 86.9 Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN (thousands of dollars) 31 1-99 9.47 1,448 2.9 272 89.4 29.3 1.7 66.9 32 100-999 8.78 3,124 2.9 328 84.5 29.8 2.9 75.5 33 1,000-9,999 8.10 4,255 3.0 119 74.4 31.7 7.0 75.8 34 10,000 or more 6.26 3,522 2.8 84.9 4.8 38.7 BASE RATE OF LOAN4 35 Prime7 9.11 5,228 3.1 85.6 39.2 79.4 36 Fed funds 6.00 2,443 2.6 11 87.8 91.9 16.5 37 Other domestic 6.92 322 2.0 284 44.6 63.3 10.0 71.6 38 Foreign 7.10 2,235 3.3 177 66.3 6.5 20.1 83.4 39 Other 8.13 2,121 2.7 670 86.9 22.0 3.2 59.7 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • February 2000 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, November 1-5, 1999 E. Commercial and industrial loans made by U.S. branches and agencies of foreign banks1 Weighted- Weighted- Amount of loans (percent) e a f v fe e c ra ti g v e e Am l o o u an n s t of Aver s a i g z e e loan m a a v t e u r r a i g ty e 3 ( l p o e a r n c e r n a t t ) e 2 o ( f m d il o l l i l o a n r s s ) (tho d u o s ll a a n r d s s ) of Days S c e o c l u la r t e e d r a b l y p S r u e p p b en a je y a c m l t t y e t n o t c M om ad m e it u m nd en er t LOAN RISK5 1 All commercial and industrial loans 6.63 51,247 5,990 184 43.0 4.2 47.3 74.4 2 Minimal risk 5.91 14,741 10,061 144 85.8 .9 91.1 97.5 3 Low risk 6.59 6,836 6,608 228 18.2 3.8 48.9 91.7 4 Moderate risk 6.78 8,099 3,743 163 12.1 5.5 30.0 53.3 5 Other 7.32 16,423 5,423 261 21.1 2.9 16.8 62.0 By maturity/repricing interval6 6 Zero interval 7.34 3,552 2,206 66.0 3.3 99.2 7 8 M Lo i w ni m ri a sk l risk 8 * .82 112 401 88* .4 100 * .0 100 * .0 9 Moderate risk 9.04 275 603 1,044 38.4 .9 19.7 99.9 10 Other 9.15 1,175 2,030 1,968 14.2 .0 80.7 99.6 11 Daily 6.05 24,556 14,067 51.2 2.3 68.2 12 Minimal risk 5.68 11,921 41,699 1 92.6 .2 97.1 13 Low risk 5.91 2,405 8,629 1 .0 2.8 21.1 95.6 14 Moderate risk 6.35 3,489 8,344 1 .7 3.6 6.2 22.4 15 Other 6.62 5,068 8,569 34 20.1 7.1 .1 39.7 16 2 to 30 days 6.82 13,392 5,092 173 26.3 .2 33.8 68.7 17 Minimal risk 6.31 1,542 3,424 456 34.4 .1 40.7 99.3 18 Low risk 6.66 2,737 7,437 320 34.3 .0 58.7 89.9 19 Moderate risk 6.59 2,254 3,003 153 20.7 .4 53.6 69.7 20 Other 7.11 6,312 7,180 61 19.4 .2 8.5 55.3 21 31 to 365 days 7.66 8,849 3,783 465 31.4 6.9 52.3 88.8 22 Minimal risk 7.41 1,167 2,591 1,193 83.5 .1 90.2 99.5 23 Low risk 7.44 1,678 4,969 421 17.9 11.5 72.7 89.8 24 Moderate risk 7.41 2,052 3,840 323 18.6 15.1 46.2 82.2 25 Other 8.00 3,821 3,923 329 27.5 2.8 33.3 91.7 26 More than 365 days 27 Minimal risk . . . 28 Low risk 29 Moderate risk . . 30 Other Weighted- Weighted- average average risk maturity/ rating3 repricing interval6 Days SIZE OF LOAN (thousands of dollars) 31 1-99 8.77 47 3.0 54.9 28.8 18.4 88.3 32 100-999 7.62 1,275 2.9 44.6 16.3 38.7 85.0 33 1,000-9,999 7.05 11,160 2.8 28.5 8.4 75.7 34 10,000 or more 6.47 38,766 2.5 47.1 2.6 73.7 BASE RATE OF LOAN4 35 Prime7 9.25 3,144 3.5 30.5 45.1 31.9 99.5 36 Fed funds 6.26 16,355 3.3 17.6 3.8 9.5 46.1 37 Other domestic 6.61 2,119 2.9 37.5 98.4 .2 38 Foreign 6.52 27,664 2.0 57.5 .3 70.8 98.4 39 Other 6.98 1,966 4.0 76.9 1.4 2.3 13.6 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A71 NOTES TO TABLE 4.23 NOTE. The Survey of Terms of Business Lending collects data on gross loan extensions 5. A complete description of these risk categories is available from the Banking Analysis made during the first full business week in the mid-month of each quarter. The authorized Section, Mail Stop 81, Board of Governors of the Federal Reserve System, Washington, DC panel size for the survey is 348 domestically chartered commercial banks and fifty U.S. 20551. The category "Moderate risk" includes the average loan, under average economic branches and agencies of foreign banks. The sample data are used to estimate the terms of conditions, at the typical lender. The category "Other" includes loans rated "acceptable" as loans extended during that week at all domestic commercial banks and all U.S. branches and well as special mention or classified loans. The weighted-average risk ratings published for agencies of foreign banks. Note that the terms on loans extended during the survey week may loans in rows 31-39 are calculated by assigning a value of "1" to minimal risk loans; "2" to differ from those extended during other weeks of the quarter. The estimates reported here are low risk loans; "3" to moderate risk loans, "4" to acceptable risk loans; and "5" to special not intended to measure the average terms on all business loans in bank portfolios. mention and classified loans. These values are weighted by loan amount and exclude loans 1. As of December 31, 1996, assets of most of the large banks were at least $7.0 billion. with no risk rating. Some of the loans in lines 1, 6, 11, 16, 21, 26, and 31-39 are not rated for Median total assets for all insured banks were roughly $62 million. Assets at all U.S. branches risk. and agencies averaged 1.3 billion. 