Federal Reserve Bulletin, 2000-06

Volume 86 • Number 6 • June 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 367 PROFITS AND BALANCE SHEET (OTC) derivatives submitted to the Congress DEVELOPMENTS AT U.S. COMMERCIAL last year by the President's Working Group on BANKS IN 1999 Financial Markets. He testifies that the Board supports the Working Group's recommendation The U.S. commercial banking industry posted for amendments to the U.S. Bankruptcy Code to record earnings in 1999. The industry's return support financial contract netting and also supon assets and return on equity both rose above ports the recommendation that the very largest the already high level of recent years. Profithedge funds be required to publicly disclose ability was concentrated at large banks— information about their financial activities; he particularly among the 100 largest—and was also states that in accordance with the Working driven upward by a surge in noninterest income Group's recommendations, the Board strongly and a significant slowdown in the growth of supports modernizing the Commodity Exchange noninterest expense. Other sources of improved Act (CEA) by excluding financial OTC derivaprofitability were a stabilization of net interest tives transactions between professional counterincome, which had been weakening in recent parties from coverage of the CEA (Testimony years, and lower loan loss provisioning permitbefore the House Committee on Banking and ted by generally good asset quality. The growth Financial Services, April 11, 2000). of total bank assets slowed slightly relative to 1998, but loans expanded at about the same 405 Alan Greenspan, Chairman, Board of Goverbrisk pace as last year. nors, discusses the evolution of U.S. equity markets and the appropriate role for policymakers in this period of rapid change and states his 396 TREASURY AND FEDERAL RESERVE confidence in competition as the fundamental FOREIGN EXCHANGE OPERATIONS guide to the organization of those markets. He further testifies that in the long run, activity will During the first quarter of 2000, the dollar appremigrate to the systems that best meet the needs ciated 5.4 percent against the euro and 0.4 perof investors, absent impediments to competition; cent against the yen. The U.S. monetary authoriin the short run, policymakers should seek to ties did not intervene in the foreign exchange markets during the quarter. remove impediments to competition and take judicious steps to mitigate the adverse effects of market fragmentation through policies such 401 INDUSTRIAL PRODUCTION AND CAPACITY as enhanced disclosure (Testimony before the UTILIZATION FOR APRIL 2000 Senate Committee on Banking, Housing, and Urban Affairs, April 13, 2000). Industrial production increased 0.9 percent in April, to 143.7 percent of its 1992 average, after an upward-revised increase of 0.7 percent in 409 ANNOUNCEMENTS March. The rate of capacity utilization for total Formation of a private-sector Working Group industry rose 0.4 percentage point, to 82.1 peron Public Disclosure by banking and securities cent, a level about even with the average for organizations. 1967 to 1999. New edition and reissuance of consumer education brochures. 404 STATEMENTS TO THE CONGRESS Publication of the May 2000 update to the Com- Patrick M. Parkinson, Associate Director, Divimercial Bank Examination Manual. sion of Research and Statistics, discusses efforts to implement recommendations contained in the Appointment of David J. Stockton as Director of reports on hedge funds and over-the-counter the Division of Research and Statistics. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

412 LEGAL DEVELOPMENTS A64 INDEX TO STATISTICAL TABLES Various bank holding company, bank service A66 BOARD OF GOVERNORS AND STAFF corporation, and bank merger orders; and pending cases. A68 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of A70 FEDERAL RESERVE BOARD PUBLICATIONS April 26, 2000. A72 SCHEDULE OF RELEASE DATES FOR A3 GUIDE TO TABULAR PRESENTATION PERIODIC RELEASES A4 Domestic Financial Statistics A42 Domestic Nonfinancial Statistics A74 MAPS OF THE FEDERAL RESERVE SYSTEM A50 International Statistics A76 FEDERAL RESERVE BANKS, BRANCHES, A63 GUIDE TO STATISTICAL RELEASES AND AND OFFICES SPECIAL TABLES 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 Graphics 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

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 William F. Bassett and Egon Zakrajsek, of the Board's 1. Measures of commercial bank profitability, 1975-99 Division of Monetary Affairs, prepared this article. Percent Thomas C. Allard assisted in developing the database used in this article and was responsible for maintaining it. James E. Cypert, Jr., provided research assistance. The U.S. commercial banking industry posted record earnings in 1999. The industry's return on assets and return on equity both rose above the already high level of recent years (chart l).1 Profitability Return on assets was concentrated at large banks—particularly among the 100 largest—and was driven upward by a surge in noninterest income and a significant slowdown in the growth of noninterest expense. Other sources of improved profitability were a stabilization of net interest income, which had been weakening in recent Components of bank credit and bank deposit years, and lower loan loss provisioning permitted liabilities that had been boosted by the financial by generally good asset quality. On the negative turmoil of 1998 declined early last year as financial side, 641 banks lost money in 1999; these institumarkets calmed. Nonetheless, demand for household tions accounted for 7.4 percent of all domestic comand business credit remained strong because of the mercial banks in operation last year but for only rapid pace of economic activity. At the end of 1998, about 1.5 percent of the industry's assets. long-term private interest rates started to trend up, and from June to November 1999 the Federal Reserve increased the intended level of the federal funds rate 1. Except where otherwise indicated, data in this article are from the quarterly Reports of Condition and Income (Call Reports) for three times in 25 basis point increments (chart 2). insured domestic commercial banks and nondeposit trust companies (hereafter, banks). The data consolidate information from foreign and domestic offices and have been adjusted to take account of mergers. 2. Selected interest rates, 1997-99 For additional information on the adjustments to the data, see the appendix in William B. English and William R. Nelson, "Profits and Balance Sheet Developments at U.S. Commercial Banks in 1997," Federal Reserve Bulletin, vol. 84 (June 1997), p. 408. Size categories, based on assets at the start of each quarter, are as follows: the 10 largest banks, large banks (those ranked 11 through Moody's Baa corporate bond 100), medium-sized banks (those ranked 101 through 1,000), and small banks (those not among the largest 1,000 banks). At the start of the fourth quarter of 1999, the approximate asset sizes of the banks in those groups were as follows: the 10 largest banks, more than $74 billion; large banks, $6.3 billion to $74 billion; mediumsized banks, $326 million to $6.2 billion; small banks, less than Thirty-year fixed mortgage $326 million. — 6 Many of the data series reported here begin in 1985 because the \ Call Reports were significantly revised at the start of that year. Data Intended federal funds rate for 1984 and earlier years are taken from Federal Deposit Insurance — 5 Corporation, Statistics on Banking (FDIC, 1999). The data reported here are also available on the Internet, at www.fdic.gov/bank/ statistical/statistics/index.html/ 1997 1998 1999 Data shown in this article may not match data published in earlier SOURCE. For intended federal funds rate, Federal Reserve board; for bond years because of revisions and corrections. In the tables, components and mortgage rates, Federal Reserve Board, Statistical Release H.15, "Selected may not sum to totals because of rounding. Interest Rates." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

368 Federal Reserve Bulletin • June 2000 3. Number of commercial banks and share of assets Consolidation within the banking industry slowed at the largest 100 banks, 1970-99 significantly in 1999. The net reduction in the number of banks, 195, was only about half the decline Thousands in each of the preceding two years. Among the 450 banks that ceased operations last year, 8 failed, and the remaining 442 merged with other banks, were purchased outright, or otherwise changed their charters. Meanwhile, 255 new banks were created— — 8 the most in one year since 1987. At the end of 1999, Percent 8,620 banks were in operation, down from 12,728 a decade ago (chart 3). The share of industry assets held by the 100 largest banks moved up just Vi percentage point, to 70 percent, after having jumped an average of 4 percentage points per year between 1995 and 1998. Consolidation slowed even more dramatically 1970 1975 1980 1985 1990 1995 among bank holding companies (BHCs) in 1999, perhaps in part because of the poor performance of 1. Annual rates of growth of balance sheet items, 1990-99 Percent MEMO; Dec. 1999 Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 (billions of dollars) Assets 2.64 1.33 2.19 5.68 8.06 7.55 6.09 9.24 8.22 5.44 5,673 Interest-earning assets 2.23 1.98 2.53 6.56 5.77 7.69 5.67 8.88 8.18 5.99 4,908 Loans and leases (net) 2.37 -2.65 -1.04 6.05 9.83 10.53 8.12 8.38 8.90 8.01 3,394 Commercial and industrial -.67 -9.10 -4.10 .52 9.33 12.26 7.24 12.02 12.96 8.07 965 Real estate 8.79 2.73 1.94 6.13 7.90 8.33 5.44 9.30 7.98 12.17 1,497 Booked in domestic offices 8.55 2.90 2.57 6.17 7.64 848 5.50 9.53 7.96 12.31 11,,446655 One- to four-family residential 14.00 7.76 7.53 11.08 10.09 10.06 4.65 9.67 6.34 9.65 831 Other 3.62 -1.93 -2.86 .22 4.35 6.25 6.75 9.33 10.28 16.01 633 Booked in foreign offices 16.64 -2.35 -17.80 4.67 18.35 2.81 3.18 .34 8.79 6.28 33 Consumer .38 -2.55 -1.66 9.06 16.01 9.50 4.90 -2.18 1.00 -1.48 541 Other loans and leases -5.68 -4.91 -4.24 9.97 5.29 14.23 22.28 13.73 14.02 6.35 451 Loan-loss reserves and unearned income .35 -3.78 -4.85 -5.82 -2.22 .25 -.06 -.49 3.30 2.50 61 Securities 8.46 16.23 12.29 12.26 -2.61 .57 .84 8.86 8.36 5.10 1,146 Investment account 8.19 14.42 11.44 8.11 -1.73 -1.58 -1.12 8.68 12.05 6.64 1,029 U.S. Treasury 3.50 32.01 23.95 7.24 -8.46 -19.21 -14.30 -8.85 -25.17 -1.89 111 U.S. government agency and corporation obligations 24.02 15.88 12.77 9.62 .87 6.43 3.61 14.20 16.98 1.82 595 Other -6.70 -2.56 -5.20 6.09 2.49 4.20 1.82 11.21 26.97 20.78 323 Trading account 11.87 38.88 21.01 51.84 -9.43 18.51 14.44 9.97 -13.52 -6.69 117 Other -11.70 2.82 1.57 -7.90 3.25 7.64 -.90 12.81 2.35 -7.57 369 Non-interest-earning assets 5.51 -3.10 -.32 -.86 25.65 6.61 8.87 11.48 8.48 2.08 765 Liabilities 2.37 1.01 1.35 5.12 8.31 7.17 5.95 9.13 8.09 5.58 5,201 Core deposits 7.58 5.25 5.09 1.49 -.17 3.97 4.12 4.53 7.05 .20 2,675 Transaction deposits 2.43 3.38 14.62 5.47 -.33 -3.09 -3.45 -4.54 -1.41 -8.98 679 Savings and small time deposits 10.51 6.24 .18 -.85 -.08 8.37 8.34 9.04 10.73 3.76 1,996 Managed liabilities1 -6.15 -6.19 -6.07 12.30 17.57 10.44 9.65 13.84 9.60 15.49 2,177 Deposits booked in foreign offices -5.88 3.81 -5.85 15.06 30.89 5.13 4.27 11.13 8.71 14.60 655 Large time -5.68 -19.73 -26.20 -9.21 8.72 19.61 21.16 20.15 9.10 14.17 472 Subordinated notes and debentures 20.99 4.69 34.90 10.82 9.23 6.61 17.74 21.05 17.00 5.07 76 Other managed liabilities -8.06 -1.39 6.94 22.18 12.91 11.24 8.21 12.23 9.87 17.68 974 Other 4.43 -4.18 -1.02 15.30 79.17 20.46 2.60 23.79 8.15 -6.06 349 Equity capital 6.64 5.98 13.75 12.58 5.24 12.00 7.72 10.46 9.61 3.95 472 MEMO Commercial real estate loans2 3.62 -2.58 -4.03 -.60 4.00 6.35 7.66 10.13 11.36 15.37 639 Mortgage-backed securities 34.39 19.27 10.37 9.66 -3.12 .67 2.03 14.18 22.09 -3.34 449 NOTE. Data are from year-end to year-end. 2. Measured as the sum of construction and land development loans secured 1. Measured as the sum of deposits in foreign offices, large time deposits in by real estate; real estate loans secured by nonfarm nonresidential properties; domestic offices, federal funds purchased and securities sold under repurchase real estate loans secured by multifamily residential properties; and loans to agreements, demand notes issued to the U.S. Treasury, subordinated notes and finance commercial real estate, construction, and land development activities debentures, and other borrowed money. not secured by real estate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 369 their equity prices. The number of mergers between in August of that year. Within loan categories, the BHCs last year, 211, was the lowest since 1994; and growth of commercial and industrial loans moderated the number of BHCs declined a net of only 27, to but remained strong, and real estate loans grew vigor- 5,953, by year's end. The percentage of BHC assets ously. Consumer loans originated by banks rose modcontrolled by the 50 largest organizations remained erately last year.2 steady at about 76 percent. Loans to Businesses BALANCE SHEET DEVELOPMENTS Growth of loans to commercial and industrial (C&I) enterprises expanded a strong 8.1 percent in 1999, The growth of total bank assets slowed from 8.2 per- although the pace was down somewhat from the cent in 1998 to 5.4 percent in 1999 (table 1). The average of the previous two years. C&I lending last deceleration was most evident in securities holdings, year was supported by a large rise in business outlays in large part because, for a significant share of these on capital goods that exceeded the increase in cash assets, price declines associated with a rise in interest flow (chart 4). Cash-financed mergers and acquisirates must be marked to market. In addition, core deposit inflows virtually stopped, leading banks to 2. In contrast, consumer loans on banks' books fell slightly because fund asset growth primarily through the issuance of securitizations (selling loans as backing for securities, a process relatively expensive managed liabilities. that takes the loans off the banks' balance sheets) rose faster than Meanwhile, loans expanded a brisk 8 percent, originations. about the same pace as in 1998, when bank lending was given a considerable boost by the Russian default 5. C&I loan standards and terms of selected commercial banks, by size of borrower, 1997-2000:Q1 4. Financing gap and net equity retirement at Percent nonfarm nonfinancial corporations, 1990-99 Net percentage that tightened standards Billions of dollars Financing gap — 50 Net equity retirement 1997 1998 1999 2000 NOTE. Net percentage is the percentage of banks reporting a tightening of standards or an increase in spreads or premiums less the percentage reporting an easing or decrease. The definition for firm size suggested for, and generally used by, survey respondents is that medium-sized firms are those with sales of NOTE. The data are four-quarter moving averages. The financing gap is the between $50 million and $250 million. difference between capital expenditures and internally generated funds. Data was collected on risk premiums beginning in 1998:Q4. SOURCE. Federal Reserve Board, Statistical Release Z.l, "Flow of Funds SOURCE. Federal Reserve Board, "Senior Loan Officer Opinion Survey on Accounts of the United States," table L. 101. Bank Lending Practices." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

370 Federal Reserve Bulletin • June 2000 tions, however, boosted overall financing needs by In the wake of the Russian default, a large fraction less than the previous year as the pace of net equity of respondents to the BLPS reported tightening their retirement slowed. Cash purchases of equity are fre- standards and terms for C&I loans during the fourth quently financed with bank loans, at least initially, quarter of 1998 (chart 5). As financial markets and changes in merger and acquisition financing calmed during 1999, however, there was no indicaneeds are typically cited as the main reason for tion that banks' standards or terms became any less changes in loan demand by respondents to the Fed- stringent. In fact, on net, small fractions of BLPS eral Reserve's quarterly Senior Loan Officer Opinion respondents continued to report tightening standards Survey on Bank Lending Practices (BLPS).3 and charging higher spreads on C&I loans. As the year unfolded, increasing fractions of banks reported charging higher premiums on riskier loans to large 3. The survey sample is selected from among the largest insured and medium-sized businesses, possibly because of domestic commercial banks in each Federal Reserve District and from admonitions by banking regulatory agencies for vigiamong the largest foreign-related banking institutions in those Federal lance in the area of loan quality.4 Reserve Districts where such institutions are common. As of December 31, 1999, the 57 domestic banks covered in the May 2000 survey Information from the Federal Reserve's quarterly accounted for nearly half of the $4.95 trillion in assets held by all Survey of Terms of Business Lending (STBL) was domestic banks; and the 21 foreign-related institutions accounted for nearly 30 percent of the $806 billion in assets held by all such consistent with the information from the BLPS, suginstitutions in the United States. The survey is available at gesting that banks had tightened lending standards www.federalreserve.gov/boarddocs/SnLoanSurvey/ and terms over the past year.5 In the STBL, the share of loan originations that was secured by collateral 6. Spread between the average C&I loan rate and the hovered at levels near the top of the historical range, intended federal funds rate, for all C&I loans, as did the share of loan originations made under 1986-2000:Q1, and by risk rating of loan, commitment. In addition, the dollar volume of loan 1997:Q2-2000:Q1 originations rated as being of minimal or low risk Basis points increased from 29 percent of total originations in All C&I loans 1998 to 33 percent in 1999.6 — 240 STBL data also corroborate evidence from the BLPS that banks charged higher spreads on business loans in general and on riskier loans in particular. The average spread of loan rates over the intended federal funds rate on new C&I loans (adjusted for changes in the composition of loan originations) increased dramatically during the fourth quarter of 1998 and remained close to that elevated level throughout 1999 (chart 6). Indeed, the average spread on relatively risky loans made last year rose well above the 1986 1988 1990 1992 1994 1996 1998 2000 levels established during the fourth quarter of 1998, 4. Board of Governors of the Federal Reserve System, "Recent Trends in Bank Lending Standards for Commercial Loans," Supervision and Regulation Letters SR 99-23 (SUP), September 28, 1999, available at www.federalreserve.gov/boarddocs/srletters/1999/ sr9923.htm/ 5. The STBL data are based on a representative sample of up to 348 insured domestic commercial banks and up to 50 foreign-related banking institutions. The sample data are used to estimate the terms of loans extended during the survey period at all domestic banks and at all foreign-related institutions. The data are available at www.federalreserve.gov/releases/E2/ 6. Loans in the STBL receive risk ratings ranging from 1 to 5, which correspond to minimal risk, low risk, moderate risk, acceptable NOTE. The data are weighted by loan volume. "Adjusted" data are adjusted risk, and classified, respectively. For more information on loan rating for compositional effects such as changes in the underlying distribution of categories in the STBL see, Thomas F. Brady, William B. English, and maturity, size, and riskiness of loans over time. Data in bottom panel are as reported. William R. Nelson, "Recent Changes to the Federal Reserve's Survey SOURCE. Federal Reserve Board, Statistical Release E.2, "Survey of Terms of Terms of Business Lending." Federal Reserve Bulletin, vol. 84 of Business Lending." (August 1998), pp. 604-15. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 371 7. Bank loans as a share of total nonmortgage credit market 8. Net percentage of selected commercial banks that debt, nonfinancial businesses, 1980-99 tightened standards for commercial real estate loans, 1990-2000:Q1 Percent Percent A — 36 — 34 — — 32 — — 30 — — 28 — 26 M il M i ll M i ll II II 1 1 1 1980 1985 1990 1995 SOURCE. Federal Reserve Board, Statistical Release Z.l, "Flow of Funds 1990 1992 1994 1996 1998 2000 Accounts of the United States," table L. 101. NOTE. Net percentage is the percentage of banks that reported a tightening of standards less the percentage that reported an easing. SOURCE. Federal Reserve Board, "Senior Loan Officer Opinion Survey on Bank Lending Practices." accounting for much of the upward trend in the overall average loan spread.7 Partly because of these developments, bank loans sizes and in all categories of commercial real estate as a share of nonmortgage credit market debt owed lending—multifamily housing, construction and land by the nonfinancial business sector declined last year, development, and nonfarm, nonresidential real estate. as firms that borrowed met somewhat more of their Construction and land development loans advanced funding needs by issuing commercial paper and most rapidly, 27 percent, while multifamily housing bonds (chart 7). However, in the year's final quarter, grew nearly 23 percent last year, a sharp acceleration the share of bank loans rose, particularly for larger from the 5 percent pace in 1998. banks, perhaps because of concerns about the risk of In addition to the strong economy, two other faccomputer-related business disruptions during the centors contributed to boosting commercial real estate tury date change. Inventory growth picked up in that loans. Real estate investment trusts (REITs), which quarter, firms appeared to build up liquid assets for overall suffered a decline in their stock prices of precautionary reasons, and bond issuance was curnearly 20 percent in 1999, were much less active tailed, all adding to demand for intermediated debt. in acquiring and developing properties. Private Nonetheless, BLPS respondents reported that concerns about the transition to the year 2000 had only a limited influence on bank lending (see box "Business 9. Spread between the yield on commercial-mortgage- Lending around the Century Date Change"). backed securities and the rate on ten-year Treasury In jumping more than 15 percent, commercial real bonds, 1997-99 estate loans last year registered their largest increase since 1987, suggesting that rising interest rates had Basis points a limited effect on demand in this market. The rapid growth was also in spite of BLPS respondents' indications that they had tightened standards for commercial real estate lending in response to the financial market distress in the fourth quarter of 1998 (chart 8). The quickened pace was evident among banks of all 7. Between 1998 and 1999, the four-quarter uncentered moving average spread over the intended federal funds rate—weighted by volume—increased only 8 basis points on 1-rated (minimal-risk) loans and 9 basis points on 2-rated (low-risk) loans; in contrast, the 1997 1998 1999 corresponding spreads for 3-rated and 4-rated loans increased 24 basis points and 55 basis points respectively. SOURCE. Morgan Stanley, "Securitized Perspectives." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

372 Federal Reserve Bulletin • June 2000 Business Lending around the Century Date Change Over the past two years, the Federal Reserve Board's quar- Weekly data on bank credit revealed strong growth in terly Senior Loan Officer Opinion Survey on Bank Lending both C&I loans and security loans during November and Practices (BLPS) has asked banks to report on their man- early December as banks' balance sheets expanded rapidly agement of risks related to potential Year 2000 (Y2K) in the fourth quarter of 1999. In the November 1999 BLPS, problems and about the supply of, and the demand for, several large banks reported increased demand from C&I business credit extending over the century date change. firms seeking to avoid high interest rates in the commercial According to the May 1999 survey, a large majority of paper market. In the January 2000 BLPS, however, only a banks had evaluated more than 90 percent of their material few respondents suggested that the rise in demand for business customers for Y2K preparedness.1 By August, C&I loans in the fourth quarter of 1999 was, even in part, almost all banks had reached this level, and more than specifically due to concerns related to the century date 95 percent of the customers that they had evaluated were change. For security loans, the BLPS respondents indicated making satisfactory progress. that brokers and dealers had experienced heavy funding About 80 percent of BLPS respondents consistently needs and, in fact, turned to banks when the cost of reported that Y2K issues had no effect on either the stan- commercial paper with maturities extending over yeardards or the terms being applied to renewals of existing end rose markedly and other institutional lenders pulled lines of credit, even if their new maturity date extended into back (chart). 2000. In addition, almost all banks reported that, for existing customers, they were willing to extend lines of credit specifically designed for addressing Y2K concerns. How- Spread between the yield on three-month nonfinancial ever, only one-third of the respondents were willing to commercial paper and the intended funds rate, extend such lines to new customers. Moreover, many banks 1999-2000:Q1 applied somewhat tighter standards and terms to Y2K contingency lines of credit than to otherwise similar lines for Basis points similar borrowers, and demand for such lines was not widespread. The Federal Reserve actively attempted to assuage fears about the cost of funds extending over year-end. A "century date change special liquidity facility" (SLF) made Federal Reserve credit available to depository institutions in sound financial condition without the usual administrative constraints on discount window borrowing. The SLF was available from October 1, 1999, to April 7, 2000, and offered loans at a premium of 150 basis points over the Federal Open Market Committee's intended federal funds rate. 1. A material business customer is one that represents a material risk as 1999 2000 indicated, for example, by the size of the overall relationship with the customer, the customer's risk rating, the complexity of the customer's SOURCE. For the intended federal funds rate, Federal Reserve Board; operating and information technology systems, and the degree of the custom- for commercial paper, Federal Reserve Board, Statistical Release H.15, er's reliance on these systems. "Selected Interest Rates." developers, who generally use more debt financ- generally rely on CMBS financing rather than carrying than do REITs, filled the void, and turned to ing loans on their balance sheets. < banks for financing. Second, the issuance of domestic securities backed by commercial mortgages Loans to Households (commercial-mortgage-backed securities, or CMBS) was off 24 percent in 1999. Spreads on CMBS spiked Banks were important suppliers of consumer credit in the fourth quarter of 1998 and remained elevated again last year. The small slippage in the stock of throughout 1999, perhaps causing some banks that consumer loans held by banks in 1999 reflected the normally participate in this market to retain a greater high proportion of these loans that were securitized portion of commercial real estate loans on their books (see text note 2), a proportion that increased again (chart 9). In addition, banks as a whole were able in 1999 (chart 10). Correspondingly, the share of to take market share from the commercial real estate consumer loans in banks' loan portfolios fell to a new divisions of Wall Street investment banks, which low of about 16 percent. Counting securitized loans, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 373 Business Lending around the Century Date Change—Continued Evidence from the STBL Y2K-related difficulties elsewhere. The spread between the rate on three-month commercial paper and the intended A statistical examination of the Federal Reserve's quarterly federal funds rate fell consistently from its October peak Survey of Terms of Business Lending (STBL) suggests that through the early part of 2000. Evidently in response, loans made under commitment and maturing in the first security loans ran off through the end of February, reversing three months of 2000 were only minimally more expensive their earlier rise. Banks also experienced some runoff of because of their maturity dates—about 6 basis points.2 This C&I loans during the last two weeks of December and first result is consistent with the information from the BLPS that two weeks of January. In the January BLPS, banks menindicated that most banks were not increasing the cost of tioned buildups of inventories and liquidity to explain strong outstanding lines of credit for Y2K lending. However, even demand for C&I loans in the final months of 1999, and it loans that were not made under commitment and that was possible that some of the strength in C&I lending was matured in the first quarter carried only 22 extra basis points for Y2K-related reasons that were not evident to responon their spreads. Banks may have been able to charge dents. However, few domestic banks reported that they relatively low risk premiums at that time because of the extended more than a negligible amount of credit under effectiveness of their preceding efforts to monitor their Y2K contingency lines. customers' Y2K preparedness. Most banks reported no unusual funding pressures around year-end. Sixty percent reported that neither credit demands Aftermath nor deposit flows were materially affected by Y2K-related concerns. In addition, the increase in the demand for cur- In the end, the century date change passed without any rency near year-end was smaller than banks expected, and major disruptions to financial markets and few reports of they were thus left with large amounts of vault cash (which increased $27 billion in the fourth quarter of 1999). Because 2. Using data from the STBL, we examined the effect that various loan vault cash earns no return, this accumulation likely had a characteristics (such as risk rating, maturity, commitment status, and so on) small adverse effect on bank profitability during the final may have had on the spread of fixed-rate loans over the intended federal funds rate. To estimate the effect of Y2K jitters on this spread, we used an quarter of last year. indicator variable for loans maturing in the first quarter of 2000 plus a variable representing the interaction of those loans with commitment status. Numerous other versions of this regression equation yielded qualitatively similar results (results available upon request). however, consumer loans originated by banks grew that were attributable to adjustable-rate mortgages an estimated 4.7 percent in 1999.8 (ARMs), from 11 percent in January to 30 percent by Banks were willing suppliers of consumer credit, August (chart 12). This shift to ARMs likely contribaccording to BLPS respondents, who also indicated that demand for consumer loans became moderately stronger, on net, throughout the year. However, the 10. Securitized share of outstanding consumer loans originated by banks, 1988-99 survey also suggested that banks, on net, continued to tighten standards and charge moderately higher Percent spreads on credit card loans, which may have contributed to the fall in such loans at banks (chart 11). Real estate loans for one- to four-family homes increased 9.7 percent at banks, up from 6.3 percent in — ' — 30 1998. In part, the acceleration reflected an exceptionally strong housing market, with new and existing — — 20 home sales reaching record levels early in the year despite the rise in mortgage rates that began at the end of 1998. In addition, rising interest rates drove — 10 up the share of mortgage lenders' originations 1-^1 1 1 1 1 1 1 1 8. The growth at banks, however, lagged behind the 7.3 percent 1988 1992 19% growth of consumer credit originated by all lenders. The notable NOTE. The data are seasonally adjusted. overall strength in auto lending and leasing—activities in which banks SOURCE. Federal Reserve Board, Statistical Releases H.8, "Assets and Liaare not major players—may have contributed to their lagging bilities of Commercial Banks in the United States," and G.19, "Consumer performance. Credit." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

374 Federal Reserve Bulletin • June 2000 11. Net percentage of selected commercial banks that 12. Share of home mortgages originated tightened standards and terms on credit card loans, with adjustable rates, 1990-99 1996-2000: Q1 Percent 1990 1992 1994 1996 1998 1996 1997 1998 1999 2000 SOURCE. Federal Home Loan Bank Board. NOTE. Net percentage is the percentage of banks that reported a tightening of standards or terms less the percentage that reported an easing. Tightening or easing of terms represented by increase or decrease respectively in spread institutions may reflect the increased reliance of comof loan yield over bank's cost of funds. mercial banks on loans from the Federal Home Loan SOURCE. Federal Reserve Board, "Senior Loan Officer Opinion Survey on Bank Lending Practices." Bank System (FHLB), as discussed below. uted to reduced securitizations because the maturities (more precisely, the durations) of ARMs match those Securities of banks' liabilities more closely than do those of fixed-rate mortgages. Taking banks' trading and investment accounts Home equity loans increased 5.9 percent in 1999 together, securities growth slowed in 1999 to a relaafter having fallen 1.6 percent in 1998. In addition, tively moderate 5.1 percent, down from more than the ratio of outstanding home equity loans to total 8 percent per year in the previous two years. Holdcommitments declined from 46 percent in 1998 to ings in the trading account fell sharply for a second 42 percent in 1999. During 1998, some households year; holdings in the investment accounts rose, but were able to tap into the accumulated equity in their more slowly than in 1998. homes directly in the form of cash-out refinancing A significant amount of the slowdown in the and use the proceeds to substitute for other debt, investment account was attributable to the effect of including home equity loans.9 Thus, the growth in rising interest rates on the 86 percent of those assets home equity loans and lines (as well as consumer that were classified as available for sale and therecredit) last year may have been supported by the fore carried at market value. At the end of 1999, the 67 percent plunge in refinancing activity relative to 1998 (chart 13). 13. Home mortgage refinancing, 1991-99 Other Loans and Leases The other loans and leases category grew 6.4 percent in 1999. Leases, which expanded 22 percent in 1999, were the fastest growing component and now account for almost one-third of this category, up from about one-seventh in 1994. Loans to depository institutions, the second largest item in this category, expanded only 2 percent in 1999, after advancing 13 percent in 1998. In part, the sluggishness of loans to depository 9. An estimated one-third of homeowners who refinanced their 1991 1993 1995 1997 1999 mortgages in 1998 took some cash out as part of the loan. SOURCE. Mortgage Bankers Association. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 375 market value of these securities was about $18 bil- liabilities grew faster than total bank assets for lion less than their book value, whereas at the end of the seventh consecutive year, advancing more than 1998 the market value exceeded the book value by 15 percent. Foreign deposits and large time deposits $10 billion. rose at double-digit rates, with most of the increase in Securities growth in the investment account was conjunction with faster asset growth in the fourth also held down by runoffs of securities acquired quarter of 1999. In part, the advance in large time during the fourth quarter of 1998. This pattern was deposits during the final quarter of 1999 reflected particularly evident for transactions in mortgage- increased investor demand for safe, liquid assets over backed securities, which banks retained in 1998 given the century date change. the lack of demand for securitized assets during the The other-managed-liabilities category, which financial crisis following the Russian default; as mar- advanced almost 10 percent in 1998 and nearly ket conditions improved in the first half of 1999, 18 percent ($146 billion) in 1999, now represents banks then sold these securities. about 19 percent of total liabilities.10 More than Still, banks' investment accounts rose 6 percent in 25 percent of that gain was related to an increase in 1999. Within the investment account, which now borrowing from the FHLB, which reported that comprises more than 18 percent of bank assets, the advances to member commercial banks expanded share represented by Treasury securities edged down, about $40 billion during 1999. The FHLB attributed and the share in corporate and other private debt rose the growth partly to the increasing number of comcorrespondingly. Some of the shift away from Trea- mercial banks joining the system.11 sury securities last year was perhaps the result of the depressing effect that soaring federal budget surpluses have had on the quantity of these securities, Capital driving up the prices, and thus reducing the yields. Equity investments, although still a tiny fraction of Growth in equity capital at banks slowed to about total assets, grew rapidly. 4 percent in 1999 after reaching nearly 10 percent in Regarding the pullback in trading account assets, 1998. However, the slowing was in line with that of the 1998 fall represented a retreat from foreign trad- asset growth, and the share of assets funded by equity ing operations, whereas the drop in 1999 was spread about equally across both domestic and foreign offices. At just over 2 percent, the share of assets held 10. Other managed liabilities include, among other things, federal in trading accounts is now the lowest it has been funds purchased and securities sold under repurchase agreements, loans sold under repurchase agreements that mature in more than one since 1992. day, sales of participations in pools of loans that mature in more than one day, purchases of term federal funds, as well as borrowings from Federal Reserve Banks and Federal Home Loan Banks. 11. Federal Housing Finance Board, Federal Home Loan Bank Liabilities System 1999 Financial Report (FHFB, 2000), p. 19. A preference for safety and liquidity during the finan- 14. Assets and regulatory capital at well-capitalized banks, cial turmoil of the final quarter of 1998 had led to a 1994-99 21 percent annualized rate of increase in core deposits. In contrast, against the backdrop of increasing Percent market interest rates and soaring prices for technol- Share of industry assets ogy stocks, deposits on net declined early in 1999, at well-capitalized banks 100 and core deposits were flat for the year as a whole. Transaction deposits shrank an appreciable 9 percent, an acceleration of declines that began in 1994 as a result of retail sweep arrangements. Meanwhile, small time and savings deposits grew less than 4 per- Average margin by which cent, down from the average of about 9 percent in banks were well capitalized — 3.0 recent years. As a share of total liabilities, core depos- — 2.4 its fell about 3 percentage points, to about 52 percent, — 1.8 after reaching 67 percent as recently as 1992. _J The sluggishness of core deposits led banking insti- 1994 1996 1998 tutions to continue to increase their reliance on gen- NOTE. For the definition of well capitalized and of the margin by which erally more expensive managed liabilities. Managed banks remain well capitalized, see text note 12. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

376 Federal Reserve Bulletin • June 2000 15. Regulatory capital ratios, 1990-99 weighted assets inched up 14 basis points in 1999, as risk-weighted assets advanced only 6 percent Percent (chart 15). Tier 2 capital, on the other hand, declined 1 percent, causing the ratio of total capital to riskweighted assets to slip 5 basis points, on balance, to — Total (tier 1 + tier 2) ratio — 14 just over 12 percent.13 The leverage ratio increased in 1999, as average tangible assets grew only 4 percent. SllBti " — u / Tier 1 ratio — 10 TRENDS IN PROFITABILITY Leverage ratio — 8 The net income of commercial banks grew 16 percent in 1999, to $71.5 billion. Bank earnings were at record levels in every quarter but the second, when a 1 1 ' 1 1 1 1 1 1 1 1 1990 1992 1994 1996 1998 large bank that was acquired at the end of the quarter NOTE. For the definition of capital ratios, see text note 13. posted a $1.5 billion net loss.14 Even so, the proportion of banks reporting negative net income, which was unchanged at 8.5 percent. Banks were able to has been rising steadily since 1995, rose again in add $16 billion to retained earnings even as they 1999, by more than 1 percentage point, to 7.4 perincreased dividend payments. They also added about cent. With last year's losses more concentrated at the $19 billion to paid-in capital, the other source of smallest banks, however, the share of the industry's equity capital. Approximately half of the $19 billion assets at unprofitable banks fell from 2.6 percent in represented new capital, a large portion of which 1998 to 1.5 percent in 1999, about the midpoint of its came from parent holding companies; the remainder range over the past few years and well below the came primarily from the excess of equity issued to levels registered in the late 1980s and early 1990s. fund mergers over the value of the shares retired in The industrywide return on assets rebounded those mergers. These additions to equity capital were 11 basis points last year, to 1.3 percent, after having partially offset, however, by a swing from $5 billion been depressed significantly by the high level of in net unrealized gains on available-for-sale securi- restructuring charges associated with the frenzied ties in 1998 to a $13 billion loss last year. pace of mergers and acquisitions during 1998 After falling in 1997 and 1998, the percentage of (table 2). The return on equity surged 1.4 percentage assets held by well-capitalized banks rose to near points, to 15.5 percent, a new record. In turn, diviits 1996 record level (chart 14). In addition, the dends, which are paid primarily to parent holding average margin by which banks remained well capi- companies, soared more than 26 percent last year, talized firmed a bit in 1999 after having narrowed to $52 billion. Dividends as a percentage of assets significantly in the previous five years.12 Tier 1 capi- increased 16 basis points last year, to a record tal increased 7.5 percent, a rate that exceeded the 0.96 percent, after having declined 10 basis points in increase in equity capital mainly because net unreal- 1998. ized gains or losses on debt securities do not affect regulatory capital. The ratio of tier 1 capital to risk- 13. The tier 1 ratio is the ratio of tier 1 capital to risk-weighted assets, and the total ratio is the ratio of the sum of tier 1 and tier 2 12. An institution is deemed to be well capitalized if it (1) has a capital to risk-weighted assets. Tier 1 capital consists primarily of total risk-based capital ratio of at least 10 percent, (2) has a tier 1 common equity (excluding intangible assets such as goodwill and risk-based capital ratio of at least 6 percent, (3) has a leverage ratio of i \ excluding net unrealized gains on investment account debt securities at least 5 percent, and (4) is not subject to any written agreement, classified as available for sale) and certain perpetual preferred stock. order, capital directive, or prompt corrective action directive issued by Tier 2 capital consists primarily of subordinated debt, preferred stock regulatory authorities. not included in tier 1 capital, and loan-loss reserves. Risk-weighted The average margin by which banks remained well capitalized was assets are calculated by multiplying the amount of assets and the computed as follows. First, among the leverage, tier 1, and total credit-equivalent amount of off-balance-sheet items (an estimate of capital ratios of each well-capitalized bank, the institution's tightest the potential credit exposure posed by the item) by the risk weight capital ratio is defined as the one closest to the regulatory standard for each category. The risk weights rise from zero to one as the credit for being well capitalized. The bank's margin is then defined as the risk of the assets increases. The leverage ratio is the ratio of tier 1 percentage point difference between its tightest capital ratio and the capital to average tangible assets. Tangible assets are equal to total corresponding regulatory standard. The average margin among all assets less assets excluded from common equity in the calculation of well-capitalized banks—the measure referred to in the text—is the tier 1 capital. weighted average of all the individual margins, with the weights being 14. Bankers Trust Company of New York, which was acquired by each bank's share of the total assets of well-capitalized banks. Deutsche Bank AG in June 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 15 2. Selected income and expense items as a proportion of assets, 1992-99 Percent Item 1992 1993 1994 1995 1996 1997 1998 1999 Net interest income 3.89 3.90 3.78 3.72 3.73 3.67 3.52 3.53 Noninterest'income 1.95 2.13 2.00 2.02 2.18 2.23 2.41 2.66 Noninterest expense 3.86 3.94 3.75 3.64 3.71 3.61 3.77 3.77 Loss provisioning .78 .47 .28 .30 .37 .41 .41 .39 Realized gains on investment account securities .11 .09 -.01 .01 .03 .04 .06 .00 Income before taxes and extraordinary items 1.32 1.70 1.73 1.81 1.85 1.93 1.81 2.04 Taxes and extraordinary items .41 .50 .58 .63 .65 .67 .61 .72 Net income (return on assets) .91 1.20 1.15 1.18 1.20 1.25 1.20 1.31 Dividends .41 .62 .73 .75 .90 .90 .80 .96 Retained income .49 .58 .42 .43 .30 .35 .39 .36 Strong performance in all key business areas lished itself in the relatively high range of the midcontributed to the record-breaking level of bank prof- 1990s. its in 1999. The ratio of noninterest expenses to At the next 90 largest banks (also accounting for revenue—a key influence on industry profitability in 35 percent of industry assets), the return on equity recent years—resumed its downward trend last year; increased 1.3 percentage points last year, to 18.6 perit had jumped sharply in 1998 because of a high level cent, a record high. The return at the next 900 largest of charges related to mergers and acquisitions. Non- banks (18 percent of industry assets) rose 61 basis interest income, which benefited from a sharp pickup points, to 16.2 percent, also a new record. For the in nondeposit fee income and strong gains in trading small banks (12 percent of industry assets)—the income, surged almost 17 percent, about three times remaining 7,600 or so banks smaller than the faster than noninterest expense. In addition, net inter- 1,000 largest—the return on equity declined 60 basis est income rose, stabilizing as a percentage of assets points, to 11.4 percent, the first year since 1992 that after having trended down steadily from the rela- this group returned less than 12 percent. tively high levels posted in the mid-1990s. The profitability gap between large and small Although widespread by function, the improve- banks would have been greater but for the growth in ment in profitability last year nevertheless was con- recent years in the number of smaller banks that have centrated at large and medium-sized banks. After a elected corporate status under subchapter S of the dip below 11 percent in 1998, the return on equity at Internal Revenue Code.15 At the end of 1999, about the 10 largest banks shot up 3 percentage points, to 15 percent of insured commercial banks had claimed 13.6 percent, in 1999 (chart 16). Thus, the profitabil- S status and accounted for little more than 2 percent ity of the 10 largest banks (which held 35 percent of of the industry's assets (table 3). the industry's assets at the end of the year) reestab- Despite the profitability of their bank subsidiaries, bank holding companies, particularly the large money 16. Return on equity, by size of bank, 1985-99 15. A subchapter S corporation is generally not subject to federal taxes at the corporate level, and its net income can therefore be as much as one-half higher than the income of a comparable bank that does not have subchapter S status. For many banks, the main impedi- Medium ment to claiming S status is the restriction on the maximum number of shareholders, which currently stands at seventy-five, and the fact that stockholders cannot be other companies. 3. Banks claiming corporate status under subchapter S of the Internal Revenue Code, year-end 1997-99 Percent Percentage Percentage MEMO: Year Number of assets of Number of of all banks all banks all banks 1997 601 6.5 .9 9,188 1998 1,041 11.8 1.6 8,815 1999 1,283 14.9 2.0 8,620 NOTE. For definition of bank size, see text note 1. NOTE. For definition of subchapter S status, see text note 15. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

378 Federal Reserve Bulletin • June 2000 17. Indexes of bank holding company stock prices and the 18. Net interest margin, by size of bank, 1985-99 S&P 500, 1999-April 28, 2000 Percent NOTE. Net interest margin is net interest income divided by average interest- NOTE. The holding company indexes are for four money center bank holding earning assets. For definition of bank size, see text note 1. companies and twenty-five regional bank holding companies as defined by Standard and Poor's. SOURCE. Standard and Poor's. The net interest margin last year was above the levels of the late 1980s but well below the levels of the early 1990s, when diminished competition for center banks, ended the year with their stock prices deposit funds in a time of sluggish economic growth, down as much as 20 percent compared with the plus a desire to curb asset growth to improve capital beginning of the year (chart 17), whereas the positions, resulted in deposit rates falling more than S&P 500 and most other broad stock indexes rose loan rates. The steady narrowing of the net interest over the course of the year. margin since 1993 reflects a confluence of two fac- The poor performance of the banking sector's tors: aggressive loan pricing and the increased reliequity prices was likely due to two factors. First, ance on managed liabilities.16 the rise in money market interest rates and the prime The decline in the industrywide net interest margin rate that began around midyear added to the interest halted last year as banks became less accommodative burden on bank borrowers and raised the likelihood late in 1998 and continued to tighten lending terms of an economic slowdown. Such developments throughout 1999. As noted, respondents to the BLPS increase the possibility of higher loan charge-off rates reported higher spreads on business loans throughout and loan loss provisioning and lowered future bank 1999, and evidence from the STBL indicates that the earnings. spreads on C&I loan originations during 1999 edged Second, the earnings results of several large-scale higher, especially for riskier loans. bank mergers fell short of expectations last year. In The industrywide results mask important differparticular, compared with analysts' initial forecasts, ences, however, in the behavior of the net interest six large banks that were involved in mergers in 1997 margin across different bank sizes (chart 18, bottom). and 1998 collectively generated an earnings shortfall For all but the 100 largest banks, the net interest of more than $5 billion during 1999. margin declined last year. The decline was particularly apparent for medium-sized banks (ranked 101 through 1,000), which saw their net interest Interest Income and Expense margin slump 23 basis points, to 4.4 percent, a level not seen since the early 1990s. For small banks, the Although market interest rates rose in the latter part net interest margin declined 8 basis points and, at the of 1999, they were lower on average for the year than end of 1999, stood considerably below the elevated in 1998, and banks' interest income and interest levels of the mid-1990s. The net interest margin at expense as a percentage of their average interest- the top 10 banks, on the other hand, climbed 13 basis earning assets fell about 30 basis points last year. As a result, the industrywide net interest margin, or the ratio of net interest income to average interest- 16. For historical perspective on the net interest margin, see earning assets, remained about unchanged at roughly Antulio N. Bomfim and William R. Nelson, "Profits and Balance Sheet Developments at U.S. Commercial Banks in 1998," Federal 4.1 percent in 1999 (chart 18, top). Reserve Bulletin, vol. 85 (June 1999), p. 379. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 379 19. Noninterest income and its components 20. Off-balance-sheet securities lent, 1989-99 as a share of total revenue, 1985-99 Billions of dollars Percent — / — 300 — — 200 — 100 Selected components Deposit fees -7 1 / 1 1 1 1 1 1 1 1 1 1 1989 1992 1995 1998 fees from the sale and servicing of mutual funds and annuities, ATM surcharges, and fee income from securitized loans and securities lending. Although no data on the individual elements of nondeposit fee income are available, the increase last year probably reflected, in part, the continued growth in the share of bank loans, especially consumer loans that are securitized. In addition, the rapid growth of securities lending over the past decade (chart 20), Nondeposit fees — 10 spurred on by the desire to increase earnings on assets held in trust, has also likely contributed to the Other nonfee increase in nondeposit fees.17 The major negative 1985 1990 1995 element in nondeposit fee income was probably the NOTE. Components of "other noninterest income" were first included in the plunge in mortgage refinancing activity, for which March 1991 Call Report. banks collect processing fees. points last year, to 3.5 percent, ending the string of Trading income as a share of revenue grew a sharp declines that began in 1994. At the next largest V2 percentage point, finishing the year above 3 per- 90 banks, the net interest margin edged up 2 basis cent for the first time since 1993 (chart 19). The jump points. in trading revenue was driven by a five-fold increase in income earned on equity, commodity, and other exposures (table 4). Revenue from equity exposures Noninterest Income and Expense 17. Banks lend securities on behalf of their trust customers, typi- Contributing importantly to the industry's record cally pension funds and some other large institutional investors, to profitability, noninterest income rose 25 basis points increase earnings on assets held in trust. In the case of most transactions, banks receive cash as collateral, which, in turn, they invest. as a percent of assets last year—the largest annual The trust benefits both from the interest earned on the invested cash gain on record—and increased nearly 2.5 percentage collateral and from the excess of cash collateral received over the points as a share of revenue. At the end of 1999, value of the securities lent. The bank benefits from the fees it earns. noninterest income accounted for 43 percent of com- 4. Trading revenue at all U.S. banks, mercial banks' total revenue, up 10 percentage points by type of exposure, 1995-99 over the past decade (chart 19, top). Millions of dollars The surge in noninterest income last year was concentrated in trading income (chart 19, middle) Interest Foreign Equity, Year Total commodity, and in the "nondeposit fee income" component of rate exchange and other other noninterest income (chart 19, bottom), both 1995 6,337 3,012 2,491 635 categories reflecting activities of large banks. Non- 1996 7,526 4,112 2,689 725 deposit fee income, which jumped 1.6 percentage 1997 8,020 3,995 3,951 72 points as a share of revenue last year, includes credit 1998 7,994 2,469 5,170 355 card fees, mortgage servicing and refinancing fees, 1999 10,486 3,846 4,813 1,825 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

380 Federal Reserve Bulletin • June 2000 21. Dollar volume of initial public offerings, 1991-99 22. Noninterest expense as a proportion of revenue, 1985-99 Billions of dollars Percent Total — / — 45 — / — 30 — 15 1 1 T 1 1 1 1 1 1 1 1991 1995 1999 Components SOURCE. Securities Data Company. ^^ Other ^ — 30 soared more than 300 percent during 1999, and trad- Salaries and benefits ing income earned on interest rate exposures shot up 56 percent. Trading income earned on foreign — 20 exchange exposures remained robust last year, Premises and fixed assets although it declined about 7 percent from the very _ — 10 high level posted in 1998. The nonfee component of other noninterest income advanced nearly 40 basis points as a share of revenue last year. This category includes income from profes- 1985 1990 1995 sional services, such as those provided for holding company affiliates; gains on the sale of assets other 1999, given the effort to ensure computer system than securities, such as loans and bank branches; and readiness for the century date change. income from venture capital activities. Gains on the The growth of noninterest expense was also venture capital activities of banks' small business damped by slowdowns in the industry's growth of investment subsidiaries are also booked in this catewages and occupancy costs last year, both of which gory. The record dollar amount of IPOs last year retreated significantly from the 10 percent pace they suggests that this category contributed importantly each posted in 1998. The rise in labor costs was to the growth of the nonfee component (chart 21). restrained in part because employment, which had Both deposit fees and fiduciary income as a share of advanced 4.3 percent in 1998, rose less than 3 percent revenue edged down about 5 basis points last year, last year, perhaps because of the high level of indusalthough fiduciary income remained at an elevated try mergers and acquisitions in recent years. With level relative to historical norms. revenue growing faster than employment, revenue Noninterest expense as a share of revenue dropped per employee increased 7.3 percent, more than off- 2.5 percentage points last year after having spiked up setting the 5.5 percent rise in employment costs per in 1998 (chart 22, top). The 1998 spike was produced employee. The decline in the growth of occupancy by growth of nearly 18 percent in the broad "other costs last year may also have reflected mergers and noninterest expense" category (chart 22, bottom), acquisitions (which can reduce the need for office which accounts for nearly half of total noninterest space) and a significant slowdown in the rise of office expense and includes charges for mergers and rents. restructuring and for data processing services. As noted, merger activity was much higher in 1998 than 1999, and the slowdown in that activity probably Loan Performance and Loss Provisioning caused the deceleration in the growth rate of other noninterest expense to just 3 percent and the decline Profitability last year was supported by good overall in noninterest expense as a whole. Charges for comloan performance, as most indicators of asset quality puter services were likely high in both 1998 and showed few signs of deterioration. Reflecting the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 381 23. Delinquency and charge-off rates for loans to businesses and households, by type of loan, 1991-99 Delinquencies, businesses Delinquencies, households 12 Commercial real estate Residential real estate J I I I Net charge-offs, businesses Net charge-offs, households — 2 1991 1993 1995 1997 1999 1991 1993 1995 1997 1999 NOTE. The data are seasonally adjusted. Delinquent loans are loans that are loans divided by the end-of-period level of outstanding loans. The net charge-off not accruing interest and those that are accruing interest but are more than thirty rate is the annualized amount of charge-offs over the period, net of recoveries, days past due. The delinquency rate is the end-of-period level of delinquent divided by the average level of outstanding loans over the period. strong market for office and commercial space, delin- such as health care, a factor boosting delinquency quency and charge-off rates on commercial mort- and charge-off rates may be the "seasoning"—the gages remained at very low levels last year (chart 23, increase in the age—of outstanding C&I loans. The left). The delinquency and charge-off rates on C&I longer a loan remains in a portfolio, the greater the loans both rose last year but remained fairly low by probability of its delinquency and default. historical standards. Two factors may be contributing to the seasoning The pickup in C&I charge-offs was driven entirely of banks' C&I loan portfolio. The first is the slowing by an increase in loss rates on C&I loans booked in the growth of business loan originations, from at domestic offices. Evidence from a recent BLPS 12 percent in 1997 and 1998 to 8 percent last year. indicates that problem C&I loans at domestic com- When loan growth decelerates, the resulting reducmercial banks have been largely confined to specific tion in the share of new loans in the portfolio can industries, particularly health care. The charge-off raise the average delinquency rate in the short run; rate on C&I loans booked abroad, which accounted the opposite effect occurs when loan growth accelerfor about 18 percent of all C&I loans last year, held ates. Second, according to the STBL, the average steady in the elevated range posted in the aftermath maturity of C&I loan originations has risen signifiof financial turmoil in the second half of 1998. Delin- cantly over the past several years (chart 24). An quencies and charge-off rates on agricultural produc- increase in the maturity of loan originations would tion loans also rose early last year, likely because of eventually raise the average age of outstanding loans low prices for agricultural products and increases in in the portfolio. production costs. The quality of household loans improved last year, The ratio of charge-offs to delinquencies on C&I but the overall picture remains mixed. The delinloans increased for the second consecutive year in quency rate on credit card loans, while declining 1999 and now stands in the range comparable to that 10 basis points, remained on the high side of hisof the 1990-91 recession. In addition to the concen- torical norms. The net charge-off rate on credit card tration of C&I loans in certain troubled industries, loans declined for the second consecutive year, but Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

382 Federal Reserve Bulletin • June 2000 24. Average maturity of new C&I loans, 1991-99 On the household side, debt burden, as measured by the sum of interest payments and required princi- Days pal payments as a fraction of disposable income, increased last year and moved closer to the high — / 600 levels of the middle and late 1980s (chart 25). On a positive note, the number of personal bankruptcies — / V — 500 filed last year retreated significantly from the record level posted at the end of 1998. — ' — 400 The exceptional strength of the economy in 1999 clearly contributed to the continued favorable trend A — / — 300 in overall loan performance. However, a slowdown in income carries with it the prospect of greater loan — 200 losses. As has been the case for several years, loan loss provisioning last year was only a bit above 1 1 1 1 1 1 I 1991 1992 1993 1994 1995 1996 1997 1998 1999 loan charge-offs. NOTE. Vertical line denotes change in composition of survey panel after the Given the robust growth in loans, reserves for loan first quarter of 1997. and lease losses as a percentage of loans and leases SOURCE. Federal Reserve Board, Statistical Release E.2, "Survey of Terms of Business Lending." continued their downward trend. At the end of last year, the fraction stood at about 1.8 percent (chart 26, it too remained at an elevated level. A similar picture top), more than 40 basis points below the average is presented by delinquency and charge-off rates on level of the past fifteen years. Relative to delinquent other consumer loans. By contrast, the delinquency loans, however, loan-loss reserves remained elerate on single-family home mortgages fell 20 basis vated, although the ratio declined slightly last year points, to below 2 percent, an exceptionally low level, while the charge-off rate was essentially unchanged, also at a low level (chart 23, right). 26. Reserves, provisioning, and charge-offs Despite the slight deterioration in the quality of the for loan and lease losses, 1985-99 C&I loan portfolio, the financial condition of the nonfinancial business sector remained generally posi- Percent tive. The aggregate debt-service burden for nonfinan- As a percentage of loans and leases cial corporations—measured by the ratio of net interest payments to cash flow—increased somewhat in Loss reserves 1999 but stayed in a low range relative to historical levels (chart 25). 25. Debt burden of businesses and households, 1985-99 Percent 1985 1990 1995 NOTE. The debt burden for nonfinancial corporations is calculated as interest payments as a percentage of cash flow. The debt burden for households is an estimate of the ratio of debt payments to disposable personal income; debt payments consist of the estimated required payments on outstanding mortgage 1985 1990 1995 and consumer debt. SOURCE. National income and product accounts and the Federal Reserve NOTE. For definitions of delinquencies and net charge-offs, see note to System. chart 23. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 383 5. Exposure of selected U.S. banking organizations to selected economies at year-end, relative to tier 1 capital, 1997-99 Percent except as noted MEMO: Money center Total exposure, All reporting Other and other large banks all reporting banks RReeggiioonn oorr ccoouunnttrryy (billions of dollars) 1997 1998 1999 1997 1998 1999 1997 1998 1999 1997 1998 1999 Selected Asian countries1 27.11 15.49 14.37 43.76 24.02 20.73 3.90 2.08 1.75 55.24 37.87 37.45 Eastern Europe and Russia All 5.84 3.49 2.85 9.97 5.61 4.25 .14 .16 .08 11.91 8.53 7.43 Russia 3.02 .43 .37 5.15 .68 .55 .08 .00 .01 6.16 1.05 .95 Latin America All 49.92 42.93 39.00 78.78 64.20 53.90 9.54 9.51 9.41 101.73 104.96 101.63 Brazil 16.39 11.27 10.49 26.28 17.04 14.53 2.59 .00 2.47 33.40 27.55 27.34 Total 82.87 61.90 56.22 132.51 93.83 78.88 13.57 11.75 11.24 168.89 151.36 146.51 NOTE. Tier 1 capital for 1997 is estimated; for definition of tier 1 capital, see banks ($133 billion in tier 1 capital), 5 were "other large" banks ($40 billion), text note 13. Exposures consist of lending and derivatives exposures for cross- and the remaining 93 were "other" banks ($87 billion). The average "other" border and local-office operations. Respondents may file information on one bank at year-end 1999 had $13 billion in assets. bank or on the bank holding company as a whole. 1. Indonesia, Korea, Malaysia, Philippines, and Thailand. At year-end 1999, "all reporting" banks consisted of 104 institutions with a SOURCE. Federal Financial Institutions Examination Council Statistical total of $261 billion in tier 1 capital; of these institutions, 6 were money center Release E.16, "Country Exposure Survey," available at www.ffiec.gov/E16/ (chart 26, bottom); relative to net charge-offs, loan- total exposure to this area remained small—only loss reserves posted their first increase since 1994 2.85 per cent of tier 1 capital at the end of 1999. The and are now near the middle of their historical range. exposure of money center and other large banks to The firming in the ratio of reserves to net charge-offs Latin America declined more than 10 percentage last year owes much to the decline in charge-offs on points, even as Moody's upgraded Mexico's soverconsumer loans. eign debt to investment grade and the Brazilian economy rebounded after shaking off the effects of the devaluation of the real in January 1999. INTERNATIONAL OPERATIONS OF U.S. BANKS The share of U.S. bank assets booked at foreign RECENT DEVELOPMENTS offices ticked down a bit in 1999, to 13 percent, after having fallen 2 percentage points in 1998 because of By the end of April 2000, the intended level of the jitters surrounding many developing economies.18 federal funds rate had increased 50 basis points from Strong income from foreign operations during the its level at the end of 1999; the economy, however, first quarter of 1999 helped boost the share of income appeared to be sustaining its momentum. The bankattributable to such operations to 9.75 percent last ing industry remained healthy, with high profits, good year, up from 8.5 percent in the previous year. The loan performance, and strong demand for credit. rise in income was almost entirely attributable to a Many large bank holding companies, especially those rebound in noninterest income, which in turn had with large securities underwriting and trading operabeen depressed in 1998 by the large trading losses tions, reported higher than expected profits during the that stemmed from the Russian default. first three months of 2000. Core loan categories have The exposure of U.S. commercial banks to Russia continued to grow rapidly, while investments in secuand to Eastern European, Latin American, and rities have picked up a bit. selected Asian economies slipped in 1999 after hav- Bank holding company stocks, particularly those ing fallen about 10 percent from year-end 1997 of money center banks, benefited briefly in late to year-end 1998 (table 5). On a percentage basis, March from a swing by investors away from the banks cut their exposure to Eastern Europe and Rus- technology sector to the so-called "old economy" sia by the largest amount last year; however, their stocks. By the end of April, however, the stock prices of money center bank holding companies were down 3.6 percent from year-end 1999, and those of regional banks were about 5 percent lower. Both had slightly 18. For additional details on the international operations of U.S. underperformed the broader market, as measured by banks, see English and Nelson, "Profits and Balance Sheet Developthe S&P 500. ments at U.S. Commercial Banks in 1997," p. 406. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

384 Federal Reserve Bulletin • June 2000 A new era in the financial services industry offi- to become financial holding companies under the cially arrived when the Gramm-Leach-Bliley Act new law. These new entities will be allowed to merge became effective on March 11. Shortly thereafter, with insurance companies and investment banks the Federal Reserve Board announced that it had as well as to engage in numerous other previously approved the applications of 117 bank holding com- restricted lines of business, most notably merchant panies and foreign banking concerns that had filed banking. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 385 A.l. Report of income, all U.S. banks, 1990-99 Millions of dollars Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Gross interest income 320,404 290,692 256,415 244,742 257,064 302,376 313,115 338,230 359,166 367,203 Taxable equivalent 324,054 293,879 259,394 247,620 259,821 305,010 315,575 340,664 361,629 369,840 Loans 238,829 215,019 185,938 178,425 189,762 227,218 239,307 255,504 270,942 279,321 Securities 51,031 52,769 51,825 48,678 48,299 51,030 50,601 52,662 56,597 62,389 Gross federal funds sold and reverse repurchase agreements 12,571 9,149 5,913 4,796 6,415 9,744 9,265 13,658 14,997 12,333 Other 17,971 13,757 12,739 12,843 12,587 14,382 13,944 16,407 16,627 13,160 Gross interest expense 204,949 168,492 122,517 105,615 110,849 147,958 150,045 164,516 177,990 175,341 Deposits 161,483 139,431 98,809 79,503 79,106 105,329 107,465 117,351 125,208 119,964 Gross federal funds purchased and repurchase agreements 22,778 14,439 9,263 8,442 12,476 18,424 16,775 20,440 22,182 21,203 Other 20,687 14,623 14,441 17,669 19,269 24,204 25,806 26,724 30,599 34,174 Net interest income 115,455 122,200 133,898 139,127 146,215 154,418 163,070 173,714 181,176 191,862 Taxable equivalent 119,105 125,387 136,877 142,005 148,972 157,052 165,530 176,148 183,639 194,499 Loss provisioning1 32,282 34,871 26,813 16,841 10,993 12,631 16,206 19,173 21,197 21,054 Noninterest income 55,684 61,124 67,044 75,847 77,223 83,851 95,278 105,775 123,779 144,586 Service charges on deposits 11,446 12,884 14,126 14,898 15,281 16,057 17,042 18,558 19,770 21,589 Income from fiduciary activities 8,886 9,499 10,452 11,199 12,124 12,890 14,288 16,604 19,272 21,136 Trading income 4,854 5,954 6,273 9,238 6,249 6,337 7,526 8,020 7,994 10,486 Other 30,497 32,785 36,193 40,513 43,572 48,567 56,421 62,593 76,746 91,374 Noninterest expense 116,606 126,665 132,815 140,523 144,905 151,137 162,399 170,995 193,679 204,958 Salaries, wages, and employee benefits .. 52,111 53,810 55,484 58,507 60,904 64,013 67,775 72,347 79,505 86,399 Expenses of premises and fixed assets .. 17,547 17,984 18,152 18,578 18,978 19,760 20,883 22,082 24,158 25,943 Other 46,948 54,871 59,181 63,439 65,023 67,363 73,741 76,567 90,018 92,616 Net noninterest expense 60,922 65,541 65,771 64,676 67,682 67,286 67,121 65,220 69,900 60,372 Realized gains on investment account securities 474 2,897 3,957 3,054 -560 481 1,123 1,826 3,087 251 Income before taxes and extraordinary items 22,725 24,684 45,273 60,662 66,989 74,980 80,864 91,146 92,881 110,689 Taxes 7,749 8,292 14,450 19,861 22,430 26,222 28,430 31,989 31,909 39,410 Extraordinary items 650 1,198 401 2,085 -17 28 88 56 506 169 Net income 15,626 17,590 31,224 42,886 44,542 48,785 52,521 59,212 61,478 71,447 Cash dividends declared 13,965 15,562 14,226 22,068 28,164 31,105 39,391 42,726 41,304 52,123 Retained income 1,661 2,028 16,997 20,816 16,377 17,681 13,131 16,486 20,174 19,324 1. Includes provisions for loan and lease losses and for allocated transfer risk. Table A.2 begins on page 386. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

386 Federal Reserve Bulletin • June 2000 A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1990-99 A. All banks Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 87.82 88.04 88.33 88.50 86.55 86.47 86.80 86.58 86.26 86.55 Loans and leases, net 60.53 59.55 57.30 56.25 56.07 58.37 59.89 58.69 58.33 59.36 Commercial and industrial 18.50 17.33 15.78 14.88 14.51 15.20 15.60 15.78 16.38 17.09 U.S. addressees 15.99 15.00 13.54 12.72 12.35 12.87 13.07 13.18 13.62 14.43 Foreign addressees 2.51 2.33 2.24 2.16 2.16 2.33 2.53 2.60 2.75 2.66 Consumer 11.77 11.45 11.00 11.00 11.43 12.08 12.21 11.44 10.36 9.71 Credit card 3.78 3.88 3.80 3.88 4.21 4.69 4.87 4.55 3.96 3.51 Installment and other 7.99 7.57 7.20 7.11 7.22 7.39 7.34 6.89 6.39 6.20 Real estate 23.86 24.87 24.87 24.80 24.43 25.01 25.06 25.02 24.87 25.44 In domestic offices 23.10 24.11 24.18 24.18 23.80 24.36 24.43 24.41 24.30 24.87 Construction and land development 4.00 3.41 2.64 1.99 1.65 1.59 1.63 1.73 1.86 2.18 Farmland .51 .53 .56 .57 .56 .56 .56 .55 .55 .56 One- to four-family residential 11.21 12.27 12.91 13.49 13.74 14.42 14.43 14.42 14.26 14.10 Home equity 1.67 1.95 2.09 2.07 1.91 1.88 1.85 1.94 1.89 1.76 Other 9.54 10.32 10.83 11.42 11.84 12.54 12.57 12.48 12.37 12.33 Multifamily residential .62 .66 .75 .79 .79 .81 .85 .83 .82 .88 Nonfarm nonresidential 6.76 7.23 7.32 7.33 7.07 6.97 6.96 6.88 6.81 7.15 In foreign offices .76 .76 .69 .62 .63 .65 .63 .61 .57 .57 Depository institutions 1.60 1.42 1.24 1.08 1.42 1.88 2.29 1.89 1.88 1.94 Foreign governments .78 .75 .73 .67 .41 .30 .26 .18 .15 .16 Agricultural production .96 1.01 1.02 .99 1.00 .96 .92 .90 .89 .83 Other loans 3.93 3.60 3.50 3.56 3.34 3.15 3.36 2.84 2.81 2.76 Lease-financing receivables 1.12 1.09 1.03 .99 1.03 1.19 1.51 1.87 2.14 2.53 LESS: Unearned income on loans -.42 -.36 -.28 -.21 -.16 -.14 -.12 -.09 -.07 -.06 LESS: Loss reserves' -1.57 -1.62 -1.60 -1.51 -1.36 -1.26 -1.21 -1.13 -1.07 -1.04 Securities 19.09 20.70 23.52 25.37 24.27 21.94 21.01 20.41 20.38 20.39 Investment account 17.63 18.93 21.18 22.50 21.60 19.39 18.20 17.25 17.49 18.33 Debt 17.37 18.62 20.82 22.12 21.21 18.98 17.75 16.75 16.94 17.73 U.S. Treasury 4.57 5.06 6.49 7.08 6.77 5.25 4.20 3.38 2.71 2.14 U.S. government agency and corporation obligations 7.56 8.75 9.86 10.73 10.24 9.81 9.75 9.74 10.29 10.85 Government-backed mortgage pools ... 4.08 4.51 4.52 4.74 4.67 4.47 4.80 4.94 5.17 5.23 Collateralized mortgage obligations 1.25 2.07 3.12 3.72 3.24 2.67 2.11 1.94 2.13 2.15 Other 2.22 2.16 2.21 2.27 2.33 2.68 2.83 2.86 2.99 3.46 State and local government 2.64 2.28 2.08 2.06 2.02 1.80 1.68 1.59 1.57 1.62 Private mortgage-backed securities n.a. .94 .82 .73 .64 .62 .61 .50 .67 .88 Other 2.59 1.59 1.58 1.52 1.54 1.49 1.51 1.54 1.71 2.24 Equity .27 .31 .37 .38 .39 .41 .45 .50 .55 .61 Trading account 1.46 1.77 2.34 2.87 2.67 2.55 2.81 3.16 2.90 2.06 Gross federal funds sold and reverse RPs 4.46 4.58 4.54 4.27 3.82 3.93 3.82 5.18 5.37 4.61 Interest-bearing balances at depositories 3.75 3.21 2.97 2.62 2.40 2.23 2.08 2.29 2.17 2.18 Non-interest-earning assets 12.18 11.96 11.67 11.50 13.45 13.53 13.20 13.42 13.74 13.45 Revaluation gains on off-balance-sheet items2 ... n.a. n.a. n.a. n.a. 2.61 2.90 2.25 2.59 2.95 2.57 Other 12.18 11.96 11.67 11.50 10.84 10.62 10.95 10.83 10.79 10.89 Liabilities 93.60 93.33 92.82 92.15 92.12 91.99 91.73 91.57 91.51 91.51 Interest-bearing liabilities 76.53 76.58 75.32 73.92 71.86 71.86 71.62 71.36 71.33 72.52 Deposits 63.44 64.45 62.94 60.26 57.34 56.30 55.87 55.01 54.66 54.80 In foreign offices 9.26 8.55 8.37 8.32 9.39 10.28 10.01 10.02 10.15 10.46 In domestic offices 54.18 55.90 54.56 51.94 47.96 46.03 45.86 44.99 44.51 44.34 Other checkable deposits 6.19 6.72 7.65 8.24 7.80 6.63 4.75 3.62 3.11 2.81 Savings (including MMDAs) 16.59 18.00 20.28 20.91 19.60 17.48 18.71 19.13 19.91 21.00 Small-denomination time deposits 19.96 21.30 19.21 16.98 15.33 16.14 15.97 15.17 14.15 13.10 Large-denomination time deposits 11.44 9.89 7.42 5.81 5.23 5.77 6.42 7.08 7.34 7.42 Gross federal funds purchased and RPs 8.03 7.09 7.02 7.47 7.60 7.71 7.18 8.13 7.99 7.97 Other 5.07 5.03 5.36 6.19 6.92 7.85 8.56 8.21 8.68 9.75 Non-interest-bearing liabilities 17.07 16.75 17.50 18.23 20.26 20.13 20.11 20.21 20.18 18.99 Demand deposits in domestic offices 12.79 12.59 13.24 13.86 13.49 12.68 12.82 12.16 11.00 9.78 Revaluation losses on off-balance-sheet items2 . n.a. n.a. n.a. n.a. 2.32 2.88 2.14 2.64 2.97 2.52 Other 4.27 4.16 4.27 4.37 4.45 4.57 5.14 5.41 6.21 6.70 Capital account 6.40 6.67 7.18 7.85 7.88 8.01 8.27 8.43 8.49 8.49 MEMO Commercial real estate loans n.a. 12.02 11.34 10.63 9.94 9.83 9.92 9.99 10.12 10.87 Other real estate owned .50 .75 .82 .63 .36 .19 .14 .11 .08 .06 Managed liabilities 34.31 31.05 28.70 28.28 29.61 32.08 32.73 34.09 34.94 36.58 Average net consolidated assets (billions of dollars) 3,338 3,379 3,442 3,566 3,863 4,148 4,376 4,733 5,144 5,438 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 387 A.2.—Continued A. All banks Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Effective interest rate (percent) 3 Rates earned Interest-earning assets 10.67 9.57 8.27 7.61 7.61 8.33 8.14 8.15 7.99 7.73 Taxable equivalent 10.80 9.69 8.37 7.71 7.70 8.41 8.21 8.22 8.06 7.79 Loans and leases, gross 11.49 10.40 9.20 8.69 8.62 9.25 8.99 9.01 8.84 8.50 Net of loss provisions 9.94 8.72 7.87 7.87 8.12 8.74 8.39 8.34 8.15 7.86 Securities 8.79 8.19 7.04 6.08 5.96 6.51 6.42 6.50 6.37 6.28 Taxable equivalent 9.21 8.56 7.34 6.36 6.20 6.73 6.66 6.73 6.63 6.48 Investment account 8.67 8.25 7.11 6.07 5.79 6.35 6.35 6.45 6.29 6.26 U.S. government and other debt 8.92 8.43 7.18 6.07 5.80 6.42 6.47 6.60 6.45 6.42 State and local 7.39 7.25 6.81 6.25 5.87 5.82 5.55 5.41 5.23 5.13 Equity 7.34 6.20 5.32 4.79 4.79 5.51 5.23 5.15 4.92 4.87 Trading account 10.15 7.54 6.40 6.16 7.41 7.73 6.86 6.75 6.85 6.48 Gross federal funds sold and reverse RPs 8.08 5.69 3.58 3.04 4.26 5.63 5.21 5.45 5.29 4.78 Interest-bearing balances at depositories 9.96 8.44 7.31 6.61 5.71 6.84 6.21 6.24 6.31 5.95 Rates paid Interest-bearing liabilities 8.04 6.55 4.75 4.01 4.01 4.99 4.82 4.92 4.88 4.48 Interest-bearing deposits 7.57 6.34 4.51 3.65 3.53 4.47 4.33 4.39 4.31 3.88 In foreign offices 10.71 8.54 7.32 6.82 5.59 6.12 5.54 5.44 5.66 4.91 In domestic offices 7.02 6.00 4.07 3.14 3.14 4.11 4.07 4.16 4.01 3.65 Other checkable deposits 4.79 4.34 2.70 1.99 1.85 2.06 2.03 2.25 2.29 2.08 Savings (including MMDAs) 5.99 5.11 3.25 2.50 2.58 3.19 2.99 2.93 2.79 2.50 Large-denomination time deposits4 8.03 6.69 4.90 4.00 4.09 5.47 5.39 5.45 5.22 4.93 Small-denomination time deposits4 7.97 6.93 5.15 4.19 4.17 5.44 5.40 5.54 5.48 5.11 Gross federal funds purchased and RPs 7.97 5.76 3.64 3.07 4.18 5.65 5.12 5.17 5.19 4.74 Other interest-bearing liabilities 12.26 8.65 7.87 8.02 7.25 7.47 6.93 6.95 6.89 6.49 Income and expense as percentage of average net consolidated assets Gross interest income 9.60 8.60 7.45 6.86 6.65 7.29 7.16 7.15 6.98 6.75 Taxable equivalent 9.71 8.70 7.54 6.94 6.73 7.35 7.21 7.20 7.03 6.80 Loans 7.15 6.36 5.40 5.00 4.91 5.48 5.47 5.40 5.27 5.14 Securities 1.53 1.56 1.51 1.37 1.25 1.23 1.16 1.11 1.10 1.15 Gross federal funds sold and reverse RPs .38 .27 .17 .13 .17 .23 .21 .29 .29 .23 Other .54 .41 .37 .36 .33 .35 .32 .35 .32 .24 Gross interest expense 6.14 4.99 3.56 2.96 2.87 3.57 3.43 3.48 3.46 3.22 Deposits 4.84 4.13 2.87 2.23 2.05 2.54 2.46 2.48 2.43 2.21 Gross federal funds purchased and RPs .68 .43 .27 .24 .32 .44 .38 .43 .43 .39 Other .62 .43 .42 .50 .50 .58 .59 .56 .59 .63 Net interest income 3.46 3.62 3.89 3.90 3.78 3.72 3.73 3.67 3.52 3.53 Taxable equivalent 3.57 3.71 3.98 3.98 3.86 3.79 3.78 3.72 3.57 3.58 Loss provisioning5 .97 1.03 .78 .47 .28 .30 .37 .41 .41 .39 Noninterest income 1.67 1.81 1.95 2.13 2.00 2.02 2.18 2.23 2.41 2.66 Service charges on deposits .34 .38 .41 .42 .40 .39 .39 .39 .38 .40 Income from fiduciary activities .27 .28 .30 .31 .31 .31 .33 .35 .37 .39 Trading income .15 .18 .18 .26 .16 .15 .17 .17 .16 .19 Interest rate exposures n.a. n.a. n.a. n.a. n.a. n.a. .09 .08 .05 .07 Foreign exchange exposures n.a. n.a. n.a. n.a. n.a. n.a. .06 .08 .10 .09 Equity, commodity, and other exposures ... n.a. n.a. n.a. n.a. n.a. n.a. .02 * .01 .03 Other .91 .97 1.05 1.14 1.13 1.17 1.29 1.32 1.49 1.68 Noninterest expense 3.49 3.75 3.86 3.94 3.75 3.64 3.71 3.61 3.77 3.77 Salaries, wages, and employee benefits 1.56 1.59 1.61 1.64 1.58 1.54 1.55 1.53 1.55 1.59 Expenses of premises and fixed assets .53 .53 .53 .52 .49 .48 .48 .47 .47 .48 Other 1.41 1.62 1.72 1.78 1.68 1.62 1.69 1.62 1.75 1.70 Net noninterest expense 1.83 1.94 1.91 1.81 1.75 1.62 1.53 1.38 1.36 1.11 Realized gains on investment account securities . .01 .09 .11 .09 -.01 .01 .03 .04 .06 * Income before taxes and extraordinary items — .68 .73 1.32 1.70 1.73 1.81 1.85 1.93 1.81 2.04 Taxes .23 .25 .42 .56 .58 .63 .65 .68 .62 .72 Extraordinary items .02 .04 .01 .06 * * * * .01 * Net income (return on assets) .47 .52 .91 1.20 1.15 1.18 1.20 1.25 1.20 1.31 Cash dividends declared .42 .46 .41 .62 .73 .75 .90 .90 .80 .96 Retained income .05 .06 .49 .58 .42 .43 .30 .35 .39 .36 MEMO: Return on equity 7.31 7.80 12.64 15.32 14.63 14.69 14.52 14.84 14.07 15.48 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve. 2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss. 3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports. 4. Before 1997, data for large time open accounts are included in small-denomination time deposits. 5. Includes provisions for loan and lease losses and for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