6. The maturity/repricing interval measures the period from the date the loan is made until it 2. Effective (compounded) annual interest rates are calculated from the stated rate and first may reprice or it matures. For floating-rate loans that are subject to repricing at any other terms of the loans and weighted by loan amount. The standard error of the loan rate for time—such as many prime-based loans—the maturity/repricing interval is zero. For floating-rate all commercial and industrial loans in the current survey (line 1, column 1) is 0.16 percentage loans that have a scheduled repricing interval, the maturity/repricing interval measures the number point. The chances are about two out of three that the average rate shown would differ by less of days between the date the loan is made and the date on which it is next scheduled to reprice. For than this amount from the average rate that would be found by a complete survey of the loans having rates that remain fixed until the loan matures (fixed-rate loans), the maturity/repricing universe of all banks. interval measures the number of days between the date the loan is made and the date on which it 3. Average maturities are weighted by loan amount and exclude loans with no stated matures. Loans that reprice daily mature or reprice on the business day after they are made. Owing maturities. to weekends and holidays, such loans may have maturity/repricing intervals in excess of one day; 4. The most common base pricing rate is that used to price the largest dollar volume of such loans are not included in the "2 to 30 day" category. loans. Base pricing rates include the prime rate (sometimes referred to as a bank's "base" or 7. For the current survey, the average reported prime rate, weighted by the amount of "reference" rate); the federal funds rate; domestic money market rates other than the prime loans priced relative to a prime base rate, was 8.26 percent for all banks; 8.25 percent for rate and the federal funds rate; foreign money market rates; and other base rates not included large domestic banks, 8.35 percent for small domestic banks; and 8.19 percent for U.S. in the foregoing classifications. branches and agencies of foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • February 2000 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1999Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l 3 n g o I n B l F y s 3 inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 1 Total assets4 851,483 173,980 680,784 144,819 28,823 5,399 53,215 7,296 2 Claims on nonrelated parties 711,312 89,865 561,374 74,821 28,067 2,224 53,104 5,914 3 Cash and balances due from depository institutions 82,727 41,841 75,607 38,160 627 130 5,524 3,304 4 Cash items in process of collection and unposted debits 2,550 0 2,495 0 7 0 11 0 5 Currency and coin (U.S. and foreign) 16 n.a. 12 n.a. 1 n.a. 0 n.a. 6 Balances with depository institutions in United States 48,699 15,852 46,444 15,008 511 57 1,144 665 7 U.S. branches and agencies of other foreign banks (including IBFs) 41,134 15,095 39,409 14,322 341 57 965 605 8 Other depository institutions in United States (including IBFs) . . . 7,565 757 7,035 686 170 0 179 60 y Balances with banks in foreign countries and with foreign central banks 31,076 25,989 26,357 23,152 88 73 4,359 2,640 10 Foreign branches of U.S. banks 713 637 624 553 0 0 56 56 11 Banks in home country and home-country central banks 5,138 3,940 5,088 3,903 23 23 15 15 12 All other banks in foreign countries and foreign central banks .... 25,225 21,411 20,644 18,696 65 50 4,289 2,569 13 Balances with Federal Reserve Banks 386 n.a. 300 n.a. 20 n.a. 10 n.a. 14 Total securities and loans 432,914 40,094 331,465 29,355 26,266 1,751 35,182 2,560 15 Total securities, book value 112,939 4,914 104,061 4,273 1,311 485 6,439 116 16 U.S. Treasury 22,998 n.a. 21,486 n.a. 67 n.a. 1,431 n.a. 17 Obligations of U.S. government agencies and corporations 46,182 n.a. 43,650 n.a. 203 n.a. 1,922 n.a. 18 Other bonds, notes, debentures, and corporate stock (including state and local securities) 43,759 4,914 38,925 4,273 1,041 485 3,086 116 19 Securities of foreign governmental units 11,432 2,785 11,071 2,631 267 109 30 30 20 All Other 32,327 2,130 27,854 1,642 774 376 3,056 85 21 Federal funds sold and securities purchased under agreements to resell 71,295 5,993 66,335 5,623 605 300 3,522 0 22 U.S. branches and agencies of other foreign banks 10,701 2,716 10,187 2,596 299 100 0 0 23 Commercial banks in United States 9,564 19 8,906 19 90 0 5 0 24 Other 51,030 3,258 47,242 3,008 216 200 3,517 0 25 Total loans, gross 320,258 35,209 227,615 25,109 24,984 1,266 28,759 2,444 26 LESS: Unearned income on loans 283 29 210 27 29 1 17 0 27 EQUALS: Loans, net 319,975 35,180 227,405 25,082 24,955 1,265 28,742 2,444 Total loans, gross, by category 28 Real estate loans 16,990 102 11,436 100 2,946 0 398 0 29 Loans to depository institutions 25.694 17,359 15,402 9,950 1,631 960 2,788 2,364 30 Commercial banks in United States (including IBFs) 6,450 3,192 4,004 1,848 1,161 516 791 704 31 U.S. branches and agencies of other foreign banks 4,867 2,920 2,742 1,745 1,138 502 635 549 32 Other commercial banks in United States 1,583 272 1,262 103 23 14 156 155 33 Other depository institutions in United States (including IBFs) 15 0 0 0 0 0 0 0 34 Banks in foreign countries 19,229 14,167 11,397 8,102 470 444 1,997 1,660 35 Foreign branches of U.S. banks 800 182 761 143 0 0 10 10 36 Other banks in foreign countries 18,428 13,985 10,636 7,960 470 444 1,987 1,650 37 Loans to other financial institutions 50,767 1,542 40,578 1,255 1,302 0 3,999 5 38 Commercial and industrial loans 206,195 13,626 142,618 11,509 18,864 282 20,188 71 39 U.S. addressees (domicile) 168,205 222 115,006 222 17,400 0 18,025 0 40 Non-U.S. addressees (domicile) 37,989 13,403 27,612 11,287 1,464 282 2,163 71 41 Acceptances of other banks 423 6 71 6 19 0 328 0 42 U.S. banks 6 0 1 0 3 0 0 0 43 Foreign banks 417 6 70 6 15 0 328 0 44 Loans to foreign governments and official institutions (including foreign central banks) 3,700 2,498 2,991 2,229 157 24 95 4 45 Loans for purchasing or carrying securities (secured and unsecured) . . . 