388 Federal Reserve Bulletin • June 2000 A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1990-99 B. Ten largest banks by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 84.85 85.41 85.16 84.79 76.97 77.02 79.94 81.62 81.07 81.29 Loans and leases, net 61.69 62.14 58.34 55.57 49.91 50.05 53.51 50.91 50.77 53.38 Commercial and industrial 22.91 22.42 20.32 18.65 16.43 16.16 17.17 16.90 18.07 19.24 U.S. addressees 13.39 13.44 12.00 10.75 9.16 8.66 9.59 10.24 11.76 13.14 Foreign addressees 9.53 8.97 8.32 7.90 7.27 7.50 7.59 6.66 6.31 6.10 Consumer 6.87 7.20 7.31 7.33 6.59 6.60 6.22 6.40 6.04 5.94 Credit card 2.20 2.53 2.61 2.50 2.28 1.96 1.23 1.34 1.30 1.36 Installment and other 4.67 4.67 4.70 4.83 4.31 4.65 4.99 5.06 4.74 4.58 Real estate 20.56 21.68 19.93 18.54 16.21 15.82 16.53 17.42 16.51 16.96 In domestic offices 17.36 18.37 17.07 15.99 13.80 13.48 14.44 15.69 15.08 15.55 Construction and land development 3.79 3.42 2.48 1.59 .84 .58 .51 .68 .77 .90 Farmland .08 .08 .07 .07 .06 .06 .06 .09 .09 .10 One- to four-family residential 9.31 10.34 10.08 10.29 9.69 9.62 10.43 11.02 10.33 10.77 Home equity 1.31 1.63 1.63 1.60 1.40 1.40 1.53 1.70 1.72 1.54 Other 8.00 8.71 8.46 8.68 8.29 8.22 8.90 9.31 8.61 9.22 Multifamily residential .68 .57 .58 .53 .41 .38 .38 .39 .38 .43 Nonfarm nonresidential 3.51 3.95 3.86 3.51 2.79 2.83 3.05 3.52 3.51 3.35 In foreign offices 3.20 3.32 2.85 2.55 2.41 2.35 2.09 1.73 1.43 1.41 Depository institutions 3.64 3.05 2.56 2.35 3.37 4.95 6.06 4.14 4.00 4.30 Foreign governments 2.76 2.88 2.75 2.46 1.27 .90 .69 .45 .35 .38 Agricultural production .31 .31 .28 .27 .25 .21 .23 .31 .28 .26 Other loans 6.05 5.61 6.05 6.82 6.44 5.85 6.42 4.21 3.79 3.97 Lease-financing receivables 1.60 1.68 1.51 1.30 1.14 1.14 1.59 2.24 2.81 3.41 LESS: Unearned income on loans -.39 -.35 -.27 -.21 -.16 -.14 -.11 -.07 -.06 -.05 LESS: Loss reserves1 -2.63 -2.34 -2.08 -1.94 -1.63 -1.45 -1.30 -1.08 -1.01 -1.03 Securities 14.03 15.58 19.13 22.74 20.43 19.53 19.83 20.00 19.72 18.34 Investment account 9.22 9.38 10.70 12.45 11.68 10.65 10.60 10.97 12.12 13.08 Debt 8.98 9.08 10.36 12.08 11.30 10.27 10.22 10.55 11.65 12.57 U.S. Treasury 1.09 1.35 2.30 2.39 2.17 2.03 1.93 1.56 1.70 1.98 U.S. government agency and corporation obligations 2.91 3.46 4.45 6.14 5.16 4.46 4.59 5.34 6.31 6.35 Government-backed mortgage pools ... 2.24 2.26 2.43 3.30 2.79 2.89 3.58 4.26 5.13 5.03 Collateralized mortgage obligations .54 1.12 1.97 2.76 2.31 1.50 .95 .93 .93 .79 Other .14 .08 .05 .08 .06 .08 .06 .15 .26 .52 State and local government 1.08 .77 .66 .59 .60 .49 .39 .51 .47 .45 Private mortgage-backed securities n.a. .48 .33 .38 .43 .32 .30 .32 .60 .57 Other 3.90 3.01 2.62 2.59 2.94 2.97 3.01 2.81 2.57 3.22 Equity .24 .30 .33 .36 .38 .38 .38 .42 .47 .51 Trading account 4.81 6.19 8.43 10.30 8.74 8.88 9.23 9.03 7.60 5.25 Gross federal funds sold and reverse RPs 2.88 2.96 3.23 2.71 2.68 3.20 3.10 7.56 7.81 6.64 Interest-bearing balances at depositories 6.25 4.74 4.45 3.76 3.95 4.25 3.50 3.15 2.77 2.94 Non-interest-earning assets 15.15 14.59 14.84 15.21 23.03 22.98 20.06 18.38 18.93 18.71 Revaluation gains on off-balance-sheet items2 ... n.a. n.a. n.a. n.a. 9.89 10.77 7.63 7.36 7.61 6.66 Other 15.15 14.59 14.84 15.21 13.14 12.21 12.43 11.02 11.32 12.05 Liabilities 95.29 94.97 94.44 93.24 93.42 93.59 93.04 92.61 92.58 92.28 Interest-bearing liabilities 73.97 74.62 73.08 71.56 64.33 63.37 64.45 65.83 65.81 66.88 Deposits 57.95 57.67 55.73 52.91 48.20 47.49 47.87 47.36 47.65 48.80 In foreign offices 29.66 28.47 27.16 25.51 26.10 28.36 26.41 22.18 20.17 21.04 In domestic offices 28.28 29.19 28.56 27.41 22.10 19.12 21.46 25.18 27.48 27.76 Other checkable deposits 2.74 3.00 3.38 3.45 2.91 2.30 1.61 1.21 .99 .74 Savings (including MMDAs) 12.05 13.50 14.91 15.33 12.70 10.56 12.31 14.26 15.84 16.83 Small-denomination time deposits 6.16 6.55 5.72 5.09 3.98 4.04 4.68 5.82 6.03 5.66 Large-denomination time deposits 7.33 6.14 4.56 3.53 2.51 2.23 2.86 3.89 4.62 4.53 Gross federal funds purchased and RPs 6.90 6.80 6.19 6.70 5.83 6.17 5.88 10.26 9.79 8.84 Other 9.13 10.15 11.16 11.94 10.29 . 9.71 10.69 8.20 8.37 9.24 Non-interest-bearing liabilities 21.32 20.35 21.36 21.68 29.09 30.22 28.59 26.78 26.76 25.40 Demand deposits in domestic offices 10.93 10.36 11.05 11.27 10.15 8.88 9.73 8.98 8.46 7.82 Revaluation losses on off-balance-sheet items2 . n.a. n.a. n.a. n.a. 8.75 10.68 7.27 7.53 7.66 6.51 Other 10.39 9.99 10.30 10.41 10.20 10.66 11.59 10.27 10.64 11.07 Capital account 4.71 5.03 5.56 6.76 6.58 6.41 6.96 7.39 7.42 7.72 MEMO Commercial real estate loans n.a. 9.05 8.01 6.46 4.65 4.40 4.65 5.45 5.61 5.69 Other real estate owned .42 .78 1.13 1.02 .58 .27 .18 .13 .09 .06 Managed liabilities 54.79 53.23 50.82 49.23 46.21 47.94 47.39 46.02 44.43 45.49 Average net consolidated assets (billions of dollars) 725 717 775 818 949 1,051 1,189 1,514 1,820 1,935 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 389 A.2.—Continued B. Ten largest banks by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Effective interest rate (percent)3 Rates earned Interest-earning assets 11.65 9.92 8.67 8.16 8.15 8.20 7.72 7.55 7.54 7.35 Taxable equivalent 11.70 9.95 8.72 8.20 8.18 8.22 7.74 7.60 7.57 7.39 Loans and leases, gross 12.29 10.46 9.36 9.07 8.89 8.84 8.32 8.25 8.21 7.99 Net of loss provisions 11.10 8.58 7.51 7.95 8.38 8.62 8.11 7.93 7.62 7.50 Securities 9.85 8.52 7.38 6.69 7.09 7.41 6.80 6.70 6.79 6.52 Taxable equivalent 10.00 8.63 7.54 6.77 7.19 7.47 6.85 6.85 6.89 6.65 Investment account 9.34 8.99 7.96 6.90 6.57 7.06 6.71 6.61 6.71 6.50 U.S. government and other debt 9.68 9.29 8.13 6.99 6.70 7.22 6.86 6.80 6.92 6.68 State and local 7.54 7.67 7.40 6.99 6.35 6.23 5.73 5.55 5.50 5.65 Equity 5.82 4.22 4.04 3.72 3.27 4.03 3.84 3.47 2.98 2.93 Trading account 10.75 7.84 6.69 6.45 7.79 7.83 6.90 6.81 6.92 6.56 Gross federal funds sold and reverse RPs 8.01 5.60 3.65 3.02 4.52 5.20 4.92 5.45 5.20 4.52 Interest-bearing balances at depositories 11.06 10.05 9.29 8.34 7.27 7.15 6.71 6.91 7.16 7.22 Rates paid Interest-bearing liabilities 10.18 7.71 6.17 5.60 5.43 5.88 5.44 5.41 5.29 4.79 Interest-bearing deposits 9.03 7.09 5.33 4.50 4.32 4.99 4.57 4.54 4.40 3.82 In foreign offices 11.11 8.76 7.55 6.87 6.04 6.07 5.62 5.52 5.83 4.99 In domestic offices 6.81 5.47 3.25 2.36 2.35 3.42 3.32 3.69 3.39 3.04 Other checkable deposits 4.35 3.93 1.97 1.28 1.10 1.29 1.32 1.97 1.67 1.44 Savings (including MMDAs) 6.21 5.09 2.95 2.14 2.35 3.11 2.76 2.68 2.45 2.11 Large-denomination time deposits4 7.96 6.50 4.66 3.55 3.12 3.73 4.62 5.17 4.53 4.36 Small-denomination time deposits4 7.76 6.09 3.81 3.01 2.80 5.08 4.58 5.45 5.21 4.95 Gross federal funds purchased and RPs 7.75 5.98 4.04 3.26 4.05 5.22 4.93 5.02 5.18 4.53 Other interest-bearing liabilities 17.27 11.20 10.40 11.16 10.87 9.80 8.86 9.13 8.85 8.61 Income and expense as a percentage of average net consolidated assets Gross interest income 10.37 8.77 7.69 7.22 6.37 6.42 6.26 6.31 6.21 6.01 Taxable equivalent 10.43 8.80 7.72 7.25 6.40 6.43 6.27 6.33 6.23 6.03 Loans 7.96 6.77 5.65 5.22 4.49 4.44 4.48 4.31 4.27 4.35 Securities .86 .84 .85 .86 .77 .75 .71 .73 .81 .85 Gross federal funds sold and reverse RPs .25 .17 .14 .11 .15 .21 .18 .45 .42 .30 Other 1.30 .98 1.05 1.04 .97 1.00 .88 .82 .70 .51 Gross interest expense 7.65 5.81 4.54 4.06 3.52 3.74 3.52 3.55 3.48 3.16 Deposits 5.41 4.23 3.09 2.48 2.15 2.43 2.26 2.26 2.20 1.97 Gross federal funds purchased and RPs .64 .43 .28 .24 .24 .35 .31 .54 .54 .40 Other 1.60 1.15 1.17 1.35 1.13 .95 .95 .75 .74 .79 Net interest income 2.72 2.96 3.15 3.16 2.86 2.68 2.73 2.76 2.73 2.84 Taxable equivalent 2.77 2.99 3.18 3.19 2.88 2.70 2.75 2.79 2.75 2.86 Loss provisioning5 .77 1.21 1.12 .64 .26 .11 .11 .16 .31 .26 Noninterest income 2.27 2.40 2.59 2.99 2.33 2.16 2.34 2.12 2.16 2.55 Service charges on deposits .23 .26 .30 .30 .26 .25 .28 .32 .33 .37 Income from fiduciary activities .31 .33 .37 .39 .36 .30 .31 .34 .32 .31 Trading income .52 .64 .66 .91 .53 .46 .52 .43 .34 .46 Interest rate exposures n.a. n.a. n.a. n.a. n.a. n.a. .30 .23 .10 .17 Foreign exchange exposures n.a. n.a. n.a. n.a. n.a. n.a. .17 .20 .22 .19 Equity, commodity, and other exposures n.a. n.a. n.a. n.a. n.a. n.a. .05 • .02 .09 Other 1.21 1.16 1.27 1.38 1.18 1.15 1.23 1.04 1.17 1.41 Noninterest expense 3.55 3.83 3.86 4.13 3.56 3.32 3.57 3.24 3.47 3.45 Salaries, wages, and employee benefits 1.74 1.79 1.78 1.88 1.65 1.58 1.57 1.45 1.45 1.57 Expenses of premises and fixed assets .65 .66 .65 .66 .55 .50 .50 .47 .47 .50 Other 1.16 1.38 1.43 1.59 1.36 1.24 1.50 1.33 1.54 1.38 Net noninterest expense 1.28 1.44 1.27 1.14 1.23 1.16 1.23 1.12 1.30 .90 Realized gains on investment account securities . .02 .04 .11 .13 .02 .03 .04 .08 .11 .03 Income before taxes and extraordinary items — .69 .34 .87 1.50 1.39 1.44 1.44 1.56 1.22 1.71 Taxes .27 .17 .26 .53 .48 .55 .52 .58 .44 .66 Extraordinary items .06 .03 * .16 * * * * • * Net income (return on assets) .48 .21 .61 1.13 .91 .88 .92 .98 .78 1.05 Cash dividends declared .26 .21 .18 .28 .58 .57 .70 .82 .53 .79 Retained income .21 * .43 .85 .33 .31 .21 .15 .25 .26 MEMO: Return on equity 10.13 4.23 10.91 16.75 13.86 13.78 13.21 13.22 10.53 13.58 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve. 2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss. 3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports. 4. Before 1997, data for large time open accounts are included in small-denomination time deposits. 5. Includes provisions for loan and lease losses and for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

390 Federal Reserve Bulletin • June 2000 A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1990-99 C. Banks ranked 11 through 100 by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Balance sheet items as percentage of average net consolidated assets Interest-earning assets 86.81 86.88 87.97 88.36 88.16 88.31 87.75 86.95 87.39 87.94 Loans and leases, net 61.22 60.08 58.30 57.33 58.56 62.68 64.24 63.89 64.42 64.29 Commercial and industrial 21.76 20.53 18.83 18.03 18.03 19.26 18.95 19.01 18.92 19.41 U.S. addressees 20.44 19.30 17.78 17.05 16.99 18.10 17.71 17.78 17.59 18.19 Foreign addressees 1.33 1.24 1.05 .98 1.04 1.16 1.24 1.22 1.33 1.22 Consumer 12.25 11.66 11.72 11.47 12.62 14.23 15.67 15.62 14.53 13.58 Credit card 5.48 5.04 5.16 5.23 5.99 7.34 8.26 8.50 7.67 6.79 Installment and other 6.76 6.62 6.56 6.24 6.63 6.89 7.40 7.12 6.86 6.79 Real estate 20.21 21.51 21.89 22.11 22.26 23.25 23.26 22.99 24.60 24.81 In domestic offices 20.04 21.37 21.78 22.01 22.17 23.10 23.10 22.85 24.42 24.63 Construction and land development 4.91 4.00 3.02 2.08 1.63 1.50 1.55 1.69 2.03 2.43 Farmland .12 .12 .14 .13 .14 .13 .13 .14 .17 .19 One- to four-family residential 8.53 10.17 11.36 12.30 12.98 14.16 14.15 13.88 14.86 14.16 Home equity 1.67 2.07 2.50 2.54 2.33 2.19 2.08 2.22 2.17 2.08 Other 6.86 8.10 8.85 9.76 10.65 11.97 12.07 11.65 12.69 12.07 Multifamily residential .46 .54 .66 .71 .71 .77 .89 .93 1.00 1.02 Nonfarm nonresidential 6.01 6.53 6.61 6.79 6.72 6.54 6.37 6.21 6.36 6.82 In foreign offices .18 .14 .11 .10 .09 .15 .16 .15 .18 .19 Depository institutions 1.57 1.58 1.43 1.30 1.49 1.59 1.50 1.27 1.06 .92 Foreign governments .52 .39 .33 .30 .28 .20 .20 .09 .06 .06 Agricultural production .28 .31 .31 .29 .29 .26 .28 .29 .33 .33 Other loans 4.82 4.55 4.28 4.05 3.47 3.32 3.30 3.21 3.38 3.01 Lease-financing receivables 1.67 1.53 1.49 1.47 1.60 1.96 2.41 2.70 2.75 3.32 LESS: Unearned income on loans -.26 -.22 -.17 -.11 -.07 -.07 -.06 -.05 -.04 -.04 LESS: Loss reserves1 -1.60 -1.76 -1.79 -1.60 -1.41 -1.32 -1.27 -1.24 -1.16 -1.11 Securities 16.19 17.38 20.38 21.97 21.19 18.64 16.87 15.80 16.67 17.78 Investment account 15.32 16.25 19.24 20.60 19.82 17.88 16.06 15.07 16.13 17.26 Debt 15.14 16.02 18.99 20.34 19.50 17.51 15.62 14.58 15.58 16.62 U.S. Treasury 3.42 3.78 5.88 7.05 6.85 4.82 3.34 2.81 2.25 1.70 U.S. government agency and corporation obligations 7.42 8.43 9.26 9.55 9.28 9.40 9.12 8.98 9.93 10.56 Government-backed mortgage pools ... 5.32 5.38 5.22 5.21 5.30 5.06 5.42 5.17 4.98 5.12 Collateralized mortgage obligations 1.56 2.48 3.54 3.71 3.07 2.82 2.16 2.13 2.83 2.87 Other .54 .57 .50 .63 .91 1.51 1.54 1.68 2.12 2.56 State and local government 2.03 1.63 1.46 1.31 1.21 1.11 .99 .88 .92 .99 Private mortgage-backed securities n.a. 1.09 1.05 1.06 .93 1.02 .96 .73 .96 1.34 Other 2.27 1.10 1.34 1.37 1.22 1.16 1.21 1.18 1.53 2.03 Equity .18 .22 .25 .26 .32 .37 .44 .49 .55 .65 Trading account .88 1.13 1.14 1.37 1.37 .76 .80 .73 .54 .51 Gross federal funds sold and reverse RPs 4.41 4.90 4.78 4.98 5.11 4.52 4.26 4.38 3.57 3.34 Interest-bearing balances at depositories 4.98 4.51 4.52 4.08 3.30 2.47 2.38 2.88 2.72 2.54 Non-interest-earning assets 13.19 13.12 12.03 11.64 11.84 11.69 12.25 13.05 12.61 12.06 Revaluation gains on off-balance-sheet items2 n.a. n.a. n.a. n.a. .57 .50 .51 .69 .75 .57 Other 13.19 13.12 12.03 11.64 11.28 11.18 11.75 12.36 11.86 11.49 Liabilities 94.35 93.93 93.13 92.56 92.47 92.23 92.02 91.85 91.63 91.65 • Interest-bearing liabilities 77.02 76.07 74.66 73.38 72.86 74.05 73.14 72.62 73.40 74.95 Deposits 57.46 59.24 56.99 54.22 53.03 52.32 51.81 51.47 51.51 51.51 In foreign offices 7.84 6.69 6.20 6.78 8.05 8.12 7.52 7.85 8.15 7.97 In domestic offices 49.62 52.54 50.79 47.43 44.98 44.20 44.30 43.62 43.36 43.54 Other checkable deposits 4.75 5.36 6.26 7.21 6.91 5.62 3.06 1.95 1.75 1.60 Savings (including MMDAs) 15.50 17.62 20.21 20.60 20.13 18.78 20.76 21.09 21.41 22.46 Small-denomination time deposits 15.59 17.99 15.98 14.19 13.26 14.24 14.09 13.43 12.84 11.85 Large-denomination time deposits 13.78 11.56 8.34 5.44 4.68 5.55 6.39 7.15 7.36 7.62 Gross federal funds purchased and RPs 13.03 10.94 11.45 11.93 11.48 11.37 10.00 9.36 9.48 9.78 Other 6.53 5.89 6.22 7.23 8.34 10.36 11.32 11.79 12.41 13.66 Non-interest-bearing liabilities 17.33 17.87 18.47 19.18 19.62 18.18 18.89 19.22 18.23 16.71 Demand deposits in domestic offices 13.23 13.76 14.52 15.38 15.27 14.26 14.47 14.17 12.40 10.52 Revaluation losses on off-balance-sheet items2 . n.a. n.a. n.a. n.a. .53 .49 .49 .68 .76 .58 Other 4.10 4.10 3.95 3.80 3.82 3.43 3.93 4.37 5.07 5.60 Capital account 5.65 6.07 6.87 7.44 7.53 7.77 7.98 8.15 8.37 8.35 MEMO Commercial real estate loans n.a. 11.83 11.09 10.29 9.69 9.42 9.38 9.44 10.11 11.00 Other real estate owned .46 .76 .70 .47 .25 .13 .08 .06 .04 .03 Managed liabilities 41.59 35.49 32.59 31.76 32.89 35.68 35.60 36.60 38.09 39.81 Average net consolidated assets (billions of dollars) 995 1,006 1,003 1,082 1,204 1,338 1,450 1,604 1,745 1,877 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 391 A.2.—Continued C. Banks ranked 11 through 100 by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Effective interest rate (percent)3 Rates earned Interest-earning assets 10.46 9.30 7.97 7.35 7.29 8.31 8.16 8.31 8.10 7.91 Taxable equivalent 10.55 9.39 8.07 7.45 7.37 8.37 8.23 8.36 8.17 7.94 Loans and leases, gross 11.09 9.96 8.75 8.25 8.22 9.10 8.87 9.03 8.82 8.56 Net of loss provisions 9.08 7.98 7.45 7.46 7.68 8.49 8.05 8.11 8.01 7.73 Securities 8.86 8.23 7.00 6.05 5.70 6.38 6.42 6.50 6.21 6.45 Taxable equivalent 9.18 8.57 7.30 6.32 5.92 6.56 6.66 6.70 6.46 6.55 Investment account 8.92 8.37 7.12 6.14 5.70 6.34 6.41 6.52 6.22 6.47 U.S. government and other debt 9.18 8.51 7.16 6.14 5.69 6.38 6.50 6.63 6.31 6.59 State and local 7.32 7.23 6.80 6.30 6.04 6.05 5.84 5.58 5.36 5.28 Equity 8.09 7.36 6.71 5.20 5.00 5.68 4.84 5.07 5.26 5.39 Trading account 8.01 6.46 4.73 4.74 5.75 7.27 6.53 6.05 5.86 5.63 Gross federal funds sold and reverse RPs 8.15 5.80 3.70 3.11 4.31 5.91 5.31 5.45 5.46 5.13 Interest-bearing balances at depositories 9.72 8.15 6.76 6.50 4.69 6.78 5.82 5.77 5.67 4.81 Rates paid Interest-bearing liabilities 7.96 6.41 4.43 3.76 3.72 4.94 4.70 4.79 4.76 4.42 Interest-bearing deposits 7.55 6.27 4.30 3.51 3.25 4.35 4.15 4.22 4.15 3.80 In foreign offices 10.08 8.39 7.26 7.37 4.60 6.30 5.29 5.23 5.22 4.71 In domestic offices 7.15 6.01 3.96 2.98 3.03 4.01 3.96 4.04 3.96 3.64 Other checkable deposits 4.67 4.21 2.43 1.70 1.62 1.89 1.78 2.01 2.41 2.06 Savings (including MMDAs) 6.07 5.04 3.07 2.33 2.46 3.10 2.91 2.84 2.76 2.51 Large-denomination time deposits4 8.11 6.77 5.10 4.30 4.21 5.70 5.50 5.47 5.32 5.01 Small-denomination time deposits4 8.09 6.96 5.07 4.06 4.18 5.35 5.26 5.43 5.35 5.09 Gross federal funds purchased and RPs 8.12 5.75 3.57 3.04 4.28 5.86 5.19 5.29 5.22 4.91 Other interest-bearing liabilities 9.27 6.55 5.77 5.97 5.24 6.43 5.95 5.85 5.81 5.44 Income and expense as a percentage of average net consolidated assets Gross interest income 9.31 8.24 7.12 6.58 6.46 7.40 7.24 7.26 7.16 7.05 Taxable equivalent 9.39 8.31 7.19 6.64 6.51 7.45 7.28 7.30 7.20 7.09 Loans 7.01 6.15 5.23 4.84 4.91 5.79 5.80 5.87 5.79 5.61 Securities 1.37 1.36 1.37 1.26 1.13 1.13 1.03 .98 1.00 1.12 Gross federal funds sold and reverse RPs — .38 .28 .18 .15 .21 .27 .23 .22 .19 .18 Other .56 .45 .34 .32 .21 .21 .18 .19 .18 .14 Gross interest expense 6.08 4.80 3.26 2.74 2.67 3.62 3.39 3.41 3.45 3.29 Deposits 4.36 3.75 2.48 1.93 1.73 2.29 2.18 2.23 2.23 2.04 Gross federal funds purchased and RPs 1.12 .67 .43 .38 .51 .67 .55 .51 .51 .51 Other .60 .38 .35 .43 .43 .66 .66 .68 .71 .74 Net interest income 3.23 3.43 3.86 3.84 3.79 3.78 3.84 3.85 3.71 3.76 Taxable equivalent 3.31 3.51 3.93 3.91 3.85 3.84 3.89 3.89 3.75 3.79 Loss provisioning5 1.27 1.22 .78 .47 .32 .39 .54 .60 .53 .54 Noninterest income 1.84 2.05 2.25 2.29 2.25 2.38 2.61 2.76 3.07 3.37 Service charges on deposits .34 .41 .44 .46 .45 .44 .44 .44 .42 .42 Income from fiduciary activities .33 .36 .38 .38 .39 .40 .43 .44 .49 .52 Trading income .08 .10 .09 .14 .08 .09 .08 .08 .09 .08 Interest rate exposures n.a. n.a. n.a. n.a. n.a. n.a. .03 .02 .03 .02 Foreign exchange exposures n.a. n.a. n.a. n.a. n.a. n.a. .04 .05 .06 .06 Equity, commodity, and other exposures n.a. n.a. n.a. n.a. n.a. n.a. .01 * * * Other 1.09 1.19 1.33 1.32 1.33 1.45 1.67 1.79 2.07 2.36 Noninterest expense 3.44 3.77 3.98 3.95 3.86 3.79 3.85 3.85 4.03 4.15 Salaries, wages, and employee benefits 1.47 1.52 1.53 1.52 1.50 1.47 1.51 1.51 1.53 1.54 Expenses of premises and fixed assets .50 .51 .49 .47 .47 .47 .48 .46 .46 .46 Other 1.48 1.74 1.95 1.95 1.89 1.85 1.86 1.88 2.04 2.15 Net noninterest expense 1.60 1.73 1.73 1.65 1.61 1.41 1.24 1.10 .96 .78 Realized gains on investment account securities . .03 .14 .15 .09 -.01 .02 .02 .02 .03 -.01 Income before taxes and extraordinary items — .38 .62 1.50 1.81 1.85 2.01 2.09 2.18 2.24 2.43 Taxes .15 .19 .48 .56 .63 .70 .75 .77 .79 .87 Extraordinary items .01 .03 .03 * * * * * * * Net income (return on assets) .24 .47 1.04 1.25 1.22 1.31 1.34 1.42 1.46 1.56 Cash dividends declared .38 .47 .46 .76 .86 .85 1.07 .93 .96 1.17 Retained income -.14 .58 .49 .36 .46 .26 .48 .50 .38 MEMO: Return on equity 4.18 7.71 15.16 16.86 16.27 16.84 16.78 17.36 17.38 18.63 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve. 2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss. 3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports. 4. Before 1997, data for large time open accounts are included in small-denomination time deposits. 5. Includes provisions for loan and lease losses and for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

392 Federal Reserve Bulletin • June 2000 A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1990-99 D. Banks ranked 101 through 1,000 by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 88.84 88.91 89.02 89.55 90.09 90.12 90.13 90.31 90.39 90.75 Loans and leases, net 63.09 61.03 58.49 57.94 59.75 62.18 62.63 62.21 61.12 61.50 Commercial and industrial 16.69 15.04 13.34 12.19 12.07 12.70 12.79 12.43 12.49 12.65 U.S. addressees 16.56 14.88 13.16 12.03 11.90 12.54 12.61 12.20 12.16 12.33 Foreign addressees .13 .16 .18 .16 .16 .16 .18 .23 .32 .32 Consumer 15.48 15.13 14.18 14.83 15.85 16.25 15.88 13.99 12.28 10.79 Credit card 5.22 5.74 5.37 5.63 6.06 6.30 6.66 5.48 4.48 3.37 Installment and other 10.26 9.39 8.80 9.20 9.79 9.95 9.22 8.51 7.80 7.42 Real estate 27.01 27.51 28.11 28.61 29.42 30.82 31.37 33.26 33.94 35.88 In domestic offices 26.99 27.47 28.07 28.59 29.39 30.80 31.35 33.23 33.91 35.86 Construction and land development 4.37 3.66 2.86 2.26 2.08 2.21 2.38 2.69 2.88 3.49 Farmland .28 .28 .32 .34 .36 .40 .46 .53 .56 .58 One- to four-family residential 12.49 13.22 14.26 15.17 16.24 17.49 17.34 18.16 18.18 18.23 Home equity 2.31 2.53 2.56 2.50 2.33 2.36 2.31 2.30 2.14 1.99 Other 10.18 10.69 11.69 12.67 13.91 15.13 15.04 15.85 16.04 16.24 Multifamily residential .73 .80 .96 1.07 1.13 1.21 1.29 1.29 1.26 1.43 Nonfarm nonresidential 9.11 9.50 9.69 9.75 9.57 9.48 9.88 10.57 11.03 12.12 In foreign offices .03 .05 .04 .02 .03 .02 .02 .02 .02 .02 Depository institutions 1.05 .93 .80 .43 .40 .35 .48 .57 .50 .44 Foreign governments .09 .07 .05 .03 .02 .02 .02 .02 .03 .03 Agricultural production .47 .49 .54 .56 .62 .69 .71 .74 .80 .78 Other loans 3.16 2.81 2.47 2.16 2.01 1.80 1.69 1.50 1.32 1.27 Lease-financing receivables .83 .85 .79 .77 .83 .90 1.01 .99 .99 .78 LESS: Unearned income on loans -.50 -.40 -.30 -.21 -.15 -.12 -.10 -.10 -.09 -.08 LESS: LOSS reserves1 -1.20 -1.42 -1.49 -1.44 -1.30 -1.22 -1.22 -1.18 -1.13 -1.06 Securities 19.34 21.28 24.13 25.92 25.71 23.09 22.67 23.47 24.26 25.16 Investment account 18.87 20.91 23.78 25.64 25.40 22.89 22.55 23.36 24.15 25.08 Debt 18.54 20.55 23.32 25.16 24.95 22.43 22.03 22.75 23.47 24.31 U.S. Treasury 5.44 6.16 7.75 8.64 8.26 6.49 5.61 4.95 3.92 2.53 U.S. government agency and corporation obligations 7.75 9.35 11.08 12.32 12.67 12.23 12.66 13.98 15.13 16.28 Government-backed mortgage pools ... 3.83 4.51 4.74 4.97 5.57 5.42 5.68 6.23 6.46 6.71 Collateralized mortgage obligations 1.72 2.73 3.95 4.82 4.39 3.56 3.12 3.02 3.23 3.52 Other 2.19 2.11 2.39 2.53 2.71 3.25 3.85 4.73 5.44 6.06 State and local government 3.11 2.65 2.27 2.26 2.29 2.13 2.24 2.45 2.70 2.91 Private mortgage-backed securities n.a. 1.16 1.01 .84 .75 .68 .76 .59 .65 1.00 Other 2.25 1.23 1.21 1.10 .99 .89 .77 .78 1.06 1.59 Equity .32 .37 .46 .48 .44 .47 .52 .61 .69 .77 Trading account .48 .36 .35 .28 .31 .20 .12 .10 .11 .08 Gross federal funds sold and reverse RPs 4.51 4.71 4.92 4.48 3.64 3.91 3.87 3.59 4.18 3.35 Interest-bearing balances at depositories 1.90 1.89 1.47 1.20 .98 .93 .96 1.03 .83 .75 Non-interest-earning assets 11.16 11.09 10.98 10.45 9.91 9.88 9.87 9.69 9.61 9.25 Revaluation gains on off-balance-sheet items2 ... n.a. n.a. n.a. n.a. .02 .05 .02 * * .01 Other 11.16 11.09 10.98 10.45 9.90 9.83 9.84 9.69 9.61 9.24 Liabilities 93.07 92.89 92.47 91.85 91.62 91.36 91.06 90.79 90.55 90.90 Interest-bearing liabilities 77.04 77.26 75.98 74.42 74.77 75.00 75.06 75.19 75.43 76.78 Deposits 65.05 66.35 65.65 63.05 60.38 59.69 59.99 61.51 62.41 61.97 In foreign offices 1.65 1.76 1.56 1.43 1.69 1.71 1.33 1.23 1.31 1.20 In domestic offices 63.40 64.59 64.09 61.62 58.69 57.97 58.66 60.28 61.10 60.77 Other checkable deposits 7.31 7.83 9.14 9.94 9.70 8.54 6.21 4.97 4.23 3.76 Savings (including MMDAs) 19.69 20.79 23.34 24.06 22.92 20.76 22.51 23.60 25.66 27.36 Small-denomination time deposits 24.09 25.22 23.56 20.77 19.29 21.12 21.61 22.05 21.21 19.62 Large-denomination time deposits 12.31 10.76 8.06 6.85 6.78 7.56 8.34 9.66 9.99 10.03 Gross federal funds purchased and RPs 8.43 7.46 7.17 7.43 8.45 8.31 8.19 7.08 6.16 6.91 Other 3.56 3.45 3.15 3.93 5.94 7.00 6.88 6.59 6.86 7.90 Non-interest-bearing liabilities 16.03 15.63 16.49 17.43 16.85 16.36 16.00 15.60 15.13 14.12 Demand deposits in domestic offices 14.07 13.56 14.39 15.07 14.58 14.07 13.84 13.16 11.91 10.20 Revaluation losses on off-balance-sheet items2 . n.a. n.a. n.a. n.a. .02 .05 .02 .01 .01 .01 Other 1.96 2.07 2.10 2.36 2.25 2.24 2.14 2.44 3.22 3.91 Capital account 6.93 7.11 7.53 8.15 8.38 8.64 8.94 9.21 9.45 9.10 MEMO Commercial real estate loans n.a. 14.63 13.91 13.37 13.05 13.20 13.84 14.79 15.38 17.28 Other real estate owned .52 .77 .80 .57 .28 .17 .13 .11 .09 .08 Managed liabilities 26.00 23.48 20.00 19.69 22.89 24.61 24.78 24.63 24.46 26.31 Average net consolidated assets (billions of dollars) 937 962 968 977 1,032 1,092 1,076 967 935 972 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 393 A.2.—Continued D. Banks ranked 101 through 1,000 by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Effective interest rate (percent)3 Rates earned Interest-earning assets 10.42 9.55 8.14 7.43 7.58 8.42 8.40 8.50 8.31 7.83 Taxable equivalent 10.57 9.70 8.25 7.55 7.68 8.51 8.49 8.59 8.43 7.92 Loans and leases, gross 11.21 10.43 9.11 8.57 8.64 9.43 9.38 9.48 9.36 8.75 Net of loss provisions 9.48 8.72 7.83 7.76 8.11 8.76 8.59 8.60 8.60 8.13 Securities 8.52 8.11 6.88 5.78 5.69 6.23 6.31 6.42 6.22 6.02 Taxable equivalent 9.00 8.54 7.19 6.10 5.93 6.49 6.59 6.69 6.57 6.29 Investment account 8.49 8.12 6.90 5.79 5.69 6.24 6.31 6.42 6.22 6.01 U.S. government and other debt 8.76 8.30 6.95 5.76 5.68 6.28 6.40 6.55 6.35 6.16 State and local 7.33 7.25 6.83 6.30 5.92 5.80 5.50 5.36 5.15 4.98 Equity 6.94 6.02 5.08 4.95 5.30 6.05 6.30 6.35 6.34 5.97 Trading account 9.92 7.19 5.61 4.74 5.29 5.55 5.94 6.37 6.84 7.18 Gross federal funds sold and reverse RPs 7.99 5.64 3.47 3.02 4.06 5.45 5.24 5.41 5.30 4.97 Interest-bearing balances at depositories 8.52 6.82 4.61 3.51 4.28 6.09 5.54 5.49 5.70 5.05 Rates paid Interest-bearing liabilities 7.26 6.11 4.19 3.33 3.57 4.64 4.57 4.66 4.59 4.19 Interest-bearing deposits 7.05 6.06 4.17 3.26 3.31 4.26 4.26 4.34 4.28 3.84 In foreign offices 8.12 6.38 4.25 3.35 4.31 5.94 5.43 5.42 5.54 5.07 In domestic offices 7.02 6.05 4.17 3.25 3.28 4.21 4.23 4.32 4.25 3.82 Other checkable deposits 4.75 4.28 2.67 2.02 1.87 2.02 1.96 2.17 2.15 1.98 Savings (including MMDAs) 5.98 5.14 3.33 2.58 2.64 3.24 3.11 3.08 2.96 2.65 Large-denomination time deposits4 8.04 6.64 4.76 3.90 4.23 5.62 5.47 5.56 5.50 5.17 Small-denomination time deposits4 8.03 7.08 5.35 4.40 4.40 5.53 5.57 5.57 5.64 5.11 Gross federal funds purchased and RPs 7.86 5.62 3.46 2.95 4.12 5.61 5.16 5.21 5.13 4.82 Other interest-bearing liabilities 8.28 6.78 5.28 4.44 4.92 6.27 5.89 6.12 6.00 5.37 Income and expense as a percentage of average net consolidated assets Gross interest income 9.38 8.64 7.36 6.75 6.90 7.68 7.67 7.76 7.63 7.19 Taxable equivalent 9.51 8.76 7.46 6.84 6.99 7.76 7.75 7.84 7.71 7.27 Loans 7.21 6.52 5.46 5.07 5.26 5.98 5.99 6.01 5.85 5.48 Securities 1.60 1.70 1.64 1.49 1.45 1.43 1.42 1.50 1.50 1.51 Gross federal funds sold and reverse RPs .36 .28 .17 .14 .14 .21 .20 .19 .22 .17 Other .20 .15 .08 .06 .06 .07 .06 .06 .05 .04 Gross interest expense 5.54 4.68 3.16 2.46 2.65 3.46 3.40 3.47 3.44 3.20 Deposits 4.58 4.03 2.75 2.07 2.01 2.56 2.57 2.70 2.71 2.44 Gross federal funds purchased and RPs .67 .42 .25 .22 .35 .46 .43 .37 .32 .34 Other .29 .23 .17 .17 .29 .44 .40 .40 .41 .42 Net interest income 3.83 3.96 4.19 4.28 4.25 4.23 4.27 4.29 4.19 3.99 Taxable equivalent 3.97 4.08 4.30 4.38 4.34 4.31 4.35 4.37 4.27 4.07 Loss provisioning5 1.12 1.07 .77 .47 .33 .43 .50 .56 .48 .39 1 Noninterest income 1.50 1.65 1.69 1.84 1.86 1.84 1.88 2.08 2.26 2.32 Service charges on deposits .37 .40 .44 .45 .42 .42 .42 .40 .39 .38 Income from fiduciary activities .26 .27 .28 .29 .28 .27 .28 .32 .37 .38 1 Trading income .02 .04 .02 .03 .02 .03 .02 .01 .02 .02 1 Interest rate exposures n.a. n.a. n.a. n.a. n.a. n.a. .01 .01 .01 .01 1 Foreign exchange exposures n.a. n.a. n.a. n.a. n.a. n.a. .01 * • * M Equity, commodity, and other exposures ... n.a. n.a. n.a. n.a. n.a. n.a. * * * * Other .84 .95 .95 1.08 1.14 1.12 1.16 1.34 1.48 1-54 8 Noninterest expense 3.50 3.77 3.87 3.92 3.78 3.68 3.68 3.73 3.86 3.70 1 Salaries, wages, and employee benefits 1.47 1.48 1.51 1.51 1.49 1.44 1.44 1.51 1.57 1.56 Expenses of premises and fixed assets .49 .49 .49 .48 .46 .45 .45 .46 .47 .47 Other 1.55 1.80 1.87 1.93 1.83 1.79 1.80 1.76 1.83 1.68 Net noninterest expense 2.01 2.12 2.18 2.08 1.92 1.84 1.81 1.65 1.61 1.39 Realized gains on investment account securities . .01 .09 .10 .06 -.05 -.01 .02 .02 .04 -.01 Income before taxes and extraordinary items .72 .86 1.35 1.78 1.96 1.96 1.98 2.10 2.15 2.21 Taxes .21 .29 .44 .61 .67 .67 .69 .73 .73 .75 Extraordinary items * -.07 * .04 * * * * .06 .01 J Net income (return on assets) .51 .49 .91 1.22 1.29 1.28 1.29 1.37 1.47 1.47 Cash dividends declared .53 .33 .49 .79 .81 .87 1.04 1.10 1.01 1.06 Retained income -.02 .16 .42 .43 .48 .41 .25 .28 .46 .41 I MEMO: Return on equity 7.37 6.93 12.13 14.93 15.40 14.82 14.45 14.93 15.56 16.19 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve. 2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss. 3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports. 3. Includes provisions for loan and lease losses and for allocated transfer risk. 4. Before 1997, data for large time open accounts are included in small-denomination time deposits. 5. Includes provisions for loan and lease losses and for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

394 Federal Reserve Bulletin • June 2000 A.2. Portfolio composition, interest rates, and income and expense, all U.S. banks, 1990-99 E. Banks not ranked among the 1,000 largest by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Balance sheet items as a percentage of average net consolidated assets Interest-earning assets 91.06 91.25 91.39 91.65 91.72 91.70 91.64 91.65 91.89 91.83 Loans and leases, net 54.74 54.05 53.03 52.94 54.64 56.62 57.37 58.77 59.12 59.74 Commercial and industrial 11.53 10.60 9.74 9.24 9.31 9.65 9.98 10.15 10.33 10.65 U.S. addressees 11.49 10.56 9.69 9.20 9.26 9.59 9.90 10.07 10.25 10.56 Foreign addressees .04 .04 .04 .04 .05 .06 .07 .08 .08 .08 Consumer 11.20 10.44 9.69 9.18 9.37 9.57 9.41 9.06 8.47 8.16 Credit card 1.00 1.02 1.00 .93 .96 1.04 1.03 .91 .70 .68 Installment and other 10.20 9.42 8.69 8.25 8.41 8.53 8.38 8.15 7.77 7.48 Real estate 28.35 29.34 30.15 31.09 32.19 33.54 34.10 35.51 36.04 36.79 In domestic offices 28.35 29.33 30.15 31.08 32.19 33.54 34.09 35.50 36.04 36.79 Construction and land development 2.37 2.18 1.98 1.93 2.14 2.38 2.61 2.82 3.01 3.28 Farmland 1.86 1.93 2.06 2.20 2.34 2.48 2.55 2.68 2.83 2.94 One- to four-family residential 15.37 16.00 16.44 16.81 16.95 17.45 17.47 18.15 18.05 17.64 Home equity 1.16 1.29 1.34 1.27 1.21 1.20 1.19 1.24 1.21 1.17 Other 14.21 14.71 15.10 15.54 15.73 16.25 16.28 16.91 16.84 16.47 Multifamily residential .66 .71 .77 .84 .93 .95 .92 .95 .93 .98 Nonfarm nonresidential 8.09 8.50 8.90 9.30 9.83 10.27 10.54 10.91 11.21 11.95 In foreign offices * * • * * * * • * * Depository institutions .23 .20 .13 .12 .13 .16 .17 .17 .12 .13 Foreign governments .01 .01 .01 .02 .01 * * • * .01 Agricultural production 3.30 3.48 3.55 3.58 3.89 3.95 3.93 4.05 4.27 4.04 Other loans 1.41 1.24 .99 .87 .81 .76 .72 .70 .69 .70 Lease-financing receivables .18 .17 .17 .18 .20 .22 .23 .25 .25 .27 LESS: Unearned income on loans -.58 -.51 -.43 -.36 -.31 -.30 -.27 -.24 -.20 -.15 LESS: Loss reserves' -.89 -.93 -.96 -.97 -.95 -.93 -.90 -.88 -.86 -.86 Securities 28.38 29.99 32.10 33.06 32.90 30.50 29.53 28.21 26.68 26.93 Investment account 28.28 29.94 32.04 33.00 32.86 30.46 29.50 28.18 26.65 26.90 Debt 27.92 29.56 31.60 32.55 32.42 30.01 29.01 27.65 26.11 26.36 U.S. Treasury 8.77 9.24 10.25 10.48 10.81 9.19 7.85 6.70 5.05 3.33 U.S. government agency and corporation obligations 12.43 13.82 15.04 15.80 15.35 15.12 15.67 15.55 15.42 16.92 Government-backed mortgage pools ... 4.58 5.59 5.52 5.38 4.81 4.19 4.21 4.00 3.90 3.95 Collateralized mortgage obligations .90 1.56 2.66 3.33 3.11 2.75 2.46 2.19 2.01 2.08 Other 6.93 6.68 6.85 7.09 7.43 8.18 9.00 9.37 9.51 10.89 State and local government 4.56 4.26 4.29 4.70 5.01 4.69 4.62 4.59 4.80 4.94 Private mortgage-backed securities n.a. .89 .77 .47 .27 .20 .18 .19 .16 .28 Other 2.15 1.34 1.26 1.10 .98 .81 .68 .61 .68 .89 Equity .36 .38 .44 .45 .44 .45 .49 .52 .54 .54 Trading account .10 .06 .05 .07 .04 .03 .03 .03 .03 .03 Gross federal funds sold and reverse RPs 6.13 5.64 5.10 4.69 3.42 3.92 4.05 3.96 5.12 4.16 Interest-bearing balances at depositories 1.81 1.57 1.16 .97 .77 .67 .69 .71 .96 1.00 Non-interest-earning assets 8.94 8.75 8.61 8.35 8.28 8.30 8.36 8.35 8.11 8.17 Revaluation gains on off-balance-sheet items2 ... n.a. n.a. n.a. n.a. * * * * * * Other 8.94 8.75 8.61 8.35 8.28 8.30 8.36 8.35 8.11 8.17 Liabilities 91.40 91.37 91.07 90.63 90.43 90.03 89.81 89.62 89.53 89.75 Interest-bearing liabilities 77.83 78.39 77.83 76.89 76.19 75.74 75.58 75.47 75.35 75.90 Deposits 75.79 76.40 75.75 74.53 73.14 72.68 72.47 71.99 71.76 71.34 In foreign offices .07 .08 .07 .08 .09 .11 .10 .09 .07 .08 In domestic offices 75.72 76.33 75.68 74.45 73.05 72.56 72.36 71.90 71.70 71.26 Other checkable deposits 10.45 10.99 12.33 13.15 13.31 12.37 11.75 11.37 11.17 11.03 Savings (including MMDAs) 18.73 19.35 22.10 23.55 23.23 20.40 19.56 18.98 19.01 19.71 Small-denomination time deposits 35.37 35.88 32.85 30.10 28.83 30.91 31.28 31.05 30.42 29.01 Large-denomination time deposits 11.17 10.11 8.40 7.65 7.68 8.88 9.77 10.49 11.10 11.51 Gross federal funds purchased and RPs 1.36 1.31 1.36 1.44 1.89 1.78 1.70 1.68 1.50 1.82 Other .67 .68 .72 .91 1.16 1.28 1.41 1.80 2.09 2.74 Non-interest-bearing liabilities 13.57 12.98 13.24 13.75 14.25 14.29 14.23 14.15 14.18 13.85 Demand deposits in domestic offices 12.37 11.84 12.23 12.82 13.34 13.22 13.13 13.09 13.08 12.80 Revaluation losses on off-balance-sheet items2 . n.a. n.a. n.a. n.a. * * * * * * Other 1.21 1.14 1.01 .93 .90 1.07 1.10 1.06 1.10 1.05 Capital account 8.60 8.63 8.93 9.37 9.57 9.97 10.19 10.38 10.47 10.25 MEMO Commercial real estate loans n.a. 11.74 11.84 12.22 13.02 13.71 14.18 14.78 15.25 16.32 Other real estate owned .61 .66 .65 .52 .35 .25 .20 .16 .13 .11 Managed liabilities 13.29 12.19 10.56 10.10 10.83 12.08 13.00 14.08 14.77 16.18 Average net consolidated assets (billions of dollars) 681 694 697 688 679 666 661 648 644 654 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Profits and Balance Sheet Developments at U.S. Commercial Banks in 1999 395 A.2.—Continued E. Banks not ranked among the 1,000 largest by assets Item 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Effective interest rate (percent)3 Rates earned Interest-earning assets 10.31 9.64 8.43 7.62 7.57 8.41 8.35 8.50 8.33 8.04 Taxable equivalent 10.52 9.82 8.59 7.78 7.72 8.56 8.49 8.63 8.49 8.18 Loans and leases, gross 11.60 11.02 9.83 9.14 9.00 9.85 9.74 9.81 9.70 9.29 Net of loss provisions 10.65 10.08 9.05 8.63 8.65 9.42 9.31 9.36 9.22 8.80 Securities 8.42 8.04 6.99 5.92 5.61 6.09 6.10 6.25 5.98 5.86 Taxable equivalent 8.99 8.53 7.40 6.33 5.99 6.49 6.52 6.65 6.47 6.29 Investment account 8.41 8.04 6.99 5.92 5.61 6.09 6.10 6.25 5.98 5.86 U.S. government and other debt 8.59 8.20 7.06 5.91 5.59 6.17 6.23 6.43 6.16 6.04 State and local 7.46 7.17 6.70 6.09 5.69 5.64 5.44 5.32 5.15 5.03 Equity 8.30 7.14 5.64 5.16 5.52 6.26 6.06 6.40 6.11 6.15 Trading account 12.13 8.41 7.14 4.83 6.03 6.12 6.48 6.60 4.61 4.04 Gross federal funds sold and reverse RPs 8.12 5.66 3.51 2.95 4.08 5.95 5.39 5.51 5.36 4.97 Interest-bearing balances at depositories 8.55 7.35 5.59 4.53 4.64 5.91 6.10 5.70 5.66 5.69 Rates paid Interest-bearing liabilities 7.02 6.17 4.44 3.54 3.49 4.47 4.49 4.61 4.60 4.28 Interest-bearing deposits 6.96 6.15 4.44 3.53 3.44 4.39 4.44 4.54 4.53 4.22 In foreign offices 7.57 5.95 3.97 2.91 3.92 5.73 11.43 4.77 5.08 4.34 In domestic offices 6.96 6.15 4.44 3.53 3.44 4.39 4.43 4.54 4.53 4.22 Other checkable deposits 5.02 4.61 3.14 2.42 2.29 2.50 2.41 2.46 2.45 2.28 Savings (including MMDAs) 5.73 5.18 3.62 2.91 2.83 3.32 3.24 3.37 3.39 3.21 Large-denomination time deposits4 7.92 6.72 4.90 3.96 4.12 5.55 5.49 5.53 5.54 5.22 Small-denomination time deposits4 7.88 6.98 5.36 4.39 4.28 5.51 5.59 5.67 5.64 5.25 Gross federal funds purchased and RPs 8.03 5.72 3.74 3.17 4.12 5.62 5.10 5.23 5.05 4.73 Other interest-bearing liabilities 7.84 7.06 5.01 4.64 4.98 6.87 5.84 6.15 6.44 5.52 Income and expense as a percentage of average net consolidated assets Gross interest income 9.51 8.91 7.79 7.05 7.01 7.80 7.75 7.89 7.74 7.45 Taxable equivalent 9.68 9.06 7.94 7.19 7.15 7.93 7.87 8.01 7.86 7.57 Loans 6.44 6.04 5.30 4.91 4.98 5.66 5.67 5.85 5.80 5.59 Securities 2.38 2.41 2.24 1.95 1.84 1.86 1.80 1.76 1.59 1.58 Gross federal funds sold and reverse RPs .53 .34 .18 .14 .15 .25 .24 .24 .29 .22 Other .17 .12 .07 .05 .04 .04 .04 .04 .05 .06 Gross interest expense 5.44 4.82 3.45 2.72 2.65 3.38 3.38 3.47 3.46 3.24 Deposits 5.28 4.70 3.36 2.63 2.52 3.19 3.22 3.28 3.25 3.01 Gross federal funds purchased and RPs .11 .07 .05 .04 .07 .10 .08 .08 .07 .08 Other .05 .05 .04 .04 .06 .09 .08 .11 .13 .15 I Net interest income 4.07 4.09 4.34 4.33 4.36 4.42 4.37 4.41 4.28 4.21 1 Taxable equivalent 4.24 4.24 4.49 4.48 4.50 4.55 4.49 4.54 4.40 4.33 Loss provisioning5 .53 .51 .42 .27 .19 .25 .25 .27 .29 .30 Noninterest income 1.01 1.07 1.16 1.25 1.30 1.38 1.42 1.44 1.52 1.43 1 Service charges on deposits .42 .44 .45 .45 .44 .44 .44 .44 .42 .42 I Income from fiduciary activities .14 .14 .16 .16 .17 .22 .20 .20 .23 .26 Trading income .01 .01 .01 .01 * .01 * * * * 1 Interest rate exposures n.a. n.a. n.a. n.a. n.a. n.a. * » * * Foreign exchange exposures n.a. n.a. n.a. n.a. n.a. n.a. * * * * Equity, commodity, and other exposures ... n.a. n.a. n.a. n.a. n.a. n.a. * * * * Other .44 .49 .55 .64 .69 .71 .78 .79 .86 .75 Noninterest expense 3.49 3.59 3.67 3.74 3.78 3.81 3.70 3.70 3.74 3.71 Salaries, wages, and employee benefits 1.64 1.64 1.69 1.72 1.75 1.80 1.77 1.80 1.82 1.81 Expenses of premises and fixed assets .49 .49 .49 .48 .49 .50 .49 .49 .49 .49 Other 1.36 1.46 1.49 1.53 1.55 1.51 1.44 1.41 1.43 1.41 Net noninterest expense 2.48 2.52 2.51 2.48 2.48 2.43 2.28 2.27 2.22 2.28 Realized gains on investment account securities . * .06 .09 .07 -.03 * .01 .01 .02 * Income before taxes and extraordinary items 1.06 1.11 1.50 1.64 1.66 1.75 1.85 1.89 1.79 1.63 Taxes .34 .35 .47 .51 .51 .55 .59 .59 .53 .47 Extraordinary items .02 .19 .02 .05 * * * * * * Net income (return on assets) .74 .95 1.04 1.19 1.15 1.20 1.26 1.30 1.26 1.17 Cash dividends declared .49 .89 .50 .56 .57 .62 .64 .73 .83 .67 Retained income .25 .06 .54 .63 .58 .58 .62 .57 .43 .49 MEMO: Return on equity 8.61 11.05 11.64 12.65 12.05 12.05 12.33 12.54 12.01 11.39 * In absolute value, less than 0.005 percent. n.a. Not available. MMDA Money market deposit account. RP Repurchase agreement. CD Certificate of deposit. 1. Includes the allowance for loan and lease losses and the allocated transfer risk reserve. 2. Before 1994, the netted value of off-balance-sheet items appeared in "trading account securities" if a gain and "other non-interest-bearing liabilities" if a loss. 3. When possible, based on the average of quarterly balance sheet data reported on schedule RC-K of the quarterly Call Reports. 4. Before 1997, data for large time open accounts are included in small-denomination time deposits. 5. Includes provisions for loan and lease losses and for allocated transfer risk. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

396 Treasury and Federal Reserve Foreign Exchange Operations This report, presented by Peter R. Fisher, Execu- 2. Yield implied by the June eurodollar contract, 2000:Q1 tive Vice President, Federal Reserve Bank of New Percent York, and Manager, System Open Market Account, describes the foreign exchange operations of the U.S. Department of the Treasury and the Federal Reserve System for the period from January 2000 through — /S~ 61 March 2000. Laura Sarlo was primarily responsible for preparation of the report. — A^ J — 6.6 During the first quarter of 2000, the dollar appreci- — 6.5 ated 5.4 percent against the euro and 0.4 percent against the yen. U.S. monetary authorities did not 1 1 1 1 intervene in the foreign exchange markets during the Jan. Feb. Mar. quarter. 2000 SOURCE. Bloomberg L.R MODEST APPRECIATION OF THE DOLLAR the February 25 release of the fourth-quarter growth On a trade-weighted basis, the dollar appreciated rate for gross domestic product of 6.9 percent, yearmodestly, rising 2.6 percent, with most of this appre- on-year (revised March 30 to 7.3 percent, year-onciation occurring relative to the European trading year) and the March 7 release of the fourth-quarter partners of the United States. The currency was sup- growth rate for productivity of 6.4 percent, year-onported by the ongoing strength in the U.S. economy year. Meanwhile, the unemployment rate held near and the perception that productivity growth was con- the January low of 4.0 percent, year-on-year. The tinuing. This view of the economy was solidified by resilience of U.S. asset markets, despite volatility in equities and bonds, also appeared to support the dollar. 1. The trade-weighted dollar against major currencies, 2000: Q1 Indications of continued strong economic activity supported market expectations for a gradual series Index, March 1973 = 100 of rate increases by the Federal Reserve, and the implied yield of the June eurodollar contract rose 18 basis points, to 6.65 percent. The Federal Open — — 98 Market Committee (FOMC) raised its target for the federal funds rate 25 basis points on both February 2 — 96 and March 21, moving it from 5.50 to 6.00 percent. — — 94 — 92 WEAKENING OF THE EURO AGAINST THE DOLLAR AND THE YEN i 1 1 Jan. Feb. Mar. The euro depreciated against the dollar, reaching an 2000 intraday low of $0.9390 on February 28 and lingering NOTE. In this and the charts that follow, the data are for business days except below $1.00 for much of the quarter, despite a brief as noted. Includes currencies of Australia, Canada, Japan, Sweden, Switzerland, the rally during the third week of February. The euro's United Kingdom, and the euro-11 countries. depreciation was relatively broad based, falling 5.2, SOURCE. Federal Reserve Board of Governors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

397 4.8, and 3.6 percent against the dollar, yen, and while many investors perceived progress on the issue British pound, respectively, as investors reportedly of tax reform, labor market rigidities in several continued to diversify portfolios away from the euro nations continued to concern market participants. area. The euro-yen exchange rate was particularly More broadly, political tension within the European volatile, as the euro depreciated more than 11 percent Union after the formation of a new government in against the yen from late February through the end Austria and concerns about the implications of Euroof March, when the exchange rate closed below pean Union expansion were also seen as negatively ¥100 per euro for the first time. affecting the euro. Several factors contributed to the weakness of the euro, including continued expectations that euro-area economic growth would lag that of other parts of the REEMERGENCE OF YEN STRENGTH world, continued cross-border investment flows out The yen depreciated during the first half of the quarof the euro area, and market participants' concerns ter and appreciated during the second half, ending the over foreign exchange policy and the pace of euroquarter on net 0.4 percent weaker against the dollar area structural reform. These factors seemed to and 5.1 percent stronger against the euro. The Japaprompt longer-term investors to scale back long-held nese monetary authorities publicly confirmed the offieuro positions during the first quarter of 2000 after cial selling of yen on several occasions. a portfolio and direct investment outflow of €168.6 billion in 1999.1 The yen weakened during the first seven weeks of the year, breaching ¥111 and ¥109 against the The persistent growth differential between the U.S. dollar and the euro respectively. Market participants and euro-area economies continued to weigh on the reportedly sold yen to establish short positions, as euro, and the March 9 announcement of euro-area comments by Japanese officials contributed to the GDP growth of 3.1 percent, year-on-year disapmarket's growing perception that fourth-quarter ecopointed many market participants. Although the prenomic data might indicate a second consecutive quarmium for ten-year U.S. Treasury securities over Gerter of negative year-on-year growth. Market concern man government securities narrowed 31 basis points that the Group of Seven (G-7), at its January meeting, during the quarter, the euro failed to benefit. Shortermight address the yen's longer-term appreciation term interest rate differentials were relatively steady, trend may also have dampened the currency's appreas investors continued to anticipate a similar amount ciation early in the quarter. The G-7 statement also of tightening by the European Central Bank (ECB) reduced market expectations for any near-term and the FOMC. The ECB increased its main refinancincrease in Japanese rates. Postponement of a banking rate 50 basis points to 3.50 percent in two quartering reform measure to institute a cap on deposit point steps on February 3 and March 16. insurance and the proposal of a tax on Japanese banks In addition, market uncertainty over the course of located in Tokyo also reportedly contributed to the structural reform may have pressured the euro lower; yen's depreciation. Some traders noted that a Moody's announcement on February 17 of a review and possible downgrade of Japan's domestic- 1. SOURCE. European Central Bank. 3. The euro against the dollar and the yen, 2000: Q1 4. The dollar against the yen, 2000:Q1 Dollars per euro Yen per euro Yen per dollar — — 110 — — 108 — \ A/ V 106 I 104 — 102 1 1 1 1 Jan. Feb. Mar. Jan. Feb. Mar. 2000 2000 SOURCE. Bloomberg L.P. SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

398 Federal Reserve Bulletin • June 2000 5. Foreign inflows into Japanese equities, 2000:Q1 Billions of yen Capital inflow ^ ^ N i k k e. 225 iHii.iutHm mr^niiiiiiii * 1 i mum urn 100 f _ \ 200 95 Jan. Feb. Mar. 2000 NOTE. Capital inflows are weekly data. SOURCE. Federal Reserve Board of Governors. currency credit rating further weighed on sentiment Nikkei and the technology-laden JASDAQ rose 7.4 toward the yen. and 12.0 percent, respectively, during the period. From February 22 through the end of the quarter, According to some market sources, the yen's however, the yen strengthened by as much as 7.9 and appreciation in mid-to-late February generated losses 13.2 percent against the dollar and the euro respec- on the significant short yen positions established tively. Although a release on March 12 indicated that in February and prompted investors to rapidly scale Japanese GDP had declined 1.4 percent year-on-year back such holdings by purchasing yen. Reported during the fourth quarter, stronger-than-expected data repatriation transactions and expectations for such on capital spending and machinery orders gave rise to flows also boosted the yen against other currencies, some market optimism about the prospects for Japa- as Japanese investors reduced foreign holdings ahead nese economic recovery. Reallocation of portfolio of the March 31 Japanese fiscal year-end. Throughout investments in favor of Japanese assets also appeared the period, however, many participants remained to support the yen against both the dollar and the wary of the possibility of further Japanese interveneuro. According to Japan's Ministry of Finance, for- tion. In anticipation of Japanese capital outflows eign investors purchased ¥1.17 trillion in Japanese after the fiscal year-end, some market participants stocks through the end of February, compared with established long euro positions against the yen dur- ¥667 billion during the first two months of 1999. ing the final week of the quarter. However, the Japanese equity markets continued to attract inflows, yen's continued appreciation prompted investors helping the Nikkei close above 20,000 on February 9 to cut back these positions, contributing to the yen's for the first time since July 1997. Although foreign 3.2 percent strengthening against the euro and the inflows diminished from mid-March, there were net breaking of the ¥100-per-euro level during the final equity inflows of ¥800.4 billion on the quarter. The day of the quarter. Foreign exchange markets were volatile over the 6. Volatility implied by one-month option prices, 2000:Q1 period and volatility implied by currency options fluctuated. At the beginning of the quarter, the Percent implied volatility of one-month options declined as Euro-yen trading conditions returned to normal following the uneventful year-end. Later in the period, market parrt 18 ticipants reported that uncertainty over the near-term — T 16 direction of the euro and the course of the yen ahead of the Japanese fiscal year-end contributed to ele- / 14 vated volatility levels. 12 Dollar-yen yf Euro-dollar — 10 TREASURY AND FEDERAL RESERVE FOREIGN 1 1 i EXCHANGE OPERATIONS Jan. Feb. Mar. 2000 The U.S. monetary authorities did not undertake any intervention operations during the quarter. At the end SOURCE. Reuters. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 399 of the quarter, the current values of euro and Japanese directly or under repurchase agreement. Government yen reserve holdings totaled $15.8 billion for the securities held under repurchase agreement are Federal Reserve System and $15.8 billion for the arranged either through transactions executed directly Treasury's Exchange Stabilization Fund. The U.S. in the market or through agreements with official monetary authorities invest all of their foreign cur- institutions. Foreign currency reserves are also rency balances in a variety of instruments that yield invested in deposits at the Bank for International market-related rates of return and have a high degree Settlements and in facilities at other official instituof liquidity and credit quality. To the greatest extent tions. As of March 31, direct holdings of foreign practicable, these investments are split evenly government securities totaled $8.6 billion, split between the Federal Reserve System and the evenly between the two authorities. Foreign govern- Exchange Stabilization Fund. ment securities held under repurchase agreement A significant portion of the balances is invested totaled $13.6 billion at the end of the quarter and in German and Japanese government securities held were also split evenly between the two authorities. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

400 Federal Reserve Bulletin • June 2000 1. Foreign currency holdings of U.S. monetary authorities based on current exchange rates, 2000:Q1 Millions of dollars Quarterly changes in balances, by source BBaallaannccee,, BBaallaannccee,, IItteemm DDeecc.. 3311,, 11999999 Net purchases Effect of Investment Currency MMaarr.. 3311,, 22000000 and sales' sales2 income ad v j a u l s u t a m ti e o n n t s3 FEDERAL RESERVE SYSTEM OPEN MARKET ACCOUNT (SOMA) Euro 6,870.6 0.0 0.0 67.8 -341.1 6,597.4 Japanese yen 9,221.5 0.0 0.0 1.0 -51.1 9,171.4 Total 16,092.1 0.0 0.0 68.8 -392.2 15,768.7 Interest receivables4 48.0 34.3 Total 16,140.1 15,803.0 U.S. TREASURY EXCHANGE STABILIZATION FUND (ESF) Euro 6,868.5 0.0 0.0 67.0 -340.9 6,594.5 Japanese yen 9,221.5 0.0 0.0 1.0 -51.1 9,171.4 Total 16,090.0 0.0 0.0 68.0 -392.0 15,765.9 Interest receivables4 78.6 59.8 Total 16,168.6 15,819.8 NOTE. Figures may not sum to totals because of rounding. 3. Foreign currency balances are marked to market monthly at month-end 1. Purchases and sales for the purpose of this table include foreign cur- exchange rates. rency sales and purchases related to official activity, swap drawings and repay- 4. Interest receivables for the ESF are revalued at month-end exchange rates. ments, and warehousing. Interest receivables for the Federal Reserve System are carried at average cost 2. This figure is calculated using marked-to-market exchange rates; it of acquisition and are not marked to market until interest is paid. represents the difference between the sale exchange rate and the most recent . . . Not applicable. revaluation exchange rate. Realized profits and losses on sales of foreign currencies, computed as the difference between the historical cost-of-acquisition exchange rate and the sale exchange rate, are reflected in table 2. 2. Net profits or losses (-) on U.S. Treasury 3. Federal Reserve reciprocal currency arrangements, and Federal Reserve foreign exchange operations, March 31, 2000 based on historical cost-of-acquisition exchange rates, Millions of dollars 2000:Q1 Amount of Outstanding, Millions of dollars Institution facility Mar. 31, 2000 Federal U.S. Treasury Federal Reserve Period and item Reserve Exchange reciprocal currency System Open Stabilization arrangements Market Account Fund 2222,,,,000000000000 0000....0000 Valuation profits and losses on 3333,,,,000000000000 0000....0000 outstanding assets and liabilities, Dec. 31, 1999 Total 5555,,,,000000000000 0000....0000 Euro -510.0 -726.9 Japanese yen 2,178.1 2,390.2 U.S. Treasury Exchange Stabilization Fund Total 1,668.1 1,663.3 currency arrangements Realized profits and losses from foreign currency sales, BBBaaannnkkk ooofff MMMeeexxxiiicccooo 333,,,000000000 000...000 Dec. 31, 1999-Mar. 31, 2000 Euro 0.0 0.0 Total 333,,,000000000 000...000 Japanese yen 0.0 0.0 Total 0.0 0.0 Valuation profits and losses on outstanding assets and liabilities, Mar. 31. 2000 Euro -851.1 -1,067.8 Japanese yen 2,126.9 2,339.1 Total 1,275.8 1,271.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

401 Industrial Production and Capacity Utilization for April 2000 Released for publication May 15 cent higher than in April 1999. The rate of capacity utilization for total industry rose 0.4 percentage point, Industrial production increased 0.9 percent in April to 82.1 percent, a level about even with the average after an upward-revised increase of 0.7 percent in for 1967 to 1999. March. Manufacturing output increased 0.8 percent, with most major industries posting gains. The output MARKET GROUPS of utilities rebounded 2.8 percent, while output for mining rose 0.4 percent. At 143.7 percent of its 1992 The output of consumer goods, which had been flat average, industrial production in April was 6.1 per- during February and March, increased 0.6 percent in Industrial production and capacity utilization Ratio scale, 1992= 100 Percent of capacity — Industrial production 150 Capacity utilization 140 85 Manufacturing 130 A/Mi Total industry A 120 Total industry 110 V Manufacturing V V^—' — 80 100 J I I I I I I I I L 1 1 1 1 1 1 1 1 1 1 1 1 1 1990 1992 1994 1996 1998 2000 1988 1990 1992 1994 1996 1998 2000 Industrial production, market groups Ratio scale, 1992 = 100 Ratio scale, 1992 = 100 sjjf - Consumer goods 155 Intermediate products - 155 - 145 - - 145 — Durable v 135 - 135 _ v j 125 _ 175 Construction supplies — f - 115 — -A. _ 115 105 105 tyftt*^ Business supplies ^^^[""""^l/Vy Nondurable 95 95 i V i i i i i i i i i 1 1 1 1 1 1 1 1 1 1 1 Ratio scale, 1992 = 100 Ratio scale, 1992 = 100 Equipment Business jf - Nondurable goods and energy Defense and space 1 1 1 1 1 1 1 1 1 1 I J I I I I L 1990 1992 1994 1996 1998 2000 1990 1992 1994 1996 1998 2000 All series are seasonally adjusted. Latest series, April. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

402 Federal Reserve Bulletin • June 2000 Industrial production and capacity utilization, April 2000 Industrial production, index, 1992= 100 Percentage change CCaatteeggoorryy 22000000 20001 AApprr.. 11999999 ttoo Jan.r Feb.r Mar.r Apr.P Jan.r Feb/ Mar/ Apr.P AApprr.. 22000000 Total 141.1 141.4 142.4 143.7 .7 6.1 Previous estimate 141.5 141.6 142.0 1.0 Major market groups Products, total2 129.7 129.9 130.4 131.3 .9 .2 .4 .7 4.1 Consumer goods 118.8 118.8 118.9 119.6 .6 .0 .0 .6 2.7 Business equipment 179.4 180.2 182.4 184.9 2.2 .5 1.3 1.3 9.1 Construction supplies 136.4 137.1 137.6 137.5 1.1 .5 .4 -.1 4.7 Materials 160.5 160.7 162.8 164.8 .5 .1 1.3 1.2 9.3 Major industry groups Manufacturing 146.7 147.0 148.3 149.5 .8 .2 .9 .8 6.6 Durable 181.0 181.5 184.0 186.1 1.5 .2 1.4 1.2 9.9 Nondurable 113.5 113.7 113.9 114.3 -.2 .1 .2 .3 2.5 Mining 99.7 99.3 100.3 100.7 .2 -.5 1.0 .4 4.1 Utilities 114.6 115.0 112.9 116.0 .9 .4 -1.8 2.8 -.2 Capacity utilization, percent MEMO Capacity, cceennttaaggee 1999 2000 cchhaannggee,, Average, Low, High, AApprr.. 11999999 1967-99 1982 1988-89 ttoo Apr. Jan/ Feb/ Mar/ Apr.P AApprr.. 22000000 Total 82.0 71.1 85.4 80.4 81.4 81.3 81.7 82.1 3.8 Previous estimate 81.6 81.5 81.4 Manufacturing 81.1 69.0 85.7 79.5 80.7 80.6 81.0 81.4 4.2 Advanced processing 80.5 70.4 84.2 78.5 79.7 79.6 80.1 80.4 5.2 Primary processing . 82.4 66.2 88.9 82.6 83.9 83.5 84.0 84.3 1.9 Mining 87.3 80.3 88.0 80.4 83.1 82.9 83.8 84.2 -.7 Utilities 87.5 75.9 92.6 91.4 89.2 89.4 87.7 90.1 1.3 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. April. The output of durable consumer goods, which equipment was up 0.7 percent, with increases wideincreased 1.4 percent, was boosted by a further spread among the component series. The production rebound in the production of automotive products index for the "other equipment" category rose since the dip in February. The production of other 3.9 percent, after having risen 3.4 percent in March; durable consumer goods increased 0.6 percent, a rate the recent surge in the output of this industry group about in line with the average for the previous three reflects the continued recovery in the production of months; ongoing strength in the production of video farm machinery and equipment after a significant and audio equipment and computers more than offset contraction during the middle of 1999. The output of a 3.9 percent fall in the output of appliances. The transit equipment edged up 0.2 percent, as a rebound production of nondurable consumer goods rose in assemblies of light vehicles more than offset 0.4 percent and was led by a sharp rebound in the declines in the production of medium and heavy output of energy products; the output of nondurable trucks and of commercial aircraft and equipment. non-energy consumer products rose 0.2 percent after The production of construction supplies, which having edged down in March. increased an average of 0.7 percent per month in the The production of business equipment rose 1.3 per- first quarter, edged down 0.1 percent in April but cent in March and again in April, a rate close to the remained more than 4'/2 percent above its level a year average pace over the January-February period. The ago. The output of materials gained 1.2 percent in production of information processing and related April. The output of durable goods materials rose equipment increased 1.6 percent in April, led by 1.3 percent, with another strong increase in equipcontinued gains in the output of computers and com- ment parts, particularly semiconductors. The output munication equipment. The output of industrial of energy materials rose 1.4 percent, while the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 403 production of nondurable goods materials gained After having changed little in the first quarter, 0.7 percent. production in nondurable manufacturing increased 0.3 percent in April to a level V-h percent higher than in April 1999. Among nondurable manufactur- INDUSTRY GROUPS ing industries, the only substantial output decline Manufacturing output rose 0.8 percent in April; most occurred in the petroleum products industry. major industries posted gains. Production in durable The factory operating rate rose to 81.4 percent manufacturing industries increased 1.2 percent after in April, rising above its 1967-99 average for the a 1.4 percent increase in March. The production of first time since May 1998. Utilization in primary electrical machinery rose 2 percent, led by a 3 per- processing industries increased to 84.3 percent, while cent gain in the output of semiconductors and related that for advanced-processing industries advanced to equipment; semiconductor output increased about 80.4 percent. 5Vi percent per month during the first quarter. The Output at utilities, which had fallen back 1.8 perproduction of industrial machinery and equipment cent in March, was up 2.8 percent in April; the (which includes computers) increased IV2 percent operating rate at utilities rose to 90.1 percent. Producin April, a rate about equaling the average pace in tion at mines increased 0.4 percent after having risen the preceding two months. In contrast, the output of 1 percent in March. The utilization rate at mines aircraft and parts continued to decline, in part because increased to 84.2 percent but remained noticeably of a strike at a producer of military aircraft. below its long-term average. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

404 Statements to the Congress Statement by Patrick M. Parkinson, Associate Direc- constrain excessive leverage in the financial system tor, Division of Research and Statistics, Board of by making private market discipline more effective. Governors of the Federal Reserve System, before the The leverage of hedge funds is constrained prima- Committee on Banking and Financial Services, U.S. rily by the credit decisions of the large banks and House of Representatives, April 11, 2000 securities firms that are their creditors and counterparties. It is of the greatest importance that those I am pleased to be here today to discuss efforts to creditors and counterparties have timely and accurate implement recommendations contained in the reports information on the risk profiles of hedge funds, so on hedge funds and over-the-counter (OTC) deriva- that they can make appropriate decisions about the tives submitted to the Congress last year by the amounts and terms and conditions of the credit that President's Working Group on Financial Markets. they provide. Your letter of invitation requested that the Board's Given the speed with which the risk profiles of testimony focus on three issues: (1) financial netting hedge funds can change, quarterly public disclosures legislation; (2) public disclosure requirements for would not meet the needs of creditors and counterparhedge funds; and (3) the regulation of OTC deriva- ties. Nonetheless, it would be useful to policymakers tives transactions, including the Board's views on the and to the general public. Evaluations of the role of bill that Chairman Leach has recently introduced. hedge funds in our financial system and of appropriate public policies toward these institutions have been hampered by a lack of reliable data on their activities. FINANCIAL NETTING LEGISLATION The Board has been following the progress of Representative Richard Baker's Hedge Fund Disclo- The Board strongly supports the Working Group's sure Act. The Board had been concerned about provirecommendations for amendments to the U.S. Banksions of an earlier version of the bill that would have ruptcy Code to support financial contract netting. It permitted collection and sequestration of proprietary commends this committee's efforts to enact those information on hedge funds' strategies and positions. amendments. Enactment of H.R. 1161, the bill pend- Such provisions could have created the perception ing before this committee, would reduce uncertainty that hedge funds were subject to prudential oversight, for market participants about the disposition of their even though the bill provided no explicit authority for financial market contracts if one of the counterparties such oversight. Such a perception would be fraught becomes insolvent. This reduced uncertainty should with moral hazard that would weaken market discilimit market disruptions in the event of an insolpline, contrary to the Working Group's goal in recvency, limit risk to federally supervised market parommending public disclosure. ticipants, including insured depositories, and limit The Board welcomed the manager's amendments systemic risk. to the earlier bill that deleted these troublesome provisions and thereby made clear that public disclosure, not prudential oversight, is the objective of the legis- PUBLIC DISCLOSURE BY HEDGE FUNDS lation. The Board supports the substantive provisions of the amended bill and commends this committee The Board also supports the Working Group's rec- for its efforts to move this legislation forward. In the Board's judgment, however, the bill could be further ommendation that the very largest hedge funds be improved by an amendment providing that the inforrequired to publicly disclose information about their mation be collected and disseminated by the Securifinancial activities, including meaningful and comties and Exchange Commission (SEC) instead of the prehensive measures of market risk, but excluding Board. Because of the SEC's broader responsibilities proprietary information on their strategies or posifor public disclosure, such an amendment would tions. The recommendation is one of a larger set of underscore the purpose of the legislation. recommendations by the Working Group intended to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

405 REGULATION OF OTC DERIVATIVES derivatives would blur some of the distinctions between OTC derivatives and exchange-traded The Board strongly supports modernizing the Com- futures and that this would aggravate existing conmodity Exchange Act (CEA) by implementing the cerns about regulatory disparities and resulting comrecommendations contained in the Working Group's petitive imbalances between the OTC markets and November 1999 report. The primary focus of the the exchanges. Consequently, the Working Group Working Group's report was on OTC derivatives. called for a review of the existing regulatory structure OTC derivatives have come to play an extremely for futures, particularly financial futures, to deterimportant role in our financial system and in our mine whether it is appropriately tailored to serve economy. In light of this, it is essential that we valid regulatory goals. Furthermore, the Working address the legal uncertainties created by the possibil- Group stated that enactment of its recommendations ity that courts could construe OTC derivatives to be with respect to OTC derivatives should be accompafutures contracts subject to the CEA. These legal nied by explicit authority for the CFTC to provide uncertainties create risks to counterparties and, appropriate regulatory relief for exchange-traded indeed, to our financial system that simply are unac- futures. The report also concluded that the current ceptable. They have also impeded initiatives to cen- prohibition on single-stock futures can be repealed if tralize the trading and clearing of OTC contracts, issues about the integrity of the underlying securities developments that have the potential to increase effi- markets are addressed. ciency and reduce risks in OTC transactions. The Working Group had envisioned that these rec- To address these concerns, the Working Group ommendations would be implemented through recommended that financial OTC derivatives trans- amendments to the CEA. Chairman Leach recently actions between professional counterparties be introduced a bill that takes a different approach to excluded from coverage of the CEA. Furthermore, it implementing some, but not all, of the Working recommended that such transactions between such Group's recommendations. The bill also includes procounterparties should be excluded even if they were visions that would enhance the Federal Reserve's executed through electronic trading systems. Finally, authority to oversee clearing organizations that seek the Working Group recommended that transactions to organize as uninsured state member banks and that were otherwise excluded from the CEA should would clarify the treatment of such clearing organizanot fall within the ambit of the act simply because tions in bankruptcy. they are cleared. While the Working Group con- The Board appreciates the efforts of this committee cluded that clearing should be subject to government and believes that they enhance prospects for impleoversight, that oversight need not be provided by the mentation of the Working Group's recommendations. Commodity Futures Trading Commission (CFTC). Nonetheless, it believes that many of those recom- Instead, for many types of derivatives, oversight mendations can be fully implemented only through could be provided by the SEC, the Office of the amendments to the CEA. The Board does support Comptroller of the Currency, the Federal Reserve, or enactment of the provisions of Chairman Leach's bill by a foreign financial regulator that the appropriate that relate to clearing organizations that choose to U.S. regulator determines to have satisfied appropri- organize under Federal Reserve supervision, which ate standards. would complement the necessary modernization of The Working Group recognized that implemen- the CEA. tation of these recommendations regarding OTC Statement by Alan Greenspan, Chairman, Board of in our economy. Through issuance of equities, firms Governors of the Federal Reserve System, before the enable broad sets of investors to share in the risks and Committee on Banking, Housing, and Urban Affairs, rewards of economic activity. The pricing of existing U.S. Senate, April 13, 2000 capital assets plays an important role in directing investments in new capital assets. I am pleased to be here today to discuss the evolu- Today, equities constitute a substantial portion of tion of our equity markets and the appropriate role for the net worth of households, both direct holdings of policymakers in this period of rapid change. Publicly shares and indirect holdings through mutual and pentraded equities are a significant source of capital for sion funds. In addition, U.S. equity markets are a firms, and equity markets are a key part of the pro- significant factor in the international competitiveness cess of allocating capital among competing uses of our finance industry. For these reasons it is vital Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

406 Federal Reserve Bulletin • June 2000 that our public policies foster equity markets that But these concerns about fragmentation must be remain efficient, innovative, and competitive. placed in perspective. Market structures are con- In my remarks today, I shall be expressing my own stantly evolving, and activity shifts in response to views and not necessarily those of the Federal innovations in trading and the development of new Reserve Board. I shall endeavor to set out a few financial instruments. In the long run, unfettered combroad principles that I believe should govern the petitive pressures will foster consolidation as liquidevolution of our stock exchanges. Clearly, however, ity tends to centralize in the system providing the Chairman Levitt and his staff at the Securities and narrowest bid-offer spread at volume. Two or more Exchange Commission (SEC) have enormous exper- venues trading the same security or commodity will tise that must be brought to bear on this issue, and naturally converge toward a single market. One marthey, along with the Congress, should lead the way in ket offering marginally narrower bid-ask spreads at formulating and implementing appropriate public volume will attract the business of others, improving policies. its liquidity further and reducing that of its competitors. This, in turn, will engender an even greater competitive imbalance, leading eventually to full consolidation. Of course, this process may not be fully IMPLICATIONS OF CHANGES IN TECHNOLOGY realized if there are impediments to competition or if More powerful and functional computers and newer markets are able to establish and secure niches by telecommunications technologies, in combination competing on factors other than price. with deregulatory innovations by the SEC, have We need to be particularly careful, however, not to facilitated the development of new trading venues for unintentionally and unnecessarily undermine sources equities. These new venues offer investors a wide of the extraordinary franchise values that have been range of alternatives for entering orders and execut- built in to our equity markets, a process beginning ing trades. Some of the new trading mechanisms also with the Buttonwood Agreement of 1792, which offer speedier executions or greater anonymity, which founded what became the New York Stock Exchange. are important to some types of investors. Many allow Participants in our equity markets have succeeded in customer orders to be matched directly, without concentrating a great depth of liquidity that is the the traditional intervention of a specialist or market envy of other nations and a symbol of the United maker. As alternative trading venues have prolifer- States as the world's preeminent financial power. ated and flourished, they have attracted increasingly Yet our established markets are undergoing prolarger volumes from the Nasdaq market and to a found competitive pressures and challenges, which lesser extent from the other exchanges. This competi- they cannot fail to meet if they are to survive. The tion among trading systems in the short run has very financial participants they serve are signaling resulted in market fragmentation—not all orders to that our exchanges may soon become noncompetibuy and sell securities necessarily have the opportu- tive, and their centralized liquidity could drift to nity to interact with one another. other, presumably far more automated, venues. The Concerns that this fragmentation will have adverse Nasdaq, as I noted earlier, has seen significant volimplications for market efficiency and investor pro- ume migrate to other trading systems. The New York tection are, as I understand it, the prime motivations Stock Exchange (NYSE) and regional exchanges, for this hearing. The prices established in equity too, recognize that investors may increasingly choose markets, as I noted at the outset, are a device through to execute their trades elsewhere. which capital is allocated. Investors rely on them Just as the market provides investors' valuations of in making portfolio decisions. These prices should the long-term prospects of individual equities trading reflect the supplies and demands of participants on exchanges, the market also signals its assessment across all markets at a given time. Fragmentation of the values of memberships in the exchanges themthus raises questions about the quality and complete- selves. It is evident from these evaluations that marness of the price discovery process and concerns that ket participants appear to be increasingly discounting investors' orders to buy and sell securities may not the earnings from seats on the NYSE itself relative to be executed at the best price or the lowest cost. the earnings of the stocks that trade on it. Since 1996, Fragmentation also creates the impression, and per- for example, price-earnings ratios of NYSE stocks haps the reality, that separate pools of liquidity yield have risen by half. The ratio of seat prices to the a lower volume of liquidity in the aggregate. Particu- underlying earnings from seat leasing has barely larly in times of stress, liquidity simply may not be budged. This clearly implies uncertainty about the there or it may not be there in depth. future of the exchange. It would be unfortunate if this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Statements to the Congress 407 prized institution symbolizing American financial participants and trading venues compete on as even hegemony allowed itself to become marginalized. terms as possible and that property rights of partici- But if it fails to respond to technological change, pants be scrupulously enforced. one centralized trading venue, even the NYSE, can This suggests a reexamination of market practices be displaced by another as other trading systems take and removal of current impediments to competition. advantage of newer technology to offer greater effi- The testimony by market participants over the past ciency or to provide new functions investors value several weeks offers some suggestions, such as more highly. The transition process clearly would broadening access to the system by which orders are result in fragmentation—a necessary consequence of routed between trading systems. Clearly, all market the process of competition in the provision of trading participants recommend steps that are in their own services. Obviously, if fragmentation can be avoided, self-interest; this, of course, is not surprising. Howit should be. But if we enter such a transition process, ever, the role of policymakers is to weigh the- ratioit probably cannot be avoided entirely. nale for recommended practices and use regulatory policy to foster competition. There are other ways in which policymakers can THE ROLE FOR POLICYMAKERS facilitate the shift to a new equilibrium market structure through steps to make competition itself more What, in general, should be the role of policymakers effective. One area in which endeavors could well in this cycle of competition, fragmentation, and con- prove fruitful is enhancement of the transparency in solidation? We would do well to borrow the advice markets. The SEC's request for comment on market offered to the medical profession and, first, do no fragmentation seeks suggestions to improve discloharm. It has never proved wise for policymakers to sures both by market centers and by brokers about the try to direct the evolution of markets, and it strikes handling of orders and the execution of trades. Transme as especially problematic at this juncture. The parency is a fundamental organizing principle of structure of our equity markets is extraordinarily markets. Buyers and sellers should be fully cognizant dynamic; hardly a week goes by that a new trading not only of the characteristics of goods being bought venue is not announced or an enhancement to an and sold but also of the costs and methods by which existing system is not trumpeted. None of us can trading occurs. Only in this way will they be able anticipate which of these venues will hit upon the to signal through their trading patterns the market combination of services that best meets the needs of venues that best fit their needs. Retail investors, in investors. That can only be revealed as competition particular, should pay attention to costs other than establishes winners and losers. commissions that may be buried in the contracts In light of these judgments, I would caution against authorizing their transactions. Such costs could the implementation of a government mandate for any include delayed executions, failures to execute, or particular form of central limit order book. Given the forgone profit if there is no opportunity for price pace of change in our markets, it is difficult to con- improvement. Disclosure empowers investors to template how a government mandate could be imple- make explicit choices about those factors that affect mented; systems might well be obsolete before we the quality of trade executions and ultimately the were halfway through the planning process. returns on their investments. As this technology-led market restructuring pro- Investors should also be particularly aware of the cess plays out, there is a role for policymakers in liquidity characteristics of the systems with which facilitating the transition to a long-run equilibrium they choose to deal. Despite the recent market volatilmarket structure. Change often proves controversial ity, the resiliency of our vastly expanded trading because entities currently earning above-market rates systems has not been fully tested, and there is a risk of return owing to dominance over a segment of a of complacency. market will seek, not unexpectedly, to protect those If investors assume that their everyday manner of returns. Many will argue that the rules, regulations, dealing will always be possible in stressful condior market practices that give rise to such niches are tions, such an assumption is unlikely to be realized. critical for the continued functioning of markets or The Long Term Capital Management episode was a are in the best interest of investors. These same wake-up call to institutional investors about the risks entities, however, will see the need for additional of dealing in illiquid markets. The private-sector competition in areas where others are earning above group that studied that event—the Counterparty Risk market returns. It is the obligation of policymakers to Management Policy Group—noted important deficut through this underbrush and ensure that market ciencies in the risk management systems of many Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

408 Federal Reserve Bulletin • June 2000 market participants. Improvements to these systems some undesirable consequences, it is an inevitable should help market participants better assess the pos- part of the competitive process. Fragmentation sigsible consequences of market illiquidity, whether in nals the value investors place on the services and the equity markets or in other markets. But liquidity functions offered by competing trading systems. In risk is not just an issue for institutional investors. the long run, activity will migrate to the systems that Retail investors, too, need to evaluate the implica- best meet the needs of investors, absent impediments tions of their decisions to deal in particular trading to competition. In the short run, policymakers should systems. These investors need to exercise caution not attempt to anticipate the outcome of the competiwhen dealing in illiquid markets, especially on a tive process. Rather, they should seek to remove leveraged basis. impediments to competition and take judicious steps to mitigate the adverse effects of fragmentation through policies such as enhanced disclosure. Investors, too, can facilitate this evolutionary process by CONCLUSION carefully evaluating the efficiency of the trading sys- In conclusion, I would like to reiterate my confidence tems they use and the appropriateness of the trading in competition as the fundamental guide to the orga- strategies they undertake. • nization of our markets. Although fragmentation has Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

409 Announcements FORMATION OF A PRIVATE-SECTOR WORKING Todd S. Thomson, chief financial officer, Citigroup, GROUP ON PUBLIC DISCLOSURE BY BANKING New York AND SECURITIES ORGANIZATIONS Barry L. Zubrow, managing director and chief administrative officer, Goldman Sachs and Co., The Federal Reserve Board, the Office of the Comp- New York troller of the Currency (OCC), and the Securities and Exchange Commission (SEC) announced on The working group will evaluate the use of April 27, 2000, that the Board had established a enhanced public disclosure as a means of improving private-sector working group to develop options for the ability of markets to evaluate the risk exposure improving the public disclosure of financial informaand risk-management practice! of large, complex tion by banking and securities organizations. The financial service organizations. It will describe indus- OCC and the SEC will participate with the Board in try best practices on disclosure and develop options support of the effort. for improving disclosure by these entities. A report Walter Shipley, who recently retired as chairman on the group's recommendations will be released to of Chase Manhattan Bank, has agreed to chair the the public upon completion. In recent years, market Working Group on Public Disclosure, made up of participants, scholars, and policymakers all have senior executives of banking and investment organi- emphasized the utility of substituting increased marzations. The other members of the working group are ket discipline for additional supervision and reguthe following: lation. This issue will become more pressing as institutions take advantage of the opportunities in the Clemens Boersig, chief financial officer and member Gramm-Leach-Bliley Act, particularly if the pace of of the board, Deutsche Bank AG, Frankfurt, financial industry consolidation continues. Effective Germany market discipline depends on stakeholders of individual banking and securities organizations being Dina Dublon, executive vice president and chief provided with the information necessary to make financial officer, Chase Manhattan Bank, New York informed judgments about the organizations' risk Douglas Flint, finance director, HSBC Holdings PLC, exposure. Although banking and securities organiza- London tions already disclose a considerable volume of information, it would be beneficial to re-examine the James Hance, vice chairman and chief financial content and scope of current practices and to look for officer, Bank of America Corp., Charlotte, N.C. further opportunities to improve disclosure and Peter Hancock, chief financial officer and risk man- enhance market discipline. ager, J.P. Morgan & Co. Inc., New York Ross Kari, executive vice president and chief finan- CONSUMER EDUCATION BROCHURES: cial officer, Wells Fargo Corp., San Francisco NEW EDITION AND REISSUANCE Thomas H. Patrick, executive vice president and chief The Federal Reserve Board announced on April 26, financial officer, Merrill Lynch and Co., New York 2000, that it had issued a revision of its brochure Lisa K. Polsky, managing director and chief risk Consumer Handbook to Credit Protection Laws. The officer, Morgan Stanley Dean Witter, New York new edition, the thirteenth, reflects recent changes in law and regulation. Marcel Rohner, member of the group managing Topics covered in the handbook include the board and chief risk manager, UBS AG, Zurich, following: Switzerland Robert Rosholt, executive vice president and chief • The cost of credit financial officer, Bank One Corporation, Chicago • Applying for credit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

410 Federal Reserve Bulletin • June 2000 • Credit histories and records vision of Large Complex Institutions (SR 97-24). See • Correcting mistakes and resolving also the handbook Framework for Risk-Focused Supervision of Community Banks (SR 97-25). misunderstandings • Canceling a mortgage The further development of the Federal Reserve Sys- • Liability limits on lost or stolen credit cards tem's on-going program of risk-focused supervision. • Electronic fund transfers. The program's standards for management, monitoring (maintenance of an institutional overview, risk matrix, It also includes a directory of federal agencies and and risk assessment), and periodic reporting, as carried out for each consolidated organization by a dediinformation on how to file a credit complaint. cated supervisory team and designated Central Point The Federal Reserve Board on April 26, 2000, also of Contact, are explained (SR 99-15). announced that it had reissued the brochure A Guide to Business Credit for Women, Minorities, and Small 2. The revised minimum criteria to be used for loan Businesses. The guide explains the application pro- write-ups. The minimum standards for information categocess for small business loans and steps to take if a ries, to be included in the examination report on special mention or adversely classified assets, are discussed. Such loan is denied. It also provides information on the write-ups are required when management and examiners Equal Credit Opportunity Act and lists sources for disagree about the institution's disposition of assets, or assistance in the application process. when the institution will be assigned a rating of 3, 4, or 5. Copies of the brochures are available from Publica- A full write-up must provide sufficient detail supporting the examiners' judgment concerning the rating assigned tions Services, Mail Stop 127, Board of Governors of and any possible follow-up supervisory action for problem the Federal Reserve System, Washington, DC 20551. institutions. See SR 99-24. The first 100 copies are free. The brochures are also available on the Board's 3. Revisions to the minimum information needed to be web site at http://www.federalreserve.gov/pubs/ included on loan line sheets. The information required on brochure.htm. line sheets must state the reason for, and the status of, a loan review's disposition as well as what information is either not available (especially loan and collateral documentation and collateral values) or is unreliable, perhaps due to deficient loan administration. See SR 99-25. PUBLICATION OF THE MAY 2000 UPDATE TO THE COMMERCIAL BANK EXAMINATION 4. Revised supervisory guidance that is to be used in MANUAL evaluating and controlling the risks posed to banks by loans with high loan-to-value (LTV) ratios. The focus is on The May 2000 update to the Commercial Bank further clarification on two exemptions of the 1992 inter- Examination Manual, Supplement No. 12, has been agency real estate lending standards—the "abundance of caution" exemption, and the exemption for loans sold published and is now available. The Manual compromptly without recourse. Guidance is provided for calcuprises the Federal Reserve System's state member lating the LTV ratio when multiple loans and lenders are bank supervisory and examination guidance. The new involved. Supervisory caution emphasizes the monitoring supplement includes the following: of high LTV limits. See SR 99-26. 1. A replacement of the "Examination Strategy" section 5. Revisions to the risk-based capital treatment for to include the following: credit derivatives that are used to synthetically replicate collateralized loan obligations (CLOs). Guidance is pro- Revised examination frequency guidelines for state vided on the capital treatment for three different synthetic member banks, as well as pre-membership or pre- CLO transactions: (1) when the entire amount of the refermerger examination guidelines. Section 306 of the enced portfolio is hedged; (2) when a high-quality senior Riegle-Neal Interstate Banking and Branching Effi- risk position in the reference portfolio is retained; or ciency Act and section 2221 of the Economic Growth (3) when a first-loss position is retained. Minimum condiand Regulatory Paperwork Reduction Act revised the tions are included for sponsoring institutions wishing to examination frequency guidelines. See SR 97-8. The obtain the synthetic securitization capital treatment for pre-membership or pre-merger examination guide- transaction 2. See SR 99-32. lines are also revised (SR 98-28). 6. Revised transfer risk examination guidelines that The Federal Reserve System's risk-focused examina- incorporate the "Guide to the Interagency Country Expotion program for large complex institutions and com- sure Review Committee" (ICERC). This clarifies for the munity banks. The program endorses the concept public the evaluation process used by ICERC and its role of conducting, when appropriate, a series of targeted in the supervisory process. New information is provided on examinations during a supervisory cycle, each focus- the application of ICERC ratings, as well as several types ing on an activity, business line, or legal entity. See of less severely rated exposures (short-term bank or trade the handbook Framework for Risk-Focused Super- exposures, trading accounts, and direct equity investments). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 411 There are criteria for determining exposures involving effective July 3, 2000. Mr. Stockton, currently Deputy strong, moderately strong, and weaker countries. See Director of the division, will succeed Michael J. SR 99-35. Prell, who will retire at the end of June, after thirty years of service in the Federal Reserve System and 7. The revision and updating of the table listing of statutes and regulations that are administered by the Fed- thirteen years as Director of the Division of Research eral Reserve. The table references are listed in order by and Statistics. title number and section number of the United States Code The Division of Research and Statistics is respon- (U.S.C.). sible for the analysis and forecasting of domestic economic and financial developments, supporting the A more detailed summary of changes is included monetary policy work of the Board and the Federal with the update package. The Manual and updates, Open Market Committee. In connection with that including pricing information, are available from activity, it produces a variety of statistical series, Publications Services, Mail Stop 127, Board of Govincluding the well-known indexes of industrial proernors of the Federal Reserve System, Washingduction and capacity utilization and the nation's flow ton, DC 20551 (or charge by facsimile: 202-728of funds accounts. The division also provides support 5886). The Manual is also available on the Board's for the formulation of policy in the areas of banking public web site at www.federalreserve.gov/ supervision and regulation, consumer protection, and boarddocs/supmanual/. community reinvestment. Mr. Stockton has been a member of the division since 1981, following his doctoral work at Yale Uni- APPOINTMENT OF DAVID J. STOCKTON AS versity. In 1987 he was promoted to Assistant Direc- DIRECTOR OF THE DIVISION OF RESEARCH tor of the division and Chief of the Economic Activ- AND STATISTICS ity Section. He was subsequently promoted to Associate Director in 1989 and to Deputy Director The Federal Reserve Board on May 4, 2000, in 1994. He has also served as Associate Economist announced the appointment of David J. Stockton as to the Federal Open Market Committee for a number Director of the Division of Research and Statistics, of years. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

412 Legal Developments ORDERS ISSUED UNDER BANK HOLDING COMPANY Certain Supervisory Considerations ACT Under section 3 of the BHC Act, the Board may not Orders Issued Under Section 3 of the Bank Holding approve an application involving a foreign bank unless the Company Act bank is "subject to comprehensive supervision or regulation on a consolidated basis by the appropriate authorities Caisse Nationale de Credit Agricole in the bank's home country."4 The Board previously has Paris, France determined, in applications under the International Banking Act (12 U.S.C. § 3101 et seq.) ("IBA"), that CNCA is Order Approving the Formation of a Bank Holding subject to comprehensive consolidated supervision by its Company home country supervisor.5 No material changes have occurred in the manner of CNCA's supervision that would Caisse Nationale de Credit Agricole ("CNCA"), a foreign alter the Board's previous determination. Based on all the banking organization subject to the Bank Holding Com- facts of record, the Board has concluded that CNCA is pany Act ("BHC Act"), has requested the Board's ap- subject to comprehensive supervision and regulation on a proval under section 3 of the BHC Act (12 U.S.C. § 1842) consolidated basis by its home country supervisor. to own indirectly all of the voting shares of Espirito Santo The BHC Act also requires the Board to determine that Bank, Miami, Florida.1 the foreign bank has provided adequate assurances that it Notice of the proposal, affording interested persons an will make available to the Board such information on its opportunity to submit comments, has been published operations and activities and those of its affiliates that the (64 Federal Register 53,680 (1999)). The time for filing Board deems appropriate to determine and enforce complicomments has expired, and the Board has considered the ance with the BHC Act.6 The Board has reviewed the proposal in light of the factors set forth in section 3 of the restrictions on disclosure in jurisdictions where CNCA has BHC Act. material operations and has communicated with relevant CNCA, with total consolidated assets of approximately government authorities concerning access to information. $402 billion, is the largest banking organization in France.2 CNCA has committed that it will make available to the In the United States, CNCA operates branches in New Board such information on its operations and any of its York, New York, and Chicago, Illinois; and representative affiliates that the Board deems necessary to determine and offices in Houston, Texas, and San Francisco, California. enforce compliance with the BHC Act, the IBA, and other CNCA also engages through subsidiaries in the United applicable federal law. CNCA also has committed to coop- States in a broad range of permissible nonbanking activi- erate with the Board to obtain any waivers or exemptions ties, including securities and futures trading, leasing, fi- that may be necessary in order to enable CNCA to make nancing, brokerage, and financial consulting activities. any such information available to the Board. In light of Espirito Santo Bank is the 53rd largest banking organiza- these commitments and other facts of record, the Board has tion in Florida, controlling deposits of $315 million, repre- concluded that CNCA has provided adequate assurances of senting less than 1 percent of all deposits in commercial access to any appropriate information the Board may rebanking organizations in the state.3 quest. For these reasons, and based on all the facts of 4. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the Board determines whether a foreign bank is subject to consolidated home country supervision under the standards set forth in Regula- 1. CNCA controls more than 25 percent of the voting shares of tion K. See 12 C.F.R. 225.13(a)(4). Regulation K provides that a Banco Espirito Santo, S.A., Lisbon, Portugal ("Banco Espirito foreign bank may be considered subject to consolidated supervision if Santo"), which also has applied to acquire all of the voting shares of the Board determines that the bank is supervised or regulated in such a Espirito Santo Bank. Because of its ownership of Banco Espirito manner that its home country supervisor receives sufficient informa- Santo, CNCA is also required to seek Board approval under the BHC tion on the worldwide operations of the foreign bank, including the Act to own indirectly the shares of Espirito Santo Bank. The Board relationships of the bank to its affiliates, to assess the foreign bank's has approved applications filed by Banco Espirito Santo and its related overall financial condition and compliance with law and regulation. holding companies in a separate order. E.S. Control Holding S.A., See 12 C.F.R. 211.24(c)(l)(ii). et al., 86 Federal Reserve Bulletin 418 (2000). 5. Caisse National de Credit Agricole, 81 Federal Reserve Bulletin 2. Data are as of December 31, 1998, and are based on exchange 1055 (1995) See also, Credit Agricole Indosuez, 83 Federal Reserve rates on that date. Bulletin 1025 (1996);. 3. Data are as of June 30, 1999. 6. See 12 U.S.C. § 1842(c)(3)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 413 record, the Board has concluded that the supervisory fac- CNCA and any of its affiliates that the Board determines to tors it is required to consider under section 3(c)(3) of the be appropriate to determine and enforce compliance by BHC Act are consistent with approval. CNCA and its affiliates with applicable federal statutes. The commitments and conditions relied on by the Board in Other Factors Under the BHC Act reaching its decision are deemed to be conditions imposed in writing by the Board in connection with its findings and The Board also has carefully considered the financial and decision and, as such, may be enforced in proceedings managerial resources and future prospects of the banks and under applicable law. companies involved in this proposal, the convenience and The acquisition of Espfrito Santo Bank shall not be needs of the communities to be served, and certain supervi- consummated before the fifteenth calendar day following sory factors. CNCA's capital levels exceed the levels re- the effective date of this order, and the proposal shall not be quired under French capital guidelines. The capital levels consummated later than three months after the effective of CNCA also exceed the capital levels under the Basle date of this order, unless such period is extended for good Capital Accord, and are considered equivalent to the capi- cause by the Board or the Federal Reserve Bank of New tal levels that would be required of a U.S. banking organi- York, acting pursuant to delegated authority. zation under similar circumstances. By order of the Board of Governors, effective April 5, The Board has reviewed supervisory information from 2000. the home country authorities responsible for supervising CNCA concerning the proposal and the condition of the Voting for this action: Chairman Greenspan, Vice Chairman Ferguparties, confidential financial information from CNCA, and son, and Governors Kelley, and Gramlich. Absent and not voting: Governor Meyer. reports of examination from the appropriate federal and state supervisors of the affected organizations assessing the ROBERT DEV. FRIERSON financial and managerial resources of the organizations. Associate Secretary of the Board Based on all the facts of record, the Board has concluded that the financial and managerial resources and future Dime Bancorp, Inc. prospects of the organizations involved in the proposal are New York, New York consistent with approval, as are other supervisory factors that the Board must consider under section 3 of the BHC Order Approving Formation of a Bank Holding Act. Company In addition, based on all the facts of record, including the fact that CNCA does not have banking operations in the Dime Bancorp, Inc. ("Dime"), a savings and loan holding banking market in which Espfrito Santo Bank operates, the company within the meaning of the Home Owners' Loan Board has concluded that consummation of the proposal Act (12 U.S.C. § 1461 et seq.),1 has requested the Board's would not have a significantly adverse effect on competiapproval under section 3(a)(1) of the Bank Holding Comtion or on the concentration of banking resources in any pany Act ("BHC Act") (12 U.S.C. § 1842(a)(1)) to berelevant banking market, and that competitive considercome a bank holding company by acquiring all the voting ations are consistent with approval. Considerations related shares of Hudson United Bancorp, Mahwah, New Jersey to the convenience and needs of the communities to be ("Hudson"), and thereby acquire its subsidiary, Hudson served, including the performance record of Espfrito Santo United Bank, Mahwah, New Jersey ("Hudson Bank").2 Bank under the Community Reinvestment Act (12 U.S.C. Notice of the proposal, affording interested persons an § 2901 et seq.) ("CRA"), also are consistent with approval opportunity to submit comments, has been published of the proposal.7 (64 Federal Register 70,258 (1999)). The time for filing comments has expired, and the Board has considered the Conclusion proposal and all comments received in light of the factors set forth in section 3 of the BHC Act. Based on the foregoing and all the facts of record, the Dime Savings is the 10th largest depository institution in Board has determined that the application should be, and New York, controlling total deposits of $10.4 billion, reprehereby is, approved. The Board's approval is specifically senting approximately 2.5 percent of total deposits in inconditioned on CNCA's compliance with all the commitsured depository institutions in the state ("state deposments made in connection with this application, and on the receipt by CNCA and Espfrito Santo Bank of all necessary approvals from state and federal regulators. The approval is also specifically conditioned on the Board's receiving 1. Dime controls The Dime Savings Bank of New York, FSB, New access to information on the operations or activities of York, New York ("Dime Savings"). 2. Dime proposes to merge Dime Savings with and into Hudson Bank simultaneously with Dime's merger with Hudson, which would be renamed "DimeBank." Dime received approval for the proposed 7. Espfrito Santo Bank was rated "satisfactory" in its most recent merger from the Federal Deposit Insurance Corporation ("FDIC") CRA performance evaluation conducted by the Federal Deposit Insur- under section 18(c) of the Federal Deposit Insurance Act (12 U.S.C. ance Corporation, as of July 21, 1997. § 1828(c)) ("Bank Merger Act") on April 5, 2000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

414 Federal Reserve Bulletin • June 2000 its").3 In New Jersey, Dime Savings is the 14th largest association that would become a bank on consummation of depository institution, controlling deposits of $2.3 billion, this transaction, the Herfindahl-Hirschman Index ("HHI") representing approximately 1.6 percent of state deposits. would decrease by 12 points to 774. Numerous competitors Hudson operates in New Jersey, New York, Connecticut, would remain in the market.7 In the Philadelphia banking and Pennsylvania. Hudson Bank is the 12th largest deposi- market Dime would become the sixth largest depository tory institution in New Jersey, controlling total deposits of institution in the market, controlling deposits of $2.1 bil- $2.4 billion, representing approximately 1.7 percent of lion, representing approximately 3.2 percent of market state deposits. Hudson Bank also is the 46th largest depos- deposits. The HHI in the Philadelphia banking market itory institution in New York, controlling deposits of would decrease by one point to 1542, and numerous com- $968 million, representing less than 1 percent of state petitors would remain in the market. deposits. After consummation of the proposal, DimeBank Based on these and all other facts of record, the Board would be the tenth largest depository institution in New concludes that consummation of the proposal would not York, controlling deposits of approximately $11.4 billion, result in any significantly adverse effects on competition or representing approximately 2.7 percent of state deposits. on the concentration of banking resources in the New York DimeBank also would be the eighth largest institution in or Philadelphia banking markets or any other relevant New Jersey, controlling deposits of $4.7 billion, represent- banking market. ing approximately 3.3 percent of state deposits. Convenience and Needs Considerations Competitive Considerations In acting on a proposal under section 3 of the BHC Act, the The BHC Act prohibits the Board from approving an Board is required to consider the effect of the proposal on application under section 3 of the BHC Act if the proposal the convenience and needs of the community to be served would result in a monopoly or would be in furtherance of and take into account the records of the relevant depository any attempt to monopolize the business of banking. The institutions under the Community Reinvestment Act BHC Act also prohibits the Board from approving a pro- ("CRA").8 The Board has carefully considered the effect of posed combination that would substantially lessen compe- the proposal on the convenience and needs of the commutition or tend to create a monopoly in any relevant banking nities to be served in light of all the facts of record, market, unless the Board finds that the anticompetitive including comments submitted by two community groups effects of the proposal are clearly outweighed in the public in New York and New Jersey, and one comment from two interest by the probable effects of the proposal in meeting elected Freeholders of Hudson County, New Jersey ("Protthe convenience and needs of the community to be served.4 estants"). Protestants expressed concern, based primarily Dime and Hudson compete directly in the New York/ on their analyses of data filed under the Home Mortgage New Jersey Metropolitan banking market ("New York Disclosure Act ("HMDA"),9 that Hudson Bank's record of banking market")5 and in the Philadelphia banking market. home mortgage and home improvement lending indicates On consummation of the proposal, Dime would become disparities in Hudson Bank's treatment of minorities. One the seventh largest depository institution in the New York Protestant also argued that the HMDA data for Dime banking market, controlling deposits of $17.1 billion, rep- Savings and its subsidiary mortgage company, North resenting approximately 4 percent of total deposits in de- American Mortgage Company ("NAM"), indicate disparpository institutions in the New York banking market ate treatment in NAM's lending to minorities. ("market deposits").6 Because Dime controls a savings A. CRA Performance Examinations 3. Deposit and ranking data are as of June 30, 1999. In this context, As provided in the CRA, the Board has evaluated the depository institutions include commercial banks, savings banks, and convenience and needs factor in light of examinations of savings associations. 4. 12 U.S.C. § 1842(c). the CRA performance records of the relevant institutions 5. The New York banking market includes Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Sullivan, Ulster, and Westchester Counties in New York; share. Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, First Banks, Inc., 76 Federal Reserve Bulletin 669 (1990). Ocean, Passaic, Somerset, Sussex, Union, Warren, and a portion of 7. Under the revised Department of Justice Merger Guidelines, 49 Mercer Counties in New Jersey; Pike County in Pennsylvania; and Federal Register 26,823 (June 29, 1984), a market in which the postportions of Fairfield and Litchfield Counties in Connecticut. merger HHI is less than 1000 points is considered to be unconcen- 6. Market share data are as of March 31, 2000 and are based on trated. The Department of Justice has informed the Board that a bank calculations in which the deposits of thrift institutions, other than merger or acquisition generally will not be challenged (in the absence Dime Savings, are included at 50 percent. The Board previously has of other factors indicating anticompetitive effects) unless the postindicated that thrift institutions have become, or have the potential to merger HHI is at least 1800 and the merger increases the HHI by more become, significant competitors of commercial banks. See WM Ban- than 200 points. The Department of Justice has stated that the higher corp, 76 Federal Reserve Bulletin 788 (1990); National City Corpora- than normal HHI thresholds for screening bank mergers for anticomtion, 70 Federal Reserve Bulletin 743 (1984). Because the Board has petitive effects implicitly recognize the competitive effects of limitedanalyzed the competitive factors in this case as if Dime Savings and purpose lenders and other nondepository financial entities. Hudson Bank were a combined entity, the deposits of Dime Savings 8. 12 U.S.C. § 2901 etseq. are included at 100 percent in the calculation of pro forma market 9. 12 U.S.C. § 2801 etseq. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 415 conducted by the appropriate federal supervisory agency.10 $14.7 million in low-income housing tax credits and Dime Savings received an overall rating of "outstanding" $21.4 million invested with the Community Preservation from its primary federal supervisor, the Office of Thrift Corporation, which finances the upgrading and construc- Supervision ("OTS"), at its most recent evaluation for tion of LMI housing in the New York City area. Dime also CRA performance, as of November 1999. Hudson Bank made $1.6 million in grants and donations during this received an overall rating of "satisfactory" from its pri- period to organizations supporting community developmary federal supervisor, the FDIC, at its most recent evalu- ment projects and programs, including affordable housing ation for CRA performance, as of February 1999. development and rehabilitation, homeownership services, economic development, youth centers, and homeless ser- B. Dime Savings' CRA Performance Record vices. Examiners found Dime Savings' community develop- In the most recent CRA performance examination (the ment services to include Community Partnership Accounts "1999 examination") of Dime Savings, examiners found ("CPAs"), in which deposits by corporations earned that Dime Savings performed at a high level in meeting the below-market interest rates. The difference between the credit needs of its assessment area, including substantial market rate and the interest paid creates funds that are used growth in lending in low- and -moderate income ("LMI") by Dime Savings to provide closing cost assistance to LMI areas and to LMI individuals. In particular, Dime Savings borrowers and other community development projects. At had increased the number and volume of its consumer the time of the examination, there were more than 30,000 loans in LMI areas since its previous performance exami- CPAs, with outstanding balances totaling $23.4 million. nation, to a total of 10,209 loans in the amount of Examiners also commended Dime Savings' efforts to as- $142.9 million in LMI areas in its assessment area. Al- certain the credit needs of its community through its outthough small business lending did not comprise a large reach efforts. portion of Dime Savings' portfolio, more than 80 percent Examiners noted with approval Dime Savings' use of a of the loans were in amounts of less than $100,000, which wide range of delivery systems for its products and serthe examiners concluded had a positive impact on serving vices, its accessibility to all segments of the community, the credit needs of the community. Overall, the geographic and its leadership in providing community development distribution of Dime Savings' lending, including housing, services. Examiners found that the bank's services were consumer, and small business loans, was found to reflect a available in all portions of its assessment area and noted good penetration throughout the assessment area, including that 16 percent of Dime Savings' 127 branches were in LMI areas. Dime Savings also offered a number of afford- LMI areas, as were 16 percent of its automatic teller able loan programs for LMI borrowers, that feature lower machines ("ATMs"). Examiners found that Dime Savings interest rates, reduced closing costs, and more lenient debt- had begun to use automatic loan machines ("ALMs"), to-income ratios. installing them in 17 of its branches." Dime Savings has Dime Savings also is active in community development also opened several 24-hour automated banking centers, lending. Between the 1999 examination and the prior CRA which use ATMs and telephone connections to Dime Savperformance examination, Dime Savings made almost ings' call center to provide customers with 24-hour services, including account opening and loan applications. $500 million in community development loans that were Dime Savings provided bilingual and multilingual publicasecured by more than 11,000 housing units that were tions and forms, and had bilingual and multilingual cusaffordable to LMI residents of the assessment area. Examtomer service staff in almost all its branches and in its iners in particular noted Dime Savings' use of multifamily telephone banking call center. housing lending, totaling $513.7 million in 1998, to meet the credit needs of LMI areas. Forty-four percent of the Finally, examiners identified no substantive violations of properties for which Dime Savings made multifamily loans antidiscrimination laws and regulations and found that in 1998 were in LMI areas. Dime Savings had implemented extensive fair lending Dime Savings was rated "outstanding" for its commu- policies, procedures, training programs, and internal asnity development investment and grant activity, based on sessment efforts. the complexity of its qualified community development investments, and excellent levels of activity and respon- C. Hudson Bank's CRA Performance Record siveness. In the period between the 1999 examination and its prior CRA performance examination, Dime Savings had In the most recent CRA performance examination of Huda total of $41.2 million of qualified investments, including son Bank, examiners found that the bank's lending performance represented good responsiveness to the credit needs of individuals and businesses in its assessment area.12 10. The Interagency Questions and Answers Regarding Community Reinvestment provide that an institution's most recent CRA performance evaluation is a particularly important consideration in the 11. ALMs allow a customer to apply for a credit line or personal application process, because it represents a detailed on-site evaluation loan of up to $7500 in minutes. of the institution's overall record of performance under the CRA by its 12. The examination, dated February 17, 1999, did not include a appropriate federal supervisor. 64 Federal Register 23,618 and 23,641 review of the CRA performance of Hudson's other subsidiary banks, (1999) ("Interagency Questions and Answers"). Bank of the Hudson, Poughkeepsie, New York, and Lafayette Ameri- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

416 Federal Reserve Bulletin • June 2000 Because 76 percent of the loans made by Hudson Bank D. Lending Records during the period covered by the examination were consumer loans, examiners concluded that the best way to The Board has also carefully considered the lending evaluate the bank's compliance with the CRA was through records of Dime Savings14 and Hudson Bank in light of an analysis of its consumer lending. Using that data, as comments on the 1998 HMDA data of the organizations' well as HMDA and other loan data, examiners found that subsidiaries.15 The 1998 data indicate that Dime Savings' Hudson Bank made a high percentage of its loans in its denial disparity ratio16 for African-Americans decreased assessment area, and that its loan distribution by borrower since its last examination, and that the denial disparity ratio income was excellent. Hudson Bank's distribution of con- was more favorable than the ratio reported by lenders in sumer loans in its assessment area exceeded the distribu- the aggregate ("the aggregate") in all of Dime Savings' tion of LMI households in the area; for example, in 1998 assessment areas.17 Dime Savings' denial disparity ratio Hudson Bank made 41 percent of its consumer loans to for Hispanics was more favorable by half than the aggrelow-income households, while only 25 percent of area gate in its New Jersey assessment area, and was similar to households were low-income. Examiners found that Hud- the rate for the aggregate in its New York City and New son Bank's distribution of small business loans reflected a York State assessment areas. Dime Savings' substantial willingness to make small commercial loans and to address multifamily lending is also reflected in the 1998 data, the credit needs of small businesses, and that the bank had which show that Dime Savings made 217 multifamily an adequate level of community development loans. loans, 94 of which (43 percent) were for properties in LMI The CRA performance exam found Hudson Bank to areas that were all in its New York City assessment area. have an excellent level of qualified investments and excel- The Board has examined the preliminary 1999 HMDA lent responsiveness to credit and community development data for Hudson,18 which show that in its New Jersey needs. Examiners particularly noted that Hudson Bank had assessment areas, the number and percentage of Hudson's increased its qualified investments from $200,000 at the loan originations to African-Americans, Hispanics, and time of the prior CRA examination to over $7 million. LMI individuals, and in predominately minority and LMI Hudson Bank purchased four mortgage-backed securities areas, all increased significantly from 1997 to 1999. Hudthat are backed by mortgages to LMI individuals in the son's denial disparity ratio for African-Americans and bank's assessment area. Hispanics in New Jersey and New York also decreased Examiners found that Hudson Bank provided delivery during that time. In addition, Hudson's percentage of origservices that were accessible to geographies and individu- inations in LMI areas in New Jersey, and to LMI individuals of different income levels, and that it had a relatively high level of community development services. The distribution of Hudson Bank branches by census tract income one of the Protestants and have criticized a publicly announced plan level was found to be very reasonable, and examiners by Dime to address CRA-related issues after the merger. The Board noted that Hudson Bank also operated a 24-hour telephone notes that the CRA requires that, in considering an acquisition proposal, the Board carefully review the actual record of performance of banking system. Hudson Bank's community development the relevant depository institutions in helping to meet the credit needs services included providing technical services to educa- of their communities. Neither the CRA nor the CRA regulations of the tional organizations, affordable housing groups, and a local federal supervisory agencies, however, require depository institutions credit union. Hudson Bank also assisted affordable housing to enter into agreements with any organization. The Board, therefore, has viewed such agreements and their enforceability as private conorganizations in procuring project loans from the Federal tractual matters between the parties and has focused on the existing Home Loan Bank and at the time of the examination was record of performance by the applicant and the programs that the setting up a consumer credit counseling service in Newark, applicant has in place to serve the credit needs of its communities. New Jersey. Any future activities of DimeBank would be reviewed by the appropri- Examiners identified no violations by Hudson Bank of ate federal supervisors in future performance examinations. 14. The data include data for Dime Savings' subsidiaries, Dime the substantive provisions of the antidiscrimination laws or Mortgage Inc. and North American Mortgage Company. regulations and found that its record of complying with 15. All three Protestants were critical of the lending record of those laws was satisfactory.13 Hudson's subsidiary banks (now merged into Hudson Bank) as reflected in their 1998 HMDA data. Protestants in particular criticized Hudson's banks for making too few HMDA-related loans to minority applicants, and for a large disparity between the denial rates for white can Bank, Bridgeport, Connecticut, which have since been merged and minority loan applicants. One Protestant also criticized Lafayette into Hudson Bank. Bank of the Hudson received a rating of "outstand- American Bank for having attracted too few minority loan applicants, ing" from the OTS at its last CRA performance examination, dated and criticized Dime Savings and NAM for making too few HMDA- February 17,1998. The examiners noted Bank of the Hudson's special related loans to minority applicants. programs for LMI borrowers and the introductory loans for the 16. The denial disparity ratio compares the denial rate for minority purchase of mobile homes. Lafayette American Bank received a rating loan applicants with that for white applicants. of "satisfactory" from the FDIC at its last CRA performance exami- 17. The aggregate represents the cumulative lending for all institunation, dated March 23, 1998. Examiners considered the distribution tions that have reported HMDA data in a given market. Dime Savings' of loans to borrowers at various income levels to be reasonable and assessment areas are New York State, New Jersey, New York City noted a positive trend in the percentage of HMDA-reportable loans in MSA, and Nassau-Suffolk (NY) MSA. LMI areas and to LMI borrowers. 18. The 1999 HMDA data discussed here for Hudson are prelimi- 13. Two of the Protestants also alleged that Hudson Bank has failed nary, and may differ from the final data, which are typically available to fulfil lending and other commitments it made in an agreement with in June of each year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 417 als in New Jersey, also increased in 1999. For example, in E. Branch Closings 1999, 23.6 percent of Hudson's loans in the Newark MSA were in LMI areas, and 38.4 percent of Hudson's loans in One Protestant expressed concern that consummation of New Jersey were to LMI individuals. the proposal would result in branch closings. Dime has In other respects, however, the HMDA data reflect dis- indicated that it is considering the potential consolidation parities in the rates of loan applications, originations, and of several pairs of Dime Savings and Hudson Bank denials by racial group and income level.19 The Board is branches after consummation of the proposed transaction. concerned when an institution's record indicates any such Dime has preliminarily identified seven pairs of Dime disparities in lending and believes that all banks are obli- Savings and Hudson Bank branches in which the banks in gated to ensure that their lending practices are based on each pair are within approximately one-half mile of each criteria that assure not only safe and sound banking, but other for possible consolidation, although Dime has not also equal access to credit by creditworthy applicants re- made any final consolidation determinations. gardless of their race or income level. The Board recog- The Board has carefully considered all the facts of nizes, however, that HMDA data alone provide an incom- record concerning branch closings, including the prelimiplete measure of an institution's lending in its community nary branch consolidation information submitted by Dime and have limitations that make the data an inadequate and Dime's record in opening and closing branches. The basis, absent other information, for concluding that an Board also has reviewed the branch closing policies of institution has not adequately assisted in meeting its com- Dime Savings and Hudson Bank. The policies are consismunity's credit needs or has engaged in illegal lending tent with federal law, which requires an insured depository discrimination.20 institution to provide notice to the public and to the appro- Because of the limitations of HMDA data, the Board has priate federal supervisory agency before closing a branch.22 considered these data carefully in light of other informa- Any branch closings resulting from the proposal would be tion, including periodic and examination reports that pro- considered by the appropriate federal supervisor at the next vide an on-site evaluation of the compliance by the subsid- CRA examination of the relevant subsidiary depository iary banks of Dime and Hudson with fair lending laws and institution. the overall lending and community development activities of the banks. In particular, the Board notes that examiners F. Conclusion on Convenience and Needs found no evidence of prohibited discriminatory practices or of substantive violations of the fair lending laws at the The Board has carefully considered all facts of record, most recent examinations of the subsidiary depository insti- including the public comments received, responses to the tutions of Dime and Hudson.21 The Board also has taken comments, and reports of examinations of the CRA perforinto account factors such as Hudson's focus on consumer mance of the institutions involved, in reviewing the proposlending, which is not reported under HMDA, in consider- al's effect on the convenience and needs of the communiing whether Dime and Hudson are meeting the credit needs ties to be served by the combined organization. Based on a of their communities. review of the entire record, and for the reasons discussed above, the Board concludes that convenience and needs considerations, including the CRA performance records of the subsidiary depository institutions of Dime and Hudson, are consistent with approval. 19. For instance, Dime Savings' percentage of loan originations in predominately minority and LMI tracts lagged the aggregate in all its assessment areas by almost 50 percent, and Hudson's percentage of Financial, Managerial, and Other Supervisory Factors loan originations to African-Americans lagged the aggregate in all but one of its assessment areas in New Jersey and New York State. In The BHC Act also requires the Board, in acting on an Connecticut, Hudson received too few applications in 1998 from application, to consider the financial and managerial re- African-Americans, Hispanics, and applicants in predominately minority tracts to be statistically relevant. sources and future prospects of the companies and banks 20. The data, for example, do not provide a basis for an independent involved in a proposal, and certain other supervisory facassessment of whether an applicant who was denied credit was, in tors. The Board has carefully considered the financial and fact, creditworthy. Information about credit history problems and managerial resources and future prospects of Dime and excessive debt levels relative to income (reasons most frequently cited for a credit denial) are not available from HMDA data. Hudson and their respective subsidiary depository institu- 21. One Protestant questioned Hudson's practice of referring certain tions, and other supervisory factors in light of all the facts loan applicants to third-party lenders and suggested, without providing evidence, that minority applicants may be referred disproportionately to such lenders. Hudson has indicated that its practice is to 22. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. advise loan applicants who do not qualify for its residential mortgage § 183lr-1), as implemented by the Joint Policy Statement Regarding products of the availability of programs at other lenders. If the Branch Closings (64 Federal Register 34,844 (1999)), requires that a applicant consents, his or her application is then referred to one of two bank provide the public with at least 30 days notice and the approprithird-party lenders for their consideration. Such referral programs are ate federal supervisory agency with at least 90 days notice before the permissible if all relevant fair lending laws are adhered to and, as date of the proposed branch closing. The bank also is required to noted, the most recent examinations found no evidence of illegal provide reasons and other supporting data for the closure, consistent discrimination or credit practices at Hudson's subsidiary depository with the institution's written policy for branch closings. The law does institutions. not authorize federal regulators to prevent the closing of any branch. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

418 Federal Reserve Bulletin • June 2000 of record, including confidential reports of examination Board or by the Federal Reserve Bank of New York, acting and other supervisory information received from the pri- pursuant to delegated authority. mary federal supervisors of the organizations. In evaluat- By order of the Board of Governors, effective April 12, ing the financial factors in expansion proposals by bank 2000. holding companies, the Board consistently has considered capital adequacy to be an especially important factor.23 In Voting for this action: Chairman Greenspan, Vice Chairman Ferguthis case, Dime will be adequately capitalized at consum- son, and Governors Kelley, and Gramlich. Absent and not voting: mation of this proposal and has committed to the Board Governor Meyer. that it will meet the well-capitalized standards of the ROBERT DEV. FRIERSON Board's Capital Adequacy Guidelines no later than June Associate Secretary of the Board 30, 2000. Based on these and other facts of record, including E.S. Control Holding S.A. Dime's commitment to increase its capital, the Board con- E.S. International Holding S.A. cludes that considerations relating to the financial and Espirito Santo Financial Group S.A. managerial resources and future prospects of Dime, Hud- All of Luxembourg son, and their respective subsidiaries are consistent with approval of the proposal, as are the other supervisory Espirito Santo Financial (Portugal) Sociedade factors the Board must consider under section 3 of the Gestora de Participacdes Sociais, S.A. BHC Act. Bespar-Sociedade Gestora de Participacdes Sociais, S.A. Conclusion Banco Espirito Santo, S.A. All of Lisbon, Portugal Based on the foregoing, the Board has determined that the application should be, and hereby is, approved.24 The Order Approving the Formation of Bank Holding Board's approval of the proposal is specifically condi- Companies tioned on compliance by Dime with all the commitments made in connection with the proposal. These commitments E.S. Control Holding S.A. ("E.S. Control Holding"), E.S. and conditions are deemed to be conditions imposed in International Holding S.A. ("E.S. International"), Espirito writing by the Board in connection with its findings and Santo Financial Group S.A. ("E.S. Financial"), Espirito decision and, as such, may be enforced in proceedings Santo Financial (Portugal) Sociedade Gestora de Particunder applicable law. ipacdes Sociais, S.A. ("E.S. Portugal"), Bespar-Sociedade The acquisition may not be consummated before the Gestora de Participacoes Sociais, S.A. ("Bespar"), and fifteenth calendar day after the effective date of this order, Banco Espirito Santo, S.A. ("Banco Espirito Santo") (color later than three months after the effective date of this lectively, "Applicants"), all foreign banking organizations order, unless such period is extended for good cause by the subject to the Bank Holding Company Act ("BHC Act"), have requested the Board's approval under section 3 of the BHC Act (12 U.S.C. § 1842) to obtain all of the voting 23. See, e.g., Banc One Corporation, 84 Federal Reserve Bulletin shares of Espirito Santo Bank, Miami, Florida.1 961 (1998); see also, Norwest Corporation, 84 Federal Reserve Notice of the proposal, affording interested persons an Bulletin 1088 (1998). opportunity to submit comments, has been published 24. The Protestants requested that the Board hold a public meeting (64 Federal Register 20,308 (1999)). The time for filing 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 comments has expired, and the Board has considered the appropriate supervisory authority for the bank to be acquired makes a proposal in light of the factors set forth in section 3 of the timely written recommendation of denial of the application. The BHC Act. Board has not received such a recommendation from the appropriate Banco Espirito Santo has total consolidated assets of supervisory authorities. approximately $30 billion and is the third largest banking 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 the application and to provide an opportunity for testimony. 12 C.F.R. 1. Under the proposal, Banco Espirito Santo would acquire up to 225.16(e). The Board has considered carefully the Protestants' re- 100 percent of the voting shares of Espirito Santo Bank. E.S. Control quests in light of all the facts of record. In the Board's view, Protes- Holding is the top tier foreign banking organization that controls tants have had ample opportunity to submit their views, and did Banco Espirito Santo for purposes of the BHC Act through its indirect submit written comments that have been considered carefully by the control of more than 25 percent of the voting shares of Banco Espirito Board in acting on the proposal. The Protestants' requests fail to Santo. E.S. Control Holding controls Banco Espirito Santo through its demonstrate why their written comments do not present their views ownership of E.S. International, E.S. Financial, E.S. Portugal, and adequately and fail to identify disputed issues of fact that are material Bespar. Caisse Nationale de Credit Agricole, Paris, France ("CNCA"), to the Board's decision that would be clarified by a public meeting or also controls more than 25 percent of the voting shares of Banco hearing. For these reasons, and based on all the facts of record, the Espirito Santo. The Board has separately approved CNCA's applica- Board has determined that a public meeting or hearing is not required tion to become a bank holding company with respect to Espirito Santo or warranted in this case. Accordingly, the requests for a public Bank. Caisse Nationale de Credit Agricole, 86 Federal Reserve Bullemeeting or hearing on the proposal are denied. tin 412 (2000). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 419 organization in Portugal.2 Banco Espfrito Santo operates a Board deems appropriate to determine and enforce complibranch in New York, New York, and engages in limited ance with the BHC Act.7 The Board has reviewed the nonbanking activities in the United States. restrictions on disclosure in jurisdictions where the Appli- Espfrito Santo Bank is the 53rd largest banking organiza- cants have material operations and has communicated with tion in Florida, controlling deposits of $315 million, repre- relevant government authorities concerning access to inforsenting less than 1 percent of all deposits in commercial mation. The Applicants have committed that they will banking organizations in the state.3 make available to the Board such information on their operations and the operations of any of their affiliates that Certain Supervisory Considerations the Board deems necessary to determine and enforce compliance with the BHC Act, the IBA, and other applicable Under section 3 of the BHC Act, the Board may not federal law. The Applicants also have committed to coopapprove an application involving a foreign bank unless the erate with the Board to obtain any waivers or exemptions bank is "subject to comprehensive supervision or regula- that may be necessary in order to enable them to make such tion on a consolidated basis by the appropriate authorities information available to the Board. In light of these comin the bank's home country."4 The Board has made the mitments and other facts of record, the Board has confollowing findings with regard to the supervision of Banco cluded that the Applicants have provided adequate assur- Espfrito Santo. ances of access to any appropriate information the Board The home country supervisor of Banco Espfrito Santo is may request. For these reasons, and based on all the facts the Bank of Portugal. The Board previously has deter- of record, the Board has concluded that the supervisory mined in an application under the International Banking factors it is required to consider under section 3(c)(3) of Act (12 U.S.C. § 3101 et seq.) ("IBA") that another Portu- the BHC Act are consistent with approval. guese bank was subject to comprehensive consolidated supervision by the Bank of Portugal.5 The Board finds that Other Factors Under the BHC Act Banco Espfrito Santo is supervised in substantially the same manner as the other Portuguese bank. Based on this The Board also has carefully considered the financial and finding and all the facts of record, the Board concludes that managerial resources and future prospects of the banks and Banco Espfrito Santo is subject to comprehensive supervi- companies involved in this proposal, the convenience and sion on a consolidated basis by its home country supervi- needs of the communities to be served, and other supervisor.6 sory factors applicable under the BHC Act. Banco Espfrito The BHC Act also requires the Board to determine that Santo's capital levels exceed the levels required under the Applicants have provided adequate assurances that they Portuguese capital guidelines. The capital levels of Banco will make available to the Board such information on their Espfrito Santo also exceed the capital levels under the operations and activities and those of their affiliates that the Basle Capital Accord, and are considered equivalent to the capital levels that would be required of a U.S. banking organization under similar circumstances. 2. Data are as of December 31, 1998, and are based on exchange The Board has reviewed supervisory information from rates on that date. the home country authorities responsible for supervising 3. Data are as of June 30, 1999. Applicants concerning the proposal and the condition of 4. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the the parties, confidential financial information from the Ap- Board determines whether a foreign bank is subject to consolidated plicants, and reports of examination from the appropriate home country supervision under the standards set forth in Regulation K. See 12 C.F.R. 225.13(a)(4). Regulation K provides that a federal and state supervisors of the affected organizations foreign bank may be considered subject to consolidated supervision if assessing the financial and managerial resources of the the Board determines that the bank is supervised or regulated in such a organizations. Based on all the facts of record, the Board manner that its home country supervisor receives sufficient informahas concluded that the financial and managerial resources tion on the worldwide operations of the foreign bank, including the relationships of the bank to its affiliates, to assess the foreign bank's and future prospects of the organizations involved in the overall financial condition and compliance with law and regulation. proposal are consistent with approval, as are other supervi- See 12 C.F.R. 211.24(c)(l)(ii). sory factors that the Board must consider under section 3 5. See Caixa Geral de Depositos S.A., 85 Federal Reserve Bulletin of the BHC Act. 774(1999). In addition, based on all the facts of record, including the 6. With regard to the supervision of the parent companies of Banco Espfrito Santo, the Board has considered that Bespar and E.S. Portugal fact that Applicants do not have banking operations in the are subject to the supervision of the Bank of Portugal. E.S. Financial, banking market in which Espfrito Santo Bank operates, the although domiciled in Luxembourg, is also subject to the supervision Board has concluded that consummation of the proposal of the Bank of Portugal as a matter of Portuguese law. would not have a significantly adverse effect on competi- E.S. Control Holding and E.S. International are deemed "mixed tion or on the concentration of banking resources in any activity holding companies" by the Bank of Portugal. Portuguese law provides that mixed activity holding companies and their subsidiaries relevant banking market, and that competitive considermust supply the Bank of Portugal with all the information that may be ations are consistent with approval. Considerations related relevant for supervision. In addition, the Bank of Portugal may examine or commission the examination of mixed activity holding companies and their subsidiaries whenever it deems necessary for the consolidated supervision of a credit institution such as Banco Espfrito Santo. 7. See 12 U.S.C. § 1842(c)(3)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

420 Federal Reserve Bulletin • June 2000 to the convenience and needs of the communities to be (64 Federal Register 71,457 (1999)). The time for filing served, including the performance record of Espirito Santo comments has expired, and the Board has considered the Bank under the Community Reinvestment Act (12 U.S.C. proposal and all comments received in light of the factors § 2901 et seq.) ("CRA"), also are consistent with approval set forth in section 3 of the BHC Act. of the proposal.8 Valley View operates five subsidiary banks in Kansas and one bank in Missouri. Valley View is the seventh Conclusion largest commercial banking organization in Kansas, controlling approximately $1.3 billion in deposits, represent- Based on the foregoing and all the facts of record, the ing 3.5 percent of total deposits in commercial banking Board has determined that the applications should be, and organizations in the state ("state deposits").1 Valley View hereby are, approved. The Board's approvals are specifi- is the 31st largest commercial banking organization in cally conditioned on Applicants' compliance with all the Missouri, controlling approximately $255.4 million in decommitments made in connection with these applications, posits, representing less than 1 percent of state deposits. and on the receipt by Applicants and Espirito Santo Bank Bank of Lee's Summit is the 87th largest commercial of all necessary approvals from state and federal regula- banking organization in Missouri, controlling approxitors. The approvals are also specifically conditioned on the mately $113.9 million in deposits, representing less than Board's receiving access to information on the operations 1 percent of state deposits. On consummation of the proor activities of Applicants and any of their affiliates that the posal, Valley View would become the 25th largest com- Board determines to be appropriate to determine and en- mercial banking organization in Missouri, controlling deforce compliance by Applicants and their affiliates with posits of approximately $369.4 million, representing less applicable federal statutes. The commitments and condi- than 1 percent of state deposits. tions relied on by the Board in reaching its decision are deemed to be conditions imposed in writing by the Board Interstate Analysis in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law. Section 3(d) of the BHC Act, allows the Board to approve The acquisition of Espirito Santo Bank shall not be an application by a bank holding company to acquire consummated before the fifteenth calendar day following control of a bank located in a state other than the home the effective date of this order, and the proposal shall not be state of such bank holding company, if certain conditions consummated later than three months after the effective are met.2 For purposes of the BHC Act, the home state of date of this order, unless such period is extended for good Valley View is Kansas, and Valley View would acquire a cause by the Board or the Federal Reserve Bank of Atlanta, bank in Missouri. The conditions for an interstate acquisiacting pursuant to delegated authority. tion under section 3(d) are met in this case.3 In view of all By order of the Board of Governors, effective April 5, the facts of record, the Board is permitted to approve the 2000. proposal under section 3(d) of the BHC Act. Voting for this action: Chairman Greenspan, Vice Chairman Fergu- Competitive Considerations son, and Governors Kelley, and Gramlich. Absent and not voting: Governor Meyer. The BHC Act prohibits the Board from approving an application under section 3 of the BHC Act if the proposal ROBERT DEV. FRIERSON would result in a monopoly or would be in furtherance of Associate Secretary of the Board any attempt to monopolize the business of banking. The BHC Act also prohibits the Board from approving a pro- Valley View Bancshares, Inc. posed combination that would substantially lessen compe- Overland Park, Kansas tition or tend to create a monopoly in any relevant banking Order Approving Acquisition of a Bank 1. State deposit data are as of June 30, 1999. Valley View Bancshares, Inc. ("Valley View"), a bank 2. See 12 U.S.C. § bank holding company's home state is that state holding company within the meaning of the Bank Holding in which the total deposits of all banking subsidiaries of the company Company Act ("BHC Act"), has requested the were the largest on July 1, 1966, or on the date on which the company became a bank holding company, whichever is later. Board's approval under section 3 of the BHC Act 12 U.S.C. § 1841(o)(4)(C). (12 U.S.C. § 1842) to acquire Bank of Lee's Summit, Lee's 3. See 12 U.S.C. § 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and Summit, Missouri ("Bank of Lee's Summit"). (B). Bank of Lee's Summit has been in existence and continuously Notice of the proposal, affording interested persons an operated for the minimum period of time required under Missouri law. In addition, on consummation of the proposal, Valley View and its opportunity to submit comments, has been published affiliates would control less than 10 percent of the total amount of deposits of insured depository institutions in the United States and less than 13 percent of the total amount of deposits of insured depository 8. Espirito Santo Bank was rated "satisfactory" in its most recent institutions in Missouri, as required by state law. Mo. Ann. CRA performance evaluation conducted by the Federal Deposit Insur- Stat. § 362.915 (West 1997). Valley View also meets the capital, ance Corporation, as of July 21, 1997. managerial, and other requirements established under applicable law. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 421 market, unless the Board finds that the anticompetitive Lee's Summit in light of all the facts of record, including effects of the proposal are clearly outweighed in the public relevant supervisory reports of examination and other coninterest by the probable effects of the proposal in meeting fidential supervisory information assessing the financial the convenience and needs of the community to be served.4 and managerial resources of the organization. The Board Valley View and Bank of Lee's Summit compete di- notes that Valley View is well capitalized and would rectly in the Kansas City, Missouri, banking market ("Kan- remain so after consummation of the proposal. Based on sas City banking market").5 Valley View is the fifth largest these and all other facts of record, the Board concludes that commercial banking organization in the market, control- the financial and managerial resources and future prospects ling deposits of $1.3 billion, representing 6.4 percent of of Valley View, its subsidiary banks, and Bank of Lee's total deposits in depository institutions in the market Summit are consistent with approval, as are other supervi- ("market deposits").6 Bank of Lee's Summit is the 26th sory factors the Board must consider under section 3 of the largest commercial banking organization in the market, BHC Act. controlling deposits of $103.8 million in deposits, representing less than 1 percent of market deposits. Consumma- Convenience and Needs Factor tion of the proposal would be consistent with the Department of Justice Merger Guidelines ("DOJ Guidelines").7 In acting on a proposal under section 3 of the BHC Act, the On consummation of the proposal, Valley View would Board is required to consider the effect of the proposal on remain the fifth largest commercial banking organization in the convenience and needs of the community to be served the Kansas City banking market, controlling $1.4 billion in and take into account the records of the relevant depository deposits, representing approximately 7 percent of market institutions under the Community Reinvestment Act deposits. The HHI would increase 7 points to 871.8 ("CRA").9 The Board has carefully considered the conve- Based on all the facts of record, the Board concludes that nience and needs factor and the CRA performance records consummation of the proposal is not likely to result in any of Bank of Lee's Summit and Valley View's subsidiary significantly adverse effects on competition or on the con- banks in light of all the facts of record, including comcentration of banking resources in the Kansas City banking ments from The Concerned Clergy Coalition, Kansas City, market or any other relevant market. Missouri ("Protestant").10 Protestant alleges that Valley View's subsidiary banks have arbitrarily excluded low- Financial, Managerial, and Other Supervisory Factors and moderate-income ("LMI") census tracts from their assessment areas and have failed to adequately assist in The BHC Act also requires that the Board, in acting on an meeting the credit needs of these areas. Protestant contends application, consider the financial and managerial resources that Valley View's subsidiary banks are not adequately and future prospects of the companies and banks involved meeting the housing lending needs in LMI census tracts of in a proposal and certain supervisory factors. The Board the Kansas City banking market. Protestant also asserts has carefully reviewed the financial and managerial re- that Security Bank of Kansas City, Kansas City, Missouri sources and future prospects of Valley View and Bank of ("Security Bank"), has failed to comply with past CRArelated representations regarding participation in government-sponsored lending programs. 4. 12 U.S.C. § 1842(c). As provided in the CRA, the Board has evaluated the 5. The Kansas City banking market is defined as the Kansas City convenience and needs factor in light of examinations of Rand McNally Marketing Area in addition to the town of Trimble in the CRA performance records of the relevant institutions Clinton County, Missouri. 6. In this context, depository institutions include commercial banks, by the appropriate federal financial supervisory agency.11 savings banks, and savings associations. All the subsidiary banks of Valley View, and Bank of 7. Under the revised DOJ Guidelines, 49 Federal Register 26,823 Lee's Summit have received "satisfactory" ratings from (June 29, 1984), a market in which the post-merger Herfindahlthe Federal Deposit Insurance Corporation ("FDIC") in Hirschman Index ("HHI") is below 1000 is considered unconcentrated. The Department of Justice has informed the Board that a bank their most recent evaluations for CRA performance.12 merger or acquisition generally will not be challenged in the absence of other factors indicating anticompetitive effects unless the postmerger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher 9. 12 U.S.C. §2901 etseq. than normal HHI thresholds for screening bank mergers for anticom- 10. Protestant requests that the Board's action on the proposal petitive effects implicitly recognize the competitive effect of limited- impose a condition on Valley View to implement specific steps and purpose lenders and other nondepository financial entities. programs that Protestant contends would improve the CRA perfor- 8. Market share data are as of June 30, 1998. These data are based mance of all the subsidiary banks involved in the proposal. on calculations in which the deposits of thrift institutions are included 11. The interagency Questions and Answers Regarding Community at 50 percent. The Board previously has indicated that thrift institu- Reinvestment provide that an institution's most recent CRA perfortions have become, or have the potential to become, significant mance evaluation is an important consideration in the applications competitors of commercial banks. See Midwest Financial Group, 75 process because it represents a detailed on-site evaluation of the Federal Reserve Bulletin 386 (1989); National City Corporation, 70 institution's overall record of performance under the CRA by the Federal Reserve Bulletin 743 (1984). Thus the Board has regularly appropriate federal financial supervisor. 64 Federal Register 23,618 included thrift deposits in the calculation of market share on a 50- and 23,641 (1999). percent weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal 12. Valley View's subsidiary banks received "satisfactory" ratings Reserve Bulletin 52 (1991). as follows, all in 1999: Citizens State Bank, Paola, Kansas ("Citi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

422 Federal Reserve Bulletin • June 2000 Protestant contends that Valley View Bank, Mission commended Valley View Bank for its excellent record of Bank, and First Bank, which serve suburban and other lending to businesses with gross annual revenues of outlying areas of the Kansas City banking market, should $1 million or less. Valley View Bank made 479 small extend their delineated communities under the CRA to business loans from January 1997 through September 1999 include LMI census tracts in Kansas City. Although a in its assessment area. Approximately 76 percent by numbank's assessment area delineation is not a separate crite- ber, and 63 percent of the total dollar amount of small rion for CRA performance, examiners review whether an business loans made, were to businesses with gross annual institution's assessment area meets the requirements of the revenues of $1 million or less. Examiners noted that this regulation, including whether it arbitrarily excludes LMI performance significantly exceeded the performance by areas. In the most recent CRA performance evaluations of area lenders in the aggregate, which averaged 42 percent of Valley View's banks, the FDIC reviewed their assessment small business loans by number and 55 percent of the total areas delineation and concluded that the assessment area dollar amount of small business loans made, to businesses for each bank met the requirements of the regulation.13 In with gross annual revenues of less than $1 million. addition, two of Valley View's subsidiary banks recently Examiners of Security Bank noted that its primary cusexpanded their assessment areas to include a greater num- tomer base consisted of small- and medium-size busiber of LMI areas.14 nesses, and its principal loan product was small business In the most recent CRA performance examination of loans. Examiners also noted that Security Bank's lending Valley View's subsidiary banks, examiners found that the reflected a good responsiveness to community credit needs. geographic distribution of loans by the banks reflected a Examiners noted that 50 percent of the small business pattern of lending throughout their respective assessment loans by number originated by Security Bank in its assessareas and to individuals of all income levels. Examiners ment area were made in LMI census tracts, compared with noted no substantive violations of any antidiscrimination 10 percent by all reporting small business lenders in Wyanlaws or regulations on any of the examinations. dotte and Johnson Counties.17 Examiners of First Bank Examiners noted that five of Valley View's six subsid- noted that 29.3 percent of total dollar amount of the bank's iary banks focused primarily on commercial lending.15 small business loans were in LMI tracts. Consistent with that business strategy, commercial loans, Examiners noted that Valley View's subsidiary banks which include construction and development, commercial have had reasonable records of mortgage and consumer real estate, and multifamily housing, represented a majority lending to LMI borrowers in light of the banks' focus on of the dollar amount of the banks' total outstanding loans.16 commercial lending and the demographic characteristics of Examinations of these banks noted the banks' committhe banks' delineated assessment areas.18 For example, ments to small business lending. For example, examiners examiners determined that Valley View Bank made zens"), as of June 29; First Bank, as of August 2; Industrial Bank, as 35 percent of its consumer loans in its assessment area to of November 2; The Mission Bank, Mission, Kansas ("Mission LMI borrowers, which exceeded the percentage of LMI Bank"), as of December 9; Security Bank, as of April 1; Valley View households in the bank's delineated area. In addition, of State Bank, Overland Park, Kansas ("Valley View Bank"), as of the 249 residential real estate loans Valley View Bank September 7. Bank of Lee's Summit received a "satisfactory" rating, as of November 2, 1998. 13. Protestant has criticized the FDIC's performance evaluations of Valley View's banks, including its review of their assessment areas. As noted above, the CRA performance evaluation is an important factor in the consideration of an institution's CRA record, and is given great weight because it represents an on-site evaluation of the CRA 17. Protestant asserts that Security Bank has failed to comply with performance record of the bank and includes a review of local CRA-related commitments made to the Board in 1996, involving community banking needs. Protestant has not presented any data or Federal Housing Administration ("FHA") and Small Business Adminevidence that were not available at the time of the performance istration ("SBA") lending. Although Valley View had stated in 1996 evaluations. that part of Security Bank's business plan was to become a more 14. Since the most recent CRA performance evaluations, Valley active SBA and FHA lender, this statement was neither a commitment View Bank added 21 census tracts in Jackson County, Missouri, nor a condition of approval of Valley View's application. See Valley which includes Kansas City, to its assessment area. Five of these tracts View Bancshares, Inc., 82 Federal Reserve Bulletin 1036, 1038 are classified as LMI census tracts. Mission Bank added 14 census (1996). Moreover, the record indicates that Security Bank has made a tracts in Wyandotte County, Kansas, to its assessment area. Ten of good faith effort to employ individuals with experience in these tracts are LMI census tracts. government-sponsored lending programs. Protestant highlights the 15. Citizens focused primarily on residential real estate lending, fact that Security Bank has not made any SBA loans during its last which represented 49 percent of its total loans. Examiners concluded assessment period. The Board notes that the CRA provides banks with that Citizens achieved an excellent penetration among borrowers of substantial leeway in developing specific CRA-related policies and different income levels. They noted that 56 percent of the total number programs and does not require participation in any particular type of of real estate loans were made to LMI borrowers, which exceeded the activity or program. Accordingly, in reviewing the proposal, the Board percentage of families in the assessment area that resided in LMI has focused on the programs and policies that Security Bank has in tracts (31 percent). place to assist in serving the credit needs of the entire community. See 16. Commercial loans represented 79 percent of the dollar amount Fifth Third Bancorp, 80 Federal Reserve Bulletin 838 (1994). of the outstanding loans for Valley View's lead bank, Valley View 18. For example, Industrial Bank, Mission Bank, and Security Bank Bank. This statistic was 69 percent for Security Bank, 96 percent for all include Wyandotte County in their assessment areas. Several of the The Mission Bank, 85 percent for Industrial Bank, and 81 percent for LMI census tracts in Wyandotte County are industrial or commercial First Bank. Citizen's Bank, however, had only 28 percent of the total in nature, have a low percentage of owner-occupied housing, or are in dollar amount of its outstanding loans in commercial loans. a flood plain. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 423 originated in its assessment area during the evaluation that this lending record compared very favorably with the period, 16 percent were to LMI borrowers.19 Examiners percentage of LMI borrowers in the assessment area noted that although this percentage of residential real estate (31 percent), and commended Citizens for achieving an loans to LMI residents was less than the aggregate percent- excellent penetration among borrowers of different income age of Home Mortgage Disclosure Act ("HMDA")20 re- levels. porters in Johnson County, the bank's lending record was Bank of Lee's Summit's primary business focus was reasonable when the demographic factors of Valley View residential real estate lending, which constituted 40 percent Bank's assessment area were taken into consideration.21 of the institution's loan portfolio. Examiners noted an Examiners noted that First Bank had demonstrated an excellent penetration of lending among borrowers of variexcellent responsiveness to the community's home mort- ous income levels. For example, examiners found that gage needs by originating 36 percent of its 99 HMDA 44 percent of loans by number originated by Bank of Lee's reportable loans in 1997 and 1998 to LMI borrowers in its Summit were to LMI borrowers. This compared favorably assessment area, compared with 24.7 percent for all report- with the percentage of LMI families living in the bank's ing HMDA lenders in the bank's assessment area. assessment area (23 percent). Examiners also noted that a Examiners also commended Security Bank for its excel- majority of the bank's loan originations were in the bank's lent response to home mortgage needs in its community. In assessment area, and that the average loan-to-deposit ratio addition, 71 percent of the consumer loans Security bank reflected a reasonable responsiveness to the credit needs of originated in its assessment area were to LMI borrowers. its community. Examiners noted no substantive or techni- Examiners noted that this compared favorably with the cal violations of any antidiscrimination laws or regulations. percentage of LMI borrowers in the assessment area (32.7 percent). Conclusion on the Convenience and Needs Factor Protestant has criticized Industrial Bank's level of housing-related lending compared with smaller banks and The Board has carefully considered the entire record in its the decline in its loan-to-deposit ratio. As noted, Industrial review of the convenience and needs factor under the BHC Bank's business strategy is focused on commercial lend- Act. Based on all the facts of record, including information ing, which represented 85 percent of the dollar amount of provided by Protestant, Valley View, and CRA perforall outstanding loans. Residential real estate loans repre- mance examinations, and for the reasons discussed above, sented 5 percent of the dollar amount of the bank's total the Board concludes that considerations relating to conveoutstanding loans. As discussed above, the CRA does not nience and needs, including the CRA performance records require participation in any particular activity. Although of the banks involved in the proposal, are consistent with Industrial Bank's home mortgage lending is limited, exam- approval. iners found that Industrial Bank's overall lending levels reflected a good responsiveness to community credit needs. Conclusion Of Industrial Bank's 95 small business loans originated from 1998 through November 1999 in its assessment area, Based on all the facts of record, the Board has determined 89 percent were to businesses that had annual revenues of that this application should be, and hereby is, approved.22 less than $1 million. Examiners commended Industrial The Board's approval is specifically conditioned on com- Bank for its responsiveness to the community's consumer pliance by Valley View with all the commitments made in loan needs by originating 70 percent of its 417 consumer connection with the application. For purposes of this acloans to LMI borrowers, compared with the percentage of tion, the commitments and conditions relied on by the LMI borrowers in the assessment area (32.7 percent). Citizens is the only Valley View subsidiary that primar- 22. Protestant has requested that the Board hold a public hearing or ily focuses on residential real estate lending. Examiners meeting to receive testimony on the proposal. Section 3 of the BHC noted that Citizens' loan-to-deposit ratio of 75 percent Act does not require the Board to hold a public hearing or meeting on reflected a strong responsiveness to community credit an application unless the appropriate supervisory authority for the needs. Examiners also noted that in the 12 months preced- bank to be acquired makes a timely written recommendation of denial ing Citizens' evaluation, Citizens made 110 HMDA report- of the application. In this case, the Board has received no such request. Under its rules, the Board may, in its discretion, hold a public able loans, of which 86 percent by number and 88 percent hearing or meeting on an application to clarify factual issues related to of the total dollar amount of these loans made, were the application and to provide an opportunity for testimony, if approoriginated in the assessment area. Of the residential real priate. 12 C.F.R. 262.3(e) and 262.25(d). The Board has carefully estate loans Citizens originated in its assessment area, considered Protestant's request in light of all the facts of record. In the 56 percent were made to LMI borrowers. Examiners noted Board's view, Protestant has had ample opportunity to submit its views, and has in fact submitted substantial written materials that have been considered by the Board in acting on the application. Protestant fails to demonstrate why its substantial written submissions do not 19. The evaluation period covered 1997 through June 1999. These adequately present its allegations or why a public hearing or meeting statistics only include loans that included the borrower's gross in- is otherwise warranted in this case. For these reasons, and based on all come. the facts of record, the Board has determined that a public hearing or 20. 12 U.S.C. § 2801 etseq. meeting is not necessary to clarify the factual record in the applica- 21. Valley View Bank's assessment area at the time of the evalua- tion, and is not warranted in this case. Accordingly, Protestant's tion was Johnson County, Kansas, which had no LMI census tracts. request for a public hearing or meeting is denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