9.020 19 8,459 19 0 0 0 0 46 All other loans 6,714 58 5,836 40 66 0 429 0 47 Lease financing receivables (net of unearned income) 757 0 225 0 0 0 532 0 48 U.S. addressees (domicile) 757 0 225 0 0 0 532 0 49 Non-U.S. addressees (domicile) 0 0 0 0 0 0 0 0 50 Trading assets 91,504 719 59,358 717 68 2 6,932 0 51 All other assets 32,871 1,219 28,608 966 501 41 1,945 50 52 Customers' liabilities on acceptances outstanding 1,263 n.a. 899 n.a. 133 n.a. 177 n.a. 53 U.S. addressees (domicile) 621 n.a. 458 n.a. 132 n.a. 25 n.a. 54 Non-U.S. addressees (domicile) 642 n.a. 441 n.a. 2 n.a. 152 n.a. 55 Other assets including other claims on nonrelated parties 31,609 1,219 27,709 966 368 41 1,768 50 56 Net due from related depository institutions5 140,171 84,115 119,410 69,998 756 3,175 111 1,382 57 Net due from head office and other related depository institutions . . . 140,171 n.a. 119,410 n.a. 756 n.a. 111 n.a. 58 Net due from establishing entity, head office, and other related depository institutions5 n.a. 84,115 n.a. 69,998 n.a. 3,175 n.a. 1,382 59 Total liabilities4 851,483 173,980 680,784 144,819 28,823 5,399 53,215 7,296 60 Liabilities to nonrelated parties 711,828 152,812 585,300 126,898 11,632 5,148 44,646 5,478 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1999'—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o I n B l F y* s exc T I l B o u t F d a s i l n g I o B n F ly s exc T I l B o u t F d a s i l n g I o B n F ly s exc T I l B o u t F d a s i l n g I o B n F ly s 61 Total deposits and credit balances 310,881 102,423 249,715 90,233 4,593 1,215 20,417 2,301 62 Individuals, partnerships, and corporations 230,558 11,095 178,319 6,434 2,725 191 17,943 34 63 U.S. addressees (domicile) 213,635 12 166,937 12 1,273 0 17,827 0 64 Non-U.S. addressees (domicile) 16,923 11,083 11,382 6,421 1,452 191 116 34 65 Commercial banks in United States (including IBFs) 40,409 13,574 35,711 13,097 464 120 1,335 223 66 U.S. branches and agencies of other foreign banks 12,845 11,470 11,511 11,074 0 120 285 148 67 Other commercial banks in United States 27,564 2,104 24,200 2,023 464 0 1,050 75 68 Banks in foreign countries 10,005 56 898 9,625 53,178 11 159 151 1,403 69 Foreign branches of U.S. banks 1,026 4,486 1,025 4,063 0 0 0 423 70 Other banks in foreign countries 8,978 52,412 8,600 49,115 11 159 151 9 80 71 Foreign governments and official institutions (including foreign central banks) 12,929 20,489 11,478 17,223 7 704 982 639 72 All other deposits and credit balances 16,826 367 14,442 302 1,383 40 5 2 73 Certified and official checks 155 139 3 1 74 Transaction accounts and credit balances (excluding IBFs) 8,402 6,512 273 421 75 Individuals, partnerships, and corporations 7,013 5,415 255 417 76 U.S. addressees (domicile) 4,991 4,252 146 414 77 Non-U.S. addressees (domicile) 2,022 1,163 109 3 78 Commercial banks in United States (including IBFs) 54 50 0 0 79 U.S. branches and agencies of other foreign banks 34 33 0 0 80 Other commercial banks in United States 20 16 0 0 81 Banks in foreign countries 673 467 11 0 82 Foreign branches of U.S. banks 2 1 0 0 83 Other banks in foreign countries 671 466 11 0 84 Foreign governments and official institutions (including foreign central banks) 229988 224433 2 2 85 All other deposits and credit balances 209 197 2 0 86 Certified and official checks 155 139 3 1 87 Demand deposits (included in transaction accounts and credit balances) 7,878 6,188 217 419 88 Individuals, partnerships, and corporations 6,665 5,264 200 415 89 U.S. addressees (domicile) 4,895 4,176 134 412 90 Non U.S. addressees (domicile) 1,770 1,088 67 3 91 Commercial banks in United States (including IBFs) 40 n.a. 37 n.a. 0 n.a. 0 n.a. 92 U.S. branches and agencies of other foreign banks 24 23 0 0 93 Other commercial banks in United States 16 13 0 0 94 Banks in foreign countries 651 445 11 0 95 Foreign branches of U.S. banks 2 1 0 0 96 Other banks in foreign countries 649 444 11 0 97 Foreign governments and official institutions (including foreign central banks) 291 236 2 2 98 All other deposits and credit balances 76 67 0 0 99 Certified and official checks 155 139 3 1 100 Nontransaction accounts (including MMDAs, excluding IBFs) 302,478 243,203 4,320 19,995 101 Individuals, partnerships, and corporations 223,545 172,904 2,470 17,525 102 U.S. addressees (domicile) 208,644 162,685 1,127 17,413 103 Non U.S. addressees (domicile) 14,901 10,219 1,343 113 104 Commercial banks in United States (including IBFs) 40,355 35,661 464 1,335 105 U.S. branches and agencies of other foreign banks 12,811 11,478 0 285 106 Other commercial banks in United States 27,544 24,184 464 1,050 107 Banks in foreign countries 9,331 9,158 0 150 108 Foreign branches of U.S. banks 1,024 1,024 0 0 109 Other banks in foreign countries 8,307 8,134 0 150 110 Foreign governments and official institutions (including foreign central banks) 12,631 11,235 5 380 111 All other deposits and credit balances 16,617 14,245 1,381 5 112 IBF deposit liabilities 102,423 90,233 1,215 2,301 113 Individuals, partnerships, and corporations 11,095 6,434 191 34 114 U.S. addressees (domicile) 12 12 0 0 115 Non-U.S. addressees (domicile) 11,083 6,421 191 34 116 Commercial banks in United States (including IBFs) 13,574 13,097 120 223 117 U.S. branches and agencies of other foreign banks 11,470 11,074 120 148 118 Other commercial banks in United States n.a. 2,104 n.a. 2,023 n.a. 0 n.a. 75 119 Banks in