424 Federal Reserve Bulletin • June 2000 Board in reaching its decision are deemed to be conditions CIBC owns a subsidiary depository institution in Florida, imposed in writing by the Board in connection with its which controls deposits of less than $1 million,1 and CIBC findings and decision and, as such, may be enforced in also operates a state- licensed branch in Chicago, Illinois; proceedings under applicable law. agencies in New York, New York; Atlanta, Georgia; and The proposed acquisition of the Bank of Lee's Summit Los Angeles and Menlo Park, California; and a representashall not be consummated before the fifteenth calendar day tive office in Houston, Texas. CIBC engages in a broad following the effective date of this order, and not later than range of permissible nonbanking activities in the United three months after the effective date of this order, unless States through subsidiaries, including a subsidiary engaged such period is extended for good cause by the Board or by in underwriting and dealing in, to a limited extent, debt and the Federal Reserve Bank of Kansas City, acting pursuant equity securities. to delegated authority. St. Anthony, with total consolidated assets of By order of the Board of Governors, effective April 3, $28.3 million, is the 591st largest depository organization 2000. in Illinois, controlling less than 1 percent of total deposits of insured depository institutions in the state ("state depos- Voting for this action: Chairman Greenspan, Vice Chairman Fergu- its").2 son, and Governors Kelley, Meyer, and Gramlich. The Board previously has determined by regulation that the operation of a savings association by a bank holding ROBERT DEV. FRIERSON company is closely related to banking for purposes of Associate Secretary of the Board section 4(c)(8) of the BHC Act.3 The Board requires that savings associations acquired by bank holding companies Orders Issued Under Section 4 of the Bank Holding conform their direct and indirect activities to those permis- Company Act sible for bank holding companies under section 4 of the BHC Act. St. Anthony does not currently engage in any Canadian Imperial Bank of Commerce activities impermissible for bank holding companies. Toronto, Canada Competitive Considerations The CIBC World Markets Corporation Toronto, Canada In order to approve the proposal, the Board is also required by section 4(j)(2)(A) of the BHC Act to determine that the CIBC World Markets Inc. acquisition of St. Anthony by CIBC "can reasonably be Toronto, Canada expected to produce benefits to the public . . . that outweigh possible adverse effects, such as undue concentra- CIBC Delaware Holdings Inc. tion of resources, decreased or unfair competition, conflicts New York, New York of interests, or unsound banking practices."4 As part of its review of these factors, the Board has considered carefully Order Approving the Acquisition of a Savings the competitive effects of the proposal in light of all the Association facts of record.5 CIBC and St. Anthony do not compete directly in any relevant banking market. Based on all the Canadian Imperial Bank of Commerce ("CIBC"), The facts of record, the Board concludes that consummation of CIBC World Markets Corporation ("World Markets the proposal would not result in a monopoly or in any Corp."), CIBC World Markets Inc. ("World Markets significantly adverse effects on competition or on the con- Inc."), and CIBC Delaware Holdings Inc. ("Holdings") centration of banking resources in any relevant banking (collectively, "Notificants"), all bank holding companies market. within the meaning of the Bank Holding Company Act ("BHC Act"), have requested the Board's approval under Convenience and Needs Considerations section 4(c)(8) of the BHC Act (12 U.S.C. § 1843(c)(8)) and section 225.24 of the Board's Regulation Y to acquire In acting on notices to acquire a savings association, the all the common stock of St. Anthony Bancorp, Inc. Board reviews the records of performance of the relevant ("St. Anthony"), and St. Anthony's wholly owned subsid- depository institutions under the Community Reinvestment iary, St. Anthony Bank, A Federal Savings Bank ("Thrift"), both of Cicero, Illinois. Notice of the proposals, affording interested persons an 1. Asset data for CIBC are as of April 30, 1999, and use exchange opportunity to comment, has been published (65 Federal rates then in effect, ranking data are as of October 31, 1998, and Register 4975 (2000)). The time for filing comments has deposit data are as of December 31, 1999. expired, and the Board has considered the notices and all 2. Asset data for St. Anthony are as of September 30, 1999, and comments received in light of the factors set forth in ranking data are as of June 30, 1999. section 4 of the BHC Act. 3. 12 C.F.R. 225.28(b)(4). 4. 12 U.S.C. § 1843(j)(2)(A). CIBC, with consolidated assets of $185 billion, is the 5. See First Hawaiian, Inc., 79 Federal Reserve Bulletin 966 largest banking organization headquartered in Canada. (1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 425 Act (12 U.S.C. § 2901 et seq.) ("CRA").6 The only insured expected to produce public benefits that would outweigh depository institution controlled by CIBC is CIBC any likely adverse effects under the proper incident to National Bank, Maitland, Florida ("CIBC NB"). CIBC banking standard of section 4(j)(2) of the BHC Act. NB commenced operations in October 1999, and has not yet received a CRA performance rating from its primary Conclusion federal supervisor, the Office of the Comptroller of the Currency. The Board has, however, reviewed the record of Based on the foregoing and all the facts of record, the performance under the CRA of Canadian Imperial Bank of Board has determined that the notice should be, and hereby Commerce (New York) ("CIBC(NY)"), a New York state is, approved. The Board's approval of the proposal is bank subsidiary of CIBC that was operated by CIBC from specifically conditioned on compliance by Notificants with 1951 until it was voluntarily dissolved in 1996. The perfor- the commitments made in connection with this notice, and mance of CIBC(NY) under the CRA was last reviewed by on the Board's receiving access to information on the the Federal Deposit Insurance Corporation on March 14, activities or operations of CIBC and any of its affiliates that 1994, and rated "outstanding."7 Thrift received a "satisfac- the Board determines to be appropriate to determine and tory" rating in its most recent CRA evaluation by the enforce compliance by CIBC and its affiliates with applica- Office of Thrift Supervision, dated August 18, 1998. ble federal statutes. The Board's approval is also subject to Based on all the facts of record, including CIBC's past all the conditions set forth in this order and in Regularecord of performance under the CRA, the Board con- tion Y, including those in sections 225.7 and 225.25(c) cludes that convenience and needs considerations are con- (12 C.F.R. 225.7 and 225.25(c)), and to the Board's authorsistent with approval of the proposal. ity to require such modification or termination of the activities of a bank holding company or any of its subsid- Financial, Managerial, and Supervisory Considerations iaries as the Board finds necessary to ensure compliance with, or to prevent evasion of, the provisions and purposes In connection with its review of the public interest factors of the BHC Act and the Board's regulations and orders under section 4 of the BHC Act, and in light of all the facts issued thereunder. These commitments and conditions reof record, the Board also has carefully reviewed the finan- lied on by the Board in reaching this decision shall be cial and managerial resources of CIBC and St. Anthony deemed to be conditions imposed in writing by the Board and their respective subsidiaries and the effect the transac- in connection with its findings and decision and, as such, tion would have on such resources.8 The Board has re- may be enforced in proceedings under applicable law. viewed, among other things, confidential reports of exami- This transaction may not be consummated later than nation and other supervisory information received from the three months after the effective date of this order, unless primary federal supervisors of the organizations. Based on such period is extended for good cause by the Board or the all the facts of record, including commitments made by Federal Reserve Bank of New York, acting pursuant to CIBC, the Board concludes that the financial and manage- delegated authority. rial resources of the organizations involved in the proposal By order of the Board of Governors, effective April 12, are consistent with approval. 2000. The record indicates that consummation of the proposal would result in benefits to consumers and businesses. The Voting for this action: Chairman Greenspan, Vice Chairman Ferguproposal would enable CIBC to provide Thrift's customers son, and Governors Kelley, and Gramlich. Absent and not voting: Governor Meyer. with access to a broad array of products and services throughout an expanded service area. Additionally, there are public benefits to be derived from permitting capital ROBERT DEV. FRIERSON markets to operate so that bank holding companies may Associate Secretary of the Board make potentially profitable investments in nonbanking Orders Issued Under Sections 3 and 4 of the Bank companies and from permitting banking organizations to Holding Company Act allocate their resources in the manner they believe is most efficient when, as in this case, those investments are consistent with the relevant considerations under the BHC Act. Peoples Heritage Financial Group, Inc. Based on all the facts of record, the Board has determined Portland, Maine that consummation of this proposal can reasonably be Order Approving the Acquisition of a Bank Holding Company 6. See, e.g., Banc One Corporation, 83 Federal Reserve Bulletin 602 (1997). Peoples Heritage Financial Group, Inc. ("Peoples Heri- 7. Between the dissolution of CIBC(NY) and the establishment of tage"), a bank holding company within the meaning of the CIBC NB, none of the operations of CIBC or its subsidiaries have Bank Holding Company Act ("BHC Act"), has requested been subject to the CRA, though CIBC also operated Canadian the Board's approval under section 3 of the BHC Act Imperial Bank of Commerce California, a California state bank, from (12 U.S.C. § 1842) to acquire Banknorth Group, Inc., Burl- 1929 until it was voluntarily dissolved in 1991. 8. See 12 C.F.R. 225.26. ington, Vermont ("Banknorth"), and its wholly owned Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

426 Federal Reserve Bulletin • June 2000 subsidiary banks.1 Peoples Heritage also has requested the banks are located in Vermont, Massachusetts, New Hamp- Board's approval under sections 4(c)(8) and 4(j) of the shire, and New York.6 Thus, for purposes of section 3(d), BHC Act (12 U.S.C. §§ 1843(c)(8) and 18430)) and sec- this transaction involves the acquisition by a Maine bank tion 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) holding company of banks in Massachusetts, New Hampto acquire The Stratevest Group, N.A., Barre, Vermont shire, New York, and Vermont. ("Stratevest"), and thereby engage in trust company activ- All the conditions for an interstate acquisition enumerities under section 225.28(b)(5) of the Board's Regula- ated in section 3(d) of the BHC Act are met in this case.7 In tion Y (12 C.F.R. 225.28(b)(5)).2 view of all the facts of record, the Board is permitted to Notice of the proposal, affording interested persons an approve the proposal under section 3(d) of the BHC Act. opportunity to submit comments, has been published (64 Federal Register 62,204 (1999)). The time for filing Competitive Considerations comments has expired, and the Board has considered the proposal and all comments received in light of the factors The BHC Act prohibits the Board from approving an set forth in sections 3 and 4 of the BHC Act. application under section 3 of the BHC Act if the proposal Peoples Heritage, with total consolidated assets of would result in a monopoly or would be in furtherance of $13.9 billion is the 48th largest commercial banking orga- any attempt to monopolize the business of banking. The nization in the United States, controlling less than 1 per- BHC Act also prohibits the Board from approving a procent of total assets of insured commercial banks in the posed combination that would substantially lessen compe- United States.3 Peoples Heritage operates depository insti- tition or tend to create a monopoly in any relevant banking tutions in Connecticut, Maine, Massachusetts, and New market, unless the Board finds that the anticompetitive Hampshire. Peoples Heritage is headquartered in Maine, effects of the proposal are clearly outweighed in the public where it is the largest commercial banking organization, interest by the probable effects of the proposal in meeting controlling deposits of $2.9 billion in the state, represent- the convenience and needs of the community to be served.8 ing approximately 21.5 percent of total deposits in insured Peoples Heritage and Banknorth compete directly in depository institutions in the state ("state deposits").4 seven banking markets: three in New Hampshire, three in Banknorth, with total consolidated assets of $4.6 billion, Massachusetts, and one in Vermont.9 The Board has careoperates depository institutions in Vermont, Massachu- fully reviewed the competitive effects of the proposal in setts, New Hampshire, and New York. Banknorth is the these banking markets in light of all the facts of record, second largest depository institution in Vermont, control- including the number of competitors that would remain in ling deposits of $1.5 billion, representing approximately the markets, the relative shares of total deposits in deposi- 20.6 percent of state deposits. On consummation of the tory institutions in the markets ("market deposits") conproposal, and after accounting for the proposed divestiture trolled by the companies involved in this transaction,10 the discussed in this order, Peoples Heritage would have total concentration levels of market deposits and the increase in consolidated assets of approximately $18.5 billion and control deposits of $11.9 billion. 6. For purposes of section 3(d) of the BHC Act, the Board considers Interstate Analysis a bank to be located in the states in which the bank is chartered or headquartered or operates a branch. NationsBank Corporation, 84 Federal Reserve Bulletin 858 (1998). Section 3(d) of the BHC Act allows the Board to approve 7. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A). Peoan application by a bank holding company to acquire ples Heritage is adequately capitalized and adequately managed, as control of a bank located in a state other than the home defined in the BHC Act, and the subsidiary banks of Banknorth have state of the bank holding company if certain conditions are been in existence and operated for the minimum periods of time met.5 For purposes of the BHC Act, the home state of necessary to satisfy age requirements established by applicable state law. See Mass. Gen. Laws Ann. Ch. 167A, § 2 (West 1998) (three Peoples Heritage is Maine, and Banknorth's subsidiary years); N.H. Rev. Stat. Ann. § 384:58 (1999) (five years). Peoples Heritage also would not exceed applicable deposit limitations as calculated under state law. See 12 U.S.C. § 1842 (d)(2)(B); Mass. 1. The subsidiary banks of Banknorth are listed in Appendix A. Gen. Laws Ann. Ch. 167A, § 2 (West 1998); N.H. Rev. Stat. 2. Peoples Heritage and Banknorth also have requested the Board's Ann. § 384-B:3 (1999); Vt. Stat. Ann. tit. 8, § 1015 (1999). On approval to hold and exercise an option for Peoples Heritage to consummation of the proposal, Peoples Heritage would control less acquire up to 19.9 percent of the voting shares of Banknorth and for than 10 percent of the total amount of deposits in insured depository Banknorth to acquire up to 19.9 percent of Peoples Heritage's voting institutions in the United States. All other requirements of section 3(d) shares. These options would expire on consummation of the proposal. of the BHC Act also would be met on consummation of the proposal. 3. Asset data are as of June 30, 1999, and ranking data are as of 8. 12 U.S.C. § 1842(c). December 31, 1999. 9. The banking markets are described in Appendix B. 4. Deposit data are as of June 30, 1999. In this context, depository 10. Market share data are as of June 30, 1998, and are based on institutions include commercial banks, savings banks, and savings calculations that include the deposits of thrift institutions at 50 perassociations. cent. The Board previously has indicated that thrift institutions have 5. See 12 U.S.C. § 1842(d). A bank holding company's home state become, or have the potential to become, significant competitors of is that state in which the total deposits of all banking subsidiaries of commercial banks. See, e.g., Midwest Financial Group, 75 Federal the company were the largest on July 1, 1966, or on the date on which Reserve Bulletin 386 (1989); National City Corporation, 70 Federal the company became a bank holding company, whichever is later. Reserve Bulletin 743 (1984). Thus, the Board has regularly included 12 U.S.C. § 1841(o)(4)(C). thrift deposits in the calculation of market share on a 50-percent Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 427 these levels as measured by the Herfindahl-Hirschman C. Portsmouth-Dover-Rochester Banking Market Index ("HHI") under the Department of Justice Merger Guidelines ("DOJ Guidelines"), and other characteristics Peoples Heritage does not propose any divestiture in the of the markets.11 Portsmouth-Dover-Rochester, New Hampshire, banking market, and consummation of the proposal in this market A. Banking Market that Complies with the DOJ would result in an increase in market concentration that Guidelines without Divestitures exceeds the thresholds in the DOJ Guidelines. The Board has considered whether other factors either mitigate the Consummation of the proposal without divestitures would competitive effects of the proposal in the market or indicate be consistent with Board precedent and the DOJ Guide- that the proposal would have a significantly adverse effect lines in five banking markets: Boston, Springfield, and on competition in the market.15 Worcester, all in Massachusetts; Laconia, New Hampshire; Peoples Heritage is the largest depository institution in and Brattleboro, Vermont.12 After consummation of the the market, controlling deposits of $811.3 million, repreproposal, numerous competitors would remain in each senting approximately 29.7 percent of market deposits. banking market and the markets would remain moderately Banknorth is the seventh largest depository institution in concentrated as measured by the HHI. the market, controlling deposits of $105.4 million, representing approximately 3.8 percent of market deposits. On B. Banking Market that Complies with the DOJ consummation of the proposed merger, Peoples Heritage Guidelines with Proposed Divestiture would remain the largest depository institution in the market, controlling deposits of $916.7 million, representing To mitigate the potential anticompetitive effects of the approximately 33.5 percent of market deposits. The HHI proposal in the Wolfeboro, New Hampshire, banking mar- would increase 229 points to 1967. ket, Peoples Heritage has committed to divest one branch In reviewing the competitive effects of this proposal, the that controls $28.1 million in deposits. The branch to be Board has considered that several factors appear to mitidivested includes all deposits in the market controlled by gate the likely effect of the proposal on competition in the Peoples Heritage before consummation of the proposal.13 Portsmouth-Dover-Rochester banking market. In particu- After accounting for the proposed divestiture, consumma- lar, the Board has considered the number and size of tion of the proposal in this market would not cause any competing institutions in the banking market. Fifteen deincrease in market concentration as measured by the HHI pository institutions in addition to Peoples Heritage would and would be consistent with Board precedent and the DOJ remain in the market after the proposed acquisition. Two of Guidelines.14 these depository institutions would each control more than 12 percent of market deposits. The market also appears to be attractive for entry by out-of-market competitors. Since 1990, the population in the market has increased at a rate faster than the rate of increase in population in New Hampshire or Maine, the two states in which the market is located. In 1998, the weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve average household income in two of the counties that Bulletin 52 (1991). comprise a significant portion of the market exceeded the 11. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), average household income in their respective states. In a market in which the post-merger HHI is more than 1800 is considered highly concentrated. The Department of Justice has informed the addition, there has been one de novo entry into the market Board that a bank merger or acquisition generally will not be chal- in the past three years. lenged (in the absence of other factors indicating anticompetitive The Board believes that the number of competitors, the effects) unless the post-merger HHI is at least 1800 and the merger structure of the market, and the attractiveness of the increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening Portsmouth-Dover-Rochester banking market mitigate pobank mergers for anticompetitive effects implicitly recognize the tential anticompetitive effects of the transaction in this competitive effects of limited-purpose lenders and other nondeposi- case. tory financial institutions. The Department of Justice has conducted a detailed 12. The effects of the proposal on the concentration of banking review of the proposal and advised the Board that, condiresources in these markets are set forth in Appendix C. 13. Peoples Heritage has committed that, if it is unsuccessful in tioned on completion of the proposed divestiture, consumcompleting the proposed divestiture with a purchaser determined by mation of the proposal would not likely have a signifithe Board to be competitively suitable within 180 days after consum- cantly adverse effect on competition in any relevant mation of the acquisition of Banknorth, it will transfer the unsold banking market. The Office of the Comptroller of the branch to an independent trustee that is acceptable to the Board and will instruct the trustee to sell the branch promptly to one or more Currency ("OCC") and the Federal Deposit Insurance alternative purchasers acceptable to the Board. See BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 11 Federal Reserve Bulletin 484 15. The number and strength of factors necessary to mitigate the (1991). competitive effects of a proposal depend on the level of concentration 14. The effect of the proposal on the concentration of banking and size of the increase in market concentration. See NationsBank resources in the Wolfeboro banking market is set forth in Appendix D. Corporation, 84 Federal Reserve Bulletin 129 (1998). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

428 Federal Reserve Bulletin • June 2000 Corporation ("FDIC") also have been afforded an opportu- by their primary federal supervisors.18 Banknorth's lead nity to comment and have not objected to consummation of subsidiary bank, Howard Bank, N.A., Burlington, Verthe proposal. mont, was rated "outstanding" for CRA performance by After carefully reviewing all the facts of record, and for the OCC, as of December 1, 1997, and Banknorth's other the reasons discussed in the order and appendices, the subsidiary banks that have been examined have received Board concludes that consummation of the proposal would "outstanding" or "satisfactory" CRA performance ratings not likely result in a significantly adverse effect on compe- in their most recent CRA examination by their primary tition or on the concentration of banking resources in any federal supervisors.19 of the seven banking markets in which Peoples Heritage In the Peoples Examination, examiners found that lendand Banknorth directly compete or in any other relevant ing by Peoples Heritage Bank was geographically distribbanking market. Accordingly, based on all the facts of uted throughout its assessment area and that credit was record, and subject to completion of the proposed divesti- extended to borrowers at all income levels. Examiners ture and compliance with the related commitments, the noted no substantive or technical violations at the bank of Board has determined that competitive factors are consis- any antidiscrimination laws or regulations. tent with approval of the proposal. In 1997, Peoples Heritage Bank was the largest home mortgage lender in Maine, with almost 17 percent of all Convenience and Needs Considerations mortgage loans reported under the Home Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.) that were originated in In acting on a proposal under section 3 of the BHC Act, the its assessment area.20 The bank made 13,959 mortgage Board is required to consider the effect of the proposal on loans totaling $1.9 billion. the convenience and needs of the community to be served. Examiners reported that Peoples Heritage Bank provided The Board has carefully considered the effect of the pro- a broad range of loan products, including governmentposal on the convenience and needs of the communities to sponsored affordable mortgage loan programs. The bank be served in light of all the facts of record, including has been the largest lender under programs offered by the comments submitted by a community development organi- Maine State Housing Authority (MSHA).21 In 1997 and the zation in Vermont ("Commenter"). Commenter expressed first six months of 1998, the bank originated 219 MSHA support for the efforts of Banknorth's subsidiary banks to loans totaling $14.7 million.22 Peoples Heritage Bank also help address the need for affordable housing, farm, and small business lending and for community reinvestment in Vermont, and expressed concern that the proposal may 18. Springfield Institution for Savings, Springfield, Massachusetts result in reduced support for these areas or reduced access ("SIS"), received an "outstanding" rating from the FDIC, as of to banking services. September 1997; Family Bank, FSB, Haverhill, Massachusetts ("Fam- The Board has long held that consideration of the conve- ily Bank"), received an "outstanding" rating from the Office of Thrift nience and needs factor includes a review of the records of Supervision ("OTS"), as of July 1997; Atlantic Bank of Portland, Portland, Maine, received a "satisfactory" rating from the OCC, as of the relevant depository institutions under the Community June 1996; Glastonbury Bank and Trust Company, Glastonbury, Con- Reinvestment Act (12 U.S.C. § 2901 et seq.) ("CRA"). As necticut, received a "satisfactory" rating from the FDIC, as of August provided in the CRA, the Board has evaluated this factor in 1996; and Bank of New Hampshire, Manchester, New Hampshire, light of examinations by the appropriate federal banking received a "satisfactory" rating from the FDIC, as of September 1998. SIS was merged into Family Bank in 1999, but Family Bank has supervisors of the CRA performance records of the relenot been examined for CRA performance since the merger. vant institutions.16 Peoples Heritage's lead subsidiary bank, 19. Franklin-Lamoille Bank, Saint Albans, Vermont, received an Peoples Heritage Savings Bank, Portland, Maine ("Peo- "outstanding" rating from the FDIC, as of March 1999; Evergreen ples Heritage Bank"), received an "outstanding" rating Bank, N.A., Glens Falls, New York, received a "satisfactory" rating from the OCC, as of November 1997; Farmington National Bank, from its primary federal supervisor, the FDIC, at its most Farmington, New Hampshire, received a "satisfactory" rating from recent CRA examination, as of September 1998 ("Peoples the OCC, as of December 1997; First Vermont Bank and Trust Examination").17 Peoples Heritage's other subsidiary Company, Brattleboro, Vermont, received a "satisfactory" rating from banks have received "outstanding" or "satisfactory" CRA the FDIC, as of December 1997; and Granite Savings Bank and Trust performance ratings in their most recent CRA examination Company, Barre, Vermont, received a "satisfactory" rating from the FDIC, as of August 1998. First Massachusetts Bank, N.A., Worcester, Massachusetts, has not been examined for CRA performance by the OCC. 20. The assessment area for Peoples Heritage Bank approximated the State of Maine. The bank controlled 21.5 percent of state deposits. 16. The Interagency Questions and Answers Regarding Community 21. Peoples Heritage Bank has been named MSHA Lender of the Reinvestment provide that an institution's most recent CRA perfor- Year for the past three years. mance evaluation is an important consideration in the applications 22. Commenter questioned whether Peoples Heritage would expand process because it represents a detailed on-site evaluation of the its support for affordable housing loans and multifamily housing institution's overall record of performance under the CRA by the projects to compensate fully for the loss of support for these projects appropriate federal banking supervisor. 64 Federal Register 23,618 by Banknorth. Commenter expressed particular concern that Peoples and 23,641 (1999). Heritage might not maintain Banknorth's level of support of programs 17. The bank has retained an "outstanding" CRA performance sponsored by the Vermont Housing Finance Authority ("VHFA"), rating since 1978 when federal supervisors began examining insured which combines state subsidies, low-cost bank funding, and the assisdepository institutions for CRA performance. tance of nonprofit associations to provide affordable mortgages to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 429 has developed its own affordable mortgage loan programs records of performance of the institutions involved, are in response to the needs of the community it serves. For consistent with approval of the proposal. example, the bank entered into an agreement with the Penquis Community Action Program to provide qualified Financial, Managerial, and Other Supervisory Factors low-income borrowers in the Bangor, Maine, area with home purchase mortgage loans featuring 100 percent fi- The BHC Act also requires the Board, in acting on an nancing and a sliding scale of fixed interest rates no higher application, to consider the financial and managerial rethan 7 percent, with lower rates for borrowers with lower sources and future prospects of the companies and banks incomes. Examiners also commended Peoples Heritage involved in a proposal, and certain other supervisory fac- Bank for its strong level of small business and small farm tors. lending. During 1997, it extended 1,843 CRA-reported The Board has carefully considered the financial and small business loans totaling $156.3 million. Of these managerial resources and future prospects of Peoples Heriloans, 93.3 percent by number, and 93.5 percent of the total tage and Banknorth and their respective subsidiary banks, dollar amount, were made in Peoples Heritage Bank's and other supervisory factors in light of all the facts of assessment area.23 record. As part of this consideration, the Board has re- In addition, examiners found that Peoples Heritage Bank viewed relevant reports of examination and other superviparticipated in community development lending in a man- sory information prepared by the Federal Reserve Bank of ner consistent with the needs of its assessment area. The Boston and other federal banking supervisory agencies, bank originated 19 qualified community development loans including reports concerning the parties' risk management in its assessment area during the period covered in the systems and steps taken recently by Peoples Heritage to Peoples Examination, totaling $11.5 million. The bank also enhance these systems. The Board notes that the bank made 50 qualified community development investments, holding companies and their subsidiary banks are well totaling $11.4 million, during this period. capitalized and are expected to remain so after consumma- Peoples Heritage Bank was considered by examiners to tion of the proposal. be competitive in the banking hours it offered, the accessi- The Board also has considered other aspects of the bility of its branches and alternative retail delivery sys- financial condition and resources of Peoples Heritage and tems, and the features of its low-cost checking accounts. Banknorth and the combined organization and other as- The branch closing policy was reviewed by examiners and pects of their managerial resources. Based on all the facts considered satisfactory.24 Peoples Heritage Bank has indi- of record, the Board concludes that considerations relating cated that the Vermont banks would remain independent to the financial and managerial resources and future prosfranchises for the foreseeable future and that it does not pects of Peoples Heritage, Banknorth, and their respective anticipate significant branch closings in the state. subsidiaries are consistent with approval of the proposal, as The Board has carefully considered all the facts of are the other supervisory factors that the Board must conrecord, including the comments received, responses to sider under section 3 of the BHC Act. these comments, and the CRA performance records of Peoples Heritage Bank, Howard Bank, and the other sub- Nonbanking Activities sidiary banks of Peoples Heritage and Banknorth, including relevant reports of examination and other supervisory Peoples Heritage has filed notice under sections 4(c)(8) information. Based on a review of the entire record and for and 4(j) of the BHC Act to acquire Banknorth's wholly the reasons discussed above, the Board concludes that owned nonbanking subsidiary, Stratevest, and thereby enconvenience and needs considerations, including the CRA gage in trust company activities. The Board has determined by regulation that trust company activities are closely related to banking for purposes of the BHC Act.25 Peoples has committed to conduct this nonbanking activity in aclow-income homebuyers. Peoples Heritage has indicated that it would continue to focus on being a leader in residential mortgage lending in cordance with the limitations set forth in Regulation Y and its market areas. the Board's orders and interpretations governing trust com- 23. More than 82 percent of the bank's small business loans were pany activities. made to borrowers with gross annual revenues of $1 million or less. In In order to approve this notice, the Board is required by addition, more than 80 percent of Peoples Heritage Bank's small business loans and all its small farm loans were originated in amounts section 4(j)(2)(A) of the BHC Act to determine that the under $100,000. acquisition of Stratevest by Peoples Heritage "can reason- 24. Commenter questioned whether job losses and community ably be expected to produce benefits to the public, such as disruptions might result from possible consolidations after consumma- greater convenience, increased competition, or gains in tion of the proposal. The effect of a proposal on employment in a efficiency, that outweigh possible adverse effects, such as community is not among the factors included in the BHC Act, and the federal banking agencies, courts, and Congress consistently have undue concentration of resources, decreased or unfair cominterpreted the convenience and needs factor to relate to the effect of a proposal on the availability and quality of banking services in the community. See, e.g., Wells Fargo & Company, 82 Federal Reserve Bulletin 445, 457 (1996). Peoples Heritage also has described certain steps it would take to minimize these effects, including job search assistance and training opportunities for dismissed employees. 25. See 12 C.F.R. 225.28(b)(5). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

430 Federal Reserve Bulletin • June 2000 petition, conflicts of interests, or unsound banking prac- those in sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and tices."26 225.25(c)), and the Board's authority to require such mod- As part of its evaluation of these factors, the Board ification or termination of the activities of a bank holding considers the financial and managerial resources of Peoples company or any of its subsidiaries as the Board finds Heritage and its subsidiaries, including the companies to be necessary to ensure compliance with, and to prevent evaacquired, and the effect of the proposed transaction on sion of, the provisions of the BHC Act and the Board's those resources. For the reasons noted above, and based on regulations and orders thereunder. For purposes of this all the facts of record, the Board has concluded that finan- transaction, the commitments and conditions referred to in cial and managerial considerations are consistent with ap- this order shall be deemed to be conditions imposed in proval of the notice. writing by the Board in connection with its findings and The Board also has considered the competitive effects of decision and, as such, may be enforced in proceedings the proposed acquisition by Peoples of Stratevest. The under applicable law. market for trust company services in which Peoples Heri- The acquisition of the subsidiary banks of Banknorth tage and Stratevest compete is national or regional in scope shall not be consummated before the fifteenth calendar day and is unconcentrated. Consummation of this proposal after the effective date of this order, and the proposal shall would have a de minimis effect on the market, and numer- not be consummated later than three months after the ous competitors would remain in the market. Based on all effective date of this order, unless such period is extended the facts of record, the Board concludes that it is unlikely for good cause by the Board or by the Federal Reserve that significantly adverse competitive effects would result Bank of Boston, acting pursuant to delegated authority. from the nonbanking acquisition proposed in this transac- By order of the Board of Governors, effective April 24, tion. 2000. The Board also expects that the proposed transaction would give Peoples Heritage an increased ability to serve Voting for this action: Chairman Greenspan, Vice Chairman Ferguthe needs of its customers. In addition, there are public son, and Governors Kelley, Meyer, and Gramlich. benefits to be derived from permitting capital markets to operate so that bank holding companies can make poten- ROBERT DEV. FRIERSON tially profitable investments in nonbanking companies and Associate Secretary of the Board from permitting banking organizations to allocate their resources in the manner they consider to be most efficient when such investments are consistent, as in this case, with the relevant considerations under the BHC Act. The Board also concludes that the conduct of the proposed nonbanking activity within the framework of Regu- Appendix A lation Y and Board precedent is not likely to result in Subsidiary Banks of Banknorth adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or Massachusetts unsound banking practices, that would outweigh the public benefits of the proposal, such as increased customer conve- First Massachusetts Bank, N.A., Worcester nience and gains in efficiency. Accordingly, based on all New Hampshire the facts of record, the Board has determined that the Farmington National Bank, Farmington balance of public interest factors that the Board must New York consider under section 4(j)(2)(A) of the BHC Act is favor- Evergreen Bank, N.A., Glen Falls able and consistent with approval of this proposal. Vermont First Vermont Bank and Trust Company, Brattleboro Conclusion Franklin-Lamoille Bank, St. Albans Granite Savings Bank and Trust Company, Barre Based on the foregoing, and in light of all the facts of Howard Bank, N.A., Burlington record, the Board has determined that the applications and Appendix B notice should be, and hereby are, approved. Approval of Banking Markets in which Peoples Heritage and the applications and notice is specifically conditioned on Banknorth Compete Directly compliance by Peoples Heritage with all the commitments made in connection with the proposal and with the conditions stated or referred to in this order, including Peoples Massachusetts Heritage's divestiture commitment. The Board's determination on the nonbanking activities also is subject to all the Boston: Boston Rand McNally Marketing Area ("RMA") terms and conditions set forth in Regulation Y, including and the town of Lyndeboro in New Hampshire. Springfield: Springfield RMA and the towns of Otis in Berkshire County; Deerfield, Leverett, Shutesbury, and 26. 12 U.S.C. § 1843(j)(2)(A). Whately in Franklin County; Blandford, Chester, Gran- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 431 ville, and Tolland in Hampden County; Chesterfield, Cum- $1.2 billion, representing approximately 20.9 percent of mington, Goshen, Pelham, Plainfield, Westhampton, and market deposits. The HHI would increase 43 points to Worthington in Hampshire County; and Hardwick and 1656. Warren in Worcester County. Worcester: Peoples Heritage is the eighth largest deposi- Worcester. Worcester RMA and the towns of Brimfield and tory institution in the market, controlling deposits of Wales in Hampton County and Hubbardston in Worcester $93.5 million, representing approximately 2.2 percent of County. market deposits. Banknorth is the third largest depository institution in the market, controlling deposits of New Hampshire $388.6 million, representing approximately 9 percent of market deposits. On consummation of the proposal, Peo- Laconia: Belknap County, excluding the town of Barn- ples Heritage would become the third largest of 25 deposistead, and the towns of Northfield in Merrimack County tory institutions in the market, controlling deposits of and Moultonboro and Sandwich in Carroll County. $482.1 million, representing approximately 11.2 percent of Portsmouth-Dover-Rochester: Portsmouth-Dover- market deposits. The HHI would increase 28 points to Rochester RMA and the towns of Brookfield, Middleton, 1819. New Durham, Northwood, Nottingham, Strafford, and Wakefield in New Hampshire; and Kennebunk, Lebanon, New Hampshire North Berwick, and Wells in Maine. Wolfeboro: The towns of Effinghham, Ossipee, Tuftonboro, Laconia: Peoples Heritage is the seventh largest depository and Wolfeboro in Carroll County. institution in the market, controlling deposits of $40.3 million, representing approximately 7.8 percent of Vermont market deposits. Banknorth is the sixth largest depository institution in the market, controlling deposits of $45.8 million, representing approximately 8.9 percent of Brattleboro: The towns of Brattleboro, Brookline, Dummarket deposits. On consummation of the proposal, Peomerston, Guilford, Halifax, Marlboro, Newfane, Putney, ples Heritage would become the fourth largest of nine Townsend, and Vernon in Windham County; and the town depository institutions in the market, controlling deposits of Hinsdale in New Hampshire. of $86.1 million, representing approximately 16.7 percent of market deposits. The HHI would increase 138 points to 1826. Appendix C Banking Markets that Comply with the DOJ Guidelines without Divestitures1 Vermont Brattleboro: Peoples Heritage is the eighth largest deposi- Massachusetts tory institution in the market, controlling deposits of $4.8 million, representing approximately 1.1 percent of Boston: Peoples Heritage is the sixth largest depository market deposits. Banknorth is the second largest deposiinstitution in the market, controlling deposits of $1.5 biltory institution in the market, controlling deposits of $145.2 lion, representing approximately 1.9 percent of market million, representing approximately 32.2 percent of market deposits. Banknorth is the 90th largest depository institudeposits. On consummation of the proposal, Peoples Herition in the market, controlling deposits of $65.1 million, tage would become the second largest of eight depository representing less than 1 percent of market deposits. On institutions in the market, controlling deposits of approxiconsummation of the proposal, Peoples Heritage would mately $150 million, representing approximately 33.2 perremain the sixth largest of 180 depository institutions in cent of market deposits. The HHI would increase 69 points the market, controlling deposits of $1.6 billion, representto 3318. ing approximately 2 percent of market deposits. The HHI would remain unchanged at 1899. Appendix D Springfield: Peoples Heritage is the second largest depository institution in the market, controlling deposits of Banking Market with Proposed Divestiture $1.1 billion, representing approximately 19.8 percent of market deposits. Banknorth is the 16th largest depository New Hampshire institution in the market, controlling deposits of $61.9 million, representing approximately 1.1 percent of Wolfeboro: Peoples Heritage is the fourth largest deposimarket deposits. On consummation of the proposal, Peo- tory institution in the market, controlling deposits of ples Heritage would remain the second largest of 22 depos- $28.1 million, representing approximately 10.2 percent of itory institutions in the market, controlling deposits of market deposits. Banknorth is the third largest depository institution in the market, controlling deposits of $56.9 million, representing approximately 20.6 percent of market deposits. Peoples Heritage proposes to divest one 1. Market deposit data are adjusted to account for bank acquisitions approved after June 30, 1998. branch with deposits of approximately $28.1 million to an Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

432 Federal Reserve Bulletin • June 2000 out-of-market competitor. After the proposed merger and SierraCities is an operating company that provides leases divestiture, Peoples Heritage would become the third larg- and loans to small businesses. Bank is the 808th largest est of five depository institution in the market, controlling depository institution in Texas, controlling $11 million in deposits of $56.9 million, representing approximately deposits, representing less than 1 percent of total deposits 20.6 percent of market deposits. The HHI would remain in commercial banking organizations in the state.3 The unchanged at 2753. proposal involves the acquisition of a bank by SierraCities, which currently does not own a commercial bank. Based Sierra Cities, com, Inc. on all the facts of record, the Board concludes that the Houston, Texas proposal would not have any significantly adverse effects on competition or on the concentration of banking re- FSF of Delaware, Inc. sources in any relevant banking market. Wilmington, Delaware The BHC Act also requires the Board to consider the financial and managerial resources and future prospects of Order Approving Formation of Bank Holding Companies the companies and banks involved in the proposal and and Acquisition of a Bank certain supervisory factors. SierraCities has indicated that Bank would adopt SierraCities's business strategy of using SierraCities.com, Inc. ("SierraCities"), and its wholly the Internet to reach and serve commercial customers owned subsidiary, FSF of Delaware, Inc. (collectively, throughout the United States.4 In addition, SierraCities "Applicants"), have requested the Board's approval under proposes changes in the data processing systems of Bank section 3(a)(1) of the Bank Holding Company Act ("BHC to improve its ability to provide services to current custom- Act") (12 U.S.C. § 1842(a)(1)) to become bank holding ers in and around the Quanah, Texas, area and to Internet companies by acquiring all the voting shares of Greenbelt customers. The Board has reviewed SierraCities's operat- Bancshares, Inc. ("Greenbelt"), thereby acquiring Security ing plan for Bank and has taken into account SierraCities's National Bank of Quanah ("Bank"), both in Quanah, record of offering lease financing and other products and Texas.1 Applicants also have requested the Board's ap- services via the Internet and related technologies. In addiproval under section 4(c)(8) of the BHC Act tion, the Board has reviewed confidential supervisory and (12 U.S.C. § 1843(c)(8)) to retain certain nonbanking busi- examination information, and publicly reported financial nesses and thereby engage in the following nonbanking and other information, and has consulted with the Office of activities: the Comptroller of the Currency ("OCC"), which is the (1) Making, acquiring, brokering, or servicing loans, pur- primary federal supervisor of Bank. After considering all suant to section 225.28(b)(1) of Regulation Y the facts of record, the Board concludes that the financial (12 C.F.R. 225.28(b)(1)); and and managerial resources and future prospects of Appli- (2) Leasing personal or real property or acting as agent, cants and Bank are consistent with approval, as are the broker, or adviser in leasing such property, pursuant to other supervisory factors the Board must consider under section 225.28(b)(3) of Regulation Y (12 C.F.R. section 3 of the BHC Act. 225.28(b)(3)). The Board also has carefully considered the effect of the proposal on the convenience and needs of the communities SierraCities also has filed an application pursuant to sec- to be served in light of all the facts of record. Bank tion 4(c)(13) of the BHC Act (12 U.S.C. § 1843(c)(13» received an overall rating of "satisfactory" from the OCC and the Board's Regulation K (12 C.F.R. 211) to retain at Bank's most recent evaluation for performance under certain foreign investments.2 the Community Reinvestment Act (12 U.S.C. § 2901 Notice of the proposal, affording interested persons an et seq.) ("CRA"), as of April 1997. SierraCities has indiopportunity to comment, has been published (64 Federal cated that, after consummation of the proposal, Bank in- Register 66,189 (1999); 65 Federal Register 13,766 tends to file a strategic plan to help meet the credit needs of (2000)). The time for filing comments has expired, and the its communities because Bank's primary focus would be- Board has considered the proposal and all comments re- come the distribution of products and services to small ceived in light of the factors set forth in sections 3 and 4 of the BHC Act. 1. On consummation of this proposal, the name of Bank would be 3. Deposit data are as of June 30, 1999. changed to SierraCities Bank, N.A. SierraCities proposes to acquire 4. SierraCities engages in the business of providing leases and loans Bank by merging Greenbelt with and into a wholly owned subsidiary to small businesses. In its initial application to become a bank holding of FSF of Delaware, Inc. company, SierraCities proposed to contribute to Bank substantially all 2. SierraCities owns the following companies, all in the United the assets and liabilities of SierraCities and its nonbank subsidiaries. Kingdom: First Sierra Financial (UK), Limited; Suffolk Street Group, SierraCities subsequently revised its application and now proposes to pic; Equitable Asset Finance Limited; Academy Asset Finance Lim- contribute capital to Bank only in the form of cash. The Board notes ited; Booker Montague Leasing LTD; and Titan Finance Limited that SierraCities must comply with all applicable requirements of (collectively, "UK Subsidiaries"). The UK Subsidiaries engage in sections 23A and/or 23B of the Federal Reserve Act, leasing activities that SierraCities proposes to retain under section 12 U.S.C. §§ 371c, 371c-l, with respect any transaction between Bank 211.5(d)(3) of Regulation K. and any of its affiliates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 433 businesses via the Internet.5 Based on all the facts of record lished under Regulation Y is not likely to result in adverse and for the reasons discussed above, the Board concludes effects, such as undue concentration of resources, dethat considerations relating to the convenience and needs creased or unfair competition, conflicts of interests, or factor including the CRA performance record of the institu- unsound banking practices, that would outweigh the public tion involved, are consistent with approval of the proposal. benefits of the proposal, such as increased customer conve- Applicants also have filed a notice under section 4 of the nience and gains in efficiency. Accordingly, based on all BHC Act to retain SierraCities's nonbanking subsidiaries the facts of record, the Board has determined that the and thereby engage in extending credit and servicing loans balance of public benefits that the Board must consider and leasing personal or real property. The Board has deter- under the proper incident to banking standard of section 4 mined by regulation that these activities are closely related of the BHC Act is favorable and consistent with approval to banking for purposes of the BHC Act.6 SierraCities has of the notice. committed to conduct these nonbanking activities in accor- SierraCities also has requested approval under secdance with the limitations set forth in Regulation Y and all tion 4(c)(13) of the BHC Act and section 211.5(c) of the relevant Board orders and interpretations. Board's Regulation K (12 C.F.R. 211.5(c)) to retain its UK In connection with its review of the public interest Subsidiaries. The Board concludes that all the factors refactors under section 4 of the BHC Act, and in light of all quired to be considered under the BHC Act and Regulathe facts of record, the Board also has carefully reviewed tion K are consistent with approval of the proposal. the financial and managerial resources of SierraCities and Based on the foregoing, and in light of all the facts of Bank and the effect the transaction would have on such record, the Board has determined that the applications and resources.7 The Board has reviewed, among other things, notice should be, and hereby are, approved. The Board's confidential reports of examination and other supervisory approval is specifically conditioned on compliance by Apinformation received from the primary federal supervisor plicants with all the commitments made in connection with of Bank, and information provided by Applicants. Based the applications and notice. The Board's approval is also on all the facts of record, including commitments made subject to all the conditions set forth in this order and in bySierraCities, the Board concludes that the financial and Regulation Y, including those in sections 225.7 and managerial resources of the organizations involved in the 225.25(c) (12 C.F.R. 225.7 and 225.25(c)). For the purpose proposal are consistent with approval. of this action, the commitments relied on by the Board in The record indicates that consummation of the proposal reaching its decision are deemed to be conditions imposed would result in benefits to consumers and businesses. in writing by the Board in connection with its findings and SierraCities has indicated that, after consummation of the decision and, as such, may be enforced in proceedings proposal, it may provide more products and services than it under applicable law. offers currently. In addition, as the Board has previously The transaction shall not be consummated before the noted, there are public benefits to be derived from permit- fifteenth calendar day after the effective date of this order, ting capital markets to operate so that bank holding compa- or later than three months after the effective date of this nies can make potentially profitable investments in non- order, unless such periods are extended for good cause by banking companies and from permitting banking the Board or the Federal Reserve Bank of Dallas, acting organizations to allocate their resources in the manner they pursuant to delegated authority. consider to be most efficient when such investments and By order of the Board of Governors, effective April 12, actions are consistent, as in this case, with the relevant 2000. considerations under the BHC Act.8 Based on all the facts of record, the Board has determined that consummation of Voting for this action: Chairman Greenspan, Vice Chairman Ferguthis proposal can reasonably be expected to produce public son, Governors Kelley, and Gramlich. Absent and not voting: Goverbenefits that would outweigh any likely adverse effects nor Meyer. under the proper incident to banking standard of section 4(j)(2) of the BHC Act.9 ROBERT DEV. FRIERSON Associate Secretary of the Board The Board also concludes that the conduct of the proposed nonbanking activities within the framework estab- ORDERS ISSUED UNDER INTERNATIONAL BANKING 5. Bank's CRA performance record of meeting the credit needs of ACT its assessment area may be assessed under an approved strategic plan. See 12 C.F.R. 25.27. Banca Intesa S.p.A. 6. See 12 C.F.R. 225.28(b)(1) and (3). Milan, Italy 7. See 12 C.F.R. 225.26. 8. See, e.g., Banc One Corporation, 84 Federal Reserve Bulletin 553 (1998); First Union Corporation, 84 Federal Reserve Bulletin Order Approving Establishment of a Branch and 489 (1998). Representative Offices 9. Regulation Y provides that a bank holding company must seek the Board's approval prior to altering in any material respect a Banca Intesa S.p.A. ("Bank"), Milan, Italy, a foreign bank nonbanking activity previously approved by the Board. See 12 C.F.R. 225.25(c)(3). within the meaning of the International Banking Act Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

434 Federal Reserve Bulletin • June 2000 ("IBA"), has applied under section 7(d) of the IBA As noted above, Bank engages directly in the business of (12 U.S.C. § 3105(d)) to establish a state-licensed branch banking outside the United States. Bank also has provided in New York, New York. Bank has also applied under the Board with information necessary to assess the applicasection 10(a) of the IBA (12 U.S.C. § 3107(a)) to establish tion through submissions that address the relevant issues. representative offices in Chicago, Illinois, and San Fran- Regulation K provides that a foreign bank will be concisco, California. The Foreign Bank Supervision Enhance- sidered to be subject to consolidated supervision or regulament Act of 1991, which amended the IBA, provides that a tion on a consolidated basis if the Board determines that foreign bank must obtain the Board's approval to establish the bank is supervised and regulated in such a manner that a branch or representative office in the United States. its home country supervisor receives sufficient information Notice of the application, affording interested persons an on the worldwide operations of the bank, including its opportunity to submit comments, has been published in relationship to any affiliates, to assess the bank's overall newspapers of general circulation in New York, New York financial condition and its compliance with law and regula- (New York Post, October 15, 1999), Chicago, Illinois tion.4 The Board has made the following findings with (Chicago Tribune, December 6, 1999), and San Francisco, regard to the supervision of Bank. California (San Francisco Chronicle, December 7, 1999). The Board previously has determined, in connection The time for filing comments has expired, and the Board with applications involving other banks in Italy, that those has considered all comments received. banks were subject to home country supervision on a Bank, with total consolidated assets of approximately consolidated basis.5 The Board has found that Bank is $194 billion, is one of the largest banks in Italy.1 Approxi- supervised by the Bank of Italy on substantially the same mately 46 percent of Bank's shares are held by fourteen terms and conditions as those other banks. Based on all the shareholders. Bank's two largest shareholders, Caisse Na- facts of record, the Board has determined that Bank is tionale de Credit Agricole, a French bank, and Fondazione subject to comprehensive supervision on a consolidated Cariplo, an Italian charitable organization, respectively basis by its home country supervisor. hold 15.01 and 10.26 percent of Bank's shares. The re- The Board also has taken into account the additional maining 54 percent of Bank's shares are widely held, with standards set forth in the IBA and Regulation K.6 The Bank no shareholder controlling more than 1.5 percent of shares. of Italy has no objection to establishment of the proposed Bank engages in retail and commercial banking and branch and representative offices. other financial activities, including insurance and securi- Italy's risk-based capital standards conform to European ties, directly and through its bank and nonbank subsidiar- Union capital standards, which are consistent with those ies. Bank has operations in Europe, Asia, the Carribean, established by the Basle Capital Accord. Bank's capital is and the United States. Bank operates three nonbank subsid- in excess of the minimum levels that would be required by iaries in the United States, and three of Bank's foreign the Basle Capital Accord and is considered equivalent to bank subsidiaries, Banco Ambrosiano Veneto S.p.A. ("Am- capital that would be required of a U.S. banking organizabroveneto"), Cariplo-Cassa di Risparmio delle Provincie tion. Managerial and other financial resources of Bank also Lombarde S.p.A. ("Cariplo"), and Banca Commerciale are considered consistent with approval, and Bank appears Italiana S.p.A., operate offices in the United States. Bank's to have the experience and capacity to support the proproposed offices would assume the existing business of posed offices. In addition, Bank has established controls Cariplo's New York branch and Chicago and San Fran- and procedures for the offices to ensure compliance with cisco representative offices and of Ambroveneto's New York representative office, and the U.S. offices of Cariplo and Ambroveneto thereafter would be closed. 4. See 12 C.F.R. 211.24(c)(1). In assessing this standard, the Board In order to approve an application by a foreign bank to considers, among other factors, the extent to which the home country supervisors: establish a branch or representative office in the United (i) Ensure that the bank has adequate procedures for monitoring States, the IBA and Regulation K require the Board to and controlling its activities worldwide; determine that the foreign bank applicant engages directly (ii) Obtain information on the condition of the bank and its subsidin the business of banking outside of the United States and iaries and offices through regular examination reports, audit that the applicant has furnished to the Board the informa- reports, or otherwise; (iii) Obtain information on the dealings with and relationship betion it needs to assess the application adequately. The tween the bank and its affiliates, both foreign and domestic; Board generally also must determine that the foreign bank (iv) Receive from the bank financial reports that are consolidated and any of its foreign bank parents is subject to comprehen- on a worldwide basis or comparable information that permits sive supervision or regulation on a consolidated basis by its analysis of the bank's financial condition on a worldwide home country supervisor.2 The Board also may take into consolidated basis; (v) Evaluate prudential standards, such as capital adequacy and account additional standards as set forth in the IBA and risk asset exposure, on a worldwide basis. These are indicia of Regulation K.3 comprehensive, consolidated supervision; no single factor is essential, and other elements may inform the Board's determination. 5. See Istituto Bancario San Paolo di Torino S.p.A., 82 Federal 1. Unless otherwise indicated, data are as of June 30, 1999. Reserve Bulletin 1147 (1996); Banca de Roma S.p.A., 82 Federal 2. See 12 U.S.C. § 3105(d)(2). Reserve Bulletin 1145 (1996). 3. See 12 U.S.C. § 3105(d)(3) & (4); 12 CFR 211.24(c). 6. See 12 U.S.C. § 3105(d)(3)-(4); 12 CFR 211.24(c)(2)-(3). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 435 U.S. law, as well as controls and procedures for its world- on access to information on the operations or activities of wide operations generally. Bank or any of its affiliates subsequently interfere with the Finally, the Board has reviewed the restrictions on dis- Board's ability to determine and enforce compliance by closure in relevant jurisdictions in which Bank operates Bank or its affiliates with applicable federal statutes, the and has communicated with relevant government authori- Board may require termination of any of Bank's direct or ties about access to information. Bank has committed to indirect activities in the United States. Approval of this make available to the Board such information on Bank and application also is specifically conditioned on Bank's comany of its affiliates that the Board deems necessary to pliance with the commitments made in connection with determine and enforce compliance with the IB A, the Bank this application and with the conditions in this order.7 The Holding Company Act, and other applicable federal law. commitments and conditions referred to above are condi- To the extent that the provision of such information may be tions imposed in writing by the Board in connection with prohibited or impeded by law or otherwise, Bank has its decision and may be enforced in proceedings under committed to cooperate with the Board to obtain any applicable law against Bank, its offices, and its affiliates. necessary consents or waivers that might be required from By order of the Board of Governors, effective April 5, third parties in connection with disclosure of certain infor- 2000. mation. In addition, subject to certain conditions, the Bank of Italy may share information on Bank's operations with Voting for this action: Chairman Greenspan, Vice Chairman Ferguother supervisors, including the Board. In light of these son, and Governors Kelley, and Gramlich. Absent and not voting: commitments and other facts of record, and subject to the Governor Meyer. condition described below, the Board concludes that Bank has provided adequate assurances of access to any neces- ROBERT DEV. FRIERSON sary information the Board may request. Associate Secretary of the Board On the basis of all the facts of record, and subject to the commitments made by Bank, as well as the terms and 7. The Board's authority to approve the establishment of the proconditions set forth in this order, the Board has determined posed branch and representative offices parallels the continuing authat Bank's application to establish the state-licensed thority of the States of New York, Illinois, and California to license offices of a foreign bank. The Board's approval of this application branch in New York, New York, and the representative does not supplant the authority of those states to license the proposed offices in Chicago, Illinois, and San Francisco, California, offices of Bank in accordance with any terms or conditions they may should be, and hereby is, approved. Should any restrictions impose. 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 Advantage Bankshares, Inc., Advantage Bank, Atlanta April 5, 2000 Village of North Palm Beach, Village of North Palm Beach, Florida Florida Anderson Bancshares, Inc., Anderson Brothers Bancshares, Inc., Richmond April 20, 2000 Hemingay, South Carolina Mullins, South Carolina Anderson Brothers Bank, Mullins, South Carolina Apalachicola State Banking Apalachicola State Bank, Atlanta March 30, 2000 Corporation, Apalachicola, Florida Apalachicola, Florida Bancorp Rhode Island, Inc., Bank Rhode Island, Boston April 7, 2000 Providence, Rhode Island Providence, Rhode Island Bay National Corporation, Bay National Bank, Richmond March 30, 2000 Baltimore, Maryland Baltimore, Maryland BGC Bancorp, Inc., Bank of Gibson City, Chicago April 14, 2000 Gibson City, Illinois Gibson City, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

436 Federal Reserve Bulletin • June 2000 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Border Bancshares, Inc., Border State Bank of International Minneapolis March 23, 2000 Greenbush, Minnesota Falls, International Falls, Minnesota Brookline Bancorp, Inc., Lighthouse Bank, Boston April 12, 2000 Brookline, Massachusetts Waltham, Massachusetts Brookline Bancorp, MHC, Brookline, Massachusetts Burton Bancshares, Inc., Burton State Bank, Dallas April 19, 2000 Burton, Texas Burton, Texas Burton Holdings, Inc., Wilmington, Delaware Cardinal Financial Corporation, Cardinal Bank-Alexandria/Arlington, Richmond March 29, 2000 Fairfax, Virginia N.A., Alexandria, Virginia Dentel Bancorporation, Pocahontas Bancorporation, Chicago April 20, 2000 Victor, Iowa Pocahontas, Iowa Pocahontas State Bank, Pocahontas, Iowa ETN Leasing, Inc., East Texas National Bank, Dallas April 13, 2000 Palestine, Texas Palestine, Texas First Sterling Bank, Inc., Main Street Banks, Inc., Atlanta April 5, 2000 Kennesaw, Georgia Covington, Georgia Greater Bay Bancorp, Coast Bancorp, San Francisco April 5, 2000 Palo Alto, California Santa Cruz, California Coast Commercial Bank, Santa Cruz, California Indiana United Bancorp, First Affiliated Bancorp, Inc., Chicago March 29, 2000 Greensburg, Indiana Watseka, Illinois FAB Merger Corporation, Capstone Bank, N.A., Greensburg, Indiana Watseka, Illinois Maries County Bancorp, Inc., Tritten Bancshares, Inc., St. Louis April 17, 2000 Vienna, Missouri Waynesville, Missouri Progress Bancshares, Inc., Sullivan, Missouri NBM Corporation Employee Stock NBM Corporation, Kansas City April 12, 2000 Ownership Plan, McAlester, Oklahoma McAlester, Oklahoma NBT Bancorp Inc., Pioneer American Holding Company New York March 30, 2000 Norwich, New York Corp., Carbondale, Pennsylvania Pioneer American Bank, National Association, Carbondale, Pennsylvania RSB Financial, Inc., Reading State Bank, Kansas City April 10, 2000 Reading, Kansas Reading, Kansas SNB Bancorp, Inc., Salyersville National Bank, Cleveland April 20, 2000 Salyersville, Kentucky Salyersville, Kentucky Tennessee Commerce Bancorp, Tennessee Commerce Bank, Atlanta March 31, 2000 Franklin, Tennessee Franklin, Tennessee Terre Haute Savings M.H.C., Terre Haute Savings Bank, Chicago April 5, 2000 Terre Haute, Indiana Terre Haute, Indiana TrustBanc Financial Group, Inc., TrustBanc, St. Louis March 28, 2000 Mountain Home, Arkansas Mountain Home, Arkansas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 75 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Waumandee Bancshares, Ltd. Waumandee State Bank, Minneapolis April 13, 2000 Waumandee, Wisconsin Waumandee, Wisconsin Weststar Financial Services The Bank of Asheville, Richmond March 29, 2000 Corporation, Asheville, North Carolina Asheville, North Carolina Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date BancFirst Ohio Corp., Milton Federal Financial Corporation, Cleveland April 13, 2000 Zanesville, Ohio West Milton, Ohio First Banks, Inc., First Capital Group, Inc., St. Louis April 14, 2000 Creve Coeur, Missouri Albuquerque, New Mexico First State Bank of Taos, Taos, New Mexico Marquette Bancshares, Inc., Marquette Consumer Finance, Inc., Minneapolis March 27, 2000 Minneapolis, Minnesota Plymouth, Minnesota Mid State Banks, Inc., Cobb Insurance Agency, Atlanta March 28, 2000 Cordele, Georgia Cordele, Georgia Northern Trust Corporation, Carl Domino Associates, L.P., Chicago April 14, 2000 Chicago, Illinois West Palm Beach, Florida Synovus Financial Corp., ProCard, Inc., Atlanta April 5, 2000 Columbus, Georgia Golden, Colorado USBANCORP, Inc., Standard Mortgage Company, Philadelphia April 4, 2000 Johnstown, Pennsylvania Atlanta, Georgia Three Rivers Bank & Trust Company, Jefferson, Pennsylvania Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Andover Bancorp, Inc., GBT Bancorp, Boston April 10,2000 Andover, Massachusetts Gloucester, Massachusetts Gloucester Bank & Trust Company, Gloucester, Massachusetts Gloucester Investment Corp., Gloucester, Massachusetts Klein Financial, Inc., Preferred Bancshares, Inc., Minneapolis April 5, 2000 Chaska, Minnesota Big Lake, Minnesota Preferred Bank, Big Lake, Minnesota Preferred Lenders, LLC, Big Lake, Minnesota Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

438 Federal Reserve Bulletin • June 2000 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 Arvest Bank, Fort Smith, Arkansas Bank of Bentonville, Bentonville, St. Louis March 23, 2000 Arkansas The Bank, Emerald Coast Bank, Atlanta March 29, 2000 Warrior, Alabama Panama City Beach, Florida C&L Bank, Bristol, Florida Legacy Bank ACB, Legacy Bank, Kansas City April 14, 2000 Binger, Oklahoma Hinton, Oklahoma Legacy Bank TC, Blanchard, Oklahoma PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Kerr v. Department of the Treasury, No. 99-16263 (9th Cir., Federal Reserve Banks in which the Board of Governors is not filed April 28, 1999). Appeal of dismissal of action chalnamed a party. lenging income taxation and Federal Reserve notes. Sedgwick v. Board of Governors, No. Civ 99 0702 (D. Arizona, filed April 14, 1999). Action under Federal Tort Bettersworth v. Board of Governors, No. 00-50262 (5th Cir., Claims Act alleging violation of bank supervision requirefiled April 14, 2000). Appeal of district court's dismissal of ments. The Board filed a motion to dismiss on June 15, Privacy Act claims 1999. Hunter v. Board of Governors, No. OO-CV-735 (ESH) (D.D.C., Hunter v. Board of Governors, No. 1:98CV02994 (ESH) filed April 5, 2000). Action claiming retaliation for whistle- (D.D.C., filed December 9, 1998). Action under the Freeblowing activity. dom of Information Act, the Privacy Act, and the first Albrecht v. Board of Governors, No. OO-CV-317 (CKK) amendment. On April 26, 2000, the court granted the (D.D.C., filed February 18, 2000). Action challenging the Board's motion to dismiss or for summary judgment. funding of the retirement plan for certain Board employees. Folstad v. Board of Governors, No. 00-1056 (6th Cir., filed Board Of Governors v. Interfinancial Services, Ltd., No. 00-75 January 14, 2000). Appeal of district court order granting (RCL) (D.D.C., filed February 9, 2000). Action to enforce summary judgment to the Board in a Freedom of Informaadministrative subpoena issued by the Board. tion Act case. Toland v. Internal Revenue Service, Federal Reserve System, Nelson v. Greenspan, No. 1:99CV00215 (EGS) (D.D.C., filed et al., No. CV-S-99-1769-JBR-RJJ (D. Nevada, filed De- January 28, 1999). Employment discrimination complaint. cember 29, 1999). Challenge to income taxation and Fed- On February 25, 2000, the court granted the Board's motion eral Reserve notes. On February 16, 2000, the government to dismiss the complaint. filed a motion to dismiss the action. Fraternal Order of Police v. Board of Governors, No. lrontown Housing Corp. v. Board of Governors, No. 99-9549 1:98CV03116 (WBB)(D.D.C„ filed December 22, 1998). (10th Cir., filed December 27, 1999). Petition for review of Declaratory judgment action challenging Board labor practices. On February 26, 1999, the Board filed a motion to Board order dated December 13, 1999, approving the dismiss the action. merger of Zions Bancorporation with First Security Corporation. Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK) (S.D.N.Y„ filed May 15, 1998). Action to freeze assets of Artis v. Greenspan, No. 1.99CV02073 (EGS) (D.D.C., filed individual pending administrative adjudication of civil August 3, 1999). Employment discrimination action. money penalty assessment by the Board. On May 26, 1998, Sheriff Gerry Ali v. U.S. State Department, No. 99-7438 (C.D. the court issued a preliminary injunction restraining the Cal., filed July 21, 1999). Action relating to impounded transfer or disposition of the individual's assets and appointbank drafts. ing the Federal Reserve Bank of New York as receiver for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 439 those assets. Following entry of the Board's order requiring Respondents assert generally that their reputations, and restitution, 85 Federal Reserve Bulletin 142 (1998), the those of witnesses and of the institution for which Mr. court granted the Board's motion for judgment in the asset Scott currently works, could be harmed by a public hearfreeze action and authorized a judicial sale of the seized ing. They also note that the allegations of wrongdoing property. occurred more than five years ago, and argue that the Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed public interest in disclosure of these events is outweighed May 4, 1998). Appeal and cross-appeal of district court by the privacy interests of the Respondents and others order granting in part and denying in part the Board's involved in the charges. motion for summary judgment seeking prejudgment interest and a statutory surcharge in connection with a civil money Discussion penalty assessed by the Board. On February 24, 1999, the court granted the Board's appeal and denied the cross- The enforcement provisions of the Federal Deposit Insurappeal, and remanded the matter to the district court for ance Act provide that all administrative hearings must be determination of prejudgment interest due to the Board. public unless the Board, in its discretion, determines that a public hearing would be "contrary to the public interest." The Board's regulations echo this requirement. 12 C.F.R. FINAL ENFORCEMENT DECISION ISSUED BY THE 263.33(a). In a recent case, In the Matter of Incus Co., Ltd., BOARD OF GOVERNORS 85 Federal Reserve Bulletin 284, 285 (1999), the Board set forth the standard by which requests for private hearings In the Matter of would be determined. Specifically, the Board ruled that, Oren L. Benton and Edward D. Scott Before the Board exercises its discretion to close a Former Institution-Affiliated Parties of hearing, there should be a substantial basis for conclud- The Professional Bank, ing that the case reflects unusual circumstances that Denver, Colorado overcome the presumption in favor of open hearings. In general, in light of the congressional requirement that Docket Nos. 99-030-E-I1, 99-030-CMP-I1, the proceeding be open unless "contrary to the public 99-030-E-12, 99-030-CMP-12 interest," those circumstances should involve serious safety and soundness concerns flowing from a public Determination on Requests for Private Hearing hearing. . . . [A] party seeking a closed hearing should be required to demonstrate how the effects of this Background proceeding differ so significantly from those involving other banks in terms of the public interest as to warrant This is an enforcement proceeding brought by the Board of special treatment. Governors of the Federal Reserve System (the "Board") against Oren L. Benton and Edward D. Scott (the "Respon- See also In the Matter of Fonkenell, 85 Federal Reserve dents") pursuant to the Federal Deposit Insurance Act (the Bulletin 353 (1999) (same). "FDI Act"). Benton was the sole shareholder and a direc- The reasons given by Respondents here for closing the tor of The Professional Bank, a state member bank, and hearing to the public do not establish that an open hearing Scott was its executive vice president and director. In a would be contrary to the public interest. Respondents as- Notice of Intent to Prohibit and Notice of Assessment of a sert that because the events in question occurred more than Civil Money Penalty (the "Notice") issued on January 24, five years ago, the potential injuries to reputation of the 1999, the Board alleged that Benton and Scott engaged in Respondents and witnesses outweigh the present public unsafe or unsound banking practices and breached their interest in disclosure. Respondents also note that the Nofiduciary duty to the Bank when they caused the Bank to tice refers to some individuals with knowledge of the engage in numerous violations of Section 23A of the events by descriptions rather than by name, in an apparent Federal Reserve Act and the Board's Regulation O. The effort to protect the anonymity and reputations of those Notice seeks civil money penalties and an order of prohibi- individuals. Respondents argue that the same concern retion against both Respondents. garding unnecessary public disclosure should apply to In accordance with section 8(u)(2) of the FDI Act, them. Finally, Respondent Scott asserts, without providing 12 U.S.C. § 1818(u)(2), the Notice advised the Respon- factual support, that a public hearing could cause "irreparadents that any hearing held in this matter would be public, ble harm" to the institution where he is now employed. unless the Board determines that an open hearing would be These arguments fail to meet the standard required by contrary to the public interest. The Notice informed Re- the Board to close a hearing to the public. The fact that the spondents that they could submit a statement detailing any alleged wrongdoing occurred some time ago may diminish reasons why the hearing should not be public. Both Re- the public's interest in the case, but it does not establish a spondents duly filed a motion with the Board seeking a public interest in keeping the hearing private. The Board private hearing in this matter. Board Enforcement Counsel has previously rejected the argument that reputational conopposed the motion. cerns of the respondent or third parties justify closing a Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