foreign countries 56,898 53,178 159 1,403 120 Foreign branches of U.S. banks 4,486 4,063 0 423 121 Other banks in foreign countries 52,412 49,115 159 80 122 Foreign governments and official institutions (including foreign central banks) 20,489 17,223 704 639 123 All other deposits and credit balances 367 302 40 2 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • February 2000 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1999Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 124 Federal funds purchased and securities sold under agreements to repurchase 126,269 21,375 109,311 14,063 1,235 595 7,933 1,936 125 U.S. branches and agencies of other foreign banks 13,953 5,523 8,857 2,730 573 344 2,197 512 126 Other commercial banks in United States 11,149 968 7,102 477 350 16 2,233 475 127 Other 101,167 14, 584 93,352 10,856 313 236 3,502 949 128 Other borrowed money 82,682 27,695 64,860 21,405 4,183 3,302 6,199 1,215 129 Owed to nonrelated commercial banks in United States (including IBFs) 13,095 5,332 10,718 4,340 877 522 695 220 130 Owed to U.S. offices of nonrelated U.S. banks 5,400 413 4,993 335 90 70 102 0 131 Owed to U.S. branches and agencies of nonrelated foreign banks 7,695 4,919 5,725 4,005 787 452 593 220 132 Owed to nonrelated banks in foreign countries 19,662 17,182 15,252 12,926 2,636 2,611 224 205 133 Owed to foreign branches of nonrelated U.S. banks 1,156 664 855 369 296 296 0 0 134 Owed to foreign offices of nonrelated foreign banks 18,506 16,518 14,397 12,557 2,340 2,315 224 205 135 Owed to others 49,925 5,181 38,890 4,140 670 170 5,280 790 136 All other liabilities 89,574 1,320 71,181 1,196 406 35 7,796 26 137 Branch or agency liability on acceptances executed and outstanding 1,723 n.a. 1,185 n.a. 113355 n. a. 333388 n.a. 138 Trading liabilities 60,039 46 46,090 46 57 0 5,914 0 139 Other liabilities to nonrelated parties 27,812 1,274 23,906 1,151 215 35 1,545 25 140 Net due to related depository institutions5 139,655 21,168 95,484 17,922 17,190 251 8,569 1,818 141 Net due to head office and other related depository institutions .... 139,655 n.a. 95,484 n.a. 17,190 n.a. 8,569 n.a. 142 Net due to establishing entity, head office, and other related depository institutions5 n.a. 21,168 n.a. 17,922 n.a. 251 n.a. 1,8 18 MEMO 143 Non-interest-bearing balances with commercial banks in United States 2,338 0 2,221 0 33 0 11 0 144 Holding of own acceptances included in commercial and industrial loans 1,847 • 1,334 • 197 • 249 • 145 Commercial and industrial loans with remaining maturity of one year or less (excluding those in nonaccrual status) 110,752 69,351 9,823 15,594 146 Predetermined interest rates 73,378 n.a. 44,949 n.a. 4,997 n.a. 13,687 n a. 147 Floating interest rates 3377,,337744 24,402 4,826 1,907 148 Commercial and industrial loans with remaining maturity of more than one year (excluding those in nonaccrual status) 93,986 72,258 8,911 4,512 149 Predetermined interest rates 23.317 19,308 1,619 620 150 Floating interest rates 70,669 52,950 7,292 3,892 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A75 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, September 30, 1999'—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 exc T I l B o u t F d a s i l n g I o B n F ly s exc T I l B o u t F d a s i l n g I o B n F ly s exc T I l B o u F t d a s i l n g I o B n F ly s 111155551111 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ((((eeeexxxxcccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss)))) 302,476 n.a. 244,740 n.a. 4,137 n.a. 20,477 n.a. 111155552222 TTTTiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 297,599 n.a. 240,516 n.a. 4,089 n.a. 19,895 n.a. 111155553333 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss 4,877 n.a. 4,224 n.a. 48 n.a. 582 n.a. All states" New York California Illinois inc T I l B u ot F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B u ot F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 111155554444 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 31,129 n.a. 28,151 n.a. 1,694 n.a. 741 n.a. 111155555555 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd6666 373 0 195 0 75 0 30 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, "Report of either because the item is not an eligible IBF asset or liability or because that level of detail is Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The form was first not reported for IBFs. From December 1981 through September 1985, IBF data were used for reporting data as of June 30, 1980, and was revised as of December 31, 1985. From included in all applicable items reported. November 1972 through May 1980, U.S. branches and agencies of foreign banks had filed a 4. Total assets and total liabilities include net balances, if any, due from or owed to related monthly FR 886a report. Aggregate data from that report were available through the Federal banking institutions in the United States and in foreign countries (see note 5). On the former Reserve monthly statistical release G.l 1, last issued on July 10, 1980. Data in this table and in monthly branch and agency report, available through the G.ll monthly statistical release, the G. 11 tables are not strictly comparable because of differences in reporting panels and in gross balances were included in total assets and total liabilities. Therefore, total asset and total definitions of balance sheet items. liability figures in this table are not comparable to those in the G. 11 tables. 2. Includes the District of Columbia. 5. Related depository institutions includes the foreign head office and other U.S. and 3. Effective December 1981, the Federal Reserve Board amended Regulations D and Q to foreign branches and agencies of a bank, a bank's parent holding company, and majoritypermit banking offices located in the United States to operate international banking facilities owned banking subsidiaries of the bank and of its parent holding company (including (IBFs). Since December 31, 1985, data for IBFs have been reported in a separate column. subsidiaries owned both directly and indirectly). These data are either included in or excluded from the total columns as indicated in the 6. In some cases two or more offices of a foreign bank within the same metropolitan area headings. The notation "n.a." indicates that no IBF data have been reported for that item, file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • February 2000 Index to Statistical Tables References are to pages A3-A75 although the prefix "A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Federal credit agencies, 30 Assets and liabilities (See also Foreigners) Federal finance Commercial banks, 15-21, 64—65 Debt subject to statutory limitation, and types and ownership Domestic finance companies, 32, 33 of gross debt, 27 Federal Reserve Banks, 10 Receipts and outlays, 25, 26 Foreign banks, U.S. branches and agencies, 72-75 Treasury financing of surplus, or deficit, 25 Foreign-related institutions, 20 Treasury operating balance, 25 Automobiles Federal Financing Bank, 30 Consumer credit, 36 Federal funds, 23, 25 Production, 44, 45 Federal Home Loan Banks, 30 Federal Home Loan Mortgage Corporation, 30, 34, 35 BANKERS acceptances, 5, 10, 22, 23 Federal Housing Administration, 30, 34, 35 Bankers balances, 15-21, 72-75. (See also Foreigners) Federal Land Banks, 35 Bonds (See also U.S. government securities) Federal National Mortgage Association, 30, 34, 35 New issues, 31 Federal Reserve Banks Rates, 23 Condition statement, 10 Business activity, nonfinancial, 42 Discount rates (See Interest rates) Business loans (See Commercial and industrial loans) U.S. government securities held, 5, 10, 11, 27 Federal Reserve credit, 5,6, 10, 12 CAPACITY utilization, 43 Federal Reserve notes, 10 Capital accounts Federally sponsored credit agencies, 30 Commercial banks, 15-21, 64—65 Finance companies Federal Reserve Banks, 10 Assets and liabilities, 32 Certificates of deposit, 23 Business credit, 33 Commercial and industrial loans Loans, 36 Commercial banks, 15-21, 64-65, 66-71 Paper, 22, 23 Weekly reporting banks, 17, 18 Float, 5 Commercial banks Flow of funds, 37-41 Assets and liabilities, 15-21, 64—65 Foreign branches, U.S. banks and agencies, 71, 72-75 Commercial and industrial loans, 15-21, 64-65, 66-71 Foreign currency operations, 10 Consumer loans held, by type and terms, 36, 66-71 Foreign deposits in U.S. banks, 5 Real estate mortgages held, by holder and property, 35 Foreign exchange rates, 62 Terms of lending, 64-65 Foreign-related institutions, 20 Time and savings deposits, 4 Foreign trade, 51 Commercial paper, 22, 23, 32 Foreigners Condition statements (See Assets and liabilities) Claims on, 52, 55, 56, 57, 59 Construction, 42, 46 Liabilities to, 51, 52, 53, 58, 60, 61 Consumer credit, 36 Consumer prices, 42 GOLD Consumption expenditures, 48, 49 Certificate account, 10 Corporations Stock, 5, 51 Profits and their distribution, 32 Government National Mortgage Association, 30, 34, 35 Security issues, 31, 61 Gross domestic product, 48, 49 Cost of living (See Consumer prices) Credit unions, 36 HOUSING, new and existing units, 46 Currency in circulation, 5, 13 Customer credit, stock market, 24 INCOME, personal and national, 42, 48, 49 DEBT (See specific types of debt or securities) Industrial production, 42, 44 Demand deposits, 15-21 Insurance companies, 27, 35 Depository institutions Interest rates Reserve requirements, 8 Bonds, 23 Reserves and related items, 4, 5, 6, 12, 64-65 Commercial banks, 66-71 Deposits (See also specific types) Consumer credit, 36 Commercial banks, 4, 15-21, 64-65 Federal Reserve Banks, 7 Federal Reserve Banks, 5, 10 Money and capital markets, 23 Discount rates at Reserve Banks and at foreign central banks and Mortgages, 34 foreign countries (See Interest rates) Prime rate, 22, 66-71 Discounts and advances by Reserve Banks (See Loans) International capital transactions of United States, 50-61 Dividends, corporate, 32 International organizations, 52, 53, 55, 58, 59 Inventories, 48 EMPLOYMENT, 42 Investment companies, issues and assets, 32 Euro, 62 Investments (See also specific types) Commercial banks, 4, 15-21, 66-71 FARM mortgage loans, 35 Federal Reserve Banks, 10, 11 Federal agency obligations, 5, 9, 10, 11, 28, 29 Financial institutions, 35 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