440 Federal Reserve Bulletin • June 2000 hearing to the public. See In the Matter of Zbinden, 80 Accordingly, Respondents' requests for a private hearing Federal Reserve Bulletin 360 (1994); Fonkenell, 85 Fed- are denied. eral Reserve Bulletin at 354; Incus, 85 Federal Reserve By Order of the Board of Governors, this 18th day of Bulletin at 285. Respondent Scott's concern about the April, 2000. potential harm to his current employer is not supported by any factual material, and as Enforcement Counsel noted, Mr. Scott's current institution was not involved in the Board of Governors of the transactions alleged in the Notice. Finally, a public hearing Federal Reserve System would obviously entail disclosure of the individuals identified only by description in the Notice, so Respondents would not be subject to any less favorable treatment than JENNIFER J. JOHNSON they. Secretary of the Board Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance—Continued A27 Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, and debt measures A29 U.S. government securities dealers— A5 Reserves of depository institutions and Reserve Bank Positions and financing credit A30 Federal and federally sponsored credit A6 Reserves and borrowings—Depository agencies—Debt outstanding institutions Securities Markets and Corporate Finance Policy Instruments A31 New security issues—Tax-exempt state and local A7 Federal Reserve Bank interest rates governments and corporations A8 Reserve requirements of depository institutions A32 Open-end investment companies—Net sales A9 Federal Reserve open market transactions and assets A32 Corporate profits and their distribution Federal Reserve Banks A3 2 Domestic finance companies—Assets and liabilities A33 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A3 5 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit 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 financiat 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 • June 2000 INTERNATIONAL STATISTICS Reported by Nonbanking Business Enterprises in the United States Summary Statistics A58 Liabilities to unaffiliated foreigners A50 U.S. international transactions A59 Claims on unaffiliated foreigners A51 U.S. foreign trade A51 U.S. reserve assets Securities Holdings and Transactions A51 Foreign official assets held at Federal Reserve A60 Foreign transactions in securities Banks A61 Marketable U.S. Treasury bonds and A52 Selected U.S. liabilities to foreign official notes—Foreign transactions institutions Interest and Exchange Rates Reported by Banks in the United States A62 Foreign exchange rates A52 Liabilities to, and claims on, foreigners A53 Liabilities to foreigners A55 Banks' own claims on foreigners A63 GUIDE TO STATISTICAL RELEASES AND A56 Banks' own and domestic customers' claims on SPECIAL TABLES foreigners A56 Banks' own claims on unaffiliated foreigners A64 INDEX TO STATISTICAL TABLES A57 Claims on foreign countries—Combined domestic offices and foreign branches Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected GNMA Government National Mortgage Association e Estimated GDP Gross domestic product n.a. Not available HUD Department of Housing and Urban P Preliminary Development r Revised (Notation appears on column heading IMF International Monetary Fund when about half of the figures in that column IO Interest only are changed.) IPCs Individuals, partnerships, and corporations * Amounts insignificant in terms of the last decimal IRA Individual retirement account place shown in the table (for example, less than MMDA Money market deposit account 500,000 when the smallest unit given is millions) MSA Metropolitan statistical area 0 Calculated to be zero NOW Negotiable order of withdrawal Cell not applicable OCD Other checkable deposit ATS Automatic transfer service OPEC Organization of Petroleum Exporting Countries BIF Bank insurance fund OTS Office of Thrift Supervision CD Certificate of deposit PMI Private mortgage insurance CMO Collateralized mortgage obligation PO Principal only CRA Community Reinvestment Act of 1977 REIT Real estate investment trust FFB Federal Financing Bank REMIC Real estate mortgage investment conduit FHA Federal Housing Administration RHS Rural Housing Service FHLBB Federal Home Loan Bank Board RP Repurchase agreement FHLMC Federal Home Loan Mortgage Corporation RTC Resolution Trust Corporation FmHA Farmers Home Administration SCO Securitized credit obligation FNMA Federal National Mortgage Association SDR Special drawing right FSLIC Federal Savings and Loan Insurance Corporation SIC Standard Industrial Classification G-7 Group of Seven VA Department of Veterans Affairs G-10 Group of Ten GENERAL INFORMATION In many of the tables, components do not sum to totals because of include not fully guaranteed issues) as well as direct obligarounding. tions of the Treasury. Minus signs are used to indicate (1) a decrease, (2) a negative "State and local government" also includes municipalities, figure, or (3) an outflow. special districts, and other political subdivisions. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Financial Statistics • June 2000 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 1999 2000 1999 2000 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q2 Q3 Q4 Q1 Nov. Dec. Jan. Feb. Mar. Reserves of depository institutions2 1 Total -6.6 -15.4 -7.9 4.2 7.5 9.4 47.0 -46.3 -33.0 2 Required -5.6 -15.0 -9.4 2.5 2.2 10.4 27.2 -22.0 -37.1 3 Nonborrowed -6.7 -17.1 -7.5 4.8 8.9 7.0 45.8 -39.2 -35.2 4 Monetary base3 9.6 9.2 20.0 3.7 25.6 44.2 1.3 -38.1 -5.3 Concepts of money and debt4 5 Ml 2.1 -1.8 4.9 .3 9.0 15.6 -3.1 — 16.8r 6.0 6 M2 6.0 5.2 5.0 5.6 4.9 7.3 6.0r 2.2 8.8 7 M3 6.0 4.9 9.8r 10.0 14.5r 16.9r 8.0r 2.6r 12.0 8 Debt 7.0 6.1 6.3r n.a. 4.7 6.9r 6.0 4.6 n.a. Nontransaction components 9 In M25 7.3 7.5 5.0 7.3 3.7 4.6 8.8 8.2 9.7 10 In M3 only6 5.9 4.0 23.lr 21.6 40.5r 42.5r 13.3r 3.7r 20.1 Time and savings deposits Commercial banks 11 Savings, including MMDAs 10.7 10.6 4.2 3.4 -.7 -3.1 2.1 12.4 6.1 12 Small time7 -2.0 2.1 6.8 8.4 9.0 8.2 7.4 9.2 9.1 13 Large time8,9 -.9 .2 36.9 21.0 52.7 47.6r 8.3r 5.5r 5.4 Thrift institutions 14 Savings, including MMDAs 14.5 13.3 -3.3 -1.1 -4.5 -8.0 -3.5r 6.1' 8.0 15 Small time7 -6.3 -3.2 5.0 5.8 8.3 6.4 8.2 2.2 1.9 16 Large time8 -4.4 1.2 6.3 17.2 20.1 5.3 36.8 6.4r .0 Money market mutual funds 17 Retail 11.2 8.0 9.4 17.8 9.2 20.2 26.9 4.1 19.4 18 Institution-only 14.1 9.3 21.4 23.5 29.9 31.0 31.8 -11.5 45.1 Repurchase agreements and Eurodollars 19 Repurchase agreements10 -1.2 9.1 12.8 16.1 31.0 49.3 -20.4 47.4 -15.1 20 Eurodollars10 21.7 -9.7 12.1r 29.6 67.5r 71.2r 18.7r -31.4r 65.2 Debt components4 21 Federal -2.3 -.3 —4.3r n.a. —7.6r .9' -4.4 -12.1 n.a. 22 Nonfederal 9.7 8.0 9.3r n.a. 8.1 8.5r 8.8 9.0 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 M1. 9. Large time deposits at commercial banks less those held by money market funds, M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) depository institutions, the U.S. government, and foreign banks and official institutions. balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 10. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures 2000 2000 Jan. Feb. Mar. Feb. 16 Feb. 23 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 582,309 556,692 555,397 557,686 557,049 556,754 554,836 555,115 556,442 553,988 U.S. government securities2 2 Bought outright—System account3 491,902 501,923 501,572 502,470 502.193 501,486 502,147 501,927 500,433 501,704 3 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 180 158 150 150 150 150 150 150 150 150 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 53,099 19,991 20,177 19,826 21,041 21,333 19,736 20,104 21,833 17,906 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 315 40 94 27 42 31 55 30 236 63 9 Seasonal credit 30 44 70 44 52 57 64 63 71 82 10 Special Liquidity Facility credit 48 17 7 19 15 16 14 14 0 0 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float 1,344 679 91 667 1,010 885 47 -207 320 334 13 Other Federal Reserve assets 35,392 33,840 33,236 34,483 32,546 32,796 32,621 33,034 33,399 33,749 14 Gold stock 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 15 Special drawing rights certificate account 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 16 Treasury currency outstanding 28,177 28,445 28,664 28,435 28,484 28,533 28,593 28,638 28,683 28,728 ABSORBING RESERVE FUNDS 17 Currency in circulation 587,982 565,554 563,365 565,828 565,907 564,245 563,645 563,646 563,220 562,761 18 Reverse repurchase agreements—triparty4 . . . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 121 148 165 146 162 162 159 164 168 170 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 8,148 5,259 5,344 5,306 5,334 5,090 5,358 5,457 5,675 5,067 21 Foreign 93 92 96 88 81 92 77 85 102 117 22 Service-related balances and adjustments . . 7,676 7,415 6,866 7,895 6,960 6,915 6,799 6,975 6,721 6,907 23 Other 361 244 201 237 238 245 234 196 190 182 24 Other Federal Reserve liabilities and capital . 18,240 18,684 19,071 18,795 18,823 18,807 18,921 19,152 19,106 19,106 25 Reserve balances with Federal Reserve Banks' 5,114 4,988r 6,201 5,074 5,278 6,981 5,483 5,327 7,192 5,656 End-of-month figures Wednesday figures Jan. Feb. Mar. Feb. 16 Feb. 23 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 561,444 558,483 559,809 557,308 560,717 558,659 559,012 560,782 559,321 555,546 U.S. government securities2 2 Bought outright—System account3 500,228 500,771 501,708 502,699 500,423 501,899 502,112 502,215 500,492 502,762 3 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 175 150 150 150 150 150 150 150 150 150 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 23,105 24,768 23,745 21,505 24,255 24,265 24,060 25,045 22,855 18,420 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 86 29 157 19 48 33 28 18 1,551 35 9 Seasonal credit 21 64 79 49 53 59 65 66 78 89 10 Special Liquidity Facility credit 22 16 0 18 16 16 14 14 0 0 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float 2,986 339 -213 482 2,998 -162 -253 107 593 31 13 Other Federal Reserve assets 34,820 32,347 34,183 32,385 32,775 32,399 32,835 33,167 33,601 34,059 14 Gold stock 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 15 Special drawing rights certificate account 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 16 Treasury currency outstanding 28,282 28,533 28,773 28,435 28,484 28,533 28,593 28,638 28,683 28,728 ABSORBING RESERVE FUNDS 17 Currency in circulation 566,568 564,789 562,970 566,669 566,193 564,784 564,734 564,517 564,013 563,999 18 Reverse repurchase agreements—triparty4 .. . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 125 162 174 162 162 158 163 168 169 174 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 6,119 5,004 4,357 4,775 4,818 5,019 5,356 7,611 4,864 5,288 21 Foreign 82 129 125 108 107 99 85 71 84 80 22 Service-related balances and adjustments . . 7,230 6,916r 7,065 7,895 6,960 6,916 6,799 6,975 6,721 6,907 23 Other 265 243 188 256 238 234 192 196 184 181 24 Other Federal Reserve liabilities and capital . 18,101 18,785 19,752 18,548 18,609 18,329 18,862 18,836 18,817 18,820 25 Reserve balances with Federal Reserve Banks 8,484 8,238r 11,198 4,578 9,362 8,902 8,661 8,294 10,400 6,074 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 • June 2000 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1997 1998 1999 1999 2000 Dec. Dec. Dec. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 Reserve balances with Reserve Banks2 10,664 9,021 5,260 7,698 6,768 6,285 5,260 5,207 5,073r 6,524 2 Total vault cash3 44,742 44,293 60,499 44,447 47,030 50,754 60,499 73,898 63,745 48,928 3 Applied vault cash4 37,255 35,997 36,384 34,089 33,933 34,660 36,384 39,097 37,015 33,231 4 Surplus vault cash5 7.486 8,296 24,116 10,359 13,096 16,094 24,116 34,802 26,731 15,697 5 Total reserves6 47,920 45,018 41,643 41,787 40,702 40,944 41,643 44,304 42,088r 39,755 6 Required reserves 46,235 43,435 40,332 40,590 39,549 39,610 40,332 42,279 40,971 38,532 7 Excess reserve balances at Reserve Banks7 1,685 1,583 1,311 1,197 1,153 1,334 1,311 2,025 1,117r 1,223 8 Total borrowing at Reserve Banks 324 117 320 338 281 236 320 374 108 179 9 Adjustment 245 101 179 56 52 157 179 296 45 101 10 Seasonal 79 15 67 282 221 71 67 31 44 71 11 Special Liquidity Facility8 74 0 8 7 74 46 19 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 2000 Dec. 1 Dec. 15 Dec. 29 Jan. 12 Jan. 26 Feb. 9 Feb. 23 Mar. 8 Mar. 22 Apr. 5 1 Reserve balances with Reserve Banks2 5,927 5,434 4,888 6,308 4,644 4,145 5,172 6,234r 6,267 7,181 2 Total vault cash3 52,813 56,693 63,663 68,851 75,759 80,804 58,780 49,745 48,678 48,593 3 Applied vault cash4 35,470 35,346 37,329 37,491 40,031 40,334 36,271 33,772 32,862 33,326 4 Surplus vault cash5 17,343 21,347 26,334 31,360 35,728 40,470 22,509 15,973 15,816 15,267 5 Total reserves6 41,397 40,780 42,217 43,799 44,675 44,479 41,443 40,006r 39,129 40,507 6 Required reserves 40,027 39,682 40,956 40,674 43,278 43,333 40,260 39,088r 38,003 38,860 7 Excess reserve balances at Reserve Banks7 1,370 1,098 1,261 3,125 1,396 1,146 1,183 918r 1,125 1,647 8 Total borrowing at Reserve Banks 133 181 425 657 224 114 100 119 207 189 9 Adjustment 64 94 222 530 180 62 35 44 133 104 10 Seasonal 62 61 79 38 28 27 48 61 67 85 11 Special Liquidity Facility8 7 27 124 90 17 25 17 15 7 0 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 statistica lrelease. For 5. Total vault cash (line 2) less applied vault cash (line 3). ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 2. Excludes required clearing balances and adjustments to compensate for float and (line 3). includes other off-balance-sheet "as-of' adjustments. 7. Total reserves (line 5) less required reserves (line 6). 3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by 8. Borrowing at the discount window under the terms and conditions established for the those banks and thrift institutions that are not exempt from reserve requirements. Dates refer Century Date Change Special Liquidity Facility in effect from October 1, 1999 through to the maintenance periods in which the vault cash can be used to satisfy reserve require- April 7, 2000. ments. 9. Consists of borrowing at the discount window under the terms and conditions estab- 4. All vault cash held during the lagged computation period by "bound" institutions (that lished for the extended credit program to help depository institutions deal with sustained is, those whose required reserves exceed their vault cash) plus the amount of vault cash liquidity pressures. Because there is not the same need to repay such borrowing promptly as applied during the maintenance period by "nonbound" institutions (that is, those whose vault with traditional short-term adjustment credit, the money market effect of extended credit is cash exceeds their required reserves) to satisfy current reserve requirements. similar to that of nonborrowed reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit Seasonal credit Extended credit3 Federal Reserve Bank On On Previous rate On 5/5/00 5/5/00 5/5/00 Boston 3/21/00 New York . . . 3/21/00 Philadelphia . 3/21/00 Cleveland . . . 3/21/00 Richmond . . . 3/21/00 Atlanta 3/21/00 Chicago 3/21/00 St. Louis 3/22/00 Minneapolis . 3/21/00 Kansas City . . 3/21/00 Dallas 3/23/00 San Francisco 3/22/00 Range of rates for adjustment credit in recent years Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Ban level)—All of Effective date level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1977 1982—Oct. 12 9.5-10 9.5 1994—May 17 3-3.5 3.5 13 9.5 9.5 18 3.5 3.5 1978-—Jan. 9 6-6.5 6.5 Nov. 22 9-9.5 9 AAuugg.. 1166 3.5-4 4 20 6.5 6.5 26 9 9 1188 4 4 May 11 6.5-7 7 Dec. 14 8.5-9 9 Nov. 15 4^1.75 4.75 12 7 7 15 8.5-9 8.5 17 4.75 4.75 July 3 7-7.25 7.25 17 8.5 8.5 10 7.25 7.25 1995—Feb. 1 4.75-5.25 5.25 Aug. 21 7.75 7.75 1984—Apr. 9 8.5-9 9 9 5.25 5.25 Sept. 22 8 8 13 9 9 Oct. 16 8-8.5 8.5 Nov. 21 8.5-9 8.5 1996—Jan. 31 5.00-5.25 5.00 20 8.5 8.5 26 8.5 8.5 Feb. 5 5.00 5.00 Nov. 1 8.5-9.5 9.5 Dec. 24 8 3 9.5 9.5 1998—Oct. 15 4.75-5.00 4.75 1985—May 20 7.5-8 7.5 16 4.75 4.75 1979--July 20 10 10 24 7.5 7.5 Nov. 17 4.50-4.75 4.50 Aug. 17 10-10.5 10.5 19 4.50 4.50 20 10.5 10.5 1986—Mar. 7 7-7.5 7 Sept. 19 10.5-11 11 10 7 7 1999—Aug. 24 4.50-4.75 4.75 21 11 11 Apr. 21 6.5-7 6.5 26 4.75 4.75 Oct. 8 11-12 12 23. 6.5 6.5 Nov. 16 4.75-5.00 4.75 10 12 12 July 11 6 6 18 5.00 5.00 Aug. 21 5.5-6 5.5 1980—Feb. 15 12-13 13 22 5.5 5.5 2000—Feb. 2 5.00-5.25 5.25 19 13 13 4 5.25 5.25 May 29 12-13 13 1987—Sept. 4 5.5-6 6 Mar. 21 5.25-5.50 5.50 30 12 12 11 6 6 23 5.50 5.50 June 13 11-12 11 16 11 11 1988—Aug. 9 6-6.5 6.5 IInn eeffffeecctt MMaayy 55,, 22000000 5.50 5.50 July 28 10-11 10 11 6.5 6.5 29 10 10 Sept. 26 11 11 1989—Feb. 24 6.5-7 7 Nov. 1/ 12 12 27 7 7 Dec. 5 12-13 13 8 13 13 1990—Dec. 19 6.5 6.5 1981-—May 5 13-14 14 1991—Feb. 1 6-6.5 6 14 14 4 6 6 Nov. 2 13-14 13 Apr. 30 5.5-6 5.5 6 13 13 May 2 5.5 5.5 Dec. 4 12 12 Sept. 13 5-5.5 5 17 5 5 1982—July 20 11.5-12 11.5 Nov. 6 4.5-5 4.5 23 11.5 11.5 7 4.5 4.5 Aug. 2 11-11.5 11 Dec. 20 3.5-4.5 3.5 3 11 11 24 3.5 3.5 16 10.5 10.5 27 10-10.5 10 1992—July 2 3-3.5 3 30 10 10 7 3 3 1. Available on a short-term basis to help depository institutions meet temporary needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that cannot be met through reasonable alternative sources. The highest rate established flexible rate somewhat above rates charged on market sources of funds is charged. The rate for loans to depository institutions may be charged on adjustment credit loans of unusual size ordinarily is reestablished on the first business day of each two-week reserve maintenance that result from a major operating problem at the borrower's facility. period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis 2. Available to help relatively small depository institutions meet regular seasonal needs for points. funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 4. For earlier data, see the following publications of the Board of Governors: Banking and that cannot be met through special industry lenders. The discount rate on seasonal credit takes Monetary• Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 1970into account rates charged by market sources of funds and ordinarily is reestablished on the 1979. first business day of each two-week reserve maintenance period; however, it is never less than In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit the discount rate applicable to adjustment credit. borrowings by institutions with deposits of $500 million or more that had borrowed in 3. May be made available to depository institutions when similar assistance is not successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was reasonably available from other sources, including special industry lenders. Such credit may in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed be provided when exceptional circumstances (including sustained deposit drains, impaired on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to access to money market funds, or sudden deterioration in loan repayment performance) or 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, practices involve only a particular institution, or to meet the needs of institutions experiencing and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the difficulties adjusting to changing market conditions over a longer period (particularly at times surcharge was changed from a calendar quarter to a moving thirteen-week period. The of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is surcharge was eliminated on Nov. 17, 1981. charged on extended-credit loans outstanding less than thirty days; however, at the discretion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • June 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 deposits1 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 instruments, payment orders of with- Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that drawal, or telephone or preauthorized transfers for the purpose of making payments to third report quarterly. persons or others. However, accounts subject to the rules that permit no more than six 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits preauthorized, automatic, or other transfers per month (of which no more than three may be with an original maturity of less than 1VS years was reduced from 3 percent to 1 Vi percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1 l/i years was reduced from 3 against which the 3 percent reserve requirement applies be modified annually by 80 percent of percent to zero on Jan. 17, 1991. the percentage change in transaction accounts held by all depository institutions, determined The reserve requirement on nonpersonal time deposits with an original maturity of 1 x/i as of June 30 of each year. Effective with the reserve maintenance period beginning years or more has been zero since Oct. 6, 1983. December 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 1V5 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 2000 TTyypp aa ee nn dd oo ff mm ttrr aa aa tt nn uu ss rrii aa tt cc yy tt iioonn 11999977 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan. Feb. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 9,147 3,550 0 0 0 0 0 0 00 00 ? Gross sales 0 0 0 0 0 0 0 0 0 0 Exchanges 435,907 450,835 464,218 37,052 42,643 35,844 36,882 42,468 37,029 38,607 4 For new bills 435,907 450,835 464,218 37,052 42,643 35,844 36,882 42,468 37,029 38,607 5 Redemptions 0 2,000 0 0 0 0 0 0 0 0 Others within one year 6 Gross purchases 5,549 6,297 11,895 429 960 0 964 1,450 0 0 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 41,716 46,062 50,590 7,669 3,468 3,831 6,675 3,936 3,566 6,877 9 Exchanges -27,499 -49,434 -53,315 -10,798 -2,125 -368 -10,150 -2,175 -4,360 -6,688 10 Redemptions 1,996 2,676 1,429 0 0 170 0 0 390 0 One to five years 11 Gross purchases 20,080 12,901 19,731 1,272 0 0 1,014 3,514 116600 00 12 Gross sales 0 0 0 0 0 0 0 0 0 0 N Maturity shifts -37,987 -37,777 -44,032 -4,751 -3,468 -3,831 -3,685 -3,936 -3,566 -5,210 14 Exchanges 20,274 37,154 42,604 8,433 2,125 0 8,015 2,175 4,045 4,348 Five to ten years 15 Gross purchases 3,449 2,294 4,303 447 0 0 0 581 809 0 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -1,954 -5,908 -5,841 -2,918 0 0 -2,273 0 0 -949 18 Exchanges 5,215 7,439 7,583 1,290 0 0 2,135 0 316 1,170 More than ten years 19 Gross purchases 5,897 4,884 9,428 1,075 0 0 925 1,257 1,069 0 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -1,775 -2,377 -717 0 0 0 -717 0 0 -717 22 Exchanges 2,360 4,842 3,139 1,075 0 374 0 0 0 1,170 All maturities 23 Gross purchases 44,122 29,926 45,357 3,223 960 0 2,903 6,802 2,038 0 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 1,996 4,676 1,429 0 0 170 0 0 390 0 Matched transactions 26 Gross purchases 3,577,954 4,395,430 4,395,998 374,032 348,014 332,708 317,537 488,845 492,277 340,127 27 Gross sales 3,580,274 4,399,330 4,414,253 373,159 350,151 330,856 318,294 510,605 471,663 339,585 Repurchase agreements 28 Gross purchases 810,485 512,671 281,599 23,097 2299,,336699 100 0 0 00 00 29 Gross sales 809,268 514,186 301,273 23,717 24,337 7,707 0 0 0 0 30 Net change in U.S. Treasury securities 41,022 19,835 5,999 3,476 3,855 -5,924 2,146 -14,959 22,262 542 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 0 00 00 32 Gross sales 0 25 0 0 0 0 0 0 0 0 33 Redemptions 1,540 322 157 11 0 50 7 0 6 25 Repurchase agreements 34 Gross purchases 160,409 284,316 360,069 61,968 53,224 9,636 0 0 00 00 35 Gross sales 159,369 276,266 370,772 56,053 47,963 24,092 0 0 0 0 36 Net change in federal agency obligations -500 7,703 -10,859 5,904 5,261 -14,506 -7 0 -6 -25 Reverse repurchase agreements 37 Gross purchases 0 0 0 00 00 0 0 0 00 0 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 0 0 304,989 0 0 68,061 81,350 155,578 61,345 82,998 40 Gross sales 0 0 164,349 0 0 45,501 54,470 64,378 178,880 81,335 41 Net change in triparty obligations 0 0 140,640 0 0 22,560 26,880 91,200 -117,535 1,663 42 Total net change in System Open Market Account... 40,522 27,538 135,780 9,380 9,116 2,130 29,019 76,241 -95,279 2,180 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 • June 2000 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 2000 2000 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Jan. 31 Feb. 29 Mar. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 2 Special drawing rights certificate account 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 3 Coin 419 431 432 438 456 357 422 483 Loans 4 To depository institutions 108 108 98 1,629 124 130 109 236 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 24,265 24,060 25,045 22,855 18,420 23,105 24,768 23,745 Federal agency obligations3 8 Bought outright 150 150 150 150 150 175 150 150 9 Held under repurchase agreements 0 0 0 0 0 0 0 0 10 Total U.S. Treasury securities3 501,899 502,112 502,215 500,492 502,762 500,228 500,771 501,708 11 Bought outright4 501,899 502,112 502,215 500,492 502,762 500,228 500,771 501,708 12 Bills 198,802 199,012 199,111 197,386 198,093 197,131 197,674 197,038 13 Notes 217,843 217,845 217,848 217,850 219,082 219,013 217,843 219,082 14 Bonds 85,254 85,255 85.256 85,257 85,588 84,084 85,254 85,588 15 Held under repurchase agreements 0 0 0 0 0 0 0 0 16 Total loans and securities 526,422 526,430 527,508 525,126 521,456 523,638 525,798 525,839 17 Items in process of collection 8,040 7,719 7,658 7,724 6,234 4,511 9,642 4,904 18 Bank premises 1,380 1,382 1,385 1,384 1,384 1,365 1,380 1,381 Other assets 19 Denominated in foreign currencies5 15,235 15,239 15,244 15,248 15,253 15,528 15,234 15,803 20 All other6 15,685 16,122 16,433 16,862 17,423 17,949 15,633 16,988 21 Total assets 584,429 584,571 585,908 584,031 579,454 580,597 585,357 582,647 LIABILITIES 22 Federal Reserve notes 536,827 536,735 536,480 535,938 535,901 538,768 536,839 534,854 23 Reverse repurchase agreements—triparty2 0 0 0 0 0 0 0 0 24 Total deposits 21,410 21,425 23,194 22,388 18,319 21,789 20,548 22,866 25 Depository institutions 16,058 15,791 15,316 17,256 12,771 15,322 15,173 18,196 26 U.S. Treasury—General account 5,019 5,356 7,611 4,864 5,288 6,119 5,004 4,357 27 Foreign—Official accounts 99 85 71 84 80 82 129 125 28 Other 234 192 196 184 181 265 243 188 29 Deferred credit items 7,862 7,549 7,399 6,888 6,413 1,939 9,186 5,175 30 Other liabilities and accrued dividends7 4,652 4,926 4,852 4,811 4,833 4,461 4,683 5,016 31 Total liabilities 570,752 570,635 571,925 570,024 565,467 566,957 571,256 567,911 CAPITAL ACCOUNTS 32 Capital paid in 6,701 6,706 6,708 6,699 6,706 6,650 6,699 6,744 33 Surplus 6,410 6,431 6,431 6,431 6,431 6,314 6,404 6,431 34 Other capital accounts 566 799 845 876 849 676 999 1,561 35 Total liabilities and capital accounts 584,429 584,571 585,908 584,031 579,454 580,597 585,357 582,647 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) 799,031 796,521 794,196 791,774 789,660 809,367 799,674 788,805 38 LESS: Held by Federal Reserve Banks 262,204 259,786 257,716 255,836 253,759 270,599 262,835 253,951 39 Federal Reserve notes, net 536,827 536,735 536,480 535,938 535,901 538,768 536,839 534,854 Collateral held against notes, net 40 Gold certificate account 11,048 11,048 11,048 11,048 11,048 11,048 11,048 11,048 41 Special drawing rights certificate account 6,200 6,200 6,200 6,200 6,200 6,200 6,200 6,200 42 Other eligible assets 0 0 0 0 0 0 0 0 43 U.S. Treasury and agency securities 519,579 519,487 519,231 518,689 518,653 521,520 519,590 517,606 44 Total collateral 536,827 536,735 536,480 535,938 535,901 538,768 536,839 534,854 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 2000 2000 Feb. 23 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 Jan. 31 Feb. 29 Mar. 31 1 Total loans 117 108 108 98 1,629 124 130 109 236 2 Within fifteen days1 99 59 54 40 1,627 107 101 81 203 3. Sixteen days to ninety days 18 50 53 57 2 17 29 28 33 4. 91 days to 1 year 0 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities2 500,423 501,899 502,112 502,215 500,493 502,762 500,228 500,771 501,708 6 Within fifteen days' 14,512 16,149 11,540 11,049 14,276 20,153 20,547 13,372 3,674 7 Sixteen days to ninety days 102,796 104,150 108,257 108,849 104,196 103,506 100,224 106,030 114,085 8 Ninety-one days to one year 139,803 138,688 139,631 139,631 139,331 134,851 136,588 138,688 141,215 9 One year to five years 124,578 123,947 123,947 123,948 123,948 124,688 124,808 123,947 123,170 10 Five years to ten years 50,941 50,941 50,943 50,944 50,946 51,437 50,720 50,941 51,438 11 More than ten years 67,793 67,793 67,794 67,795 67,795 68,126 67,340 67,793 68,127 12 Total federal agency obligations 150 150 150 150 150 150 175 150 150 13 Within fifteen days' 0 0 0 0 0 10 25 0 10 14 Sixteen days to ninety days 10 10 10 10 10 0 10 10 0 15 Ninety-one days to one year 10 10 10 10 10 10 10 10 10 16 One year to five years 10 10 10 10 10 10 10 10 10 17 Five years to ten years 120 120 120 120 120 120 120 120 120 18 More than ten years 0 0 0 0 0 0 0 10 0 1. Holdings under repurchase agreements are classified as maturing within fifteen days in 2. Includes compensation that adjusts for the effects of inflatio non 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 • June 2000 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 1999 2000 IItteemm D 19 e 9 c 6 . D 19 e 9 c 7 . D 19 e 9 c 8 . D 19 e 9 c 9 . Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 50.16 46.86 44.90 41.52 42.07 42.11 40.94 41.20 41.52 43.15 41.48 40.34 2 Nonborrowed reserves4 50.01 46.54 44.79 41.20 41.72 41.77 40.66 40.96 41.20 42.77 41.38 40.16 3 Nonborrowed reserves plus extended credit5 50.01 46.54 44.79 41.20 41.72 41.77 40.66 40.96 41.20 42.77 41.38 40.16 4 Required reserves 48.75 45.18 43.32 40.21 40.94 40.92 39.79 39.86 40.21 41.12 40.37 39.12 5 Monetary base6 451.61 479.16 512.59 590.65 544.63 550.22 557.75 569.66 590.65 591.30 572.51 569.99 Not seasonally adjusted 6 Total reserves7 51.45 48.01 45.12 41.72 41.92 41.85 40.77 41.02 41.72 44.29 42.10 39.78 7 Nonborrowed reserves 51.30 47.69 45.00 41.40 41.58 41.51 40.49 40.78 41.40 43.92 41.99 39.60 8 Nonborrowed reserves plus extended credit5 51.30 47.69 45.00 41.40 41.58 41.51 40.49 40.78 41.40 43.92 41.99 39.60 9 Required reserves8 50.04 46.33 43.54 40.41 40.79 40.65 39.62 39.68 40.41 42.27 40.98 38.55 10 Monetary base9 456.63 484.98 518.28 600.46 543.87 548.13 555.51 571.89 600.46 597.03 571.68 569.79 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 51.17 47.92 45.02 41.64 41.87 41.79 40.70 40.94 41.64 44.30 42.09 39.76 12 Nonborrowed reserves 51.02 47.60 44.90 41.32 41.53 41.45 40.42 40.71 41.32 43.93 41.98 39.58 13 Nonborrowed reserves plus extended credit5 51.02 47.60 44.90 41.32 41.53 41.45 40.42 40.71 41.32 43.93 41.98 39.58 14 Required reserves 49.76 46.24 43.44 40.33 40.74 40.59 39.55 39.61 40.33 42.28 40.97 38.53 15 Monetary base12 463.40 491.79 525.06 607.93 550.86 555.19 562.64 579.02 607.93 604.76 579.02 576.66 16 Excess reserves13 1.42 1.69 1.58 1.31 1.13 1.20 1.15 1.33 1.31 2.03 1.12 1.22 17 Borrowings from the Federal Reserve .16 .32 .12 .32 .34 .34 .28 .24 .32 .37 .11 .18 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 2000 1996 1997 1998 1999 IItteemm Dec. Dec. Dec. Dec. Dec. Jan. Feb. Mar. Seasonally adjusted Measures2 1 Ml 1,081.1 1,073.9 1,097.4 1,123.8 1,123.8 1,120.9 l,105.2r 1,110.7 2 M2 3,822.9 4,040.8 4,397.0 4,652.2 4,652.2 4,675.3r 4,683.8r 4,718.0 3 M3 4,952.4 5,402.2 5,996.9 6,469.3r 6,469.3r 6,512.5r 6,526.7r 6,591.7 4 Debt 14,446.5 15,209.2 16,230.9 17,314.8r 17,314.8r 17,401.2r 17,467.8 n.a. Ml components 5 Currency3 394.3 424.8 459.5 515.6 515.6 524.3 518.T 516.9 6 Travelers checks4 8.3 8.1 8.2 8.3 8.3 8.2 8.1 8.2 7 Demand deposits5 402.3 395.3 379.3 355.9 355.9 345.5r 338.3r 343.0 8 Other checkable deposits6 276.1 245.8 250.3 244.0 244.0 243.0 240.6 242.6 Nontransaction components 9 In M27 2,741.8 2,966.9 3,299.6 3,528.4 3,528.4 3,554.4 33,,557788..66rr 3,607.4 10 In M3 only8 1,129.5 1,361.3 1,599.9 l,817.1r l,817.1r l,837.2r l,842.9r 1,873.7 Commercial banks 11 Savings deposits, including MMDAs 904.0 1,020.5 1,184.8 1,285.8 1,285.8 1,288.1 1,301.4 1,308.0 12 Small time deposits9 593.3 625.4 626.1 634.5 634.5 638.4 643.3 648.2 13 Large time deposits10, " 413.9 488.3 539.3 610.4r 610.4r 614.6r 617.4r 620.2 Thrift institutions 14 Savings deposits, including MMDAs 366.6 376.6 413.8 448.7 448.7 447.4r 444499..99rr 452.9 15 Small time deposits9 353.6 342.8 325.6 320.6 320.6 322.8 323.4 323.9 16 Large time deposits10 78.3 85.6 88.9 91.4 91.4 94.2 94.7r 94.7 Money market mutual funds 17 Retail 524.4 601.7 749.4 838.9 838.9 857.7 860.6 874.5 18 Institution-only 312.0 380.8 518.4 607.4 607.4 623.5 617.5 640.7 Repurchase agreements and Eurodollars 19 Repurchase agreements12 210.7 256.0 300.8 334.7 334.7 329.0 342.0 337.7 20 Eurodollars12 114.6 150.7 152.6 173.lr 173.r 175.8r 171.2r 180.5 Debt components 21 Federal debt 3,781.3 3,800.3 3,750.8 3,659.5r 33,,665599..55rr 33,,664466..22rr 3,609.4 n.a. 22 Nonfederal debt 10,665.2 11,408.9 12,480.1 13,655.4r 13,655.4r 13,755.0r 13,858.4 n.a. Not seasonally adjusted Measures2 23 Ml 1,105.1 1,097.7 1,121.3 1,148.3 1,148.3 1,127.6 l,096.7r 1,107.4 24 M2 3,845.1 4,063.9 4,422.2 4,680.5 4,680.5 4,685.8 4,681.9r 4,738.8 25 M3 4,973.4 5,426.1 6,026.5 6,504.4r 6,504.4r 6,528.9r 6,546. lr 6,625.1 26 Debt 14,443.3 15,206.3 16,227.8 17,313.2r 17,313.2r 17,386.3r 17,439.6 n.a. Ml components 27 Currency3 397.9 428.9 464.1 521.3 521.3 523.1 517.2 517.0 28 Travelers checks4 8.6 8.3 8.4 8.4 8.4 8.4 8.3 8.3 29 Demand deposits5 419.9 412.4 395.9 371.9 371.9 350.2r 331.9r 338.5 30 Other checkable deposits6 278.8 248.2 252.8 246.7 246.7 246.0 239.3 243.6 Nontransaction components 31 In M27 2,740.0 2,966.3 3,300.9 3,532.2 3,532.2 3,558.2 33,,558855..22rr 3,631.4 32 In M3 only8 1,128.2 1,362.2 1,604.3 l,823.9r l,823.9r l,843.0r l,864.2r 1,886.2 Commercial banks 33 Savings deposits, including MMDAs 903.3 1,020.4 1,186.0 1,288.6 1,288.6 1,286.3 1,294.0 1,310.7 34 Small time deposits9 592.7 625.3 626.5 635.3 635.3 640.0 645.8 650.2 35 Large time deposits10, 11 413.2 487.2 537.8 608.6 608.6 605.8r 613.0r 620.4 Thrift institutions 36 Savings deposits, including MMDAs 366.3 376.5 414.2 449.7 449.7 446.7 447.4 453.8 37 Small time deposits9 353.2 342.8 325.8 321.0 321.0 323.6 324.7 324.9 38 Large time deposits10 78.1 85.4 88.6 91.1 91.1 92.9 94.1 94.7 Money market mutual funds 39 Retail 524.3 601.3 748.3 837.5 837.5 861.5 873.4 891.9 40 Institution-only 315.6 386.7 527.9 618.9 618.9 638.2 640.6 650.5 Repurchase agreements and Eurodollars 41 Repurchase agreements12 205.7 250.5 295.4 330.0 330.0 329.2 343.9 340.3 42 Eurodollars12 115.7 152.3 154.5 175.2r 175.2r 177.0r 172.6r 180.3 Debt components 43 Federal debt 3,787.9 3,805.8 3,754.9 3,663.lr 3,663.lr 3,639.0r 3,605.4 n.a. 44 Nonfederal debt 10,655.4 11,400.5 12,472.9 13,650. r 13,650. lr 13,747.2r 13,834.2 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics • June 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 M1. 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 1999 1999r 2000 2000 Mar. Sept. Oct. Nov. Dec. Jan.r Feb/ Mar. Mar. 8 Mar. 15 Mar. 22 Mar. 29 Seasonally adjusted Assets 1 Bank credit 4,494.4 4,617.3 4,634.0 4,690.6 4,766.3 4,788.4 4,821.5 4,856.7 4,856.3 4,848.7 4,859.3 4,857.6 2 Securities in bank credit 1,190.8 1,244.8 1,249.7 1,242.9 1,263.3 1,265.2 1,266.4 1,275.4 1,273.8 1,2713 1,271.1 1,284.8 3 U.S. government securities 801.4 817.6 813.2 799.1 804.0 811.4 812.7 812.0 813.8 811.3 808.4 813.9 4 Other securities 389.4 427.2 436.5 443.9 459.3 453.8 453.7 463.4 460.0 460.0 462.7 470.9 5 Loans and leases in bank credit2 . . . 3,303.6 3,372.5 3,384.2 3,447.6 3,502.9 3,523.2 3,555.1 3,581.3 3,582.6 3,577.4 3,588.2 3,572.8 6 Commercial and industrial 954.9 978.4 982.4 998.1 1,003.4 1,010.2 1,021.3 1,029.1 1,025.6 1,032.7 1,032.6 1,026.0 7 Real estate 1,346.1 1,402.5 1,419.5 1,432.9 1,469.9 1,488.6 1,505.4 1,520.1 1,513.6 1,518.6 1,524.2 1,521.5 8 Revolving home equity 103.3 100.2 100.9 102.7 107.6 110.8 112.9 115.0 114.0 114.5 115.1 116.0 9 Other 1,242.8 1,302.3 1,318.6 1,330.3 1,362.2 1,377.7 1,392.5 1,405.1 1,399.7 1,404.1 1,409.1 1,405.5 10 Consumer 495.8 482.4 482.6 484.7 492.9 499.5 503.2 505.8 503.9 504.0 506.3 508.8 11 Security3 123.5 118.3 109.6 133.7 153.2 143.1 142.4 142.5 155.9 135.9 140.4 136.8 12 Other loans and leases 383.3 390.8 390.1 398.3 383.6 381.8 382.9 383.7 383.6 386.3 384.6 379.7 13 Interbank loans 218.7 213.5 225.4 222.1 226.5 222.2 234.2 235.8 235.1 234.7 238.8 238.0 14 Cash assets4 258.0 264.4 269.0 274.6 287.6 286.2 284.3 277.9 281.9 281.1 282.6 262.4 15 Other assets5 346.1 359.1 362.6 368.8 379.1 405.4 408.0 400.0 398.8 404.4 396.9 401.0 16 Total assets6 5,258.7 5,395.2 5,431.7 5,496.8 5,599.6 5.643.1 5,689.1 5,7113 5,713.0 5,709.8 5,718.6 5,699.9 Liabilities 17 Deposits 3,362.4 3,414.3 3,448.4 3,481.8 3,524.5 3.541.8 3,559.6 3,576.6 3,563.2 3,595.1 3,577.9 3,556.6 18 Transaction 662.0 634.7 630.8 624.9 630.2 626.8 624.9 625.7 606.3 634.7 635.8 628.5 19 Nontransaction 2,700.5 2,779.6 2,817.6 2,856.9 2,894.4 2,915.0 2,934.7 2,951.0 2,957.0 2,960.4 2,942.1 2,928.1 20 Large time 719.3 741.0 772.4 801.8 828.1 840.9 847.6 854.4 852.3 850.7 851.2 858.2 21 Other 1,981.1 2,038.6 2,045.2 2,055.1 2,066.2 2.074.1 2,087.1 2,096.6 2,104.7 2,109.7 2,090.9 2,069.9 22 Borrowings 986.6 1,045.5 1,050.2 1,059.8 1,116.6 1,134.0 1,130.8 1,149.1 1,159.5 1,148.0 1,138.7 1,146.6 23 From banks in the U.S 315.6 336.1 348.3 349.9 347.1 360.0 365.7 373.3 370.0 381.8 366.2 375.6 24 From others 671.0 709.4 702.0 709.9 769.5 774.0 765.1 775.7 789.4 766.2 772.5 771.0 25 Net due to related foreign offices 201.7 218.3 220.4 223.9 221.1 229.8 233.9 233.1 236.7 215.2 240.4 241.9 26 Other liabilities 271.0 283.3 291.3 297.7 302.2 288.8 295.3 289.1 292.9 291.3 281.4 292.7 27 Total liabilities 4,821.8 4,961.4 5,010.4 5,063.2 5,164.5 5,1943 5,219.6 5,247.9 5,2523 5,249.6 5,238.4 5,237.8 28 Residual (assets less liabilities)7 436.9 433.7 421.4 433.7 435.1 448.8 469.5 463.3 460.7 460.2 480.2 462.0 Not seasonally adjusted Assets 29 Bank credit 4,489.7 4,604.1 4,643.2 4,718.1 4,798.8 4,812.6 4,824.5 4,850.8 4,855.0 4,844.7 4,846.4 4,849.3 30 Securities in bank credit 1,194.1 1,238.4 1,252.6 1,256.8 1,273.5 1,273.6 1,270.5 1,276.8 1,278.1 1,273.2 1,268.6 1,284.8 31 U.S. government securities 807.9 809.2 808.3 801.9 806.1 813.1 816.6 819.0 821.1 818.3 813.6 821.2 32 Other securities 386.2 429.3 444.3 455.0 467.4 460.5 453.9 457.8 457.0 454.9 454.9 463.5 33 Loans and leases in bank credit2 .. . 3,295.6 3,365.7 3,390.6 3,461.3 3,525.3 3,539.0 3,554.0 3,574.0 3,576.8 3,571.4 3,577.8 3,564.5 34 Commercial and industrial 958.7 974.8 983.1 1,001.9 1,005.4 1,007.8 1,022.0 1,033.0 1,026.7 1,036.5 1,037.7 1,031.2 35 Real estate 1,341.7 1,403.0 1,424.2 1,439.4 1,474.7 1,492.6 1,502.3 1,515.3 1,511.0 1,515.0 1.517.2 1,515.5 36 Revolving home equity 102.3 100.8 101.3 103.0 108.0 111.1 112.5 113.9 113.2 113.5 113.8 114.7 37 Other 1,239.4 1,302.2 1,322.9 1,336.3 1,366.6 1,381.4 1,389.8 1,401.4 1,397.8 1,401.5 1,403.4 1,400.8 38 Consumer 493.6 482.6 480.2 483.3 498.4 506.8 505.3 504.2 502.5 502.7 504.9 506.4 39 Security3 122.5 113.0 112.1 135.8 157.8 147.2 143.9 141.5 156.9 135.4 138.9 134.3 40 Other loans and leases 379.1 392.2 391.1 400.9 389.1 384.7 380.5 379.8 379.7 381.8 379.1 377.1 41 Interbank loans 224.6 207.9 219.5 226.2 231.9 223.1 235.7 241.7 243.5 241.3 239.7 243.0 42 Cash assets4 249.4 260.1 270.2 283.6 307.5 300.4 284.8 2694 272.3 275.8 265.7 258.7 43 Other assets5 347.9 358.0 356.0 365.7 379.1 404.0 410.5 403.7 403.1 407.6 397.2 406.3 44 Total assets6 5,253.1 5370.9 5,429.7 5,534.1 5,6573 5,6813 5,696.7 5,706.4 5,714.6 5,710.2 5,689.9 5,6983 Liabilities 45 Deposits 3,364.9 3,400.0 3,440.9 3,509.6 3,566.9 3,555.1 3,558.5 3,580.5 3,572.4 3,599.0 3,559.5 3,567.0 46 Transaction 654.4 628.1 622.3 633.1 662.9 638.3 617.9 618.6 598.2 629.3 612.8 630.5 47 Nontransaction 2,710.5 2,771.9 2,818.5 2,876.5 2,903.9 2,916.8 2,940.6 2,961.9 2,974.2 2,969.7 2,946.8 2,936.5 48 Large time 725.5 732.3 770.7 811.9 843.2 851.9 860.3 862.9 863.9 860.0 858.9 864.9 49 Other 1,985.0 2,039.6 2,047.8 2,064.6 2,060.8 2,064.9 2,080.3 2,099.0 2,110.3 2,109.7 2,087.9 2,071.6 50 Borrowings 984.6 1,039.7 1,049.9 1,067.7 1,125.8 1,152.5 1,134.7 1,144.1 1,149.6 1,147.4 1,143.3 1,135.9 51 From banks in the U.S 315.9 333.8 345.3 353.3 352.0 363.9 367.2 373.2 367.8 381.9 367.9 375.8 52 From others 668.7 705.9 704.6 714.4 773.8 788.7 767.5 770.9 781.8 765.4 775.4 760.1 53 Net due to related foreign offices .... 202.0 214.4 221.5 227.9 227.3 233.3 248.2 236.6 239.1 218.0 249.5 248.6 54 Other liabilities 271.7 282.8 290.4 298.7 304.4 290.2 297.6 289.8 294.6 292.4 281.7 292.8 55 Total liabilities 4,823.2 4,936.9 5,002.6 5,103.9 5,224.5 5,231.1 5,239.1 5,251.1 5,255.6 5,256.7 5,234.0 5,244.2 56 Residual (assets less liabilities)7 430.0 434.0 427.1 430.2 432.9 450.1 457.6 455.3 459.0 453.5 455.8 454.0 MEMO 57 Revaluation gains on off-balance-sheet items8 86.7 97.9 100.0 100.8 104.0 101.4 104.9 105.3 108.3 105.1 102.9 106.3 58 Revaluation losses on off-balancesheet items8 86.3 96.7 97.8 99.7 102.3 99.5 104.4 102.3 105.2 101.1 100.3 103.4 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • June 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 1999 1999R 2000 2000 Mar. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar. Mar. 8 Mar. 15 Mar. 22 Mar. 29 Seasonally adjusted Assets 1 Bank credit 3,944.5 4,097.2 4,109.2 4,152.1 4,218.1 4,242.5 4,281.7 4,313.7 4,311.7 4,315.5 4,320.8 4,305.1 2 Securities in bank credit 992.0 1,055.1 1,057.8 1,050.6 1,061.1 1,065.9 1,075.2 1,081.4 1,077.7 1,084.2 1,081.5 1,082.0 3 U.S. government securities 714.5 734.9 730.8 720.6 723.3 731.2 737.4 734.7 735.2 736.5 733.8 732.6 4 Other securities 277.5 320.2 327.0 330.0 337.8 334.7 337.8 346.6 342.4 347.7 347.7 349.4 5 Loans and leases in bank credit2 2,952.5 3,042.1 3,051.3 3,101.4 3,157.0 3,176.6 3,206.5 3,232.3 3,234.1 3,231.3 3,239.3 3,223.1 6 Commercial and industrial 746.7 783.8 787.5 801.9 810.0 815.4 824.6 831.0 827.7 833.5 834.1 829.3 7 Real estate 1,325.9 1,384.8 1,401.8 1,415.6 1,452.9 1,471.2 1,487.6 1,502.0 1,495.8 1,500.6 1,506.0 1,503.2 8 Revolving home equity 103.3 100.2 100.9 102.7 107.6 110.8 112.9 115.0 114.0 114.5 115.1 116.0 9 Other 1,222.6 1,284.6 1,301.0 1,313.0 1,345.3 1,360.3 1,374.8 1,387.0 1,381.8 1,386.1 1,391.0 1,387.2 10 Consumer 495.8 482.4 482.6 484.7 492.9 499.5 503.2 505.8 503.9 504.0 506.3 508.8 11 Security3 72.2 66.4 54.6 68.3 86.1 76.5 75.8 76.3 90.1 72.8 73.4 69.5 12 Other loans and leases 311.8 324.7 324.8 331.0 315.2 314.0 315.2 317.2 316.6 320.4 319.5 312.3 13 Interbank loans 193.1 188.5 199.8 196.9 197.0 193.3 201.6 207.2 206.6 207.3 208.6 208.5 14 Cash assets4 223.2 222.6 224.6 225.8 234.1 230.8 229.8 226.1 229.1 229.0 229.9 213.5 15 Other assets5 309.4 328.6 329.8 333.9 342.5 366.9 369.8 360.9 360.3 365.8 358.4 360.2 16 Total assets6 4,612.0 4,778.1 4,804.4 4,849.7 4,932.2 4,974.6 5,024.3 5,049.2 5,048.9 5,058.8 5,059.0 5,028.5 Uabilities 17 Deposits 3,051.2 3,098.9 3,112.9 3,126.5 3,150.4 3,161.0 3,179.0 3,193.5 3,180.5 3,214.8 3,197.6 3,169.8 18 Transaction 651.1 624.4 620.2 614.5 619.6 615.9 613.8 614.3 595.4 622.7 624.3 617.5 19 Nontransaction 2,400.1 2,474.5 2,492.8 2,511.9 2,530.8 2,545.0 2,565.2 2,579.2 2,585.1 2,592.1 2,573.3 2,552.3 20 Large time 421.3 438.6 450.3 459.5 467.8 473.5 480.0 485.4 483.2 485.4 484.9 485.6 21 Other 1,978.7 2,035.9 2,042.4 2,052.4 2,063.0 2,071.5 2,085.1 2,093.7 2,101.9 2,106.7 2,088.4 2,066.7 22 Borrowings 810.6 873.1 871.6 873.8 935.1 954.0 954.6 971.1 978.1 970.0 964.2 970.6 23 From banks in the U.S 291.3 311.9 326.1 323.8 322.6 340.3 347.3 353.8 349.2 358.9 349.5 358.3 24 From others 519.3 561.2 545.6 550.1 612.5 613.7 607.3 617.3 628.9 611.1 614.8 612.3 25 Net due to related foreign offices .... 117.4 152.7 165.4 178.9 182.0 194.1 207.1 213.2 214.3 199.8 219.7 221.6 26 Other liabilities 203.7 219.3 225.5 230.5 232.9 220.1 223.8 219.9 221.4 223.6 214.3 222.4 27 Total Uabilities 4,182.9 4,344.0 4,375.4 4,409.7 4,500.4 4,529.2 4,564.5 4,597.7 4,594.2 4,608.2 4,595.8 4,584.4 28 Residual (assets less liabilities)7 429.1 434.2 429.0 440.0 431.8 445.5 459.8 451.4 454.7 450.6 463.2 444.0 Not seasonally adjusted Assets 29 Bank credit 3,940.0 4,085.9 4,111.3 4,167.0 4,240.6 4,258.9 4,280.4 4,309.2 4,309.8 4,311.6 4,310.7 4,300.0 30 Securities in bank credit 997.0 1,049.5 1,055.0 1,055.0 1,067.5 1,070.4 1,078.0 1,085.7 1,083.0 1,088.0 1,083.8 1,086.9 31 U.S. government securities 720.9 728.6 726.3 721.9 724.0 732.3 741.2 741.9 743.1 743.4 739.4 740.0 32 Other securities 276.0 321.0 328.7 333.1 343.5 338.1 336.8 343.8 339.9 344.6 344.5 346.9 33 Loans and leases in bank credit2 2,943.0 3,036.4 3,056.4 3,112.0 3,173.1 3,188.5 3,202.4 3,223.4 3,226.8 3,223.6 3,226.9 3,213.1 34 Commercial and industrial 749.1 780.3 786.9 802.7 808.4 811.5 822.8 833.3 827.4 835.3 837.2 833.0 3 3 6 5 Re R al e v es o t l a v t i e n g home equity 1,3 1 2 0 1 2 . . 5 3 1,3 1 8 0 5 0. . 8 4 1,4 1 0 0 6 1. . 3 3 1,4 10 2 3 2 . . 0 0 1,4 1 5 0 7 8 . . 8 0 1,4 1 7 1 5 1 . . 0 1 1,4 1 8 12 4 . . 5 3 1,4 1 9 1 7 3. . 9 1 1,4 1 9 1 2 3. . 2 8 1,4 1 9 1 6 3. . 5 7 1,4 1 9 1 8 3. . 8 9 1, 1 4 1 9 4 7 . . 7 2 37 Other 1,219.2 1,284.6 1,304.9 1,318.9 1,349.7 1,363.9 1,371.8 1,383.2 1,379.7 1,383.2 1,385.0 1,382.6 38 Consumer 493.6 482.6 480.2 483.3 498.4 506.8 505.3 504.2 502.5 502.7 504.9 506.4 39 Security' 70.9 61.3 57.4 71.0 90.3 80.2 77.5 75.0 91.3 72.3 71.3 66.1 40 Other loans and leases 308.0 326.7 325.6 333.0 318.3 315.1 312.4 313.8 312.8 316.6 314.6 310.3 41 Interbank loans 199.0 182.9 193.9 201.0 202.4 194.2 203.1 213.1 215.0 213.9 209.4 213.5 42 Cash assets4 215.4 219.0 224.9 231.8 249.7 242.7 231.0 218.6 220.8 224.7 214.2 210.3 43 Other assets5 310.1 328.1 323.9 330.8 340.3 363.9 370.4 363.4 361.9 367.2 358.2 365.2 44 Total assets6 4,606.3 4,756.9 4,795.2 4,871.5 4,973.4 5,001.3 5,026.4 5,045.4 5,048.6 5,058.6 5,033.7 5,030.3 Liabilities 45 Deposits 3,049.0 3.089.4 3,108.8 3,151.6 3,184.2 3,167.4 3,170.8 3,191.2 3,184.4 3,213.0 3,172.4 3,172.1 46 Transaction 643.8 617.3 611.6 622.6 651.8 627.3 606.9 607.5 587.7 617.6 601.6 619.5 47 Nontransaction 2,405.2 2,472.0 2,497.2 2,529.0 2,532.4 2,540.1 2,563.9 2,583.7 2,596.7 2,595.4 2,570.8 2,552.6 48 Large time 422.3 434.8 451.7 466.7 474.0 479.1 486.7 487.1 488.8 488.1 485.4 483.5 49 Other 1,983.0 2.037.3 2,045.5 2,062.3 2,058.5 2,061.0 2,077.2 2,096.6 2,107.9 2,107.3 2,085.4 2,069.2 50 Borrowings 808.6 867.3 871.2 881.7 944.3 972.5 958.5 966.1 968.2 969.4 968.9 959.9 51 From banks in the U.S 291.7 309.6 323.1 327.2 327.6 344.1 348.9 353.7 346.9 359.1 351.2 358.4 52 From others 516.9 557.7 548.2 554.5 616.7 628.3 609.7 612.4 621.3 610.3 617.7 601.5 53 Net due to related foreign offices .... 117.6 149.8 166.2 181.2 183.0 195.4 219.1 216.2 219.4 202.7 225.3 225.0 54 Other liabilities 204.1 219.1 225.2 230.5 233.1 219.8 224.2 220.3 221.9 223.9 214.5 222.8 55 Total Uabilities 4,179.3 4,325.5 4,371.4 4,445.0 4,544.6 4,555.1 4,572.7 4,593.8 4,593.8 4,608.9 4,581.1 4,579.9 56 Residual (assets less liabilities)7 427.0 431.3 423.8 426.4 428.8 446.2 453.7 451.6 454.8 449.7 452.6 450.5 MEMO 57 Revaluation gains on off-balance-sheet items8 47.8 60.1 60.9 59.8 64.5 62.7 64.8 66.0 66.8 66.7 64.7 67.2 58 Revaluation losses on olf-balancesheet items8 47.7 59.8 60.0 59.8 63.9 61.9 64.4 64.1 64.5 64.0 63.1 65.5 59 Mortgage-backed securities9 337.1 347.9 346.7 348.2 347.7 348.0 351.6 353.8 355.2 353.7 351.8 352.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A17 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 1999 1999r 2000 2000 Mar. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar. Mar. 8 Mar. 15 Mar. 22 Mar. 29 Seasonally adjusted Assets 1 Bank credit 2,460.0 2,530.4 2,527.5 2,566.9 2,620.8 2,619.8 2,640.2 2,662.4 2,662.6 2,663.5 2,669.8 2,652.6 2 Securities in bank credit 556.1 596.9 598.7 596.9 608.6 607.3 612.4 620.5 615.1 622.7 622.0 622.4 3 U.S. government securities 389.5 395.3 390.7 386.1 391.3 392.2 393.9 393.7 392.5 394.9 393.8 392.9 4 Trading account 22.4 21.3 20.7 18.8 20.1 21.0 22.1 21.2 19.1 21.2 21.8 22.5 5 Investment account 367.1 374.0 369.9 367.3 371.2 371.2 371.8 372.5 373.3 373.8 372.0 370.4 6 Other securities 166.6 201.6 208.1 210.8 217.3 215.1 218.5 226.8 222.7 227.7 228.2 229.5 7 Trading account 67.7 78.1 81.7 82.4 87.1 81.8 86.2 91.5 89.0 92.8 92.2 92.9 8 Investment account 98.9 123.6 126.3 128.4 130.2 133.2 132.3 135.3 133.7 134.9 136.0 136.6 9 State and local government . 24.8 25.7 25.9 26.3 26.4 26.7 26.8 27.0 26.8 26.8 27.2 27.2 10 Other 74.1 97.8 100.5 102.1 103.9 106.5 105.4 108.3 106.9 108.1 108.9 109.4 11 Loans and leases in bank credit2 . .. 1,903.9 1,933.5 1,928.8 1,969.9 2,012.2 2,012.5 2,027.8 2,041.9 2,047.5 2,040.9 2,047.8 2,030.1 12 Commercial and industrial 555.0 577.1 576.8 588.4 594.8 595.2 601.3 604.7 602.1 607.4 607.5 602.5 13 Bankers acceptances 1.1 1.2 1.1 1.1 1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.1 14 Other 553.9 575.9 575.6 587.3 593.7 594.2 600.3 603.7 601.2 606.4 606.5 601.4 15 Real estate 734.7 752.5 761.5 769.4 800.2 808.3 814.5 822.7 819.3 821.3 825.5 822.1 16 Revolving home equity 74.3 69.5 69.8 71.2 75.7 78.1 79.4 81.2 80.3 80.8 81.3 82.0 17 Other 660.4 683.0 691.7 698.1 724.4 730.2 735.1 741.5 739.0 740.6 744.2 740.2 18 Consumer 304.7 286.3 284.6 287.9 291.8 294.0 296.9 298.5 296.8 296.8 298.5 301.1 19 Security3 66.8 61.4 49.5 62.7 80.6 71.3 70.4 70.8 84.6 67.4 68.1 63.8 20 Federal funds sold to and repurchase agreements with broker-dealers 50.6 43.7 32.3 44.4 60.7 50.2 47.0 48.7 62.0 44.1 46.5 43.5 21 Other 16.2 17.7 17.2 18.3 19.9 21.1 23.4 22.0 22.6 23.3 21.6 20.3 22 State and local government 11.7 12.2 12.3 12.2 12.2 12.2 12.3 12.5 12.5 12.6 12.6 12.5 23 Agricultural 9.0 9.3 9.6 9.5 9.6 9.7 9.9 9.9 9.9 9.9 9.9 9.9 24 Federal funds sold to and repurchase agreements with others 12.7 11.2 10.0 12.3 11.8 11.2 11.3 11.3 12.8 1100..99 1100..99 10.5 25 All other loans 93.6 98.4 97.2 98.3 81.2 80.1 80.7 81.1 79.2 84.2 84.3 77.5 26 Lease-financing receivables 115.7 125.2 127.3 129.2 130.0 130.3 130.3 130.3 130.2 130.3 130.3 130.3 27 Interbank loans 135.8 137.3 150.8 142.4 142.7 139.3 145.9 151.5 153.0 152.7 154.5 148.9 28 Federal funds sold to and repurchase agreements with commercial banks 86.1 84.1 91.9 75.5 73.0 67.5 74.7 78.4 82.4 81.5 7766..99 74.3 29 Other 49.7 53.2 58.9 67.0 69.7 71.9 71.2 73.2 70.6 71.2 77.5 74.7 30 Cash assets4 155.3 152.5 154.5 154.6 159.5 159.6 159.8 156.2 160.3 157.8 159.5 145.3 31 Other assets5 240.4 249.5 247.7 252.3 259.6 281.1 285.8 277.0 276.6 280.1 274.5 278.1 32 Total assets6 2^52.4 3,030.7 3,041.6 3,077.2 3,143.4 3,161.4 3,193.6 3,209.1 3,214.5 3,216.2 3,2203 3,186.9 Liabilities 33 Deposits 1,724.9 1,721.2 1,722.3 1,726.1 1,738.3 1,732.6 1,739.3 1,744.6 1,739.4 1,762.3 1,748.4 1,720.2 34 Transaction 370.2 346.9 342.6 338.7 345.3 336.9 333.6 332.9 321.4 340.6 339.2 331.8 35 Nontransaction 1,354.7 1,374.3 1,379.7 1,387.4 1,393.1 1,395.7 1,405.7 1,411.7 1,418.0 1,421.7 1,409.3 1,388.3 36 Large time 230.2 239.2 246.7 251.9 258.0 260.8 263.2 265.3 264.2 265.3 264.5 264.9 37 Other 1,124.5 1,135.1 1,133.0 1,135.5 1,135.0 1,134.9 1,142.4 1,146.4 1,153.8 1,156.3 1,144.8 1,123.5 38 Borrowings 632.1 671.8 669.3 673.0 728.6 733.1 731.7 743.1 751.7 741.5 737.4 740.5 39 From banks in the U.S 208.6 222.0 238.7 237.7 237.9 250.9 257.2 259.9 256.0 264.9 255.6 262.5 40 From others 423.5 449.8 430.7 435.3 490.7 482.2 474.5 483.2 495.7 476.7 481.8 477.9 41 Net due to related foreign offices 112.8 149.3 161.1 174.4 177.5 189.1 201.9 207.8 208.8 194.4 214.3 216.6 42 Other liabilities 174.7 185.2 191.2 196.6 198.6 184.9 186.7 185.0 186.1 188.9 179.3 187.1 43 Total liabilities 2,644.5 2,727.4 2,744.0 2,770.0 2343.0 2,839.6 2,859.6 2,880.6 2,886.0 2,887.1 2,879.5 2,864.4 44 Residual (assets less liabilities)7 307.9 303.3 297.6 307.1 300.4 321.8 334.0 328.6 328.5 329.1 340.8 322.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Financial Statistics • June 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 1999 1999r 2000 2000 Mar. Sept. Oct. Nov. Dec. Jan.r Feb/ Mar. Mar. 8 Mar. 15 Mar. 22 Mar. 29 Not seasonally adjusted Assets 45 Bank credit 2,461.2 2,515.4 2,528.4 2,582.1 2,642.9 2,642.6 2,651.6 2,663.9 2,671.1 2,666.8 2,665.0 2,649.7 46 Securities in bank credit 559.9 592.3 598.3 603.0 615.5 613.6 618.5 623.8 621.7 626.1 622.6 624.1 47 U.S. government securities 394.7 389.8 388.5 389.2 392.5 394.9 400.2 399.5 400.9 400.8 397.4 397.5 48 Trading account 23.4 20.7 20.8 19.9 20.0 21.7 23.2 22.2 21.3 22.4 22.1 22.2 49 Investment account 371.2 369.1 367.7 369.2 372.5 373.2 377.1 377.4 379.7 378.4 375.3 375.3 50 Mortgage-backed securities . . 250.5 245.6 243.7 244.1 243.9 243.7 248.3 249.3 251.3 249.9 247.5 247.4 51 Other 120.7 123.4 123.9 125.1 128.6 129.5 128.8 128.1 128.4 128.4 127.7 127.9 52 One year or less 24.9 24.8 25.6 24.0 25.3 26.1 30.4 32.4 32.8 32.6 31.9 31.8 53 One to five years 54.4 59.2 60.0 60.7 61.6 61.3 58.2 56.2 56.4 56.5 56.1 55.9 54 More than five years . . . 41.4 39.4 38.3 40.5 41.7 42.0 40.1 39.6 39.1 39.3 39.7 40.2 55 Other securities 165.2 202.6 209.8 213.9 222.9 218.7 218.3 224.3 220.8 225.3 225.2 226.6 56 Trading account 67.7 78.1 81.7 82.4 87.1 81.8 86.2 91.5 89.0 92.8 92.2 92.9 57 Investment account 97.5 124.5 128.1 131.5 135.8 136.8 132.0 132.8 131.8 132.5 133.0 133.7 58 State and local government . . 24.9 25.6 25.9 26.6 26.6 26.9 27.0 27.1 27.0 26.9 27.3 27.3 59 Other 72.6 98.9 102.2 104.9 109.2 109.9 105.0 105.7 104.8 105.6 105.8 106.4 60 Loans and leases in bank credit2 . . 1,901.4 1,923.1 1,930.0 1,979.1 2,027.4 2,029.0 2,033.1 2,040.1 2,049.4 2,040.7 2,042.3 2,025.6 61 Commercial and industrial 557.2 574.8 576.6 590.3 593.6 592.2 600.7 607.0 602.6 609.4 610.2 605.7 62 Bankers acceptances 1.1 1.2 1.1 1.1 1.1 1.1 1.0 1.0 1.0 1.0 1.0 1.1 63 Other 556.0 573.7 575.5 589.2 592.5 591.1 599.6 605.9 601.6 608.4 609.2 6W.6 64 Real estate 733.1 750.6 763.2 773.8 805.7 814.5 815.8 820.9 820.3 820.8 821.8 818.3 65 Revolving home equity 73.5 69.9 70.0 71.4 75.9 78.4 79.3 80.3 79.7 80.0 80.3 81.0 66 Other 401.6 413.0 419.5 425.7 450.0 453.1 451.9 454.8 455.5 454.9 454.9 452.2 67 Commercial 258.0 267.7 273.8 276.7 279.7 283.0 284.6 285.8 285.1 286.0 286.6 285.1 68 Consumer 304.4 285.4 282.3 286.0 295.0 300.6 300.0 298.7 297.5 297.2 298.8 300.7 69 Security3 65.5 56.3 52.4 65.5 84.8 74.9 72.1 69.5 85.7 66.8 66.0 60.4 70 Federal funds sold to and repurchase agreements with broker-dealers .... 49.0 38.9 35.3 47.5 64.6 54.5 49.6 47.2 63.5 43.2 43.9 39.2 71 Other 16.5 17.4 17.1 17.9 20.2 20.4 22.5 22.3 22.2 23.6 22.2 21.3 72 State and local government .... 11.7 12.4 12.4 12.3 12.2 12.2 12.3 12.4 12.4 12.5 12.5 12.4 73 Agricultural 8.8 9.5 9.8 9.6 9.6 9.8 9.7 9.7 9.7 9.7 9.7 9.7 74 Federal funds sold to and repurchase agreements with others 12.7 11.2 10.0 12.3 11.8 11.2 11.3 11.3 12.8 10.9 10.9 10.5 75 All other loans 91.1 99.2 97.2 101.3 85.0 81.1 79.0 78.8 76.4 81.5 80.7 76.3 76 Lease-financing receivables .... 116.9 123.6 126.2 127.9 129.6 132.5 132.2 131.9 131.9 131.8 131.7 131.7 77 Interbank loans 137.7 133.7 144.8 141.7 143.8 140.0 146.2 154.3 155.4 156.6 155.1 152.5 78 Federal funds sold to and repurchase agreements with commercial banks 87.7 81.8 88.6 76.5 74.5 69.0 74.3 80.4 84.5 84.1 76.7 77.6 79 Other 50.0 51.9 56.3 65.1 69.3 71.0 71.9 73.9 70.9 72.5 78.4 74.9 80 Cash assets4 149.6 149.3 155.0 157.6 170.8 170.1 161.4 150.9 153.7 155.6 148.0 142.9 81 Other assets5 241.2 249.3 242.0 247.9 258.0 280.3 287.3 279.5 278.4 282.8 275.8 281.2 82 Total assets6 2^50.6 3,008.4 3,031.2 3,090.1 3,176.1 3,194.9 3,208.5 3,210.5 3,2203 3,223.7 3,205.9 3,188.5 Liabilities 83 Deposits 1,723.8 1,713.3 1,716.9 1,740.2 1,763.3 1,744.0 1,739.7 1,744.4 1,742.9 1,764.3 1,732.8 1,722.3 84 Transaction 365.1 341.7 336.3 343.2 366.6 346.6 330.2 328.4 314.0 337.9 324.3 334.8 85 Nontransaction 1,358.8 1,371.6 1,380.6 1,397.0 1,396.7 1,397.4 1,409.5 1,416.0 1,428.9 1,426.4 1,408.6 1,387.5 86 Large time 231.1 235.4 248.1 259.1 264.2 266.4 269.9 267.0 269.8 268.1 265.0 262.7 87 Other 1,127.7 1,136.1 1,132.5 1,137.9 1,132.5 1,131.0 1,139.6 1,149.0 1,159.1 1,158.3 1,143.6 1,124.8 88 Borrowings 635.4 662.4 667.1 679.5 735.3 753.2 739.8 744.1 750.6 747.6 745.9 734.0 89 From banks in the U.S 212.1 217.8 234.2 240.6 241.4 255.3 261.4 263.3 258.6 268.8 259.9 265.4 90 From nonbanks in the U.S 423.3 444.7 432.9 438.9 493.9 497.8 478.5 480.8 492.0 478.7 485.9 468.6 91 Net due to related foreign offices . .. 113.1 146.4 161.9 176.7 178.6 190.4 213.9 210.8 213.9 197.3 219.9 220.0 92 Other liabilities 174.7 185.2 191.2 196.6 198.6 184.9 186.7 185.0 186.1 188.9 179.3 187.1 93 Total liabilities 2,646.9 2,7073 2,737.1 2,793.0 2,875.7 2^72.4 2,880.1 2,8843 2,893.4 2,898.0 2,877.9 2,863.5 94 Residual (assets less liabilities)7 .... 303.7 301.2 294.2 297.1 300.4 322.6 328.4 326.2 326.8 325.7 328.0 325.0 MEMO 95 Revaluation gains on off-balancesheet items8 47.8 60.1 60.9 59.8 64.5 62.7 64.8 66.0 66.8 66.7 64.7 67.2 96 Revaluation losses on off-balancesheet items8 47.6 59.8 60.0 59.8 63.9 61.9 64.4 64.1 64.5 64.0 63.1 65.5 97 Mortgage-backed securities9 278.4 280.3 278.7 281.5 281.5 280.7 283.1 284.2 285.7 284.2 282.4 282.6 98 Pass-through securities 184.5 185.6 185.0 188.1 189.0 188.6 192.0 192.1 193.5 192.5 190.4 190.4 99 CMOs, REMICs, and other mortgage-backed securities . . 93.9 94.7 93.7 93.4 92.5 92.1 91.1 92.1 92.2 91.8 92.0 92.2 100 Net unrealized gains (losses) on available-for-sale securities10 . . . .6 -.2 -5.6 -5.8 -6.0 -7.4 -7.8 -7.3 -7.4 -7.3 -7.0 -7.1 101 Olfshore credit to U.S. residents" . . . 39.0 27.8 26.7 24.8 24.0 23.2 23.6 24.1 23.9 24.4 23.9 24.3 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 1999 1999r 2000 2000 Mar. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar. Mar. 8 Mar. 15 Mar. 22 Mar. 29 Seasonally adjusted Assets 1 Bank credit 1,484.5 1,566.8 1,581.7 1,585.2 1,597.3 1,622.7 1,641.4 1,651.4 1,649.1 1,652.0 1,650.9 1,652.5 7 Securities in bank credit 435.9 458.2 459.1 453.7 452.5 458.6 462.8 460.9 462.5 461.6 459.4 459.6 3 U.S. government securities 324.9 339.6 340.1 334.5 332.1 339.0 343.5 341.1 342.8 341.6 340.0 339.7 4 Other securities 111.0 118.6 119.0 119.2 120.4 119.6 119.3 119.8 119.8 120.0 119.5 119.8 Loans and leases in bank credit2 1,048.6 1,108.6 1,122.6 1,131.5 1,144.8 1,164.1 1,178.7 1,190.5 1,186.6 1,190.4 1,191.5 1,192.9 6 Commercial and industrial 191.7 206.8 210.7 213.5 215.2 220.2 223.3 226.3 225.6 226.1 226.5 226.8 7 Real estate 591.3 632.2 640.3 646.3 652.7 662.9 673.1 679.4 676.4 679.2 680.5 681.1 8 Revolving home equity 29.0 30.7 31.1 31.4 31.9 32.8 33.4 33.8 33.7 33.7 33.8 34.1 9 Other 562.3 601.6 609.2 614.8 620.8 630.1 639.7 645.5 642.8 645.5 646.7 647.0 in Consumer 191.1 196.2 198.0 196.8 201.0 205.5 206.3 207.4 207.1 207.2 207.8 207.7 n Security3 5.4 5.0 5.0 5.5 5.4 5.2 5.4 5.5 5.6 5.5 5.3 5.7 17. Other loans and leases 69.1 68.4 68.5 69.4 70.4 70.3 70.6 71.9 71.9 72.5 71.4 71.7 13 Interbank loans 57.3 51.2 48.9 54.5 54.3 54.0 55.7 55.7 53.5 54.5 54.1 59.6 14 Cash assets4 67.9 70.1 70.1 71.2 74.7 71.2 70.0 69.8 68.9 71.1 70.5 68.3 15 Other assets5 69.1 79.1 82.0 81.7 82.8 85.7 84.0 83.9 83.6 85.8 83.9 82.1 16 Total assets6 1,659.6 1,747.4 1,762.9 1,772.6 1,788.7 1,813.2 1,830.7 1340.0 1,834.4 1,842.6 1,838.7 1,841.5 Liabilities 17 Deposits 1,326.3 1,377.7 1,390.6 1,400.4 1,412.1 1,428.4 1,439.7 1,448.9 1,441.1 1,452.5 1,449.1 1,449.6 18 Transaction 280.9 277.6 277.6 275.8 274.4 279.1 280.2 281.4 274.0 282.1 285.1 285.6 19 Nontransaction 1,045.4 1,100.2 1,113.1 1,124.6 1,137.7 1,149.3 1,159.5 1,167.5 1,167.1 1,170.4 1,164.0 1,164.0 70 Large time 191.2 199.4 203.7 207.6 209.8 212.8 216.8 220.1 219.0 220.0 220.4 220.7 71 Other 854.2 900.8 909.4 917.0 928.0 936.5 942.7 947.3 948.1 950.4 943.6 943.2 22 Borrowings 178.5 201.3 202.3 200.9 206.5 220.9 222.9 228.0 226.4 228.5 226.8 230.1 73 From banks in the U.S 82.7 89.9 87.4 86.1 84.7 89.4 90.1 93.9 93.1 94.1 93.9 95.7 74 From others 95.8 111.4 114.9 114.8 121.8 131.5 132.8 134.1 133.2 134.4 133.0 134.4 25 Net due to related foreign offices .... 4.5 3.4 4.3 4.5 4.5 5.1 5.2 5.3 5.5 5.4 5.4 5.0 26 Other liabilities 29.0 34.1 34.3 34.0 34.3 35.2 37.1 35.0 35.2 34.7 35.0 35.3 27 Total liabilities 1,538.4 1,616.5 1,6315 1,639.7 1,6573 1,689.6 1,704.9 1,7m 1,708.2 1,721.1 1,7163 1,720.0 28 Residual (assets less liabilities)7 121.2 130.9 131.4 132.8 131.4 123.7 125.8 122.9 126.3 121.5 122.3 121.5 Not seasonally adjusted Assets 79 Bank credit 1,478.8 1,570.5 1,583.0 1,584.9 1,597.7 1,616.3 1,628.8 1,645.2 1,638.8 1,644.9 1,645.8 1,650.3 30 Securities in bank credit 437.1 457.2 456.7 452.0 452.0 456.9 459.5 461.9 461.3 461.9 461.2 462.8 31 U.S. government securities 326.3 338.8 337.8 332.7 331.4 337.4 341.0 342.3 342.2 342.6 342.0 342.5 37 Other securities 110.9 118.4 118.9 119.3 120.6 119.4 118.5 119.6 119.1 119.3 119.2 120.2 33 Loans and leases in bank credit2 1,041.7 1,113.3 1,126.3 1,132.9 1,145.7 1,159.5 1,169.2 1,183.3 1,177.5 1,182.9 1,184.6 1,187.5 34 Commercial and industrial 191.9 205.5 210.3 212.4 214.8 219.3 222.1 226.3 224.9 225.9 227.0 227.3 35 Real estate 588.3 634.8 643.0 648.2 652.1 660.5 668.5 676.2 672.5 675.9 677.1 679.0 36 Revolving home equity 28.8 30.9 31.3 31.7 32.1 32.7 33.2 33.6 33.5 33.5 33.5 33.7 37 Other 559.5 603.9 611.7 616.5 620.0 627.8 635.3 642.6 639.0 642.3 643.6 645.3 38 Consumer 189.2 197.2 197.8 197.3 203.4 206.1 205.3 205.5 205.0 205.5 206.1 205.8 39 Security3 5.4 5.0 5.0 5.5 5.4 5.2 5.4 5.5 5.6 5.5 5.3 5.7 40 Other loans and leases 66.8 70.7 70.1 69.5 70.0 68.3 67.9 69.7 69.5 70.1 69.1 69.8 41 Interbank loans 61.3 49.2 49.0 59.3 58.7 54.2 56.9 58.8 59.6 57.3 54.3 61.0 42 Cash assets4 65.8 69.7 69.9 74.2 78.9 72.5 69.6 67.8 67.1 69.1 66.2 67.4 43 Other assets5 68.9 78.8 81.9 82.9 82.3 83.7 83.1 83.9 83.6 84.4 82.4 84.0 44 Total assets6 1,655.7 1,748.4 1,764.0 1,7813 1,7973 1,806.4 1,817.8 1,834.9 1,8283 1,834.8 1,827.9 1,841.9 Liabilities 45 Deposits 1,325.1 1,376.1 1,392.0 1,411.4 1,420.9 1,423.4 1,431.2 1,446.9 1,441.5 1,448.7 1,439.6 1,449.8 46 Transaction 278.7 275.6 275.3 279.4 285.2 280.7 276.7 279.2 273.7 279.7 277.3 284.7 47 Nontransaction 1,046.4 1,100.5 1,116.7 1,132.0 1,135.7 1,142.7 1,154.4 1,167.7 1,167.8 1,169.0 1,162.2 1,165.1 48 Large time 191.2 199.4 203.7 207.6 209.8 212.8 216.8 220.1 219.0 220.0 220.4 220.7 49 Other 855.3 901.1 913.0 924.4 926.0 930.0 937.6 947.6 948.8 948.9 941.8 944.4 50 Borrowings 173.3 204.8 204.1 202.2 209.0 219.3 218.7 222.0 217.6 221.8 223.0 225.9 51 From banks in the U.S 79.6 91.8 88.9 86.6 86.2 88.8 87.5 90.4 88.3 90.3 91.3 93.0 57 From others 93.7 113.1 115.2 115.6 122.8 130.5 131.2 131.6 129.3 131.5 131.7 132.9 53 Net due to related foreign offices .... 4.5 3.4 4.3 4.5 4.5 5.1 5.2 5.3 5.5 5.4 5.4 5.0 54 Other liabilities 33.9 34.0 33.9 34.5 35.0 37.4 35.3 35.8 34.9 35.2 35.7 55 Total liabilities 1,532.4 1,618.2 1,634.3 1,652.0 1,668.9 1,682.8 1,692.5 1,709.5 1,700.4 1,710.8 1,703.2 1,716.4 56 Residual (assets less liabilities)7 123.3 130.2 129.7 129.3 128.4 123.6 125.3 125.4 127.9 124.0 124.6 125.5 MEMO 57 Mortgage-backed securities9 58.7 67.5 68.0 66.7 66.2 67.3 68.6 69.7 69.5 69.5 69.5 70.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Financial Statistics • June 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 1999 1999R 2000 2000 Mar. Sept. Oct. Nov. Dec. Jan.r Feb.r Mar. Mar. 8 Mar. 15 Mar. 22 Mar. 29 Seasonally adjusted Assets 1 Bank credit 549ff 520.1 524.8 538.5 548.2 545.9 539.9 543.0 544.6 533.2 538.6 552.5 2 Securities in bank credit 198.8R 189.7 191.9 192.3 202.3 199.3 191.2 194.1 196.1 187.0 189.7 202.8 3 U.S. government securities 86.9" 82.7 82.4 78.5 80.7 80.2 75.3 77.3 78.5 74.8 74.6 81.2 4 Other securities lll^ 107.0 109.5 113.9 121.6 119.1 115.9 116.8 117.6 112.3 115.0 121.6 5 Loans and leases in bank credit2 . . . 351.lr 330.3 332.9 346.2 345.9 346.6 348.7 348.9 348.5 346.2 348.9 349.7 6 Commercial and industrial 208. lr 194.6 194.9 196.2 193.4 194.8 196.7 198.1 197.8 199.1 198.6 196.7 7 Real estate 20.2 17.8 17.6 17.3 17.0 17.4 17.7 18.1 17.9 18.0 18.2 18.3 8 Security3 51.3R 51.9 55.1 65.4 67.1 66.6 66.6 66.3 65.8 63.1 67.0 67.4 9 Other loans and leases 71.5R 66.1 65.3 67.3 68.5 67.8 67.7 66.5 67.0 65.9 65.2 67.3 10 Interbank loans 25.6 25.0 25.6 25.2 29.5 28.9 32.6 28.6 28.5 27.4 30.3 29.5 11 Cash assets4 34.8R 41.8 44.4 48.8 53.5 55.4 54.5 51.8 52.8 52.2 52.6 48.9 12 Other assets5 36.6R 30.5 32.8 34.8 36.6 38.5 38.2 39.0 38.5 38.6 38.5 40.8 13 Total assets6 646.7r 617.0 6273 M7.1 667.5 668.4 664.8 662.1 664.1 651.0 659.6 671.4 Liabilities 14 Deposits 311.21" 315.4 335.5 355.3 374.2 380.8 380.6 383.1 382.7 380.3 380.3 386.8 15 Transaction 10.8R 10.3 10.6 10.4 10.5 10.8 11.1 11.3 10.8 12.1 11.5 11.0 16 Nontransaction 300.4R 305.2 324.9 345.0 363.6 370.0 369.5 371.8 371.9 368.3 368.8 375.8 17 Borrowings 176.0 172.4 178.6 186.0 181.5 180.0 176.2 178.0 181.4 178.0 174.4 176.0 18 From banks in the U.S 24.3 24.2 22.2 26.1 24.4 19.7 18.3 19.5 20.8 22.8 16.7 17.4 19 From others 151.7R 148.2 156.4 159.8 157.1 160.3 157.9 158.4 160.5 155.2 157.7 158.6 20 Net due to related foreign offices 84.4R 65.6 55.0 45.0 39.1 35.6 26.8 19.9 22.4 15.4 20.7 20.3 21 Other liabilities 67.3R 64.1 65.8 67.2 69.3 68.7 71.5 69.2 71.6 67.7 67.1 70.3 22 Total liabilities 638.9r 617.5 634.9 653.4 664.1 665.1 655.1 650.2 658.1 641.4 642.6 653.4 23 Residual (assets less liabilities)7 7.8R -.5 -7.6 -6.3 3.4 3.3 9.7 11.9 6.0 9.6 17.0 18.0 Not seasonally adjusted Assets 24 Bank credit 549.7 518.2 531.8 551.1 558.2 553.7 544.1 541.6 545.1 533.0 535.7 549.3 25 Securities in bank credit 197.1 188.9 197.6 201.8 206.0 203.2 192.5 191.1 195.1 185.2 184.7 197.9 26 U.S. government securities 87.0 80.6 82.0 80.0 82.1 80.8 75.4 77.1 78.0 74.9 74.3 81.2 27 Trading account 21.3 14.9 14.2 8.5 6.7 7.6 7.4 9.4 9.6 7.3 7.0 13.5 28 Investment account 65.7 65.7 67.8 71.5 75.4 73.2 68.1 67.8 68.4 67.6 67.2 67.6 29 Other securities 110.1 108.3 115.6 121.8 123.9 122.4 117.0 114.0 117.1 110.4 110.4 116.7 30 Trading account 66.1 69.1 75.3 80.3 80.7 77.1 74.3 71.7 76.0 68.2 68.0 73.6 31 Investment account 44.1 39.2 40.2 41.5 43.2 45.3 42.8 42.3 41.2 42.2 42.4 43.1 32 Loans and leases in bank credit2 . .. 352.6 329.3 334.3 349.3 352.2 350.5 351.6 350.5 350.0 347.8 351.0 351.4 33 Commercial and industrial 209.6 194.5 196.2 199.2 197.0 196.3 199.2 199.7 199.2 201.1 200.5 198.2 34 Real estate 20.3 17.6 17.9 17.4 16.9 17.6 18.0 18.2 18.2 18.3 18.3 18.2 35 Security3 51.6 51.8 54.7 64.8 67.5 67.0 66.4 66.5 65.7 63.1 67.6 68.2 .36 Other loans and leases 71.1 65.5 65.5 67.9 70.8 69.6 68.1 66.0 66.9 65.3 64.5 66.8 37 Interbank loans 25.6 25.0 25.6 25.2 29.5 28.9 32.6 28.6 28.5 27.4 30.3 29.5 38 Cash assets4 34.(F 41.1 45.3 51.8 57.8 57.7 53.8 50.7 51.5 51.1 51.5 48.4 39 Other assets5 37.7 30.0 32.1 34.9 38.7 40.0 40.1 40.3 41.2 40.4 39.0 41.1 40 Total assets6 646.8r 614.0 634.5 662.6 683.9 680.0 6703 660.9 666.0 651.6 656.1 667.9 Liabilities 41 Deposits 315.9 310.6 332.0 358.0 382.6 387.7 387.7 389.3 388.0 386.0 387.1 394.9 42 Transaction 10.6 10.8 10.7 10.5 11.1 11.0 11.0 11.1 10.4 11.7 11.2 11.0 43 Nontransaction 305.3 299.8 321.3 347.5 371.5 376.7 376.7 378.2 377.5 374.3 376.0 383.8 44 Borrowings 176.0 172.4 178.6 186.0 181.5 180.0 176.2 178.0 181.4 178.0 174.4 176.0 45 From banks in the U.S 24.3 24.2 22.2 26.1 24.4 19.7 18.3 19.5 20.8 22.8 16.7 17.4 46 From others 151.7R 148.2 156.4 159.8 157.1 160.3 157.9 158.4 160.5 155.2 157.7 158.6 47 Net due to related foreign offices .... 84.4 64.6 55.3 46.7 44.3 37.9 29.1 20.5 19.7 15.3 24.2 23.5 48 Other liabilities 67.6 63.7 65.2 68.2 71.4 70.4 73.5 69.5 72.7 68.5 67.2 70.0 49 Total liabilities 643.9 611.4 631.2 658.8 679.9 676.0 666.4 657.2 661.8 647.8 652.9 664.4 50 Residual (assets less liabilities)7 Iff 2.7 3.3 3.8 4.1 4.0 3.9 3.7 4.2 3.8 3.2 3.6 MEMO 51 Revaluation gains on off-balance-sheet items8 39.0 37.8 39.1 41.0 39.5 38.7 40.1 39.3 41.5 38.4 38.2 39.1 52 Revaluation losses on off-balancesheet items8 38.6 36.9 37.8 39.9 38.5 37.7 40.0 38.2 40.7 37.1 37.2 37.8 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