LABOR force, 42 Savings institutions, 35, 36, 37^11 Life insurance companies (See Insurance companies) Savings deposits (See Time and savings deposits) Loans (See also specific types) Securities (See also specific types) Commercial banks, 15-21, 64-65, 66-71 Federal and federally sponsored credit agencies, 30 Federal Reserve Banks, 5, 6, 7, 10, 11 Foreign transactions, 60 Financial institutions, 35 New issues, 31 Foreign banks, U.S. branches and agencies, 72 Prices, 24 Insured or guaranteed by United States, 34, 35 Special drawing rights, 5, 10, 50, 51 State and local governments MANUFACTURING Holdings of U.S. government securities, 27 Capacity utilization, 43 New security issues, 31 Production, 43, 45 Rates on securities, 23 Margin requirements, 24 Stock market, selected statistics, 24 Member banks, reserve requirements, 8 Stocks (See also Securities) Mining production, 45 New issues, 31 Mobile homes shipped, 46 Prices, 24 Monetary and credit aggregates, 4, 12 Money and capital market rates, 23 Student Loan Marketing Association, 30 Money stock measures and components, 4, 13 Mortgages (See Real estate loans) TAX receipts, federal, 26 Mutual funds, 13, 32 Thrift institutions, 4. (See also Credit unions and Savings Mutual savings banks (See Thrift institutions) institutions) Time and savings deposits, 4, 13, 15-21, 64-65 NATIONAL defense outlays, 26 Trade, foreign, 51 National income, 48 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 OPEN market transactions, 9 Treasury operating balance, 25 UNEMPLOYMENT, 42 PERSONAL income, 49 US. government balances Prices Commercial bank holdings, 15-21 Consumer and producer, 42, 47 Treasury deposits at Reserve Banks, 5, 10, 25 Stock market, 24 U.S. government securities Prime rate, 22, 66-71 Bank holdings, 15-21, 27 Producer prices, 42, 47 Dealer transactions, positions, and financing, 29 Production, 42, 44 Federal Reserve Bank holdings, 5, 10, 11, 27 Profits, corporate, 32 Foreign and international holdings and transactions, 10, 27, 61 REAL estate loans Open market transactions, 9 Banks, 15-21, 35 Outstanding, by type and holder, 27, 28 Terms, yields, and activity, 34 Rates, 23 Type of holder and property mortgaged, 35 U.S. international transactions, 50-62 Reserve requirements, 8 Utilities, production, 45 Reserves Commercial banks, 15-21 VETERANS Administration, 34, 35 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) SAVING Flow of funds, 37-41 National income accounts, 48 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • February 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 ]. VIRGIL MATTINGLY, JR., General Counsel STEVEN B. KAMIN, Assistant Director SCOTT G. ALVAREZ, Associate General Counsel RALPH W. TRYON, Assistant Director RICHARD M. ASHTON, Associate General Counsel OLIVER IRELAND, Associate General Counsel DIVISION OF RESEARCH AND STATISTICS KATHLEEN M. O'DAY, Associate General Counsel MICHAEL J. PRELL, Director KATHERINE H. WHEATLEY, Assistant General Counsel EDWARD C. ETTIN, Deputy Director DAVID J. STOCKTON, Deputy Director OFFICE OF THE SECRETARY WILLIAM R. JONES, Associate Director MYRON L. KWAST, Associate Director JENNIFER J. JOHNSON, Secretary PATRICK M. PARKINSON, Associate Director ROBERT DEV. FRIERSON, Associate Secretary THOMAS D. SIMPSON, Associate Director BARBARA R. LOWREY, Associate Secretary and Ombudsman LAWRENCE SLIFMAN, Associate Director MARTHA S. SCANLON, Deputy Associate Director 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 DIVISION OF CONSUMER RICHARD A. SMALL, Assistant Director 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

A79 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

80 Federal Reserve Bulletin • February 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 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 R. SCOTT JONES, Ninth District DAVID A. DABERKO, Fourth District C. Q. CHANDLER, Tenth District L. M. BAKER, JR., Fifth District RICHARD W. EVANS, JR., Eleventh District WILLIAM G. SMITH, JR., 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

A81 CONSUMER ADVISORY COUNCIL DWIGHT GOLANN, Boston, Massachusetts, Chairman LAUREN ANDERSON, New Orleans, Louisiana, Vice Chairman WALTER J. BOYER, Dallas, Texas M. DEAN KEYES, St. Louis, Missouri TERESA A. BRYCE, Charlotte, North Carolina GWENN S. KYZER, Allen, Texas DOROTHY BROADMAN, San Francisco, California JOHN C. LAMB, Sacramento, California MALCOLM M. BUSH, Chicago, Illinois ANNE S. LI, Trenton, New Jersey ROBERT M. CHEADLE, Ada, Oklahoma MARTHA W. MILLER, Greensboro, North Carolina MARY ELLEN DOMEIER, New Ulm, Minnesota DANIEL W. MORTON, Columbus, Ohio JEREMY D. EISLER, Biloxi, Mississippi JEREMY NOWAK, Philadelphia, Pennsylvania ROBERT F. ELLIOTT, Prospect Heights, Illinois MARTA RAMOS, San Juan, Puerto Rico LESTER W. FIRSTENBERGER, Middletown, Connecticut DAVID L. RAMP, St. Paul, Minnesota JOHN C. GAMBOA, San Francisco, California RUSSELL W. SCHRADER, San Francisco, California ROSE M. GARCIA, Las Cruces, New Mexico ROBERT G. SCHWEMM, Lexington, Kentucky VINCENT J. GIBLIN, West Caldwell, New Jersey DAVID J. SHIRK, Tarrytown, New York KARLA S. IRVINE, Cincinnati, Ohio GARY S. WASHINGTON, Chicago, Illinois WILLIE M. JONES, Boston, Massachusetts ROBERT L. WYNN, II, Madison, Wisconsin THRIFT INSTITUTIONS ADVISORY COUNCIL F. WELLER MEYER, Falls Church, Virginia, President THOMAS S. JOHNSON, New York, New York, Vice President JAMES C. BLAINE, Raleigh, North Carolina CORNELIUS D. MAHONEY, Westfield, Massachusetts LAWRENCE L. BOUDREAUX III, New Orleans, Louisiana KATHLEEN E. MARINANGEL, McHenry, Illinois TOM R. DORETY, Tampa, Florida ANTHONY J. POPP, Marietta, Ohio BABETTE E. HEIMBUCH, Santa Monica, California MARK H. WRIGHT, San Antonio, Texas WILLIAM A. LONGBRAKE, Seattle, Washington CLARENCE ZUGELTER, Kansas City, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • February 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, Federal Reserve Bank Board of Directors $35.00 per year or $.80 each. Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL A Consumer's Guide to Mortgage Lock-Ins RESERVE SYSTEM. A Consumer's Guide to Mortgage Settlement Costs ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Refinancings Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Home Mortgages: Understanding the Process and Your Right Vol. II (Irregular Transactions). 1969. 116 pp. Each volume to Fair Lending $5.00. How to File a Consumer Complaint about a Bank GUIDE TO THE FLOW OF FUNDS ACCOUNTS. 672 pp. $8.50 each. Making Sense of Savings FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated SHOP: The Card You Pick Can Save You Money monthly. (Requests must be prepaid.) Welcome to the Federal Reserve Consumer and Community Affairs Handbook. $75.00 per year. When Your Home is on the Line: What You Should Know Monetary Policy and Reserve Requirements Handbook. $75.00 About Home Equity Lines of Credit per year. Keys to Vehicle Leasing Securities Credit Transactions Handbook. $75.00 per year. Looking for the Best Mortgage The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A83 STAFF STUDIES: Only Summaries Printed in the 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by BULLETIN James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. Studies and papers on economic and financial subjects that are of 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANKgeneral interest. Requests to obtain single copies of the full text or ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING to be added to the mailing list for the series may be sent to PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, Publications Services. by Stephen A. Rhoades. July 1994. 37 pp. 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- Staff Studies 1-158, 161, 163, 165, 166, 168, and 169 are out of LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH print. IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. Lowrey, December 1997. 17 pp. 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and DENCE, by Gregory Elliehausen, April 1998. 35 pp. Donald Savage. February 1990. 12 pp. 172. USING SUBORDINATED DEBT AS AN INSTRUMENT OF MAR- 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- KET DISCIPLINE, by Study Group on Subordinated Notes VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by and Debentures, Federal Reserve System, December 1999. Gregory E. Elliehausen and John D. Wolken. September 69 pp. 1990. 35 pp. 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Federal Reserve Bulletin • February 2000 Maps of the Federal Reserve System 1 _ Bos TON I • _ W NEW YORK Dm 12 CHICAGO® ^ • CLEVELAND PHTTADLLPHIA a \ S ^ A N FRA w N ^ C ' IS v C ^ O u |1| 0 | RICHMOND ATLANIA \l. VSkA HAWAII LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A85 1—A 2-B 3-C 4-D 5-E Mh Pittsburgh Baltimore MD NY \ ^PA , CI —wv NC NH • Cincinnati Buffalo •Chariot I e MA ® ^ NY i;T ^RI sc BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G l-R 1 N — • Nashville KY / Birmingham. \M r il ; IN Detroit < Louisville MS (( OOAA --AA—— • TN L.A JJaacckkssoonnvviillllee AR • Memphis New Orleans FFII JJ MS MMiiaammii ATLANTA CHICAGO ST. LOUIS 9-1 ND • Helena MINNEAPOLIS 10-J 12-L WY CO Omaha® MO KS • Denver NM Oklahoma Cit\ OK KANSAS CITY 11-K TX | Salt Lake City NM {MPflNHHlt || II AA • Paso HHMKVl , jSBBISl A r1 •\ VHous*ton I H^R . r •Los Angeles San Antonio AZ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • February 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 John T. Ryan, III Robert B. Schaub RICHMOND* 23219 Jeremiah J. Sheehan J. Alfred Broaddus, Jr. Wesley S. Williams, Jr. Walter A. Varvel Baltimore 21203 George L. Russell, Jr. William J. Tignanelli1 Charlotte 28230 Joan H. Zimmerman Dan M. Bechter1 ATLANTA 30303 John F. Wieland Jack Guynn Paula Lovell Patrick K. Barron James M. McKee Birmingham 35283 D. Bruce Carr Andre T. Anderson Jacksonville 32231 William E. Flaherty Robert J. Slack Miami 33152 Karen Johnson-Street James T. Curry III Nashville 37203 Frances F. Marcum Melvyn K. Purcell1 New Orleans 70161 Dwight H. Evans 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 J. Stephen Barger Thomas A. Boone Memphis 38101 Mike P. Sturdivant, Jr. 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 Edward O. Gaylord Robert Smith, III1 San Antonio 78295 Patty P. Mueller James L. Stull1 SAN FRANCISCO 94120 Gary G. Michael Robert T. Parry Nelson C. Rising John F. Moore Los Angeles 90051 Lonnie Kane Mark L. Mullinix1 Portland 97208 Nancy Wilgenbusch Raymond H. Laurence1 Salt Lake City 84125 Barbara L. Wilson Andrea P. Wolcott Seattle 98124 Richard R. Sonstelie Gordon R. G. Werkema2 * Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607. 1. Senior Vice President. 2. Executive Vice President Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS The Federal Reserve Board publishes a series of Shop . . . The Card You Pick Can Save You Money brochures covering individual credit laws and topics, is designed to help consumers comparison shop when as pictured below. looking for a credit card. It contains the results of the Five brochures on the mortgage process are avail- Federal Reserve Board's biannual survey of the terms able: A Consumer's Guide to Mortgage Lock-Ins, of credit card plans offered by credit card issuers A Consumer's Guide to Mortgage Refinancings, A throughout the United States. Because the terms can Consumer's Guide to Mortgage Settlement Costs, affect the amount an individual pays for using a Home Mortgages: Understanding the Process and credit card, the booklet lists the annual percentage Your Right to Fair Lending, and Looking for the Best rate (APR), annual fee, grace period, type of pricing Mortgage: Shop, Compare, Negotiate. These bro- (fixed or