A22 Domestic NonfinancialS tatistics • June 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 2000 IItteemm 1995 1996 1997 1998 1999 Sept. Oct. Nov. Dec. Jan. Feb. 1 All issuers 674,904 775,371 966,699 1,163,303 1,403,023 1,274,726 1,321,163 1,369,100 1,403,023 1,407,789 1,428,605 Financial companies1 2 Dealer-placed paper, total2 275,815 361,147 513,307 614,142 786,643 718,380 751,245 802,194 786,643 821,870 835,140 3 Directly placed paper, total3 210,829 229,662 252,536 322,030 337,240 293,381 296,998 299,777 337,240 299,599 298,603 4 Nonfinancial companies4 188,260 184,563 200,857 227,132 279,140 262,965 272,920 267,128 279,140 286,319 294,863 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 commerici 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 g e Period Av r e a r t a e g e 1997—Jan. 1 8.25 1997 8.44 1998—Jan 8.50 1999—Jan 7.75 Mar. 26 8.50 1998 8.35 Feb 8.50 Feb 7.75 1999 8.00 Mar 8.50 Mar. 7.75 1998—Sept. 30 8.25 Apr 8.50 Apr 7.75 Oct. 16 8.00 1997—Jan 8.25 May 8.50 May 7.75 Nov. 18 7.75 Feb 8.25 June 8.50 June 7.75 Mar 8.30 July 8.50 July 8.00 1999—July 1 8.00 Apr. 8.50 Aug 8.50 Aug 8.06 Aug. 25 8.25 Mav 8.50 Sept 8.49 Sept 8.25 Nov. 17 8.50 June 8.50 Ocl 8.12 Ocl 8.25 July 8.50 Nov 7.89 Nov 8.37 2000—Feb. 3 8.75 Aug 8.50 Dec 7.75 Dec 8.50 Mar. 22 9.00 Sept 8.50 Oct 8.50 2000—Jan 8.50 Nov. 8.50 Feb 8.73 Dec 88..5500 8 83 Apr 9.00 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 2000 2000, week ending IItteemm 11999977 11999988 11999999 Dec. Jan. Feb. Mar. Mar. 3 Mar. 10 Mar. 17 Mar. 24 Mar. 31 MONEY MARKET INSTRUMENTS 1 Federal funds1'2,3 5.46 5.35 4.97 5.30 5.45 5.73 5.85 5.77 5.73 5.79 5.81 6.01 2 Discount window borrowing2'4 5.00 4.92 4.62 5.00 5.00 5.24 5.34 5.25 5.25 5.25 5.32 5.50 Commercial paper''5,6 Nonfinancial 3 1-month 5.57 5.40 5.09 5.97 5.59 5.76 5.93 5.78 5.83 5.93 6.01 6.04 4 2-month 5.57 5.38 5.14 5.91 5.67 5.81 5.96 5.85 5.87 5.96 6.03 6.04 5 3-month 5.56 5.34 5.18 5.87 5.74 5.87 6.00 5.89 5.91 6.00 6.05 6.09 Financial 6 1-month 5.59 5.42 5.11 6.02 5.62 5.78 5.94 5.79 5.85 5.94 6.02 6.03 7 2-month 5.59 5.40 5.16 5.95 5.72 5.84 5.98 5.88 5.90 5.97 6.05 6.05 8 3-month 5.60 5.37 5.22 5.93 5.81 5.90 6.03 5.93 5.95 6.02 6.08 6.11 Commercial paper (historical)3'51 9 1-month 5.54 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 3-month 5.58 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 6-month 5.62 n.a. 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 5.44 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 13 3-month 5.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 14 6-month 5.48 n.a. 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 5.54 5.39 5.24 6.00 5.88 5.94 6.06 5.97 5.99 6.06 66..1100 6.14 16 6-month 5.57 5.30 5.30 5.94 5.99 6.11 6.22 6.15 6.15 6.20 6.25 6.30 Certificates of deposit, secondary market3^0 17 1-month 5.54 5.49 5.19 6.34 5.74 5.83 6.01 5.87 5.93 6.00 6.08 6.10 18 3-month 5.62 5.47 5.33 6.05 5.95 6.01 6.14 6.04 6.07 6.13 6.19 6.24 19 6-month 5.73 5.44 5.46 6.07 6.15 6.26 6.36 6.26 6.29 6.33 6.39 6.48 20 Eurodollar deposits, 3-month3,11 5.61 5.45 5.31 6.06 5.94 6.02 6.13 6.06 6.05 6.11 6.18 6.22 U.S. Treasury bills Secondary market3,5 71 3-month 5.06 4.78 4.64 5.20 5.32 5.55 5.69 5.62 5.67 5.71 5.74 5.71 77 6-month 5.18 4.83 4.75 5.44 5.50 5.72 5.85 5.76 5.82 5.86 5.88 5.90 23 1-year 5.32 4.80 4.81 5.51 5.75 5.84 5.86 5.83 5.83 5.84 5.88 5.93 Auction high3,5,12 74 3-month 5.07 4.81 4.66 5.23 5.34 5.57 5.72 5.67 5.69 5.73 5.78 5.72 75 6-month 5.18 4.85 4.76 5.43 5.52 5.75 5.85 5.77 5.83 5.86 5.90 5.91 26 1-year 5.36 4.85 4.78 5.35 5.65 5.91 5.84 5.84 n.a. n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities13 77 1-year 5.63 5.05 5.08 5.84 6.12 6.22 6.22 6.18 6.18 6.20 6.24 6.30 78 2-year 5.99 5.13 5.43 6.10 6.44 6.61 6.53 6.51 6.51 6.50 6.54 6.57 79 3-year 6.10 5.14 5.49 6.14 6.49 6.65 6.53 6.55 6.56 6.50 6.50 6.53 30 5-year 6.22 5.15 5.55 6.19 6.58 6.68 6.50 6.58 6.60 6.50 6.44 6.42 31 7-year 6.33 5.28 5.79 6.38 6.70 6.72 6.51 6.64 6.62 6.52 6.42 6.40 37 10-year 6.35 5.26 5.65 6.28 6.66 6.52 6.26 6.39 6.39 6.28 6.14 6.13 33 20-year 6.69 5.72 6.20 6.69 6.86 6.54 6.38 6.45 6.48 6.40 6.30 6.30 34 30-year 6.61 5.58 5.87 6.35 6.63 6.23 6.05 6.15 6.17 6.08 5.97 5.94 Composite 35 More than 10 years (long-term) 6.67 5.69 6.14 6.63 6.81 6.49 6.33 6.41 6.43 6.36 6.25 6.24 STATE AND LOCAL NOTES AND BONDS Moody's series^ 36 Aaa 5.32 4.93 5.28 5.82 5.91 5.88 5.68 5.81 5.76 5.62 5.60 5.60 37 Baa 5.50 5.14 5.70 6.25 6.38 6.35 6.19 6.33 6.25 6.09 6.13 6.15 38 Bond Buyer series15 5.52 5.09 5.43 5.95 6.08 6.00 5.83 5.94 5.89 5.84 5.76 5.74 CORPORATE BONDS 39 Seasoned issues, all industries16 7.54 6.87 7.45 7.87 8.06 7.96 7.99 8.00 8.03 8.06 7.92 7.95 Rating group 40 Aaa 7.27 6.53 7.05 7.55 7.78 7.68 7.68 7.71 7.73 7.75 77..6611 77..6633 41 Aa 7.48 6.80 7.36 7.78 7.96 7.82 7.83 7.85 7.88 7.90 7.75 7.79 47 A 7.54 6.93 7.53 7.96 8.15 8.02 8.07 8.09 8.11 8.13 8.00 8.02 43 Baa 7.87 7.22 7.88 8.19 8.33 8.29 8.37 8.35 8.38 8.45 8.31 8.34 MEMO Dividend-price ratio17 44 Common stocks 1.77 1.49 1.25 1.18 1.18 1.21 1.18 1.22 1.23 1.21 1.12 1.11 NOTE. Some of the data in this table also appear in the Board's H.15 (519) weekly and 9. Representative closing yields for acceptances of the highest-rated money center banks. G.13 (415) monthly statistical releases. For ordering address, see inside front cover. 10. An average of dealer offering rates on nationally traded certificates of deposit. 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. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • June 2000 1.36 STOCK MARKET Selected Statistics 1999 2000 IInnddiiccaattoorr 11999977 11999988 11999999 July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 456.99 550.65 619.52 648.83 621.03 607.87 599.04 634.22 638.17 634.07 606.03 622.28 2 Industrial 574.97 684.35 775.29 809.33 778.82 769.47 753.94 791.41 808.28 814.73 767.08 790.35 3 Transportation 415.08 468.61 491.62 528.72 492.13 462.33 450.13 474.78 461.04 456.35 398.69 384.39 4 Utility 143.87 190.52 284.82 250.50 241.84 237.71 285.16 502.58 511.78 485.82 482.30 509.59 5 Finance 424.84 516.65 530.97 557.92 521.59 493.37 490.92 539.20 510.99 495.23 471.65 491.29 6 Standard & Poor's Corporation (1941-43 = 10)' 873.43 1,085.50 1,327.33 1,380.99 1,327.49 1,318.17 1,300.01 1,390.99 1,428.68 1,425.59 1,388.88 1,442.21 7 American Stock Exchange (Aug. 31, 1973 = 50)2 628.34 682.69 770.90 803.75 781.33 788.74 786.96 819.60 838.24 878.73 910.00 1,014.03 Volume of trading (thousands of shares) 8 New York Stock Exchange 523,254 666,534 799,554 721,294 709,569 772,627 882,422 866,281 884,141 1,058,021 1,032,791 1,124,097 9 American Stock Exchange 24,390 28,870 32,629 25,754 27,795 32,540 35,762 33,330 41,076 47,530 51,134 59,449 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers' 126,090 140,980 228,530 178,360 176,390 179,316 182,272 206,280 228,530 243,490 265,210 278,530 Free credit balances at brokers4 11 Margin accounts5 31,410 40,250 55,130 44,330 44,230 47,125 51,040 49,480 55,130 57,800 56,470 65,020 12 Cash accounts 52,160 62,450 79,070 60,000 62,600 62,810 61,085 68,200 79,070 75,760 79,700 85,530 Margin requirements (percent of market value and effective date)6 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. In July 1976 a financial group, composed of banks and insurance companies, was added 6. Margin requirements, stated in regulations adopted by the Board of Governors pursuant to the group of stocks on which the index is based. The index is now based on 400 industrial to the Securities Exchange Act of 1934, limit the amount of credit that can be used to stocks (formerly 425), 20 transportation (formerly 15 rail), 40 public utility (formerly 60), and purchase and carry "margin securities" (as defined in the regulations) when such credit is 40 financial. collateralized by securities. Margin requirements on securities are the difference between the 2. On July 5, 1983, the American Stock Exchange rebased its index, effectively cutting market value (100 percent) and the maximum loan value of collateral as prescribed by the previous readings in half. Board. Regulation T was adopted effective Oct. 15, 1934; Regulation U, effective May 1, 3. Since July 1983, under the revised Regulation T, margin credit at broker-dealers has 1936; Regulation G, effective Mar. 11, 1968; and Regulation X, effective Nov. 1, 1971. included credit extended against stocks, convertible bonds, stocks acquired through the On Jan. 1, 1977, the Board of Governors for the first time established in Regulation T the exercise of subscription rights, corporate bonds, and government securities. Separate report- initial margin required for writing options on securities, setting it at 30 percent of the current ing of data for margin stocks, convertible bonds, and subscription issues was discontinued in market value of the stock underlying the option. On Sept. 30, 1985, the Board changed the April 1984. required initial margin, allowing it to be the same as the option maintenance margin required 4. Free credit balances are amounts in accounts with no unfulfilled commitments to by the appropriate exchange or self-regulatory organization; such maintenance margin rules brokers and are subject to withdrawal by customers on demand. must be approved by the Securities and Exchange Commission. 5. Series initiated in June 1984. 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 2000 11999977 11999988 11999999 Oct. Nov. Dec. Jan. Feb. Mar. US. budget1 1 Receipts, total 1,579,292 1,721,798 1,827,454 121,035 121,375 201,196 189,478 108,675 135,582 2 On-budget 1,187,302 1,305,999 1,382,986 89,009 86,909 162,772 143,838 71,090 94,586 3 Off-budget 391,990 415,799 444,468 32,026 34,466 38.424 45,640 37,585 40,996 4 Outlays, total 1,601,235 1,652,552 1,702,940 147.691 148,407 168,114 127,326 150,409 170,962 5 On-budget 1,290,609 1,335,948 1,382,262 119,495 116,387 165,504 97,451 118,340 137,864 6 Off-budget 310,626 316,604 320,778 28,196 32,020 2,611 29,875 32,069 33,099 7 Surplus or deficit (—), total -21,943 69,246 124,414 -26,656 -27,031 33,081 62,152 -41,734 -35,380 8 On-budget -103,307 -29,949 724 -30,486 -29,478 -2,732 46,387 -47,250 -43,278 9 Off-budget 81,364 99,195 123,690 3,830 2,446 35,813 15,765 5,516 7,897 Source of financing (total) 10 Borrowing from the public 38,171 -51,211 -88,304 5,754 6,132 35,749 -83,985 17,131 39,746 11 Operating cash (decrease, or increase (—)) 604 4,743 -17,580 8,891 41,488 -77,248 20,592 40,773 -22,808 12 Other 2 -16,832 -22,778 -18,530 12,011 -20,589 8,418 1,241 -16,170 18,442 MEMO 13 Treasury operating balance (level, end of period) 43,621 38,878 56,458 47,567 6,079 83,327 62,735 21,962 44,770 14 Federal Reserve Banks 7,692 4,952 6,641 4,527 5,025 28,402 6,119 5,004 4,357 15 Tax and loan accounts 35,930 33,926 49,817 43,040 1,054 54,925 56,615 16,958 40,413 1. Since 1990, off-budget items have been the social security trust funds (federal old-age net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loansurvivors insurance and federal disability insurance) and the U.S. Postal Service. valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous and Budget, Budget of the U.S. Government. liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic Nonfinancial Statistics • June 2000 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1998 1999 2000 11999988 11999999 HI H2 HI H2 Jan. Feb. Mar. RECEIPTS 1 All sources 1,721,798 1,827,454 922,630 825,057 966,045 892,266 189,478 108,675 135,582 2 Individual income taxes, net 828,586 879,480 447,514 392,332 481,744r 425,451 111,306 45,731 44,789 3 Withheld 646,483 693,940 316,309 339,144 351,068 372,012 65,922 65,868 75,161 4 Nonwithheld 281,527 308,185 219,136 65,204 240,278 68,302 46,556 3,730 7,855 5 Refunds 99,476 122,706 87,989 12,032 109,467 14,841 1,173 23,875 38,239 Corporation income taxes 6 Gross receipts 213,008 216,324 109,353 104,163 106,861 110,111 7,135 4,903 27,546 7 Refunds 24,593 31,645 14,220 14,250 17,092 13,996 1,800 3,126 3,273 8 Social insurance taxes and contributions, net . . . 571,831 611,833 312,713 268,466 324,831 292,551 60,484 50,514 53,329 9 Employment taxes and contributions2 540,014 580,880 293,520 256,142 306,235 280,059 58,819 47,859 52,565 10 Unemployment insurance 27,484 26,480 17,080 10,121 16,378 10,173 1,319 2,280 317 11 Other net receipts3 4,333 4,473 2,112 2,202 2,216 2,319 346 376 447 12 Excise taxes 57,673 70,414 29,922 33,366 31,015 34,262 5,316 5,076 5,722 13 Customs deposits 18,297 18,336 8,546 9,838 8,440 10,287 1,457 1.212 1,681 14 Estate and gift taxes 24,076 27,782 12,971 12,359 14,915 14,001 2,116 1,768 2,379 15 Miscellaneous receipts4 32,658 34,929 15,829 18,735 15,140 19,569 3,464 2,597 3,412 OUTLAYS 16 All types 1,652,552 1,702,940 815,884 877,414 817,227 882,795r 127,326 150,409 170,962 17 National defense 268,456 274,873 129,351 140,196 134,414 149,820 17,581 22,136 29,266 18 International affairs 13,109 15,243 4,610 8,297 6,879 8,530 1,404 1,366 859 19 General science, space, and technology 18.219 18,125 9,426 10,142 9,319 10,089 1,229 1,569 1,725 20 Energy 1,270 912 957 699 797 -90 94 -238 -737 21 Natural resources and environment 22,396 23,970 10,051 12,671 10,351 12,100 1,490 1,779 1,872 22 Agriculture 12,206 23,011 2,387 16,757 9,803 20,887 4,213 1,896 1,588 23 Commerce and housing credit 1,014 2,649 -2,483 4,046 -1,629 7,353 -1,336 -1,685 699 24 Transportation 40,332 42,531 16,196 20,836 17,082 22,912' 3,112 2,909 3,739 25 Community and regional development 9,720 11,870 4,863 6,972 5,368 7,135 270 -23 1,221 26 Education, training, employment, and social services 54,919 56,402 25,928 27,762 29,003 27,532 4,788 5,385 6,656 27 Health 131.440 141,079 65,053 67,838 69,320 74,490 11,575 11,567 14,333 28 Social security and Medicare 572.047 580,488 286,305 316,809 261,146 295,030 45,336 49,858 54,344 29 Income security 233,202 237,707 125,196 109,481 126,552 113,504 16,565 32,110 29,211 30 Veterans benefits and services 41,781 43,212 19,615 22,750 20,105 23,412 1,991 3,741 5,868 31 Administration of justice 22.832 25,924 11,287 12,041 13,149 13,459 2,224 2,147 2,647 32 General government 13.444 15,771 6,139 9,136 6,641 7,006 490 38 1,942 33 Net interest5 243.359 229,735 122,345 116,954 116,655 112,420 19,428 18,884 19,002 34 Undistributed olfsetting receipts6 -47.194 -40,445 -21,340 -25,793 -17,724 -22,850 -3,129 -3,030 -3,270 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 2001; 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 1998 1999 2000 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 5,573 5,578 5,556 5,643 5,681 5,668 5,685 29 n.a.r 2 Public debt securities 5,542 5,548 5,526 5,614 5,652 5,639 5,656 5,776 5,773r 3 Held by public 3,872 3,790 3,761 3,787 3,795 3,685 3,667 3,716 n.a.r 4 Held by agencies 1,670 1,758 1,766 1,827 1,857 1,954 1,989 2,061 n.a.r 5 Agency securities 31 30 29 29 29 29 29 29 n.a.r 6 Held by public 26 26 26 29 28 28 28 28 n.a.r 7 Held by agencies 5 4 4 1 1 1 1 1 n.a.r 8 Debt subject to statutory limit 5,457 5,460 5,440 5,530 5,566 5,552 5,568 5,687 5,687r 9 Public debt securities 5,456 5,460 5,439 5,530 5,566 5,552 5,568 5,687 5,686r 10 Other debt1 0 0 0 0 0 0 0 0 0r MEMO 11 Statutory debt limit 5,950 5,950 5,950 5,950 5,950 5,950 5,950 5,950 5,950r 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 1999 2000 TTyyppee aanndd hhoollddeerr 11999966 11999977 11999988 11999999 Q2 Q3 Q4 Qi 1 Total gross public debt 5,323.2 5,502.4 5,614.2 5,776.1 5,638.8 5,656.3 5,776.1 5,773.4 By type 2 Interest-bearing 5,317.2 5,494.9 5,605.4 5,766.1 5,629.5 5,647.2 5,766.1 5,763.8 3 Marketable 3,459.7 3,456.8 3,355.5 3,281.0 3,248.5 3,233.0 3,281.0 3,261.2 4 Bills 777.4 715.4 691.0 737.1 647.8 653.2 737.1 753.3 5 Notes 2,112.3 2,106.1 1,960.7 1,784.5 1,868.5 1,828.8 1,784.5 1,732.6 6 Bonds 555.0 587.3 621.2 643.7 632.5 643.7 643.7 653.0 7 Inflation-indexed notes and bonds' n.a. 33.0 50.6 68.2 59.9 67.6 68.2 74.7 8 Nonmarketable2 1,857.5 2,038.1 2,249.9 2,485.1 2,381.0 2,414.2 2,485.1 2,502.6 9 State and local government series 101.3 124.1 165.3 165.7 172.6 168.1 165.7 161.9 10 Foreign issues3 37.4 36.2 34.3 31.3 30.9 31.0 31.3 28.8 11 Government 47.4 36.2 34.3 31.3 30.9 31.0 31.3 28.8 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 182.4 181.2 180.3 179.4 180.0 180.0 179.4 178.6 14 Government account series4 1,505.9 1,666.7 1,840.0 2,078.7 1,967.5 2,005.2 2,078.7 2,103.3 15 Non-interest-bearing 6.0 7.5 8.8 10.0 9.3 9.0 10.0 n a. By holder 5 16 U.S. Treasury and other federal agencies and trust funds 1,497.2 1,655.7 1,826.8 2,060.6 1,953.6 1,989.1 2,060.6 17 Federal Reserve Banks 410.9 451.9 471.7 477.7 493.8 496.5 477.7 18 Private investors 3,431.2 3,414.6 3,334.0 3,234.2 3,199.3 3,175.6 3,234.2 19 Depository institutions 296.6 300.3 237.3 n.a. 240.6 240.6 n.a. 20 Mutual funds 315.8 321.5 343.2 n.a. 335.4 332.6 n.a. 21 Insurance companies 214.1 176.6 144.5 n.a. 142.5 138.2 n.a. n.a. 22 State and local treasuries6 257.0 239.3 269.3 n.a. 279.1 271.6 n.a. Individuals 23 Savings bonds 187.0 186.5 186.7 186.5 186.6 186.6 186.5 24 Pension funds 392.7 421.0 434.7 n.a. 449.1 444.9 n.a. 25 Private 189.2 204.1 218.1 n.a. 226.6 228.3 n.a. 26 State and Local 203.5 216.9 216.6 n.a. 222.5 216.6 n.a. 27 Foreign and international7 1,102.1 1,241.6 1,278.7 1,268.7 1,258.6 1,281.3 1,268.7 28 Other miscellaneous investors6'8 665.9 527.9 439.6 n.a. 307.4 279.8 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 • June 2000 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 1999 2000 2000, week ending item Dec. Jan. Feb. Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Mar. 29 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 32,212 27.307 31,065 29,997 25,658 28,301 36,030 36,848 36,679 25,896 24,758 47,120 Coupon securities, by maturity 2 Five years or less 7722,,446600 110055..111199 111166,,661155 132,069 123,653 107,635 111,093 116,838 95,661 96,707 86,272 115,093 3 More than five years 42,065 68.774 87,516 95,038 117,810 82,512 65,400 74,257 59,187 60,163 61,308 71,333 4 Inflation-indexed 469 1.560 937 1,618 1,379 601 687 716 948 1,040 983 978 Federal agency 5 Discount notes 4444,,335500 47.215 53,679 56,356 57,374 52,220 47,914 55,312 53,939 52,829 62,412 58,405 Coupon securities, by maturity 6 One year or less 797 1.482 992 790 876 1,245 1,236 677 1,010 1,838 884 1,537 7 More than one year, but less than or equal to five years 4,350 8.172 8,577 7,461 7,940 11,369 7,153 7,865 7,702 6,330 7,642 8,247 8 More than five years 2,935 7.417 7,419 7,432 9,004 9,240 5,113 5,463 6,611 5,112 6,163 14,884 9 Mortgage-backed 43,380 65.811 67,758 59,435 103,218 66,634 50,841 45,916 63,522 86,330 47,833 42,007 By type of counterparty With interdealer broker 10 U.S. Treasury 77,097 103.083 119,309 130,522 136,646 112,587 106,793 112,949 94,848 86,273 83,724 113,659 11 Federal agency 3,757 6,123 7,538 8,152 8,417 7,220 6,855 7,211 6,143 6,215 7,558 9,597 12 Mortgage-backed 16,476 25.254 27,071 24,832 36,862 28,271 22,804 18,718 19,480 30,410 2200,,661166 1177,,999922 With other 13 U.S. Treasury 70,108 99.679 116,824 128,200 131,854 106,461 106,417 115,710 97,627 97,533 89,597 120,865 14 Federal agency 48,674 58.162 63,129 63,887 66,776 66,854 54,560 62,106 63,119 59,893 69,543 73,476 15 Mortgage-backed 26,904 40.557 40,687 34,602 66,356 38,363 28,037 27,199 44,041 55,920 27,217 24,016 FUTURES TRANSACTIONS3 By type of deliverable security 16 U.S. Treasury bills n.a. 0 0 0 n.a. 0 0 n.a. n.a. n.a. 0 0 Coupon securities, by maturity 17 Five years or less 3,382 3.726 6,293 6,875 6,521 5,817 5,662 6,944 3,886 5,308 3,424 3,217 18 More than five years 12,135 18.071 21,702 24,776 26,651 16,193 20,458 22,108 13,731 15,460 14,574 14,253 19 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 00 Federal agency 20 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 21 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 22 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 n.a. n.a. n.a. 23 More than five years 0 0 0 0 0 0 0 0 0 n.a. 21 31 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 1,042 1,449 1,397 1,200 1.480 1,145 1,847 1,255 1,619 1,589 1,388 1,123 27 More than five years 3,773 5,616 5,601 6,323 6,800 4,147 7,022 4,137 4,023 2,171 3,754 3,795 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 583 620 776 494 931 404 948 1,015 754 297 702 1,527 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 2000 2000, week ending IItteemm Dec. Jan. Feb. Feb. 2 Feb. 9 Feb. 16 Feb. 23 Mar. 1 Mar. 8 Mar. 15 Mar. 22 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 21,385 14,304 2,930 5,747 3,667 -2,846 7,682 2,325 6,040 1,748 1,064 Coupon securities, by maturity 2 Five years or less -24,622 -38,777 -37,515 -41,018 -39,008 -40,533 -34,981 -34,043 -35,406 -31,091 -31,704 3 More than five years -29,849 -32,995 -22,779 -28,754 -21,045 -23,939 -21,847 -22,545 -22,166 -20,900 -20,618 4 Inflation-indexed 2,438 2,894 3,197 3,659 3,131 3,049 3,610 2,812 2,730 2,799 2,661 Federal agency 5 Discount notes 45,011 39,668 37,602 33,400 41,209 35,515 38,358 36,348 32,716 36,734 34,724 Coupon securities, by maturity 6 One year or less 5,436 7,101 9,707 8,571 8,474 10,855 9,561 10,357 11,061 13,338 12,843 7 More than one year, but less than or equal to five years 1,910 7,172 5,855 7,252 2,519 7,556 6,910 6,066 6,291 4,451 2,913 8 More than five years 2,706 6,114 3,848 5,453 3,162 4,627 4,072 2,941 2,909 1,358 2,220 9 Mortgage-backed 25,603 21,183 15,723 13,922 18,182 20,133 11,269 13,505 18,519 22,813 25,750 NET FUTURES POSITIONS4 By type of deliverable security 10 U.S. Treasury bills 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 0 0 Coupon securities, by maturity 11 Five years or less 7,121 11,986 14,668 12,487 17,902 13,660 13,167 14,550 14,513 13,145 14,086 12 More than five years 408 8,056 -2,067 5,497 1,658 -615 -6,337 -5,645 -6,130 -9,896 -6,041 13 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 14 Discount notes 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 15 One year or less 0 0 0 0 0 0 0 0 0 0 0 16 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 n.a. n.a. 17 More than five years 0 0 0 0 0 0 0 0 0 0 -28 18 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 NET OPTIONS POSITIONS By type of deliverable security 19 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 20 Five years or less -1,855 -3,840 -2,684 -3,009 -3,616 -3,870 -2,196 -673 -1,176 -519 425 21 More than five years 241 -1,465 2,770 2,003 2,310 2,222 3,054 3,869 4,326 4,981 5,422 22 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 23 Discount notes 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 24 One year or less 0 0 0 0 0 0 0 0 0 0 0 25 More than one year, but less than or equal to five years n.a. 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 26 More than five years n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 27 Mortgage-backed 1,260 2,215 2,728 2,602 3,271 2,616 2,440 2,603 2,811 956 727 Financing5 Reverse repurchase agreements 28 Overnight and continuing 260,169 281,382 301,114 298,458 281,516 313,199 302,825 308,769 298,906 276,751 298,448 29 Term 847,806 729,307 711,031 759,268 823,767 652,298 667,517 682,715 750,898 834,477 850,467 Securities borrowed 30 Overnight and continuing 224,527 240,177 261,280 265,418 262,639 258,495 257,744 265,688 257,004 255,405 267,674 31 Term 117,116 112,088 98,511 99,073 102,979 101,040 96,149 92,914 97,532 102,930 103,430 Securities received as pledge 32 Overnight and continuing 1,647 1,677 1,632 1,632 n.a. n.a. n.a. n.a. n.a. n.a. 2,042 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 647,385 690,465 729,491 718,575 727,628 742,894 731,678 717,115 709,447 715,862 730,788 35 Term 761,776 619,703 580,824 640,630 682,425 517,879 539,250 564,294 623,256 704,778 726,614 Securities loaned 36 Overnight and continuing 8,843 9,344 10,660 11,143 11,513 9,980 10,437 10,556 9,236 9,124 7,914 37 Term 7,283 7,149 6,087 6,856 6,642 5,732 5,734 6,011 6,018 6,526 9,044 Securities pledged 38 Overnight and continuing 49,236 47,887 51,230 49,496 50,432 48,757 52,860 53,721 55,533 53,595 61,892 39 Term 10,713 10,985 7,232 9,223 7,750 8,255 6,097 6,097 6,005 7,009 7,340 Collateralized loans 40 Total 14,892 20,093 16,629 15,282 16,272 17,367 19,241 13,588 11,753 13,882 18,063 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 • June 2000 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 1999 2000 AAggeennccyy 11999966 11999977 11999988 11999999 Sept. Oct. Nov. Dec. Jan. 1 Federal and federally sponsored agencies 925,823 1,022,609 1,296,477 1,616,492 1,525,916 n.a. n.a. 1,616,492 2 Federal agencies 29,380 27,792 26,502 26,376 26,384 28,218 28,218 26,376 3 Defense Department1 6 6 6 6 6 6 6 6 4 Export-Import Bank2'3 1,447 552 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 84 102 205 126 114 126 126 126 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 Postal Service6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 27,853 27,786 26,496 26,370 26,378 28,212 28,212 26,370 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 896,443 994,817 1,269,975 1,590,116 1,499,532 n.a. n.a. 1,590,116 11 Federal Home Loan Banks 263,404 313,919 382,131 529,005 481,639 489,401 502,842 529,005 522,692 12 Federal Home Loan Mortgage Corporation 156,980 169,200 287,396 360,711 341,144 352,487 357,317 360,711 372,586 13 Federal National Mortgage Association 331,270 369,774 460,291 547,619 524,880 527,403 540,364 547,619 544,360 14 Farm Credit Banks8 60,053 63,517 63,488 68,883 67,938 68,338 67,654 68,883 69,082 15 Student Loan Marketing Association9 44,763 37,717 35,399 41,988 41,921 44,224 44,402 41,988 n.a. 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation11 1,261 1,261 1.261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 58,172 49,090 44,129 42,152 43,116 42,843 42,843 42,152 n.a. Lending to federal and federally sponsored agencies 20 Export-Import Bank3 1,431 552 f f f 4 f f 21 Postal Service6 n.a. n.a. 1 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 ay th o A r s it s y o ciation6 n n . . a a . . n n . . a a . . 1I 1 I i1 •1 t I {I n.a. Other lending14 25 Farmers Home Administiation 18,325 13,530 9,500 6,665 7,125 6,775 6,775 6,665 26 Rural Electrification Administration 16,702 14,898 14,091 14,085 13,885 14,025 14,025 14,085 27 Other 21,714 20,110 20,538 21,402 22,106 22,043 22,043 21,402 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 2000 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999977 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. 1 All issues, new and refunding1 214,694 262,342 215,427 15,746 18,433 17,497 17,428 14,751 8,969 10,905 16,780 By type of issue 2 General obligation 69,934 87,015 73,308 4,268 5,171 4,183 4,996 3,715 3,454 4,473 5,008 3 Revenue 134,989 175,327 142,120 11,478 13,262 13,314 12,433 11,035 5,516 6,433 11,773 By type of issuer 4 State 18,237 23,506 16,376 911 2,341 1,753 929 834 863 1,730 1,570 5 Special district or statutory authority2 134,919 178,421 152,418 11,578 13,449 12,186 12,613 10,640 5,784 7,414 11,098 6 Municipality, county, or township 70,558 60,173 46,634 3,257 2,642 3,557 3,886 3,277 2,322 1,761 4,112 7 Issues for new capital 135,519 160,568 161,065 12,530 14,973 14,908 14,084 11,475 8,009 9,382 13,508 By use of proceeds 8 Education 31,860 36,904 36,563 2,842 2,885 2,049 2,732 3,095 2,189 2,548 3,436 9 Transportation 13,951 19,926 17,394 1,955 1,886 1,674 892 1,201 1,064 723 2,723 10 Utilities and conservation 12,219 21,037 15,098 1,038 1,976 1,176 1,893 1,008 588 115 1,086 11 Social welfare 27,794 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Industrial aid 6,667 8,594 9,099 585 1,271 726 668 707 89 647 747 13 Other purposes 35,095 42,450 47,896 3,255 3,941 4,509 5,213 3,141 2,885 2,804 2,426 1. Par amounts of long-terra 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 2000 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999977 11999988 11999999 oorr iissssuueerr July Aug. Sept. Oct. Nov. Dec. Jan. Feb. 1 All issues' 929,256 1,128,491 l,072,866r 96,608 83,466 82,414 58,613 85,016 50,805r 55,714r 81,038 2 Bonds2 811,376 1,001,736 941,298r 83,546 75,708 75,807 47,103 61,033 42,477r 44,220 63,391 By type of offering 3 Sold in the United States 708,188 923,771 818,683r 69,451 63,383 65,679 37,721 53,908 36,488r 30,784 56,727 4 Sold abroad 103,188 77,965 122,615 14,095 12,325 10,128 9,382 7,125 5,989 13,436 6,664 MEMO 5 Private placements, domestic 54,990 37,845 28,506 2,133 1,670 1,640r l,632r 1,237 3,241 967 65 By industry group 6 Nonfinancial 222,603 307,935 293,963r 25,526 22,704 20,655 13,990 24,283 14,614r 14,599 26,593 7 Financial 588,773 693,801 647,335 58,020 53,005 55,151 33,112 36,750 27,863 29,620 36,792 8 Stocks3 117,880 126,755 131,568 13,062 7,758 6,607 11,510 23,983 8,328 ll,494r 21,956 By type of offering 9 Public 117,880 126,755 131,568 13,062 7,758 6,607 11,510 23,983 8,328 11,494r 21,956 10 Private placement4 55,450 78,850 86,300 7,192 7,192 7,192 7,192 7,192 7,192 n.a. n.a. By industry group 11 Nonfinancial 60,386 74,113 110,284 11,589 6,379 5,647 10,961 22,611 7,450 9,247r 21,464 12 Financial 57,494 52,642 21,284 1,473 1,379 960 549 1,372 878 2,247 492 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 NonfinancialS tatistics • June 2000 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 1999 2000 IItteemm 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan. Feb.r Mar. 1 Sales of own shares2 1,461,430 1,791,894 132,991 132,226 140,738 155,490 185,898 226,251 237,861 264,419 2 Redemptions of own shares 1,217,022 1,621,987 125,908 126,207 124,052 143,688 178,855 204,380 197,423 242,633 3 Net sales3 244,408 169,906 7,084 6,019 16,686 11,801 7,042 21,871 40,438 21,786 4 Assets4 4,173,531 5,233,191 4,548,784 4,498,964 4,705,746 4,874,733 5,233,191 5,114,482 5,375,874 5,596,806 5 Cash5 191,393 219,189 209,349 209,709 225,762 214,751 219,189 222,729 231,480 221,624 6 Other 3,982,138 5,014,002 4,339,435 4,289,255 4,479,985 4,659,982 5,014,002 4,891,753 5,144,394 5,375,182 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 1998 1999 AAccccoouunntt 11999977 11999988 11999999 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 1 Profits with inventory valuation and capital consumption adjustment 838.5r 848.4r 892.7 858.4r 849.4r 846.8r 839.0r 886.9r 880.5r 884. lr 919.4 2 Profits before taxes 795.9 781.9 848.5 788.9 792.0 780.1 766.7 818.1 835.8 853.8 886.3 3 Profits-tax liability 238.3 240.2 259.4 239.9 241.1 244.3 235.6 248.0 254.4 259.4 275.7 4 Profits after taxes 557.6 541.7 589.1 548.9 550.9 535.8 531.0 570.1 581.4 594.3 610.6 5 Dividends 333.7 348.6 364.7 346.5 347.3 348.4 352.2 356.4 361.5 367.3 373.5 6 Undistributed profits 223.9 193.1 224.4 202.5 203.6 187.4 178.8 213.7 219.9 227.0 237.1 7 Inventory valuation 7.4 20.9 -13.0 29.5 13.6 19.8 20.8 13.3 -13.6 -26.7 -24.9 8 Capital consumption adjustment 35.3r 45.6r 57.2' 40. lr 43.8r 46.9r 51.6r 55.5r 58.2r 57.0r 58.0r 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 11999977 11999988 11999999 Q2 Q3 Q4 Ql Q2 Q3 Q4 ASSETS 1 Accounts receivable, gross2 663.3 711.7 811.5r 676.0 687.6 711.7 733.8 756.5 776.3 811.5r 2 Consumer 256.8 261.8 279.8 251.3 254.0 261.8 261.7 269.2 271.0 279.8 3 Business 318.5 347.5 405.2r 334.9 335.1 347.5 362.8 373.7 383.0 405.2r 4 Real estate 87.9 102.3 126.5r 89.9 98.5 102.3 109.2 113.5 122.3 126.5r 5 LESS: Reserves for unearned income 52.7 56.3 54.1 53.2 52.4 56.3 52.9 53.4 54.0 54.1 6 Reserves for losses 13.0 13.8 13.6 13.2 13.2 13.8 13.4 13.4 13.6 13.6 7 Accounts receivable, net 597.6 641.6 743.8r 609.6 622.0 641.6 667.6 689.7 708.6 743.8r 8 All other 312.4 337.9 388.1 340.1 313.7 337.9 363.3 373.2 368.5 388.1 9 Total assets 910.0 979.5 l,131.9r 949.7 935.7 979.5 1,030.8 1,062.9 1,077.2 l,131.9r LIABILITIES AND CAPITAL 10 Bank loans 24.1 26.3 35.1 22.3 24.9 26.3 24.8 25.1 27.0 35.1 11 Commercial paper 201.5 231.5 223.9 225.9 226.9 231.5 222.9 231.0 205.3 223.9 Debt 12 Owed to parent 64.7 61.8 105.8 60.0 58.3 61.8 64.6 65.4 84.5 105.8 13 Not elsewhere classified 328.8 339.7 394.8 348.7 337.6 339.7 366.7 383.1 396.2 394.8 14 All other liabilities 189.6 203.2 228.9 188.9 185.4 203.2 220.3 226.1 216.0 228.9 15 Capital, surplus, and undivided profits 101.3 117.0 144.5 103.9 103.6 117.0 131.5 132.2 148.2 144.5 16 Total liabilities and capital 910.0 979.5 1,132.9 949.7 936.6 979.5 1,030.8 1,062.9 1,077.2 1,132.9 1. Includes finance company subsidiaries of bank holding companies but not of retailers 2. Before deduction for unearned income and losses, and banks. Data are amounts carried on the balance sheets of finance companies; securitized pools are not shown, as they are not on the books. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Market and Corporate Finance A33 1.52 DOMESTIC FINANCE COMPANIES Owned and Managed Receivables1 Billions of dollars, amounts outstanding 1999 2000 TTyyppee ooff ccrreeddiitt 11999977 11999988 11999999 Sept. Oct. Nov. Dec. Jan.r Feb. Seasonally adjusted 1 Total 810.5 875.8 993.9 972.8 980.6 984.8 993.9 1,020.0 1,029.2 2 Consumer 327.9 352.8 385.3 381.9 384.0 385.2 385.3 391.7 395.9 3 Real estate 121.1 131.4 154.7 148.9 149.3 152.7 154.7 159.1 162.2 4 Business 361.5 391.6 453.9 442.0 447.2 446.9 453.9 469.2 471.1 Not seasonally adjusted 5 Total 818.1 884.0 1,003.2 968.4 978.8 986.3 1,003.2 1,020.0 1,028.9 6 Consumer 330.9 356.1 388.8 383.1 384.5 386.5 388.8 391.1 392.7 7 Motor vehicles loans 87.0 103.1 114.7 109.5 110.2 111.6 114.7 117.6 121.3 8 Motor vehicle leases 96.8 93.3 98.3 98.1 98.4 99.1 98.3 99.3 100.7 9 Revolving2 38.6 32.3 33.8 30.7 31.5 30.5 33.8 34.4 33.2 10 Other3 34.4 33.1 33.1 32.8 32.4 33.2 33.1 33.0 32.8 Securitized assets4 11 Motor vehicle loans 44.3 54.8 71.1 73.5 74.1 74.6 71.1 69.6 67.8 12 Motor vehicle leases 10.8 12.7 9.7 10.6 10.3 10.0 9.7 9.5 9.4 13 Revolving .0 8.7 10.5 10.2 10.1 10.2 10.5 10.4 10.2 14 Other 19.0 18.1 17.7 17.8 17.6 17.4 17.7 17.4 17.3 15 Real estate 121.1 131.4 154.7 148.9 149.3 152.7 154.7 159.1 162.2 16 One- to four-family 59.0 75.7 88.3 87.7 87.7 89.4 88.3 91.1 91.3 17 Other 28.9 26.6 38.3 34.6 35.1 37.1 38.3 38.6 38.4 Securitized real estate assets4 18 One- to four-family 33.0 29.0 28.0 26.5 26.2 25.9 28.0 29.2 32.2 19 Other .2 .1 .2 .2 .2 .2 .2 .2 .2 20 Business 366.1 396.5 459.6 436.3 445.0 447.1 459.6 469.8 474.1 21 Motor vehicles 63.5 79.6 87.8 80.3 84.3 85.4 87.8 87.9 89.6 22 Retail loans 25.6 28.1 33.2 34.5 34.9 33.7 33.2 33.3 33.7 23 Wholesale loans5 27.7 32.8 34.7 26.8 30.3 32.6 34.7 34.6 35.8 24 Leases 10.2 18.7 19.9 19.0 19.1 19.2 19.9 20.1 20.1 25 Equipment 203.9 198.0 221.9 208.0 212.8 211.2 221.9 222.3 224.2 26 Loans 51.5 50.4 52.2 48.2 51.5 49.1 52.2 51.9 52.3 27 Leases 152.3 147.6 169.7 159.8 161.3 162.1 169.7 170.4 171.8 28 Other business receivables6 51.1 69.9 95.5 94.7 97.1 98.2 95.5 98.2 100.0 Securitized assets4 29 Motor vehicles 33.0 29.2 31.5 31.0 28.8 30.6 31.5 31.5 31.0 30 Retail loans 2.4 2.6 2.9 2.6 2.5 3.0 2.9 2.9 2.8 31 Wholesale loans 30.5 24.7 26.4 26.4 24.3 25.6 26.4 26.5 26.1 32 Leases .0 1.9 2.1 2.0 2.0 2.0 2.1 2.1 2.1 33 Equipment 10.7 13.0 14.6 14.6 14.3 14.0 14.6 21.8 21.6 34 Loans 4.2 6.6 7.9 7.7 7.6 7.4 7.9 15.1 15.0 35 Leases 6.5 6.4 6.7 6.9 6.8 6.6 6.7 6.7 6.6 36 Other business receivables6 4.0 6.8 8.4 7.7 7.7 7.7 8.4 8.1 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 statistica lrelease. 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 • June 2000 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 1999 2000 IItteemm 11999977 11999988 11999999 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars! 180.1 195.2 210.7 210.3 214.4 220.8 216.3 223.7 216.9 226.0 2 Amount of loan (thousands of dollars) 140.3 151.1 161.7 161.8 165.1 167.0 167.2 169.9 165.6 170.7 3 Loan-to-price ratio (percent) 80.4 80.0 78.7 78.8 79.0 77.4 78.6 77.9 78.4 77.7 4 Maturity (years) 28.2 28.4 28.8 29.1 29.1 29.0 29.0 29.1 29.1 29.0 5 Fees and charges (percent of loan amount)2 1.02 .89 .77 .64 .71 .73 .71 .75 .71 .68 Yield (percent per year) 6 Contract rate1 7.57 6.95 6.94 6.99 7.06 7.13 7.18 7.34 7.43 7.49 7 Effective rate1,3 7.73 7.08 7.06 7.09 7.17 7.24 7.28 7.45 7.54 7.60 8 Contract rate (HUD series)4 7.76 7.00 7.45 7.76 7.77 7.79 7.95 8.21 8.20 8.19 SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 7.89 7.04 7.74 8.05 8.02 8.06 8.55 8.56 8.53 8.35 10 GNMA securities6 7.26 6.43 7.03 7.42 7.52 7.37 7.58 7.84 7.96 7.79 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 1 1T otal 316,678 414,515 523,941 504,938 509,990 518,337 523,941 527,977 535,096 538,751 12 FHA/VA insured 31,925 33,770 55,318 49,456 50,639 52,632 55,318 57,369 58,294 58,451 13 Conventional 284,753 380,745 468,623 455,482 459,351 465,705 468,623 470,608 476,802 480,300 14 Mortgage transactions purchased (during period) 70,465 188,448 195,210 15,200 10,057 14,683 11,416 9,035 11,484 8,801 Mortgage commitments (during period) 15 Issued7 69,965 193,795 187,948 7,998 10,480 12,050 9,931 9,130 9,811 10,051 16 To sell8 1,298 1,880 5,900 609 1,710 381 1,592 1,287 612 1,954 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 164,421 255,010 324,443 315,968 318,682 323,027 324,443 325,914 328,598 336,338 18 FHA/VA insured 177 785 l,836r 1,689 1,744 1,848 l,836r 1,806 1,719 2,521 19 Conventional 164,244 254,225 322,607r 314,279 316,938 321,179 322,607r 324,108 326,879 333,817 Mortgage transactions (during period) 20 Purchases 117,401 267,402 239,793 15,238 13,323 11,869 9,335 12,942 6,747 9,323 21 Sales 114,258 250,565 233,031 14,153 12,671 11,129 8,589 12,764 6,424 8,569 22 Mortgage commitments contracted (during period)9 120,089 281,899 228,432 14,608 10,810 10,501 11,587 8,341 7,156 10,122 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 11999966 11999977 11999988 Q4 Q1 Q2 Q3 Q4 1 All holders 4,880,736 5,184,691 5,683,280 5,683,280 5,819,743 5,968,122 6,173,523 6,318,783 Bv type of property 7 One- to four-familv residences 3,721,917 3,959,565 4,328,434 4,328,434 4,420,898 4,533,031 4,663,148 44,,775599,,996622 3 Multifamily residences 288,929 301,516 328,714 328,714 339,266 346,240 357,423 370,381 4 Nonfarm, nonresidential 782,755 833,311 929,626 929,626 962.175 989,206 1,051,551 1,085,896 5 Farm 87,134 90,299 96,506 96,506 97,404 99,644 101,403 102,544 Bv type of holder 6 Major financial institutions 1,981,885 2,083,978 2,194,813 2,194,813 2,202,306 2,242,525 2,321,448 2,393,404 7 Commercial banks 1,145,389 1,245,315 1,337,217 1,337,217 1,336,733 1,361,365 1,418,819 1,495,717 8 One- to four-family 677,603 745,510 797,195 797,195 782,135 790,043 826,936 879,299 9 Multifamily 45,451 49,670 52,871 52,871 56,731 59,151 62,477 66,010 in Nonfarm, nonresidential 397,452 423,148 458,115 458,115 468,355 481,635 498,087 518,569 11 Farm 24,883 26,986 29,035 29,035 29,513 30,536 31,320 31,839 12 Savings institutions' 628,335 631,822 643,957 643,957 646,510 656,518 676,346 668,634 13 One- to four-family 513,712 520,672 533,792 533,792 534,772 544,832 560,483 548,926 14 Multifamily 61,570 59,543 56,825 56,825 56,763 55,020 57,286 59,143 15 Nonfarm, nonresidential 52,723 51,252 52,923 52,923 54,539 56,222 58,118 60,090 16 Farm 331 354 417 417 435 443 459 475 17 Life insurance companies 208,161 206,841 213,640 213,640 219,063 224,642 226,282 229,053 18 One- to four-family 6,977 7,187 6,590 6,590 6,956 7,295 7,435 7,278 19 Multifamily 30,750 30,402 31.522 31,522 31,528 31,813 32,011 32,460 70 Nonfarm, nonresidential 160,314 158,780 164,004 164,004 168,862 173,568 174,642 177,092 21 Farm 10,120 10,472 11,524 11,524 11,717 11,966 12,194 12,223 22 Federal and related agencies 295,192 286,167 292,636 292,636 288,176 288,038 322,098 321,717 23 Government National Mortgage Association 2 8 7 7 6 8 8 7 24 One- to four-family 2 8 7 7 6 8 8 7 25 Multifamily 0 0 0 0 0 0 0 0 76 Farmers Home Administration4 41,596 41,195 40,851 40,851 40,691 40,766 73,705 73,871 27 One- to four-family 17,303 17,253 16,895 16,895 16,777 16,653 16,583 16,506 28 Multifamily 11,685 11,720 11,739 11,739 11,731 11,735 11,745 11,741 79 Nonfarm, nonresidential 6,841 7,370 7,705 7,705 7,769 7,943 41,068 41,355 30 Farm 5,768 4,852 4,513 4,513 4,413 4.435 4,308 4,268 31 Federal Housing and Veterans' Administrations 6,244 3,821 3,674 3,674 3,538 3,490 3,889 3,737 32 One- to four-family 3,524 1,767 1,849 1,849 1,713 1,623 2,013 1,862 33 Multifamily 2,719 2,054 1,825 1,825 1,825 1,867 1,876 1,876 34 Resolution Trust Corporation 0 0 0 0 0 0 0 0 35 One- to four-family 0 0 0 0 0 0 0 0 36 Multifamily 0 0 0 0 0 0 0 0 37 Nonfarm, nonresidential 0 0 0 0 0 0 0 0 .38 Farm 0 0 0 0 0 0 0 0 39 Federal Deposit Insurance Corporation 2,431 724 361 361 315 189 163 152 40 One- to four-family 365 109 54 54 47 28 24 23 41 Multifamily 413 123 61 61 54 32 28 26 4? Nonfarm, nonresidential 1,653 492 245 245 214 129 111 103 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 168,813 161,308 157,675 157,675 157,185 155,637 154,420 152,633 45 One- to four-family 155,008 149,831 147,594 147,594 147,063 145,033 142,982 141,195 46 Multifamily 13,805 11,477 10,081 10,081 10,122 10,604 11,438 11,438 47 Federal Land Banks 29,602 30,657 32,983 32,983 33,128 33,666 34,218 34,640 48 One- to four-family 1,742 1,804 1,941 1,941 1,949 1,981 2,013 2,038 49 Farm 27,860 28,853 31,042 31,042 31,179 31,685 32,205 32,602 50 Federal Home Loan Mortgage Corporation 46,504 48,454 57,085 57,085 53,313 54,282 55,695 56,676 51 One- to four-family 41,758 42,629 49,106 49,106 44,140 43,574 44,010 44,321 52 Multifamily 4,746 5,825 7,979 7,979 9,173 10,708 11,685 12,355 53 Mortgage pools or trusts5 2,044,049 2,240,928 2,587,942 2,587,942 2,715,181 2,810,119 2,891,145 2,954,654 54 Government National Mortgage Association 506,340 536,879 537,446 537,446 543,280 553,196 569,038 582,296 55 One- to four-family 494,158 523,225 522,498 522,498 527,886 537,287 552,670 565,222 56 Multifamily 12,182 13,654 14,948 14,948 15,395 15,909 16,368 17,074 57 Federal Home Loan Mortgage Corporation 554,260 579,385 646,459 646,459 687,179 718,085 738,581 749,081 58 One- to four-family 551,513 576,846 643,465 643,465 684,240 714,844 735,088 744,619 59 Multifamily 2,747 2,539 2,994 2,994 2,939 3,241 3,493 4,462 60 Federal National Mortgage Association 650,780 709,582 834,518 834,518 881,815 911,435 938,484 960,883 61 One- to four-family 633,210 687,981 804,205 804,205 849,513 877,863 903,531 924,941 62 Multifamily 17,570 21,601 30,313 30,313 32,302 33,572 34,953 35,942 63 Farmers Home Administration4 3 2 1 1 1 1 0 0 64 One- to four-family 0 0 0 0 0 0 0 0 65 Multifamily 0 0 0 0 0 0 0 0 66 Nonfarm, nonresidential 0 0 0 0 0 0 0 0 67 Farm 3 2 1 1 1 1 0 0 68 Private mortgage conduits 332,666 415,080 569,518 569,518 602,906 627,403 645,041 662,394 69 One- to four-family6 261,900 318,000 410,900 410,900 430,653 447,938 455,276 462,600 70 Multifamily 16,113 20,278 32,586 32,586 35,455 37,065 38,551 40,164 71 Nonfarm, nonresidential 54,654 76,802 126,033 126,033 136,798 142,400 151,215 159,630 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 559,609 573,619 607,888 607,888 614,081 627,440 638,833 649,008 74 One- to four-family 363,143 366,744 392,343 392,343 393,047 404,028 414,094 421,125 75 Multifamily 69,179 72,629 74,971 74,971 75,249 75,524 75,512 77,690 76 Nonfarm, nonresidential 109,119 115,467 120,600 120,600 125,638 127,310 128,311 129,057 77 Farm 18,169 18,779 19,974 19,974 20,147 20,578 20,917 21,137 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 • June 2000 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 1999 2000 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999977 11999988 11999999 Sept.r Oct. Nov. Dec. Jan.' Feb. Seasonally adjusted 1 Total 1,234,122 1,300,491 l,393,062r 1,365,434 l,370,373r l,383,108r l,393,062r 1,411,279 1,423,250 2 Revolving 531,295 560,653 595,773r 584,419 584,72 lr 589,647r 595,773' 604,980 610,739 3 Nonrevolving2 702,828 739,838 797,289r 781,015 785,653r 793,461r 797,289' 806,299 812,512 Not seasonally adjusted 4 Total 1,264,103 1,331,742 l,426,151r 1,368,929 l,375,474r l,389,747r l,426,151r 1,420,628 1,416,671 By major holder 5 Commercial banks 512,563 508,932 499,758 472,524 474,042 480,763 499,758 498,589 499,164 6 Finance companies 160,022 168,491 181,573 172,956 174,081 175,296 181,573 184,887 187,283 7 Credit unions 152,362 155,406 167,921' 162,911 164,391r 165,951' 167,921' 168,109 168,449 8 Savings institutions 47,172 51,611 61,527 60,051 60,544 61,035 61,527 62,019 62,511 9 Nonfinancial business 78,927 74,877 80,311' 67,454 67,962' 70,286' 80,311' 76,073 73,465 10 Pools of securitized assets3 313,057 372,425 435,061 433,033 434,454 436,416 435,061 430,951 425,799 By major type of credit 11 Revolving 555,858 586,528 623,245' 581,268 583,488' 592,022' 623,245' 615,608 611,571 12 Commercial banks 219,826 210,346 189,352 168,882 167,469 172,345 189,352 185,451 186,360 13 Finance companies 38,608 32,309 33,814 30,731 31,453 30,512 33,814 34,352 33,236 14 Credit unions 19,552 19,930 20,641' 19,396 19,328' 19,582' 20,641' 20,175 19,916 15 Savings institutions 11,441 12,450 15,838 13,461 14,254 15,046 15,838 16,631 17,423 16 Nonfinancial business 44,966 39,166 42,783 34,156 34,534 36,002 42,783 39,746 37,838 17 Pools of securitized assets' 221,465 272,327 320,817 314,642 316,450 318,535 320,817 319,253 316,798 18 Nonrevolving 708,245 745,214 802,906' 787,661 791,986' 797,725' 802,906' 805,020 805,100 19 Commercial banks 292,737 298,586 310,406 303,642 306,573 308,418 310,406 313,138 312,804 20 Finance companies 121,414 136,182 147,759 142,225 142,628 144,784 147,759 150,535 154,047 21 Credit unions 132,810 135,476 147,280' 143,515 145,063' 146,369r 147,2801 147,934 148,533 22 Savings institutions 35,731 39,161 45,689 46,590 46,290 45,989 45,689 45,388 45,088 23 Nonfinancial business 33,961 35,711 37,528' 33,298 33,428' 34,284' 37,528' 36,327 35,627 24 Pools of securitized assets3 91,592 100,098 114,244 118,391 118,004 117,881 114,244 111,698 109,001 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 2000 IItteemm 11999977 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan. Feb. INTEREST RATES Commercial banks2 1 48-month new car 9.02 8.72 8.44 8.44 n.a. n.a. 8.66 n.a. n.a. 8.88 2 24-month personal 13.90 13.74 13.39 13.38 n.a. n.a. 13.52 n.a. n.a. 13.76 Credit card plan 3 All accounts 15.77 15.71 15.21 15.08 n.a. n.a. 15.13 n.a. n.a. 15.47 4 Accounts assessed interest 15.57 15.59 14.81 14.79 n.a. n.a. 14.77 n.a. n.a. 14.32 Auto finance companies 5 New car 7.12 6.30 6.66 6.28 6.47 7.07 7.44 7.32 7.18 7.34 6 Used car 13.27 12.64 12.60 12.96 13.13 13.28 13.27 13.28 12.95 13.27 OTHER TERMS3 Maturity (months) 7 New car 54.1 52.1 52.7 51.7 52.1 53.2 53.9 53.4 52.9 52.7 8 Used car 51.0 53.5 55.9 55.8 55.9 55.8 55.8 55.6 57.0' 57.1 Loan-to-value ratio 9 New car 92 92 92 92 92 92 91 91 91 92 10 Used car 99 99 99 100 100 100 99 99 98 98 Amount financed (dollars) 11 New car 18,077 19,083 19,880 20,012 20,154 20,335 20,517 20,699 20,503 20,206 12 Used car 12,281 12,691 13,642 13,374 13,449 13,613 13,777 13,970 13,809' 13,697 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999955 11999966 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors . . . 568.0 712.0 735.6 775.8 1,011.3 1,033.7 888.2 1,056.5 1,276.6 871.5 1,168.2 1,107.4 By sector and instrument 7 Federal government 155.8 144.4 145.0 23.1 -52.6 -28.4 -113.5 -54.1 -75.2 -112.2 --8833..11 --1166..99 3 Treasury securities 155.7 142.9 146.6 23.2 -54.6 -26.9 -113.1 -66.3 -73.7 -112.8 -83.2 -16.9 4 Budget agency securities and mortgages .2 1.5 -1.6 -.1 2.0 -1.4 -.4 12.2 -1.5 .6 .0 .0 5 Nonfederal 412.2 567.6 590.6 752.7 1,063.9 1,062.0 1,001.7 1,110.7 1,351.8 983.7 1,251.3 1,124.3 By instrument 6 Commercial paper 21.4 18.1 -.9 13.7 24.4 3.8 85.6 -43.0 58.3 -2.6 49.8 44.0 7 Municipal securities and loans -35.9 -48.2 2.6 71.4 96.8 101.3 82.9 89.6 100.7 48.0 77.0 47.0 8 Corporate bonds 23.3 91.1 116.3 150.5 218.7 294.8 108.0 193.2 274.0 287.6 202.8 155.2 9 Bank loans n.e.c 75.2 103.7 70.5 106.5 108.2 169.2 107.8 120.9 70.0 22.2 112.8 123.7 in Other loans and advances 34.0 67.2 33.5 69.1 74.3 40.8 77.7 102.5 154.1 -14.3 78.9 66.6 II Mortgages 169.3 196.7 280.0 289.0 473.9 390.1 460.2 577.5 563.1 580.4 652.8 571.9 i? 183.4 180.4 245.3 237.6 367.9 289.1 375.2 429.1 414.9 422.9 492.8 396.4 n Multifamily residential -3.5 5.5 9.3 7.7 19.2 19.8 13.2 25.9 32.4 32.0 43.7 45.7 14 Commercial -12.9 9.3 22.9 40.6 80.5 74.5 66.3 113.9 112.1 116.6 109.1 124.9 15 2.2 1.6 2.6 3.2 6.2 6.7 5.5 8.6 3.6 9.0 7.2 4.9 16 Consumer credit 124.9 138.9 88.8 52.5 67.6 62.1 79.6 69.9 131.5 62.4 77.3 115.9 By borrowing sector 17 Household 316.3 350.9 354.0 327.3 471.9 420.3 473.4 528.6 558.6 519.4 661144..66 553333..88 18 Nonfinancial business 142.2 268.2 243.4 369.4 511.7 559.8 458.3 507.0 705.8 428.6 579.7 559.8 19 Corporate 134.5 234.7 154.9 285.7 405.7 456.9 353.4 396.1 597.5 315.3 449.9 413.4 70 Nonfarm noncorporate 3.3 30.6 83.8 77.4 98.4 95.4 97.6 103.3 101.6 114.2 120.2 140.8 ?1 Farm 4.4 2.9 4.8 6.2 7.7 7.5 7.3 7.5 6.6 -1.0 9.7 5.6 22 State and local government -46.2 -51.5 -6.8 56.1 80.3 82.0 70.0 75.1 87.4 35.7 57.0 30.7 7.3 Foreign net borrowing in United States -13.9 71.1 77.2 57.6 33.6 97.9 -19.6 -38.9 17.0 -36.8 62.2 30.8 74 Commercial paper -26.1 13.5 11.3 3.7 7.8 -25.5 6.2 -4.7 18.0 -27.5 41.1 33.6 75 Bonds 12.2 49.7 55.8 47.2 25.1 119.2 -27.2 -34.2 .9 -12.6 29.4 -8.2 76 Bank loans n.e.c 1.4 8.5 9.1 8.5 6.7 8.4 3.6 9.8 .9 5.6 -6.6 2.4 27 Other loans and advances -1.4 -.5 1.0 -1.8 -6.0 -4.2 -2.2 -9.7 -2.8 -2.3 -1.6 3.0 28 Total domestic plus foreign 554.1 783.1 812.9 833.4 1,044.9 1,131.6 868.6 1,017.7 1,293.5 834.8 1,230.4 1,138.2 Financial sectors 29 Total net borrowing by financial sectors 468.4 453.9 548.9 652.2 1,068.8 988.9 1,056.3 1,298.7 1,213.1 1,016.1 1,078.0 1,056.5 By instrument 30 Federal government-related 287.5 204.1 231.5 212.8 470.9 405.4 555.8 673.3 592.2 578.9 653.0 543.9 31 Government-sponsored enterprise securities 176.9 105.9 90.4 98.4 278.3 166.4 294.0 510.5 193.0 304.7 407.1 367.9 32 Mortgage pool securities 115.4 98.2 141.1 114.5 192.6 239.0 261.7 162.8 399.2 274.3 245.9 176.0 33 Loans from U.S. government -4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 180.9 249.8 317.5 439.4 597.9 583.5 500.5 625.4 620.9 437.2 425.1 512.6 35 Open market paper 40.5 42.7 92.2 166.7 161.0 135.6 141.0 130.7 78.3 57.8 89.8 478.9 36 Corporate bonds 121.8 195.9 176.9 209.0 291.8 361.8 177.4 281.9 489.7 263.2 184.9 -56.8 37 Bank loans n.e.c -13.7 2.5 12.6 13.2 30.1 -9.7 60.2 12.4 -8.8 10.5 -6.2 -50.1 38 Other loans and advances 22.6 3.4 27.9 35.6 90.2 76.0 82.3 169.9 41.6 117.9 147.2 121.8 39 Mortgages 9.8 5.3 7.9 14.9 24.8 19.9 39.6 30.6 20.1 -12.3 9.4 18.8 By borrowing sector 40 Commercial banking 20.1 22.5 13.0 46.1 72.9 80.8 61.7 66.3 31.1 72.7 111111..33 6622..77 41 Savings institutions 12.8 2.6 25.5 19.7 52.2 31.2 63.7 103.2 58.0 58.6 55.2 11.5 47 Credit unions .2 -.1 .1 .1 .6 .2 1.0 .4 1.5 1.4 2.8 3.3 43 Life insurance companies .3 -.1 1.1 .2 .7 -.6 1.6 1.8 3.3 3.0 1.1 -4.4 44 Government-sponsored enterprises 172.1 105.9 90.4 98.4 278.3 166.4 294.0 510.5 193.0 304.7 407.1 367.9 45 Federally related mortgage pools 115.4 98.2 141.1 114.5 192.6 239.0 261.7 162.8 399.2 274.3 245.9 176.0 46 Issuers of asset-backed securities (ABSs) 76.5 142.4 153.9 200.7 316.3 352.4 294.2 335.7 299.4 309.2 227.4 114.3 47 Finance companies 48.7 50.2 45.9 48.7 43.0 91.9 -12.0 17.8 71.2 88.4 -22.6 88.2 48 Mortgage companies -11.5 -2.2 4.1 -4.6 1.6 -28.2 2.3 3.0 -4.6 5.1 -6.1 6.2 49 Real estate investment trusts (REITs) 10.2 4.5 11.9 39.6 62.7 64.4 79.3 44.0 25.6 -19.7 7.9 17.7 50 Brokers and dealers .5 -5.0 -2.0 8.1 7.2 20.0 -2.6 12.4 -31.1 -17.4 16.9 -37.3 51 Funding corporations 23.1 34.9 64.1 80.7 40.7 -28.6 11.2 40.9 166.5 -63.8 31.2 250.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic NonfinancialS tatistics • June 2000 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 Q2 Q3 Q4 Qi Q2 Q3 Q4 All sectors 52 Total net borrowing, all sectors 1,022.5 1,237.0 1,361.8 1,485.6 2,113.7 2,120.5 1,924.9 2,316.4 2,506.6 1,850.9 2,308.5 2,194.7 53 Open market paper 35.7 74.3 102.6 184.1 193.1 113.8 232.7 83.0 154.6 27.7 180.6 556.5 54 U.S. government securities 448.1 348.5 376.5 235.9 418.3 377.1 442.3 619.1 517.0 466.8 569.8 527.0 55 Municipal securities -35.9 -48.2 2.6 71.4 96.8 101.3 82.9 89.6 100.7 48.0 77.0 47.0 56 Corporate and foreign bonds 157.3 336.7 348.9 406.7 535.6 775.8 258.2 440.9 764.6 538.2 417.1 90.3 57 Bank loans n.e.c 62.9 114.7 92.1 128.2 145.0 167.9 171.6 143.0 62.1 38.3 100.0 75.9 58 Other loans and advances 50.4 70.1 62.5 102.8 158.5 112.5 157.8 262.7 192.9 101.3 224.5 191.4 59 Mortgages 179.0 202.0 287.9 303.9 498.6 410.0 499.8 608.1 583.2 568.2 662.1 590.7 60 Consumer credit 124.9 138.9 88.8 52.5 67.6 62.1 79.6 69.9 131.5 62.4 77.3 115.9 Funds raised through mutual funds and corporate equities 61 Total net issues 113.4 131.5 209.1 165.6 76.5 261.6 -166.6 -3.5 135.4 143.3 47.7 167.7 62 Corporate equities 12.8 -16.0 -28.5 -99.6 -198.1 -116.2 -340.0 -228.3 -117.9 -64.9 -79.1 -9.2 63 Nonfinancial corporations -44.9 -58.3 -69.5 -114.4 -267.0 -129.1 -308.4 -491.3 -52.2 -338.2 -138.6 -41.6 64 Foreign shares purchased by U.S. residents 48.1 50.4 60.0 42.0 77.8 12.3 -32.8 317.4 -33.4 270.9 76.7 64.0 65 Financial corporations 9.6 -8.1 -19.0 -27.1 -8.9 .6 1.1 -54.5 -32.3 2.4 -17.2 -31.6 66 Mutual fund shares 100.6 147.4 237.6 265.1 274.6 377.8 173.4 224.8 253.3 208.2 126.8 176.9 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999955 11999966 11999977 11999988 Q2 Q3 Q4 QI Q2 Q3 Q4 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,022.5 1,237.0 1,361.8 1,485.6 2,113.7 2,120.5 1,924.9 2,316.4 2,506.6 1,850.9 2,308.5 2,194.7 ? Domestic nonfederal nonfinancial sectors 223.4 -98.4 15.1 -79.2 35.1 461.4 27.9 -304.3 398.8 351.3 147.9 55.0 Household 260.2 -3.0 63.4 -76.5 -64.0 335.0 -106.6 -425.4 347.4 280.9 147.9 -59.1 4 Nonfinancial corporate business 17.7 -8.8 -10.2 -2.3 -.3 -47.9 8.9R 29.3R -I.R 17.3R 34.6 82.1 .5 Nonfarm noncorporate business .6 4.7 -4.3 -.6 .0 .0 .0 .0 .4 -.2 -.6 .0 6 State and local governments -55.0 -91.4 -33.7 .1 99.5 174.3 125.7 91.7 52.2 53.3 -33.9 32.0 7 Federal government -27.4 -.2 -7.4 5.1 13.5 12.9 13.8 11.7 17.0 6.9 11.4 12.9 8 Rest of the world 132.3 273.9 414.4 310.7 249.3 321.8 60.8 390.7 253.3 37.4 371.3 237.3 9 Financial sectors 694.1 1,061.7 939.7 1,249.0 1,815.8 1,324.5 1,822.3 2,218.3 1,837.5 1,455.2 1,777.8 1,889.5 10 Monetary authority 31.5 12.7 12.3 38.3 21.1 11.5 41.6 3.5 71.8 62.4 34.1 -65.7 11 Commercial banking 163.4 265.9 187.5 324.3 305.2 132.7 250.1 531.5 68.9 135.4 435.5 592.8 17 U.S.-chartered banks 148.1 186.5 119.6 274.9 312.0 130.0 309.2 540.2 134.1 231.5 410.7 494.2 13 Foreign banking offices in United States 11.2 75.4 63.3 40.2 -11.9 15.2 -68.1 -12.1 -54.9 -105.7 30.6 49.5 14 Bank holding companies .9 -.3 3.9 5.4 -.9 -17.6 6.0 -7.4 -6.0 .4 -12.4 42.6 15 Banks in U.S.-affiliated areas 3.3 4.2 .7 3.7 6.0 5.1 2.9 10.7 -4.4 9.2 6.6 6.6 16 Savings institutions 6.7 -7.6 19.9 -4.7 36.3 2.1 17.9 113.3 102.7 88.8 60.9 22.0 17 Credit unions 28.1 16.2 25.5 16.8 19.0 22.7 21.0 16.0 34.7 32.1 36.6 21.2 18 Bank personal trusts and estates 7.1 -8.3 -7.7 -25.0 -12.8 -11.3 -16.0 -13.5 -7.6 -8.4 -8.6 -9.1 19 Life insurance companies 72.0 100.0 69.6 104.8 76.9 63.4 65.6 86.0 82.2 84.0 52.9 71.3 70 Other insurance companies 24.9 21.5 22.5 25.2 20.4 -1.5 -7.7 67.6 -19.7 26.7 -14.4 -12.6 71 Private pension funds 46.1 56.0 52.3 65.5 118.7 130.1 95.5 174.5 60.6 150.0 45.4 104.9 77 State and local government retirement funds 30.9 33.6 37.3 63.8 66.0 78.4 68.7 49.5 76.5 27.3 38.4 49.1 73 Money market mutual funds 30.0 86.5 88.8 87.5 244.0 208.1 255.5 353.1 227.6 -92.6 232.1 360.8 74 Mutual funds -7.1 52.5 48.9 80.9 124.8 146.4 92.9 103.5 103.0 121.0 -20.2 1.1 75 Closed-end funds -3.7 10.5 4.7 -2.9 4.5 4.5 4.5 4.5 4.4 4.4 4.3 4.3 76 Government-sponsored enterprises 117.8 86.7 84.2 94.3 260.8 150.6 264.7 429.5 157.2 259.2 287.5 264.6 27 Federally related mortgage pools 115.4 98.2 141.1 114.5 192.6 239.0 261.7 162.8 399.2 274.3 245.9 176.0 78 Asset-backed securities issuers (ABSs) 69.4 120.6 123.6 162.3 276.7 321.4 248.7 312.7 281.8 292.4 218.9 84.5 79 Finance companies 48.3 49.9 18.4 21.9 51.9 24.0 79.5 75.3 92.2 79.6 94.7 116.9 30 Mortgage companies —24.0 -3.4 8.2 -9.1 3.2 -56.4 4.5 6.0 -9.1 10.2 -12.1 12.3 31 Real estate investment trusts (REITs) -.7 1.4 4.4 20.2 -5.1 6.1 -11.3 -40.8 1.7 -2.2 -2.7 -7.3 37 Brokers and dealers -44.2 90.1 -15.7 14.9 6.8 -133.2 146.0 —226.1 88.0 -193.7 16.3 -37.4 33 Funding corporations -17.8 -21.2 14.0 55.6 5.0 -14.2 -61.4 9.4 21.5 104.4 32.4 140.0 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 1,022.5 1,237.0 1,361.8 1,485.6 2,113.7 2,120.5 1,924.9 2,316.4 2,506.6 1,850.9 2,308.5 2,194.7 Other financial sources 35 Official foreign exchange -5.8 8.8 -6.3 .7 66..66 88..11 88..99 88..66 --1144..00 --55..44 -8.5 --55..55 36 Special drawing rights certificates .0 2.2 -.5 -.5 .0 ..00 .0 .0 -4.0 .0 -4.0 -4.0 37 Treasury currency .7 .6 .1 .0 .0 .2 1.7 -2.3 .0 2.1 2.0 -4.1 38 Foreign deposits 52.9 35.3 85.9 106.8 -.2 92.9 84.9 -131.9 127.7 99.3 63.6 -55.9 39 Net interbank transactions 89.8 10.0 -51.6 -19.7 -32.3 40.1 44.7 -118.9 49.5 90.6 -36.0 -55.4 40 Checkable deposits and currency -9.7 -12.7 15.8 41.5 47.6 90.1 -24.9 72.8 61.1 10.1 141.0 394.2 41 Small time and savings deposits -39.9 96.6 97.2 97.1 152.4 84.9 144.7 281.2 -68.0 100.0 144.7 4.3 47 Large time deposits 19.6 65.6 114.0 122.5 92.1 -5.6 81.8 104.4 -5.9 42.6 105.2 379.2 43 Money market fund shares 43.3 142.3 145.8 157.6 285.5 247.2 367.9 313.1 204.9 100.5 180.3 516.7 44 Security repurchase agreements 78.2 110.5 41.4 120.9 91.3 50.7 274.8 -181.8 253.3 -27.9 114.6 345.7 45 Corporate equities 12.8 -16.0 -28.5 -99.6 -198.1 -116.2 -340.0 -228.3 -117.9 -64.9 -79.1 -9.2 46 Mutual fund shares 100.6 147.4 237.6 265.1 274.6 377.8 173.4 224.8 253.3 208.2 126.8 176.9 47 Trade payables 120.0 128.9 114.8 125.9 27.9 -27.9 57.9 -56.9 144.8 237.1 190.8 90.4 48 Security credit -.1 26.7 52.4 111.0 103.3 131.3 149.5 -25.7 -66.6 139.9 29.5 271.1 49 Life insurance reserves 35.5 45.8 44.5 59.3 53.3 53.3 51.7 59.0 40.8 59.6 41.5 63.2 50 Pension fund reserves 254.7 235.1 246.9 304.0 290.4 272.8 279.2 314.8 286.1 324.4 305.0 373.5 51 Taxes payable 2.6 6.2 16.0 16.8 12.5 1.9 27.5 8.4 -8.0 41.8 -1.8 14.0 57 Investment in bank personal trusts 17.8 4.0 -8.6 -56.3 -48.0 -46.5 -51.2 -48.8 -32.0 -25.9 -34.3 -32.3 53 Noncorporate proprietors' equity 62.7 65.6 5.1 9.9 -19.9 -19.2 -64.0 16.3 10.1 16.0 -47.4 -18.5 54 Miscellaneous 253.4 453.6 508.1 527.5 710.0 434.1 749.8 577.8 129.4 1,223.6 360.0 682.3 55 Total financial sources 2,111.6 2,793.5 2,992.0 3,376.2 3,962.6 3,790.4 3,943.2 3,502.8 3,751.3 4,422.5 3,902.2 5,321.4 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.5 -.9 -.6 -.7 -.3 1.1 -3.4 -1.5 .6 .2 --66..33 57 Foreign deposits 43.0 25.1 59.6 106.8 -8.1 149.9 69.9 -156.5 62.7 83.5 19.9 13.6 58 Net interbank liabilities .... -2.7 -3.1 -3.3 -19.9 3.4 8.9 22.3 -52.8 58.7 -1.7 -1.0 -53.1 59 Security repurchase agreements 67.7 20.2 4.5 62.3 54.1 -18.6 153.8 -11.0 209.4 67.5 43.0 -153.9 60 Taxes payable 16.6 21.1 22.8 26.8 17.7 9.1 28.2 19.1 -15.4 4.8 2.4 -10.1 61 Miscellaneous -120.2 -179.5 -37.3 -214.7 -58.3 -323.0 -70.6 .7 -408.9 -568.0 -539.2 -112.4 Floats not included in assets ( —) 62 Federal government checkable deposits -4.8 -6.0 .5 -2.7 2.6 -44.4 32.4 14.0 -1.8 -41.4 23.0 -8.7 63 Other checkable deposits -2.8 -3.8 -4.0 -3.9 -3.1 -2.9 -3.6 -1.8 -1.9 -1.0 -.5 .1 64 Trade credit 27.4 15.6 -21.2 33.2 -30.9 -110.5 -65.0 -20.2 45.8 -9.9 71.7 39.7 65 Total identified to sectors as assets 2,087.5 2,904.5 2,971.4 3,388.8 3,986.1 4,122.2 3,774.7 3,714.5 3,804.3 4,888.1 4,282.6 5,612.6 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. El and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • June 2000 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1998 1999 11999988 Q2 Q3 Q4 Ql Q2 Q3 Q4 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 13,723.8 14,459.4 15,233.8 16,245.0 15,710.4 15,921.7 16,245.0 16,557.5 16,730.6 17,048.8 17,385.6 By sector and instrument 2 Federal government 3,636.7 3,781.8 3,804.9 3,752.2 3,749.0 3,720.2 3,752.2 3,759.7 3,651.7 3,632.7 3,680.4 3 Treasury securities 3,608.5 3,755.1 3,778.3 3,723.7 3,723.4 3,694.7 3,723.7 3,731.6 3,623.4 3,604.5 3,652.1 4 Budget agency securities and mortgages 28.2 26.6 26.5 28.5 25.6 25.5 28.5 28.1 28.3 28.3 28.3 5 Nonfederal 10,087.1 10,677.7 11,428.9 12,492.8 11,961.4 12,201.5 12,492.8 12,797.8 13,078.9 13,416.1 13,705.2 By instrument 6 Commercial paper 157.4 156.4 168.6 193.0 202.5 216.9 193.0 223.9 232.4 239.3 230.3 7 Municipal securities and loans 1,293.5 1,296.0 1,367.5 1,464.3 1,429.3 1,439.9 1,464.3 1,491.0 1,510.0 1,518.6 1,532.5 8 Corporate bonds 1,344.1 1,460.4 1,610.9 1,829.6 1,754.3 1,781.3 1,829.6 1,898.1 1,970.0 2,020.7 2,059.5 y Bank loans n.e.c 863.6 934.1 1,040.5 1,148.8 1,097.6 1,120.6 1,148.8 1,165.2 1,178.5 1,202.9 1,231.0 10 Other loans and advances 736.9 770.4 839.5 913.8 873.1 886.8 913.8 957.5 953.5 967.1 985.4 11 Mortgages 4,568.8 4,848.9 5,137.8 5,611.7 5,347.9 5,469.5 5,611.7 5,742.9 5,894.2 6,097.4 6,238.1 12 Home 3,510.4 3,721.9 3,959.5 4,327.5 4,122.0 4,222.4 4,327.5 4,420.2 4,532.1 4,662.4 4,759.2 13 Multifamily residential 265.5 278.4 286.1 305.3 295.5 298.8 305.3 313.6 321.6 332.6 344.0 14 Commercial 708.5 761.4 801.9 882.4 837.4 853.9 882.4 911.7 940.8 1,001.0 1,032.2 15 Farm 84.6 87.1 90.3 96.5 93.0 94.4 96.5 97.4 99.6 101.4 102.7 16 Consumer credit 1,122.8 1,211.6 1,264.1 1,331.7 1,256.8 1,286.6 1,331.7 1,319.3 1,340.4 1,370.1 1,428.5 By borrowing sector 17 Household 4,782.8 5,108.0 5,438.0 5,909.9 5,618.8 5,752.1 5,909.9 5,993.0 6,136.7 6,306.1 6,466.8 18 Nonfinancial business 4,234.1 4,506.2 4,871.4 5,383.1 5,171.8 5,270.7 5,383.1 5,581.7 5,704.0 5,867.6 5,985.9 19 Corporate 2,936.6 3,120.2 3,401.7 3,807.3 3,649.0 3,722.1 3,807.3 3,981.8 4,071.9 4,203.6 4,285.7 20 Nonfarm noncorporate 1,152.4 1,236.1 1,313.6 1,411.9 1,361.8 1,385.5 1,411.9 1,437.4 1,466.0 1,495.3 1,531.1 21 Farm 145.1 149.9 156.1 163.8 161.0 163.1 163.8 162.4 166.1 168.7 169.1 22 State and local government 1,070.2 1,063.4 1,119.5 1,199.8 1,170.8 1,178.8 1,199.8 1,223.2 1,238.2 1,242.4 1,252.5 23 Foreign credit market debt held in United States 441.4 518.7 570.1 603.7 617.1 612.8 603.7 607.8 598.2 614.7 622.0 24 Commercial paper 56.2 67.5 65.1 72.9 71.4 74.0 72.9 77.2 70.1 81.8 89.2 25 Bonds 291.9 347.7 394.9 420.0 435.4 428.6 420.0 420.2 417.1 424.4 422.4 26 Bank loans n.e.c 34.6 43.7 52.1 58.9 55.5 56.4 58.9 59.1 60.5 58.8 59.4 27 Other loans and advances 58.8 59.8 58.0 52.0 54.8 53.8 52.0 51.3 50.5 49.7 51.0 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 14,165.2 14,978.1 15,803.9 16,848.7 16,327.4 16,534.4 16,848.7 17,165.3 17,328.8 17,663.6 18,007.6 Financial sectors 29 Total credit market debt owed by financial sectors 4,278.8 4,827.7 5,446.8 6,515.6 5,926.8 6,195.5 6,515.6 6,809.0 7,073.3 7,347.6 7,606.6 By instrument 30 Federal government-related 2,376.8 2,608.3 2,821.1 3,292.0 2,981.4 3,121.7 3,292.0 3,434.1 3,580.7 3,745.9 3,884.0 31 Government-sponsored enterprise securities 806.5 896.9 995.3 1,273.6 1,072.5 1,146.0 1,273.6 1,321.8 1,398.0 1,499.8 1,591.7 32 Mortgage pool securities 1,570.3 1,711.4 1,825.8 2,018.4 1,908.9 1,975.7 2,018.4 2,112.3 2,182.7 2,246.1 2,292.3 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 1,901.9 2,219.4 2,625.7 3,223.6 2,945.4 3,073.8 3,223.6 3,374.9 3,492.6 3,601.8 3,722.6 35 Open market paper 486.9 579.1 745.7 906.7 838.9 874.2 906.7 926.4 940.9 963.4 1,082.9 36 Corporate bonds 1,204.7 1,381.5 1,557.5 1,849.4 1,738.7 1,786.2 1,849.4 1,968.6 2,042.8 2,091.9 2,069.6 37 Bank loans n.e.c 51.4 64.0 77.2 107.2 88.2 103.2 107.2 104.1 106.8 105.2 93.6 38 Other loans and advances 135.0 162.9 198.5 288.7 225.6 246.2 288.7 299.1 328.6 365.4 395.8 39 Mortgages 24.1 31.9 46.8 71.6 54.1 64.0 71.6 76.6 73.6 75.9 80.6 By borrowing sector 40 Commercial banks 102.6 113.6 140.6 188.6 159.6 169.6 188.6 187.5 202.7 224.2 232.2 41 Bank holding companies 148.0 150.0 168.6 193.5 190.5 196.1 193.5 202.6 205.5 211.9 219.4 42 Savings institutions 115.0 140.5 160.3 212.4 170.7 186.6 212.4 226.9 241.6 255.4 258.3 43 Credit unions .4 .4 .6 1.1 .8 1.0 1.1 1.5 1.8 2.5 3.4 44 Life insurance companies .5 1.6 1.8 2.5 1.6 2.0 2.5 3.3 4.0 4.3 3.2 45 Government-sponsored enterprises 806.5 896.9 995.3 1,273.6 1,072.5 1,146.0 1,273.6 1,321.8 1,398.0 1,499.8 1,591.7 46 Federally related mortgage pools 1,570.3 1,711.4 1,825.8 2,018.4 1,908.9 1,975.7 2,018.4 2,112.3 2,182.7 2,246.1 2,292.3 47 Issuers of asset-backed securities (ABSs) 712.5 866.4 1,078.2 1,394.6 1,230.4 1,307.0 1,394.6 1,463.1 1,539.9 1,599.8 1,632.1 48 Brokers and dealers 29.3 27.3 35.3 42.5 40.1 39.4 42.5 34.8 30.4 34.6 25.3 49 Finance companies 483.9 529.8 554.5 597.5 596.9 589.4 597.5 614.4 639.2 628.5 653.8 50 Mortgage companies 16.5 20.6 16.0 17.7 16.3 16.9 17.7 16.5 17.8 16.3 17.8 51 Real estate investment trusts (REITs) 44.6 56.5 96.1 158.8 128.0 147.8 158.8 165.2 160.3 162.2 166.7 52 Funding corporations 248.6 312.7 373.7 414.4 410.5 417.9 414.4 459.1 449.5 462.0 510.5 All sectors 53 Total credit market debt, domestic and foreign ... 18,444.0 19,805.8 21,250.7 23,364.4 22,254.2 22,730.0 23,364.4 23,974.3 24,402.2 25,011.2 25,614.2 54 Open market paper 700.4 803.0 979.4 1,172.6 1,112.7 1,165.1 1,172.6 1,227.6 1,243.3 1,284.5 1,402.4 55 U.S. government securities 6,013.6 6,390.0 6,626.0 7,044.3 6,730.3 6,841.9 7,044.3 7,193.8 7,232.4 7,378.6 7,564.4 56 Municipal securities 1,293.5 1,296.0 1,367.5 1,464.3 1,429.3 1,439.9 1,464.3 1,491.0 1,510.0 1,518.6 1,532.5 57 Corporate and foreign bonds 2,840.7 3,189.6 3,563.3 4,098.9 3,928.3 3,996.0 4,098.9 4,286.9 4,429.9 4,536.9 4,551.5 58 Bank loans n.e.c 949.6 1,041.7 1,169.8 1,314.9 1,241.3 1,280.3 1,314.9 1,328.3 1,345.7 1,366.9 1,383.9 59 Other loans and advances 930.6 993.1 1,095.9 1,254.4 1,153.6 1,186.8 1,254.4 1,307.8 1,332.6 1,382.2 1,432.2 60 Mortgages 4,592.9 4,880.8 5,184.7 5,683.3 5,402.0 5,533.5 5,683.3 5,819.6 5,967.8 6,173.3 6,318.7 61 Consumer credit 1,122.8 1,211.6 1,264.1 1,331.7 1,256.8 1,286.6 1,331.7 1,319.3 1,340.4 1,370.1 1,428.5 1. Data in this table also appear in the Board's Z.l (780) quarterly statistica lrelease, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1998 1999 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 Q2 Q3 Q4 Ql Q2 Q3 Q4 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 18,444.0 19,805.8 21,250.7 23,364.4 22,254.2 22,730.0 23,364.4 23,974.3 24,402.2 25,011.2 25,614.2 2 Domestic nonfederal nonfinancial sectors 2,846.3 2,906.7 2,783.8 2,790.6 2,837.8 2,850.6 2,790.6 2,877.6 2,918.4 2,964.9 3,021.4 Household 1,885.0 1,993.7 1,873.5 1,781.1 1,910.3 1,889.0 1,781.1 1,878.2 1,898.9 1,944.2 1,960.4 4 Nonfinancial corporate business 280.4 270.2 268.0 267.6 238.5 243.2 267.6 244.9 249.6 261.4 300.9 Nonfarm noncorporate business 42.3 38.0 37.4 37.4 37.4 37.4 37.4 37.5 37.5 37.3 37.3 6 State and local governments 638.6 604.8 605.0 704.4 651.6 681.1 704.4 717.1 732.3 721.9 722.8 7 Federal government 202.7 195.3 200.4 213.9 207.5 210.9 213.9 218.1 219.8 255.6 258.8 8 Rest of the world 1,531.1 1,926.6 2,256.8 2,534.3 2,396.0 2,412.2 2,534.3 2,601.8 2,609.8 2,703.5 2,736.7 9 Financial sectors 13,863.9 14,777.2 16,009.8 17,825.6 16,812.9 17,256.3 17,825.6 18,276.7 18,654.2 19,087.3 19,597.3 10 Monetary authority 380.8 393.1 431.4 452.5 440.3 446.5 452.5 466.0 485.1 489.3 478.1 11 Commercial banking 3,520.1 3,707.7 4,031.9 4,335.7 4,136.4 4,195.7 4,335.7 4,338.4 4,383.4 4,488.3 4,643.9 1?. U.S.-chartered banks 3,056.1 3,175.8 3,450.7 3,761.2 3,543.6 3,616.2 3,761.2 3,782.9 3,847.6 3,944.3 4,078.9 13 Foreign banking offices in United States 412.6 475.8 516.1 504.2 525.6 510.1 504.2 487.8 465.7 475.3 484.0 14 Bank holding companies 18.0 22.0 27.4 26.5 26.8 28.3 26.5 25.0 25.1 22.0 32.6 15 Banks in U.S.-affiliated areas 33.4 34.1 37.8 43.8 40.4 41.1 43.8 42.7 45.0 46.7 48.3 16 Savings institutions 913.3 933.2 928.5 964.8 930.8 939.3 964.8 990.8 1,011.4 1,030.8 1,033.4 17 Credit unions 263.0 288.5 305.3 324.2 315.1 320.5 324.2 330.2 341.0 350.2 355.3 18 Bank personal trusts and estates 239.7 232.0 207.0 194.1 201.5 197.5 194.1 192.2 190.1 188.0 185.7 19 Life insurance companies 1,587.5 1,657.0 1,751.1 1,828.0 1,793.2 1,810.6 1,828.0 1,853.7 1,874.7 1,889.2 1,902.7 20 Other insurance companies 468.7 491.2 515.3 535.7 520.8 518.8 535.7 530.8 537.5 533.9 530.7 71 Private pension funds 716.9 769.2 834.7 953.4 885.9 909.8 953.4 968.5 1,006.0 1,017.4 1,043.6 22 State and local government retirement lunds 531.0 568.2 632.0 698.0 668.5 685.7 698.0 717.2 724.0 733.6 745.8 23 Money market mutual funds 545.5 634.3 721.9 965.9 815.9 869.9 965.9 1,036.2 1,001.8 1,049.7 1,147.8 74 Mutual funds 771.3 820.2 901.1 1,025.9 979.1 1,005.9 1,025.9 1,050.8 1,084.0 1,083.0 1,077.1 75 Closed-end funds 96.4 101.1 98.3 102.8 100.5 101.7 102.8 103.9 105.0 106.1 107.1 26 Government-sponsored enterprises 750.0 807.9 902.2 1,163.0 989.4 1,055.4 1,163.0 1,201.9 1,267.0 1,338.6 1,405.1 27 Federally related mortgage pools 1,570.3 1,711.4 1,825.8 2,018.4 1,908.9 1,975.7 2,018.4 2,112.3 2,182.7 2,246.1 2,292.3 78 Asset-backed securities issuers (ABSs) 653.4 777.0 939.3 1,216.0 1,068.9 1,134.2 1,216.0 1,280.1 1,352.7 1,410.5 1,435.4 79 Finance companies 526.2 544.5 566.4 618.4 579.0 592.7 618.4 639.9 660.9 678.2 714.2 30 Mortgage companies 33.0 41.2 32.1 35.3 32.7 33.8 35.3 33.0 35.6 32.5 35.6 31 Real estate investment trusts (REITs) 26.0 30.4 50.6 45.5 58.5 55.7 45.5 45.9 45.3 44.7 42.8 37 Brokers and dealers 183.4 167.7 182.6 189.4 209.4 245.9 189.4 211.4 162.9 167.0 157.7 33 Funding corporations 87.4 101.4 152.3 158.7 178.3 161.3 158.7 173.5 202.9 210.3 263.0 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 18,444.0 19,805.8 21,250.7 23,364.4 22,254.2 22,730.0 23,364.4 23,974.3 24,402.2 25,011.2 25,614.2 Other liabilities .35 Official foreign exchange 63.7 53.7 48.9 60.1 50.1 54.5 60.1 53.6 50.9 52.1 50.1 36 Special drawing rights certificates 10.2 9.7 9.2 9.2 9.2 9.2 9.2 8.2 8.2 7.2 6.2 37 Treasury currency 18.2 18.3 18.3 18.3 18.4 18.8 18.3 18.3 18.8 19.3 18.3 38 Foreign deposits 418.8 516.1 618.8 639.9 630.4 651.7 639.9 671.8 696.6 712.5 698.5 39 Net interbank liabilities 290.7 240.8 219.4 188.9 189.2 198.9 188.9 181.8 203.2 195.8 199.1 40 Checkable deposits and currency 1,229.3 1,245.1 1,286.6 1,334.2 1,320.7 1,282.3 1,334.2 1,311.4 1,354.1 1,354.9 1,485.8 41 Small time and savings deposits 2,279.7 2,377.0 2,474.1 2,626.5 2,531.0 2,553.8 2,626.5 2,637.6 2,644.6 2,666.6 2,671.8 47 Large time deposits 476.9 590.9 713.4 805.5 754.0 776.5 805.5 804.3 809.0 837.5 935.8 43 Money market fund shares 745.3 891.1 1,048.7 1,334.2 1,153.7 1,249.7 1,334.2 1,416.0 1,398.1 1,449.6 1,584.8 44 Security repurchase agreements 660.0 701.5 822.4 913.7 892.1 960.5 913.7 980.3 970.8 999.3 1,085.2 45 Mutual fund shares 1,852.8 2,342.4 2,989.4 3,610.5 3,438.4 3,137.3 3,610.5 3,758.4 4,049.4 3,933.6 4,515.3 46 Security credit 305.7 358.1 469.1 572.3 539.6 573.6 572.3 552.7 589.3 593.2 665.8 47 Life insurance reserves 566.2 610.6 665.0 718.3 690.6 703.5 718.3 730.9 745.8 756.2 772.0 48 Pension fund reserves 5,767.8 6,642.5 7,894.4 9,079.2 8,730.8 8,116.5 9,079.2 9,267.0 9,729.0 9,487.5 10,360.4 49 Trade payables 1,698.0 1,812.8 1,938.6 1,966.5 1,933.9 1,953.0 1,966.5 1,970.0 2,028.8 2,082.0 2,132.3 50 Taxes payable 107.6 123.6 140.4 152.8 144.6 155.0 152.8 159.6 162.1 165.5 164.4 51 Investment in bank personal trusts 803.0 871.7 942.5 1,001.0 999.8 908.6 1,001.0 1,012.5 1,059.8 998.3 1,116.6 52 Miscellaneous 5,645.8 6,119.6 6,698.5 7,147.3 6,860.2 7,041.3 7,147.3 7,162.6 7,311.5 7,255.7 7,542.8 53 Total liabilities 41,383.6 45,331.1 50,248.3 55,542.8 53,140.9 53,074.8 55,542.8 56,671.4 58,232.1 58,577.8 61,619.3 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 22.1 21.4 21.1 21.6 21.0 21.2 21.6 20.7 20.8 21.3 21.4 55 Corporate equities 8,495.7 10,255.8 13,181.4 15,413.4 14,987.0 13,121.2 15,413.4 15,893.6 17,018.0 16,008.3 18,876.7 56 Household equity in noncorporate business 3,640.4 3,833.2 4,171.8 4,395.3 4,284.7 4,331.3 4,395.3 4,404.7 4,488.7 4,543.3 4,630.3 Liabilities not identified as assets ( — ) 57 Treasury currency -5.8 -6.7 -7.3 -8.0 -7.4 -7.2 -8.0 -8.4 -8.2 -8.2 -9.7 58 Foreign deposits 360.2 431.4 534.0 547.2 547.6 565.1 547.2 562.8 583.7 588.7 592.1 59 Net interbank transactions -9.0 -10.6 -32.2 -27.0 -17.1 -15.4 -27.0 -11.3 -10.6 -13.0 -28.2 60 Security repurchase agreements 86.4 90.9 153.1 207.2 171.6 216.8 207.2 263.6 276.8 294.0 248.7 61 Taxes payable 62.4 76.7 93.5 103.4 95.8 102.2 103.4 90.6 111.8 94.4 92.4 62 Miscellaneous -1,000.3 -1,318.8 -1,636.8 -2,213.3 -1,907.9 -1,959.4 -2,213.3 -2,382.4 -2,510.0 -2,974.4 -2,953.8 Floats not included in assets ( —) 63 Federal government checkable deposits 3.1 -1.6 -8.1 -3.9 -16.1 -12.0 -3.9 -7.2 -12.4 -10.2 -9.8 64 Other checkable deposits 34.2 30.1 26.2 23.1 24.2 15.7 23.1 18.9 22.1 14.5 22.3 65 Trade credit 198.2 176.7 199.5 168.0 119.4 98.9 168.0 123.4 105.0 119.8 204.8 66 Total identified to sectors as assets 53,812.5 59,973.5 68,300.6 76,576.3 73,423.6 71,543.7 76,576.3 78,340.3 81,201.2 81,045.3 86,988.9 1. Data in this table also appear in the Board's Z.l (780) quarterly statistica lrelease, tables 2. Excludes corporate equities and mutual fund shares. L. 1 and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • June 2000 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 1999 2000 MMeeaassuurree 11999977 11999988 11999999 July Aug. Sept. Oct. Nov. Dec. Jan.r Feb. Mar.p 1 Industrial production1 127.1 132.4 137.1 137.4 137.7 138.1 139.1 139.4 140.1r 141.5 141.6 142.0 Market groupings 2 Products, total 119.6 123.7 126.5 126.9 127.6 127.6 128.5 128.0 128.5 130.0 130.2 130.3 3 Final, total 121.1 125.4 128.0 128.6 129.5 129.1 130.2 129.8 130.3r 131.9 132.0 132.2 4 Consumer goods 115.1 116.2 116.9 116.8 117.6 117.1 118.2 117.6 118.1r 119.2 119.2 119.0 5 Equipment 132.1 142.7 148.9 149.3 150.5 150.2 151.2 151.4 151.8r 154.3 154.6 155.7 6 Intermediate 115.3 118.8 122.1 121.5 121.7 122.6 123.2 122.4 123.lr 124.3 124.5 124.2 7 Materials 139.0 146.5 154.8 155.0 154.6 155.7 156.8 158.8 159.7r 160.8 161.0 162.0 Industry groupings 8 Manufacturing 130.1 136.4 142.3 142.0 142.5 142.9 144.2 145.0 145.6 146.8 147.0 147.6 9 Capacity utilization, manufacturing (percent)2. . 82.4 80.9 79.8 79.7 79.7 79.7 80.2 80.3 80.3r 80.7 80.6 80.6 10 Construction contracts3 143. r 157.3r 169.3r 168.0r 160.0r 162.0r 172.0 172.0 171.0 174.0 175.0 n.a. 11 Nonagricultural employment, total4 120.3 123.4 126.2 126.3 126.5 126.6 126.9 127.1 127.4 127.8 127.8 128.2 12 Goods-producing, total 101.2 102.7 102.3 102.3 101.9 102.1 102.1 102.4 102.5 103.0 102.9 103.2 13 Manufacturing, total 98.3 98.8 97.0 97.1 96.7 96.7 96.6 96.6 96.6 96.7 96.7 96.6 14 Manufacturing, production workers 99.6 99.8 97.8 98.0 97.4 97.4 97.3 97.4 97.4 97.5 97.4 97.3 15 Service-producing 126.5 130.0 133.8 134.0 134.3 134.4 134.7 135.0 135.4 135.7 135.8 136.2 16 Personal income, total 175.4 185.7 196.6 197.0 197.9 198.1 200.5 201.3 201.9 203.3 204.2 n.a. 17 Wages and salary disbursements 171.3 184.4 197.0 197.8 198.6 199.5 200.7 201.3 202.6 204.4 205.0 n.a. 18 Manufacturing 144.6 152.4 156.9 158.2 158.0 158.6 159.7 158.8 158.8 160.3 161.0 n.a. 19 Disposable personal income5 172.9 181.7 191.9 192.1 193.4 193.0 195.6 196.4 196.7 198.5 199.1 n.a. 20 Retail sales5 170.1 178.5 194.4 194.5 197.1 197.1 197.7 200.3 204.2 205.5 209.2 210.0 Prices6 21 Consumer (1982-84= 100) 160.5 163.0 166.6 166.7 167.1 167.9 168.2 168.3 168.3 168.7 169.7 171.1 22 Producer finished goods (1982=100) 131.8 130.7 133.1 132.9 133.7 134.7 135.1 134.9r 135.0 134.7 136.0 137.0 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 is described in an article in the 4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series March 2000 issue of the Bulletin. For a description of the methods of estimating industrial covers employees only, excluding personnel in the armed forces. production and capacity utilization, see "Industrial Production and Capacity Utilization: 5. Based on data from U.S. Department of Commerce, Survey of Current Business. Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price 1997), pp. 67-92, and the references cited therein. For details about the construction of indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, individual industrial production series, see "Industrial Production: 1989 Developments and Monthly Labor Review. Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series 2. Ratio of index of production to index of capacity. Based on data from the Federal mentioned in notes 3 and 6, can also be found in the Survey of Current Business. Reserve, U.S. Department of Commerce, and other sources. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 1999 2000 CCaatteeggoorryy 11999977 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan.r Feb. Mar. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 136,297 137,673 139,368 139,372 139,475 139,697 139,834 140,108 140,910 141,165 140,867 Employment 2 Nonagricultural industries3 126,159 128,085 130,207 130,296 130,471 130,702 130,788 131,141 131,850 131,954 131,801 3 Agriculture 3,399 3,378 3,281 3,234 3,179 3,238 3,310 3,279 3,371 3,408 3,359 Unemployment 4 Number 6,739 6,210 5,880 5,842 5,825 5,757 5,736 5,688 5,689 5,804 5,708 5 Rate (percent of civilian labor force) 4.9 4.5 4.2 4.2 4.2 4.1 4.1 4.1 4.0 4.1 4.1 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 122,690 125,826 128,616 128,945 129,048 129,332 129,589 129,898 130,292 130,299 130,715 7 Manufacturing 18,675 18,772 18,431 18,378 18,366 18,356 18,361 18,361 18,376 18,364 18,359 8 Mining 596 590 535 524 527 528 527 529 530 532 536 9 Contract construction 5,691 5,985 6,273 6,246 6,293 6,314 6,369 6,393 6,504 6,487 6,576 10 Transportation and public utilities 6,408 6,600 6.792 6,813 6,831 6,841 6,862 6,897 6,902 6,892 6,919 11 Trade 28,614 29,127 29,792 29,919 29,903 29,955 29,972 30,061 30,126 30,115 30,135 12 Finance 7,109 7,407 7,632 7,650 7,653 7,668 7,675 7,685 7,685 7,696 7,685 13 Service 36,040 37,526 39,000 39,205 39,257 39,433 39,554 39,657 39,804 39,826 39,976 14 Government 19,557 19,819 20,161 20,210 20,218 20,237 20,269 20,315 20,365 20,387 20,529 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 1999 2000 1999 2000 1999 2000 SSeerriieess Q2 Q3 Q4r Ql Q2 Q3 Q4 Ql Q2 Q3 Q4r Ql Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 136.1 137.7 139.5 141.7 169.2 170.7 172.3 173.8 80.5 80.7 81.0 81.5 2 Manufacturing 140.9 142.5 144.9 147.1 176.9 178.7 180.6 182.4 79.6 79.7 80.3 80.7 3 Primary processing3 122.5 123.4 125.4 126.3 148.2 149.0 149.8 150.5 82.7 82.8 83.7 83.9 4 Advanced processing4 150.5 152.5 155.2 158.1 191.4 193.7 196.1 198.6 78.6 78.7 79.1 79.6 Durable goods 170.8 174.4 177.4 181.6 214.2 217.6 221.0 224.7 79.8 80.2 80.3 80.8 6 Lumber and products 122.5 120.5 120.6 121.9 146.3 147.4 148.4 149.1 83.7 81.7 81.2 81.7 7 Primary metals 125.1 128.7 130.9 132.3 148.5 149.3 150.1 150.6 84.2 86.2 87.2 87.8 8 Iron and steel 121.4 126.6 129.1 130.3 150.0 151.3 152.5 153.3 80.9 83.7 84.6 85.0 9 Nonferrous 129.6 131.2 133.3 134.8 146.8 147.0 147.2 147.5 88.3 89.3 90.5 91.4 10 Industrial machinery and equipment 227.9 232.3 239.9 251.2 275.5 285.3 295.8 306.4 82.7 81.4 81.1 82.0 11 Electrical machinery 374.6 400.9 419.0 450.7 482.0 498.5 514.6 535.7 77.7 80.4 81.4 84.1 12 Motor vehicles and parts 150.6 153.3 154.7 154.6 184.8 184.9 185.0 185.7 81.5 82.9 83.6 83.3 13 Aerospace and miscellaneous transportation equipment 95.9 93.8 89.9 87.1 126.6 126.2 125.8 125.2 75.7 74.3 71.5 69.5 14 Nondurable goods 111.6 111.5 113.4 113.9 139.5 139.9 140.3 140.5 80.0 79.7 80.9 81.0 15 Textile mill products lit.1 111.6 111.4 112.0 131.5 131.6 131.8 132.0 84.5 84.8 84.5 84.9 16 Paper and products 115.1 116.0 117.9 116.3 134.5 135.3 136.1 136.6 85.6 85.7 86.6 85.1 17 Chemicals and products 116.3 117.0 121.8 122.6 150.4 150.7 151.0 151.4 77.3 77.6 80.7 81.0 18 Plastics materials 123.5 124.2 132.3 131.9 137.2 138.4 139.6 140.8 90.0 89.7 94.8 93.7 19 Petroleum products 114.1 114.6 114.1 117.4 122.2 122.7 123.1 123.5 93.3 93.4 92.7 95.1 70 Mining 97.1 98.2 99.5 99.7 120.3 120.2 120.2 119.8 80.7 81.7 82.8 83.2 71 Utilities 116.6 118.4 113.2 117.3 127.3 127.8 128.2 128.6 91.6 92.7 88.3 91.2 22 Electric 118.9 120.8 116.5 119.6 125.2 125.6 126.1 126.6 95.0 96.2 92.4 94.5 1973 1975 Previous cycle5 Latest cycle6 1999 1999 2000 High Low High Low High Low Mar. Oct. Nov. Dec.r Jan.r Feb. Mar.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 80.5 81.0 80.9 81.1 81.6 81.5 81.4 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 79.6 80.2 80.3 80.3 80.7 80.6 80.6 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 82.9 83.4 83.8 83.9 83.9 83.9 84.0 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 78.5 79.1 79.2 79.2 79.7 79.5 79.5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 79.5 80.3 80.3 80.3 81.0 80.6 80.8 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 83.6 81.4 80.7 81.6 82.2 81.8 81.2 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 83.8 86.1 87.4 88.3 88.3 87.4 87.8 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 79.2 82.1 85.7 86.1 85.6 84.4 85.0 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 89.6 91.1 89.4 91.0 91.7 91.1 91.2 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 83.5 81.6 81.1 80.7 81.8 82.1 82.0 II Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 75.5 81.1 81.3 82.0 83.8 83.9 84.7 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 80.1 84.2 84.2 82.5 84.6 82.4 82.8 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 77.2 71.9 71.2 71.4 70.4 69.4 68.9 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 80.3 80.6 81.0 81.0 81.0 81.1 81.0 IS Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 83.8 85.5 84.5 83.5 85.0 84.8 84.9 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 86.5 86.9 86.7 86.3 85.9 84.8 84.7 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 77.7 79.4 81.3 81.3 80.5 81.1 81.3 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 90.2 94.0 95.4 94.9 91.9 94.2 94.9 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 94.3 93.2 91.7 93.3 92.0 95.0 98.3 70 Mining 94.3 88.2 96.0 80.3 88.0 87.0 80.9 82.6 83.0 82.8 83.3 82.7 83.6 71 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 91.9 89.9 86.5 88.4 91.6 92.3 89.9 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 95.4 92.8 91.8 92.6 94.7 95.3 93.5 1. Data in this table appear in the Board's G. 17 (419) monthly statistica lrelease. 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 is described in an article in the 4. Advanced processing includes foods; tobacco; apparel; furniture and fixtures; printing March 2000 issue of the Bulletin. For a description of the methods of estimating industrial and publishing; chemical products such as drugs and toiletries; agricultural chemicals; leather production and capacity utilization, see "Industrial Production and Capacity Utilization: and products; machinery; transportation equipment; instruments; and miscellaneous manufac- Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February tures. 1997), pp. 67-92, and the references cited therein. For details about the construction of 5. Monthly highs, 1978-80; monthly lows, 1982. individual industrial production series, see "Industrial Production: 1989 Developments and 6. Monthly highs, 1988-89; monthly lows, 1990-91. Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted index of industrial production to the corresponding index of capacity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • June 2000 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1999 2000 GGGrrrooouuuppp pprroo-- 1999 aavvgg.. tion Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec/ Jan/ Feb. Mar.p Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 137.1 135.1 135.5 136.2 136.6 137.4 137.7 138.1 139.1 139.4 140.1 141.5 141.6 142.0 2 Products 60.5 126.5 126.0 126.2 126.8 126.8 126.9 127.6 127.6 128.5 128.0 128.5 130.0 130.2 130.3 3 Final products 46.3 128.0 127.3 127.6 128.2 128.3 128.6 129.5 129.1 130.2 129.8 130.3 131.9 132.0 132.2 4 Consumer goods, total 29.1 116.9 116.7 116.5 116.8 117.0 116.8 117.6 117.1 118.2 117.6 118.1 119.2 119.2 119.0 5 Durable consumer goods 6.1 152.6 149.9 152.0 152.8 154.0 153.4 155.5 153.5 157.4 154.4 155.7 159.0 157.6 158.1 6 Automotive products 2.6 144.7 140.0 142.0 145.4 147.4 143.7 150.6 145.5 147.9 146.2 144.4 149.2 146.1 147.2 7 Autos and trucks 1.7 151.8 147.0 149.0 153.2 157.5 148.9 162.9 152.8 155.1 154.3 148.7 155.0 150.7 152.4 8 Autos, consumer .9 102.6 101.6 102.3 99.9 101.8 102.4 105.0 105.5 103.9 107.2 99.8 105.4 105.0 103.2 9 Trucks, consumer .7 202.4 194.1 197.3 207.4 214.2 197.2 221.6 201.9 207.8 203.6 199.0 206.3 198.3 203.3 10 Auto parts and allied goods .... .9 133.9 129.3 131.4 133.6 132.5 135.3 132.8 134.4 136.7 133.8 137.1 139.9 138.5 138.5 11 Other 3.5 158.6 157.8 160.0 158.3 158.8 161.1 158.7 159.7 165.0 160.7 164.9 166.7 166.9 167.1 12 Appliances, televisions, and air conditioners 1.0 324.3 317.6 325.8 311.1 319.0 329.9 319.0 326.3 363.1 348.4 357.6 361.1 362.9 368.3 13 Carpeting and furniture .8 121.7 119.6 120.2 121.0 121.0 124.1 122.1 124.1 124.8 117.4 123.0 127.3 126.5 126.7 14 Miscellaneous home goods 1.6 114.7 115.7 116.9 117.2 116.2 115.9 115.4 114.4 114.8 115.0 116.7 116.6 116.9 115.9 15 Nondurable consumer goods 23.0 108.7 108.9 108.3 108.4 108.4 108.3 108.9 108.7 109.3 109.1 109.5 110.1 110.4 110.0 16 Foods and tobacco 10.3 107.3 108.4 107.8 107.7 107.3 106.7 106.5 106.2 106.8 107.3 107.4 107.7 107.9 107.2 17 Clothing 2.4 90.6 91.3 91.8 90.2 90.2 89.2 90.1 89.9 89.4 90.6 89.1 90.3 89.5 89.3 18 Chemical products 4.5 121.8 121.6 118.7 120.5 120.2 119.4 122.7 120.9 123.1 126.0 126.5 126.1 126.7 127.3 19 Paper products 2.9 102.3 98.8 99.9 100.3 101.5 102.0 103.2 104.7 106.3 105.1 103.1 104.3 103.5 104.0 20 Energy 2.9 114.0 115.4 115.1 114.7 115.3 118.6 116.6 117.6 114.5 106.7 112.0 114.9 117.1 115.2 21 Fuels .8 111.3 110.7 111.5 110.9 109.9 111.1 110.0 112.0 112.4 110.1 111.7 108.4 113.7 117.6 22 Residential utilities 2.1 115.0 117.2 116.4 116.1 117.4 121.7 119.3 119.7 114.9 104.3 111.6 117.5 118.1 113.3 23 Equipment 17.2 148.9 145.9 147.0 148.4 148.3 149.3 150.5 150.2 151.2 151.4 151.8 154.3 154.6 155.7 24 Business equipment 13.2 171.6 167.5 169.4 171.2 171.2 172.6 173.9 173.7 174.8 175.0 175.5 179.4 180.0 181.5 25 Information processing and related 5.4 248.6 229.2 236.9 244.3 248.2 253.8 259.9 261.3 265.6 266.7 270.1 277.8 281.4 287.0 26 Computer and office equipment 1.1 840.1 736.1 773.0 805.8 830.2 851.9 892.8 926.9 950.5 970.0 985.6 1,015.3 1,043.6 1,070.5 27 Industrial 4.0 135.3 135.2 136.0 135.3 133.7 135.4 133.6 133.9 134.9 134.6 135.0 138.9 139.9 139.0 28 Transit 2.5 126.9 129.5 129.4 128.9 128.2 127.5 128.1 124.0 122.3 121.2 118.5 119.6 115.6 114.2 29 Autos and trucks 1.2 131.4 129.0 130.7 131.2 132.2 131.2 135.3 132.0 133.4 134.2 127.8 134.6 132.9 131.8 30 Other 1.3 131.4 143.0 135.7 134.0 130.2 123.8 123.2 126.4 125.1 127.5 128.1 126.9 128.1 132.9 31 Defense and space equipment 3.3 74.4 75.6 75.1 75.2 74.6 74.5 74.7 73.6 73.7 73.0 72.4 70.6 69.8 70.2 32 Oil and gas well drilling .6 106.8 100.8 97.2 99.8 100.1 102.0 107.1 111.3 115.7 121.3 124.3 125.5 129.9 127.3 33 Manufactured homes .2 155.2 168.8 164.7 161.3 158.9 151.5 151.3 144.4 142.6 139.3 138.3 135.4 129.6 131.7 34 Intermediate products, total 14.2 122.1 121.6 121.7 122.3 121.7 121.5 121.7 122.6 123.2 122.4 123.1 124.3 124.5 124.2 35 Construction supplies 5.3 133.4 131.7 131.3 132.9 132.6 133.2 132.9 134.1 135.4 134.3 134.9 136.5 136.6 136.5 36 Business supplies 8.9 115.3 115.6 116.1 116.1 115.3 114.6 115.1 115.8 115.9 115.2 116.0 117.0 117.2 116.9 37 Materials 39.5 154.8 150.3 150.8 151.7 153.1 155.0 154.6 155.7 156.8 158.8 159.7 160.8 161.0 162.0 38 Durable goods materials 20.8 198.9 191.9 193.1 194.3 197.2 200.3 199.9 202.3 203.4 206.7 208.8 211.3 211.9 213.7 39 Durable consumer parts 4.0 150.7 149.9 147.7 148.4 150.5 153.9 147.2 156.0 153.7 154.8 155.0 155.6 154.1 154.6 40 Equipment parts 7.6 360.9 331.5 340.5 345.0 355.2 364.6 369.0 371.4 377.5 386.8 394.9 403.7 409.8 417.9 41 Other 9.2 131.3 130.9 130.4 130.4 130.6 131.1 131.6 131.2 131.7 133.4 134.0 134.8 134.5 134.4 42 Basic metal materials 3.1 121.8 119.8 120.1 119.9 122.6 122.8 123.3 122.1 123.5 125.6 126.3 126.2 125.1 125.4 43 Nondurable goods materials 8.9 114.6 112.7 112.8 113.8 114.2 114.5 114.4 114.7 117.4 119.1 118.7 117.1 117.4 117.6 44 Textile materials 1.1 101.0 101.2 101.8 101.8 101.2 101.2 101.1 100.3 102.3 103.3 100.9 99.0 101.1 101.2 45 Paper materials 1.8 117.0 116.3 116.5 115.3 117.7 116.3 116.3 118.6 118.5 119.3 118.5 118.3 116.1 116.4 46 Chemical materials 3.9 117.3 113.6 114.2 116.0 116.9 117.7 117.4 117.7 122.0 125.1 124.2 122.4 124.2 124.7 47 Other 2.1 113.5 113.3 111.9 114.2 112.0 113.0 113.2 112.5 114.9 114.9 116.8 114.8 113.3 113.2 48 Energy materials 9.7 101.7 102.4 102.2 102.2 101.6 102.9 102.3 101.8 101.5 101.6 101.4 102.7 102.0 102.3 49 Primary energy 6.3 99.2 99.1 97.3 98.3 98.9 100.2 100.3 99.6 98.8 100.1 99.5 100.0 98.7 99.8 50 Converted fuel materials 3.3 107.0 108.9 111.7 109.9 106.8 108.0 106.1 106.1 106.5 104.1 104.8 107.8 108.7 107.0 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 137.0 135.1 135.4 136.1 136.4 137.3 137.4 138.0 138.9 139.3 140.2 141.4 141.7 142.0 52 Total excluding motor vehicles and parts 95.1 136.4 134.6 134.9 135.6 135.9 136.7 137.1 137.2 138.3 138.7 139.5 140.8 141.1 141.5 53 Total excluding computer and office equipment 98.2 131.1 129.5 129.7 130.2 130.6 131.2 131.4 131.5 132.4 132.7 133.2 134.4 134.5 134.7 54 Consumer goods excluding autos and trucks . 27.4 115.0 115.1 114.8 114.8 114.8 115.0 115.2 115.2 116.3 115.6 116.4 117.3 117.5 117.2 55 Consumer goods excluding energy 26.2 117.3 116.9 116.7 117.0 117.2 116.6 117.7 117.1 118.7 118.8 118.8 119.7 119.5 119.4 56 Business equipment excluding autos and trucks 12.0 176.2 171.9 173.8 175.7 175.7 177.4 178.3 178.5 179.5 179.7 181.1 184.6 185.4 187.3 57 Business equipment excluding computer and office equipment 12.1 143.8 142.6 143.4 144.2 143.6 144.4 144.6 143.6 144.0 143.7 143.8 146.9 146.7 147.5 58 Materials excluding energy 29.8 172.0 165.5 166.3 167.4 169.5 171.6 171.3 173.0 174.7 177.4 178.6 179.7 180.2 181.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued 1992 SIC pro- 1999 Group code por- avg. tion Mar. Apr. May June July Aug. Sept Jan.' Mar.p Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 137.1 135.1 135.5 136.2 136.6 137.4 137.7 138.1 139.1 139.4 140.1 141.5 141.6 142.0 60 Manufacturing 85.4 142.3 139.7 140.2 141.0 141.4 142.0 142.5 142.9 144.2 145.0 145.6 146.8 147.0 147.6 61 Primary processing 26.5 123.3 122.4 122.2 122.5 122.7 123.3 123.4 123.6 124.8 125.6 125.9 126.2 126.2 126.5 62 Advanced processing 58.8 151.8 148.8 149.6 150.7 151.2 151.8 152.6 153.1 154.5 155.2 155.9 157.6 157.9 158.7 63 Durable goods 45.0 172.8 168.1 169.4 170.8 172.2 173.8 174.4 175.0 176.5 177.4 178.4 181.0 181.2 182.5 64 Lumber and products 24 2.0 121.6 121.7 121.5 123.9 122.2 121.5 120.2 119.7 120.5 119.8 121.4 122.5 121.9 121.2 65 Furniture and fixtures 25 1.4 125.5 125.8 123.8 124.4 124.4 125.7 126.4 127.9 127.0 125.2 128.6 127.3 126.9 127.4 66 Stone, clay, and glass products 32 2.1 130.5 130.8 128.8 128.5 127.8 129.3 130.2 129.6 131.2 132.4 131.4 131.0 132.0 131.7 67 Primary metals 33 3.1 126.6 124.0 123.9 123.9 127.4 128.0 129.6 128.3 129.0 131.1 132.8 132.9 131.7 132.3 68 Iron and steel 331,2 1.7 123.2 118.1 119.4 120.1 124.5 126.2 127.6 125.9 124.9 130.7 131.7 131.0 129.5 130.4 69 Raw steel 331PT .1 113.3 108.3 109.3 111.4 110.7 111.1 115.9 112.4 121.8 124.0 124.2 123.1 118.7 120.2 70 Nonferrous 333-6,9 1.4 130.9 131.4 129.4 128.6 130.8 130.2 132.1 131.4 134.0 131.7 134.1 135.2 134.4 134.7 71 Fabricated metal products .. 34 5.0 128.7 128.5 128.0 127.2 128.3 12&.6 128.5 128.4 128.8 129.7 129.0 130.6 130.7 130.8 72 Industrial machinery and equipment 35 8.0 230.1 224.6 227.0 228.4 228.2 230.0 231.4 235.5 238.3 239.7 241.8 247.9 251.6 254.0 73 Computer and office equipment . . 357 1.8 1,061.4 947.6 987.5 1,021.6 1,048.2 1,075.1 1,123.7 1,167.5 1,196.6 1,222.8 1,244.6 1,283.3 1,320.3 1,356.0 74 Electrical machinery 36 7.3 390.2 354.0 366.4 373.3 384.2 399.2 401.3 402.1- 412.6 418.1 426.4 442.2 449.2 460.6 75 Transportation equipment. .. 37 9.5 122.4 122.6 122.1 122.8 123.5 122.9 122.9 123.1 122.3 121.8 120.4 121.6 119.1 119.2 76 Motor vehicles and parts . 371 4.9 151.0 148.1 148.4 150.6 152.9 152.2 152.2 155.6 155.7 155.8 152.7 156.8 153.1 154.1 77 Autos and light trucks . 371PT 2.6 137.8 134.0 135.7 138.3 142.0 135.8 146.8 139.4 140.7 141.0 135.0 141.0 137.7 138.6 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 94.9 97.9 96.5 96.0 95.2 94.7 94.7 92.2 90.6 89.5 89.7 88.3 86.8 86.1 79 Instruments 38 5.4 116.5 113.7 115.1 116.7 117.0 117.2 117.7 117.2 118.3 118.9 119.7 118.4 117.4 117.7 80 Miscellaneous 39 1.3 124.7 122.9 124.2 125.5 124.5 125.2 125.2 125.1 125.0 125.0 126.4 126.9 125.7 125.1 81 Nondurable goods 40.4 111.8 111.8 111.5 111.9 111.3 111.0 111.5 111.8 113.0 113.6 113.7 113.8 113.9 113.9 82 Foods 20 9.4 110.1 110.9 110.6 110.6 110.0 108.9 108.9 109.6 110.1 110.3 110.0 110.0 110.7 110.6 83 Tobacco products 21 1.6 94.3 95.4 94.1 95.4 94.5 96.0 94.8 90.9 91.9 93.1 94.7 96.7 94.5 91.4 84 Textile null products 22 1.8 110.9 110.1 111.4 110.9 110.8 112.3 111.7 110.8 112.7 111.4 110.1 112.1 111.9 112.1 85 Apparel products 23 2.2 90.7 91.8 92.4 91.2 90.7 89.8 89.2 89.0 89.1 89.1 89.1 89.5 89.6 89.3 86 Paper and products 26 3.6 116.2 115.9 115.0 114.6 115.7 115.0 115.8 117.2 118.0 118.1 117.7 117.3 115.8 115.8 87 Printing and publishing .... 27 6.7 104.4 103.7 104.2 104.1 103.5 102.8 103.6 104.6 106.0 105.7 105.3 106.0 105.3 105.4 88 Chemicals and products .... 28 9.9 117.5 116.8 115.6 117.0 116.3 115.8 117.7 117.4 119.8 122.7 122.9 121.8 122.8 123.1 89 Petroleum products 29 1.4 114.7 114.9 114.6 114.2 113.4 115.1 114.1 114.6 114.5 112.8 114.9 113.5 117.3 121.5 90 Rubber and plastic products . 30 3.5 137.7 135.8 136.2 137.4 136.4 138.0 137.6 139.3 138.9 139.3 141.4 142.2 141.5 141.0 91 Leather and products 31 .3 69.8 71.3 70.6 70.9 71.3 69.1 70.2 69.5 68.2 67.7 65.4 67.1 66.4 65.7 92 Mining 6.9 98.0 97.5 96.7 97.4 97.1 97.8 98.5 98.3 99.2 99.7 99.5 99.9 99.1 100.0 93 Metal 10 .5 97.1 98.5 100.5 100.2 98.9 96.2 93.0 91.4 94.2 94.5 95.2 94.1 93.1 92.1 94 Coal 12 1.0 108.1 103.9 107.3 106.1 107.0 110.0 110.7 109.4 108.8 110.0 109.5 106.3 101.9 109.3 95 Oil and gas extraction 13 4.8 92.5 92.1 90.8 91.8 91.4 92.3 93.2 93.0 94.0 94.5 94.6 95.7 95.4 95.4 96 Stone and earth minerals 14 .6 124.4 126.6 121.8 123.9 123.3 120.5 123.0 125.5 126.3 125.0 122.4 124.0 124.0 124.6 97 Utilities 7.7 115.6 116.8 116.3 116.1 117.4 119.8 117.8 117.7 115.2 110.9 113.5 117.7 118.6 115.7 98 Electric 491,493PT 6.2 118.2 119.1 118.6 118.4 119.6 122.6 120.0 119.8 116.9 115.8 116.9 119.8 120.6 118.5 99 Gas 492.493PT 1.6 104.8 106.4 105.7 105.8 107.5 107.4 108.2 108.5 107.9 88.2 98.1 108.4 110.1 102.7 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 141.7 139.3 139.8 140.5 140.8 141.4 142.0 142.3 143.6 144.5 114455..22 114466..33 146.7 114477..33 101 Manufacturing excluding computer and office equipment 83.6 135.3 133.1 133.4 134.1 134.3 134.8 135.1 135.3 136.5 137.1 137.6 138.6 138.6 139.1 102 Computers, communications equipment, and semiconductors 5.9 794.1 700.3 731.6 753.3 780.5 812.1 830.4 843.0 863.9 887.7 990088..55 948.9 975.4 1,007.9 103 Manufacturing excluding computers and semiconductors 81.1 121.6 121.0 120.9 121.3 121.2 121.3 121.6 121.7 122.6 122.9 123.1 123.8 123.6 123.8 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 119.3 118.9 118.7 119.1 118.9 118.9 119.1 119.3 120.1 120.4 120.6 121.1 120.8 120.8 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total 2,001.9 2,726.1 2,701.8 2,710.2 2,721.9 2,723.6 2,726.1 2,742.0 2,740.2 2,762.6 2,740.0 2,751.5 2,788.2 2,793.9 2,799.1 106 Final 1,552.1 2,101.6 2,080.1 2,087.2 2,095.3 2,100.3 2,102.8 2,118.5 2,112.5 2,132.5 2,115.8 2,122.4 2,151.6 2,156.2 2,161.7 107 Consumer goods 1,049.6 1,294.9 1,287.9 1,288.4 1,290.1 1,295.1 1,292.4 1,301.3 1,297.0 1,311.7 1,294.7 1,301.5 1,313.5 1,316.5 1,316.9 108 Equipment 502.5 808.3 793.3 800.1 806.7 806.7 812.3 819.0 817.5 822.5 823.4 822.9 840.7 842.3 847.7 109 Intermediate 449.9 623.3 620.4 621.7 625.2 622.1 622.0 622.4 626.4 628.9 623.0 627.9 635.4 636.5 636.2 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The 1997), pp. 67-92, and the references cited therein. For details about the construction of latest historical revision of the industrial production index and the capacity utilization rates individual industrial production series, see "Industrial Production: 1989 Developments and was released in November 1999. The recent annual revision is described in an article in the Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. March 2000 issue of the Bulletin. For a description of the methods of estimating industrial 2. Standard industrial classification. production and capacity utilization, see "Industrial Production and Capacity Utilization: Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A46 Domestic Nonfinancial Statistics • June 2000 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1999 2000 item 11999988 11999999 May June July Aug. Sept. Oct. Nov.r Dec.r Jan.r Feb. Private residential real estate activity (thousands of units except as noted) NEW UNTTS 1 Permits authorized 1,441 1,612 1,640 1,591 1,641 1,641 1,619 1,506 1,594 1,612 1,622 1,772 1,653 2 One-family 1,062 1,188 1,232 1,243 1,241 1,247 1,210 1,171 1,178 1,200 1,228 1,318 1,223 i Two-family or more 379 425 408 348 400 394 409 335 416 412 394 454 430 4 Started 1,474 1,617 1,667 1,649 1,562 1,704 1,657 1,628 1,636 1,663 1,769 1,744 1,807 5 One-family 1,134 1,271 1,335 1,368 1,269 1,348 1,285 1,290 1,343 1,344 1,441 1,361 1,307 6 Two-family or more 340 346 332 281 293 356 372 338 293 319 328 383 500 7 Under constraction at end of period1 833 935 1,022 1,026 1,013 1,017 1,026 1,021 1,020 1,022 1,025 1,032 1,042 8 One-family 570 637 704 706 698 702 706 702 706 708 710 712 714 y Two-family or more 264 297 318 320 315 315 320 319 314 314 315 320 328 10 Completed 1,404 1,473 l,636r 1,680 1,657 1,619 1,581 1,642 1,608 1,653 1,675 1,593 1,712 n One-family 1,120 1,158 l,308r 1,355 1,336 1,262 1,251 1,307 1,274 1,345 1,340 1,294 1,349 12 Two-family or more 285 315 328 325 321 357 330 335 334 308 335 299 363 13 Mobile homes shipped 354 374 348 365 355 336 340 320 321 316 304 307 291 Merchant builder activity in one-family units 14 Number sold 804 886 907 896 948 936 914 848 906 895 921 924 919 15 Number for sale at end of period1 287 300 326r 305 305 306 307 311 314 317 320 323 311 Price of units sold (thousands of dollars)1 16 Median 146.0 152.5 160.0 154.8 158.3 157.9 154.9 162.0 160.0 172.9 165.0 158.0 162.0 17 Average 176.2 181.9 195.7r 188.2 193.4 188.8 193.3 194.4 200.3 212.4 203.2 194.4 202.5 EXISTING UNITS (one-family) 18 Number sold 4,382 4,970 5,197 5,040 5,590 5,310 5,300 5,150 4,880 5,150 5,140 4,450 4,750 Price of units sold (thousands of dollars)2 19 Median 121.8 128.4 133.3 132.8 136.9 136.0 137.4 134.4 132.5 133.2 133.7 132.2 133.7 20 Average 150.5 159.1 168.3 167.4 174.2 171.9 174.3 170.2 167.2 168.9 168.8 168.9 168.1 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 617,877 664,451 706,431r 698,461 698,852 701,961 698,439 698,168 703,447r 717,585 731,771 747,610 758,733 22 Private 474,842 518,987 547,514r 546,880 546,931 545,992 541,793 540,939 544,532r 550,018 557,688 568,277 579,573 23 Residential 265,908 293,569 321,795r 321,803 320,913 320,350 319,656 320,048 322,876r 326,091 330,141 338,624 340,655 24 Nonresidential 208,933 225,418 225,720r 225,077 226,018 225,642 222,137 220,891 221,656r 223,927 227,547 229,653 238,918 25 Industrial buildings 31,355 32,308 26,698r 24,975 25,465 26,246 25,703 25,566 25,387r 26,136 26,771 26,452 28,066 26 Commercial buildings 86,190 95,252 103,lllr 104,134 104,457 103,355 102,407 102,728 102,746r 104,208 104,172 106,363 111,920 27 Other buildings 37,198 39,438 38,774r 38,876 38,592 38,412 37,791 37,727 38,478r 37,820 38,735 39,305 41,027 28 Public utilities and other 54,190 58,421 57,136r 57,092 57,504 57,629 56,236 54,870 55,045r 55,763 57,869 57,533 57,905 29 Public 143,035 145,464 158,917r 151,581 151,921 155,969 156,646 157,229 158,915r 167,566 174,083 179,333 179,160 30 Military 2,559 2,588 2,133 2,128 2,137 2,275 1,682 1,947 2,090R 1,961 2,362 1,773 2,837 31 Highway 44,295 45,067 50,495r 48,542 45,518 47,822 48,182 49,031 47,058r 53,487 56,887 61,855 57,468 32 Conservation and development 5,576 5,487 6,173R 5,101 5,845 5,820 6,598 6,268 6,283R 6,555 7,104 6,484 7,109 33 Other 90,605 92,322 100,117R 95,810 98,421 100,052 100,184 99,983 103,484R 105,563 107,730 109,221 111,746 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) Index level, Item 1999 2000 1999 2000 Mar. 1999 2000 2000 Mar. Mar. June Sept. Dec. Mar. Nov. Dec. Jan. Feb. Mar. CONSUMER PRICES2 (1982-84=100) 1 1.7 3.7 2.7 3.9 2.4 5.8 .2 .2 .2 .5 .7 171.1 1 Food 2.3 2.0 1.5 2.5 2.2 1.7 .2 .1 -.1 .4 .1 166.5 3 -3.1 24.2 16.5 26.0 7.8 50.5 .1 1.8 1.0 4.6 4.9 122.2 4 2.1 2.4 2.1 2.5 1.8 3.2 .2 .1 .2 .2 .4 180.4 .6 1.0 1.7 2.5 -.6 .3 -.2 -.1 -.2 .0 .3 145.3 6 22..88 33..00 22..33 22..55 3.1 44..11 .4 .2 .3 .3 .5 200.5 PRODUCER PRICES (1982=100) 77 .8 4.5 2.5 6.8 1.2 8.2 ,lr .2' .0 1.0 1.0 137.0 88 1.0 .9 -.6 3.3 -1.8 3.0 — .2' ,r .1 .4 .1 135.9 9 -4.0 29.2 22.4 37.6 6.9 57.5 i.r 1.0r .7 5.2 5.8 92.0 10 2.8 1.6 .8 3.8 1.1 .8 -,ir ,i -.4 .5 .1 153.6 1111 -.1 .6 ..00 .3 1.2 .9 ,i .1 .0 .1 138.5 Intermediate materials P -2.0 6.3 5.7 6.6 4.2 9.1 ,,33rr .6' .4 .8 1.0 128.8 1133 --11..66 33..11 22..88 33..44 22..44 33..66 ,,ii .2 .3 .2 .4 136.0 Crude materials 14 -7.1 2.5 -7.7 3.7 -4.0 21.5 1.0 -2.1 .7 .7 3.5 101.3 15 -13.1 70.9 163.8 134.4 -24.3 82.2 11.5r -10.0r 4.4 10.0 1.2 103.4 1166 Other --1122..99 1166..33 77..00 22.6 24.5 11.7 1.0r 2.2r 3.2 -.2 -.2 151.1 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 • June 2000 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1998 1999 AAccccoouunntt 11999977 11999988 11999999RR Q4 Ql Q2 Q3 Q4R GROSS DOMESTIC PRODUCT 1 Total 8,300.8 8,759.9 9,256.1 8,947.6 9,072.7 9,146.2 9,297.8 9,507.9 By source 2 Personal consumption expenditures 5,524.4 5,848.6 6,257.3 5,973.7 6,090.8 6,200.8 6,303.7 6,434.1 3 Durable goods 642.9 698.2 758.6 722.8 739.0 751.6 761.8 782.1 4 Nondurable goods 1,641.7 1,708.9 1,843.1 1,742.9 1,787.8 1,824.8 1,853.9 1,905.8 5 Services 3,239.8 3,441.5 3,655.6 3,508.0 3,564.0 3,624.3 3,688.0 3,746.2 6 Gross private domestic investment 1,383.7 1,531.2 1,622.7 1,580.3 1,594.3 1,585.4 1,635.0 1,675.8 7 Fixed investment 1,315.4 1,460.0 1,578.0 1,508.9 1,543.3 1,567.8 1,594.2 1,606.8 8 Nonresidential 986.1 1,091.3 1,166.7 1,121.4 1,139.9 1,155.4 1,181.6 1,190.0 9 Structures 254.1 272.8 273.4 278.0 274.7 272.5 272.1 274.1 10 Producers' durable equipment 732.1 818.5 893.4 843.4 865.2 882.9 909.5 916.0 11 Residential structures 329.2 368.7 411.3 387.5 403.4 412.4 412.7 416.7 12 Change in business inventories 68.3 71.2 44.6 71.4 51.0 17.6 40.8 69.1 13 Nonfarm 65.6 70.9 41.3 56.2 40.9 12.8 40.1 71.3 14 Net exports of goods and services -88.3 -149.6 -253.9 -161.2 -201.6 -245.8 -278.2 -290.1 15 Exports 968.0 966.3 998.3 981.8 966.9 978.2 1,008.5 1,039.5 16 Imports 1,056.3 1,115.9 1,252.2 1,143.1 1,168.5 1,224.0 1,286.6 1,329.6 17 Government consumption expenditures and gross investment 1,481.0 1,529.7 1,630.1 1,554.8 1,589.1 1,605.9 1,637.2 1,688.0 18 Federal 537.8 538.7 570.6 546.7 557.4 561.6 569.8 593.6 19 State and local 943.2 991.0 1,059.4 1,008.1 1,031.8 1,044.3 1,067.4 1,094.4 By major type of product 20 Final sales, total 8,232.4 8,688.7 9,211.5 8,876.2 9,021.6 9,128.6 9,257.0 9,438.8 21 Goods 3,074.1 3,239.1 3,437.5 3,318.4 3,365.6 3,406.6 3,453.2 3,524.6 22 Durable 1,424.8 1,528.9 1,618.7 1,571.4 1,584.3 1,601.7 1,631.1 1,657.8 23 Nondurable 1,649.3 1,710.3 1,818.8 1,747.0 1,781.3 1,804.9 1,822.2 1,866.9 24 Services 4,434.7 4,664.6 4,932.0 4,747.9 4,820.7 4,885.5 4,963.7 5,058.2 25 Structures 723.7 785.1 842.0 809.9 835.3 836.5 840.1 856.0 26 Change in business inventories 68.3 71.2 44.6 71.4 51.0 17.6 40.8 69.1 27 Durable goods 35.6 39.0 25.8 38.6 24.1 6.3 23.0 49.8 28 Nondurable goods 32.8 32.3 18.9 32.8 27.0 11.4 17.8 19.2 MEMO 29 Total GDP in chained 1996 dollars 8,144.8r 8,495.7r 8,848.2 8,639.5r 8,717.6r 8,758.3r 8,879.8r 9,037.2 NATIONAL INCOME 30 Total 6,635.5r 7,038.8r 7,496.3 7,198.6r 7,339.4r 7,428. lr 7,527.0r 7,690.9 31 Compensation of employees 4,675.7 5,011.2 5,331.7 5,134.7 5,217.7 5,287.1 5,373.6 5,448.3 32 Wages and salaries 3,884.7 4,189.5 4,472.3 4,300.8 4,371.5 4,432.6 4,509.4 4,575.6 33 Government and government enterprises 664.4 692.8 726.5 702.8 715.8 721.3 730.3 738.5 34 Other 3,220.3 3,496.7 3,745.8 3,598.0 3,655.7 3,711.3 3,779.1 3,837.1 35 Supplement to wages and salaries 791.0 821.7 859.4 833.9 846.2 854.5 864.2 872.7 36 Employer contributions for social insurance 290.1 306.0 323.6 311.8 318.3 321.5 325.7 329.0 37 Other labor income 500.9 515.7 535.8 522.1 528.0 533.0 538.5 543.7 38 Proprietors' income1 578.6 606.1 658.5 637.1 639.9 655.3 654.0 685.0 39 Business and professional1 549.1 581.0 627.3 596.0 607.5 621.2 633.0 647.4 40 Farm' 29.5 25.1 31.3 41.1 32.5 34.1 21.0 37.6 41 Rental income of persons2 130.2 137.4 145.9 147.0 148.6 148.8 139.0 147.3 42 Corporate profits' 838.5R 848.4R 892,7 839.0R 886.9R 880.5R 884. lr 919.4 43 Profits before tax3 795.9 781.9 848.5 766.7 818.1 835.8 853.8 886.3 44 Inventory valuation adjustment 7.4 20.9 -13,0 20.8 13.3 -13.6 -26.7 -24.9 45 Capital consumption adjustment 35.3R 45.6R 57.2 51.6R 55.5R 58.2R 57.0R 58.0 46 Net interest 412.5 435.7 467.5 440.8 446.3 456.4 476.3 491.0 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 11999977 11999988 11999999 Q4 Ql Q2 Q3 Q4r PERSONAL INCOME AND SAVING 1 Total personal income 6,951.1 7,358.9 7,791.8R 7,530.8 7,630.2 7,732.6 7,831.4 7,972.9 7 Wage and salary disbursements 3,888.9 4,186.0 4,472.3r 4,297.3 4,371.5 4,432.6 4,509.4 4,575.6 Commodity-producing industries 975.5 1,038.7 1,082.4 1,056.6 1,062.9 1,075.1 1,090.2 1,101.4 4 Manufacturing 718.8 757.5 779.7 765.6 767.0 774.8 786.4 790.7 Distributive industries 879.1 944.6 1,005.8 969.9 986.3 997.6 1,013.4 1,025.8 6 Service industries 1,369.8 1,509.9 l,657.6r 1,568.0 1,606.6 1,638.5 1,675.5 1,709.9 7 Government and government enterprises 664.4 692.8 726.5 702.8 715.8 721.3 730.3 738.5 8 Other labor income 500.9 515.7 535.8 522.1 528.0 533.0 538.5 543.7 9 Proprietors' income1 578.6 606.1 658.5 637.1 639.9 655.3 654.0 685.0 in Business and professional1 549.1 581.0 627.3r 596.0 607.5 621.2 633.0 647.4 n Farm1 29.5 25.1 31.3r 41.1 32.5 34.1 21.0 37.6 I? Rental income of persons2 130.2 137.4 145.9 147.0 148.6 148.8 139.0 147.3 n Dividends 333.4 348.3 364.3 351.9 356.1 361.2 367.0 373.1 14 Personal interest income 854.9 897.8 931.3r 906.4 907.4 920.5 938.8 958.5 15 Transfer payments 962.4 983.6 L,018.2r 991.0 1,007.8 1,013.6 1,021.3 1,030.2 16 Old-age survivors, disability, and health insurance benefits 565.8 578.1 596.4 581.1 588.9 593.0 599.0 604.7 17 LESS: Personal contributions for social insurance 298.1 315.9 334.6 322.0 328.9 332.3 336.7 340.4 18 EQUALS: Personal income 6,951.1 7,358.9 7,791.8C 7,530.8 7,630.2 7,732.6 7,831.4 7,972.9 19 LESS: Personal tax and nontax payments 968.3 1,072.6 l,152.1r 1,113.0 1,124.8 1,139.4 1,160.4 1,183.8 20 EQUALS: Disposable personal income 5,982.8 6,286.2 6,639.7r 6,417.8 6,505.4 6,593.2 6,671.0 6,789.1 21 LESS: Personal outlays 5,711.7 6,056.6 6,483.3r 6,190.3 6,310.3 6,425.2 6,531.5 6,666.3 22 EQUALS: Personal saving 271.1 229.7 156.3r 227.5 195.1 168.0 139.5 122.8 MEMO Per capita (chained 1996 dollars) 73 Gross domestic product 30,391.0r 31,395.8r 32,387.3r 31,809.6r 3322,,003388..22rr 3322,,110055..22rr 3322,,446677..33rr 32,958.4 74 Personal consumption expenditures 20,213.8r 20,997.0r 21,901.9r 21,278.7r 21,577.7r 21,790.7r 21,995.2r 22,257.1 25 Disposable personal income 21,887.0r 22,569.0r 23,244.0r 22,859.0r 23,043.0r 23,172.0r 23,275.0r 23,485.0 26 Saving rate (percent) 4.5 3.7 2.4r 3.5 3.0 2.5 2.1 1.8 GROSS SAVING 27 Gross saving 1,521.3 1,646.0 1,727.1 1,685.4 1,727.8 1,709.5 1,735.6 1,735.8 28 Gross private saving 1,362.0 1,371.2 1,364.7 1,382.3 1,389.4 1,359.3 1,355.7 1,354.3 ?9 Personal saving 271.1 229.7 156.3r 227.5 195.1 168.0 139.5 122.8 30 Undistributed corporate profits1 266.6r 259.6r 268.6 251.2r 282.5r 264.5r 257.4r 270.1 31 Corporate inventory valuation adjustment 7.4 20.9 -13.0 20.8 13.3 -13.6 -26.7 -24.9 Capital consumption allowances 3? Corporate 578.8r 616.9r 661.lr 663322..44rr 664400..99rr 665522..22rr 671,6r 667799..77 33 Noncorporate 249.8 261.5 278.6r 267.7 271.0 274.6 287.2 281.6 34 Gross government saving 159.3 274.8 362.5 303.0 338.3 350.2 379.9 381.4 35 Federal 37.7 134.3 206.3 147.8 187.2 208.3 225.1 204.6 36 Consumption of fixed capital 86.6 87.4 90.9 88.1 89.6 90.2 91.2 92.4 37 Current surplus or deficit (—), national accounts -48.8 46.9 115.4 59.7 97.6 118.1 133.8 112.2 38 State and local 121.5 140.5 156.2 155.2 151.1 141.9 154.8 176.9 39 Consumption of fixed capital 94.0 98.8 105.2' 101.1 102.4 104.3 106.0 108.1 40 Current surplus or deficit (-), national accounts 27.5 41.7 51.0 54.2 48.7 37.6 48.9 68.8 41 Gross investment 1,518.1 1,598.4 1,602.0 1,623.0 1,628.4 1,574.0 1,594.4 1,611.3 47 Gross private domestic investment 1,383.7 1,531.2 l,622.7r 1,580.3 1,594.3 1,585.4 1,635.0 1,675.8 43 Gross government investment 258.1 268.7 297.9r 272.6 289.8 292.2 295.7 313.7 44 Net foreign investment -123.7 -201.5 -318.5 -229.9 -255.7 -303.7 -336.3 -378.2 45 Statistical discrepancy -3.2 -47.6 -125.1 -62.4 -99.4 -135.5 -141.2 -124.5 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 • June 2000 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted' 1998 1999 IItteemm ccrreeddiittss oorr ddeebbiittss 11999977 11999988 11999999 Q4 Qi Q2 Q3 Q4 1 Balance on current account -143.465 -220,562 -338,918 -61,669 -68,902 -81,157 -89,085 -99,779 2 Balance on goods and services -104,730 -164,282 -267,548 -43,262 -54,177 -65,290 -72,588 -75,496 3 Exports 938,543 933,907 960,088 236,904 231,567 234,174 243,254 251,092 4 Imports -1,043,273 -1,098,189 -1,227,636 -280,166 -285,744 -299,464 -315,842 -326,588 5 Income, net 3,231 -12,205 -24,789 -4,933 -4,419 -4,692 -5,289 -10,391 6 Investment, net 8,185 -6,956 -19,186 -3,571 -3,029 -3,308 -3,887 -8,964 7 Direct 69,220 59,405 58,433 14,558 14,757 13,913 16,543 13,218 8 Portfolio -61,035 -66,361 -77,619 -18,129 -17,786 -17,221 -20,430 -22,182 9 Compensation of employees -4,954 -5,249 -5,603 -1,362 -1,390 -1,384 -1,402 -1,427 10 Unilateral current transfers, net -41,966 -44,075 -46,581 -13,474 -10,306 -11,175 -11,208 -13,892 11 Change in U.S. government assets other than official reserve assets, net (increase, —) 68 -429 -365 -50 119 -392 -686 594 12 Change in U.S. official reserve assets (increase, —) -1,010 -6,784 8,749 -2,369 4,068 1,159 1,950 1,572 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -350 -149 12 -227 563 -190 -185 -176 15 Reserve position in International Monetary Fund -3,575 -5,118 5,485 -1,924 3 1,413 2,268 1,801 16 Foreign currencies 2,915 -1,517 3,252 -218 3,502 -64 -133 -53 17 Change in U.S. private assets abroad (increase, -) -464,354 -285,605 -380,951 -48,188 -19,581 -155,726 -114,652 -90,988 18 Bank-reported claims3 -144,822 -24,918 -61,424 37,192 27,771 -42,519 -8,799 -37,877 19 Nonbank-reported claims -120,403 -25,041 -69,493 16,202 -13,853 -16,816 -24,066 -14,758 20 U.S. purchases of foreign securities, net -89,174 -102,817 -97,882 -70,809 8,132 -64,579 -34,431 -7,004 21 U.S. direct investments abroad, net -109,955 -132,829 -152,152 -30,773 -41,631 -31,812 -47,356 -31,349 22 Change in foreign official assets in United States (increase, +) 18,119 -21,684 44,570 24,352 4,708 -628 11,881 28,609 23 U.S. Treasury securities -6,690 -9,957 12,073 31,836 800 -6,708 12,963 5,018 24 Other U.S. government obligations 4,529 6,332 20,350 1,562 5,993 5,792 1,835 6,730 25 Other U.S. government liabilities3 -1.798 -3,113 -3,698 -1,054 -1,594 -647 -1,070 -387 26 Other U.S. liabilities reported by U.S. banks3 22,286 -11,469 14,937 -7,133 -589 1,437 -2,032 16,121 27 Other foreign official assets4 —208 -3,477 908 -859 98 -502 185 1,127 28 Change in foreign private assets in United States (increase, +) 733,542 524,321 706,195 125,453 84,260 275,007 195,854 151,077 29 U.S. bank-reported liabilities2 149,026 40,731 67,713 -21,811 -14,184 34,938 22,629 24,330 30 U.S. nonbank-reported liabilities 107,779 9,412 29,411 -53,210 20,188 8,871 3,475 -3,123 31 Foreign private purchases of U.S. Treasury securities, net 146,433 46,155 -21,756 24,391 -8,781 -5,407 9,639 -17,207 32 U.S. currency flows 24,782 16,622 22,407 6,250 2,440 3,057 4,697 12,213 33 Foreign purchases of other U.S. securities, net 196,258 218,026 325,913 49,328 61,540 79,067 94,573 90,733 34 Foreign direct investments in United States, net 109,264 193,375 282,507 120,505 23,057 154,481 60,841 44,131 35 Capital account transactions, net5 292 617 -172 166 166 178 175 -691 36 Discrepancy -143,192 10,126 -39,108 -37,695 -4,838 -38,441 -5,437 9,606 37 Due to seasonal adjustment 4,144 5,650 662 -9,615 3.301 38 Before seasonal adjustment -143,192 10,126 -39,108 -41,839 -10,488 -39,103 4,178 6,305 MEMO Changes in official assets 39 U.S. official reserve assets (increase, —) -1,010 -6,784 8,749 -2,369 4,068 1,159 1,950 1,572 40 Foreign official assets in United States, excluding line 25 (increase, +) 19,917 -18,571 48,268 25,406 6,302 19 12,951 28,996 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 12,124 -11,499 968 2,057 2,058 1,966 -983 -2,073 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38-^11. corporations and state and local governments. 2. Reporting banks included all types of depository institutions as well as some brokers 5. Consists of capital transfers (such as those of accompanying migrants entering or and dealers. leaving the country and debt forgiveness) and the acquisition and disposal of nonproduced 3. Associated primarily with military sales contracts and other transactions arranged with nonfinancial assets. or through foreign official agencies. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current 4. Consists of investments in U.S. corporate stocks and in debt securities of private Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Summary Statistics A51 3.11 U.S. FOREIGN TRADE1 Millions of dollars; monthly data seasonally adjusted 1999 2000 IItteemm 11999977 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan. Feb." 1 Goods and services, balance -104,731 -164,282 -267,575 -23,747 -23,548 -24,935 -25,974 -24,610 -27,447 -29,241 2 Merchandise -196,652 -246,932 -347,158 -30,192 -30,271 -31,876 -32,869 -31,494 -34,154 -35,953 3 Services 91,921 82,650 79,583 6,445 6,723 6,941 6,895 6,884 6,707 6,712 4 Goods and services, exports 938,543 933,907 960,288 82,188 82,266 82,711 83,021 85,562 84,342 84,186 5 Merchandise 679,715 670,246 683,221 59,044 58,839 58,832 59,184 61,942 60,714 60,206 6 Services 258,828 263,661 277,067 23,144 23,427 23,879 23,837 23,620 23,628 23,980 7 Goods and services, imports -1,043,273 -1,098,189 -1,227,863 -105,935 -105,814 -107,646 -108,995 -110,172 -111,789 -113,427 8 Merchandise -876,366 -917,178 -1,030,379 -89,236 -89,110 -90,708 -92,053 -93,436 -94,868 -96,159 9 Services -166,907 -181,011 -197,484 -16,699 -16,704 -16,938 -16,942 -16,736 -16,921 -17,268 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 2000 AAsssseett 11999966 11999977 11999988 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Total 75,090 69,954 81,755 73,414 73,230 72,318 71,516 69,898 69,309 70,789 66,587 2 Gold stock, including Exchange Stabilization Fund1 11,049 11,050 11,041 11,047 11,049 11,049 11,089 11,048 11,048 11,048 11,048 3 Special drawing rights2'3 10,312 10,027 10,603 10,284 10,232 10,326 10,336 10,199 10,277 10,335 10,122 4 Reserve position in International Monetary Fund2 15,435 18,071 24,111 19,978 19,571 18,707 17,950 17,710 17,578 17,871 15,403 5 Foreign currencies4 38,294 30,809 36,001 32,105 32,378 32,236 32,182 30,941 30,406 31,535 30,014 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 2000 AAsssseett 11999966 11999977 11999988 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr.p 1 Deposits 167 457 167 243 189 501 71 82 87 125 142 Held in custody 2 U.S. Treasury securities2 638,049 620,885 607.574 634,086 621,351 629,430 632,482 627,326 631,421 641,830 632,216 3 Earmarked gold3 11,197 10,763 10,343 10,155 10,114 10,015 9,933 9,866 9,771 9,711 9,711 1. Excludes deposits and U.S. Treasury securities held for internationa land 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 • June 2000 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 1999 2000 IItteemm 11999977 11999988 Aug. Sept. Oct. Nov. Dec. Jan. Feb.p 1 Total1 776,505 759,928 782,490 778,640 782,865 779,191 806,046r 808,231 812,110 By type 2 Liabilities reported by banks in the United States 135,384 125,883 126,220 124,148 124,523 122,505 138,575r 134,510 130,025 3 U.S. Treasury bills and certificates3 148,301 134,177 153,499 152,457 154,582 153,465 156,177r 153,548 156,995 U.S. Treasury bonds and notes 4 Marketable 428,004 432,127 422,591 420,877 419,629 417,304 422,266 429,029 430,806 5 Nonmarketable4 5,994 6,074 6,060 6,098 6,139 6,177 6,111 6,152 6,191 6 U.S. securities other than U.S. Treasury securities5 58,822 61,667 74,120 75,060 77,992 79,740 82,917 84,992 88,093 By area 7 Europe1 252,289 256,026 243,334 241,233 243,412 242,587 244,805r 246,022 248,792 8 Canada 36,177 36,715 39,342 39,337 39,682 39,081 38,666 39,439 39,358 9 Latin America and Caribbean 96,942 79,503 75,339 74,279 73,627 70,632 73,518r 71,888 71,180 10 Asia 400.144 400,631 438,264 437,895 439,811 441,070 463,434 463,561 465,847 11 Africa 9,981 10,059 8,140 8,236 7,868 7,174 7,520 8,205 7,973 12 Other countries 7,058 3,080 4,157 3,746 4,551 4,733 4,189 5,202 5,046 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 1999 IItteemm 11999966 11999977 11999988 Mar. June Sept. Dec. 1 Banks' liabilities 103,383 117,524 101,125 101,360 97,820 111,221 97,223 2 Banks' claims 66,018 83,038 78,162 80,640 67,946 79,418 79,155 3 Deposits 22,467 28,661 45,985 40,957 39,801 45,099 46,232 4 Other claims 43,551 54,377 32,177 39,683 28,145 34,319 32,923 5 Claims of banks' domestic customers2 10,978 8,191 20,718 11,039 23,474 11,534 20,826 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A53 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 1999 2000 IItteemm 11999977 11999988 11999999rr Aug. Sept. Oct. Nov. Dec.' Jan. Feb.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,283,027 1,347,837 1,413,074 l,387,623r l,382,451r 1,377,112r l,422,378r 1,413,074 1,413,444 1,398,607 2 Banks' own liabilities 882,980 884,939 975,791 908,237r 928,497r 932,195r 976,348' 975,791 981,094 962,058 3 Demand deposits 31,344 29,558 42,917 44,940 44,594 39,452r 42,889 42,917 36,555 39,673 4 Time deposits2 198,546 151,761 167,182 154,433 156,316r 162,271' 166,483 167,182 165,190 170,756 5 Other3 168,011 140,752 162,485 152,766 161,867r 155,705' 162,708' 162,485 174,656 164,579 6 Own foreign offices4 485,079 562,868 603,207 556,098r 565,720r 574,767' 604,268' 603,207 604,693 587,050 7 Banks' custodial liabilities5 400,047 462,898 437,283 479,386 453,954r 444,917' 446,030' 437,283 432,350 436,549 8 U.S. Treasury bills and certificates6 193,239 183,494 185,797 192,096 189,030 188,486 184,675 185,797 181,879 184,604 9 Other negotiable and readily transferable instruments7 93,641 141,699 132,575 133,789 131,726 131,464 131,859 132,575 129,551 128,673 10 Other 113,167 137,705 118,911 153,501 133,198r 124,967' 129,496' 118,911 120,920 123,272 11 Nonmonetary international and regional organizations8 . . 11,690 11,883 14,872 18,268 19,799r 17,893 14,043 14,872 21,615 20,095 12 Banks' own liabilities 11,486 10,850 13,953 16,856 18,879r 17,052 13,156 13,953 20,759 19,172 13 Demand deposits 16 172 98 31 21 187 70 98 202 148 14 Time deposits2 5,466 5,793 10,349 6,419 7,370 8,772 7,675 10,349 9,621 9,151 15 Other3 6,004 4,885 3,506 10,406 ll,488r 8,093 5,411 3,506 10,936 9,873 16 Banks' custodial liabilities5 204 1,033 919 1,412 920 841 887 919 856 923 17 U.S. Treasury bills and certificates6 69 636 680 896 661 628 658 680 625 704 18 Other negotiable and readily transferable instruments7 133 397 233 516 259 213 229 233 225 213 19 Other 2 0 6 0 0 0 0 6 6 6 20 Official institutions9 283,685 260,060 294,752 279,719 276,605 279,105 275,970 294,752 288,058 287,020 21 Banks' own liabilities 102,028 80,256 97,373 77,801 76,780 79,376 80,029 97,373 82,435 79,409 22 Demand deposits 2,314 3,003 3,341 2,537 2,932 2,314 2,829 3,341 2,645 3,306 23 Time deposits2 41,396 29,506 28,700 24,407 25,271r 29,152 27,009 28,700 25,666 27,447 24 Other3 58,318 47,747 65,332 50,857 48,577r 47,910 50,191 65,332 54,124 48,656 25 Banks' custodial liabilities5 181,657 179,804 197,379 201,918 199,825 199,729 195,941 197,379 205,623 207,611 26 U.S. Treasury bills and certificates6 148,301 134,177 156,177 153,499 152,457 154,582 153,465 156,177 153,548 156,995 27 Other negotiable and readily transferable instruments7 33,151 44,953 41,152 48,297 46,633 44,804 42,331 41,152 51,522 50,298 28 Other 205 674 50 122 735 343 145 50 553 318 29 Banks10 815,247 885,336 901,425 888,649r 880,533r 877,167' 923,780' 901,425 901,612 878,505 30 Banks' own liabilities 641,447 676,057 729,398 677,252r 692,545r 698,718' 739,978' 729,398 736,922 716,330 31 Unaffiliated foreign banks 156,368 113,189 126,191 121,154 126,825r 123,951' 135,710' 126,191 132,229 129,280 32 Demand deposits 16,767 14,071 17,583 15,436 14,084 17,111 14,402 17,583 12,964 12,424 33 Time deposits2 83,433 45,904 48,199 49,623 49,649r 48,693 54,388 48,199 51,218 51,522 34 Other3 56,168 53,214 60,409 56,095 63,092r 58,147' 66,920' 60,409 68,047 65,334 35 Own foreign offices4 485,079 562,868 603,207 556,098r 565,720r 574,767' 604,268' 603,207 604,693 587,050 36 Banks' custodial liabilities5 173,800 209,279 172,027 211,397 187,988r 178,449' 183,802' 172,027 164,690 162,175 37 U.S. Treasury bills and certificates6 31,915 35,359 16,936 26,314 24,749 22,203 19,512 16,936 17,582 14,635 38 Other negotiable and readily transferable instruments7 35,393 45,332 45,695 41,541 40,370 41,529 44,889 45,695 36,426 34,629 39 Other 106,492 128,588 109,396 143,542 122,869r 114,717' 119,401' 109,396 110,682 112,911 40 Other foreigners 172,405 190,558 202,025 200,987 205,514 202,947' 208,585' 202,025 202,159 212,987 41 Banks' own liabilities 128,019 117,776 135,067 136,328 140,293 137,049' 143,185' 135,067 140,978 147,147 42 Demand deposits 12,247 12,312 21,895 26,936 27,557 19,840' 25,588 21,895 20,744 23,795 43 Time deposits2 68,251 70,558 79,934 73,984 74,026 75,654' 77,411 79,934 78,685 82,636 44 Other3 47,521 34,906 33,238 35,408 38,710 41,555' 40,186' 33,238 41,549 40,716 45 Banks' custodial liabilities5 44,386 72,782 66,958 64,659 65,221 65,898 65,400 66,958 61,181 65,840 46 U.S. Treasury bills and certificates6 12,954 13,322 12,004 11,387 11,163 11,073 11,040 12,004 10,124 12,270 47 Other negotiable and readily transferable instruments7 24,964 51,017 45,495 43,435 44,464 44,918 44,410 45,495 41,378 43,533 48 Other 6,468 8,443 9,459 9,837 9,594 9,907 9,950 9,459 9,679 10,037 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 16,083 27,026 30,345 22,565 24,367 26,550 28,320 30,345 28,344 27,266 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 • June 2000 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued 1999 2000 IItteemm 11999977 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan. Feb.p AREA 50 Total, all foreigners 1,283,027 1,347,837 L,413,074R L,387,623R L,382,451R L,377,112R L,422,378R L,413,074R 1,413,444 1,398,607 51 Foreign countries 1,271,337 1,335,954 L,398,202R L,369,355R L,362,652R L,359,219R L,408,335R L,398,202R 1,391,829 1,378,512 52 Europe 419,672 427,375 448,004r 452,885r 457,041r 442,633r 470,893r 448,004r 449,971 451,718 53 Austria 2,717 3,178 2,789 3,210 3,205 3,299 2,842 2,789 2,648 2,997 54 Belgium and Luxembourg 41,007 42,818 44,692 36,908r 37,130r 38,750r 41,331 44,692 42,434 38,783 55 Denmark 1,514 1,437 2,196 1,811 1,903 2,658 3,197 2,196 2,510 2,533 56 Finland 2,246 1,862 1,658 1,335 1,222 1,269 1,894 1,658 1,290 1.479 5 7 France 46,607 44,616 49,790 42,424 45,809 45,763r 50,26 lr 49,790 48,530 49,839 58 Germany 23,737 21,357 24,748 23,719 24,485 25,472r 26,530r 24,748 24,097 24,201 59 Greece 1,552 2,066 3,748 3,121 3,358 3,322 3,365 3,748 3,145 4,000 60 Italy 11,378 7,103 6,775 5,832 6,231 6,305r 5,264 6,775 6,261 5,405 61 Netherlands 7,385 10,793 8,310 1 l,284r ll,626r 13,874r 12,775 8,310 7,271 7,797 62 Norway 317 710 1,327 1,333 1,225 951 1,364 1,327 834 1,169 63 Portugal 2,262 3,236 2,228 1,912 1,976 1,875 2,148 2,228 2,034 2,113 64 Russia 7,968 2,439 5,475 2,665 2,816 3,713 3,655 5,475 6,404 7,543 65 Spain 18,989 15,781 10,426 8,202 9,479 9,287 11,181 10,426 12,531 12,130 66 Sweden 1,628 3,027 4,652 3,779 4,571 5,381 5,518 4,652 4,673 4,792 67 Switzerland 39,023 50,654 65,985 76,176 68,971r 65,966r 67,025r 65,985 64,282 61,335 68 Turkey 4,054 4,286 7,842 7,883 8,368 8,250r 8,817 7,842 6,912 7,714 69 United Kingdom 181,904 181,554 176,168r 192,431 196,710r 177,992r 195,453r 176,168r 184,457 188,043 70 Yugoslavia11 239 233 286 270 266 267 267 286 273 294 71 Other Europe and other former U.S.S.R.12 25,145 30,225 28,909r 28,590 27,690 28,239 28,006 28,909r 29,385 29,551 72 Canada 28,341 30.212 34,119 30,409 29,728 34,995 33,746 34,119 32,965 33,387 73 Latin America and Caribbean 536,393 554,866 577,599r 581,427r 572,664r 576,142r 594,400r 577,599r 599.473 587,209 74 Argentina 20,199 19,014 18,633r 17,064 15,547 17,547r 15,042 18,633r 15,333 16,327 75 Bahamas 112,217 118,085 134,407 132,442 139,101 134,111 139,179 134,407 149,727 155,720 76 Bermuda 6,911 6,846 7,877 9,319 8,747 10,902 8,859 7,877 9,910 9,106 77 Brazil 31,037 15,815 12,860 15,423 16,241 13,252r 14,184 12,860 12,230 12,785 78 British West Indies 276,418 302,486 312,664r 315,843 302,016r 31 l,509r 328,052r 312,664r 320,245 302,939 79 Chile 4,072 5,015 7,008 5,805 6,601 6,559 6,521 7,008 6,366 6,244 80 Colombia 3,652 4,624 5,656 4,455 4,711 5,011 4,783 5,656 4,438 4,304 81 Cuba 66 62 75 72 76 72 73 75 75 75 82 Ecuador 2,078 1.572 1,956 1,724 1,792 1,833 1,930 1,956 1,985 2,035 83 Guatemala 1,494 1,336 1,621 1,521 1,471 1,484 1,577 1,621 1,630 1,611 84 Jamaica 450 577 520 533 550 549 546 520 540 571 85 Mexico 33,972 37.157 30,718 36,301 35,028 32,210r 31,189r 30,718 32,090 32,216 86 Netherlands Antilles 5,085 5,010 3,997 3,416r 2,935r 2,696r 3,389 3,997 4,269 3,692 87 Panama 4,241 3,864 4,415 3,816 4,029 4,007 3,834 4,415 4,042 3,737 88 Peru 893 840 1,142 995 1,042 958r 997 1,142 1,073 1,051 89 Uruguay 2,382 2,486 2,386 2,151 2,177 2,219r 2,585 2,386 2,260 2,262 90 Venezuela 21,601 19,894 20,189 19,797 19,451 19,914 20,311 20,189 21,517 21,297 91 Other 9,625 10,183 1 l,475r 10,750 11,149 ll,309r 11,349 ll,475r 11,743 11,237 92 Asia 269,379 307,960 319,361r 288,982 287,347r 287,963 229922,,007788 331199,,336611rr 229900,,441177 228877,,338899 China 93 Mainland 18,252 13,441 12,325 12,359 11,914 10,460 13,981 12,325 11,570 11,661 94 Taiwan 11,840 12,708 13,595 12,678 12,514 12,023 14,791 13,595 11,667 11,213 95 Hong Kong 17,722 20,900 27,697 24,149 23,368 24,299 22,276 27,697 25,951 24,049 96 India 4,567 5,250 7,367 5,408 5,625 5,659 5,610 7,367 5,491 5,405 97 Indonesia 3,554 8,282 6,567 6,633 6,468 6,037 6,486 6,567 6,853 7,495 98 Israel 6,281 7,749 7,488 5,059 5,688 5,175 5,071 7,488 6,581 7,669 99 Japan 143,401 168,563 159,075r 145,403 149,698r 151,632 152,095 159,075r 149,033 145,314 100 Korea (South) 13,060 12,524 12,840 12,723 11,903 9,935 8,474 12,840 11,558 12,620 101 Philippines 3,250 3,324 3,253 2,189 2,414 2,134 2,639 3,253 1,938 2,541 102 Thailand 6,501 7,359 6,050 5,809 5,281 4,983 5,164 6,050 5,399 5,134 103 Middle Eastern oil-exporting countries13 14,959 15,609 21,280 15,942 14,367 16,825 17,944 21,280 16,923 15,807 104 Other 25,992 32,251 41,824 40,630 38,107 38,801 37,547 41,824 37,453 38.481 105 Africa 10,347 8,905 9,469 7,660 8,045 8,037 7,799 9,469 8,106 8,271 106 Egypt 1,663 1.339 2,022 1,851 1,852 1,364 1,846 2,022 1,616 1,703 107 Morocco 138 97 179 108 118 174 166 179 176 262 108 South Africa 2,158 1,522 1,495 885 753 828 957 1,495 730 698 109 Zaire 10 5 14 13 13 14 13 14 7 13 no Oil-exporting countries14 3,060 3,088 2,915 2,510 2,807 2,912 2,248 2,915 2,953 3,099 111 Other 3,318 2,854 2,844 2,293 2,502 2,745 2,569 2,844 2,624 2,496 112 Other 7,205 6,636 9,650r 7,992 7,827 9,449 9,419 9,650r 10,897 10,538 113 Australia 6,304 5,495 8,377 6,963 6,788 8,199 8,394 8,377 9,910 9,335 114 Other 901 1,141 l,273r 1,029 1,039 1,250 1,025 l,273r 987 1,203 115 Nonmonetary international and regional organizations . . 11,690 11,883 14,872r 18,268 19,799r 17,893 14,043 14,872r 21,615 20,095 116 International15 10,517 10,221 12,972r 16,112 17,723r 16,009 12,710 12,972r 19,516 17,520 117 Latin American regional16 424 594 650 725 662 960 345 650 1,128 1,558 118 Other regional17 749 1,068 1,250 1,431 1,414 924 988 1,250 971 1,017 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 15. Principally the International Bank for Reconstruction and Development. Excludes 12. Includes the Bank for International Settlements. Since December 1992, has "holdings of dollars" of the International Monetary Fund. included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 17. Asian, African, Middle Eastern, and European regional organizations, except the Bank Emirates (Trucial States). for International Settlements, which is included in "Other Europe." 14. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 1999 2000 AArreeaa oorr ccoouunnttrryy 11999977 11999988 11999999 Aug. Sept. Oct. Nov. Dec. Jan. Feb.p 1 Total, all foreigners 708,225 734,995 793,421r 731,113r 759,084r 752,319r 779,765r 793,421r 755,381 740,609 2 Foreign countries 705,762 731,378 788,855r 727,957r 755,494r 747,029r 774,100r 788,855r 749,760 735,942 3 Europe 199,880 233,321 313,955r 305,205 316,617r 293,618r 313,288 313,955' 306,304 312,700 4 Austria 1,354 1,043 2,643 3,080 2,335 2,752r 2,407 2,643 3,020 2,471 5 Belgium and Luxembourg 6,641 7,187 10,193r 7,478 7,239 9,624 9,332 10,193r 8,898 9,771 6 Denmark 980 2,383 1,669 1,442 1,756 2,352 1,756 1,669 1,702 1,743 7 Finland 1,233 1,070 2,020r 1,915 1,855 1,669 2,034 2,020r 2,328 1,846 8 France 16,239 15,251 29,142r 19,040 19,253 21,533r 24,592 29,142r 30,051 28,303 9 Germany 12,676 15,923 29,205r 23,558 22,995 23,616 22,365 29,205r 29,871 28,887 in Greece 402 575 806 659 663 743 754 806 793 683 11 Italy 6,230 7,284 8,496 7,748 7,958 6,682 7,297 8,496 8,614 6,785 1? Netherlands 6,141 5,697 10,477r 10,132 9,425 8,940 8,100 10,477r 10,144 10,151 13 Norway 555 827 867r 583 1,252 949 920 867r 1,243 1,013 14 Portugal 777 669 1,571 1,222 1,342 1,691 1,430 1,571 1,307 1,155 15 Russia 1,248 789 713 782 814 871 711 713 701 743 16 Spain 2,942 5,735 3,796 3,700 5,104 4,073 4,641 3,796 4,581 4,339 17 Sweden 1,854 4,223 3,213 4,082 4,184 4,325 3,853 3,213 4,505 5,331 18 Switzerland 28,846 46,874 79,086r 71,866 90,380r 78,448 91,493 79,086r 68,904 70,178 19 Turkey 1,558 1,982 2,617 2,270 2,385 2,403r 2,491 2,617 2,969 3,031 70 United Kingdom 103,143 106,349 119,829r 137,680 129,619r 114,209 120,836 119,829r 119,886 128,046 21 Yugoslavia2 52 53 50 49 50 51 50 50 50 50 22 Other Europe and other former U.S.S.R.' 7,009 9,407 7,562 7,919 8,008 8,687 8,226 7,562 6,737 8,174 23 Canada 27,189 47,037 37,196r 32,109 37,197 35,903 37,060 37,196r 36,474 38,541 74 Latin America and Caribbean 343,730 342,654 353,409r 310,088 320,952 335,163r 335,356 353,409r 323,534 306,322 75 Argentina 8,924 9,552 10,167 10,253 10,293 10,148r 10,034 10,167 9,962 10,092 76 Bahamas 89,379 96,455 99,324 77,674 85,386 87,083r 87,177 99,324 78,641 68,914 77 Bermuda 8,782 5,011 8,007 9,747 8,481 9,887 9,449 8,007 10,145 11,771 78 Brazil 21,696 16,184 15,706 13,793 13,983 14,218r 14,973 15,706 15,031 15,359 79 British West Indies 145,471 153,749 167,182r 137,214 142,500 159,171r 158,937 167,182r 157,469 148,316 3n Chile 7,913 8,250 6,607 6,900 6,810 6,846 6,591 6,607 6,672 6,224 31 Colombia 6,945 6,507 4,529r 5,040 4,818 4,800 4,745 4,529r 4,331 4,176 37 Cuba 0 0 0 0 0 0 0 0 0 0 33 Ecuador 1,311 1,400 760 889 844 792r 761 760 692 730 34 Guatemala 886 1,127 1,133 1,053 1,064 1,084 1,090 1,133 1,065 1,169 35 Jamaica 424 239 295 322 330 319r 309 295 298 332 36 Mexico 19,428 21,212 17,899r 17,819 18,255 17,792r 17,924 17,899r 17,848 17,480 37 Netherlands Antilles 17,838 6,779 5,982r 14,032 13,298 7,497 8,078 5,982r 6,194 6,341 38 Panama 4,364 3,584 3,387 2,898 2,941 2,917 3,050 3,387 3,067 2,970 39 Peru 3,491 3,275 2,529 2,515 2,533 2,442 2,507 2,529 2,462 2,411 40 Uruguay 629 1,126 801 1,041 945 778 775 801 709 777 41 Venezuela 2,129 3,089 3,494 3,460 3,325 4,103 3,587 3,494 3,571 3,524 42 Other 4,120 5,115 5,607r 5,438 5,146 5,286r 5,369 5,607r 5,377 5,736 43 125,092 98,607 74,922r 73,240r 72,448r 73,099r 78,454r 74,922r 73,338 69,032 China 44 Mainland 1,579 1,261 2,090 2,758 2,032 1,998 2,082 2,090 2,221 2,726 45 Taiwan 922 1,041 l,390r 937 790 816 1,495 l,390r 1,462 1,501 46 Hong Kong 13,991 9,080 5,893r 4,969 5,224 4,740 6,010 5,893r 5,240 4,453 47 India 2,200 1,440 1,738 1,728 1,736 1,856 1,972 1,738 1,616 1,802 48 Indonesia 2,651 1,942 1,776 1,711 1,689 1,636 1,681 1,776 1,711 1,743 49 Israel 768 1,166 1,875 l,652r 934r 851r 1,053 1,875 1,853 1,832 50 Japan 59,549 46,713 28,636r 26,226 28,003r 28,363r 30,305r 28,636r 28,597 25,540 51 Korea (South) 18,162 8,289 9,267r 12,194 1 l,085r 12,441r 13,262 9,267r 11,386 12,043 57 Philippines 1,689 1,465 1,410 1,279 1,491 l,562r 990 1,410 1,088 1,058 53 Thailand 2,259 1,807 1,518 1,549 1,432 1,411 1,433 1,518 1,158 1,275 54 Middle Eastern oil-exporting countries4 10,790 16,130 14,252 11,221 11,379 10,667 11,631 14,252 10,774 10,947 55 Other 10,532 8,273 5,077r 7,016 6,653r 6,758 6,540 5,077r 6,232 4,112 56 3,530 3,122 2,268r 2,178 2,293 2,299 2,473 2,268 2,786 2,453 57 Egypt 247 257 258 209 225 251 233 258 222 207 58 Morocco 511 372 352 444 437 439 354 352 299 313 59 South Africa 805 643 622 449 506 589 873 622 943 889 60 Zaire 0 0 24 0 0 0 9 24 0 0 61 Oil-exporting countries5 1,212 936 276 280 323 253 275 276 494 228 62 Other 755 914 736r 796 802 767 729 736r 828 816 63 Other 6,341 6,637 7,105r 5,137 5,987 6,947 7,469 7,105r 7,324 6,894 64 Australia 5,300 6,173 6,824r 4,907 5,770 6,696 7,272 6,824r 7,113 6,682 65 Other 1,041 464 281 230 217 251 197 281 211 212 66 Nonmonetary international and regional organizations6. . . 2,463 3,617 4,566r 3,156 3,590 5,290 5,665 4,566r 5,621 4,667 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 • June 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 2000 TTyyppee ooff ccllaaiimm 11999977 11999988 11999999rr Aug. Sept. Oct.r Nov.r Dec.r Jan. Feb.p 1 Total 852,852 875,891 943,357 901,046r 943,357 2 Banks' claims 708,225 734,995 793,421 731,113r 759,084r 752,319 779,765 793,421 755,381 740,609 3 Foreign public borrowers 20,581 23,542 35,213 35,701 35,002 40,948 39,910 35,213 42,352 36,640 4 Own foreign offices2 431,685 484,535 528,036 457,994 488,820r 487,624 511,669 528,036 490,013 488,112 5 Unaffiliated foreign banks 109,230 106,206 101,230 108,885r 102,012r 97,262 99,497 101,230 93,527 87,597 6 Deposits 30,995 27,230 34,320 23,708 24,407 24,865 27,835 34,320 24,239 21,265 7 Other 78,235 78,976 66,910 85,177r 77,605r 72,397 71,662 66,910 69,288 66,332 8 All other foreigners 146,729 120,712 128,942 128,533 133,250r 126,485 128,689 128,942 129,489 128,260 9 Claims of banks' domestic customers3 144,627 140,896 149,936 141,962 149,936 10 Deposits 73,110 79,363 86,293 87,222 86,293 11 Negotiable and readily transferable instruments4 53,967 47,914 51.011 40,604 51,011 12 Outstanding collections and other claims 17,550 13,619 12,632 14,136 12,632 MEMO 13 Customer liability on acceptances 9,624 4,520 4,672 4,620 4,672 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 33,816 39,978 34,789 32,336 27,750 33,847 37,163 34,789 46,020 54,565 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 1999 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999966 11999977 11999988 Mar. June Sept. Dec. 1 Total 258,106 276,550 250,418 242,348 260,554 270,085 263,548 By borrower 2 Maturity of one year or less 211,859 205,781 186,526 175,391 186,818 196,816 187,396 3 Foreign public borrowers 15,411 12,081 13,671 20,902 24,661 22,603 22,527 4 All other foreigners 196,448 193,700 172,855 154,489 162,157 174,213 164,869 5 Maturity of more than one year 46,247 70,769 63,892 66,957 73,736 73,269 76,152 6 Foreign public borrowers 6,790 8,499 9,839 13,290 11,677 12,193 12,043 7 All other foreigners 39,457 62,270 54,053 53,667 62,059 61,076 64,109 By area Maturity of one year or less 8 Europe 55,690 58,294 68,679 66,875 84,723 82,567 80,967 9 Canada 8,339 9,917 10,968 7,832 6,705 8,545 7,860 10 Latin America and Caribbean 103,254 97,207 81,766 71,111 65,776 78,122 69,299 11 Asia 38,078 33,964 18,007 21,347 21,977 20,839 21,795 12 Africa 1,316 2,211 1,835 1,571 1,543 1,119 1,122 13 All other3 5,182 4,188 5,271 6,655 6,094 5,624 6,353 Maturity of more than one year 14 Europe 6,965 13,240 14,923 16,949 18,863 18,618 20,896 15 Canada 2,645 2,525 3,140 2,766 3,261 3,192 3,112 16 Latin America and Caribbean 24,943 42,049 33,442 33,538 38,193 38,091 38,558 17 Asia 9,392 10,235 10,018 10,972 10,471 10,649 10,888 18 Africa 1,361 1,236 1,232 1,160 1,105 1,087 1,065 19 All other3 941 1,484 1,137 1,572 1,843 1,632 1,633 1. Reporting banks include all types of depository institutions as well as some brokers and 2. Maturity is time remaining until maturity, dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Nonbank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks1 Billions of dollars, end of period 1997 1998 1999 Area or country 11999955 11999966 Dec. Mar. June Sept. Dec. Mar. June Sept. Dec. 1 Total 556.4 645.8 721.8 1029.8 1017.2 1071.9 1051.6 992.7 938.5 936.9 934.4 2 G-10 countries and Switzerland 206.0 228.3 242.8 250.9 273.9 240.0 217.7 208.5 222.2 205.5 235.0 3 Belgium and Luxembourg 13.6 11.7 11.0 12.0 14.0 11.7 10.7 15.6 16.1 15.7 14.2 4 France 19.4 16.6 15.4 16.5 21.7 20.3 18.4 21.6 20.4 19.9 29.0 5 Germany 27.3 29.8 28.6 27.0 30.5 31.4 30.9 34.7 32.1 37.4 38.7 6 Italy 11.5 16.0 15.5 20.8 21.1 18.5 11.5 17.8 16.4 15.0 18.1 7 Netherlands 3.7 4.0 6.2 7.7 8.6 8.4 7.8 10.7 13.3 10.6 10.9 8 Sweden 2.7 2.6 3.3 4.8 3.1 2.1 2.3 4.0 2.6 3.6 2.9 9 Switzerland 6.7 5.3 7.2 5.9 7.0 7.6 8.5 7.8 8.2 8.8 10.1 10 United Kingdom 82.4 104.7 113.4 114.6 125.9 100.1 85.4 55.9 73.4 51.1 72.7 11 Canada 10.3 14.0 13.7 14.2 16.7 15.9 16.8 15.9 17.1 17.8 16.2 12 Japan 28.5 23.7 28.6 27.3 25.3 23.9 25.4 24.6 22.6 25.6 22.0 13 Other industrialized countries 51.9 66.1 65.5 78.2 78.7 78.5 69.0 80.1 79.7 71.7 68.1 14 Austria .9 1.1 1.5 1.7 1.9 2.1 1.4 2.8 2.8 3.0 3.5 15 Denmark 2.6 1.5 2.4 2.1 2.2 3.0 2.2 3.4 2.9 2.1 2.6 16 Finland .8 .8 1.3 1.5 1.4 1.6 1.4 1.5 .9 .9 .8 17 Greece 5.7 6.7 5.1 6.1 5.8 5.8 5.9 6.5 5.9 6.6 6.0 18 Norway 3.2 8.0 3.6 4.0 3.4 3.2 3.2 3.1 3.0 3.8 3.1 19 Portugal 1.3 .9 .9 .8 1.4 1.1 1.4 1.4 1.2 1.2 1.0 20 Spain 12.5 13.3 12.6 18.1 17.5 19.5 13.7 15.7 16.6 15.1 12.1 21 Turkey 1.9 2.7 4.5 4.9 6.5 5.2 4.8 5.2 4.9 4.7 4.8 22 Other Western Europe 4.8 4.9 8.3 10.2 9.9 10.4 10.4 10.2 10.2 9.2 6.8 23 South Africa 1.2 2.0 2.2 5.5 6.9 5.4 4.4 4.8 4.7 4.0 3.8 24 Australia 16.9 24.0 23.1 23.2 21.8 21.4 20.3 25.4 26.6 21.1 23.5 25 OPEC2 22.1 19.8 26.0 26.0 25.5 26.0 27.1 26.2 26.1 30.1 31.4 26 Ecuador .7 1.1 1.3 1.3 1.2 1.2 1.3 1.2 1.1 .9 .8 27 Venezuela 2.7 2.4 2.5 3.4 3.3 3.1 3.2 3.5 3.2 3.0 2.8 28 Indonesia 4.8 5.2 6.7 5.6 5.1 4.7 4.7 4.5 5.0 4.4 4.2 29 Middle East countries 13.3 10.7 14.4 14.4 15.6 16.1 17.0 16.7 16.5 21.4 23.0 30 African countries .6 .4 1.2 1.4 .3 .8 1.0 .4 .4 .5 .5 31 Non-OPEC developing countries 112.9 130.3 139.2 149.8 146.1 140.4 143.4 146.7 148.6 142.5 147.2 Latin America 32 Argentina 12.9 14.3 18.4 20.0 20.9 22.9 23.1 24.3 22.8 22.1 22.4 33 Brazil 13.7 20.7 28.6 33.4 30.3 24.0 24.7 24.2 25.1 22.1 26.4 34 Chile 6.8 7.0 8.7 9.0 9.1 8.5 8.3 8.6 8.2 7.7 7.4 35 Colombia 2.9 4.1 3.4 3.3 3.6 3.4 3.2 3.3 3.1 2.7 2.5 36 Mexico 17.3 16.2 17.4 17.8 18.1 18.7 18.9 19.7 18.5 19.4 18.6 37 Peru .8 1.6 2.0 2.1 2.2 2.2 2.2 2.2 2.1 1.8 1.7 38 Other 2.8 3.3 4.1 4.0 4.4 4.6 5.4 5.3 5.5 5.5 5.9 Asia China 39 Mainland 1.8 2.5 3.2 4.2 3.9 2.8 3.0 5.0 5.3 3.3 3.6 40 Taiwan 9.4 10.3 9.5 12.1 11.8 12.5 13.3 11.8 12.6 12.3 12.0 41 India 4.4 4.3 4.9 5.0 4.9 5.3 5.5 5.5 6.7 7.0 7.7 42 Israel .5 .5 .7 .7 .9 .9 1.1 1.1 2.0 1.0 1.8 43 Korea (South) 19.1 21.5 15.6 16.2 14.6 13.1 13.7 13.7 15.3 16,0 15.0 44 Malaysia 4.4 6.0 5.1 4.5 4.7 5.0 5.6 5.9 6.0 6.1 6.1 45 Philippines 4.1 5.8 5.7 5.1 5.4 4.7 5.1 5.4 5.7 5.8 6.2 46 Thailand 5.2 5.7 5.4 5.5 5.0 5.3 4.7 4.5 4.2 4.0 4.1 47 Other Asia 4.5 4.1 4.3 4.2 3.7 3.1 2.9 3.0 2.8 2.8 2.9 Africa 48 Egypt .4 .7 .9 1.0 1.5 1.7 1.3 1.4 1.4 1.3 1.4 49 Morocco .7 .7 .6 .6 .6 .5 .5 .5 .5 .5 .4 50 Zaire .0 .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .9 .9 .8 1.1 .8 1.1 1.0 1.2 1.0 1.0 1.0 52 Eastern Europe 4.2 6.9 9.1 12.3 11.3 6.3 5.5 7.1 5.8 5.4 5.2 53 Russia4 1.0 3.7 5.1 7.5 6.9 2.8 2.2 2.3 2.1 2.0 1.6 54 Other 3.2 3.2 4.0 4.7 4.4 3.5 3.3 4.8 3.7 3.4 3.6 55 Offshore banking centers 102.2 135.1 140.2 133.1 130.0 121.0 93.9 93.6 75.9 90.3 60.0 56 Bahamas 12.9 20.5 24.2 32.6 28.6 30.7 35.4 32.6 20.4 29.4 13.9 57 Bermuda 6.3 4.5 9.8 9.1 9.4 10.4 4.6 3.9 5.7 8.2 8.0 58 Cayman Islands and other British West Indies 32.4 37.2 43.4 24.9 34.3 27.8 12.8 13.9 7.2 6.3 1.3 59 Netherlands Antilles 10.3 26.1 14.6 14.0 10.5 6.0 2.6 2.7 1.3 9.1 1.7 60 Panama5 1.4 2.0 3.1 3.2 3.3 4.0 3.9 3.9 3.9 3.9 3.9 61 Lebanon .1 .1 .1 .1 .1 .2 .1 .1 .1 .2 .1 62 Hong Kong, China 25.0 27.9 32.2 33.9 30.0 30.6 23.3 22.8 22.0 22.4 21.0 63 Singapore 13.7 16.7 12.7 15.0 13.6 11.1 11.1 13.5 15.2 10.6 10.0 64 Other6 .1 .1 .1 .1 .2 .2 .2 .2 .1 .2 .1 65 Miscellaneous and unallocated7 57.6 59.6 99.1 379.7 351.7 459.9 495.1 430.4 380.2 391.2 387.5 1. The banking offices covered by these data include U.S. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Soviet Union. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 5. Includes Canal Zone. branch of the same banking institution. 6. Foreign branch claims only. These data are on a gross claims basis and do not necessarily reflect the ultimate country 7. Includes New Zealand, Liberia, and international and regional organizations. risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • June 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 11999966 11999977 11999988 Sept. Dec. Mar. June Sept. Dec.p 1 Total 61,782 57,382 46,570 49,279 46,570 46,663 49,337 52,979 53,227 2 Payable in dollars 39,542 41,543 36,668 38,410 36,668 34,030 36,032 36,296 37,812 3 Payable in foreign currencies 22,240 15,839 9,902 10,869 9,902 12,633 13,305 16,683 15,415 By type 4 Financial liabilities 33,049 26,877 19,255 19,331 19,255 22,458 25,058 27,422 27,980 5 Payable in dollars 11,913 12,630 10,371 9,812 10,371 11,225 13,205 12,231 13,883 6 Payable in foreign currencies 21,136 14,247 8,884 9,519 8,884 11,233 11,853 15,191 14,097 7 Commercial liabilities 28,733 30,505 27,315 29,948 27,315 24,205 24,279 25,557 25,247 8 Trade payables 12,720 10,904 10,978 10,276 10,978 9,999 10,935 12,651 12,864 9 Advance receipts and other liabilities 16,013 19,601 16,337 19,672 16,337 14,206 13,344 12,906 12,383 10 Payable in dollars 27,629 28,913 26,297 28,598 26,297 22,805 22,827 24,065 23,929 11 Payable in foreign currencies 1,104 1,592 1,018 1,350 1,018 1,400 1,452 1,492 1,318 By area or country Financial liabilities 12 Europe 23,179 18,027 12,589 12,905 12,589 16,098 19,578 21,695 23,241 13 Belgium and Luxembourg 632 186 79 150 79 50 70 50 31 14 France 1,091 1,425 1,097 1,457 1,097 1,178 1,287 1,675 1,659 15 Germany 1,834 1,958 2,063 2,167 2,063 1,906 1,959 1,712 1,974 16 Netherlands 556 494 1,406 417 1,406 1,337 2,104 2,066 1,996 17 Switzerland 699 561 155 179 155 141 143 133 147 18 United Kingdom 17,161 11,667 5,980 6,610 5,980 9,729 13,097 15,096 16,521 19 Canada 1,401 2,374 693 389 693 781 320 344 284 20 Latin America and Caribbean 1,668 1,386 1,495 1,351 1,495 1,528 1,369 1,180 892 21 Bahamas 236 141 7 1 7 1 1 1 1 22 Bermuda 50 229 101 73 101 78 52 26 5 23 Brazil 78 143 152 154 152 137 131 122 126 24 British West Indies 1,030 604 957 834 957 1,064 944 786 492 25 Mexico 17 26 59 23 59 22 19 28 25 26 Venezuela 1 1 2 1 2 2 1 0 0 27 Asia 6,423 4,387 3,785 4,005 3,785 3,475 3,217 3,622 3,437 28 Japan 5,869 4,102 3,612 3,754 3,612 3,337 3,035 3,384 3,142 29 Middle Eastern oil-exporting countries1 25 27 0 0 0 1 2 3 3 30 Africa 38 60 28 31 28 31 29 31 28 31 Oil-exporting countries2 0 0 0 0 0 2 0 0 0 32 All other3 340 643 665 650 665 545 545 550 98 Commercial liabilities 33 Europe 9,767 10,228 10,030 11,010 10,030 8,580 8,718 9,265 9,432 34 Belgium and Luxembourg 479 666 278 623 278 229 189 128 140 35 France 680 764 920 740 920 654 656 620 665 36 Germany 1,002 1,274 1,392 1,408 1,392 1,088 1,143 1,201 1,124 37 Netherlands 766 439 429 440 429 361 432 535 506 38 Switzerland 624 375 499 507 499 535 497 593 626 39 United Kingdom 4,303 4.086 3,697 4,286 3,697 3,008 2,959 3,175 3,244 40 Canada 1,090 1,175 1,390 1,504 1,390 1,597 1,670 1,753 1,777 41 Latin America and Caribbean 2,574 2,176 1,618 1,840 1,618 1,612 1,674 1,957 2,323 42 Bahamas 63 16 14 48 14 11 19 24 16 43 Bermuda 297 203 198 168 198 225 180 178 152 44 Brazil 196 220 152 256 152 107 112 120 145 45 British West Indies 14 12 10 5 10 7 5 39 48 46 Mexico 665 565 347 511 347 437 490 704 904 47 Venezuela 328 261 202 230 202 155 149 182 305 48 Asia 13,422 14,966 12,342 13,539 12,342 10,428 10,039 10,428 9,886 49 Japan 4,614 4,500 3,827 3,779 3,827 2,715 2,753 2,689 2,609 50 Middle Eastern oil-exporting countries1 2,168 3,111 2,852 3,582 2,852 2,479 2,209 2,618 2,551 51 Africa 1,040 874 794 810 794 727 832 959 950 52 Oil-exporting countries2 532 408 393 372 393 377 392 584 499 53 Other3 840 1,086 1,141 1,245 1,141 1,261 1,346 1,195 879 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 11999966 11999977 11999988 Sept. Dec. Mar. June Sept. Dec.P 1 Total 65,897 68,128 77,462 67,976 77,462 69,054 63,884 67,566 76,676 2 Payable in dollars 59,156 62,173 72,171 62,034 72,171 64,026 57,006 60,456 69,213 3 Payable in foreign currencies 6,741 5,955 5,291 5,942 5,291 5,028 6,878 7,110 7,463 By type 4 Financial claims 37,523 36,959 46,260 37,262 46,260 38,217 31,957 33,877 40,272 5 Deposits 21,624 22,909 30,199 15,406 30,199 18,686 13,350 15,192 18,607 6 Payable in dollars 20,852 21,060 28,549 13,374 28,549 17,101 11,636 13,240 16,423 7 Payable in foreign currencies 772 1,849 1,650 2,032 1,650 1,585 1,714 1,952 2,184 8 Other financial claims 15,899 14,050 16,061 21,856 16,061 19,531 18,607 18,685 21,665 Payable in dollars 12,374 11,806 14,049 19,867 14,049 17,457 14,800 15,718 18,593 10 Payable in foreign currencies 3,525 2,244 2,012 1,989 2,012 2,074 3,807 2,967 3,072 11 Commercial claims 28,374 31,169 31,202 30,714 31,202 30,837 31,927 33,689 36,404 1? Trade receivables 25,751 27,536 27,202 26,330 27,202 26,724 27,791 29,397 32,595 13 Advance payments and other claims 2,623 3,633 4,000 4,384 4,000 4,113 4,136 4,292 3,809 14 Payable in dollars 25,930 29,307 29,573 28,793 29,573 29,468 30,570 31,498 34,197 15 Payable in foreign currencies 2,444 1,862 1,629 1,921 1,629 1,369 1,357 2,191 2,207 By area or country Financial claims 16 Europe 11,085 14,999 12,294 14,473 12,294 12,881 13,978 13,878 13,016 17 Belgium and Luxembourg 185 406 661 496 661 469 457 574 529 18 France 694 1,015 864 1,140 864 913 1,368 1,212 967 19 Germany 276 427 304 359 304 302 367 549 504 70 Netherlands 493 677 875 867 875 993 997 1,067 1,229 71 Switzerland 474 434 414 409 414 530 504 559 643 22 United Kingdom 7,922 10,337 7,766 9,849 7,766 8,400 8,631 8,157 7,554 23 Canada 3,442 3,313 2,503 4,090 2,503 3,111 2,828 3,172 2,552 74 Latin America and Caribbean 20,032 15,543 27,714 15,758 27,714 18,825 11,486 12,749 18,256 75 Bahamas 1,553 2,308 403 2,105 403 666 467 755 1,598 76 Bermuda 140 108 39 63 39 41 39 524 11 77 Brazil 1,468 1,313 835 710 835 1,112 1,102 1,265 1,476 78 British West Indies 15,536 10,462 24,388 10,960 24,388 14,621 7,393 7,263 12,144 79 Mexico 457 537 1,245 1,122 1,245 1,583 1,702 1,791 1,798 30 Venezuela 31 36 55 50 55 72 71 47 48 31 2,221 2,133 3,027 2,121 3,027 2,648 2,801 3,205 5,457 37 Japan 1,035 823 1,194 928 1,194 942 949 1,250 3,262 33 Middle Eastern oil-exporting countries 22 11 9 13 9 8 5 5 21 34 Africa 174 319 159 157 159 174 228 251 285 35 Oil-exporting countries2 14 15 16 16 16 26 5 12 15 36 All other3 569 652 563 663 563 578 636 622 706 Commercial claims 37 Europe 10,443 12,120 13,246 13,029 13,246 12,782 12,961 14,367 16,372 38 Belgium and Luxembourg 226 328 238 219 238 281 286 289 316 39 France 1,644 1,796 2,171 2,098 2,171 2,173 2,094 2,375 2,232 40 Germany 1,337 1,614 1,822 1,502 1,822 1,599 1,660 1,944 1,955 41 Netherlands 562 597 467 463 467 415 389 617 1,427 47 Switzerland 642 554 483 546 483 367 385 714 610 43 United Kingdom 2,946 3,660 4,769 4,681 4,769 4,529 4,615 4,789 5,822 44 Canada 2,165 2,660 2,617 2,291 2,617 2,983 2,855 2,638 2,741 45 Latin America and Caribbean 5,276 5,750 6,296 5,773 6,296 5,930 6,278 5,879 5,965 46 Bahamas 35 27 24 39 24 10 21 29 20 47 Bermuda 275 244 536 173 536 500 583 549 390 48 Brazil 1,303 1,162 1,024 1,062 1,024 936 887 763 909 49 British West Indies 190 109 104 91 104 117 127 157 184 50 Mexico 1,128 1,392 1,545 1,356 1,545 1,431 1,478 1,613 1,690 51 Venezuela 357 576 401 566 401 361 384 365 439 57 8,376 8,713 7,192 7,190 7,192 7,080 7,690 8,579 9,158 53 Japan 2,003 1,976 1,681 1,789 1,681 1,486 1,511 1,823 2,074 54 Middle Eastern oil-exporting countries 971 1,107 1,135 967 1,135 1,286 1,465 1,479 1,625 55 Africa 746 680 711 740 711 685 738 682 631 56 Oil-exporting countries2 166 119 165 128 165 116 202 221 171 57 Other3 1,368 1,246 1,140 1,691 1,140 1,377 1,405 1,544 1,537 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 • June 2000 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2000 1999 2000 Transaction, and area or country 1998 1999 J F a e n b .- . Aug. Sept. Oct. Nov. Dec. Jan. Feb.p U.S. corporate securities STOCKS 1 Foreign purchases 1,574,192 2,340,659 557,057 178,051 175,193 218,983 240,329 256,414 263,947 293,110 2 Foreign sales 1,524,203 2,233,137 518,730 165,889 171,908 211,213 221,911 247,460 253,365 265,365 3 Net purchases, or sales (—) 49,989 107,522 38,327 12,162 3,285 7,770 18,418 8,954 10,582 27,745 4 Foreign countries 50,369 107,578 38,166 12,179 3,282 7,796 18,393 8,983 10,540 27,626 5 Europe 68,124 98,060 40,079 9,511 7,196 7,760 10,695 13,283 15,704 24,375 6 France 5,672 3,813 289 254 91 1,020 -369 66 -240 529 / Germany 9,195 13,410 11,058 1,309 114 1,719 2,467 1,587 5,633 5,425 8 Netherlands 8,249 8,083 235 564 -539 159 1,375 1,640 -281 516 9 Switzerland 5,001 5,650 7,730 814 1,194 -1,418 384 1,495 2,926 4,804 10 United Kingdom 23,952 42,902 8,931 4,560 4,786 3,836 3,966 3,080 2,246 66,,668855 11 Canada -4,689 -335 1,556 -7 -931 543 -958 -940 666 889900 12 Latin America and Caribbean 757 5,187 -3,201 841 -4,693 -3,162 7,746 -4,735 -5,190 1,989 13 Middle East' -1,449 -1,068 1,859 170 -25 -14 -1,197 465 677 1,182 14 Other Asia -12,351 4,447 -2,508 1,643 1,438 2,386 2,350 752 -1,645 -863 13 Japan -1,171 5,723 -2,718 1,269 2,652 1,695 630 211 -1,603 -1,115 lb Africa 639 372 149 -39 61 -23 1 -18 151 -2 17 Other countries -662 915 232 60 236 306 -244 176 177 55 18 Nonmonetary international and regional organizations -380 -56 161 -17 3 -26 25 -29 42 119 BONDS2 19 Foreign purchases 905,782 856,429 178,088 65,007 76,263 80,926 74,940 56,928 78,481 99,607 20 Foreign sales 727,044 602,109 128,365 46,661 48,902 55,120 50,839 41,321 58,889 69,476 21 Net purchases, or sales (—) 178,738 254,320 49,723 18,346 27,361 25,806 24,101 15,607 19,592 30,131 22 Foreign countries 179,081 254,722 49,746 18,373 27,030 26,670 24,172 15,626 19,597 30,149 23 Europe 130,057 140,299 26,964 11,105 13,719 14,376 11,639 7,500 9,899 17,065 24 France 3,386 1,870 1,010 160 24 52 53 269 -114 1,124 25 Germany 4,369 7,723 84 31 752 1,203 1,327 -228 -618 702 26 Netherlands 3,443 2,446 -120 144 279 103 133 183 -23 -97 21 Switzerland 4,826 4,553 479 322 496 360 429 462 -47 526 28 United Kingdom 99,637 105,969 23,620 8,643 9,761 10,668 9,241 6,040 10,140 13,480 29 Canada 6,121 6,043 3,457 286 908 271 1,506 961 2,133 1,324 30 Latin America and Caribbean 23,938 60,861 14,317 5,561 5,488 6,396 6,652 4,094 4,658 9,659 31 Middle East1 4,997 1,979 -263 -219 257 178 -506 309 -86 -177 32 Other Asia 12,662 42,842 4,788 1,179 6,698 4,847 4,566 2,591 2,243 2,545 33 Japan 8,384 17,541 1,906 827 4,375 2,081 2,297 1,437 733 1,173 34 Africa 190 1,411 547 59 -189 343 146 257 677 -130 35 Other countries 1,116 1,287 -64 402 149 259 169 -86 73 -137 36 Nonmonetary international and regional organizations -343 -402 -23 -27 331 -864 -71 -19 -5 -18 Foreign securities 37 Stocks, net purchases, or sales ( —) 6,227 15,643 -7,061 598 825 -8,206 3,816 -1,504 1,107 -8,168 38 Foreign purchases 929,923 l,177,306r 311,894 91,801 97,384 96,523 129,534 125,956r 134,949 176,945 39 Foreign sales 923,696 l,161,663r 318,955 91,203 96,559 104,729 125,718 127,460r 133,842 185,113 40 Bonds, net purchases, or sales (-) -17,350 -5,676 -4,790 -6,421 1,132 -1,320 -512 3,872 -3,502 -1,288 41 Foreign purchases 1,328,281 798,267 136,547 70,061 66,661 62,533 59,650 52,227 62,189 74,358 42 Foreign sales 1,345,631 803,943 141,337 76,482 65,529 63,853 60,162 48,355 65,691 75,646 43 Net purchases, or sales (—), of stocks and bonds .... -11,123 9,967 -11,851 -5,823 1,957 -9,526 3,304 2,368 -2,395 -9,456 44 Foreign countries -10,778 9,682 -12,040 -6,006 2,027 -9,532 3,496 2,210 -2,555 -9,485 45 Europe 12,632 59,247 -4,215 -1,814 2,224 2,202 2,238 5,001 754 -4,969 46 Canada -1,901 -999 -2,336 528 301 315 -1,671 1,342 -471 -1,865 47 Latin America and Caribbean -13,798 -4,726 -7,938 -312 581 -1,950 6,403 524 -4,868 -3,070 48 Asia -3,992 -42,961 1,471 -4,304 -429 -9,603 -4,048 -4,945 11,,995511 -480 49 Japan -1,742 -43,637 -35 -4,805 -565 -10,006 -4,453 -3,596 886666 -901 50 Africa -1,225 713 282 4 -116 63 160 535 99 183 51 Other countries -2,494 -1,592 696 -108 -534 -559 414 -247 -20 716 52 Nonmonetary international and regional organizations -345 285 189 183 -70 6 -192 158 160 29 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 US. 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 2000 1999 2000 AArreeaa oorr ccoouunnttrryy 11999988 11999999 Jan.- Aug. Sept. Oct. Nov. Dec. Jan. Feb.? Feb. 1 Total estimated 49,039 -9,953 15,106 19,118 90 -9,733 -3,615 4,642 9,543r 5,563 2 Foreign countries 46,570 -10,518 15,348 18,847 -1 -9,904 -3,802 4,566 9,578r 5,770 3 Europe 23,797 -38,228 -2,229 1,771 -9,265 -405 8,643 -5,533 214r -2,443 4 Belgium and Luxembourg 3,805 -81 796 105 12 -351 -357 -798 731 65 Germany 144 2,285 840 1,438 -963 78 510 607 1,706 -866 6 Netherlands -5,533 2,122 3,281 453 -423 130 360 268 806 2,475 7 Sweden 1,486 1,699 399 876 -45 -6 369 317 499 -100 8 Switzerland 5,240 -1,761 -4,789 -714 237 365 144 1,403 -3,407 -1,382 9 United Kingdom 14,384 -20,232 -1,711 1,934 -3,534 -1,854 5,837 -3,481 -450r -1,261 10 Other Europe and former U.S.S.R 4,271 -22,260 -1,045 -2,321 -4,549 1,233 1,780 -3,849 329 -1,374 11 Canada 615 7,348 -574 1,339 1,459 -656 -550 218 -582 8 17 Latin America and Caribbean -3,662 -7,523 4,435 8,695 3,003 -9,911 -5,417 806 -2,409 6,844 13 Venezuela 59 362 67 15 10 25 154 -33 54 13 14 Other Latin America and Caribbean 9,523 1,661 -1,355 1,650 2,982 -1,777 1,362 576 -3,837 2,482 15 Netherlands Antilles -13,244 -9,546 5,723 7,030 11 -8,159 -6,933 263 1,374 4,349 16 27,433 29,359 13,467 6,832 5,344 942 -6,630 9,718 12,403r 1,064 17 Japan 13,048 20,102 -577 2,913 5,259 344 -4,378 8,263 l,297r -1,874 18 Africa 751 -3,021 37 -622 -302 -202 -680 -541 -43 80 19 Other -2,364 1,547 212 832 -240 328 832 -102 -5 217 20 Nonmonetary international and regional organizations 2,469 565 -242 271 91 171 187 76 -35 -207 71 International 1,502 190 -201 233 98 184 125 75 -7 -194 22 Latin American regional 199 666 0 175 -9 -1 -4 1 0 0 MEMO 73 Foreign countries 46,570 -10,518 15,348 18,847 -1 -9,904 -3,802 4,566 9,578r 5,770 74 Official institutions 4,123 -9,861 8,540 2,394 -1,714 -1,248 -2,325 4,962 6,763 1,777 25 Other foreign 42,447 -657 6,808 16,453 1,713 -8,656 -1,477 -396 2,815r 3,993 Oil-exporting countries 76 Middle East2 -16,554 2,207 3,083 130 401 201 -2,050 -3,556 2,913 170 27 2 0 0 1 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 • June 2000 3.28 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR1 Currency units per U.S. dollar except as noted 1999 2000 Nov. Dec. Jan. Feb. Mar. Apr. Exchange Rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 74.37 62.91 64.54 63.88 64.10 65.60 62.78 60.94 59.60 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 1.9314 1.8442 1.8057 1.7765 1.7424 1.7696 5 Canada/dollar 1.3849 1.4836 1.4858 1.4674 1.4722 1.4486 1.4512 1.4608 1.4689 6 China, P.R./yuan 8.3193 8.3008 8.2781 8.2782 8.2794 8.2792 8.2781 8.2786 8.2793 7 Denmark/krone 6.6092 6.7030 6.9900 7.2019 7.3597 7.3492 7.5725 7.7228 7.8872 8 European Monetary Union/euro3 n.a. n.a. 1.0653 1.0328 1.0110 1.0131 0.9834 0.9643 0.9449 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 273.28 295.70 306.30 318.24 326.19 326.86 338.87 346.33 355.02 13 Hong Kong/dollar 7.7431 7.7467 7.7594 7.7718 7.7728 7.7791 7.7816 7.7848 7.7880 14 India/rupee 36.36 41.36 43.13 43.46 43.52 43.59 43.65 43.64 43.68 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 121.06 130.99 113.73 104.65 102.58 105.30 109.39 106.31 105.63 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 9.416 9.427 9.494 9.427 9.289 9.394 20 Netherlands/guilder 1.9525 1.9837 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 New Zealand/dollar2 66.25 53.61 52.94 51.22 50.87 51.27 49.03 49.02 49.60 22 Norway/krone 7.0857 7.5521 7.8071 7.9367 8.0113 8.0241 8.2374 8.4100 8.6272 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 1.6699 1.6745 1.6757 1.7028 1.7153 1.7096 25 South Africa/rand 4.6072 5.5417 6.1191 6.1424 6.1503 6.1309 6.3209 6.4675 6.6480 26 South Korea/won 947.65 1,400.40 1,189.84 1,176.98 1,136.80 1,130.99 1,129.75 1,116.39 1,110.32 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 72.040 72.018 73.140 73.552 73.810 74.123 29 Sweden/krona 7.6446 7.9522 8.2740 8.3586 8.4910 8.4918 8.6480 8.6971 8.7486 30 Switzerland/franc 1.4514 1.4506 1.5045 1.5543 1.5841 1.5903 1.6348 1.6636 1.6657 31 Taiwan/dollar 28.775 33.547 32.322 31.794 31.625 30.890 30.806 30.724 30.520 32 Thailand/baht 31.072 41.262 37.887 38.749 38.227 37.380 37.759 37.923 37.993 33 United Kingdom/pound2 163.76 165.73 161.72 162.05 161.32 164.04 160.00 157.99 158.23 34 Venezuela/bolivar 488.87r 548.39 606.82 634.80 644.28 652.81 659.44 666.82 672.73 Indexes4 NOMINAL 35 Broad (January 1997= 100)5 104.44 116.48 116.87 116.08 116.09 115.95 117.44 117.44 118.10 36 Major currencies (March 1973 = 100)6 91.24 95.79 94.07 92.87 93.23 93.14 95.31 95.64 96.31 37 Other important trading partners (January 1997= 100)7 104.67 126.03 129.94 129.93 129.34 129.14 129.11 128.54 129.05 REAL 38 Broad (March 1973 = 100)5 91.33 99.36 98.76r 98.20 98.14 98.06r 99.36r 100.09r 101.06 39 Major currencies (March 1973 = 100)6 92.25 97.25 96.75r 96.12 96.42 96.64 99.20r 99.95r 100.78 40 Other important trading partners (March 1973 = 100)7 95.87 108.52 107.74 107.24r 106.67r 106.18r 105.82r 106.58 107.81 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. U.S. cents per currency unit. 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 By convention, the rate is reported in U.S. dollars per euro. These currency rates can be average of U.S. bilateral import shares from and export shares to the issuing country and of a derived from the euro rate by using the fixed conversion rates (in currencies per euro) as measure of the importance to U.S. exporters of that country's trade in third country markets. shown below: 6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of broad index currencies that circulate widely outside the country of issue. The weight for each Euro equals currency is its broad index weight scaled so that the weights of the subset of currencies in the 13.7603 Austrian schillings 1936.27 Italian lire index sum to one. 40.3399 Belgian francs 40.3399 Luxembourg francs 7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 5.94573 Finnish markkas 2.20371 Netherlands guilders broad index currencies that do not circulate widely outside the country of issue. The weight 6.55957 French francs 200.482 Portuguese escudos for each currency is its broad index weight scaled so that the weights of the subset of 1.95583 German marks 166.386 Spanish pesetas currencies in the index sum to one. .787564 Irish pounds 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 June 2000 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks March 31, 1999 August 1999 A64 June 30, 1999 November 1999 A64 September 30, 1999 February 2000 A64 December 31, 1999 May 2000 A64 Terms of lending at commercial banks May 1999 August 1999 A66 August 1999 November 1999 A66 November 1999 February 2000 A66 February 2000 May 2000 A66 Assets and liabilities of U.S. branches and agencies of foreign banks March 31, 1999 August 1999 All June 30, 1999 November 1999 A72 September 30, 1999 February 2000 A72 December 31, 1999 May 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 All 1998 September 1999 A73 Small loans to businesses and farms 1997 September 1998 A76 1998 September 1999 A76 Community development lending reported under the Community Reinvestment Act 1997 September 1998 A79 1998 September 1999 A79 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 Federal Reserve Bulletin • June 2000 Index to Statistical Tables References are to pages A3-A62, although the prefix 'A" is omitted in this index ACCEPTANCES, bankers (See Bankers acceptances) Federal finance Assets and liabilities (See also Foreigners) Debt subject to statutory limitation, and types and ownership Commercial banks, 15-21 of gross debt, 27 Domestic finance companies, 32, 33 Receipts and outlays, 25, 26 Federal Reserve Banks, 10 Treasury financing of surplus, or deficit, 25 Foreign-related institutions, 20 Treasury operating balance, 25 Automobiles Federal Financing Bank, 30 Consumer credit, 36 Federal funds, 23, 25 Production, 44, 45 Federal Home Loan Banks, 30 Federal Home Loan Mortgage Corporation, 30, 34, 35 Federal Housing Administration, 30, 34, 35 BANKERS acceptances, 5, 10, 22, 23 Federal Land Banks, 35 Bankers balances, 15-21. (See also Foreigners) Federal National Mortgage Association, 30, 34, 35 Bonds (See also U.S. government securities) Federal Reserve Banks New issues, 31 Condition statement, 10 Rates, 23 Discount rates (See Interest rates) Business activity, nonfinancial, 42 U.S. government securities, 5, 10, 11, 27 Business loans (See Commercial and industrial loans) Federal Reserve credit, 5, 6, 10, 12 Federal Reserve notes, 10 CAPACITY utilization, 43 Federally sponsored credit agencies, 30 Capital accounts Finance companies Commercial banks, 15-21 Assets and liabilities, 32 Federal Reserve Banks, 10 Business credit, 33 Certificates of deposit, 23 Loans, 36 Commercial and industrial loans Paper, 22, 23 Commercial banks, 15-21 Float, 5 Weekly reporting banks, 17, 18 Flow of funds, 37-41 Commercial banks Foreign currency operations, 10 Assets and liabilities, 15-21 Foreign deposits in U.S. banks, 5 Commercial and industrial loans, 15-21 Foreign exchange rates, 62 Consumer loans held, by type and terms, 36 Foreign-related institutions, 20 Real estate mortgages held, by holder and property, 35 Foreign trade, 51 Time and savings deposits, 4 Foreigners Commercial paper, 22, 23, 32 Claims on, 52, 55-7, 59 Condition statements (See Assets and liabilities) Liabilities to, 51-3, 58, 60, 61 Construction, 42, 46 Consumer credit, 36 GOLD Consumer prices, 42 Certificate account, 10 Consumption expenditures, 48, 49 Stock, 5, 51 Corporations Government National Mortgage Association, 30, 34, 35 Profits and their distribution, 32 Gross domestic product, 48, 49 Security issues, 31, 61 Cost of living (See Consumer prices) Credit unions, 36 HOUSING, new and existing units, 46 Currency in circulation, 5, 13 Customer credit, stock market, 24 INCOME, personal and national, 42, 48, 49 Industrial production, 42, 44 DEBT (See specific types of debt or securities) Insurance companies, 27, 35 Demand deposits, 15-21 Interest rates Depository institutions Bonds, 23 Reserve requirements, 8 Consumer credit, 36 Reserves and related items, 4—6, 12 Federal Reserve Banks, 7 Deposits (See also specific types) Money and capital markets, 23 Commercial banks, 4, 15-21 Mortgages, 34 Federal Reserve Banks, 5, 10 Prime rate, 22 Discount rates at Reserve Banks and at foreign central banks and International capital transactions of United States, 50-61 foreign countries (See Interest rates) International organizations, 52, 53, 55, 58, 59 Discounts and advances by Reserve Banks (See Loans) Inventories, 48 Dividends, corporate, 32 Investment companies, issues and assets, 32 Investments (See also specific types) EMPLOYMENT, 42 Commercial banks, 4, 15-21 Euro, 62 Federal Reserve Banks, 10, 11 Financial institutions, 35 FARM mortgage loans, 35 Federal agency obligations, 5, 9-11, 28, 29 LABOR force, 42 Federal credit agencies, 30 Life insurance companies (See Insurance companies) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

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

A67 EDWARD M. GRAMLICH OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS STEPHEN R. MALPHRUS, Staff Director LOUISE L. ROSEMAN, Director 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 EDGAR A. MARTINDALE, Assistant Director MARSHA REIDHILL, Assistant Director DIVISION OF SUPPORT SERVICES JEFF J. STEHM, Assistant Director ROBERT E. FRAZIER, Director OFFICE OF THE INSPECTOR GENERAL GEORGE M. LOPEZ, Assistant Director DAVID L. WILLIAMS, Assistant Director BARRY R. SNYDER, Inspector General DONALD L. ROBINSON, Deputy Inspector General DIVISION OF INFORMATION TECHNOLOGY RICHARD C. STEVENS, Director MARIANNE M. EMERSON, Deputy Director MAUREEN T. HANNAN, Associate Director TILLENA G. CLARK, Assistant Director GEARY L. CUNNINGHAM, Assistant Director Po KYUNG KIM, Assistant Director RAYMOND H. MASSEY, Assistant Director SHARON L. MOWRY, Assistant Director DAY W. RADEBAUGH, JR., Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

68 Federal Reserve Bulletin • June 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 CHRISTINE M. CUMMING, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary ROBERT A. EISENBEIS, Associate Economist LYNN S. FOX, Assistant Secretary MARVIN S. GOODFRIEND, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID H. HOWARD, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel DAVID E. LINDSEY, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel VINCENT R. REINHART, Associate Economist KAREN H. JOHNSON, Economist THOMAS D. SIMPSON, Associate Economist MICHAEL J. PRELL, Economist MARK S. SNIDERMAN, Associate Economist JACK H. BEEBE, Associate Economist DAVID J. STOCKTON, Associate Economist PETER R. FISHER, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL DOUGLAS A. WARNER III, President NORMAN R. BOBINS, Vice President LAWRENCE K. FISH, First District NORMAN R. BOBINS, Seventh District DOUGLAS A. WARNER III, Second District KATIE S. WINCHESTER, Eighth District RONALD L. HANKEY, Third District 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

A69 CONSUMER ADVISORY COUNCIL DWIGHT GOLANN, Boston, Massachusetts, Chairman LAUREN ANDERSON, New Orleans, Louisiana, Vice Chairman WALTER J. BOYER, Dallas, Texas GWENN S. KYZER, Allen, Texas DOROTHY BROADMAN, San Francisco, California JOHN C. LAMB, Sacramento, California TERESA A. BRYCE, Charlotte, North Carolina ANNE S. LI, Trenton, New Jersey MALCOLM M. BUSH, Chicago, Illinois MARTHA W. MILLER, Greensboro, North Carolina ROBERT M. CHEADLE, Ada, Oklahoma DANIEL W. MORTON, Columbus, Ohio MARY ELLEN DOMEIER, New Ulm, Minnesota JEREMY NOWAK, Philadelphia, Pennsylvania JEREMY D. EISLER, Biloxi, Mississippi MARTA RAMOS, San Juan, Puerto Rico ROBERT F. ELLIOTT, Prospect Heights, Illinois DAVID L. RAMP, St. Paul, Minnesota LESTER W. FIRSTENBERGER, Middletown, Connecticut RUSSELL W. SCHRADER, San Francisco, California JOHN C. GAMBOA, San Francisco, California 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 M. DEAN KEYES, St. Louis, Missouri 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

70 Federal Reserve Bulletin • June 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, 1999. 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. January 2000. Making Sense of Savings 1,186 pp. $20.00 each. SHOP: The Card You Pick Can Save You Money FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated Welcome to the Federal Reserve monthly. (Requests must be prepaid.) When Your Home is on the Line: What You Should Know Consumer and Community Affairs Handbook. $75.00 per year. About Home Equity Lines of Credit Monetary Policy and Reserve Requirements Handbook. $75.00 Keys to Vehicle Leasing per year. Looking for the Best Mortgage Securities Credit Transactions Handbook. $75.00 per year. The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A71 STAFF STUDIES: Only Summaries Printed in the 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by BULLETIN James T. Fergus and John L. Goodman, Jr. July 1993. Studies and papers on economic and financial subjects that are of 20 pp. general interest. Requests to obtain single copies of the full text or 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANKto be added to the mailing list for the series may be sent to ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING Publications Services. PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, by Stephen A. Rhoades. July 1994. 37 pp. 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. 173. IMPROVING PUBLIC DISCLOSURE IN BANKING, by Study 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- Group on Disclosure, Federal Reserve System, March 2000. GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. 35 pp. Rhoades. February 1992. 11 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 Federal Reserve Bulletin • June 2000 ANTICIPATED SCHEDULE OF RELEASE DATES FOR PERIODIC RELEASES OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM (PAYMENT MUST ACCOMPANY REQUESTS) Annual Annual Approximate Corresponding Period or date to Release number and title USPS fax release Bulletin which data refer rate rate days1 table numbers2 Weekly Releases H.2. Actions of the Board: $55.00 n.a. Friday Week ended Applications and Reports previous Received Saturday H.3. Aggregate Reserves of $20.00 n.a. Thursday Week ended 1.20 Depository Institutions and previous the Monetary Base3 Wednesday H.4.1. Factors Affecting Reserve Balances $20.00 n.a. Thursday Week ended 1.11, 1.18 of Depository Institutions and previous Condition Statement of Wednesday Federal Reserve Banks3 H.6. Money Stock and Debt $35.00 n.a. Thursday Week ended 1.21 Measures3 Monday of previous week H.8. Assets and Liabilities of $30.00 n.a. Friday Week ended 1.26A-E Commercial Banks in the previous United States3 Wednesday H.10. Foreign Exchange Rates3 $20.00 $20.00 Monday Week ended 3.28 previous Friday H.15. Selected Interest Rates3 $20.00 $20.00 Monday Week ended 1.35 previous Friday Monthly Releases G.5. Foreign Exchange Rates3 $ 5.00 $ 5.00 First of month Previous month 3.28 G.13. Selected Interest Rates $ 5.00 $ 5.00 First Tuesday of Previous month 1.35 month G.17. Industrial Production and $15.00 n.a. Midmonth Previous month 2.12, 2.13 Capacity Utilization3 G.19. Consumer Credit3 $ 5.00 $ 5.00 Fifth working day Second month 1.55, 1.56 of month previous G.20. Finance Companies $ 5.00 n.a. End of month Second month 1.51, 1.52 previous Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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

74 Federal Reserve Bulletin • June 2000 Maps of the Federal Reserve System 1 ^2 BO•ST ON 12 • NEW YORK PHILADELPHIA • SAN FRANCISCO ALASKA HAWAII LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city E3 Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 1-A 2-B 3-C 4 -D 5-E ME Pittsburgh Baltimore MD NY I wv NC NH Buffalo Cincinnati • Charlotte M A" NY CT ^RI sc BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H TN—»• • Nashville KY At MI / Birmingham \M II- J IN MS a\ IA Detroit1 Louisville > -A % TN LA Jacksonv ille ii. • Memphis New Orleans Little / .„ >> Rock ( MS MMiiaammii ATLANTA CHICAGO ST. LOUIS 9-1 NO MN • Helena 'iiim^fi^''1 SD • Wl MINNEAPOLIS 10-J 12-L WY .'.INob CO Omaha • • ICS • Denver \L ASK \ WWAA J / SSeeaattttllee NM 1 Oklahoma Cit\ • Portland OK OR ) KANSAS CITY ID S Vj 11-K TX I • • ^ NM • Salt Lake City 7 • " El Paso A_rJ ' •Y HVoust # on u r r •Los Angeles Sail Antonio HAWAII A J. DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • June 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 Diana T. Hueter 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 James M. Lyon 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 Beauregard Brite White Sammie C. Clay Houston 77252 Edward O. Gay lord Robert Smith, III1 San Antonio 78295 Patty P. Mueller James L. Stull1 SAN FRANCISCO 94120 Gary G. Michael Robert T. Parry Nelson C. Rising John F. Moore Los Angeles 90051 Lonnie Kane Mark L. Mullinix1 Portland 97208 Nancy Wilgenbusch Raymond H. Laurence1 Salt Lake City 84125 Barbara L. Wilson Andrea P. Wolcott Seattle 98124 Richard R. Sonstelie Gordon R. G. Werkema2 * Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607. 1. Senior Vice President. 2. Executive Vice President Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 Publications of Interest FEDERAL RESERVE CONSUMER CREDIT PUBLICATIONS The Federal Reserve Board publishes a series of bro- Shop . . . The Card You Pick Can Save You Money is chures covering individual credit laws and topics, as designed to help consumers comparison shop when pictured below. looking for a credit card. It contains the results of the Seven brochures on the mortgage process are avail- Federal Reserve Board's survey of the terms of credit able: A Consumer's Guide to Mortgage Lock-Ins; A card plans offered by credit card issuers throughout the Consumer's Guide to Mortgage Refinancings', A Con- United States. Because the terms can affect the amount sumer's Guide to Mortgage Settlement Costs', Con- an individual pays for using a credit card, the booklet sumer Handbook on Adjustable Rate Mortgages', lists the annual percentage rate (APR), annual fee, Home Mortgages: Understanding the Process and grace period, type of pricing (fixed or variable rate), Your Right to Fair Lending', Looking for the Best other features, and a telephone number for each card Mortgage: Shop, Compare, Negotiate', and When Your issuer surveyed. Home Is on the Line: What You Should Know about A Guide to Business Credit for Women, Minorities, Home Equity Lines of Credit. These brochures were and Small Businesses covers the credit application prepared in conjunction with other federal agencies process and points out sources of technical assistance and trade and consumer groups. for small business loans. It also covers borrower rights The Board also publishes the Consumer Handbook under the Equal Credit Opportunity Act. to Credit Protection Laws. This booklet explains, Up to 100 copies of consumer publications are availamong other things, how to shop for and obtain credit, able free of charge from Publications Services, Mail how to maintain a good credit rating, and how to Stop 127, Board of Governors of the Federal Reserve dispute unfair credit transactions and resolve billing System, Washington, DC 20551. Some brochures errors. It also covers some aspects of electronic funds are available on the Board's web site at http:// transfers. www.federalreserve.gov/pubs/brochure.htm/. A Consumer's Guide to Mortsage Lock-ins m SHOP Consumer Handbook to Credit Protection Laws 1 %V The Card You Pick Can Save You Money Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • June 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 Regulatoij 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 A new edition of Guide to the Flow of Funds Accounts and describes how the series is derived from source is now available from the Board of Governors. The new data. The Guide also explains the relationship between edition incorporates changes to the accounts since the the flow of funds accounts and the national income and initial edition was published in 1993. Like the earlier product accounts and discusses the analytical uses of publication, it explains the principles underlying the flow of funds data. The publication can be purchased, flow of funds accounts and describes how the accounts for $20.00, from Publications Services, Board of Goverare constructed. It lists each flow series in the Board's nors of the Federal Reserve System, Washington, DC flow of funds publication, "Flow of Funds Accounts of 20551. the United States" (the Z.l quarterly statistical release), Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A79 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