variable rate), and a telephone number for chures were prepared in conjunction with the Federal each card issuer surveyed. A Guide to Business Credit Home Loan Bank Board and in consultation with for Women, Minorities, and Small Businesses covers other federal agencies and trade and consumer the credit application process and points out sources groups. The Board also publishes the Consumer of technical assistance for small business loans. Handbook to Credit Protection Laws, a complete Up to 100 copies of consumer publications are guide to consumer credit protections. This forty-four- available free of charge from Publications Services, page booklet explains how to shop and obtain credit, Mail Stop 127, Board of Governors of the Federal how to maintain a good credit rating, and how to go Reserve System, Washington, DC 20551. about resolving credit problems. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • February 2000 Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory func- The Payment System Handbook deals with expedited tions, the Board publishes the Federal Reserve Regu- funds availability, check collection, wire transfers, and latory Service, a four-volume loose-leaf service con- risk-reduction policy. It includes Regulations CC, J, and taining all Board regulations as well as related statutes, EE, related statutes and commentaries, and policy interpretations, policy statements, rulings, and staff statements on risk reduction in the payment system. opinions. For those with a more specialized interest in For domestic subscribers, the annual rate is $200 for the Board's regulations, parts of this service are pub- the Federal Reserve Regulatory Service and $75 for lished separately as handbooks pertaining to monetary each handbook. For subscribers outside the United policy, securities credit, consumer affairs, and the pay- States, the price including additional air mail costs is ment system. $250 for the service and $90 for each handbook. These publications are designed to help those who The Federal Reserve Regulatory Service is also availmust frequently refer to the Board's regulatory materi- able on CD-ROM for use on personal computers. For a als. They are updated monthly, and each contains cita- standalone PC, the annual subscription fee is $300. For tion indexes and a subject index. network subscriptions, the annual fee is $300 for 1 con- The Monetary Policy and Reserve Requirements current user, $750 for a maximum of 10 concurrent Handbook contains Regulations A, D, and Q, plus users, $2,000 for a maximum of 50 concurrent users, related materials. and $3,000 for a maximum of 100 concurrent users. The Securities Credit Transactions Handbook con- Subscribers outside the United States should add $50 tains Regulations T, U, and X, dealing with exten- to cover additional airmail costs. For further informasions of credit for the purchase of securities, together tion, call (202) 452-3244. with related statutes, Board interpretations, rulings, All subscription requests must be accompanied by a and staff opinions. Also included is the Board's list of check or money order payable to the Board of Goverforeign margin stocks. nors of the Federal Reserve System. Orders should be The Consumer and Community Affairs Handbook addressed to Publications Services, mail stop 127, Board contains Regulations B, C, E, M, Z, AA, BB, and DD, of Governors of the Federal Reserve System, Washingand associated materials. ton, DC 20551. GUIDE TO THE FLOW OF FUNDS ACCOUNTS Guide to the Flow of Funds Accounts explains in detail dures as seasonal adjustment, extrapolation, and how the U.S. financial flow accounts are prepared. The interpolation. accounts, which are compiled by the Division of The balance of the Guide contains explanatory tables Research and Statistics, are published in the Board's corresponding to the tables of financial flows data that quarterly Z.l statistical release, "Flow of Funds appeared in the September 1992 Z.l release. These Accounts, Flows and Outstandings." The Guide updates tables give, for each data series, the source of the data or and replaces Introduction to Flow of Funds, published the methods of calculation, along with annual data for in 1980. 1991 that were published in the September 1992 release. The 670-page Guide begins with an explanation of Guide to the Flow of Funds Accounts is available for the organization and uses of the flow of funds accounts $8.50 per copy from Publications Services, Board of and their relationship to the national income and Governors of the Federal Reserve System, Washington, product accounts prepared by the U.S. Department of DC 20551. Orders must include a check or money order, Commerce. Also discussed are the individual data in U.S. dollars, made payable to the Board of Governors series that make up the accounts and such proce- of the Federal Reserve System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A89 Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve Sys- For further information regarding a subscription to tem makes some of its statistical releases available to the economic bulletin board, please call (202) 482the public through the U.S. Department of Com- 1986. The releases transmitted to the economic bullemerce's economic bulletin board. Computer access tin board, on a regular basis, are the following: to the releases can be obtained by subscription. Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z. 1 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis