Federal Reserve Bulletin, 2000-12

Volume 86 • Number 12 • December 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 797 MUTUAL FUNDS AND THE U.S. EQUITY 818 INDUSTRIAL PRODUCTION AND CAPACITY MARKET UTILIZATION FOR OCTOBER 2000 Mutual funds have become an important inter- Industrial production edged down 0.1 percent in mediary between households and financial mar- October, to 146.3 percent of its 1992 average, kets, especially the equity market. About half after increases in August and September that of all households have a mutual fund account, were revised upward. The rate of capacity utiliand mutual funds hold about one-fifth of house- zation for total industry decreased to 82.1 perhold financial assets. Because households have cent, just 0.1 percentage point above its 1967-99 favored equity investments in their mutual fund average. accounts, mutual funds currently hold about one-fifth of all publicly traded U.S. equities. In 821 ANNOUNCEMENTS addition to discussing the recent growth of Modification of the supervision program for U.S. mutual funds and their role in household operations of foreign banks. finances, this article analyzes the relationship between households' investment decisions in Negotiation of ACH transaction fees with equity mutual funds and equity market prices. private-sector operators. Increase in adversely classified syndicated loans. 813 TREASURY AND FEDERAL RESERVE FOREIGN EXCHANGE OPERATIONS Interagency proposal to simplify capital requirements for non-complex banks and thrift During the third quarter of 2000, the dollar institutions. appreciated 8.2 percent against the euro and 2.0 percent against the yen. On a trade-weighted Interagency proposal to limit sharing of conbasis, the dollar ended the quarter 4.1 percent sumer data among financial affiliates. stronger against the currencies of the United Enforcement actions. States' major trading partners. On September 22, the U.S. monetary authorities intervened Change in Board staff. in the foreign exchange markets, purchasing 1.5 billion euros against the dollar. The opera- 825 LEGAL DEVELOPMENTS tion, which was divided evenly between the U.S. Various bank holding company, bank service Treasury Department's Exchange Stabilization corporation, and bank merger orders; and pend- Fund and the Federal Reserve System, was cooring cases. dinated with the European Central Bank and the monetary authorities of Japan, Canada, and the United Kingdom. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 FINANCIAL AND BUSINESS STATISTICS A68 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS These tables reflect data available as of October 27, 2000. A70 FEDERAL RESERVE BOARD PUBLICATIONS A3 GUIDE TO TABULAR PRESENTATION A72 ANTICIPATED SCHEDULE OF RELEASE A4 Domestic Financial Statistics DATES FOR PERIODIC RELEASES A42 Domestic Nonfinancial Statistics A50 International Statistics A74 MAPS OF THE FEDERAL RESERVE SYSTEM A63 GUIDE TO STATISTICAL RELEASES AND A76 FEDERAL RESERVE BANKS, BRANCHES, SPECIAL TABLES AND OFFICES A64 INDEX TO STATISTICAL TABLES All INDEX TO VOLUME 86 A66 BOARD OF GOVERNORS AND STAFF 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. • Dolores S. Smith • Richard Spillenkothen • Richard C. Stevens • David J. Stockton 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

Mutual Funds and the U.S. Equity Market Eric M. Engen and Andreas Lehnert, of the Board's Mutual fund investors could also distort equity Division of Research and Statistics, prepared this prices if their enthusiasm for investing in mutual article with the assistance of Richard Kehoe. funds were to go beyond general market assessments of fundamentals and tolerance for risk, pushing equity Mutual funds have become an important intermedi- prices temporarily above the level that other equity ary between households and financial markets, par- market participants would tend to settle on. We ticularly the equity market. By providing liquid, low- present evidence, however, indicating that mutual cost shares in a diversified portfolio of financial assets fund investors, like other market investors, have been selected by professional money managers, mutual trading primarily in response to new information and funds have enabled an increasing number of house- other factors that influence the value of stocks. Thus, holds to enter financial markets. Indeed, about half of in general, we find little evidence that mutual fund all U.S. households currently own shares in a mutual investors have been a destabilizing force in the U.S. fund. equity market in recent years. Since 1990, total mutual fund assets have increased nearly sevenfold, and the assets of mutual funds that GROWTH OF MUTUAL FUND ASSETS invest in stocks have grown even more, expanding nearly twentyfold. Over the same period, mutual fund Assets under management at mutual funds have assets have come to account for a larger share of grown substantially over the past fifteen years household wealth. Moreover, a greater proportion of (chart l).1 At the end of August 2000, mutual funds U.S. households now own stock, in large part because of their investments in mutual funds. Much of this growth has come in households' retirement assets, 1. This article focuses on registered investment companies that are as developments in pension plans and other tax- called mutual funds or open-end funds and excludes from the discuspreferred retirement accounts have increasingly made sion other types of registered investment companies such as closedend funds, unit investment trusts, and exchange-traded funds. For it possible for households to control more of their more discussion of the mutual fund industry, see Phillip R. Mack retirement asset portfolios—and households have "Recent Trends in the Mutual Fund Industry," Federal Reserve Bulletin, vol. 79 (November 1993), pp. 1001-12; Robert Pozen, The tended to invest a significant portion of their retire- Mutual Fund Business (MIT Press, 1998); Investment Company Instiment assets in mutual funds. tute, Mutual Fund Fact Book (ICI, 2000); and Brian Reid, "The As the popularity of mutual funds as an investment 1990s: A Decade of Expansion and Change in the U.S. Mutual Fund Industry," Investment Company Institute Perspective, vol. 6 (July vehicle has grown, so too has their importance in 2000). financial markets. Mutual funds currently hold about one-fifth of publicly traded U.S. corporate equities. 1. Assets of mutual funds, January 1984-August 2000 Thus, the investment behavior of mutual fund share- Billions of dollars holders could, in theory, influence equity market prices. For example, if fund shareholders were to request large redemptions from their accounts when faced with a sharp decline in equity prices, mutual fund managers might be forced to sell some of the funds' equity holdings in the slumping market, exacerbating the decline. In recent years, however, mutual fund shareholders as a group have not tended to flee from their equity investments when confronted with sharp temporary drops in equity prices. Indeed, there is some evidence that shareholder restraint in requesting redemptions has been greater recently than during 1984 1986 1988 1990 1992 1994 1996 1998 2000 earlier periods of market turbulence. NOTE. Data show month-end assets. SOURCE. Investment Company Institute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

798 Federal Reserve Bulletin • December 2000 2. Assets of equity mutual funds, January 1984-August 2000 3. Net new cash flows to mutual funds, 1990-2000 LJ i i i i i i i i i i i L 1990 1992 1994 1996 1998 2000 NOTE. Data show average net monthly flows excluding reinvested dividends for the year indicated; for 2000, values reflect flows through August. "Other NOTE. Data show month-end assets. funds" are hybrid, bond, and retail money market mutual funds. SOURCE. Investment Company Institute. SOURCE. Investment Company Institute. held about $71/? trillion in assets, making them the and other organizations. Institutional investors are largest type of financial institution (as measured by much more likely to invest in money market funds assets under management), even larger than commerthan in long-term funds (equity, hybrid, and bond) cial banks. Most of the recent growth has come in and at the end of August 2000 held less than 10 perassets invested in equity mutual funds, that is, mutual cent of the assets of equity funds. Thus, almost all funds that specialize in investing in the shares of mutual fund assets invested in the equity market are publicly traded firms. At the end of August 2000, owned by households.4 equity funds held more than 60 percent of all mutual Mutual fund assets grow because investors, on net, fund assets, or more than $4V2 trillion. The next decide to put more of their financial assets into largest group—money market mutual funds, which mutual funds or because the underlying financial invest in very short term liquid assets such as comsecurities held by the funds increase in value, or a mercial paper and Treasury bills—held less than combination of these two factors. Over the 1990s, $2 trillion in assets. Bond funds—which invest in total mutual fund assets grew at an annual rate of corporate, Treasury, government agency, and foreign more than 21 percent.5 More than half the growth bonds—and hybrid funds—which invest in a mix of came from fund performance, that is, from the net stocks and bonds—held about $1 trillion in assets appreciation in value of the securities held in the combined.2 funds and from the reinvestment of dividends and Mutual funds that invest primarily in the shares of interest earned by the securities held in the funds. corporations based in the United States are by far the Mutual fund performance has been robust in recent largest type of equity mutual fund (chart 2). These years, primarily because equity funds have benefited domestic equity funds hold more than 85 percent of from the stock market boom. Net new cash flows the assets of all equity mutual funds. International accounted for 40 percent of mutual fund asset growth equity funds, which invest primarily in the shares of over the 1990s.6 non-U.S. companies, account for the remainder. Recently, average monthly net new cash flows into In 1999, 81 percent of total mutual fund assets mutual funds have been dominated by flows into were held by households.3 The remainder were held equity funds (chart 3). Since 1994, net new cash by institutional investors—businesses, fiduciaries, flows from households into equity funds have greatly outpaced those into all other types of mutual funds 2. Modern mutual funds were introduced in 1924. Equity funds were the most popular type of fund until 1979, when the assets of money market funds surpassed those of equity funds. Money market 4. In contrast, approximately 40 percent of money market fund funds dominated equity funds throughout the 1980s, and by 1985, assets are held in institutional accounts, with the remainder in retail bond fund assets had also grown beyond those of equity funds. It was accounts. The share of money market fund assets held by institutional not until 1993 that equity funds regained their current position as the shareholders has increased greatly in recent years, as many businesses largest type of mutual fund. and other organizations have decided that having their liquid assets 3. See Investment Company Institute, Mutual Fund Fact Book, managed by mutual funds is more cost effective than managing them p. 41. Household holdings include mutual funds held in retail internally. accounts, employer-sponsored pension plan accounts, individual 5. See Reid, "The 1990s," p. 2. retirement accounts, and variable annuities. 6. Ibid. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mutual Funds and the U.S. Equity Market 799 4. Net new cash flows to equity mutual funds, 1996-2000 5. Change in equity indexes, January 1996-August 2000 Billions of dollars Percent • Capital appreciation funds • Total return funds 9 International equity funds 1996 1997 1998 1999 2000 1996 1997 1998 1999 2000 NOTE. Data show average net monthly flows excluding reinvested dividends NOTE. Data show the six-month moving average of the monthly percentage for the year indicated; for 2000, values reflect flows through August. change in the indexes. SOURCE. Investment Company Institute. tially relative to both the pace of the preceding few combined in all years except one. The Asian financial years and the pace of flows into total return funds, crisis and the Russian debt default prompted a "flight which fell off appreciably. Through August, net new to safety" in 1998, and mutual fund investors reduced flows into capital appreciation funds in 2000 were at their investments in stocks and increased their investa pace more than twice that of 1999, whereas total ments in lower-risk money funds and short-term bond return funds experienced net outflows. funds. That episode proved to be only temporary, and Over the same period in which the composition mutual fund investors returned vigorously to equity of equity fund flows was shifting, the relative share funds, increasing the pace of net new cash flows into prices of technology firms were booming. From late those funds to a record level over the first eight 1998 until mid-2000, the six-month moving average months of 2000. Over the same period, however, of increases in the Nasdaq composite index, which is households were, on balance, net sellers of directly dominated by technology firms, was markedly greater held equities.7 Thus, at least part of the cash flows than the increases in the Wilshire 5000 index of into equity mutual funds may represent a shift in the total stock market (chart 5). Capital appreciation household preferences toward holding a smaller porequity funds are more likely than total return equity tion of their equity portfolio in directly held stocks funds to hold the shares of technology companies.9 and a larger portion in indirect holdings via equity Thus, households were directing more of their net funds.8 new investment into capital appreciation funds, which In recent years, the flow of net new investment into hold a greater share of their portfolio in technology equity funds has been greatest for domestic equity stocks, at the same time the share prices of technolfunds, with a much smaller flow going into internaogy firms were generally outperforming the share tional equity funds. From 1996 to 1998, net new prices of other publicly traded firms. investment in domestic equity funds was split fairly The volatility of equity prices has also increased evenly between capital appreciation funds—which recently (chart 6). Greater equity price volatility, hold stocks whose return is mainly from capital everything else constant, might be expected to temgains—and total return funds—which hold stocks per risk-averse households' appetite for equity mutual that return a mix of capital gains and dividend income funds. However, not only did domestic equity fund (chart 4). In 1999, however, the pace of net new flows flows accelerate through August 2000, but they were into capital appreciation funds picked up substanincreasingly targeted toward relatively riskier capital appreciation funds. Taken together, these developments might suggest 7. See Federal Reserve Board, Flow of Funds Accounts of the that there is a relationship between equity fund flows United States (Z.l statistical release), September 2000, table F.100, p. 16. From 1995 to 1999, households, on net, sold an average of about $329 billion worth of directly held corporate equities annually. In the first half of 2000, households sold, on net, $513 billion of directly held corporate equities, at an annual rate. 9. Using the most recent data available on mutual fund portfolios 8. Indirect equity holdings include holdings through mutual funds collected by the Morningstar data service, we calculate that, on an and also through employer-sponsored defined contribution accounts, asset-weighted basis, capital appreciation funds hold an average of personal trust accounts, and annuity accounts at life insurance about 40 percent of their assets, and total return funds about 20 percompanies. cent of their assets, in the stocks of technology companies. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

800 Federal Reserve Bulletin • December 2000 6. Equity market volatility, January 1996-August 2000 and because they became the preferred type of fund for new mutual fund investments. Percent Net additions to household wealth, as measured by the U.S. personal saving rate, have declined dramatically over the past fifteen years, even as the popularity of mutual fund investing has grown.10 As a result, the share of household saving done through mutual funds has been rising. The share of gross financial saving—households' acquisition of financial assets, net of capital gains—allocated to mutual funds rose from about 15 percent in 1985 to about 70 percent in 1999 (chart 8).11 If this trend continues, mutual funds will represent an increasing share of households' 1996 1997 1998 1999 2000 financial assets over time, even if the performance NOTE. Data show the six-month moving average of intra-day swings in the S&P 500; swings are calculated as the difference between the intra-day high and of mutual funds is equivalent to that of households' low as a percentage of the intra-day low. other financial assets. SOURCE. Authors' calculations using data from Standard & Poors. Mutual funds' share of aggregate household financial assets has grown in part because an increasing and equity prices. Such a link would depend on the percentage of U.S. households are investing in mutual role mutual funds play in household finances. There- funds. In June 2000, an estimated 50 million housefore, we turn our attention to the influence of mutual holds, or about half of all U.S. households, owned funds on the level and flow of household assets, the shares in at least one mutual fund (table l).12 types of households most likely to hold mutual funds, and the purposes for which mutual funds are held. 10. After averaging around 9 percent from 1950 through 1985, the U.S. personal savings rate has fallen to lower than Vi percent in 2000. MUTUAL FUNDS AND HOUSEHOLD ASSETS 11. The Federal Reserve Board's flow of funds accounts calculate personal saving in several ways. One measure is households' net acquisition of financial and housing assets less their increase in The share of households' financial assets kept in liabilities. Gross financial saving, which excludes the acquisition of mutual funds roughly doubled over the past decade, housing assets and liabilities, is the component of this measure of personal saving that is most relevant to households' mutual fund approaching 20 percent at the end of 1999; nearly all decisions. the increase was in long-term funds (chart 7). Domes- 12. In 1984, fewer than 12 percent of all U.S. households owned tic equity funds accounted for most of the increase shares in a mutual fund; by 1992, the proportion had grown to 27 percent. See Investment Company Institute, "U.S. Household in long-term funds, both because their assets appreci- Ownership of Mutual Funds in 2000," Fundamentals, vol. 9 (August ated at a greater rate than most other financial assets 2000), p. 1. 8. Mutual fund acquisitions as a percentage 7. Mutual fund assets as a percentage of gross household of gross household financial saving, 1984-99 financial assets, 1984-99 Percent Percent NOTE. Data show end-of-year values and include direct and indirect acquisi- NOTE. Data show end-of-year values and include direct and indirect holdings tions of mutual funds. Gross household financial saving is defined as the net of mutual funds. Long-term funds include all equity, hybrid, and bond funds and acquisition of financial assets over the year; it excludes capital gains and any exclude money market funds. increase in liabilities over the year. SOURCE. Flow of funds accounts and the Investment Company Institute. SOURCE. Flow of funds accounts and the Investment Company Institute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mutual Funds and the U.S. Equity Market 801 1. U.S. households owning shares in a mutual fund, 2. Proportion of U.S. households owning shares by household characteristics, June 2000 in a mutual fund, by household characteristics Percent and type of fund, June 2000 Percent As a proportion Household As a proportion of households Money characteristic of all U.S. households owning shares Household Equity Hybrid Bond market in mutual funds characteristic fund fund fund fund 1999 income 1999 income Less than $25,000 17 9 Less than $35,000 13 4 6 9 $25,000-$34,999 37 11 $35,000-$49,999 33 11 14 26 $35,000-$49,999 49 19 $50,000-$74,999 46 15 20 32 $50,000-$74,999 66 28 $75,000-$99,999 60 24 28 39 $75,000-$99,999 77 14 $100,000 or more 68 27 31 44 $100,000 or more 79 19 Age of head of household Age of head of household Younger than 25 14 2 7 8 Younger than 25 23 2 25-34 33 10 12 23 25-34 49 18 35-44 44 12 17 26 35-44 58 28 45-54 42 16 20 30 45-54 59 25 55-64 37 15 17 29 55-64 54 13 65 or older 21 11 14 19 65 or older 32 14 AH shareholders 35 12 16 24 All shareholders 49 100 SOURCE. Investment Company Institute. SOURCE. Investment Company Institute. investment option is still a rather recent phenomenon, Higher-income households are more likely than this pattern may also reflect generational factors. lower-income households to have financial assets, and they have greater financial asset holdings.13 Thus Younger generations, which have grown up with a well-established mutual fund industry, may be more they are also more likely to own mutual fund shares. willing to invest in these funds than older genera- Nevertheless, mutual funds provide access to finantions, which grew up less familiar with market investcial markets for households at all income levels. ments and more likely to rely on bank deposits and Indeed, almost 40 percent of mutual fund shareholdinsurance contracts. ers have an annual household income of less than Equity funds are the most popular type of mutual $50,000. Investors who have relatively low levels of fund, with more than one-third of all U.S. households income and financial assets generally find investing owning shares in such a fund (table 2). Indeed, for directly in stocks and bonds more difficult because of each income and age group, more households invest high minimum investment requirements and higher in equity funds than in hybrid, bond, or money marfees for small investments. Thus, mutual funds offer ket funds. a relatively low cost means of holding a diversified portfolio of financial instruments. And because The percentage of households that directly or indilower-income households may be less financially rectly own stock in publicly traded companies sophisticated than higher-income households, they increased dramatically over the past decade, rising may benefit more from the professional money- from fewer than one-third of all households in 1989 management services provided by mutual funds.14 The likelihood of owning shares in a mutual fund 3. Proportion of U.S. families holding stock directly peaks between the ages of 45 and 54, when most and indirectly, by family income, 1998 heads of household are working, and declines at later Percent ages, when a greater proportion have retired. This Memo: pattern may reflect, at least in part, the importance of Direct stock Direct Stock holdings holdings outside mutual funds for retirement saving. Because rela- Family income or indirect of retirement as a share stock holdings of group's tively widespread acceptance of mutual funds as an accounts' financial assets2 Less than $10,000 ... 88 44 2255 $10,000-$24,999 .... 2255 77 2288 $25,000-$49,999 .... 5533 1188 3399 $50,000-$99,999 .... 7744 2288 4499 13. See Arthur B. Kennickell, Martha Starr-McCluer, and Brian J. $100,000 or more .... 9911 5577 6633 Surette, "Recent Changes in U.S. Family Finances: Results from the 1998 Survey of Consumer Finances," Federal Reserve Bulletin, All families 4499 1199 5544 vol. 86 (January 2000), table 5, pp. 10-11. 1. Retirement accounts include individual retirement accounts and employer- 14. Dean M. Maki, "Portfolio Shuffling and Tax Reform," sponsored defined contribution pension plans. National Tax Journal, vol. 49 (September 1996), pp. 320-21, for 2. Includes both direct and indirect stock holdings and is based on families example, presents evidence that lower-income households may be less that have some stock holdings. financially sophisticated than higher-income households. SOURCE. Survey of Consumer Finances. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

802 Federal Reserve Bulletin • December 2000 to almost half in 1998.15 Across all but the highest 4. Distribution of IRA assets by type of institution, income levels, households are more likely to own selected years, 1985-99 stock indirectly and in retirement accounts than Percent directly outside of retirement accounts (table 3). In Type of institution 1985 1990 1995 1999 1998, only 19 percent of households owned stock directly outside of a retirement account whereas Mutual funds 17 22 37 49 Brokerage accounts 14 28 35 32 30 percent owned stock indirectly (often through a Life insurance companies 9 8 7 9 Bank and thrift deposits 60 42 20 10 mutual fund) or in a retirement account. For many households, retirement accounts are an important NOTE. Distributions may not sum to 100 percent because of rounding. SOURCE. Investment Company Institute. point of access to the equity market; 49 percent of all households owned some type of retirement account in 1998, up from 35 percent in 1989.16 ment earnings for IRAs but restricted the tax deductibility of contributions for higher-income households that were covered by an employer-provided pension plan; subsequently, annual contributions to traditional MUTUAL FUNDS AND RETIREMENT ASSETS IRAs dropped substantially.19 Legislation enacted in 1997 introduced Roth IRAs, which permit non-tax- Over the past two decades, the growth of individual deductible contributions. All distributions from these retirement accounts (IRAs) and a shift from defined accounts are untaxed, assuming that certain early benefit to defined contribution pension plans have withdrawal restrictions are not violated. Roth IRAs given households considerably more control over the have renewed investor interest in IRAs. Several types portfolio allocation of their retirement assets. At the of employer-sponsored IRAs are available to selfsame time, mutual funds have become an increasemployed individuals and employees of small busiingly important component of households' retirement nesses; they are similar to tax-deductible traditional accounts. IRAs but typically have higher contribution limits.20 IRAs generally feature tax-deductible annual con- IRA ownership has grown considerably over the tributions and tax-free accrual of investment earntwo decades since the accounts became universally ings. Once the account holder reaches age 59 V2, available. In June 2000, 41 percent of all U.S. houseassets withdrawn from the IRA are taxed as ordinary holds owned at least one type of IRA.21 Of those income; in addition, a tax penalty is usually imposed households that owned an IRA, 78 percent held a on assets withdrawn before that age. Traditional traditional IRA, 24 percent a Roth IRA, and 17 per- IRAs were established in 1974, but because they cent an employer-sponsored IRA.22 As ownerwere available only to workers not covered by an ship was growing, mutual funds were becoming an employer-provided pension, they were not common.17 In 1981, eligibility was extended to all work- increasingly important institution for the management of IRA assets, holding almost half of those ers and the annual tax-deductible contribution limits assets in 1999 (table 4). were increased. IRAs subsequently became quite popular.18 The Tax Reform Act of 1986 retained Households have also gained greater control over universal eligibility and the tax-free accrual of invest- the investment of their pension assets. Employersponsored pension plans have increasingly shifted away from traditional defined benefit plans, which 15. See Kennickell and others, "Recent Changes in U.S. Family typically do not allow employees to decide how their Finances," table 6, p. 15. A 1999 survey by the Investment Company Institute and the Securities Industry Association (Equity Ownership in America, ICI and SLA, 1999, p. 5) found that 48 percent of households owned stock, a proportion very close to that found in the 1998 Survey 19. Annual contributions to traditional IRAs, including both tax of Consumer Finances. deductible and non-deductible contributions, averaged less than 16. Data for 1998 are from Kennickell and others, "Recent $11 billion from 1990 through 1998. Changes in U.S. Family Finances," table 5, pp. 10-11; 1989 data are 20. Simplified employee pension IRAs (SEP IRAs) were created in from Arthur Kennickell and Martha Starr-McCluer, "Changes in U.S. 1978. SAR-SEP IRAs are a special type of SEP IRA with a salary Family Finances from 1989 to 1992: Evidence from the Survey of reduction feature; the formation of new SAR-SEPs has been prohib- Consumer Finances," Federal Reserve Bulletin, vol. 80 (October ited since 1996 but established SAR-SEPs can still be used. SIMPLE 1994), table 5, pp. 868-69. IRAs were introduced in 1996 for small business employers. Keogh 17. For more discussion of the development and details of IRAs, plans, which were established in 1962, are defined contribution pensee Eric M. Engen, William Gale, and John Karl Scholz, "Do Saving sion plans similar to SEP IRAs that can be set up by sole proprietors Incentives Work?" Brookings Papers on Economic Activity, vol. 1 and partnerships. (1994) pp. 85-180, and Investment Company Institute, "IRA Owner- 21. Investment Company Institute, "IRA Ownership in 2000," ship in 2000," Fundamentals, vol. 9 (October 2000). p. 1. 18. By 1986, annual contributions to IRAs had risen to more than 22. These numbers sum to more than 100 percent because some $35 billion. households own more than one type of IRA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mutual Funds and the U.S. Equity Market 803 5. Distribution of private pension plan assets by type of plan, selected years, 1975-99 Percent Type of plan 1975 1980 1985 1990 1995 1999 Defined benefit 72 71 66 55 50 45 Defined contribution 28 29 34 45 50 55 SOURCE. Flow of funds accounts. plan assets are invested, toward defined contribution 401(k) plans rose, reaching 78 percent in 1998, makplans, which usually give employees considerable ing them the most popular type of plan. discretion in the investment of those assets. In 1980, Like IRAs, 401(k) plans feature tax-deductible defined benefit plans held more than 70 percent of contributions, tax-free accrual of investment returns, the assets in all private pension funds (table 5). As annual contribution limits, and restrictions on withdefined contribution plans became more popular, their drawals.23 Employees who separate from a firm sponassets grew, so that they now hold 55 percent of all soring a plan before retirement age must pay income private pension assets. This shift in private pension taxes on the withdrawn funds at ordinary rates; assets has been important to mutual funds because in addition, they also face a tax penalty unless they defined contribution plans are much more likely to roll the funds over into an IRA or another 401(k) use mutual funds to manage their assets (table 6). account.24 Unlike IRAs, 401(k) plans are available The percentage of working households (that is, only to employees of firms that choose to sponsor the households with at least one employed adult) that are plans. Employers may also make tax-deductible concovered by a pension and have a defined contribution tributions to employees' accounts, and total contriplan has also risen (table 7). In 1989, 40 percent of bution limits are generally higher for 401(k) plans working households with a pension were covered by than for IRAs. Also, employers select the investment only a defined benefit plan, and another 31 percent options available in 401(k) plans; as a result, the were covered by both a defined benefit and a defined number of options is typically more limited than in contribution plan; only 30 percent were covered an IRA. In 1998, the typical 401(k) plan offered six solely by a defined contribution plan. By 1998, to nine investment options.25 These options usually 57 percent of working households with pension included equity, bond, and money market funds. coverage had only a defined contribution plan, and More than 70 percent of the plans offered an equity another 25 percent were covered by both types of fund option, making it the most popular option plans; only 18 percent were covered solely by a offered by sponsoring employers.26 defined benefit plan. As defined contribution plans became more common, the percentage that were 23. These plans, which were established in 1978, are named after section 401(k) of the Internal Revenue Code, which authorizes their 6. Distribution of financial assets in private defined benefit use. Other types of defined contribution plans include 403(b) and 457 and defined contribution pension funds by type of asset, plans, which are available to employees of nonprofit institutions and selected years 1985-99 state and local governments respectively; and thrift plans, which are Percent available to employees of the federal government. These other types of plans are similar to 401(k) plans in many respects. See Engen and Type of asset 1985 1990 1995 1999 others, "Do Saving Incentives Work?" for more discussion of 401(k) plans. Defined benefit funds 24. As a consequence, rollovers from 401(k) accounts and other Cash' 7 7 6 5 types of defined contribution pension plan accounts have been an Bonds 32 39 32 26 Equities 42 38 48 54 important source of funds to IRAs in recent years. Forty-six percent of Mutual funds 1 1 4 6 the owners of traditional IRAs and 13 percent of Roth IRA owners Insurance contracts2 10 8 5 5 have in their IRAs assets that were converted from an employer- Other financial assets 8 7 5 4 sponsored pension plan. See Investment Company Institute, "IRA Defined contribution funds Ownership in 2000," pp. 2, 4. Cash' 10 10 3 1 25. The Investment Company Institute reported that the median Bonds 19 17 12 7 number of investment options in 401(k) plans was six, whereas Hewitt Equities 39 36 40 44 Associates reported that the median number was nine. See Investment Mutual funds 3 7 21 30 Insurance contracts2 12 19 17 13 Company Institute, 401(k) Plan Participants: Characteristics, Contri- Other financial assets 16 12 7 5 butions, and Account Activity (Spring 2000), p. 20; and Hewitt Associates, Trends and Experience in 401(k) Plans (1999), p. 27. NOTE. Distributions may not sum to 100 percent because of rounding. 26. See Investment Company Institute, 401(k) Plan Participants, 1. Includes currency, insured deposits, and repurchase agreements; does not p. 22. This survey did not make a distinction between mutual funds include money market mutual funds, which are included with mutual funds. 2. Includes mutual funds held in variable annuities. and other pooled investment vehicles, such as trusts and separate SOURCE. Flow of funds accounts. accounts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

804 Federal Reserve Bulletin • December 2000 7. Pension coverage for working households, by type of plan, selected years, 1989-98 Percent Distribution of plans Distribution of defined contribution plans by type by type HHoouusseehhoollddss ccoovveerreedd Both defined benefit Defined benefit Defined contribution and defined 401(k) Other only only contribution 1989 55 40 30 31 55 45 1992 55 35 37 27 48 52 1995 54 23 52 24 65 35 1998 55 18 57 25 78 22 NOTE. Distributions may not sum to 100 percent because of rounding. SOURCE. Survey of Consumer Finances. Working households are those with at least one employed adult. Total retirement assets increased threefold over the retirement accounts. In this view, these households past decade, to almost $13 trillion in 1999 (table 8).27 would be less likely to trade frequently and, in par- Mutual funds have played an increasingly important ticular, less likely to redeem their equity fund shares role in this growth, accounting for almost one-fifth of in response to temporary stock-price declines. An total retirement assets in 1999. Moreover, retirement alternative hypothesis is that households switch more assets held within mutual funds have risen signifi- frequently between equity funds and money market cantly relative to total mutual fund assets, accounting or bond funds because the earnings in retirement for 35 percent of total fund assets in 1999. accounts, including capital gains, are not taxed. In Households have chosen to allocate the bulk of the this view, households with equity funds in retirement retirement assets they hold in mutual funds to equi- accounts would be more likely to trade frequently ties, thus bolstering the total share of mutual fund and, in particular, more likely to redeem their equity assets allocated to equity funds (table 9). In 1999, fund shares in response to stock-price declines. 73 percent of mutual fund IRA assets and 81 percent Testing these hypotheses and determining the overof mutual fund defined contribution pension plan all effect of equity mutual fund investing on stock assets were invested in equity funds.28 Retirement prices is an empirical issue. In the next section we account assets in mutual funds are much more likely analyze the evidence concerning the relationship than non-retirement-account assets in mutual funds to between mutual fund investors' behavior and equity be devoted to equity investments. market developments. The growing role of retirement assets in households' equity mutual fund holdings might be expected to affect mutual fund shareholders' investment behav- MUTUAL FUNDS AND FINANCIAL MARKETS ior. One hypothesis is that households take a longerterm perspective with the funds they have invested in Mutual funds hold about 20 percent of the publicly traded stocks of U.S. corporations. This proportion 27. Total retirement assets consist of assets in IRAs, private not only is much greater than it was a decade ago, but employer-sponsored pension plans (both defined contribution and it also is larger than the proportion of the bond defined benefit plans), federal, state, and local government employee retirement funds, and annuity reserves at life insurance companies. market held by mutual funds (chart 9). 28. About two-thirds of defined contribution pension plan assets The growing importance of mutual funds in the invested in mutual funds come from 401(k) plans; the remainder come U.S. equity market increases the possibility that from 403(b), 457, and other defined contribution pension plans. 8. Retirement assets, by type, selected years, 1990-99 Total retirement assets Mutual fund retirement assets (trillions of dollars) (billions of dollars) Memo: Memo: YYeeaarr Mutual fund Employer- Mutual fund Individual All employer- Individual retirement assets sponsored retirement assets retirement sponsored retirement as a share of total defined contribution as a share of total accounts pension plans accounts retirement assets pension plans mutual fund assets (percent) (percent) 1990 .6 3.4 5 141 67 19 1995 1.3 5.7 13 479 439 33 1999 2.5 10.2 19 1,222 1,204 35 SOURCE. Investment Company Institute. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mutual Funds and the U.S. Equity Market 805 9. Distribution of mutual fund assets within different types of accounts, by type of fund, 1999 Percent Type of mutual fund account Domestic equity fund Foreign equity fund Hybrid fund Bond fund Money market fund IRA 63 10 8 8 11 Defined contribution pension plan 73 8 8 5 6 All other mutual fund accounts 41 8 4 15 32 SOURCE. Investment Company Institute. households' decisions to invest new cash in, or mance for the stock market since World War II), request redemptions from, equity mutual funds sig- domestic equity funds experienced net outflows of nificantly affect equity prices. This possibility can more than $6 billion. This outflow amounted to be evaluated by looking at the relationship between 0.2 percent of the total value of the stock market, or domestic equity fund flows and equity prices. Net just under 3 percent of domestic equity fund assets; new flows into domestic equity funds as a percentage this was the largest monthly outflow as a percentage of the value of the U.S. stock market have tended to of fund assets to date. Indeed, domestic equity funds increase over the past fifteen years (chart 10).29 The experienced outflows in fourteen of the sixteen monthly percent change in the Wilshire 5000 index months following the October crash, outflows that of stock prices over the same period shows that while summed to a net total of more than $18 billion. All equity fund flows were becoming more stable, equity told, mutual fund shareholders withdrew more than prices were becoming more volatile (chart ll).30 A 11 percent of domestic equity fund assets in the related development is that the response of mutual aftermath of the October 1987 episode.31 fund investors to large market declines—specifically, The next large decline in stock prices occurred in the equity price declines in October 1987, August August 1990, when the Wilshire index fell about 1990, and August 1998—has become progressively 10 percent in the wake of concerns about the Gulf smaller. War in Kuwait and Iraq. In that month, mutual fund In October 1987, when the Wilshire index fell shareholders withdrew about %2Vi billion from more than 20 percent (the worst monthly perfor- domestic equity funds, which amounted to less than 0.1 percent of the value of the stock market, or about 1 percent of domestic equity fund assets. Outflows 29. Average monthly domestic equity fund inflows were 0.02 per- from August through September 1990 were only cent of the market's value over the period 1985-89, rose to 0.10 per- $3 billion, or a little more than 1 percent of fund cent over 1990-94, and rose further, to 0.14 percent, over 1995-99. 30. The coefficient of variation for domestic equity fund inflows assets. Although the Wilshire index fell half as far in (defined as the standard deviation of fund flows divided by the mean August 1990 as it had in October 1987, fund withof fund flows) was 2.9 over the period 1985-89, dropped to 0.6 over drawals during the 1990 episode were less than half 1990-94, and fell further, to 0.4, over 1995-99. those during the 1987 episode. Domestic equity funds did not experience a net 9. Percentage of total outstanding securities monthly outflow again until August 1998, when the held by mutual funds, 1984:Q1-2000:Q2 Wilshire index declined 15 percent in the midst of Percent the Asian financial market crisis and Russian bond defaults. Shareholders in domestic equity funds requested net redemptions of about $61/2 billion in that month, an amount equal to about 0.3 percent of total domestic equity fund assets. Domestic equity fund inflows resumed the following month. Thus, redemptions in August 1998 were substantially 31. John Rea and Richard Marcis ("Mutual Fund Shareholder Activity during U.S. Stock Market Cycles," Investment Company 1984 1986 1988 1990 1992 1994 1996 1998 2000 Institute Perspective, vol. 2, March 1996, pp. 1-16) show that during the bear markets in the 1970s, equity fund shareholders were sensitive NOTE. Data exclude variable annuities. Total outstanding equities include all to prolonged share price declines. Equity funds had outflows in almost publicly traded domestic securities as well as those foreign equities owned by every month between 1971 and 1982 as the stock market waded U.S. nationals, and total outstanding bonds include all publicly traded corporate, through three periods of price contraction, including the long bear Treasury, agency, and municipal bonds held by households and foreign bonds market over 1973 and 1974, when the S&P 500 index declined held by U.S. nationals. SOURCE. Flow of funds accounts. 48 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

806 Federal Reserve Bulletin • December 2000 10. Net new cash flows to domestic equity mutual funds as a percentage of the value of the U.S. stock market, January 1984-August 2000 Percent .15 I August .15 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 NOTE. Data show total net flows, excluding reinvested dividends, during the SOURCE. Authors' calculations using data from the Investment Company indicated month as a percentage of the total market capitalization of all stocks Institute and U.S. stock exchanges. traded on the NYSE, AMEX, and Nasdaq exchanges at the end of the preceding month. 11. Change in the Wilshire 5000 index, January 1984-August 2000 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 NOTE. Data show the percent change in the index from the last business day of the preceding month to the last business day of the month shown. smaller, as a percentage of assets, than those in redemptions from equity funds, as a percentage of August 1990, even though the stock price decline in assets, have diminished over time.32 1998 was greater. A fund's cash holdings are not its only means of Although investors have withdrawn money from meeting a short-term episode of redemptions without domestic equity funds during severe market declines, selling some of its equity portfolio. Many families of mutual fund managers have not necessarily had mutual funds now have committed lines of credit to to sell stocks immediately to cover redemptions. In help meet unexpectedly large temporary outflows.33 addition to holding stocks, equity funds also hold Also, some large fund families have been allowed by safe, liquid money market assets, usually referred to the Securities and Exchange Commission to borrow as "cash." The proportion of a mutual fund's total between funds. Thus, an outflow from an equity fund, assets held in cash is known as the cash ratio. To the for example, could be covered by borrowing at a fair extent that net outflows can be met by cash on hand, they need not translate into forced sales of equities by fund managers. The asset-weighted mean cash ratio 32. On average, net redemption rates have been far below equity for all domestic equity funds has generally been funds' cash ratios on a monthly basis; however, some individual funds trending down and recently stood a little above 4 per- may have needed to sell some of their equity portfolio to meet redemption requests. cent (chart 12). Despite the decline, funds have had, 33. Mutual fund credit lines are typically used for short-term on average, more than enough cash on hand to cover adjustments. It is possible for funds to use leverage as part of their monthly redemptions throughout the past fifteen long-term portfolio management, but they must have at least $3 in assets for each $1 they borrow. In practice, very few mutual funds use years. Moreover, the frequency and magnitude of net long-term leverage. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mutual Funds and the U.S. Equity Market 807 12. Domestic equity fund cash holdings and outflows as a percentage of fund assets, January 1984-August 2000 Percent 12 Cash holdings 10 Fund outflows October August - 2 August 1 1. ilnL.i .11 ill ihilil ill li i . I il. 1 I 1 1 1 1 1 . i 1 1 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 NOTE. Cash holdings are liquid assets as a percentage of total fund assets. SOURCE. Investment Company Institute. Fund outflows are net for the month; months with net inflows are not shown. market rate from another fund in the family that is could cause flows, flows could cause price changes, receiving inflows—say, a bond or money fund. or both flows and price changes could react to new Credit lines and fund-family borrowing agree- information that affects the market's perceived value ments can serve as additional buffers that, along with of stocks. Exploring the alternative hypotheses assothose traditionally provided by funds' liquid assets, ciated with these relationships requires an examinahelp equity fund managers avoid having to sell equi- tion of the effect of lagged price changes on current ties in a slumping market. However, temporary flows and of lagged flows on current price changes. periods of sharp equity price declines may not be the The feedback trading hypothesis provides one posonly time equity fund shareholders' behavior could sible explanation for a positive correlation between have affected equity prices. Equity fund flows may domestic equity fund flows and equity price changes. have had more subtle effects on equity prices— Mutual fund investors may be feedback traders, that effects that may have been small and that may have is, they may follow the stock market, so that an appeared only with a delay. Evidence of these effects increase in equity prices one month would be folcan be sought by calculating correlation coefficients lowed by a positive flow the next month. However, that measure the strength and direction of the the average correlation between current flows and co-movement of equity mutual fund flows and price changes lagged one month has been essentially changes in equity prices over time. Analysis of these zero since 1984 (chart 13, middle panel). Thus, at correlation coefficients can give some indication of least when the analysis is based on monthly data, the whether equity mutual fund flows cause changes in feedback trading hypothesis is not supported. equity market prices, or the other way around, or A second hypothesis—the price pressure neither. (A more detailed statistical treatment of this hypothesis—holds that the contemporaneous correlaissue is given in the appendix.) tion arises because flows exert upward pressure on As would be expected, given that cash has flowed stock prices for reasons other than changes in availout of domestic equity funds in months with steep able information that affect the market's valuation of stock market declines, fund flows and stock price stocks. After such an increase, equity prices would changes have a positive contemporaneous correla- decline as they return to a level more consistent with tion, averaging about 0.6 for the period since 1984 the general market perception of the appropriate level (chart 13, upper panel). This contemporaneous corre- of stock valuation. This hypothesis can be tested by lation is statistically significant, although it has calculating the correlation between current price declined over time, from 0.7 in the mid-1980s to changes and lagged flows (that is, the effect of flows below 0.25 more recently. Thus, as an increasing pro- one month on price changes the next). Consistent portion of equity mutual funds were being held in with this hypothesis, the correlation coefficient is retirement accounts, flows to equity mutual funds negative; the correlation is weak, however, averaging were becoming less sensitive to market performance. only about -0.2 (chart 13, lower panel), and is not This positive contemporaneous correlation says statistically significant. little about the direction of causality (if any) between Finally, the information hypothesis maintains that domestic equity fund flows and equity price changes. equity mutual fund investors, like other investors in Three causal relationships are possible: price changes the equity market, merely trade on the basis of new Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

808 Federal Reserve Bulletin • December 2000 information that the market uses to value equities. If CONCLUSION this hypothesis is correct, then stock price declines should not follow equity fund inflows. The finding Mutual funds have grown rapidly over the past that equity fund flows and stock price changes are decade, both in absolute terms and as a percentage of significantly correlated only contemporaneously is household assets, in large part because of the growth consistent with this hypothesis. Econometric analysis of retirement saving accounts. In defined contribution (reported in the appendix) generally confirms the pension plans and individual retirement accounts, evidence suggested by the correlation coefficients. households directly control the allocation of their Overall, there is little evidence that mutual fund retirement assets and often use equity mutual funds investors have been a destabilizing force in equity as the primary vehicle for investing them. markets over the past fifteen years. There is little evidence that over the past decade or so mutual fund investors have traded in a manner that has significantly influenced stock prices indepen- 13. Correlation between domestic equity mutual dently of the rest of the market, or that mutual fund fund flows and stock market price changes, investors have been entering and exiting equity January 1985-August 2000 funds merely on the basis of past price changes in the stock market. Equity fund investors appear to have Correlation coefficient behaved like other investors in the equity market and Current flows and current price changes simply traded on the basis of new information that the market uses to value equities. Thus, there is little indication that mutual fund investors have in recent history been a destabilizing force in the equity market even as mutual funds were becoming larger players in the market. Further, the evidence suggests that fund shareholders who held retirement accounts were generally focused on investing for the long term rather than using these tax-sheltered accounts for active trading, because even as retirement assets were Current flows and lagged price changes becoming an increasingly larger share of equity fund assets, fund flows were becoming less sensitive to stock price changes. — .50 APPENDIX: ECONOMETRIC ANALYSIS OF EQUITY MUTUAL FUND FLOWS AND STOCK MARKET PRICE CHANGES Correlation coefficients and other simple statistics Lagged flows and current price changes can provide only limited insight into the behavior of mutual fund investors. In this appendix, we investigate the relationship between equity mutual fund flows and equity market price changes using regression analysis. We find no compelling evidence that fund flows cause stock price changes or that stock market price changes cause fund flows. As noted in the main text, more cash tends to flow into domestic equity mutual funds in months when 1 I 1 I I 1 I I I I I I I I I I I I the stock market does well than in months when 1984 1986 1988 1990 1992 1994 1996 1998 2000 it does poorly. The most likely explanations for this NOTE. Data show the twelve-month moving average of the correlation contemporaneous correlation are the price pressure between (1) net new cash flows to domestic equity funds as a percentage of the value of the U.S. stock market and (2) the percentage change in the hypothesis and the information hypothesis. Wilshire 5000 index from the end of the preceding month to the end of the A related issue is whether or not mutual fund indicated month. Correlation coefficients are calculated using data for the twelve months preceding the indicated month. Monthly values for stock market capitali- investors are following a feedback strategy, so that zation are smoothed to conform to the market's long-run growth rate. equity fund inflows react to past values of stock SOURCE. Authors' calculations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mutual Funds and the U.S. Equity Market 809 market price changes. Several fund-level studies have F(t) fit) = 100 ,*=!,..., 200. found that mutual fund investors transfer money into A H + g)^ 0 individual mutual funds that are doing well and out of individual funds that are doing poorly.34 This Here, t - 1 refers to the first month in the sample finding is not evidence, however, that in the aggreperiod (January 1984) and t = 200 refers to the last gate, mutual fund investors choose to invest in equity month in the period (August 2000). Fit) is the dollar funds as a whole (as opposed to, say, money market value of net new cash flows into domestic equity funds) on the basis of previous months' equity marfunds, A is the dollar value of the total U.S. stock ket price changes. If mutual fund investors are 0 market capitalization (NYSE + AMEX + Nasdaq) at indeed feedback traders, we would be less likely to the beginning of the sample period, and g equals believe the information hypothesis, which requires 0.01134 (the average monthly rate of growth of the that mutual fund investors react mainly to new inforstock market over the period). Thus fit) can be mation about stocks. thought of as fund flows as a percentage of smoothed We find evidence that strongly favors the informastock market capitalization. Deflating flows Fit) by tion hypothesis and are able to reject the price presthe actual beginning-of-period stock market capitalisure hypothesis in most cases. We can consistently zation would introduce a direct effect of stock market reject the feedback trading hypothesis. On balance, price changes on flows, as the stock market grows our results indicate that flows to equity mutual and shrinks with price changes. This direct effect funds do not generally push stock prices above the would bias downward any estimates of the effect of level determined by other market participants.35 lagged price changes on current flows because flows would appear smaller (as a percentage of the stock market) precisely when the stock market does well. Econometric Modeling of Flows Therefore, to avoid this bias we normalize fund flows by the smoothed, not the actual, stock market Our analysis concentrates on net new cash flows to capitalization. domestic equity mutual funds and percent changes To test the competing price pressure and inforin domestic equity market prices. We use data on the mation hypotheses, one might run the following monthly aggregate flow of new cash, excluding reinregressions: vested dividends, to all domestic equity funds for January 1984 through August 2000 collected by (la) fit) = k + b Rit) + bRit - 1) + • • • + b Rit - 6) the Investment Company Institute. Our measure of b 0 x 6 equity price changes is the percent change in the Wilshire 5000 index of stocks from the last business (lb) Rit) = k + cjit) + cjit- 1) + ... 4- cjit - 6). c day of one month to the last business day of the next month. Here, fit) is the normalized flow variable explained To test our hypotheses, we construct the following above, Rit) is the monthly percent change in the normalized fund flow variable: Wilshire 5000 index of stocks, and k and k are the b c constant terms in the regression. The regression coefficient estimates for equations la and lb are 34. Richard A. Ippolito, "Consumer Reaction to Measures of Poor shown in table A. 1. They appear to support the price Quality: Evidence from the Mutual Fund Industry," Journal of Law pressure hypothesis, as current price changes are and Economics, vol. 35 (April 1992), pp. 45-70; Judith Chevalier and Glenn Ellison, "Risk Taking by Mutual Funds as a Response to negatively correlated with lagged flows. They also Incentives," Journal of Political Economy, vol. 105 (December 1997), seem to support the feedback trading hypothesis, pp. 1167-200; and Roger M. Edelen, "Investor Flows and the because current flows are positively correlated with Assessed Performance of Open-End Mutual Funds," Journal of Financial Economics, vol. 53 (September 1999), pp. 439-66. lagged price changes. 35. Our analysis follows that by Vincent A. Warther, "Aggregate These results are almost completely driven by Mutual Fund Flows and Security Returns," Journal of Financial misspecification. Suppose that there is a slow-moving Economics, vol. 39 (October 1995), pp. 209-35, and "Has the Rise of Mutual Funds Increased Market Instability?" in Robert Litan and trend in mutual fund flows (as is strongly suggested A. Santomero, eds., Brookings-Wharton Papers on Financial Ser- by chart 10), so that flows in a given month are made vices (Brookings Press, 1998), pp. 239-80. See also Mark Grinblatt, up of this trend and the effect of that month's infor- Sheridan Titman, and Russ Wermers, "Momentum Investment Strategies, Portfolio Performance, and Herding: A Study of Mutual Fund mation lit). Assume that the trend component of Behavior," American Economic Review, vol. 85 (December 1995), flows can be captured by a simple autoregressive pp. 1088-105; and L. Franklin Fant, "Investment Behavior of Mutual process with six months of lags. Under the informa- Fund Shareholders: The Evidence from Aggregate Fund Flows," Journal of Financial Markets, vol. 2 (1999), pp. 391^102. tion hypothesis, price changes and flows (correcting Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

810 Federal Reserve Bulletin • December 2000 A. 1. Regressions of flows on price changes K + c k — kh 0 d and price changes on flows c d = hj 0 2 Independent variable Coefficient c + c d = 0. x 0 x Flows on price changes Our hypothetical analyst would falsely conclude Constant .04154*** Price change t .00750*** that flows push up current price changes (because c 0 Price change t - 1 .00214** would be positive) but depress future price changes Price change t- 2 .00277*** Price change t- 3 .00290*** (because c would be negative). The same sort of Price change t- 4 .00311*** l Price change t - 5 .00259*** analysis can be applied to regressions of the form in Price change t- 6 .00201* /?-squared .33 equation la to show that the analyst would, falsely, conclude that investors were following a feedback Price changes on flows trading strategy. Thus the results in table A.l cannot Constant .82** be taken as evidence of the price pressure hypothesis Flows t 70.58*** Flows t - 1 -24.79*** because they are entirely consistent with the informa- Flows t- 2 -23.15*** tion hypothesis. Flows t — 3 -18.98*** Flows t — 4 -5.82 If the true model were actually given by the infor- Flows / - 5 7.64 Flows t- 6 -.09 mation hypothesis, specified by equations 2a and 2b, /f-squared .57 the correct estimation strategy would be to proxy this NOTE. Flows are defined as monthly net new cash flows to domestic equity month's information /(f), which is unobserved, by mutual funds as a percentage of smoothed stock market capitalization (see appendix text for details). Price change is defined as the monthly percent change observed price changes, R(t), while at the same time in the Wilshire 5000 index. For the dependent variable, regressions use monthly controlling for the trend in mutual fund flows. The data from July 1984 through August 2000. * Significant at 10 percent level. results of these regressions are shown in table A.2. ** Significant at 5 percent level. Note that the effect of contemporaneous price *** significant at 1 percent level. changes declines somewhat from the first half of the sample period to the second. This result is consistent for their trend) are driven only by information I(t) with the correlation coefficient shown in chart 13 (top each month. The information hypothesis model is panel), which trends downward over time. (2a) f{t) = k + d,I(t) + dj(t-1) + ... 4- dj{t - 6) d Granger Causality Tests (2b) R(t) = k + hjl(t). h Although the results in tables A.l and A.2 are consis- An analyst who regresses price changes on current tent with the information hypothesis, they do not and lagged flows, as in equation lb, when the true rule out the price pressure hypothesis. We now test model is given by equations 2a and 2b, would esti- directly the proposition that flows to equity mutual mate coefficients that are in fact spurious. Assume for convenience that the analyst uses only one lag of flows in the regression, estimating A.2. Regressions of flows on price changes and lagged flows R(t) = k + Cf(t) + f(t-1). Coefficient c 0 Cl variable January 1984- January 1984- June 1992- August 2000 May 1992 August 2000 Assume further that only one lag is needed, so that d = d = . . . = d = 0. Substituting for f(t) from Constant -.0001 -.0036 .0285*** 2 3 6 Price change t .. .0078*** .0084*** .0071*** equation 2a, the regression equation above can be Flows t - 1 .3688*** .2200*** .5079*** rewritten as Flows/-2 .... .2849*** .2817*** .2201*** Flows t - 3 .2010*** .2533*** .0692 Flows t - 4 .0669 .0514 .1344 Flows t - 5 -.0149 .0519 -.1890** R(t) = [k c + c 0 k d ] + [c 0 d 2 ]I(t) + [ Cl + cMfit - 1). Flows t- 6 -.0294 .0116 -.1000 i?-squared .79 .77 .61 Comparing this relation with the true relation, given NOTE. The dependent variable is the monthly net new cash flow to domestic equity mutual funds as a percentage of smoothed market capitalization (see in equation 2b, we see that, with enough data, the appendix text for details). Price change is defined as the monthly percent change parameter estimates k, c , and c, will be related to the in the Wilshire 5000 index. c 0 ** Significant at 5 percent level. true parameters k and hj by the system of equations h *** Significant at 1 percent level. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Mutual Funds and the U.S. Equity Market 811 funds statistically cause equity market price changes price changes. Also given is the long-term effect of using Granger causality tests. If flows can help pre- flows on price changes, which is simply the sum of dict equity price changes, they would be said to the coefficients y in the unrestricted equation. t Granger-cause equity market price changes. Our We can reject the hypothesis that flows cause price goal, in essence, is to test statistically whether the changes for all but one specification, the specification negative correlation coefficient between current flows with six lags estimated over the earlier half of the and future price changes, shown in chart 13 (lower sample period. Because mutual funds were a much panel), is statistically significant. The Granger test smaller part of the equity market in this earlier period, requires estimating two regression equations: an this single result seems somewhat anomalous and unrestricted equation (UR) that regresses current cannot be taken as strong evidence for the price price changes on lagged price changes and lagged pressure hypothesis. Further, tests using the second flows and a restricted equation (R) that regresses half of the period, when mutual funds were a larger current price changes on lagged price changes only, part of the equity market, indicate that flows do excluding lagged flows. We then use an F-test to test not cause price changes. Consistent with chart 13 the hypothesis that the coefficients on the lagged (lower panel), the long-term effects are negative, flows in the unrestricted equation are jointly equal to although, again, in most cases they are not statiszero. Intuitively, if excluding flows affects our ability tically different from zero. These results do not proto explain price changes, then flows must determine, vide compelling support for the price pressure at least in part, price changes. More formally, the hypothesis. Of course, the price pressure effect may equations to fit are play out quite rapidly, with prices rising and then falling within a matter of days, so that with our n m monthly data we are unable to detect it. However, (UR) R(t) = x 0 +£ Xi R(t - i) +Xyjf(t ~ j) such a scenario cannot explain the strong simulta- /=i j=i neous correlation between flows and price changes that we do observe in the data. Our results indicate (R) R(t)=x* +^R(t-i). 0 that this monthly correlation cannot be ascribed to the i= 1 price pressure hypothesis. The test results are sensitive to the number of lags In the same way that we tested whether flows (the parameters m and n) used and the time periods caused price changes, we can test whether price over which the equations are estimated. In the upper changes cause flows; that is, we can test the proposipanel of table A.3 are the results of using six months tion that households are following, in the aggregate, and twelve months of lags (for both flows and price a feedback trader strategy. The lower panel of changes) over the entire sample period as well as table A.3 displays the results of Granger causality over the first and second halves of the period. The tests of the effect of price changes on flows. For all table gives the F-statistic for the hypothesis that y = specifications we reject the hypothesis that flows x y = . . . = y = 0, that is, that flows do not cause cause price changes. Thus, the evidence does not 2 n A.3. Granger causality tests of the effect of flows on price changes and price changes on flows January 1984-August 2000 January 1984-May 1992 June 1992-August 2000 NNuummbbeerr ooff llaaggss F-statistic Effect F-statistic Effect F-statistic Effect Flows on price changes SSSSiiiixxxx .97 -3.33 2.53** -16.48 1.42 -14.81 TTTTwwwweeeellllvvvveeee .48 -1.49 1.18 -10.63 1.13 -21.45 Price changes on flows SSSSiiiixxxx .74 -.0035 1.65 -.0064 .79 .0001 TTTTwwwweeeellllvvvveeee 1.06 -.0013 1.21 -.0084 1.06 .0072 NOTE. The upper panel gives the F-statistic for the hypothesis test that flows as monthly net new cash flows to domestic equity mutual funds as a percentage do not cause price changes and the sum of the computed coefficients of the of smoothed stock market capitalization (see appendix text for details). Price effect of flows on price changes; the lower panel gives the F-statistic for the change is defined as the monthly percent change in the Wilshire 5000 index. hypothesis test that price changes do not cause flows and the sum of the ** Hypothesis rejected at the 5 percent confidence level. computed coefficients of the effect of price changes on flows. Flows are defined Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

812 Federal Reserve Bulletin • December 2000 suggest that households are, in the aggregate, follow- individuals who own stocks directly). Our results do ing a feedback trader strategy. not support this idea. We find that mutual fund inves- Financial commentators often claim that equity tors do not lag the market; that is, they do not invest mutual funds play a large role in the domestic stock more in equity funds in the months following a market. Some claim that the long bull market of the particularly positive performance by the market. Nor 1990s was driven by cash flows to mutual funds, do we find evidence that equity fund flows statistiwhile others claim, to the contrary, that cash flows to cally cause market price changes, by either tempoequity funds drive up the stock market only tempo- rarily or permanently pushing stock prices above rarily, after which the market gradually readjusts to their market values. We conclude that mutual fund its general market value. Underlying both views is investors react to incoming news and other factors the idea that mutual fund investors are somehow less that influence the valuations of stocks in a manner savvy or less informed about equity markets than similar to that of other market participants. • other investors (for example, institutional investors or Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

813 Treasury and Federal Reserve Foreign Exchange Operations This report, presented by Peter R. Fisher, Executive operation, which was divided evenly between the Vice President, Federal Reserve Bank of New York, U.S. Treasury Department's Exchange Stabilization and Manager, System Open Market Account, de- Fund and the Federal Reserve System, was coorscribes the foreign exchange operations of the U.S. dinated with the European Central Bank (ECB) and Department of the Treasury and the Federal Reserve the monetary authorities of Japan, Canada, and the System for the period from July 2000 through Sep- United Kingdom. tember 2l)00. Ryan Faulkner was primarily responsible for preparing the report. CURRENCY MOVEMENTS DOMINATED During the third quarter, the dollar appreciated BY EURO WEAKNESS DURING THE FIRST HALF 8.2 percent against the euro and 2.0 percent against OF THE QUARTER the yen. On a trade-weighted basis, the dollar ended the quarter 4.1 percent stronger against the currencies During the first half of the quarter, the euro weakened of the United States' major trading partners. In addi- against the major currencies, having depreciated tion, the euro depreciated 5.5 percent against the yen 4.3 percent against the dollar and 1.5 percent against over the course of the third quarter. The euro's value the yen, and neared the lows reached in May 2000. during the first half of the quarter was largely influ- The depreciation of the euro was widely attributed to enced by market expectations of a continued net market expectations of continued cross-border investoutflow of capital from the euro area, especially ment flows out of the euro area that were related to related to merger and acquisition activity. During the merger and acquisition announcements made in July first week of September, the euro's decline acceler- and August. According to the ECB, the euro area had ated, prompted by reports of global portfolio realloca- net outflows of direct investment and portfolio investtions, and contributed to a sharp increase in currency ment in July 2000 of €11.3 billion and €5.9 billion market volatility. respectively. On September 22, the U.S. monetary authorities The euro's depreciation during the first half of the intervened in the foreign exchange markets, pur- quarter also coincided with uncertainty regarding the chasing 1.5 billion euros against the dollar. The growth prospects for the euro area and the perceived risk that inflationary pressures were growing. In addition, weaker-than-expected German business confi- 1. Trade-weighted G-3 currencies, 2000:Q3 dence in June and purchasing manager surveys in Index, July 1 = 100 July suggested to some market participants that the pace of growth in the euro area was moderating. However, higher-than-expected euro-area inflation for June and July solidified expectations that the ECB would tighten monetary policy, with the implied yield on the three-month December euribor futures contract having risen 18 basis points, to a yield of 5.31 percent during the first half of the quarter. Rising import prices and higher oil prices were cited as the main factors behind the jump in headline inflation. In the United States, economic data releases during July Aug. Sept. the first half of the quarter supported market expec- 2000 tations that the pace of U.S. economic growth was NOTE. In this and the charts that follow, the data are for business days except moderating. Among these data were the weaker-thanas noted. expected surveys for June and July from the National SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

814 Federal Reserve Bulletin • December 2000 2. Yield implied by the December euribor contract, 2000:Q3 two-year dollar swap rate over the two-year euro swap rate fell from 190 to 135 basis points during the quarter, extending the narrowing that began in early May when the spread was 245 basis points. The — 5.4 effect of narrowing interest rate differentials on the euro appeared to be overshadowed by the market's attention to potential capital flows out of the euro area. Currency option prices during the first half of the quarter indicated that market anxiety remained relatively low. During July and August, implied volatilities for one-month options on the euro-dollar and euro-yen exchange rate pairs reached their lowest July Aug. Sept. 2000 points of the year, averaging 11.2 and 13.4 percent, SOURCE. Bloomberg L.P. respectively, over these two months. In addition, prices of euro-dollar risk reversals indicated continued demand for protection against euro appreciation, Association of Purchasing Managers, the Chicago with one-month euro calls being favored over one- Purchasing Managers Index survey for July, and conmonth euro puts. struction spending for June. During the first half of In comparison with the euro, the yen traded in a the quarter, market participants reduced their expectarelatively narrow range against the dollar, between tions for additional tightening of U.S. monetary pol- ¥105 and ¥110, in response to mixed evidence icy before year-end amid signs of subdued inflation. regarding Japanese economic conditions, strength Over this period, the implied yield on the December in local equity markets, and speculation about the federal funds futures contract declined 26 basis timing of an end to the Bank of Japan's near-zero points, to 6.60 percent, and ended the quarter at interest rate policy. In July, the dollar was supported 6.49 percent. Signs that growth could be moderating by diminishing expectations of a near-term increase also led many market participants to lower U.S. earnin Japanese rates after the release of mixed economic ings forecasts for the remainder of the year. U.S. data and several corporate bankruptcy announceequities were mixed during the first half of the quarments. Commentary from Bank of Japan officials and ter but then declined during the second half. On signs of improving economic conditions in August balance, the S&P 500 and the Nasdaq composite once again raised market expectations for an end to equity indexes fell 1.2 and 7.4 percent, respectively, the near-zero interest rate policy. On August 11, the during the third quarter. Bank of Japan raised its target for the overnight call Short-dated dollar-euro interest rate differentials rate to 0.25 percent. The reaction in the currency narrowed during the first half of the quarter but markets was relatively mild, and the yen weakened remained in favor of the dollar. The spread of the modestly against the dollar and euro amid specula- 4. Yields on short-term Japanese fixed-income securities, 3. Implied yields on U.S. interest rate futures contracts, 2000:Q3 2000:Q3 Percent — — 7.1 December eurodollar contract — 6.9 V- — 6.7 — — 6.5 December federal funds futures contract _J 1 1 July Aug. Sept. July Aug. Sept. 2000 2000 SOURCE. Bloomberg L.P. SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 815 5. Foreign inflows into Japanese equities and the dollar-yen spot exchange rate, 2000:Q3 Billions of yen Yen per dollar Capital inflows — 112 ______ Yen spot rate II w - 300 — — 103 1 1 1 i 1 1 July Aug. Sept. 2000 NOTE. Capital inflows are weekly data. SOURCE. Bloomberg L.P. { tion about the effect of higher rates on the Japanese 2.8 percent against the yen and 1.9 percent against economy. the dollar. During the second half of August, the yen strength- Market nervousness over additional bouts of volaened 2.3 and 5.1 percent against the dollar and euro, tility increased as the euro reached new historic lows respectively, amid gains in Japanese equities and against the major currencies, raising market percepsigns of continued economic recovery. Although tions of the possibility of official intervention in the consumer price index data released in August support of the euro. Implied volatility for one-month renewed deflationary concerns, other reports on eco- options on the euro-yen exchange pair jumped nomic activity, such as June data on machine orders, 1.5 percentage points in the first week of September, increased speculation that the Japanese economy con- to 18.2 percent, its highest level since April 2000. tinued to recover. The yen was also supported by Implied volatility for options on the euro-dollar investor interest in buying Japanese shares, coinci- exchange pair also increased, with the one-month dent with a 4.4 percent rise in the Nikkei over the last tenor reaching 14.4 percent on September 8. two weeks of August. According to the Ministry of Pressure on other currencies and capital markets Finance, foreign investors bought ¥350 billion in also emerged, reflecting a decline in investor risk Japanese stocks in August, marking the first time that appetite. In addition to the Japanese repatriation they had been net purchasers of Japanese shares since flows, higher oil prices and signs of slower global March 2000. growth also contributed to uncertainty in the currency markets, as speculation rose about the effect that higher oil prices would have on countries' monetary SHARP RISE OF CURRENCY MARKET VOLATILITY IN SEPTEMBER During the first two weeks of September, currency 6. The euro against the dollar: spot exchange rate and option implied volatility, 2000:Q3 market volatility increased sharply in response to reported portfolio reallocations. In addition to Dollars per euro Percent expected outflows from the euro area, the repositioning of Japanese firms in anticipation of the Septem- % Spot exchange rate ber 30 fiscal-half year-end appeared to have been a 18 1166 major factor behind the sharp currency fluctuations. VV The depreciation of the euro reportedly prompted 93 — \/ V K ) One-month Japanese institutional investors who had acquired volatility euro assets at higher exchange rates to sell euros .90 1 / ^ ^ O v ^v A — 14 against the yen to hedge or liquidate eurodenominated debt holdings. As investors scaled back .87 — V s T^ — 12 their positions, movements in the currency market 1 1 1 1 were exacerbated. In the week after the ECB's deci- July Aug. Sept. sion to raise its main policy rate 25 basis points, to 2000 4.5 percent on August 31, the euro depreciated SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

816 Federal Reserve Bulletin • December 2000 7. The euro against the yen: spot exchange rate this statement later that morning during a previously and option implied volatility, 2000:Q3 scheduled press conference before the September 23 Group of Seven (G-7) meeting and noted that "Brit- Yen per euro Percent ish and Canadian authorities also took part in the Spot exchange rate operation, purchasing euros with their currencies." 102 18 Secretary Summers also said that "Our policy on the V 16 dollar is unchanged. As I have said many times, a 99 — strong dollar is in the national interest of the United One-month volatility States." 96 t— — 14 The euro rose as high as 0.9014 against the dollar and 96.17 against the yen before consolidating its 93 — — 12 gains just above $0.88 and ¥94.60. From Thursday's to Friday's close, the euro appreciated 2.4 and 1 1 ^ 1 3.2 percent against the dollar and yen respectively. July Aug. Sept. 2000 Against the Canadian dollar and British pound, the SOURCE. Bloomberg L.P. euro rose 2.1 and 0.9 percent, respectively, over the same period. Although the dollar declined 2.3 percent policies and the ability of some countries to attract against the euro from Thursday's to Friday's close, it international capital. Among the currencies affected appreciated by 1.3 percent against the yen over the were the New Zealand dollar, the Australian dollar, same period. the South African rand, and the Brazilian real, which In the days after the intervention, the euro traded in depreciated 13.1, 9.1, 6.3, and 2.0 percent, respec- a narrow range against the yen and the dollar. For the tively, against the U.S. dollar over the quarter. remainder of the third quarter, the euro-dollar and euro-yen exchange pairs traded in a 0.7 and 1.0 percent range respectively. The implied volatility of COORDINATED INTERVENTION TO PURCHASE one-month euro-dollar options also declined, falling EUROS IN THE MARKET from 16.2 percent on September 22 to 13.4 percent at On September 22, the Federal Reserve Bank of New the quarter's close. Over the same period, the implied York (FRBNY) entered the market to purchase euros volatility of one-month euro-yen options declined against dollars for the U.S. monetary authorities in a from 16.9 to 14.9 percent. coordinated intervention operation initiated by the ECB. The Japanese, British, and Canadian monetary TREASURY AND FEDERAL RESERVE FOREIGN authorities also participated in the intervention, pur- EXCHANGE RESERVES chasing euros with their currencies. The operation began at 7:11 a.m., with the euro At the end of the quarter, the current values of the trading at 0.8750 against the dollar, 2.0 percent higher euro and Japanese yen reserve holdings totaled than the closing price the previous day, and at 93.20 $15.7 billion for the Federal Reserve System and against the yen, 1.6 percent higher than the previous $15.7 billion for the Treasury's Exchange Stabilizaday's close. The FRBNY Trading Desk operated tion Fund. The U.S. monetary authorities invest all of intermittently until 9:20 a.m. Over the course of their foreign currency balances in a variety of instruthe morning, the U.S. monetary authorities acquired ments that yield market-related rates of return and €1.5 billion against $1.34 billion. The total amount have a high degree of liquidity and credit quality. To was evenly divided between the U.S. Treasury De- the extent practicable, the investments are split evenly partment's Exchange Stabilization Fund and the Fed- between the Federal Reserve System and the eral Reserve System. Exchange Stabilization Fund. As the operation began, the U.S. Department of A significant portion of the balances is invested the Treasury issued the following statement: 'At the in German and Japanese government securities held initiative of the European Central Bank, the monetary directly or under repurchase agreement. Government authorities of the United States and Japan joined with securities held under repurchase agreement are the European Central Bank in concerted intervention arranged either through transactions executed in exchange markets, because of their shared concern directly in the market or through agreements with about the potential implications of recent movements official institutions. Foreign currency reserves are in the Euro for the world economy." also invested in deposits at the Bank for International Treasury Secretary Lawrence H. Summers repeated Settlements and in facilities at other official institu- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 817 tions. As of September 29, direct holdings of for- ment securities held under repurchase agreement eign government securities totaled $8.5 billion, split totaled $9.3 billion at the end of the quarter and were evenly between the two authorities. Foreign govern- also split evenly between the two authorities. 1. Foreign currency holdings of U.S. monetary authorities based on current exchange rates, 2000:Q3 Millions of dollars Quarterly changes in balances, by source BBaallaannccee,, BBaallaannccee,, IItteemm Currency Interest JJuunnee 3300,, 22000000 Net purchases Effect of Investment SSeepptt.. 2299,, 22000000 and sales1 sales2 income ad v j a u l s u t a m ti e o n n t s3 an a d c c o r t u h a e l r4 FEDERAL RESERVE SYSTEM OPEN MARKET ACCOUNT (SOMA) Euro 6,637.5 669.7 0.0 66.2 -501.3 6,872.1 Japanese yen 8,877.9 0.0 0.0 0.7 -144.8 8,733.7 Total 15,515.3 669.7 0.0 66.9 -646.1 15,605.8 Interest receivables (net)5 34.5 32.3 66.8 Other cash flow from investments4 4.6 4.6 0.0 Total 15,554.4 669.7 0.0 66.9 -646.1 27.7 15,672.6 U.S. TREASURY EXCHANGE STABILIZATION FUND (ESF) Euro 6,634.7 669.7 0.0 66.2 -501.1 6,869.5 Japanese yen 8,877.8 0.0 0.0 0.7 -144.8 8,733.8 Total 15,512.5 669.7 0.0 66.9 -645.9 15,603.2 Interest receivables5 56.4 1.2 57.6 Other cash flow from investments4 4.7 -4.7 0.0 Total 15,573.6 669.7 0.0 66.9 -645.9 -3.5 15,660.8 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. Values are cash flow differences from payments and collection of funds ments, and warehousing. between quarters. 2. This figure is calculated using marked-to-market exchange rates; it 5. Interest receivables for the ESF are revalued at month-end exchange rates. represents the difference between the sale exchange rate and the most recent Interest receivables for the Federal Reserve System are carried at average cost revaluation exchange rate. Realized profits and losses on sales of foreign cur- of acquisition and are not marked to market until interest is paid. rencies, computed as the difference between the historical cost-of-acquisition . . . Not applicable. exchange rate and the sale exchange rate, are reflected in table 2. 2. Net profits or losses (-) on U.S. Treasury 3. Reciprocal currency arrangements, September 29, 2000 and Federal Reserve foreign exchange operations, Millions of dollars based on historical cost-of-acquisition exchange rates, 2000:Q3 Amount of Outstanding, Institution facility Sept. 29, 2000 Millions of dollars Reciprocal currency Federal U.S. Treasury arrangements Reserve Exchange Period and item System Open Stabilization BBaannkk ooff CCaannaaddaa 22,,000000 00..00 Market Account Fund BBaannkk ooff MMeexxiiccoo 33,,000000 00..00 Valuation profits and losses on TToottaall 55,,000000 00..00 outstanding assets and liabilities, June 30, 2000 Federal Reserve and U.S. Treasury Euro -869.6 -1,086.3 Exchange Stabilization Fund Japanese yen 1,832.3 2,044.4 currency arrangements Total 962.7 958.2 BBBaaannnkkk ooofff MMMeeexxxiiicccooo 33,,000000 00..00 Realized profits and losses TTToootttaaalll 33,,000000 00..00 from foreign currency sales, June 30, 2000-Sept. 29, 2000 Euro 0.0 0.0 Japanese yen 0.0 0.0 Total 0.0 0.0 Valuation profits and losses on outstanding assets and liabilities, Sept. 29, 2000 Euro -1.370.9 -1,587.3 Japanese yen 1,687.5 1,899.7 Total 316.6 312.3 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

818 Industrial Production and Capacity Utilization for October 2000 Released for publication November 15 cent, just 0.1 percentage point above its 1967-99 average. Industrial production edged down 0.1 percent in October after increases in August and September that were revised upward. At 146.3 percent of its 1992 MARKET GROUPS average, industrial production in October was 5.2 percent higher than in October 1999. The rate of capac- The output of consumer goods fell 0.4 percent in ity utilization for total industry decreased to 82.1 per- October, retracing its September rise. The production Industrial production and capacity utilization Ratio scale, 1992 = 100 Percent of capacity — Industrial production 150 Capacity utilization - // - 140 - Manufacturing - 130 85 - - 120 i wb"\Total industry jC V _ - Total industry - 110 Manufacturing 80 f Vs* 100 1 1 1 1 1 i i i i i i 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 Ratio scale, 1992 = 100 ^- Equipment 180 ^ - — 160 - 140 Business 112200 - 100 Defense and space 80 1 1 1 1 1 1 1 1 1 1 1 1990 1992 1994 1996 1998 2000 1990 1992 1994 1996 1998 2000 All series are seasonally adjusted. Latest series, October. Capacity is an index of potential industrial production. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

819 Industrial production and capacity utilization, October 2000 Industrial production, index, 1992=100 Percentage change Category 2000 2000! Oct. 1999 to July' Aug.r Sept.r Oct.? Julyr Aug.r Sept.1 Oct.? Oct. 2000 Total 145.1 145.9 146.5 146.3 -.2 .5 .4 -.1 5.2 Previous estimate 145.0 145.6 146.0 -.2 .4 .2 Major market groups Products, total2 131.8 132.0 132.4 132.3 .1 .1 .3 -.1 3.0 Consumer goods ... 118.8 119.1 119.7 119.2 -.5 .3 .4 -.4 .8 Business equipment 188.7 190.2 191.9 192.5 .8 .8 .9 .3 10.1 Construction supplies 137.7 136.0 136.4 136.2 .7 -1.3 .3 -.1 .6 Materials 168.1 170.1 171.0 170.6 -.6 1.2 .5 -.2 8.8 Major industry groups Manufacturing 151.1 151.7 152.4 152.3 .0 .4 .5 .0 5.6 Durable 190.9 192.4 194.0 193.5 .1 .8 .8 -.3 9.7 Nondurable 113.1 113.1 113.0 113.3 .0 -.1 .0 .2 .3 Mining 102.7 102.9 101.8 102.5 -.1 .1 -1.0 .7 3.3 Utilities 115.2 118.6 119.7 117.4 -3.0 3.0 .9 -1.9 1.9 Capacity utilization, percent MMMEEEMMMOOO CCCaaapppaaaccciiitttyyy,,, pppeeerrr--ccceeennntttaaagggeee 1999 2000 ccchhhaaannngggeee,,, AAvveerraaggee,, LLooww,, HHiigghh,, OOOcccttt... 111999999999 11996677--9999 11998822 11998888--8899 Oct. Julyr Aug.r Sept.r Oct.P tttooo OOOcccttt... 222000000000 Total 82.0 71.1 85.4 81.0 82.2 82.4 82.5 82.1 3.7 Previous estimate 82.1 82.2 82.2 Manufacturing 81.1 69.0 85.7 80.2 81.3 81.4 81.5 81.2 4.2 Advanced processing 80.5 70.4 84.2 79.1 81.1 81.5 81.6 81.3 5.5 Primary processing 82.4 66.2 88.9 83.4 82.4 81.8 81.9 81.7 1.2 Mining 87.3 80.3 88.0 82.6 86.3 86.5 85.8 86.5 -1.4 Utilities 87.5 75.9 92.6 89.9 89.1 91.7 92.4 90.6 1.2 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. of durable consumer goods fell 2.5 percent, in large The production of industrial equipment, which had part because of a drop in the output of automotive fallen more than 1 percent in September, dropped products, particularly auto and light truck assem- 0.3 percent further in October. The output of transit blies. Production also declined across many other equipment decreased 4 percent, a sharp drop largely categories of consumer durables; the largest of these reflecting declines in motor vehicles. Within the other decreases was in the production of household "other equipment" category, the output of farm appliances. machinery turned up after having fallen substantially By contrast, nondurable consumer goods rose in the third quarter. 0.2 percent, continuing a pattern of small gains The production of construction supplies, which had posted over the past several months. Declines in the eased in the third quarter, was little changed. The output of clothing and consumer energy products index for business supplies declined 0.3 percent, a were more than offset by increases in the production dropoff mainly reflecting lower output of commercial of food and paper products. As a result of unusually energy products. warm weather in October, residential sales of electric- Among materials, the production of durable goods ity dropped; in addition, the production of consumer materials slipped 0.2 percent, the first decline in this fuel, including gasoline, decreased. group in more than a year. The output of consumer The production of business equipment moved up parts dropped 4.2 percent, with sizable declines in 0.3 percent, its smallest increase so far this year. The steel and original equipment motor vehicle parts. The output of office and computing equipment posted production of equipment parts recorded another large another strong gain, but it was less than the average increase; as in previous months, the production of monthly gain for the first three quarters of the year. semiconductors posted the strongest gains in this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

820 Federal Reserve Bulletin • December 2000 category. The output of nondurable goods materials, tion methods. The revision will also include a refinewhich stayed flat for the second consecutive month, ment of the method used to aggregate the individual was nearly 3 percent below its level of twelve months series in the production and capacity indexes. The earlier. The index for energy materials decreased new source data are for recent years, primarily 1997 0.4 percent; cutbacks at utilities more than accounted through 1999, and the modified methods will affect for the loss. data from 1992 onward. The G.17 statistical release will be redesigned with the publication of the revision. Special aggregates INDUSTRY GROUPS will be added; although some detailed industry data will no longer be listed in the regular release, they Manufacturing output was unchanged following will be available on the Federal Reserve Board's gains of around 1/2 percent in August and Septem- public web site. On November 15, a template of the ber; excluding motor vehicles and parts, however, the redesigned tables will be available on the Board's gain in October was 0.5 percent. The output of dura- web site (www.federalreserve.gov/releases/gl7). bles decreased, led by losses in motor vehicles and The updating of source data for IP will include parts, primary metals (particularly iron and steel), annual data from the following reports of the Bureau and furniture and fixtures. Smaller cutbacks were of the Census: the 1997 Census of Manufactures, the recorded in lumber and products, fabricated metal 1998 Annual Survey of Manufactures, and sielected products, instruments, and miscellaneous manufac- editions of its 1998 and 1999 Current Industrial turing goods. Offsetting these declines were further Reports. Annual data from the U.S. Geological Surgains in the production of computer and office equip- vey regarding metallic and nonmetallic minerals ment and semiconductors. After several months of (except fuels) for 1998 and 1999 will also be introweakness, the production of nondurable goods edged duced. The updating will include revisions to the up 0.2 percent, a move buoyed by a 1.0 percent gain monthly indicator for each industry (either physical in food and a 0.6 percent gain in printing and publish- product data, production-worker hours, or electric ing. Production declined in the apparel, textile mill power usage) and to seasonal factors. products, and petroleum products industries. Capacity and capacity utilization will be revised to The overall factory operating rate dropped 0.3 per- incorporate preliminary data from the 1999 Survey of centage point, to 81.2 percent; capacity utilization Plant Capacity of the Bureau of the Census, which at primary-processing industries fell 0.2 percentage covers manufacturing, along with other new data on point, to 81.7 percent, while utilization at advanced- capacity from the U.S. Geological Survey, the Departprocessing industries fell to 81.3 percent. ment of Energy, and other organizations. The statis- The output at utilities fell back almost 2 percent in tics on the industrial use of electric power will incor- October; mine production, which was boosted by porate additional information received from utilities increases in coal mining and in oil and gas well for the past few years and will include some data drilling, increased 0.7 percent. from the 1997 Census of Manufactures and 1998 Annual Survey of Manufactures. Aggregate industrial production indexes have been REVISION OF INDUSTRIAL PRODUCTION AND built as annually weighted chain-type indexes, begin- CAP A CITY* UTIDIZA TION ning with data for 1977. Currently, the weights are changed at the middle of every year; with the coming On December 5, the Federal Reserve Board will revision, the weights will change every month, rather publish revisions to the index of industrial production than once a year, beginning with data for 1992. (IP), to the related measures of capacity and capacity Once the revision is published, it will be made utilization, and to the index of industrial use of elec- available on the Board's web site. The revised data tric power. The updated measures will reflect both the will also be available through the web site of the incorporation of newly available, more comprehen- Department of Commerce. Further information on sive source data typical of annual revisions and, for these revisions is available from the Board's Indussome series, the introduction of improved compila- trial Output Section (telephone 202-452-3197). • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

821 Announcements MODIFICATION OF SUPERVISION PROGRAM Reserve Banks' automated clearinghouse (ACH) FOR U.S. OPERATIONS OF FOREIGN BANKS transactions, which is intended to enhance competition in the provision of services to depository The Federal Reserve Board announced on Octo- institutions. ber 24, 2000, that it is updating and streamlining the The ACH is a nationwide system used to process interagency program for supervising the U.S. opera- electronically originated credit and debit transfers. tions of foreign banks in cooperation with other fed- ACH credit transfers include direct deposit payroll eral and state authorities involved in supervising the payments and corporate payments to contractors and banks. vendors. ACH debit transfers include consumer pay- The changes, outlined in a supervisory letter ments on insurance premiums, mortgage loans, and (SR 00-14) to Federal Reserve supervisors, include other bills. sharing supervisors' Strength of Support Assessment The Reserve Banks and private-sector ACH opera- (SOSA) rankings with the senior managers of foreign tors (PSOs) rely on each other to process some transbanks and the banks' home country supervisors. Also, actions in which either the originating depository the five current SOSA rankings, A to E, were stream- financial institution or receiving depository financial lined into three rankings, 1 to 3. institution is not their customer. Some industry repre- SOSA rankings, which have been used since 1995, sentatives expressed concern that Reserve Banks' assess a foreign bank's ability to provide financial, deposit deadlines and price structure do not permit liquidity, and management support to its U.S. opera- the PSOs to compete effectively. tions. They serve as a starting point for U.S. bank Under the new approach approved by the Board, supervisors in assessing the risks of foreign banks' the Reserve Banks will negotiate with the PSOs operations in the United States and in formulating a regarding new deposit deadlines and fees for interstrategy for their supervision. operator transactions between Reserve Banks and the Sharing SOSA rankings "should strengthen com- PSOs. Eligibility for the new deposit deadlines and munications with bank management, as well as fees will be limited to operators as defined by the enhance information sharing, collaboration, and coor- rules of the National Automated Clearing House dination between the host (U.S.) and home country Association. The new interoperator deadlines will be authorities in the supervision of multinational bank- implemented no later than June 2001 and the new ing organizations," wrote Richard Spillenkothen, fees no later than September 2001. director of the Board's Division of Banking Supervision and Regulation. INCREASE IN ADVERSELY CLASSIFIED U.S. supervisors will continue to provide the senior SYNDICATED LOANS management of foreign banks and their home country supervisors with examination ratings of the for- Syndicated bank loans adversely classified by exameign banking organizations' operations in the United iners increased in 2000 for the second consecutive States. year, according to data released on October 10, 2000, Supervisory letters are the Federal Reserve's pri- by three federal bank regulatory agencies. mary means of communicating key policy direc- The agencies—the Board of Governors of the Fedtives to its supervisory staff and the banking industry. eral Reserve System, the Office of the Comptroller They can be viewed on the Board's web site: of the Currency, and the Federal Deposit Insurance www.federalreserve.gov/boarddocs/srletters. Corporation—released aggregate data for the past six years and data by major industry sector for the past three years. NEGOTIATION OF ACH TRANSACTION FEES Under the Shared National Credit (SNC) Program, WITH PRIVATE-SECTOR OPERATORS the agencies review large syndicated loans annually, The Federal Reserve Board announced on Octo- usually in May and June. The program, established in ber 31, 2000, a new approach to pricing Federal 1977, is designed to provide an efficient and consis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

822 Federal Reserve Bulletin • December 2000 tent review and classification of any loan or loan Comments are due February 1, 2001, to the Office commitment shared by three or more supervised insti- of the Comptroller of the Currency, the Board of tutions and totaling $20 million or more. Governors of the Federal Reserve System, the Fed- In 2000, the SNC Program covered 9,848 credits to eral Deposit Insurance Corporation, or the Office of 5,844 borrowers totaling nearly $2 trillion in drawn Thrift Supervision. and undrawn loan commitments. Of the total, $63 bil- Banks and thrift institutions are required to mainlion, or 3.3 percent, was classified adversely because tain minimum levels of capital set by U.S. regulators of default or other significant credit concerns. That under a framework established by the Basel Accord percentage is up from 2.0 percent in 1999 and in 1988. The U.S. and other regulators are currently 1.3 percent in 1998, the lowest level of the decade. revising the Accord to provide a more refined assess- Classified loans remain low relative to the peak of ment of the capital requirements for large, complex, 10 percent of total commitments recorded in 1991. internationally active banks. The agencies seek com- Borrowers have drawn down about a third of ment on simplified capital frameworks for nonthe $1.95 trillion in loan commitments, or $701 bil- complex banks and thrift institutions that would conlion. Of this amount, $56 billion, or 8 percent, was form to the underlying principles of a revised Basel classified adversely, up from 5.3 percent in 1999 but Accord and maintain the principles of prudential down from the peak of 18 percent in 1991. supervision, yet would relieve unnecessary regula- The percentage of adversely classified credits rose tory burden. in 2000 for several major industry sectors. Problem The advance notice by the agencies observes that a loans in the health-care services sector continued to large number of community banks and thrift instituincrease after the significant deterioration in 1999, tions might benefit from a simpler capital framework and health care remains the industry with the highest that relieves some of the regulatory burden associated relative concentration of classified SNC loans. Sev- with regulatory capital calculations. The agencies eral traditional manufacturing industries also experi- suggest criteria that could be used to determine eligienced a significant increase in problem credits, and bility for a simplified capital framework, such as the some industries were heavily influenced by problems nature of a bank's activities, its asset size, and its risk encountered by leveraged borrowers that had profile. In the advance notice, the agencies seek comexpanded operations aggressively through acquisi- ment on possible minimum regulatory capital requiretions in recent years. ments for non-complex institutions, including a sim- In addition, credits listed as "special mention" by plified risk-based ratio, a simple leverage ratio, or a examiners because of potential weakness—a less leverage ratio modified to incorporate certain offserious category than the three adverse classifica- balance-sheet exposures. tions: substandard, doubtful, and loss—totaled The advance notice solicits public comment on the $36.3 billion in 2000, up from $31.4 billion in 1999. agencies' preliminary views, particularly on the fol- Special mention loans rose to 1.9 percent of total loan lowing issues: commitments, up from 1.7 percent in 1999. • Defining a non-complex institution U.S. banking organizations hold approximately • Identifying the factors for determining eligibility one-half of the value of loans in the SNC Program. for a simplified capital framework Foreign banks hold just over 40 percent, and nonbank • Setting an appropriate minimum capital threshand nonfinancial companies and investment funds old for non-complex institutions that maintains pruhold the rest. dent capital levels and minimizes the regulatory burden associated with calculating that level • Considering additional options for measuring INTERAGENCY PROPOSAL TO SIMPLIFY CAPITAL regulatory capital at non-complex institutions REQUIREMENTS FOR NON-COMPLEX BANKS • Resolving the implementation issues associated AND THRIFT INSTITUTIONS with a simplified capital framework. The federal bank and thrift regulatory agencies requested on November 3, 2000, public comment on INTERAGENCY PROPOSAL TO LIMIT SHARING an advance notice of proposed rulemaking that con- OF CONSUMER DATA AMONG FINANCIAL siders the establishment of a simplified regulatory AFFILIATES capital framework for non-complex institutions. The advance notice was published in the Federal Register The federal bank and thrift regulatory agencies on (November 3, 2000). October 20, 2000, proposed rules to implement the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 823 Fair Credit Reporting Act's (FCRA) notice and opt- ENFORCEMENT ACTIONS out provisions governing the sharing of information among financial institution affiliates. The Federal Reserve Board announced on Octo- The rules, proposed by the Board of Governors of ber 23, 2000, the execution of a written agreement by the Federal Reserve System, the Federal Deposit and between Citizens Deposit Bank and Trust, Vance- Insurance Corporation, the Office of the Comptroller burg, Kentucky, and the Federal Reserve Bank of of the Currency, and the Office of Thrift Supervision, Cleveland. explain how to comply with affiliate sharing provi- The Federal Reserve Board announced on Octosions of the FCRA that have been in place since ber 11, 2000, the execution of a written agreement 1996. Comments are due by December 4, 2000. by and between Bay View Capital Corporation, The Gramm-Leach-Bliley Act (GLBA) restored San Mateo, California, and the Federal Reserve Bank the agencies' authority to conduct regular examina- of San Francisco. tions for compliance with the FCRA. In addition, the The Federal Reserve Board announced on Octo- GLBA authorized the agencies to issue joint rules ber 6, 2000, the issuance of a final decision and order implementing the FCRA. of prohibition against Carolyn D. Nelson, former The agencies minimized the compliance burden on assistant vice president, Lone Star National Bank, banks and thrift institutions by making the proposed Pharr, Texas. The order, the result of an action rules for notice and opt-out provisions generally con- brought by the Office of the Comptroller of the sistent with recently adopted privacy regulations that Currency, prohibits Ms. Nelson from participating in were required under the GLBA. The proposed rules the conduct of the affairs of any financial institution apply to any institution that wants to share consumer or holding company. information, other than transaction or experience information, with its affiliates, but does not wish to be considered a consumer reporting agency. The con- CHANGE IN BOARD STAFF sumer information subject to the rule must bear on a consumer's creditworthiness, credit standing, credit The Board of Governors announced that Oliver Irecapacity, character, general reputation, personal char- land, associate general counsel, would be leaving acteristics, or mode of living. An institution intend- the Board on Friday, November 24, 2000, after ing to share this information with affiliates without twenty-six years of service with the Federal Reserve becoming a consumer reporting agency must first System. • provide consumers with a notice advising them of their right to opt out of this information sharing, as well as a reasonable opportunity and convenient means to exercise this right. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

825 Legal Developments FINAL RULE—AMENDMENT TO RULES OF PRACTICE (2) 12 U.S.C. 504, 505, 18170X16), 1818(i)(2) and FOR HEARINGS 1972(F): (i) First tier — $5,500. The Board of Governors is amending 12 C.F.R. Part 263, (ii) Second tier — $27,500. its rules of practice and procedure to adjust the maximum (iii) Third tier — $1,175,000. amount, as set by statute, of each civil money penalty (3) 12 U.S.C. 1832(c) —$1,100. (CMP) within its jurisdiction to account for inflation. This (4) 12 U.S.C. 1847(b), 3110(a) — $27,500. action is required under the Federal Civil Penalties Infla- (5) 12 U.S.C. 1847(d), 3110(c): tion Adjustment Act of 1990, as amended by the Debt (i) First tier — $2,200. Collection Improvement Act of 1996. (ii) Second tier — $22,000. Effective October 12, 2000, 12 C.F.R. Part 263 is (iii) Third tier — $1,175,000. amended as follows: (6) 12 U.S.C. 334, 374a, 1884 — $110. (7) 12 U.S.C. 3909(d) —$1,100. Part 263—Rules of Practice for Hearings (8) 15 U.S.C. 78u-2: (i) 15 U.S.C. 78u-2(b)(l) — $5,500 for a natural 1. The authority citation for Part 263 continues to read as person and $60,000 for any other person. follows: (ii) 15 U.S.C. 78u-2(b)(2) — $60,000 for a natural person and $300,000 for any other person. Authority. 5 U.S.C. 504; 12 U.S.C. 248, 324, 504, 505, (iii) 15 U.S.C. 78u-2(b)(3) — $120,000 for a natu- 1817(j), 1818, 1828(c), 1831o, 1831p-l, 1847(b), 1847(d), ral person and $575,000 for any other person. 1884((b), 1972(2)(F), 3105, 3107, 3108, 3907, 3909; (9) 42 U.S.C. 4012a(f)(5): 15 U.S.C. 21, 78o-4, 78o-5, 78u-2; and 28 U.S.C. 2461 (i) For each violation — $350. note. (ii) For the total amount of penalties assessed under 42 U.S.C. 4012a(f)(5) against an institu- 2. Section 263.65 is revised to read as follows: tion or enterprise during any calendar year — $115,000. Section 263.65—Civil penalty inflation adjustments (a) Inflation adjustments. In accordance with the Federal ORDERS ISSUED UNDER BANK HOLDING COMPANY Civil Penalties Inflation Adjustment Act of 1990 (28 U.S.C. ACT 2461 note), the Board has set forth in paragraph (b) of this section adjusted maximum penalty amounts for each civil Orders Issued Under Section 4 of the Bank Holding money penalty provided by law within its jurisdiction. The Company Act adjusted civil penalty amounts provided in paragraph (b) of this section replace only the amounts published in the UniCredito Italiano S.p.A. statutes authorizing the assessment of penalties and the Milan, Italy previously-adjusted amounts adopted as of October 24, 1996. The authorizing statutes contain the complete provi- Order Approving Notice to Engage in Nonbanking sions under which the Board may seek a civil money Activities penalty. The increased penalty amounts apply only to violations occurring after the effective date of this rule. UniCredito Italiano S.p.A. ("UniCredito"), a foreign bank (b) Maximum civil money penalties. The maximum civil subject to the provisions of the Bank Holding Company money penalties as set forth in the referenced statutory Act ("BHC Act"),1 has requested the Board's approval sections are adjusted as follows: under sections 4(c)(8) and 4(j) of the BHC Act (1) 12 U.S.C. 324: (12 U.S.C. §§ 1843(c)(8) and 1843(j)> and section 225.24 (i) Inadvertently late or misleading reports, inter of the Board's Regulation Y (12 C.F.R. 225.24)) to acquire alia — $2200. (ii) Other late or misleading reports, inter alia — 1. As a foreign bank operating a branch and representative offices in $22,000. the United States, UniCredito is subject to certain provisions of the (iii) Knowingly or recklessly false or misleading BHC Act by operation of section 8(a) of the International Banking reports, inter alia — $1,175,000. Act of 1978 (12 U.S.C. § 3106(a)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

826 Federal Reserve Bulletin • December 2000 The Pioneer Group, Inc., Boston, Massachusetts (collec- Pioneer is, and after consummation of the proposal will tively with its subsidiaries "Pioneer"), and thereby engage continue to be, registered with the Securities and Exchange in the following nonbanking activities: Commission ("SEC") as an investment advisor under the 1. Providing financial and investment advisory ser- Investment Advisors Act of 1940 ("1940 Act"), as a vices, pursuant to section 225.28(b)(6) of Regula- broker-dealer under the Securities Exchange Act of 1934 tion Y (12 C.F.R. 225.28(b)(6)); (15 U.S.C. § 78a et seq.) ("1934 Act"), and a member of 2. Providing certain administrative services for open- the National Association of Securities Dealers, Inc. end investment companies ("mutual funds"); ("NASD"). Accordingly, Pioneer is subject to the record- 3. Providing agency transactional services, in accor- keeping and reporting obligations, fiduciary standards, and dance with section 225.28(b)(7) of Regulation Y other requirements of the 1934 Act, the 1940 Act, the SEC, (12 C.F.R. 225.28(b)(7)); and the NASD. 4. Acting as a general partner or managing member for certain private investment funds that invest in assets Mutual Fund Activities in which a bank holding company is permitted to invest; and The Board previously has determined that providing ad- 5. Acting as a commodity pool operator for private ministrative services to mutual funds is closely related to investment funds organized as commodity pools banking within the meaning of section 4(c)(8) of the BHC that invest in assets in which a bank holding com- Act.5 UniCredito proposes to provide through Pioneer inpany is permitted to invest. vestment advisory, securities brokerage, and mutual fund administrative services that previously have been approved Notice of the proposal affording interested persons an by the Board, and UniCredito has committed that the opportunity to submit comments has been published proposed activities will be conducted in compliance with (65 Federal Register 43,763 (2000)). The time for filing Regulation Y and subject to the prudential and other limitacomments has expired, and the Board has considered the tions established by the Board.6 notice and all comments received in light of the factors set UniCredito also proposes to have certain director and forth in section 4 of the BHC Act. officer interlocks with the funds. In particular, UniCredito UniCredito, with total consolidated assets of approxi- proposes that up to 25 percent of the directors of a mutual mately $180 billion, is the second largest banking organiza- fund would be employees, officers, or directors of Unition in Italy and the 54th largest banking organization in Credito or one of its subsidiaries, including Pioneer. Unithe world.2 In the United States, UniCredito operates a Credito proposes that one of these directors may serve as branch in New York, New York; and representative offices chairman of the board of the fund. In addition, UniCredito in Los Angeles, California; Chicago, Illinois; and New seeks to have up to three directors, officers, or employees York, New York. Pioneer, with total consolidated assets of of UniCredito or its subsidiaries serve as senior officers of approximately $300 million and total assets under manage- the fund and other UniCredito personnel serve as juniorment of approximately $24 billion,3 engages in investment level officers of the fund.7 and financial advisory activities and provides administra- The Board previously has authorized a bank holding tive services to mutual funds and other institutional cus- company and its nonbank subsidiaries to have limited tomers.4 director and officer interlocks with mutual funds that the bank holding company advises and administers.8 As in previous cases, the funds in this case would be controlled by their independent directors, and the independent direc- 2. UniCredito asset data are as of June 30, 2000, and are based on foreign exchange rates as of that date. Foreign and world ranking data are as of December 31, 1999, and are based on foreign exchange rates as of that date. 5. See, e.g., Societe Generale, 84 Federal Reserve Bulletin 680 3. Pioneer asset data are as of December 31, 1999. (1998) ("SoGen"); Bankers Trust New York Corporation, 83 Federal 4. Pioneer currently engages in certain activities, including the Reserve Bulletin 780 (1997) ("BTNT'); Commerzbank AG, distribution of mutual fund shares, and controls certain investment 83 Federal Reserve Bulletin 679 (1997). vehicles that have investments that are not permissible for a bank 6. See, e.g., SoGen, BTNY. The administrative services that Uniholding company. UniCredito has committed to conform the activi- Credito would provide to mutual funds through Pioneer include comties, investments, and relationships of Pioneer to those permissible for puting the funds' financial data, maintaining and preserving the a bank holding company within two years of acquiring Pioneer. In records of the funds, providing office facilities and clerical support for some cases, mutual funds advised and administered by Pioneer would the funds, and preparing and filing tax returns for the funds. The not have a distributor. In these cases, UniCredito has committed to services are listed in the Appendix. ensure that Pioneer would not be engaged in distributing these funds. 7. Senior officers include the president, secretary, treasurer, and See Lloyds TSB Group pic, 84 Federal Reserve Bulletin 116 (1998) vice-presidents with policymaking functions. Junior officers include ("Lloyds"). Among these commitments are that the so-called distribu- assistant secretaries, assistant treasurers and assistant vice-presidents torless funds would employ a marketing officer who is independent of of the funds. Junior officers are fund employees who have no authority UniCredito and Pioneer, and who would initiate contact with financial or responsibility to make policy. intermediaries regarding the sale of fund shares, negotiate broker 8. See, e.g., SoGen; BTNY; Lloyds; Travelers Group Inc., selling agreements on behalf of the funds, and be responsible for 84 Federal Reserve Bulletin 985 (1998); BankAmerica Corporation, placing, reviewing, and filing with regulators advertisements on be- 83 Federal Reserve Bulletin 913 (1997); The Governor and Company half of the funds. of the Bank of Ireland, 82 Federal Reserve Bulletin 1129 (1996). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 827 tors would be responsible for the selection and review of itors. As a result, consummation of the proposal would the investment adviser, the underwriter, and other major have a de minimis effect on competition for these services, service contractors of the fund.9 and the Board has concluded that the proposal would not result in a significantly adverse effect on competition in Other Activities Approved by Regulation or Order any relevant market. The Board also expects that the proposed transaction The Board has previously determined that providing finan- would give UniCredito an increased ability to serve the cial and investment advisory services, providing agency needs of its customers. In addition, there are public benefits transactional services for customer investments, acting as a to be derived from permitting capital markets to operate so general partner or managing member for private invest- that bank holding companies can make potentially profitment funds that make investments that a bank holding able investments in nonbanking companies and from percompany may make, and acting as a commodity pool mitting banking organizations to allocate their resources in operator are all closely related to banking within the mean- the manner they consider to be most efficient when such ing of section 4(c)(8) of the BHC Act.10 UniCredito has investments are consistent, as in this case, with the relevant committed that it will conduct these activities in accor- considerations under the BHC Act. dance with the limitations set forth in Regulation Y and the The Board previously has determined that the provision Board's orders and interpretations relating to each of the of administrative services to mutual funds within the paactivities.11 rameters established by the Board is not likely to result in certain types of subtle hazards or in other significant ad- Other Considerations verse effects. UniCredito also would be required to comply with the Board's interpretive rule on Investment Adviser In order to approve the proposal, the Board is required by Activities,14 which was designed to mitigate potential consection 4(j)(2)(A) of the BHC Act to determine that the flicts of interests and the potential for customer confusion acquisition of Pioneer by UniCredito "can reasonably be associated with the proposed activities. Based on the foreexpected to produce benefits to the public, such as greater going and all the facts of record, the Board concludes that convenience, increased competition, or gains in efficiency, there is no evidence in the record to indicate that consumthat outweigh possible adverse effects, such as undue con- mation of this proposal is likely to result in significantly centration of resources, decreased or unfair competition, adverse effects, such as undue concentration of resources, conflicts of interests, or unsound banking practices."12 decreased or unfair competition, conflicts of interests, or As part of its evaluation of these factors, the Board unsound banking practices, that would outweigh the public considers the financial and managerial resources of Uni- benefits of the proposal. Accordingly, based on all the facts Credito and its subsidiaries, including the companies to be of record, the Board has determined that the balance of acquired, and the effect of the proposed transaction on public interest factors that the Board must consider under those resources.13 UniCredito's capital ratios satisfy appli- section 4(j)(2)(A) of the BHC Act is favorable and consiscable risk-based standards under the Basle Accord and are tent with approval of the proposal. considered equivalent to the capital ratios that would be required of a United States banking organization. Based on Conclusion all the facts of record, the Board has concluded that financial and managerial considerations are consistent with ap- Based on the foregoing, and in light of all the facts of proval of the notice. record, the Board has determined that the notice should be, The Board also has considered the competitive effects of and hereby is, approved. Approval of the notice is specifithe proposed acquisition of Pioneer by UniCredito. To the cally conditioned on compliance by UniCredito with all the extent that UniCredito and Pioneer offer different types of commitments made in connection with the proposal and products and services, the proposal would result in no loss with the conditions stated or referred to in this order, of competition. In those markets where the product offer- including the Board's reservation of authority to establish ings of UniCredito and its subsidiaries and Pioneer do additional limitations to ensure that UniCredito's activities overlap, there are numerous existing and potential compet- are consistent with safety and soundness, avoidance of conflicts of interests, and other relevant considerations under the BHC Act. 9. Under the 1940 Act, at least 40 percent of the board of directors The Board's determination also is subject to all the terms of a mutual fund must be individuals who are not affiliated with the and conditions set forth in Regulation Y, including those in mutual fund. The 1940 Act and related regulatory provisions require sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and that the independent directors annually review and approve the mutual 225.25(c)), and the Board's authority to require such modfund's investment advisory contract and any plan of distribution or related agreement. ification or termination of the activities of a bank holding 10. See 12 C.F.R. 225.28(b)(6) and (7); Dresdner Bank AG, company or any of its subsidiaries as the Board finds 84 Federal Reserve Bulletin 361 (1998) ("Dresdner"). necessary to ensure compliance with, and to prevent eva- 11. See 12 C.F.R. 225.28(b)(6) and (7); Dresdner. 12. 12 U.S.C. § 1843(j)(2)(A). 13. See 12 C.F.R. 225.26(b); see also The Fuji Bank, Limited, 75 Federal Reserve Bulletin 94 (1989). 14. 12 C.F.R. 225.125. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

828 Federal Reserve Bulletin • December 2000 sion of, the provisions of the BHC Act and the Board's 14. Providing information to the distributor's personnel regulations and orders thereunder. For purposes of the concerning performance and administration of the transaction, the commitments and conditions referred to in funds. this order shall be deemed to be conditions imposed in 15. Participating in seminars, meetings, and conferences writing by the Board in connection with its findings and designed to present information to financial intermedidecision and, as such, may be enforced in proceedings aries concerning the operations of the funds, including under applicable law. administrative services provided by Pioneer to the The proposal shall not be consummated later than three funds, but not in connection with the sale of shares of months after the effective date of this order, unless such the funds to the public. period is extended for good cause by the Board or by the 16. Assisting in the development of additional funds. Federal Reserve Bank of New York, acting pursuant to 17. Providing reports to the boards of directors of the delegated authority. funds. By order of the Board of Governors, effective 18. Providing telephone shareholder services through a October 23, 2000. toll-free number (telephone service operators will not solicit callers to purchase shares in particular funds or Voting for this action: Chairman Greenspan, Vice Chairman Fergu- make outgoing calls to solicit investors, but on request son, and Governors Kelley, Meyer, and Gramlich. of a caller may provide historical performance information concerning a fund or general information con- ROBERT DEV. FRIERSON cerning a fund's investment objectives). Associate Secretary of the Board Orders Issued Under Sections 3 and 4 of the Bank Appendix Holding Company Act List of Administrative Services Wells Fargo & Company San Francisco, California 1. Maintaining and preserving the records of the funds, including financial and corporate records. Order Approving the Acquisition of a Bank Holding 2. Computing net asset value, dividends, performance Company data, and financial information regarding the funds. 3. Furnishing statistical and research data to the funds. Wells Fargo & Company ("Wells Fargo"), a bank holding 4. Preparing and filing with the SEC and state securities company within the meaning of the Bank Holding Comregulators registration statements, notices, reports, and pany Act ("BHC Act"), has requested the Board's apother materials required to be filed under applicable proval under section 3 of the BHC Act (12 U.S.C. § 1842) laws. to acquire Brenton Banks, Inc., ("Brenton") and its subsid- 5. Preparing reports and other informational materials iary bank, Brenton Bank, both of Des Moines, Iowa. Wells regarding the funds, including proxies and other share- Fargo also has requested the Board's approval under secholder communications, and reviewing prospectuses. tions 4(c)(8) and 4(j) of the BHC Act (12 U.S.C. 6. Providing legal and other regulatory advice to the §§ 1843(c)(8) and 1843(j)) and section 225.24 of the funds in connection with their other administrative Board's Regulation Y (12 C.F.R. 225.24) to acquire Brenfunctions. ton's nonbanking subsidiaries, including Brenton Savings 7. Providing office facilities and clerical support for the Bank, FSB, Ames, Iowa ("Brenton Savings"). funds. Notice of the proposal, affording interested persons an 8. Developing and implementing procedures for monitor- opportunity to submit comments, has been published ing compliance with regulatory requirements and com- (65 Federal Register 54,533 (2000)). The time for filing pliance with the funds' investment objectives, policies, comments has expired, and the Board has considered the and restrictions as established by the boards of direc- proposal and all comments received in light of the factors tors of the funds. set forth in sections 3 and 4 of the BHC Act. 9. Providing routine accounting services to the funds and Wells Fargo, with total consolidated assets of $234 billiaison with outside auditors. lion, is the seventh largest commercial banking organiza- 10. Preparing and filing tax returns. tion in the United States, controlling 3.4 percent of total 11. Reviewing and arranging for payment of expenses for assets of insured commercial banks in the United States.1 the funds. Wells Fargo operates a large network of subsidiary banks 12. Providing communication and coordination services in 23 states, including Iowa.2 Wells Fargo is the largest with regard to the funds' transfer agent, custodian, distributor, and other service organizations that render distribution, recordkeeping, or shareholder communi- 1. Asset and ranking data are as of June 30, 2000. cation services. 2. Wells Fargo operates in Alaska, Arizona, California, Colorado, Idaho, Iowa, Illinois, Indiana, Michigan, Minnesota, Montana, Ne- 13. Preparing advertising materials, sales literature, and braska, Nevada, New Mexico, North Dakota, Ohio, Oregon, South marketing plans for the funds. Dakota, Texas, Utah, Washington, Wisconsin, and Wyoming. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 829 commercial banking organization in Iowa, controlling de- market, unless the Board finds that the anticompetitive posits of $4.3 billion, representing approximately effects of the proposal are clearly outweighed in the public 10.4 percent of total deposits in depository institutions in interest by the probable effects of the proposal in meeting the state ("state deposits").3 Brenton, with total consoli- the convenience and needs of the community to be served.7 dated assets of $2 billion, also operates depository institu- The Board has carefully reviewed the competitive effects tions in Iowa. Brenton is the fifth largest commercial of the proposal in the relevant banking markets in light of banking organization in Iowa, controlling deposits of $1.5 all the facts of record, including the number of competitors billion, representing approximately 3.5 percent of state that would remain in the markets, the relative shares of deposits. On consummation of the proposal, and taking total deposits in depository institutions in the markets into account the proposed divestitures discussed in this ("market deposits") controlled by the companies involved order, Wells Fargo would remain the largest commercial in the transaction,8 the concentration levels of market debanking organization in Iowa, controlling deposits of ap- posits and the increase in these levels as measured by the proximately $5.7 billion, representing approximately 13.6 Herfindahl-Hirschman Index ("HHI") under the Departpercent of state deposits. ment of Justice Merger Guidelines ("DOJ Guidelines"), and other characteristics of the markets.9 Interstate Analysis Wells Fargo and Brenton compete directly in five banking markets: Ames,10 Cedar Rapids,11 Des Moines,12 and Section 3(d) of the BHC Act allows the Board to approve Marshall County,13 all in Iowa, and Rock Islandan application by a bank holding company to acquire Davenport,14 in Iowa and Illinois. In the Ames, Cedar control of a bank located in a state other than the home Rapids, and Rock Island-Davenport banking markets, constate of the bank holding company if certain conditions are met.4 For purposes of the BHC Act, the home state of Wells Fargo is California, and Brenton Bank is located in Iowa.5 All the conditions for an interstate acquisition enumer- 7. 12 U.S.C. § 1842(c). ated in section 3(d) of the BHC Act are met in this case.6 In 8. Market share data are as of June 30, 1999, and are based on view of all the facts of record, the Board is permitted to calculations that include the deposits of thrift institutions at 50 perapprove the proposal under section 3(d) of the BHC Act. cent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See WM Bancorp, 76 Federal Reserve Bulletin Competitive Considerations 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included thrift deposits in Section 3 of the BHC Act prohibits the Board from approv- the calculation of market share on a 50-percent weighted basis. See, ing an application if the proposal would result in a monop- e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). oly or would be in furtherance of any attempt to monopo- Because the Board has analyzed the competitive factors in this case as if Wells Fargo and Brenton were a combined entity, the deposits of lize the business of banking in any relevant market. The Brenton Savings are included at 100 percent in the calculation of BHC Act also prohibits the Board from approving a pro- pro forma market share. See Norwest Corporation, 78 Federal Reposed combination that would substantially lessen compe- serve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve tition or tend to create a monopoly in any relevant banking Bulletin 669 (1990). 9. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a market in which the post-merger HHI is more than 1800 is considered highly concentrated. The Department of Justice has informed the 3. Deposit data are as of June 30, 1999. In this context, depository Board that a bank merger or acquisition generally will not be chalinstitutions include commercial banks, savings banks, and savings lenged (in the absence of other factors indicating anticompetitive associations. effects) unless the post-merger HHI is at least 1800 and the merger 4. See 12 U.S.C. § 1842(d). A bank holding company's home state increases the HHI by more than 200 points. The Department of Justice is the state in which the total deposits of all banking subsidiaries of the has stated that the higher than normal HHI thresholds for screening company were largest on July 1, 1966, or on the date when the bank mergers for anticompetitive effects implicitly recognize the company became a bank holding company, whichever is later. competitive effects of limited-purpose lenders and other nondeposi- 12 U.S.C. § 1841(o)(4)(C). tory financial institutions. 5. For purposes of section 3(d) of the BHC Act, the Board considers 10. The Ames banking market is defined as Boone and Story a bank to be located in the state in which the bank operates a branch or Counties, and Clear Lake, Ellsworth, Lincoln, Lyon, Marion, and is chartered or headquartered. NationsBank Corporation, 84 Federal Scott Townships in Hamilton County, Iowa. Reserve Bulletin 858 (1998). 11. The Cedar Rapids banking market is defined as Linn County and 6. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and Jefferson Township in Johnson County, Iowa. (B). Brenton Bank has been in existence and continuously operated 12. The Des Moines banking market is defined as Polk County and for the minimum period required under state law. See Iowa Code Linn Township in Warren County, Iowa. Ann. § 524.1805(1) (five year minimum). In addition, on consumma- 13. The Marshall County banking market is defined as Marshall tion of the proposal, Wells Fargo and its affiliates would control less County and Carlton, Highland, Indian Village, and Spring Creek than 10 percent of the total amount of deposits of insured depository Townships in Tama County, Iowa. institutions in the United States and would not exceed applicable 14. The Rock Island-Davenport banking market is defined as Scott deposit limitations as calculated under state law. See Iowa Code County and Farmington Township in Cedar County, Iowa, and Rock Ann. § 524.1802(2)(b) (establishing a 15-percent deposit cap). Wells Island County except for Buffalo Prairie and Drury Townships, and Fargo also meets the capital, managerial, and other requirements Colona, Edgord, Geneseo, and Western Townships in Henry County, established under applicable law. Illinois. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

830 Federal Reserve Bulletin • December 2000 summation of the proposal without divestitures would be DOJ Guidelines, the Board will consider whether other consistent with the DOJ Guidelines and Board precedent.15 factors tend to mitigate the competitive effects of the proposal. The number and strength of factors necessary to A. Des Moines Banking Market mitigate the competitive effects of a proposal depend on the level of market concentration and the size of the Wells Fargo's subsidiary bank, Wells Fargo Bank Iowa, increase in market concentration.17 National Association, Des Moines, Iowa ("Wells Iowa"), In reviewing the competitive effects of this proposal, the is the largest depository institution in the Des Moines Board has considered that several factors appear to mitibanking market and controls deposits of approximately gate the likely effect of the proposal on competition in the $1.9 billion, representing 34.5 percent of market deposits. Des Moines and Marshall County banking markets. For Brenton Bank is the fifth largest depository institution example, in the Des Moines banking market, 27 banking in the market and controls deposits of approximately organizations excluding Wells Fargo would remain in the $372.1 million, representing 6.9 percent of market depos- market after the proposed acquisition. Three of these orgaits. In order to mitigate the potential anticompetitive effects nizations would each control more than 8.8 percent of of the proposal in this market, Wells Fargo has committed market deposits. The market also appears to be attractive to to divest three branches of Brenton Bank with at least out-of-market and de novo competitors. Since 1997, ten $110 million in total deposits at the time of divestiture to a depository institutions have entered the Des Moines bankcommercial bank that currently does not operate in the ing market, five by opening branches, and five de novo. An market.16 With this divestiture, the HHI for the market eleventh market entrant is in formation. In addition, would increase 314 points to 1930, and Wells Fargo would Des Moines is the largest market in Iowa in terms of remain the largest depository institution in the Des Moines deposits and is increasing in population more rapidly than market with 39.3 percent of market deposits. other metropolitan areas in the state. In the Marshall County banking market, 11 banking B. Marshall County Banking Market organizations excluding Wells Fargo would remain in the market after the proposed acquisition, including several In the Marshall County banking market, Wells Iowa is the large multistate banking organizations. Brenton is curseventh largest depository institution and controls deposits rently the second largest banking organization in the marof approximately $24.3 million, representing 3.7 percent of ket, and a merged Wells Fargo/Brenton organization would market deposits. Brenton Bank is the second largest depos- retain that position in the market. In addition, Marshall itory institution in the market and controls deposits of County appears to be relatively attractive for entry by $184.7 million, representing 28.4 percent of market depos- out-of-market competitors, as it has increased in populaits. On consummation of the proposal, the HHI would tion more rapidly and is wealthier than other rural markets increase 213 points to 2393. in Iowa. Specifically, the population of Marshall County has increased slightly from 1996 to 1999, while other rural C. Mitigating Factors Iowa counties decreased in population, on average, during the same period. In addition, per capita income in Marshall As the Board has indicated in previous cases, in a market County in 1998 was almost 10 percent higher than the in which the competitive effects of a proposal exceed the average for rural counties in Iowa, and in 1999, the average deposits per bank branch in Marshall County were 60 percent higher than the average for all rural Iowa 15. On consummation of the proposal, Wells Fargo would become counties. Seven banking organizations have entered the the third largest banking organization in the Ames banking market and Marshall County market by acquisition in the last three control $119.3 million in deposits, representing 9.3 percent of market years. deposits. The HHI would increase 30 points to 1839. In the Cedar The Department of Justice has also conducted a detailed Rapids banking market, Wells Fargo would become the largest banking organization in the market and control $572 million in deposits, review of the anticipated competitive effects of the prorepresenting 26.9 percent of market deposits. The HHI would increase posal. The Department of Justice has advised the Board 268 points to 1662. In the Rock Island-Davenport banking market, that, in light of the proposed divestitures, consummation of Wells Fargo would become the largest banking organization in the the proposal would not have a significantly adverse effect market and control $976.6 million in deposits, representing on competition in any relevant banking market. 21.2 percent of market deposits. The HHI would increase 107 points to 1111. After carefully reviewing all the facts of record, and for 16. Wells Fargo has committed to execute sales agreements for the the reasons discussed in the order, the Board concludes that proposed divestitures, before consummation of the acquisition of consummation of the proposal would not likely result in a Brenton, with a purchaser determined by the Board to be competisignificantly adverse effect on competition or on the contively suitable. Wells Fargo also has committed that, if it is unsuccesscentration of banking resources in any of the banking ful in completing any divestiture within 180 days of consummation, it will transfer the unsold office(s) to an independent trustee that is markets in which Wells Fargo and Brenton directly comacceptable to the Board and will instruct the trustee to sell the office(s) promptly to one or more alternative purchasers acceptable to the Board. See BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 11 Federal 17. See NationsBank Corporation, 84 Federal Reserve Bulletin 129 Reserve Bulletin 484(1991). (1998). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 831 pete or in any other relevant banking market. Accordingly, such as undue concentration of resources, decreased or based on all the facts of record, and subject to completion unfair competition, conflicts of interests, or unsound bankof the proposed divestitures and compliance with the re- ing practices."20 lated commitments, the Board has determined that the As part of its evaluation of these factors, the Board competitive factors are consistent with approval of the considers the financial and managerial resources of Wells proposal. Fargo and its subsidiaries, including the companies to be acquired, and the effect of the proposed transaction on Other Considerations those resources. For the reasons noted above, and based on all the facts of record, the Board has concluded that finan- The BHC Act requires the Board, in acting on an applica- cial and managerial considerations are consistent with aption, to consider the financial and managerial resources and proval of the notice. future prospects of the companies and banks involved, the The Board also has considered the competitive effects of convenience and needs of the communities to be served, Wells Fargo's proposed acquisition of the nonbanking suband certain supervisory factors. The Board has reviewed sidiaries of Brenton in light of all the facts of record. For these factors in light of the record, including supervisory the reasons already discussed, the Board has concluded reports of examination assessing the financial and manage- that Wells Fargo's proposed acquisition of Brenton Savrial resources of the organizations and financial informa- ings would not likely result in decreased or unfair competition provided by Wells Fargo. Based on all the facts of tion or undue concentration of resources in the Ames, record, the Board concludes that the financial and manage- Iowa, banking market. rial resources and the future prospects of Wells Fargo, The Board also expects that the proposed transaction Brenton, and their respective depository institutions are would give Wells Fargo an increased ability to serve the consistent with approval, as are the other supervisory fac- needs of its customers through the expansion of its affilitors the Board must consider under section 3 of the BHC ates' branch network in Iowa, and would give customers of Act. In addition, considerations related to the convenience Brenton Bank and Brenton Savings access to products and and needs of the communities to be served, including the services offered by Wells Fargo's other bank and nonbank records of performance of the relevant institutions under affiliates, including mortgage and investment banking, inthe Community Reinvestment Act (12 U.S.C. § 2901 surance agency services, venture capital financing, conet seq.) ("CRA"), are consistent with approval of the sumer financing, trust services, international trade financproposal.18 ing, leasing, and asset-backed lending. In addition, there are public benefits to be derived from permitting capital Nonbanking Activities markets to operate so that bank holding companies can make potentially profitable investments in nonbanking Wells Fargo has filed notice under sections 4(c)(8) and 4(j) companies and from permitting banking organizations to of the BHC Act to acquire Brenton's nonbanking subsidiar- allocate their resources in the manner they consider to be ies and thereby engage in operating a savings association most efficient when such investments are consistent, as in and in lending activities. The Board has determined by this case, with the relevant considerations under the BHC regulation that these activities are closely related to bank- Act. ing for purposes of the BHC Act.19 Wells Fargo has com- The Board concludes that the conduct of the proposed mitted to conduct these nonbanking activities in accor- nonbanking activities within the framework of Reguladance with the limitations set forth in Regulation Y and the tion Y and Board precedent is not likely to result in adverse Board's orders and interpretations. effects, such as undue concentration of resources, de- In order to approve this notice, the Board is required by creased or unfair competition, conflicts of interests, or section 4(j)(2) of the BHC Act to determine that the unsound banking practices, that woufd outweigh the public acquisition of the nonbanking subsidiaries of Brenton by benefits of the proposal, such as increased customer conve- Wells Fargo "can reasonably be expected to produce bene- nience and gains in efficiency. Accordingly, based on all fits to the public . . . that outweigh possible adverse effects, the facts of record, the Board has determined that the balance of public interest factors that the Board must consider under section 4(j)(2)(A) of the BHC Act is favorable and consistent with approval of the proposal. 18. Wells Fargo's lead bank, Wells Fargo Bank, N.A., San Francisco, California, which accounts for approximately 45 percent of the total consolidated assets of Wells Fargo, received an "outstanding" Conclusion rating at its most recent examination for CRA performance by its primary federal supervisor, the Office of the Comptroller of the Based on the foregoing, and in light of all the facts of Currency, as of June 1998. All of Wells Fargo's other subsidiary banks received ratings of either "outstanding" or "satisfactory" at the record, the Board has determined that the application and most recent examinations of their CRA performance. Brenton Bank notice should be, and hereby are, approved. Approval of received a CRA rating of "satisfactory" from the Federal Deposit the application and notice is specifically conditioned on Insurance Corporation, as of August 1999, and Brenton Savings received a CRA rating of "satisfactory" from the Office of Thrift Supervision, as of January 1998. 19. See 12 C.F.R. 225.28(b)(1) and (4). 20. 12 U.S.C. § 1843(j)(2)(A). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

832 Federal Reserve Bulletin • December 2000 compliance by Wells Fargo with all the commitments made and thereby engage in permissible nonbanking activities.2 in connection with the proposal and with the conditions In addition, Wells Fargo has filed an application under stated or referred to in this order, including Wells Fargo's section 25 of the Federal Reserve Act (12 U.S.C. §§ 601 divestiture commitments. The Board's determination on et seq.) and the Board's Regulation K (12 C.F.R. Part 211) the nonbanking activities also is subject to all the terms and to acquire certain foreign operations and agreement corpoconditions set forth in Regulation Y, including those in ration subsidiaries of First Security. sections 225.7 and 225.25(c) (12 C.F.R. 225.7 and Notice of the proposal, affording interested persons an 225.25(c)), and the Board's authority to require such mod- opportunity to submit comments, has been published ification or termination of the activities of a bank holding (65 Federal Register 45,081 and 45,986 (2000)). The time company or any of its subsidiaries as the Board finds for filing comments has expired, and the Board has considnecessary to ensure compliance with, and to prevent eva- ered the proposal and all comments received in light of the sion of, the provisions of the BHC Act and the Board's factors set forth in sections 3 and 4 of the BHC Act. regulations and orders thereunder. For purposes of the Wells Fargo, with total consolidated assets of transaction, the commitments and conditions referred to in $236.9 billion, is the seventh largest commercial banking this order shall be deemed to be conditions imposed in organization in the United States, controlling approxiwriting by the Board in connection with its findings and mately 3.4 percent of banking assets in the United States decision and, as such, may be enforced in proceedings ("total U.S. banking assets").3 Wells Fargo operates subunder applicable law. sidiary banks in 23 western and midwestern states. Wells The acquisition of the subsidiary banks of Brenton shall Fargo is the third largest commercial banking organization not be consummated before the fifteenth calendar day after in California, controlling deposits of $55.6 billion, reprethe effective date of this order, and the proposal shall not be senting approximately 13 percent of total deposits in inconsummated later than three months after the effective sured depository institutions in the state ("state deposdate of this order, unless such period is extended for good its").4 Wells Fargo also engages in a broad range of cause by the Board or by the Federal Reserve Bank of permissible nonbanking activities, including mortgage San Francisco, acting pursuant to delegated authority. banking, consumer finance, securities brokerage, and By order of the Board of Governors, effective equipment leasing. October 23, 2000. First Security, with total consolidated assets of $22.5 billion, is the 39th largest commercial banking orga- Voting for this action: Chairman Greenspan, Vice Chairman Fergu- nization in the United States, controlling less than 1 person, and Governors Kelley, Meyer, and Gramlich. cent of total U.S. banking assets. First Security is the largest commercial banking organization in Utah, control- ROBERT DEV. FRIERSON ling deposits of $5.1 billion, representing approximately Associate Secretary of the Board 26.5 percent of state deposits. First Security also engages in a broad range of permissible nonbanking activities in the Wells Fargo & Company United States, including underwriting and dealing in debt San Francisco, California and equity securities, providing financial consulting services, and providing data processing services. Order Approving Acquisition of a Bank Holding After consummation of the proposal and accounting for Company the proposed divestitures discussed in this order, Wells Fargo would remain the seventh largest commercial bank- Wells Fargo & Company ("Wells Fargo"), a bank holding ing organization in the United States, with total consolicompany within the meaning of the Bank Holding Comdated assets of $259.4 billion, representing approximately pany Act ("BHC Act"), has requested the Board's ap- 3.8 percent of total U.S. banking assets. Wells Fargo also proval under section 3 of the BHC Act (12 U.S.C. § 1842) would become the largest commercial banking organizato acquire First Security Corporation, Salt Lake City, Utah tion in Utah, controlling deposits of $5.5 billion, represent- ("First Security"), and thereby acquire the subsidiary ing approximately 28.8 percent of state deposits. In addibanks of First Security.1 Wells Fargo also has requested the tion, Wells Fargo would become the largest commercial Board's approval under sections 4(c)(8) and 4(j) of the banking organization in Idaho and Nevada. BHC Act (12 U.S.C. §§ 1843(c)(8) and 1843(j)) and section 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to acquire certain nonbanking subsidiaries of First Security 2. These nonbanking activities are listed in Appendix A. Wells Fargo also is a financial holding company and intends to acquire the remaining nonbanking subsidiaries of First Security under sec- 1. First Security controls the following subsidiary banks: First tion 4(k)(4) of the BHC Act. Security Bank, National Association, Ogden, Utah; First Security 3. Asset and ranking data are as of June 30, 2000. Bank of California, National Association, West Covina, California; 4. Deposit data are as of June 30, 1999, and are adjusted to reflect First Security Bank of Nevada, Las Vegas, Nevada; and First Security mergers and acquisitions approved after this date. In this context, Bank of New Mexico, National Association, Albuquerque, New depository institutions include commercial banks, savings banks, and Mexico. savings associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 833 Interstate Analysis meeting the convenience and needs of the community to be served.8 Section 3(d) of the BHC Act allows the Board to approve Wells Fargo and First Security are among the largest an application by a bank holding company to acquire providers of banking services in the western United States control of a bank located in a state other than the home and compete directly in 31 local banking markets in eight state of the bank holding company if certain conditions are states.9 The Board has reviewed carefully the competitive met. For purposes of the BHC Act, the home state of Wells effects of the proposal in these banking markets in light of Fargo is California,5 and the subsidiary banks of First all the facts of record, including the number of competitors Security are located in California, Idaho, Nevada, New that would remain in the markets, the relative share of total Mexico, Oregon, Utah, and Wyoming.6 All the conditions deposits in depository institutions in the markets ("market for an interstate acquisition enumerated in section 3(d) are deposits") controlled by Wells Fargo and First Security,10 met in this case.7 In light of all the facts of record, the the concentration level of market deposits and the increase Board is permitted to approve the proposed transaction in this level as measured by the Herfindahl-Hirschman under section 3(d) of the BHC Act. Index ("HHI") under the Department of Justice Guidelines ("DOJ Guidelines"),11 and other characteristics of the Competitive Considerations markets.12 Section 3 of the BHC Act prohibits the Board from approv- A. Certain Banking Markets without Divestitures ing a proposal that would result in a monopoly or would be in furtherance of any attempt to monopolize the business of Consummation of the proposal without divestitures would banking in any relevant market. The BHC Act also prohib- be consistent with Board precedent and the DOJ Guideits the Board from approving a proposed bank acquisition lines in 18 banking markets.13 After consummation of the that would substantially lessen competition in any relevant proposal, nine of these banking markets would remain banking market, unless the Board finds that the anticom- moderately concentrated as measured by the HHI.14 The petitive effects of the proposal are clearly outweighed in other nine banking markets would be highly concentrated the public interest by the probable effect of the proposal in 8. 12 U.S.C. § 1842(c)(1). 9. The banking markets are described in Appendix B. 5. A bank holding company's home state is that state in which the 10. Market share data are as of June 30, 1999, and are based on total deposits of all banking subsidiaries of the company were the calculations in which the deposits of thrift institutions are included at largest on July 1, 1966, or the date on which the company became 50 percent, except as discussed in the order. The Board has indicated a bank holding company, whichever is later. 12 U.S.C. previously that thrift institutions have become, or have the potential to § 1841(o)(4)(C). become, significant competitors of commercial banks. See, e.g., Mid- 6. For purposes of section 3(d), the Board considers a bank to be west Financial Group, 75 Federal Reserve Bulletin 386 (1989); located in the states in which the bank is chartered, headquartered, or National City Corporation, 70 Federal Reserve Bulletin 743 (1984). operates a branch. In addition to the interstate aspects of this proposal, Thus, the Board has regularly included thrift deposits in the calcula- Wells Fargo would acquire a California bank in an intrastate transac- tion of market share on a 50-percent weighted basis. See, e.g., First tion. Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991). 7. Wells Fargo is adequately capitalized and adequately managed, as 11. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), defined by applicable law. 12 U.S.C. § 1842(d)(1)(A). Each subsidiary a market is considered moderately concentrated if the post-merger bank of First Security has been in existence and operated continuously HHI is between 1000 and 1800 and highly concentrated if the postfor at least the period of time required by applicable state law. See merger HHI is more than 1800. The Department of Justice has 12 U.S.C. § 1841(d)(1)(B). On consummation of the proposal and informed the Board that a bank merger or acquisition generally will after accounting for the proposed divestitures, Wells Fargo and its not be challenged (in the absence of other factors indicating anticomaffiliates would control less than 10 percent of the total amount of petitive effects) unless the post-merger HHI is at least 1800 and the deposits of insured depository institutions in the United States, and merger increases the HHI by more than 200 points. The Department less than 30 percent, or the applicable percentage established by state of Justice has stated that the higher than normal HHI thresholds for law, of total deposits held by insured depository institutions in each screening bank mergers for anticompetitive effects implicitly recogstate in which the insured depository institutions of Wells Fargo and nize the competitive effects of limited-purpose lenders and other First Security both operate, except as discussed below. See Idaho nondepository financial institutions. Code § 26-1606 (LEXIS 1999). Wells Fargo would control more than 12. Several commenters expressed concern that the proposal would 30 percent of state deposits in Idaho. However, the state deposit cap have anticompetitive effects in the relevant banking markets. The contained in section 3(d) does not bar Board approval of a proposal if Board has carefully reviewed these comments in connection with its the appropriate state bank supervisor approves a transaction that consideration of the competitive effects of the proposal. exceeds the cap under a provision of state law that does not discrimi- 13. These markets are: Hesperia-Apple Valley-Victorville, Los Annate against out-of-state banking organizations. See 12 U.S.C. geles, and Riverside-San Bernardino, California; Idaho Falls and § 1842(d)(2)(D)(ii). The Idaho state bank supervisor has approved the Sandpoint, Idaho; Reno, Nevada; Rio Arriba County, Roswell-Artesia, proposed transaction under an appropriate provision of law and, and Santa Fe, New Mexico; Corvallis, Deschutes, Ontario, Portland, consequently, the state deposit cap contained in section 3(d) does not and Salem, Oregon; El Paso, Texas; Ogden, and Provo-Orem, Utah; prevent the Board from approving the proposal. After reviewing the and Spokane, Washington. The effects of the proposal on the concenlaws of each state in which Wells Fargo would acquire banking tration of banking resources in these markets are described in Appenoperations and consulting with the appropriate state banking regulator dix C. in each of those states about the proposed transaction, the Board has 14. These markets are: Hesperia-Apple Valley-Victorville, Los Anconcluded that all other requirements of section 3(d) would be met on geles, Riverside-San Bernardino, Roswell-Artesia, Santa Fe, Corvalconsummation of the proposal. lis, Ontario, Salem, and Spokane. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

834 Federal Reserve Bulletin • December 2000 as measured by the HHI, but the increase in the HHI would would exceed the DOJ Guidelines. In these markets, the be within the threshold levels in the DOJ Guidelines.15 Board has considered whether other factors either mitigate the competitive effects of the proposal in the market or B. Certain Banking Markets with Divestitures indicate that the proposal would have a significantly adverse effect on competition in the market.19 To reduce the potential for adverse effects on competition Las Vegas, Nevada. Wells Fargo operates the second in nine of the 13 remaining markets in which Wells Fargo largest depository institution in the market, controlling and First Security compete directly,16 Wells Fargo has deposits of $2.8 billion, representing approximately committed to divest 37 branches, which account for ap- 26.2 percent of market deposits. First Security operates the proximately $1.4 billion in deposits.17 In light of the pro- fourth largest depository institution in the market, controlposed divestitures, consummation of the proposal would be ling deposits of $904 million, representing approximately consistent with Board precedent and the DOJ Guidelines in 8.3 percent of market deposits. Wells Fargo proposes to eight of the markets.18 The transaction would result in no divest seven branches in the market, with $392.5 million of increase in the HHI in four of these markets: South Lake deposits, representing approximately 3.6 percent of market Tahoe, Hailey, Box Elder, and Park City. In three of the deposits, to an out-of-market competitor. After the proremaining markets, Boise, Carson City, and Albuquerque, posed merger and divestiture, Wells Fargo would operate the increase in the HHI would be within the threshold the largest depository institution in the market, controlling levels in the DOJ Guidelines. In the Las Cruces market, a deposits of $3.3 billion, representing 30.9 percent of marlarge number of competitors relative to total market depos- ket deposits. The HHI would increase by 213 points to its would remain, and the market would remain moderately 2062. concentrated as measured by the HHI. Several factors indicate that the increase in market concentration in the Las Vegas banking market, as measured C. Other Banking Markets by the HHI, does not reflect a significantly adverse effect on competition. Twenty-two other commercial banks and In the Las Vegas, Nevada; Salt Lake City, Utah; Pocatello savings associations would remain in the market as comand Twin Falls, Idaho; and Truckee-Tahoe California, mar- petitors of Wells Fargo, including one large multistate kets, consummation of the proposed acquisition, account- banking organization with more than 30 percent of market ing for the proposed divestitures in the Las Vegas market, deposits and another large multistate banking organization with more than 10 percent of market deposits. The market also has several factors that make it attractive for entry by out-of-market competitors. From 1990 to 1999, the popula- 15. These markets are: Idaho Falls, Sandpoint, Reno, Rio Arriba County, Deschutes, Portland, El Paso, Ogden, and Provo-Orem. tion in the Las Vegas Metropolitan Statistical Area 16. Several commenters criticized Wells Fargo for not identifying ("MSA") increased 73.5 percent, which was the largest the specific branches that it would divest in the Box Elder, Carson percentage increase in population in any MSA during this City, Park City, Sandpoint, and South Lake Tahoe markets during the period. From 1990 to 1999, employment in Clark County, public comment period and indicated that this omission hindered their ability to comment on the competitive effects of the proposal in these Nevada, the location of the City of Las Vegas, increased markets. The Board has concluded, however, that the public informa- 57.6 percent and, from 1990 to 1998, per capita income in tion provided by Wells Fargo on the proposed divestitures, including the Las Vegas MSA increased 43 percent. In the Las Vegas the resulting structural effects in each market, was sufficient for banking market, from June 1995 to June 1999, deposits interested persons to evaluate and comment on the competitive effects increased 71.4 percent, compared with a national rate of of the proposal. 17. These markets are: South Lake Tahoe, California; Boise and increase of 18 percent during this period. Ten depository Hailey, Idaho; Carson City and Las Vegas, Nevada; Albuquerque and institutions have entered the market de novo since 1995. Las Cruces, New Mexico; and Box Elder and Park City, Utah. With Salt Lake City, Utah. Wells Fargo operates the sixth respect to each market in which Wells Fargo has committed to divest largest depository institution in the market, controlling offices to mitigate the anticompetitive effects of the proposal, Wells Fargo has committed to execute, before consummation of the pro- deposits of $387.1 million, representing approximately posal, a sales agreement for the proposed divestiture with a purchaser 4.9 percent of market deposits. First Security operates the determined by the Board to be competitively suitable and to complete largest depository institution in the market, controlling the divestiture within 180 days after consummation of the proposal. deposits of $2.8 billion, representing approximately Wells Fargo also has committed that, if it is unsuccessful in complet- 34.8 percent of market deposits. On consummation of the ing any divestiture within 180 days of consummation, it will transfer the unsold branch(es) to an independent trustee that is acceptable to proposal, Wells Fargo would operate the largest depository the Board and will instruct the trustee to sell the branch(es) promptly institution in the market, controlling deposits of $3.1 bilto one or more alternative purchasers acceptable to the Board. See lion, representing approximately 39.7 percent of market BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); deposits. The HHI would increase by 340 points to 2234. United New Mexico Financial Corporation, 11 Federal Reserve Bulletin 484 (1991). Wells Fargo also has committed to submit to the Board, before consummation of the proposal, an executed trust agreement acceptable to the Board stating the terms of the divestitures. 18. These markets are: Albuquerque, Boise, Box Elder, Carson City, 19. The number and strength of factors necessary to mitigate the Hailey, Las Cruces, Park City, and South Lake Tahoe. The effects of competitive effects of a proposal depend on the level of concentration the proposed merger and divestitures on the concentration of banking and size of the increase in market concentration. See NationsBank resources in these markets are described in Appendix D. Corporation, 84 Federal Reserve Bulletin 129 (1998). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 835 The presence of numerous bank and thrift competitors is and two savings associations would remain in the market an important consideration in this market. Eighteen other after consummation of the proposal. One of these savings commercial banks and three savings associations would institutions is a significant source of commercial loans in remain after consummation of the proposal, including a the market. Twelve credit unions also compete in the large bank holding company that would control more than market and control approximately 29 percent of insured 18 percent of market deposits. The third, fourth, and fifth deposits in the market. The largest credit union in the largest depository institutions in the market are operated by market controls approximately 4.9 percent of insured delarge multistate banking organizations, each of which con- posits in the market and is open for membership by subtrols between 4 percent and 10 percent of market deposits. stantially all residents of the market.23 In reviewing the competitive effects of the proposal, the The market also has several characteristics that make it Board also has taken into account that credit unions are attractive for entry. From 1990 to 1999, population in the particularly active competitors in the Salt Lake City mar- market increased 12.7 percent; employment in the City of ket. The Board has noted previously that numerous credit Pocatello increased 31.9 percent; and per capita income in unions in the market are open to all or a substantial the Pocatello MSA increased 39.4 percent. Four commermajority of persons in the market and operate through cial banks and one thrift institution have entered the market street-level branches that are accessible to the public.20 In de novo since 1995. One of these commercial banks has light of the activities, open membership, branch operations, become the fourth largest depository institution in the size, number, and market share of credit unions in the market and controls 7.9 percent of market deposits. Moremarket, the Board has concluded that credit unions exert a over, the market is becoming less concentrated. From June competitive influence that mitigates in part the potential 1996 to June 1999, the market's HHI decreased approxianticompetitive effects of the proposal.21 mately 500 points. In addition, the Salt Lake City market is attractive for Twin Falls, Idaho. Wells Fargo operates the seventh entry by additional depository institutions. The population largest depository institution in the market, controlling in the Salt Lake City Ranally Marketing Area ("RMA") deposits of $24.5 million, representing approximately increased 17.6 percent from 1990 to 1999, which was 2.6 percent of market deposits. First Security operates the significantly higher than the national rate of increase. Em- largest depository institution in the market, controlling ployment in the City of Salt Lake City increased 30 percent deposits of $379.7 million, representing approximately during this period, which was more than twice the national 39.6 percent of market deposits. On consummation of the rate.22 proposal, Wells Fargo would operate the largest depository Pocatello, Idaho. Wells Fargo operates the fifth largest institution in the market, controlling deposits of approxidepository institution in the market, controlling deposits of mately $404.2 million, representing approximately $18.7 million, representing approximately 5 percent of 42.2 percent of market deposits. The HHI would increase market deposits. First Security operates the largest de- by 203 points to 2471. pository institution in the market, controlling deposits of Several factors mitigate the adverse competitive effects $127.2 million, representing approximately 34.4 percent of that might result from the proposal in the Twin Falls market deposits. On consummation of the proposal, Wells market. From 1990 to 1999, the population in the City of Fargo would operate the largest depository institution in Twin Falls increased 23 percent and employment increased the market, controlling deposits of approximately $145.9 27 percent. Eleven depository institutions, including Wells million, representing approximately 39.4 percent of market Fargo, would remain in the market. Two commercial bank deposits. The HHI would increase by 347 points to 2541. competitors of Wells Fargo each would control more than Several factors mitigate the potential adverse effects that 15 percent of market deposits, and three large multistate may result from the proposal in the Pocatello banking banking organizations operate in the market. Two banks market. A large number of competing depository institu- and one savings association have entered the market tions, relative to total market deposits, would remain in the de novo since 1994. market. Eight commercial banks, including Wells Fargo, Truckee-Tahoe, California. Wells Fargo operates the fourth largest depository institution in the market, controlling deposits of $71 million, representing approximately 20. See First Security Corporation, 86 Federal Reserve Bulletin 12.9 percent of market deposits. First Security operates the 122, 126 (2000) ("First Security Order"). fifth largest depository institution in the market, controlling 21. Thirty-one credit unions with competitively significant characteristics compete with banks in the Salt Lake City market and account deposits of $45.8 million, representing approximately for approximately 19.9 percent of total deposits in the market. Credit 8.3 percent of market deposits. On consummation of the unions control approximately 8.5 percent of all insured deposits in the proposal, Wells Fargo would operate the third largest de- United States. Although these credit unions are a competitive force, pository institution in the market, controlling deposits of the Board has not considered them to be full competitors of banks because they do not provide the full range of banking products and approximately $116.8 million, representing approximately services. If the Board were to include the deposits of these credit unions in the market and weight them at 50 percent, Wells Fargo would have a post-merger market share of 35.2 percent, and the HHI 23. If the Board were to include the deposits of this credit union in would increase by 267 points to 1768. the market at 50 percent, Wells Fargo would have a post-merger 22. Employment increased 12.4 percent in the United States be- market share of 38.1 percent and the HHI would increase by 324 tween 1990 and 1998. points to 2390. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

836 Federal Reserve Bulletin • December 2000 21.2 percent of market deposits. The HHI would increase Wells Fargo is, and after the proposed transaction would by 214 points to 2485. remain, well capitalized and the earnings of the company A number of factors indicate that the competitive effects are strong. The proposed acquisition is structured as an of the proposal are not likely to be significantly adverse in exchange of shares of Wells Fargo for shares of First this market. First, a large number of financial institutions Security, and Well Fargo would not incur any debt as a compete in this market relative to the size of total market result of the transaction. The Board has considered that deposits. Five commercial banks, including Wells Fargo, Wells Fargo recently acquired other bank holding compaand one savings association would remain in the market. nies and that Wells Fargo's management successfully inte- Three of the competing commercial banks, including the grated the acquired institutions into Wells Fargo's existing two largest depository institutions in the market, are sub- operations. sidiaries of large multistate banking organizations. Second, Based on all the facts of record, including confidential the Truckee-Tahoe banking market has characteristics that reports of examination and other supervisory information make it attractive for entry. From 1990 to 1998, the popula- received from the primary federal banking agency that tion in the market's principal towns increased 15 percent, supervises each institution, the Board has concluded that more than twice the average for California. From 1990 to considerations relating to the financial and managerial re- 1999, employment increased 21 percent in Truckee and sources and future prospects of Wells Fargo, First Security, 32.4 percent in the north shore area of Lake Tahoe. From and their respective banking subsidiaries are consistent June 1996 to June 1999, total market deposits in Truckee- with approval, as are the other supervisory factors that the Tahoe increased 18.9 percent. One commercial bank en- Board must consider under section 3 of the BHC Act. tered the market de novo in 1995. Convenience and Needs Considerations D. Views of Other Agencies and Conclusion In acting on a proposal under section 3 of the BHC Act, the The Department of Justice also has conducted a detailed Board is required to consider the effects of the proposal on review of the anticipated competitive effects of the pro- the convenience and needs of the community to be served posal. The Department has advised the Board that, in light and take into account the records of the relevant depository of the proposed divestitures, consummation of the proposal institutions under the Community Reinvestment Act would not be likely to have a significantly adverse effect on ("CRA").25 The CRA requires the federal financial supercompetition in any relevant banking market. The Office of visory agencies to encourage financial institutions to help the Comptroller of the Currency ("OCC") and the Federal meet the credit needs of local communities in which they Deposit Insurance Corporation ("FDIC") have been af- operate, consistent with safe and sound operation, and forded an opportunity to comment and have not objected to requires the appropriate federal supervisory agency to take consummation of the proposal. into account an institution's record of meeting the credit After carefully reviewing all the facts of record, includ- needs of its entire community, including low- and ing public comments on the competitive effects of the moderate-income ("LMI") neighborhoods, in evaluating bank expansion proposals. The Board has carefully considproposal, and for the reasons discussed in the order and ered the convenience and needs factor and the CRA perforappendices, the Board has concluded that consummation of mance records of the subsidiary depository institutions of the proposal would not be likely to result in a significantly Wells Fargo and First Security in light of all the facts of adverse effect on competition or on the concentration of record, including public comments received on the effect banking resources in any of the 31 markets in which Wells the proposal would have on the communities to be served Fargo and First Security both compete or in any other by the combined organization. relevant banking market. Accordingly, based on all the facts of record and subject to completion of the proposed divestitures, the Board has determined that competitive A. Summary of Public Comments factors are consistent with approval of the proposal. The Board received approximately 25 comments on the Financial, Managerial, and Other Supervisory Factors proposal. Most comments expressed concerns about the records of either Wells Fargo, First Security, or both in Section 3 of the BHC Act requires the Board to consider meeting the convenience and needs of the communities the financial and managerial resources and future prospects they serve.26 Commenters asserted that Wells Fargo's comof the companies and banks involved in the proposal and mitment to lending, community investment, and local deciother supervisory factors. The Board has carefully considered these factors in light of all the facts of record, including public comments.24 bank acquisitions has compromised its ability to operate in a safe and sound manner. Commenters also noted that First Security recently experienced a decline in earnings. 25. 12 U.S.C. §2901 et seq. 24. Several commenters expressed concern about the financial and 26. Several commenters who objected to the transaction stated that, managerial resources of Wells Fargo and First Security. Some com- if the Board were to approve the transaction, the approval should be menters asserted that the rate of Wells Fargo's expansion through subject to conditions suggested by the commenters. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 837 sion making had declined after previous bank acquisitions, it represents a detailed, on-site evaluation of the instituparticularly in Wells Fargo's home state of California, and tion's overall record of performance under the CRA by its expressed concern that Wells Fargo's proposed acquisition appropriate federal supervisor.29 of First Security would worsen this perceived trend. Com- All Wells Fargo's subsidiary banks received either "outmenters also expressed concern about Wells Fargo's record standing" or "satisfactory" ratings at the most recent of lending to LMI and minority individuals and small examinations of their CRA performance. In particular, businesses in various areas and about Wells Fargo's record Wells Fargo's lead bank, Wells Fargo Bank, N.A., San of providing banking services, particularly in LMI areas.27 Francisco, California ("Wells Fargo Bank"),30 which ac- One commenter alleged specifically that Wells Fargo Home counts for approximately 45 percent of the total consoli- Mortgage, Inc. ("WFHM", formerly Norwest Mortgage, dated assets of Wells Fargo, received an "outstanding" Inc.), a nonbanking subsidiary engaged in mortgage lend- rating at its most recent CRA examination by its primary ing, denied applications by minority individuals at a dispro- federal supervisory agency, the OCC, as of June 1998.31 portionately high rate. Some commenters also expressed All First Security's subsidiary banks received either "outconcern that Wells Fargo had unusually high default rates standing" or "satisfactory" ratings at the most recent on mortgage loans made in Washington. In addition, sev- examinations of their CRA performance. In particular, First eral commenters questioned the business practices of Wells Security Bank, N.A., Salt Lake City, Utah, ("First Security Fargo's subprime lending operations.28 Bank"), which is First Security's lead bank and represents Some commenters also criticized First Security's record approximately 76 percent of the assets controlled by First of home mortgage lending to LMI and minority individu- Security, received an "outstanding" rating from the OCC, als, particularly in Idaho, Oregon, Nevada, and Washing- as of May 1999.32 ton. These commenters alleged that First Security's subsidiary banks did not market conventional and governmentsubsidized loan products adequately to LMI and minority individuals, and that the banks denied loan applications of 29. See Interagency Questions and Answers Regarding Community LMI and minority applicants at a disproportionately high Reinvestment, 64 Federal Register 23,618 and 23,641 (1999). 30. Wells Fargo Bank operates in California, where it holds rate. They also asserted that First Security had a poor 81 percent of its deposits, and eight other western states. record of providing banking products and services to LMI 31. Norwest Corporation acquired Wells Fargo in 1998 and retained individuals and communities in Idaho, Oregon, and Wash- the Wells Fargo name and is in the process of merging and renaming ington. banks under the combined organization. See Norwest Corporation, 84 Federal Reserve Bulletin 1088 (1998). Norwest Bank Montana, N.A., Billings, Montana (now Wells Fargo Bank Montana, N.A.), received B. CRA Performance Examinations an "outstanding" CRA performance rating from the OCC, as of August 1997. Although Wells Fargo Bank Wisconsin, N.A., Milwau- The Board long has held that consideration of the conve- kee, Wisconsin, has not been examined for CRA performance, each of nience and needs factor includes a review of the records of its predecessor banks received at least a "satisfactory" CRA performance rating from its appropriate federal supervisory agency: Northe relevant depository institutions under the CRA. As west Bank Wisconsin, N.A., Milwaukee, Wisconsin, received an provided in the CRA, the Board evaluates the record of "outstanding" CRA performance rating from the OCC, as of Novemperformance of an institution in light of examinations by ber 1996; Norwest Bank La Crosse, N.A., La Crosse, Wisconsin, the appropriate federal supervisors of the CRA perfor- received a "satisfactory" CRA performance rating from the OCC, as mance records of the relevant institutions. An institution's of February 1997; and Midamerica Bank Hudson, Hudson, Wisconsin, received a "satisfactory" CRA performance rating from the most recent CRA performance evaluation is a particularly FDIC, as of March 1995 (before the acquisition of the bank by important consideration in the applications process because Norwest Corporation). Norwest Bank South Dakota, N.A., Sioux Falls, South Dakota, received an "outstanding" CRA performance rating from the OCC, as of November 1996. Norwest Bank New 27. Commenters expressed concern about Wells Fargo's record of Mexico, N.A., Albuquerque, New Mexico (now Wells Fargo Bank home mortgage and small business lending to LMI and minority New Mexico, N.A.), received a "satisfactory" CRA performance borrowers in California, Idaho, Montana, Nevada, New Mexico, Ore- rating from the OCC, as of July 1997. Norwest Bank Nevada, N.A., gon, South Dakota, Utah, Washington, and Wisconsin. A coalition of Las Vegas, Nevada (now Wells Fargo Bank Nevada, N.A.), received a commenters provided survey data from several states in support of its "satisfactory" CRA performance rating from the OCC, as of August allegations. In particular, commenters alleged that Wells Fargo made a 1999. Dial Bank, Sioux Falls, South Dakota (now Wells Fargo Finandisproportionately low share of its mortgage loans to LMI and minor- cial Bank), a credit card bank controlled by Wells Fargo, received an ity borrowers relative to these borrower's share of the general popula- "outstanding" CRA performance rating from the FDIC, as of June tion and lagged behind other lenders in the share of its mortgage loans 1999. originated among these groups. 32. First Security Bank New Mexico, National Association, Albu- 28. A coalition of commenters also asserted that Wells Fargo's querque, New Mexico, received an "outstanding" CRA performance record of lending to minority individuals suffered as a result of a lack rating from the OCC, as of December 1995; First Security Bank of of diversity among Wells Fargo's employees. The BHC Act does not Nevada, Las Vegas, Nevada, received a "satisfactory" CRA perforauthorize the Board to consider the racial composition of any organi- mance rating from the Federal Reserve Bank of San Francisco, as of zation's employees. Under regulations of the Department of Labor, January 1999. Although First Security Bank California, West Covina, the banking subsidiaries of Wells Fargo are required to file reports California, has not been examined for CRA performance, its predeceswith the Equal Employment Opportunity Commission ("EEOC") sor banks received "satisfactory" CRA performance ratings from concerning all employees, and the EEOC has jurisdiction to determine their appropriate federal financial supervisory agencies: California whether companies are in compliance with equal employment oppor- State Bank, West Covina, California, received a "satisfactory" CRA tunity statutes. See 41 C.F.R. 60-1.7(a), 60-1.40. performance rating from the FDIC, as of July 1996; and Marine Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

838 Federal Reserve Bulletin • December 2000 Examiners found no evidence of prohibited discrimina- dential loans made by the bank, 36 percent, totaling tion or other illegal credit practices, and identified no $240 million, were made to LMI borrowers. Examiners of violations of fair lending laws, at any subsidiary bank of Wells Fargo's other subsidiary banks observed that these Wells Fargo or First Security.33 Examiners also reviewed banks were active in residential lending and, in general, the assessment areas delineated by the subsidiary banks of that their residential lending was well distributed among Wells Fargo and First Security and found that these assess- borrowers and geographies of different income levels. ment areas were reasonable and did not arbitrarily exclude Examiners stated that Wells Fargo Bank exhibited a LMI areas.34 strong level of community development lending, particularly in California, Arizona, and Washington, where it C. Wells Fargo's CRA Performance Record Overview35 originated 149 community development loans, totaling approximately $651 million. In addition, the bank made more Examiners of Wells Fargo Bank noted that the bank had than 2,000 qualified community development investments, adopted a business strategy that concentrated on small totaling more than $227 million, to capitalize loan pools, business lending and de-emphasized residential lending. community development corporations, and government- As a result, the bank's small business lending in California subsidized programs and to support nonprofit developers, increased by $2.7 billion compared with the period covered social services, and support groups. Approximately in its previous examination, while its residential lending $26 million was invested in regional and national organizadecreased by $2.2 billion.36 During the review period, tions that helped to address affordable housing and small which covered 1996, 1997, and the first quarter of 1998, business credit needs.39 Wells Fargo Bank made approximately 239,000 small busi- Examiners determined that Wells Fargo Bank's delivery ness loans, totaling approximately $9.3 billion.37 Twenty- systems were reasonably accessible to individuals and geosix percent of these loans were made to businesses located graphical areas of all income levels throughout the bank's in LMI areas. Examiners concluded that Wells Fargo 58 assessment areas. Examiners reported that Wells Fargo Bank's gains in small business lending more than offset the Bank offered a variety of loan and deposit products through decline in its residential lending.38 Moreover, of the resi- its branch network, and that the bank offered several alternative delivery systems and products that improved the availability of these products to LMI individuals 40 National Bank, Irvine, California, received a "satisfactory" CRA California. Wells Fargo Bank's business and residential performance rating from the OCC, as of September 1996. lending in California represented 77 percent of the bank's 33. One commenter opposed to the proposal alleged that Wells total lending activity. Examiners found that Wells Fargo Fargo discriminated against him in a loan transaction. A copy of the Bank had a very strong lending record in California, the comment was provided to the OCC, the primary federal supervisor of the subsidiary bank engaged in the alleged discrimination. The Board bank's primary geographic market, based on the bank's also has reviewed this comment in light of all the facts of record, large volume of community development lending to supincluding examinations of the relevant bank under the CRA. port low-income and very-low-income housing develop- 34. Wells Fargo Bank engages in subprime lending through two business units of WFHM, Wells Fargo Mortgage Resources (formerly Directors Acceptance) and Wells Fargo Equity Resources. In addition, Wells Fargo engages in subprime lending through Wells Fargo Finan- 39. One commenter criticized Wells Fargo's record of serving cial, Inc. (formerly Norwest Financial, Inc.). Commenters alleged that Native American communities and individuals. Examiners found that these subprime lending units engage in predatory lending by targeting Wells Fargo Bank provided three loan facilities, totaling $32 million, minority individuals for subprime loan products. The Board for- to a Native American tribal organization to support construction of a warded comments containing these allegations to the Department of shopping center and recreational facility in a low-income area of a Housing and Urban Development, the Department of Justice, and the reservation in Arizona and provided economic development loans, Federal Trade Commission, which have responsibility for enforcing totaling $7 million, to Native American tribes in Oregon. Moreover, fair lending laws for nondepository lending companies. Wells Fargo Wells Fargo represented that it has various programs and investments has stated that its subprime lending subsidiaries provide financing to designed to meet the needs of Native American communities. Examcustomers who may not otherwise qualify for credit and has provided ples of such programs include the Native American Banking Services information about steps these subsidiaries take to ensure that individu- Program, which offers credit for reservation development and infraals who qualify for conventional loans are informed about prime structure improvements; a $300,000 contribution in 1999 to the First credit products. Nations Development Institute to support training and technical assis- 35. The Board recently reviewed in detail the record of Wells Fargo tance for Native American communities to increase their ability to use Bank under the CRA. See Wells Fargo & Company, 86 Federal working capital; and a commitment to invest more than $2 million in Reserve Bulletin 602 (2000). the formation of the Native American National Bank, which would be 36. Numerous commenters criticized Wells Fargo for its declining based in Denver and would serve Native American tribes nationwide. record of residential lending and expressed concern that this trend 40. Wells Fargo provided additional information to the Board about would continue after it acquired First Security. the low-cost and basic deposit services its subsidiary banks offer and 37. In this context, "small business loans" means loans to busi- the methods Wells Fargo uses to promote these services to LMI nesses in amounts less than $1 million. Wells Fargo Bank also made individuals and communities. For example, Wells Fargo Bank repre- 33 percent of its small business loans to businesses with gross annual sented that it offers free checking accounts throughout its retail revenues less than $1 million ("loans to small businesses"). banking territory and provides electronic benefits transfer services 38. Although the Board has recognized that banks help to serve the designed to assist low-income individuals who do not have a banking banking needs of communities by making a variety of products and relationship or are otherwise underserved to receive federal benefits services available, the CRA does not require an institution to provide electronically. Wells Fargo also represented that almost one-half of its any specific types of products or services, such as mortgage or small retail branches are within one mile of an LMI area and that it has an business loans, in their assessment areas. extensive supermarket retail network. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 839 ment and the bank's large volume of small business loans businesses with gross annual revenues less than $1 million, in LMI areas.41 Wells Fargo Bank also made approxi- and 90 percent of the bank's small business loans were in mately 7,000 residential loans in California, totaling ap- amounts less than $100,000. Examiners found that Wells proximately $700 million. Fargo Bank made 80 percent of its small business loans in Examiners considered Wells Fargo Bank to be a leader LMI areas, compared with 17 percent for reporting lenders in providing financing for affordable housing. During the in the aggregate. review period, Wells Fargo Bank originated 99 community Examiners found that Wells Fargo Bank's distribution of development loans, totaling $469 million. These loans residential lending reflected an adequate penetration among included financing for 64 affordable housing projects to borrowers of all income levels and that the amount of the help construct more than 4,300 affordable housing units, bank's residential loans to LMI borrowers, as a percentage which helped meet an important housing- related lending of the bank's residential lending in Idaho compared favorneed in California. The examination report observed that ably to the percentage of LMI households among all Idaho more than one-half of Wells Fargo Bank's financing for households. The bank generated 806 residential loans in affordable housing projects was classified as highly com- Idaho, totaling $30 million. plex under CRA regulations, including arrangements using Wells Fargo Bank made three community development low-income housing tax credits ("LIHTCs") and loans in Idaho, totaling $7 million. Examiners noted that government-sponsored programs. these loans helped to provide 180 units of low-income Examiners particularly commended the bank for its inno- housing, which was a significant need in the assessment vative approach to and overall level of small business areas in which the loans were made. The bank also purlending in California, where the bank made approximately chased $1 million in LIHTCs to provide affordable housing 191,000 small business loans, totaling more than $7 bil- for LMI individuals and granted a nonprofit organization lion. Wells Fargo Bank was the leading small business $150,000 to support micro- and startup-loans for small lender in most of its assessment areas and in the state businesses and provide technical business assistance. Exoverall and was a leading small business lender in LMI aminers commented that each of these statewide investareas in California. The bank originated one out of every ments was either the largest or the only investment of its three small business loans made by retail banks and sav- kind in Idaho by a commercial bank. ings associations in LMI areas in the state. Montana. Examiners found that Norwest Bank Montana, Examiners also found that the bank's delivery systems N.A., Billings, Montana ("Norwest Bank Montana"), were accessible throughout the state, including LMI areas. along with its mortgage lending affiliate, Norwest Mort- Twenty-eight percent of California census tracts were des- gage, Inc. ("NMI"), was a leader in conventional residenignated as LMI areas, and 22 percent of Wells Fargo tial lending in the Billings MSA and Great Falls MSA, Bank's branches were in LMI areas. In addition, 7 percent extending more loans reported under the Home Mortgage of the bank's branches were on the border of LMI areas Disclosure Act ("HMDA") ("HMDA-reported loans") 42 and an additional 20 percent of its branches were within measured by number and dollar amount, than any other one mile of LMI areas. Examiners concluded that the lender in the market.43 Norwest Bank Montana employed bank's geographic branch distribution compared favorably flexible underwriting terms for LMI applicants under its with the geographic distribution of residents by income Community Home Ownership Program ("CHOP"), and level in the state. Branch hours were reasonable and conve- made 384 home purchase loans, totaling approximately nient to LMI areas and individuals, and branch opening $18 million, under the program during the CRA review and closing activity during the review period did not ad- period. Examiners also reported that NMI had a strong versely affect access to the bank's delivery systems by LMI record of originating government-sponsored real estate individuals. loans under programs sponsored by the Federal Housing Idaho. Wells Fargo Bank originated 2,164 small busi- Authority, the Department of Veteran's Affairs, and the ness loans in Idaho, totaling $107 million. More than Farmers Home Administration, and that Norwest Bank 50 percent of the bank's small business loans were made to Montana and NMI made a significant volume of residential loans to LMI borrowers and in LMI areas. Examiners found that Norwest Bank Montana demonstrated a strong commitment to supporting community 41. Several commenters from California alleged that Wells Fargo had downgraded its CRA and community development functions. Wells Fargo responded that it had upgraded its community development structure in California to make the company more responsive to 42. 12 U.S.C. § 2801 et seq. local credit needs and provided information about the company's 43. In the Billings banking market, Wells Fargo (including Norwest current CRA structure in the state. Moreover, Wells Fargo stated that Bank Montana, NMI, and Norwest Home Improvement) controlled it extended more than $195 million in community development loans approximately 16 percent of market deposits and made 17 percent of in 1999 and provided $205 million in community development loans all HMDA-reported loans in the market in 1998 and controlled apin California communities during the first seven months of 2000. proximately 14 percent of market deposits and made 14 percent of Wells Fargo indicated that a large portion of these loans were de- HMDA-reported loans in 1999. In the Great Falls banking market, signed to help provide affordable housing. In addition, Wells Fargo Wells Fargo controlled approximately 20 percent of market deposits indicated that it had recorded a total of $190 million in qualified and made 39 percent of all HMDA-reported loans in the market in community development investments in California, as of July 31, 1998 and controlled approximately 19 percent of market deposits and 2000. made 40 percent of HMDA-reported loans in 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

840 Federal Reserve Bulletin • December 2000 development and redevelopment initiatives by providing tion report commended Wells Fargo Bank for the distribufinancial support and technical assistance to various organi- tion of its residential loans to low-income borrowers.45 zations and community groups. For example, the bank Norwest Bank Nevada, together with the home mortgage provided a construction loan of $956,000 for a 24-unit lending subsidiaries of Norwest Corporation, made more low-income senior citizen housing complex in Billings and residential loans in Nevada than Wells Fargo Bank.46 Ex- $1.2 million in permanent financing for a 48-unit afford- aminers of Norwest Bank Nevada found that the bank able housing complex in Great Falls. Norwest Bank Mon- made 9,742 home purchase loans from January 1997 tana also provided bridge loans that assisted nonprofit through December 1998 and that it ranked first in the Reno organizations in constructing housing for LMI individuals. MSA, second in the bank's rural Nevada assessment area, Norwest Bank Montana was a Small Business Adminis- and fourth in the Las Vegas Multistate MSA in the number tration ("SBA") designated preferred lender and originated of home purchase loans originated.47 Examiners com- 207 SBA loans in Montana, totaling $19.2 million, during mended the bank for its distribution of home purchase the review period. Norwest also supported nonprofit orga- loans to low-income census tracts in the Las Vegas Multinizations that benefited LMI families, small businesses, state MSA and found that the bank's market share of home and farms by providing direct financial contributions and purchase loans in low-income census tracts was signifitechnical expertise. cantly higher than its overall market share of home pur- Nevada. Wells Fargo Bank was a major small business chase loans. lender in Nevada, making 2,694 small business loans in In the Las Vegas Multistate MSA, Wells Fargo Bank that state, totaling $111 million, during the review period. made loans to two affordable housing projects, totaling Examiners commented favorably on the bank's lending to $21 million, that helped to provide 456 affordable housing small businesses, including small businesses in LMI cen- rental units for low- income families. The bank also made sus tracts. According to examiners, Norwest Bank Nevada, two investments in Nevada to support affordable housing N.A., Las Vegas, Nevada ("Norwest Bank Nevada") also and provided 35 grants, totaling more than $3 million, to had a good geographic distribution of its small business organizations that developed affordable housing. Examinloans. The bank was commended for its small business ers considered this to be a significant volume of investment loans in LMI census tracts, particularly in the Las Vegas relative to the amount of the bank's deposits collected in MSA, where the amount of small business loans in low- the state. Examiners of Norwest Bank Nevada also deterincome census tracts, as a percentage of the bank's total mined that the bank made a significant number of qualified small business lending in the MSA, exceeded both the community development investments that all addressed percentage of small businesses in the state that were lo- identified needs in its assessment areas. For example, in the cated in low-income areas and the bank's overall market Reno MSA, Norwest Bank Nevada invested $9.6 million share of small business lending. Examiners also noted that Norwest Bank Nevada had an excellent record of lending to businesses of different sizes, with 74 percent of its small 45. In the Reno MSA, where low-income families represented 17 percent of all households, Wells Fargo Bank made 35 percent of its business loans originated to businesses with gross annual residential loans to low-income borrowers. In the Las Vegas Multirevenues of $100,000 or less. Examiners stated that this state MSA, which includes portions of Arizona, LMI families reprepercentage exceeded the percentage of businesses of this sented 37 percent of the population of the MSA and Wells Fargo Bank size in the state and was significantly higher than the level made 39 percent of its residential loans to LMI borrowers. In rural of lending to such borrowers by market lenders in the Nevada, where LMI families represented 37 percent of the population, Wells Fargo Bank made 37 percent of its residential loans to LMI aggregate. Examiners also commented favorably on the borrowers, and its performance in providing residential credit to bank's record of lending to small farms.44 low-income borrowers exceeded that of lenders in the aggregate. Wells Fargo Bank made 459 residential loans in Nevada, 46. Examiners stated that Norwest Bank Nevada had a high volume totaling $15 million. Although the bank's volume of resi- of loan originations in Nevada in 1997 compared with similarly situated commercial banks and noted particularly that the number and dential lending was relatively low, examiners found that dollar volume of the bank's loans increased significantly during the Wells Fargo Bank's loan distribution among areas repre- period of 1997 to the end of 1998. senting different income levels was good, and that the 47. One commenter argued that the most recent CRA examination bank's market share of lending in LMI areas approximated for Norwest Bank Nevada demonstrated that the bank has a poor record of compliance with the CRA. Examiners noted that Norwest its overall market share of residential loans. The examina- Bank Nevada had a poor record of home purchase lending in moderate-income areas of the Las Vegas Multistate MSA. However, the examination report also stated that the bank's distribution of home purchase loans in low-income areas of the Las Vegas Multistate MSA was excellent and that the bank's market share of home purchase 44. The examination report indicated that there were some low- loans in low-income areas was significantly higher than its market income areas in which Norwest Bank Nevada made very few or no share of home purchase loans in all geographies. Similarly, although residential, small business, or small farm loans. However, examiners examiners noted that the bank had an uneven distribution of home determined that these gaps resulted primarily from a lack of lending improvement loans in the Reno MSA, they found that the bank's opportunities in these areas because of small population, few owner- geographic distribution of home improvement loans was excellent in occupied homes, or a small number of businesses. Furthermore, rural Nevada, adequate in the Las Vegas Multistate MSA, and adeexaminers concluded that there were no gaps in the bank's lending quate for the state overall. Examiners rated Norwest Bank Nevada's that were unexplained or that reflected poorly on its lending perfor- performance under the lending test component of its overall CRA mance in any assessment area. rating as "high satisfactory." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 841 in multifamily Fannie Mae Delegated Underwriting and credit to a nonprofit economic development organization Service LIHTC bonds and $1.8 million in privately pooled that made guaranteed and direct loans and offered technical mortgage-backed securities. In the Las Vegas Multistate assistance to economically disadvantaged businesses. Nor- MSA, the bank made grants to nonprofit organizations, west Bank NM also issued a $8.6 million letter of credit to affordable housing projects, small business lenders, and support the expansion of two manufacturing plants in LMI providers of educational and social services for at-risk areas, thereby significantly improving employment opporyouth. tunities for LMI residents in the area. New Mexico. During the period covered by its most Oregon. Examiners found that Wells Fargo Bank was a recent CRA performance examination, Wells Fargo Bank major small business lender in Oregon. The bank made made almost 1,000 small business loans, totaling $21 mil- approximately 5,000 small business loans, totaling approxlion, in New Mexico that were almost all in amounts of imately $180 million, and examiners considered it to be less than $100,000. Examiners found that the bank's per- responsive to the credit needs of small businesses in the centage of small business loans made in LMI areas was state. Wells Fargo Bank's distribution of lending to small comparable to the percentage of the state's small busi- businesses in LMI areas compared favorably to the percentnesses located in these areas and slightly exceeded the age of small businesses located in these areas. The bank percentage of small business loans made in LMI areas by made 94 percent of its small business loans in amounts of market lenders in the aggregate. Similarly, examiners deter- less than $100,000 and 53 percent of all its small business mined that Norwest Bank NM's distribution of small busi- loans to businesses with gross annual revenues of less than ness loans was responsive to the credit needs of small $1 million. businesses. The bank was an active SBA lender with Wells Fargo Bank originated 1,618 residential loans in preferred lender status and ranked first in SBA lending in Oregon, totaling $69 million, during the examination pethe Albuquerque MSA in 1996. The bank established a riod, and examiners found that the distribution of these Business Solutions Center in Albuquerque to process credit loans reflected good penetration among borrowers of all requests of $250,000 or less from small businesses with income levels. The percentage of the bank's residential gross annual revenues not exceeding $2 million. loans made in LMI areas equaled the percentage of all Consistent with its strategic concentration on small busi- owner-occupied housing units in LMI areas that were in ness lending, Wells Fargo Bank originated only 34 residen- the bank's assessment area. Moreover, Wells Fargo Bank's tial loans in New Mexico, totaling $2 million, to borrowers market share of residential loans to LMI borrowers reprein the Santa Fe MSA. Fifty percent of the loans were to sented 88 percent of its overall market share of residential low-income borrowers and 29 percent of the loans were in loans. LMI census tracts. Wells Fargo Bank made seven affordable housing loans Examiners in the most recent CRA performance exami- in Oregon, totaling $5 million. Examiners found that these nation of Norwest Bank New Mexico, N.A., Albuquerque, loans helped to provide low-income housing units for New Mexico ("Norwest Bank NM"), considered the bank, senior citizens and families and addressed significant needs along with its affiliate NMI, to be a leading residential in the bank's assessment areas. Wells Fargo Bank also lender in its assessment areas. In 1995 and 1996, Norwest made two economic development loans to Native Ameri- Bank NM made 107 CHOP loans, totaling $16.3 million, can tribes, totaling almost $7 million. In addition, the bank and examiners found that the bank's distribution of loans made $8 million of LIHTC investments that helped finance in its assessment area, including LMI areas, was reason- the acquisition, rehabilitation, and construction of affordable.48 able housing units for LMI individuals in Oregon. Wells Wells Fargo Bank made one community development Fargo Bank also made 76 grants, totaling $616,000, to investment and 29 grants, totaling $366,000, in New Mex- support community development, affordable housing, and ico during the review period. Examiners concluded that economic and small business development, and to provide this level of investment was significant when compared to food, shelter, health, and relief services to LMI individuals the amount of deposits the bank collected in the state. The and families. bank was the largest provider of funds to an Hispanic South Dakota.49 Examiners found that Norwest Bank community development organization that facilitated small South Dakota, N.A., Sioux Falls, South Dakota ("Norwest business micro-lending to minorities in economically dis- Bank SD"), and NMI made more conventional HMDAtressed areas of the state. Examiners also determined that Norwest Bank NM and NMI supported community development projects. The bank provided a $100,000 line of 49. Wells Fargo also controls a credit card bank, Wells Fargo credit to a nonprofit micro-lender and a revolving line of Financial Bank, Sioux Falls, South Dakota (formerly Dial Bank). At its most recent CRA examination, examiners noted that Dial Bank had a high volume of community development loans, a very high volume of qualified community development investments, and had assumed a 48. Wells Fargo (including Wells Fargo Bank, Wells Fargo Bank leadership role in many projects related to these qualified investments. NM, NMI, and Norwest Home Improvement) made 22.6 percent of its Examiners concluded that the CRA performance of Dial Bank was HMDA-reported loans to LMI individuals in 1998 and 23.9 percent to commendable in light of "somewhat limited" community develop- LMI individuals in 1999. Wells Fargo's record of lending to LMI ment lending and investment opportunities in the Sioux Falls area and individuals, however, somewhat lagged the record of lenders in the intense competition from several other limited-purpose institutions in aggregate for both 1998 and 1999. the area for these types of projects. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

842 Federal Reserve Bulletin • December 2000 reported loans, measured by number and dollar amount, bank's lending was distributed reasonably among borrowthan any other conventional home mortgage lender in the ers and geographic areas of all income levels. The amount Sioux Falls and Rapid City MSAs. Moreover, Norwest of residential loans made in LMI areas, as a percentage of Bank SD and NMI were the leading originators of HMDA- the bank's total residential lending in Utah, approximated reported loans in moderate-income census tracts and to the percentage of the state's owner-occupied housing units LMI borrowers in both MSAs.50 Norwest Bank SD and located in these areas. Similarly, the amount of residential NMI made 67 CHOP loans, totaling $2.6 million, and 926 loans made to LMI households, as a percentage of the Community Home Improvement Program ("CHIP") loans, bank's total residential lending in Utah, exceeded the perwhich also used flexible underwriting criteria for LMI centage of all Utah households that were LMI. applicants, during the CRA examination review period. Wells Fargo Bank made 10 community development According to examiners, Norwest Bank SD participated loans in Utah, totaling $21 million, during the bank's actively in community development and redevelopment review period that supported the development of 428 lowinitiatives and provided leadership, technical support, and income housing units. The bank also made two community financial support throughout its assessment area. For exam- development investments in the Salt Lake City MSA, ple, the bank assumed a leadership role in forming the totaling $448,000. One investment assisted LMI individu- Sioux Empire Housing Partnership ("SEHP"), a nonprofit als and families to maintain home ownership, and the other corporation devoted to providing affordable housing to provided financing and management support to start-up LMI individuals in Sioux Falls, and committed $1 million and existing small businesses that did not qualify for to SEHP projects and $500,000 to the SEHP equity fund conventional financing. Wells Fargo Bank also made 59 for the purchase of tax credits. Norwest Bank SD provided grants, totaling $259,000, that were used to provide assisover $7.6 million to finance multifamily LMI housing tance in the areas of affordable housing, small business projects in South Dakota and extended a $2.8 million loan development, and economic development and to provide a to the Rapid City YMCA Center, which is in a moderate- variety of other services to LMI families in Utah. income area, to build child care and health facilities and to Washington. Wells Fargo Bank made more than 8,000 support gymnastics programs. small business loans, totaling almost $394 million, in Examiners concluded that Norwest Bank SD made a Washington, of which 92 percent were in amounts less than sizeable volume of loans to small businesses and small $100,000 and 47 percent went to businesses with gross farms in South Dakota. As of June 30, 1996, Norwest Bank annual revenue less than $1 million. Examiners found that SD had outstanding 9,003 small business loans, totaling these loans were dispersed throughout the state. The $294 million, and 5,616 small farm loans, totaling amount of the bank's loans to small businesses located in $203 million. Eighty-four percent of these loans were LMI areas, as a percentage of the bank's total business originated in amounts less than $100,000. lending, approximated the percentage of the state's small Utah. Wells Fargo Bank made more than 2,000 small businesses that were located in these areas. business loans in Utah, totaling almost $138 million, of Wells Fargo Bank made 2,118 residential loans in Washwhich 89 percent were in amounts of less than $100,000, ington, totaling $103 million, and examiners found that the and 46 percent were to businesses with gross annual reve- amount of residential loans made in LMI census tracts, as a nue less than $1 million. Examiners found that the bank's percentage of the bank's total residential lending, approxismall business lending in LMI census tracts was good, and mated the percentage of the state's owner-occupied housthat the amount of small business loans made in LMI ing units located in these areas. The bank's residential census tracts, as a percentage of the bank's total small lending also was well distributed among borrowers of all business lending in the state, exceeded the percentage of income levels, and the percentage of the bank's residential the state's small businesses located in these areas. loans made to LMI households exceeded the percentage of Wells Fargo Bank made 294 residential loans, totaling all Washington households that were LMI.51 $29 million, in the state, and examiners found that the Wells Fargo Bank made nine community development loans in Washington, including $31 million to support the development of 638 low-income housing units and other 50. In 1998, Wells Fargo (including Norwest Bank SD, NMI, and affordable housing initiatives and $6 million to provide Norwest Home Improvement) controlled approximately 34 percent of community services for LMI individuals. Examiners commarket deposits in the Rapid City banking market and made 29 mended Wells Fargo Bank for its community development percent of all HMDA-reported loans in the Rapid City MSA; in 1999 Wells Fargo controlled 32 percent of market deposits and made 25 investments, totaling almost $8 million. These investments percent of these loans. Wells Fargo controlled approximately 11 percent of market deposits in the Sioux Falls banking market in 1998 and made 33 percent of all HMDA-reported loans in the Sioux Falls MSA; in 1999 the organization controlled approximately 12 percent 51. Commenters from Washington alleged that Wells Fargo's subof market deposits and made 30 percent of these loans. Wells Fargo sidiaries generally experienced higher default rates on their mortgage made 21.2 percent of all its HMDA-reported loans in the Sioux Falls loans compared with loan originators in the aggregate. Wells Fargo MSA to LMI individuals in 1998. In 1999, the organization made 23.2 has indicated that WFHM had received the highest servicing perforpercent of its HMDA-reported loans to LMI individuals in the MSA. mance rating from Freddie Mac, based on the company's default Lenders in the aggregate in the Rapid City and Sioux Falls MSAs performance and the effectiveness of its loss mitigation efforts, and slightly exceeded Wells Fargo in the percentage of loans made to LMI that Fannie Mae had recognized WFHM for good performance on individuals and in LMI census tracts during this time period. defaults and loss mitigation. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 843 helped to provide capital, loan financing, and technical grams. Norwest Bank Wisconsin and Norwest Bank La assistance to low-income entrepreneurs and to support the Crosse also participated actively with the Wisconsin Housrehabilitation of affordable housing. In addition, Wells ing and Economic Development Authority ("WHEDA") in Fargo Bank made 198 grants, totaling almost $2 million, its programs to assist LMI individuals to become homeprimarily to nonprofit organizations engaged in providing owners.54 Examiners also found that all three banks and affordable housing, supporting small businesses, and other NMI had a reasonable distribution of loans to LMI individcommunity revitalization efforts. uals and in LMI areas. For example, Norwest Bank Wis- Wisconsin.52 Examiners generally found that each of the consin and NMI generated 2,455 residential loans to LMI predecessor banks to Wells Fargo Bank Wisconsin had individuals and 1,165 residential loans in LMI areas from made good efforts to address housing, small business, January 1994 to September 30, 1996.55 Moreover, Norwest small farm, and consumer credit needs in its communities, Bank Wisconsin's and NMI's market share of residential that each bank actively invested in its community, and that loans to LMI borrowers was equal to the organizations' each bank had a good record of originating loans to LMI overall market share.56 individuals and in LMI areas.53 Examiners stated that Norwest Bank Wisconsin partici- Examiners found, in an examination conducted as of pated actively in community development initiatives, often November 1996, that Norwest Bank Wisconsin provided a assuming a leadership role. The bank provided $3 million comprehensive array of loan products to meet community in financing to help build 250 housing units for LMI credit needs. Between January 1994 and September 30, individuals in Milwaukee and participated in a program to 1996, Norwest Bank Wisconsin originated 2,575 small provide matching funds to assist LMI loan applicants with business loans and small farm loans in amounts of less than down payments. Norwest Bank Wisconsin also provided $1 million, totaling $304 million. Examiners found that, in $10 million in funding to seven projects devoted to devel- 1996, 72 percent of these loans were to businesses and oping LMI multi-family housing in various communities in farms with gross annual revenues of less than $1 million. Wisconsin and provided capital to projects designed to As of June 30, 1996, Norwest Bank La Crosse had out- expand job opportunities for LMI individuals. Examiners standing 1,150 small business loans, totaling $54.8 million, found that Norwest Bank La Crosse participated in projects and 246 small farm loans, totaling $2.3 million, of which to provide rental housing to students and in LMI communi- 83 percent were in amounts of less than $100,000. Examin- ties and originated loans to support revitalization and job ers also determined that Midamerica actively participated growth in the inner city area of La Crosse. Examiners in economic development projects and made loans that reported that Midamerica had funded the expansion of facilitated the start- up, expansion, and relocation of busi- community facilities, such as a hospital and a YMCA, and nesses, including women-owned businesses. provided check cashing and other banking services at a Norwest Bank Wisconsin made 50 CHOP loans, totaling retirement home to meet the special needs of elderly com- $1.9 million, from January 1995 to June 30, 1996. Simi- munity members. larly, Norwest Bank La Crosse made 17 CHOP loans, totaling approximately $600,000, in 1994 and 1995. Exam- D. First Security's CRA Performance Record57 iners found that each of the three former Norwest banks in Wisconsin, together with NMI, consistently originated As noted above, First Security Bank received an overall loans through federal government-sponsored loan pro- rating of "outstanding" at its most recent examination for CRA performance. Examiners commented favorably on 52. As of June 24, 2000, Norwest Bank Wisconsin, N.A., Milwaukee, Wisconsin ("Norwest Bank Wisconsin"), was renamed Wells 54. Wells Fargo has indicated that demand for WHEDA loans from Fargo Bank Wisconsin, N.A. ("Wells Fargo Bank Wisconsin"), and Midamerica may have been limited by the relatively high income consolidated with Norwest Bank La Crosse, N.A., La Crosse, Wiscon- levels of the communities the bank serves. sin ("Norwest Bank La Crosse"), and Midamerica Bank Hudson, 55. In the eight MSAs included in Wells Fargo's Wisconsin assess- Hudson, Wisconsin ("Midamerica"). ment area, Wells Fargo (including the three former Norwest banks, 53. One commenter criticized Wells Fargo's record of residential NMI, and Norwest Home Improvement) made 2,297 HMDAlending to LMI and minority borrowers in Wisconsin based on data reported loans to LMI individuals in 1998, which represented available after the most recent CRA examinations of Wells Fargo's 19.9 percent of all HMDA-reported loans by Wells Fargo. In 1999, Wisconsin banks. Wells Fargo has represented that, in 1999, the Wells Fargo made 2,140 HMDA-reported loans to LMI individuals in percentage of conventional home mortgage loans made to minority these assessment areas, which represented 27.2 percent of all HMDAindividuals in Wisconsin by Wells Fargo's subsidiaries was compara- reported loans by the bank. The percentage of Wells Fargo's HMDAble with the percentage of these loans to minority individuals in reported loans to LMI individuals in these areas in 1998 and 1999 was Wisconsin by lenders in the aggregate. Moreover, Wells Fargo has slightly below that of lenders in the aggregate. stated that, in 1999, the percentage of conventional home mortgage 56. One commenter questioned whether Wells Fargo's subsidiary loans to LMI individuals in Wisconsin by Wells Fargo's subsidiaries banks in Wisconsin complied with section 109 of the Riegle-Neal approximated the percentage of these loans by lenders in the aggre- Interstate Banking and Branching Efficiency Act of 1994 gate in all but the La Crosse and the Milwaukee-Waukesha MSAs. (12 U.S.C. § 1835a). The Board has been advised by the appropriate Wells Fargo further has represented that, based on 1998 market share federal banking supervisors that all Wells Fargo's subsidiary banks data, the percentage of home purchase loans by Wells Fargo's subsid- satisfy the provision. iaries in the La Crosse and Milwaukee-Waukesha MSAs was compa- 57. The Board recently reviewed in detail the record of First rable with the percentage of loans by Wells Fargo to all borrowers in Security's subsidiary banks under the CRA. See First Security Order those MSAs, regardless of the borrower's income. at 131-132. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

844 Federal Reserve Bulletin • December 2000 the bank's responsiveness to community lending needs and LMI areas. Examiners also determined that First Security rated the institution's lending activities "outstanding" on Bank's business hours in Idaho were reasonable and acthe lending test component of its CRA performance rat- commodated customer needs, noting that 27 percent of the ing.58 At the state level, examiners rated First Security bank's branches, including several branches in LMI geog- Bank's lending activities "outstanding" in Utah and "high raphies, offered Saturday hours. Similarly, examiners consatisfactory" in Idaho and Oregon. Examiners found that cluded that First Security Bank's branches and ATMs in the bank had a good distribution of home mortgage loans Oregon were well distributed, and that the bank's business to borrowers of all income levels. The bank's record of hours accommodated customer needs. home purchase lending to low-income individuals in Idaho and Oregon was good and its record of home purchase E. HMDA Data lending to moderate-income individuals was excellent. First Security Bank also was responsive to the credit needs The Board also has considered Wells Fargo's and First of small businesses in the bank's assessment areas and had Security's records in light of comments on data provided a good record of lending to businesses of different sizes. In by the organizations' subsidiaries under HMDA.59 HMDA addition, examiners commended the bank for its respon- data for 1998 and 1999 indicate that Wells Fargo generally siveness to the credit needs of small farms. Examiners lagged the aggregate of lenders in its assessment areas in noted that First Security Bank regularly used flexible un- the percentage of its housing-related loans that were made derwriting practices to meet the credit needs of LMI home- to LMI individuals and for properties in LMI census tracts. buyers and small businesses in Idaho and Oregon. The data do not indicate, however, that Wells Fargo Examiners stated that First Security Bank had a high neglected home mortgage lending or systematically omitlevel of community development lending and investment ted any particular racial, economic, or geographic segment activity, and rated the bank "high satisfactory" on the of its communities under its home mortgage lending proinvestment test component of its CRA performance evalu- grams. The 1998 and 1999 data also show generally that ation. Of particular note was the bank's level of investment the percentage of Wells Fargo's housing-related loans to in affordable housing projects. In Idaho, First Security Native Americans, African Americans, and Hispanics ap- Bank made qualified loans totaling $12 million, which proximated the percentage of such loans to minority indihelped to develop 442 affordable housing units. The bank viduals by lenders in the aggregate in Wells Fargo's assessalso made complex investments involving LIHTCs that ment areas. Typically, however, the percentages of generated an additional 58 units of affordable housing. In housing-related loans to minority individuals by Wells Oregon, the bank made three loans, totaling $2.2 million, Fargo and lenders in the aggregate were less than the to support the development of 156 affordable housing percentage of these individuals in the total population of units, made a qualified loan of $130,000 to support other the assessment areas. Similarly, although denial disparity affordable housing initiatives, and provided $3.9 million to ratios vary widely among groups of applicants and by area, a project to develop government-subsidized affordable Wells Fargo's denial disparity ratios for minority individuhousing. In addition, First Security Bank made 20 commu- als were generally higher than the denial disparity ratios nity development investments, totaling $801,000, which for lenders in the aggregate in its assessment areas. examiners characterized as an adequate response to com- The 1998 and 1999 HMDA data for First Security in the munity needs in light of the investment opportunities avail- MSAs cited by commenters indicate that the percentage of able in the area. housing-related loans by the organization to LMI individu- First Security Bank received a rating of "outstanding" als and in LMI census tracts was comparable with or on the service test component of its CRA evaluation. exceeded the lending activities by lenders in the aggregate Examiners commended the bank for the geographical dis- to LMI individuals and in LMI areas. The percentage of tribution of its branches and ATMs throughout in its Idaho First Security's housing-related loans to minority individuassessment areas, noting that the percentage of the bank's als was comparable with the percentage of these loans by branches and ATMs located in LMI areas exceeded the lenders in the aggregate in the State of Utah and the percentage of all state geographies that were designated percentage of First Security's housing-related loans to Hispanics approximated or exceeded the percentage of these loans by lenders in the aggregate in the other cited markets. With limited exceptions, however, there were too few 58. A Nevada commenter particularly criticized First Security's record of making small business and residential loans to minority Native Americans or African Americans in the other cited individuals and its record of making small business loans in LMI areas. First Security Bank of Nevada focuses on providing loans and services to businesses in its assessment areas. At the bank's most recent CRA performance evaluation, examiners reviewed its small 59. Commenters criticized Wells Fargo's record of home mortgage business lending, which accounted for the largest portion of the bank's lending to LMI and minority individuals in California, Idaho, Monloan portfolio, and found that the distribution of lending in its assess- tana, Nevada, New Mexico, Oregon, South Dakota, Washington, and ment areas, including LMI areas, was good. The performance exami- Wisconsin. Commenters also alleged that First Security made an nation also stated that First Security Bank of Nevada had a good inadequate number of home mortgage loans to LMI and minority record of lending to businesses of all sizes. Moreover, examiners did individuals in Idaho, Oregon, and Washington in light of the percentnot identify any violations of applicable antidiscrimination laws by age of the general population in these states that these individuals the bank. constituted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 845 markets and First Security received too few housing- The Board has carefully considered the branch closing related loan applications from members of these groups to policy of Wells Fargo and Wells Fargo's record of opening evaluate the organization's lending to members of these and closing branches. The Board notes that the branch groups in these areas.60 closing policy provides that local bank management in the The Board is concerned when the record of an institution areas of proposed branch closings must review the impact indicates disparities in lending and believes that all banks that each branch closing would have on the community. are obligated to ensure that their lending practices are Examiners have reviewed the performance of Wells Farbased on criteria that ensure not only safe and sound go's subsidiary banks under the branch closing policy on lending, but also equal access to credit by creditworthy several occasions. In addition, the most recent CRA examapplicants regardless of their race or income level. The ination of Wells Fargo Bank indicated that the bank had a Board recognizes, however, that HMDA data alone provide satisfactory record of opening and closing branches, noted an incomplete measure of an institution's lending in its generally that the branch closings did not affect LMI comcommunity because these data cover only a few categories munities in a materially adverse manner, and concluded of housing-related lending. HMDA data, moreover, pro- that Wells Fargo Bank's delivery systems were reasonably vide only limited information about the covered loans.61 accessible to LMI individuals and areas. Examiners also HMDA data, therefore, have limitations that make them an concluded that First Security's subsidiary banks had a inadequate basis, absent other information, for concluding good record of opening and closing branches. that an institution has not assisted adequately in meeting its The Board expects that the subsidiary banks of the community's credit needs or has engaged in illegal lending combined organization would continue to use a satisfactory discrimination. branch closing policy for any branch closings that might Because of the limitations of HMDA data, the Board has result from the proposed transaction. The Board also notes considered these data carefully in light of other informa- that the appropriate federal supervisor for each of Wells tion. As noted above, examiners found no evidence of Fargo's subsidiary banks will, in the course of conducting prohibited discrimination or other illegal credit practices at CRA performance examinations, continue to review the the subsidiary banks of Wells Fargo and First Security at branch closing record of these banks. their most recent examinations. Examiners reviewed fair lending policies and procedures of the banks and found the G. Conclusion on Convenience and Needs policies and procedures to be comprehensive and appropriate for monitoring compliance with fair lending laws. The In reviewing the effect of the proposal on the convenience Board also has considered the HMDA data in light of and needs of the communities to be served, the Board has Wells Fargo's and First Security's lending records, which carefully considered all the facts of records, including the show that the organizations' subsidiary banks assist signifi- public comments received, Wells Fargo's responses to the cantly in helping to meet the credit needs of their commu- comments, and evaluations of the performance of each of nities, including LMI areas. Wells Fargo's and First Security's insured depository institution subsidiaries under the CRA.62 In connection with the F. Branch Closings proposal, Wells Fargo has indicated that the combined organization generally would follow the CRA policies and One commenter alleged that Wells Fargo had a poor record procedures currently used by Wells Fargo's subsidiary of retaining branches and several commenters expressed banks and has provided the Board with detailed informaconcern about the effect of possible branch closings that tion about the proposed CRA policies, procedures, and might result from this proposal. Wells Fargo has provided programs it intends to use in the future. Moreover, Wells the Board with its branch closing policy, and Board has Fargo has informed the Board that the combined organizaconsidered the public comments about potential branch tion would honor the existing CRA lending and contribuclosings in light of all the facts of record, including infor- tion commitments of First Security and retain various First mation provided by Wells Fargo. 60. In the Boise MSA, First Security's housing-related lending to 62. One commenter alleged that Wells Fargo has indirectly sup- Native Americans exceeded the percentage of these loans by lenders ported predatory lending through the business relationships of Norin the aggregate. west Bank Minnesota, N.A., Minneapolis, Minnesota ("Norwest Bank 61. The data, for example, do not account for the possibility that an Minnesota"), with Delta Funding Corporation and First Alliance institution's outreach efforts may attract a larger proportion of margin- Mortgage, which the commenter characterized as predatory lenders. ally qualified applicants than other institutions attract and do not Wells Fargo has stated that Norwest Bank Minnesota's only relationprovide a basis for an independent assessment of whether an applicant ship with Delta Funding Corporation and First Alliance Mortgage is to who was denied credit was, in fact, creditworthy. Credit history serve as a trustee on bond issues secured by pools of mortgage loans problems and excessive debt levels relative to income (reasons most originated by these two parties and that the bank's sole duty is to the frequently cited for a credit denial) are not available from HMDA bondholders. Wells Fargo has represented that Norwest Bank Minnedata. HMDA data also may be incomplete and may not identify all sota has no role in the initial funding of the loans that are included in applicants with regard to income level, ethnicity, or other demo- the mortgage loan pools and has no knowledge of the lending pracgraphic factors. tices followed by the party originating the loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

846 Federal Reserve Bulletin • December 2000 Security products and programs that are designed to help pects that consummation of the proposal would have a meet the credit needs of LMI individuals and areas.63 de minimis effect on competition for these services. Based Based on a review of the entire record and for the on all the facts of record, the Board concludes that it is reasons discussed above, the Board concludes that conve- unlikely that significantly adverse competitive effects nience and needs considerations, including the CRA perfor- would result from the nonbanking acquisitions proposed in mance records of the subsidiary banks of Wells Fargo and this transaction. First Security, are consistent with approval of the propos- Wells Fargo has indicated that consummation of the al.64 proposal would provide customers of Wells Fargo and First Security with access to a wider range of products and Nonbanking Activities services than Wells Fargo or First Security individually could provide. In addition, there are public benefits to be Wells Fargo also has filed notice under section 4(c)(8) of derived from permitting capital markets to operate so that the BHC Act to acquire certain nonbanking subsidiaries of bank holding companies can make potentially profitable First Security. Wells Fargo would engage through these investments in nonbanking companies and from permitting subsidiaries in a number of permissible nonbanking activi- banking organizations to allocate their resources in the ties, including providing credit-related insurance, data pro- manner they consider to be most efficient when the investcessing services, and equipment leasing. The Board has ments and actions are consistent, as in this case, with the determined by regulation that each activity conducted by a relevant considerations under the BHC Act. First Security subsidiary for which Wells Fargo provided The Board also has concluded that the conduct of the notice under section 4 of the BHC Act is closely related to proposed activities within the framework of Regulation Y banking for purposes of the BHC Act. In order to approve and Board precedent is not likely to result in any signifithe notice filed by Wells Fargo to acquire certain nonbank- cantly adverse effects, such as undue concentration of ing subsidiaries of First Security, the Board is required by resources, decreased or unfair competition, conflicts of section 4(j)(2)(A) of the BHC Act to determine that the interests, or unsound banking practices, that would outacquisition of these subsidiaries "can reasonably be ex- weigh the public benefits of the proposal, such as increased pected to produce benefits to the public . . . that outweigh customer convenience and gains in efficiency. Accordingly, possible adverse eiFects, such as undue concentration of based on all the facts of record, the Board has determined resources, decreased or unfair competition, conflicts of that the balance of public benefits that the Board must interests, or unsound banking practices."65 consider under section 4(j) of the BHC Act is favorable As part of its evaluation of these factors, the Board and consistent with approval of the notice. considers the financial condition and managerial resources As required by section 25 of the Federal Reserve Act of the notificant, its subsidiaries, and the companies to be and section 211.4(f) of the Board's Regulation K acquired, and the effect of the proposed transaction on (12 C.F.R. 211.4(f)), Wells Fargo also has applied to acthose resources. For the reasons discussed above and based quire First Security Hong Kong Agreement Corporation, on all the facts of record, the Board has concluded that Salt Lake City, Utah, which is organized under section 25 financial and managerial considerations are consistent with of the Federal Reserve Act, and its subsidiary. The Board approval of the notice. concludes that all the factors it is required to consider The Board also has considered the competitive effects of under the Federal Reserve Act and the Board's Regulathe proposed acquisition by Wells Fargo of the nonbanking tion K in connection with this application are consistent subsidiaries of First Security. Each of the markets in which with approval of the proposal. the nonbanking subsidiaries of Wells Fargo and First Security compete is unconcentrated, and there are numerous Conclusion providers of each service. As a result, the Board ex- Based on the foregoing and in light of all the facts of record, the Board has determined that the applications and 63. Wells Fargo has specifically identified certain affordable hous- notice should be, and hereby are, approved.66 In reaching ing programs provided by First Security that the combined organization would continue to offer. These programs include Federal Home Loan Bank, state housing agency first-time homebuyer, and nonprofit LMI home mortgage loan programs. 66. Several commenters requested that the Board hold a public 64. Certain commenters questioned whether Wells Fargo had ful- meeting or hearing on the proposal. Section 3(b) of the BHC Act does filled previous CRA pledges it had made in the past, and requested the not require the Board to hold a public hearing on an application unless Board to investigate Wells Fargo's performance. Neither the CRA nor the appropriate supervisory authority for the bank to be acquired the federal banking agencies' CRA regulations require depository makes a timely written recommendation of denial of the application. institutions to make pledges or enter into agreements with any organi- The Board has not received such a recommendation from the approprization. The Board, therefore, views such pledges and agreements and ate supervisory authorities. their enforceability as matters outside the CRA and focuses on the Under its rules, the Board also may, in its discretion, hold a public existing record of an applicant and the programs that the applicant has meeting or hearing on an application to acquire a bank if a meeting or in place to serve the credit needs of its community. See Fleet Finan- hearing is necessary or appropriate to clarify factual issues related to cial Group, Inc., 85 Federal Reserve Bulletin 747, 765 (1999); First the application and to provide an opportunity for testimony. 12 C.F.R. Union Corporation, 84 Federal Reserve Bulletin 489, 500 (1998). 225.16(e). Section 4 of the BHC Act and the Board's rules thereunder 65. 12 U.S.C. § 1843(j)(2)(A). provide for a hearing on a notice to acquire nonbanking companies if Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 847 its conclusion, the Board has considered all the facts of Voting for this action: Chairman Greenspan, Vice Chairman Fergurecord in light of the factors that it is required to consider son, and Governors Kelley, Meyer, and Gramlich. under the BHC Act and other applicable statutes.67 The Board's approval is specifically conditioned on compliance ROBERT DEV. FRIERSON by Wells Fargo with all the commitments made in connec- Associate Secretary of the Board tion with the applications and notice, including the commitments discussed in this order, and the conditions set forth in this order and the above-noted Board regulations and Appendix A orders. The Board's approval of the nonbanking aspects of the proposal also is subject to all the conditions set forth in Nonbanking Activities of First Security to Be Acquired Regulation Y, including those in sections 225.7 and under Section 4 of the BHC Act 225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)), and to the Board's authority to require such modification or (i) First Security Mortgage Company and its wholly termination of the activities of a bank holding company or owned subsidiary, Asset Recovery, Inc., both of Salt any of its subsidiaries as the Board finds necessary to Lake City, Utah, and thereby engage in extending ensure compliance with, and to prevent evasion of, the credit and servicing loans, in accordance with secprovisions of the BHC Act and the Board's regulations and tion 225.28(b)(1) of Regulation Y (12 C.F.R. orders issued thereunder. These commitments and condi- 225.28(b)(1)); tions are deemed to be conditions imposed in writing by (ii) First Security Leasing Company and its wholly owned the Board in connection with its findings and decision and, subsidiary, First Security Leasing Company of Neas such, may be enforced in proceedings under applicable vada, and Banker's Equipment Alliance, Inc., all of law. Salt Lake City, Utah, and thereby engage in personal The acquisition of the subsidiary banks of First Security property leasing, in accordance with section 225.28(b)(3) may not be consummated before the fifteenth calendar day of Regulation Y (12 C.F.R. 225.28(b)(3)); after the effective date of this order, and the proposal may (iii) First Security Investment Services, Inc. and its wholly not be consummated later than three months after the owned subsidiary, First Security Investment Manageeffective date of this order, unless such period is extended ment, Inc., both of Salt Lake City, Utah, and thereby for good cause by the Board or by the Federal Reserve engage in providing investment management and Bank of San Francisco, acting pursuant to delegated auinvestment advisory services, in accordance with thority. section 225.28(b)(6) of Regulation Y (12 C.F.R By order of the Board of Governors, effective 225.28(b)(6)); October 10, 2000. (iv) First Security Specialized Services, Inc., Salt Lake City, Utah, and thereby engage in providing financial consulting services, in accordance with sectthere are disputed issues of material fact that cannot be resolved in ions 225.28(b)(6) and (9) of Regulation Y (12 C.F.R. some other manner. 12 U.S.C. § 1843(c)(8); 12 C.F.R. 225.25(a)(2). 225.28(b)(6) and (9)); The Board has considered carefully these commenters' requests in (v) First Security Life Insurance Company of Arizona, light of all the facts of record. In the Board's view, commenters have Salt Lake City, Utah, and thereby engage in credit life had ample opportunity to submit their views, and they submitted written comments that have been considered carefully by the Board in and disability insurance underwriting, in accordance acting on the proposal. The commenters' requests fail to demonstrate with section 225.28(b)(ll)(i) of Regulation Y why their written comments do not present their evidence adequately (12 C.F.R. 225.28(b)(ll)(i)); and and fail to identify disputed issues of fact that are material to the (vi) First Security Processing Services, Inc., Salt Lake City, Board's decision that would be clarified by a public meeting or hearing. For these reasons, and based on all the facts of record, the Utah, and thereby engage in data processing and data Board has determined that a public meeting or hearing is not required transmission services, in accordance with section or warranted in this case. Accordingly, the requests for a public 225.28(b)(14) of Regulation Y (12 C.F.R. 225.28(b)(14)). meeting on the proposal are denied. 67. A number of commenters requested that the Board delay action or extend the comment period on the proposal. The Board has accumu- Appendix B lated a significant record in this case, including reports of examination, supervisory information, public reports and information, and considerable public comment. In the Board's view, for the reasons Banking Markets in which Wells Fargo and First discussed above, commenters have had ample opportunity to submit Security Compete Directly their views and, in fact, have provided substantial written submissions that have been considered carefully by the Board in acting on the California proposal. Moreover, the BHC Act and Regulation Y require the Board to act on proposals submitted under those provisions within certain time periods. Based on a review of all the facts of record, the Board Hesperia-Apple Valley-Victorville: Hesperia-Apple Valleyhas concluded that the record in this case is sufficient to warrant Board Victorville RMA and the towns of Helendale, Lucerne action at this time, and that a further delay in considering the proposal, Valley, Phelan, and Wrightwood. extension of the comment period, or a denial of the proposal on the grounds discussed above or on the basis of informational insufficiency Los Angeles: Los Angeles RMA and the towns of Rancho is not warranted. Santa Margarita and Rosamond. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

848 Federal Reserve Bulletin • December 2000 Riverside-San Bernardino: Riverside-San Bernardino Utah RMA and the towns of Banning, Beaumont, and Nuevo. South Lake Tahoe: The towns of South Lake Tahoe in Box Elder: The towns of Brigham City and Tremonton. California and Stateline and Zephyr Cove in Nevada. Ogden: Ogden RMA. Truckee-Tahoe: The towns of Kings Beach, Tahoe City, Park City: The towns of Coalville, Heber City, Kamas, and and Truckee in California and Incline Village in Nevada. Park City. Provo-Orem: Provo-Orem RMA. Idaho Salt Lake City: Salt Lake City RMA and the towns of Tooele and Grantsville. Boise: Boise RMA and the towns of Emmett, Homedale, Marsing, Parma, and Wilder. Washington Hailey: The towns of Bellevue, Hailey, Ketchum, and Sun Valley. Spokane: Spokane RMA and the town of Medical Lake in Idaho Falls: Idaho Falls RMA and the towns of Shelley Washington and the towns of Coeur d'Alene, Hay den, and Ririe. Hyden Lake, and Rathdrum in Idaho. Pocatello: Pocatello RMA. Sandpoinf. The towns of Ponderay, Priest River, and Sand- Appendix C point in Idaho and Newport in Washington. Twin Falls: The towns of Buhl, Filer, Gooding, Hagerman, Certain Banking Markets without Divestitures Hazelton, Jerome, Kimberly, Richfield, Shoshone, Twin Falls, and Wendell. California Nevada Hesperia-Apple Valley-Victorville: Wells Fargo operates Carson City. The towns of Carson City, Dayton, Gardner- the sixth largest depository institution in the market, conville, Minden, and Virginia City. trolling deposits of $71.3 million, representing approxi- Las Vegas: Las Vegas RMA. mately 6.6 percent of market deposits. First Security oper- Reno: Reno RMA and the town of Fernley. ates the 12th largest depository institution in the market, controlling deposits of $20.9 million, representing approx- New Mexico imately 1.9 percent of market deposits. On consummation of the proposal, Wells Fargo would operate the fifth largest Albuquerque: Albuquerque MSA and Guadalupe and Tor- depository institution in the market, controlling deposits of rance Counties. $92.2 million, representing approximately 8.5 percent of Las Cruces: Las Cruces MSA, excluding the towns of market deposits. The HHI would increase by 26 points to Anthony, Santa Teresa, and Sunland Park in Dona Ana 1162. County. Los Angeles: Wells Fargo operates the second largest de- Rio Arriba County: Rio Arriba County. pository institution in the market, controlling deposits of Roswell-Artesia: Chaves County and the northern half of $14.2 billion, representing approximately 10.2 percent of Eddy County. market deposits. First Security operates the 27th largest Santa Fe: Santa Fe RMA. depository institution in the market, controlling deposits of $962.6 million, representing less than 1 percent of market Oregon deposits. On consummation of the proposal, Wells Fargo would continue to operate the second largest depository Corvallis: Corvallis RMA. institution in the market, controlling deposits of Deschutes: The towns of Bend, La Pine, Redmond, Sisters, $15.2 billion, representing approximately 10.9 percent of Sunriver, and Terrebonne. market deposits. The HHI would increase by 14 points to Ontario: The towns of Nyssa, Ontario, and Vale in Oregon 1032. and Fruitland, New Plymouth, Payette, and Weiser in Riverside-San Bernardino: Wells Fargo operates the third Idaho. largest depository institution in the market, controlling Portland: Portland RMA and the towns of Mount Angel, deposits of $547 million, representing approximately Scappoose, St. Helens, and Vernonia in Oregon and Yacolt 10.1 percent of market deposits. First Security operates the in Washington. 21st largest depository institution in the market, controlling deposits of $36.1 million, representing less than 1 percent Salem: Salem RMA and the town of Silverton. of market deposits. On consummation of the proposal, Wells Fargo would operate the second largest depository Texas institution in the market, controlling deposits of El Paso: El Paso MSA and the towns of Anthony, Santa $583.1 million, representing approximately 10.7 percent of Teresa, and Sunland Park in Dona Ana County, New market deposits. The HHI would increase by 13 points to Mexico. 1622. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 849 Idaho market deposits. On consummation of the proposal, Wells Fargo would continue to operate the largest depository Idaho Falls: Wells Fargo operates the sixth largest deposi- institution in the market, controlling deposits of $154 miltory institution in the market, controlling deposits of lion, representing approximately 24.7 percent of market $29.7 million, representing approximately 3.8 percent of deposits. The HHI would increase by 169 points to 1583. market deposits. First Security operates the second largest Santa Fe: Wells Fargo operates the fourth largest deposidepository institution in the market, controlling deposits of tory institution in the market, controlling deposits of $198.7 million, representing approximately 25.3 percent of $110.1 million, representing approximately 10.6 percent of market deposits. On consummation of the proposal, Wells market deposits. First Security operates the eighth largest Fargo would operate the largest depository institution in depository institution in the market, controlling deposits of the market, controlling deposits of $228.4 million, repre- $41.2 million, representing approximately 4 percent of senting approximately 29.1 percent of market deposits. The market deposits. On consummation of the proposal, Wells HHI would increase by 191 points to 2156. Fargo would operate the third largest depository institution Sandpoinf. Wells Fargo operates the sixth largest deposi- in the market, controlling deposits of approximately $151.3 tory institution in the market, controlling deposits of million, representing approximately 14.6 percent of market $18.5 million, representing approximately 5.4 percent of deposits. The HHI would increase by 85 points to 1575. market deposits. First Security operates the fourth largest depository institution in the market, controlling deposits of Oregon $52.1 million, representing approximately 15.3 percent of market deposits. On consummation of the proposal, Wells Corvallis: Wells Fargo operates the third largest depository Fargo would operate the second largest depository institu- institution in the market, controlling deposits of tion in the market, controlling deposits of $70.6 million, $99.3 million, representing approximately 13 percent of representing approximately 20.7 percent of market depos- market deposits. First Security operates the fourth largest its. The HHI would increase by 166 points to 2218. depository institution in the market, controlling deposits of $64.2 million, representing approximately 8.4 percent of Nevada market deposits. On consummation of the proposal, Wells Fargo would operate the second largest depository institu- Reno: Wells Fargo operates the largest depository institu- tion in the market, controlling deposits of approximately tion in the market, controlling deposits of $828.9 million, $163.5 million, representing approximately 21.4 percent of representing approximately 27 percent of market deposits. market deposits. The HHI would increase by 220 points to First Security operates the seventh largest depository insti- 1623. tution in the market, controlling deposits of $106.1 million, Deschutes-. Wells Fargo operates the sixth largest deposirepresenting approximately 3.5 percent of market deposits. tory institution in the market, controlling deposits of On consummation of the proposal, Wells Fargo would $61.6 million, representing approximately 6.9 percent of continue to operate the largest depository institution in the market deposits. First Security operates the fourth largest market, controlling deposits of $935 million, representing depository institution in the market, controlling deposits of approximately 30.5 percent of market deposits. The HHI $76.2 million, representing approximately 8.5 percent of would increase by 187 points to 2082. market deposits. On consummation of the proposal, Wells Fargo would operate the third largest depository institution New Mexico in the market, controlling deposits of approximately $137.8 million, representing approximately 15.4 percent of market Rio Arriba County. Wells Fargo operates the fifth largest deposits. The HHI would increase by 115 points to 2072. depository institution in the market, controlling deposits of Ontario: Wells Fargo operates the eighth largest depository $2.9 million, representing approximately 1.1 percent of institution in the market, controlling deposits of market deposits. First Security operates the fourth largest $25.3 million, representing approximately 4.5 percent of depository institution in the market, controlling deposits of market deposits. First Security operates the third largest $33.7 million, representing approximately 12.5 percent of depository institution in the market, controlling deposits of market deposits. On consummation of the proposal, Wells $88.1 million, representing approximately 15.7 percent of Fargo would operate the fourth largest depository institu- market deposits. On consummation of the proposal, Wells tion in the market, controlling deposits of approximately Fargo would operate the third largest depository institution $36.6 million, representing approximately 13.6 percent of in the market, controlling deposits of $113.4 million, repremarket deposits. The HHI would increase by 26 points to senting approximately 20.2 percent of market deposits. The 3349. HHI would increase by 141 points to 1755. Roswell-Artesia: Wells Fargo operates the largest deposi- Portland: Wells Fargo operates the third largest depository tory institution in the market, controlling deposits of institution in the market, controlling deposits of $1.6 bil- $128.5 million, representing approximately 20.6 percent of lion, representing approximately 11.6 percent of market market deposits. First Security operates the eighth largest deposits. First Security operates the 20th largest depository depository institution in the market, controlling deposits of institution in the market, controlling deposits of $25.5 million, representing approximately 4.1 percent of $36.3 million, representing less than 1 percent of market Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

850 Federal Reserve Bulletin • December 2000 deposits. On consummation of the proposal, Wells Fargo Washington would continue to operate the third largest depository institution in the market, controlling deposits of $1.7 bil- Spokane: Wells Fargo operates the fifth largest depository lion, representing approximately 11.9 percent of market institution in the market, controlling deposits of deposits. The HHI would increase by 6 points to 2087. $210.9 million, representing approximately 6 percent of Salem: Wells Fargo operates the fourth largest depository market deposits. First Security operates the sixth largest institution in the market, controlling deposits of $158 mil- depository institution in the market, controlling deposits of lion, representing approximately 8.2 percent of market $195.8 million, representing approximately 5.6 percent of deposits. First Security operates the third largest depository market deposits. On consummation of the proposal, Wells institution in the market, controlling deposits of Fargo would operate the fourth largest depository institu- $271.3 million, representing approximately 14 percent of tion in the market, controlling deposits of $406.7 million, market deposits. On consummation of the proposal, Wells representing approximately 11.6 percent of market depos- Fargo would operate the second largest depository institu- its. The HHI would increase by 68 points to 1641. tion in the market, controlling deposits of $429.3 million, representing approximately 22.2 percent of market depos- Appendix D its. The HHI would increase by 230 points to 1585. Certain Banking Markets with Divestitures Texas California South Lake Tahoe: Wells Fargo operates the second largest El Paso: Wells Fargo operates the second largest deposidepository institution in the market, controlling deposits of tory institution in the market, controlling deposits of $74.2 million, representing approximately 22.6 percent of $892.6 million, representing approximately 27 percent of market deposits. First Security operates the fifth largest market deposits. First Security operates the seventh largest depository institution in the market, controlling deposits of depository institution in the market, controlling deposits of $31.9 million, representing approximately 9.7 percent of $72.8 million, representing approximately 2.2 percent of market deposits. Wells Fargo proposes to divest one branch market deposits. On consummation of the proposal, Wells in the market, with deposits of $31.9 million, representing Fargo would continue to operate the second largest deposiapproximately 9.7 percent of market deposits, to a suitable tory institution in the market, controlling deposits of out-of-market competitor. After the proposed merger and $965.4 million, representing approximately 29.2 percent of divestiture, Wells Fargo would continue to operate the market deposits. The HHI would increase by 119 points to second largest depository institution in the market, control- 2286. ling deposits of $74.2 million, representing approximately 22.6 percent of market deposits. The HHI would remain unchanged at 2010. Utah Idaho Ogden: Wells Fargo operates the tenth largest depository institution in the market, controlling deposits of Boise: Wells Fargo operates the fourth largest depository $17.5 million, representing approximately 1.4 percent of institution in the market, controlling deposits of $205 milmarket deposits. First Security operates the largest deposi- lion, representing approximately 6.1 percent of market tory institution in the market, controlling deposits of $458 deposits. First Security operates the second largest deposimillion, representing approximately 37.4 percent of market tory institution in the market, controlling deposits of deposits. On consummation of the proposal, Wells Fargo $1.1 billion, representing approximately 31.8 percent of would operate the largest depository institution in the mar- market deposits. Wells Fargo proposes to divest three ket, controlling deposits of approximately $475.5 million, branches in the market, with deposits of $94.1 million, representing approximately 38.8 percent of market depos- representing approximately 2.8 percent of market deposits, its. The HHI would increase by 107 points to 2134. to a suitable in-market competitor. After the proposed Provo-Orem: Wells Fargo operates the seventh largest de- merger and divestiture, Wells Fargo would operate the pository institution in the market, controlling deposits of largest depository institution in the market, controlling $39.1 million, representing approximately 2.1 percent of deposits of $1.2 billion, representing approximately market deposits. First Security operates the largest deposi- 35.1 percent of market deposits. The HHI would increase tory institution in the market, controlling deposits of by not more than 192 points to 2555. $571.8 million, representing approximately 30.5 percent of Hailey: Wells Fargo operates the fourth largest depository market deposits. On consummation of the proposal, Wells institution in the market, controlling deposits of Fargo would operate the largest depository institution in $24.9 million, representing approximately 10.9 percent of the market, controlling deposits of $610.9 million, repre- market deposits. First Security operates the largest deposisenting approximately 32.6 percent of market deposits. The tory institution in the market, controlling deposits of $87.4 HHI would increase by 127 points to 2157. million, representing approximately 38.3 percent of market Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 851 deposits. Wells Fargo proposes to divest two branches in approximately 27.1 percent of market deposits. The HHI the market, with $24.9 million of deposits, representing would increase by 234 points to 1750.1 approximately 10.9 percent of market deposits, to a suitable out-of-market competitor. After the proposed merger Utah and divestiture, Wells Fargo would operate the largest depository institution in the market, controlling deposits of Box Elder: Wells Fargo operates the second largest deposi- $87.4 million, representing approximately 38.3 percent of tory institution in the market, controlling deposits of market deposits. The HHI would remain unchanged at $34.7 million, representing approximately 14.6 percent of 2562. market deposits. First Security operates the largest depository institution in the market, controlling deposits of $128.4 million, representing approximately 53.9 percent of Nevada market deposits. Wells Fargo proposes to divest one branch in the market, with $34.7 million of deposits, representing Carson City: Wells Fargo operates the largest depository approximately 14.6 percent of market deposits, to a suitinstitution in the market, controlling deposits of able out-of-market competitor. After the proposed merger $272.3 million, representing approximately 32.2 percent of and divestiture, Wells Fargo would operate the largest market deposits. First Security operates the third largest depository institution in the market, controlling deposits of depository institution in the market, controlling deposits of $128.4 million, representing approximately 53.9 percent of $106.4 million, representing approximately 12.6 percent of market deposits. The HHI would remain unchanged at market deposits. Wells Fargo proposes to divest one branch 3361. in the market, with $74.8 million of deposits, representing Park City: Wells Fargo operates the fourth largest deposiapproximately 8.9 percent of market deposits, to a suitable tory institution in the market, controlling deposits of out- of-market competitor. After the proposed merger and $30.2 million, representing approximately 6.9 percent of divestiture, Wells Fargo would continue to operate the market deposits. First Security operates the largest deposilargest depository institution in the market, controlling tory institution in the market, controlling deposits of $167.3 deposits of $303.9 million, representing approximately million, representing approximately 38.2 percent of market 36 percent of market deposits. The HHI would increase by deposits. Wells Fargo proposes to divest one branch in the 175 points to 2004. market, with $30.2 million of deposits, representing approximately 6.9 percent of market deposits, to a suitable New Mexico out-of-market competitor. After the proposed merger and divestiture, Wells Fargo would operate the largest deposi- Albuquerque: Wells Fargo operates the third largest depos- tory institution in the market, controlling deposits of $167.3 itory institution in the market, controlling deposits of million, representing approximately 38.2 percent of market $1.2 billion, representing approximately 23.7 percent of deposits. The HHI would remain unchanged at 2668. market deposits. First Security operates the second largest depository institution in the market, controlling deposits of $1.3 billion, representing approximately 24.2 percent ORDERS ISSUED UNDER INTERNATIONAL BANKING of market deposits. Wells Fargo proposes to divest ACT 20 branches in the market, with $725 million of deposits, representing approximately 14 percent of market deposits, Banco Itau S.A. to a suitable out-of-market competitor. After the proposed Sao Paolo, Brazil merger and divestiture, Wells Fargo would operate the Order Approving Establishment of a Representative largest depository institution in the market, controlling Office deposits of $1.7 billion, representing approximately 33.8 percent of market deposits. The HHI would increase Banco Itau S.A. ("Bank"), Sao Paolo, Brazil, a foreign by 196 points to 2247. bank within the meaning of the International Banking Act Las Cruces: Wells Fargo operates the fifth largest deposi- ("IBA"), has applied under section 10(a) of the IBA tory institution in the market, controlling deposits of (12 U.S.C. § 3107(a)) to establish a representative office in $79.3 million, representing approximately 7.4 percent of Miami, Florida. The Foreign Bank Supervision Enhancemarket deposits. First Security operates the second largest ment Act of 1991 ("FBSEA"), which amended the IBA, depository institution in the market, controlling deposits of provides that a foreign bank must obtain the approval of $236.3 million, representing approximately 22 percent of market deposits. Wells Fargo proposes to divest one branch in the market, with $14.6 million of deposits, representing 1. These market share calculations may overstate the competitive approximately 1.3 percent of market deposits, to a suitable significance of one savings association in the market, based on the out-of-market depository institution. After the proposed unique business focus of the institution. Based on all the facts of merger and divestiture, Wells Fargo would operate the record, however, including the presence of two other savings associations as active commercial lenders in the market, the Board has largest depository institution in the market, controlling determined that the increase in HHI in the market is consistent with deposits of approximately $301 million, representing approval of the proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

852 Federal Reserve Bulletin • December 2000 the Board to establish a representative office in the United Regulation K.2 The Board previously has stated that the States. standards that apply to the establishment of a branch or Notice of the application, affording interested persons an agency need not in every case apply to the establishment of opportunity to submit comments, has been published in a a representative office, because representative offices do newspaper of general circulation in Miami (The Miami not engage in a banking business and cannot take deposits Herald, March 12, 2000). The time for filing comments has or make loans.3 expired and all comments have been considered. As noted above, Bank engages directly in the business of Bank, with assets of $30 billion (as of June 30, 2000), is banking outside the United States through its banking the fourth largest banking organization in Brazil. Bank is operations in Brazil and elsewhere. Bank has provided the 78 percent owned by Itausa-Investimentos Itau S.A. Board with the information necessary to assess the applica- ("Itausa") and its subsidiaries. Approximately 60 percent tion through submissions that address the relevant issues. of Itausa is owned by members of two related Brazilian With respect to home country supervision of Bank, the families, either directly or through related companies. The Board has considered the following information. Bank is remaining 40 percent of Itausa's shares is owned by the subject to the regulatory and supervisory authority of the public (18 percent), two foundations associated with Central Bank of Brazil (the "Central Bank"), which has Bank (12 percent), and an unrelated Brazilian company primary responsibility for the regulation of financial institu- (10 percent). tions in Brazil. The Board previously has determined that Bank provides commercial and retail banking services, the Central Bank exercises a significant degree of superviinvestment banking services, and other financial services sion over the activities of three other Brazilian banks, each such as securities brokerage and insurance. Bank operates of which were approved to establish representative offices branches in New York and the Cayman Islands, banking in the United States.4 Bank is supervised by the Central subsidiaries in the Cayman Islands, Argentina, and Uru- Bank on substantially the same terms and conditions as the guay, and a representative office in Frankfurt, Germany. other Brazilian banks. Based on all the facts of record, the Bank also owns less than 20 percent of the shares of banks Board has determined that factors relating to the supervioperating in Luxembourg and Portugal. Bank's parent, sion of Bank by its home country supervisor are consistent Itausa, owns most of the remaining shares of these banks. with approval of the proposed representative office. The The representative office would market the products of Board has taken into account the additional standards set Bank in the United States, act as a liaison between head forth in the IBA and in Regulation K.5 The Central Bank office and U.S.-based customers, and facilitate correspon- has authorized Bank to establish the proposed office. With dent banking activities in the United States. respect to the financial and managerial resources of Bank, In acting on an application to establish a representative taking into consideration Bank's record of operations in its office, the IBA and Regulation K provide that the Board home country, its overall financial resources, and its standshall take into account whether the foreign bank engages ing with its home country supervisor, the Board has deterdirectly in the business of banking outside of the United mined that financial and managerial considerations are States and has furnished to the Board the information it consistent with approval. In addition, Bank appears to have needs to assess the application adequately. The Board also the experience and capacity to support the proposed office shall take into account whether the foreign bank and any and has established controls and procedures in the branch foreign bank parent is subject to comprehensive supervi- to ensure compliance with applicable U.S. law, as well as sion or regulation on a consolidated basis by its home controls and procedures for its worldwide operations genercountry supervisor.1 In addition, the Board may take into ally. account additional standards set forth in the IBA and With respect to access to information, the Board has reviewed the restrictions on disclosure in relevant jurisdictions in which Bank operates and has communicated with relevant government authorities about access to informa- 1. See 12 U.S.C. § 3107(a)(2); 12 CFR 211.24(d)(2). In assessing this standard, the Board considers, among other factors, the extent to tion. Bank and Itausa have committed to make available to which the home country supervisors: the Board such information on the operations of Bank and (i) Ensure that the bank has adequate procedures for monitoring any affiliate of Bank that the Board deems necessary to and controlling its activities worldwide; determine and enforce compliance with the IBA, the Bank (ii) Obtain information on the condition of the bank and its Holding Company Act, and other applicable federal law. subsidiaries and offices through regular examination reports, audit reports, or otherwise; (iii) Obtain information on the dealings with and relationship between the bank and its affiliates, both foreign and domestic; 2. See 12 U.S.C. § 3105(d)(3) and (4); 12 C.F.R. 211.24(c)(2). (iv) Receive from the bank financial reports that are consolidated 3. See 58 Federal Register 6348, 6351 (1993). See also Banco de la on a worldwide basis, or comparable information that permits Ciudad de Buenos Aires, 85 Federal Reserve Bulletin 647 (1999); analysis of the bank's financial condition on a worldwide Agricultural Bank of China, 83 Federal Reserve Bulletin 617 (1997); consolidated basis; Citizens National Bank, 79 Federal Reser\'e Bulletin 805 (1993). (v) Evaluate prudential standards, such as capital adequacy and 4. See Banco Bandeirantes, S.A., 81 Federal Reserve Bulletin 742 risk asset exposure, on a worldwide basis. These are indicia (1995); Unibanco-Uniao do Banco Brasileiros, S.A., 82 Federal Reof comprehensive consolidated supervision; no single factor serve Bulletin 1148 (1996); Banco BBA-Creditanstalt S.A., 85 Federal is essential and other elements may inform the Board's Reserve Bulletin 518 (1999). determination. 5. See 12 U.S.C. § 3105(d)(3) and (4); 12 C.F.R. 211.24(c)(2). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 853 To the extent that the provision of such information may be States. Approval of this application also is specifically prohibited or impeded by law or otherwise, Bank and conditioned on Bank's compliance with the commitments Itausa have committed to cooperate with the Board to made in connection with this application and with the obtain any necessary consents or waivers that might be conditions in this order.6 The commitments and conditions required from third parties in connection with disclosure of referred to above are conditions imposed in writing by the certain information. In addition, subject to certain condi- Board in connection with its decision and may be enforced tions, the Central Bank may share information on Bank's in proceedings against Bank and its affiliates under applicaoperations with other supervisors, including the Board. In ble law. light of these commitments and other facts of record, and By order of the Board of Governors, effective subject to the condition described below, the Board has con- October 16, 2000. cluded that Bank has provided adequate assurances of access Voting for this action: Chairman Greenspan, Vice Chairman Ferguto any necessary information the Board may request. son, and Governors Kelley and Gramlich. Absent and not voting: On the basis of all the facts of record, and subject to the Governor Meyer. commitments made by Bank, as well as the terms and conditions set forth in this order, the Board has determined ROBERT DEV. FRIERSON Associate Secretary of the Board that Bank's application to establish a representative office in Miami should be, and hereby is, approved. Should any restrictions on access to information on the operations or 6. The Board's authority to approve the establishment of the proactivities of Bank or any of its affiliates subsequently posed office parallels the continuing authority of the State of Florida interfere with the Board's ability to determine and enforce to license offices of a foreign bank. The Board's approval of this application does not supplant the authority of the State of Florida or its compliance by Bank or its affiliates with applicable federal agent, the Florida Department of Banking and Finance, to license the statutes, the Board may require or recommend termination proposed office of Bank in accordance with any terms or conditions of any of Bank's direct or indirect activities in the United that the Florida Department of Banking and Finance may impose. APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) Effective Date Pinnacle Financial Partners, Inc., Pinnacle National Bank, October 12, 2000 Nashville, Tennessee Nashville, Tennessee 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 Alpena Banking Corporation, The Bank of Alpena, Chicago October 5, 2000 Alpena, Michigan Alpena, Michigan ANB Holdings, Inc., American National Bank, Atlanta October 23, 2000 Oakland Park, Florida Oakland Park, Florida Atlantic National Corporation, Atlantic National Bank, Atlanta October 12, 2000 Brunswick, Georgia Brunswick, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

854 Federal Reserve Bulletin • December 2000 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Avant Financial, LLC, Reliance Bank, New York October 25, 2000 Syracuse, New York White Plains, New York The Avoca Company, First State Bank of Nebraska, Kansas City October 11, 2000 Omaha, Nebraska Nebraska City, Nebraska Farmers State Bank of Nebraska, Bennet, Nebraska Basile Bancshares, Inc., Basile State Bank, Atlanta October 6, 2000 Basile, Louisiana Basile, Louisiana BB&T Corporation, FCNB Corp, Richmond October 19, 2000 Winston-Salem, North Carolina Frederick, Maryland Big Mac Bancshares, Inc., Peoples State Bank, Kansas City October 13, 2000 Hoxie, Kansas McDonald, Kansas BOK Financial Corporation, CNBT Bancshares, Inc., Kansas City October 26, 2000 Tulsa, Oklahoma Bellaire, Texas BOU Bancorp, Bank of Utah, San Francisco September 21, 2000 Ogden, Utah Ogden, Utah Capitol Bancorp Ltd., Yuma Community Bank, Chicago October 18, 2000 Lansing, Michigan Yuma, Arizona Sun Community Bancorp Limited, Phoenix, Arizona Central Banc, Inc., Marquette Bank Fulton, Chicago October 26, 2000 Geneseo, Illinois Fulton, Illinois Central Financial Corporation, Bank of Nevada, Kansas City September 25, 2000 Hutchinson, Kansas Las Vegas, Nevada Central Financial Corporation, New Frontier Bancshares, Inc., Kansas City September 28, 2000 Hutchinson, Kansas St. Charles, Missouri CommunityOne BancShares, Inc., Community Bank Plymouth, Minneapolis September 25, 2000 Plymouth, Minnesota Plymouth, Minnesota Coronado Financial Corporation, Lyons State Bank, Kansas City October 25, 2000 Lyons, Kansas Lyons, Kansas Cumberland Bancorp, Inc., Insurors Bank of Tennessee, Atlanta October 16, 2000 Nashville, Tennessee Nashville, Tennessee Custer Bancorp, Orchard Valley Financial Corp., Kansas City October 6, 2000 Westcliffe, Colorado Englewood, Colorado Dinsdale Brothers, Inc., Pinnacle Bank-Wyoming, Kansas City October 5, 2000 Palmer, Nebraska Torrington, Wyoming Elmer Bancorp, Inc., The First National Bank of Elmer, Philadelphia October 19, 2000 Elmer, New Jersey Elmer, New Jersey F.F. Holding Corporation, Rush-Oak Corporation, Chicago September 26, 2000 West Chicago, Illinois Chicago, Illinois Oak Bank, Chicago, Illinois First Banks, Inc., Commercial Bank of San Francisco, St. Louis October 10, 2000 St. Louis, Missouri San Francisco, California First Banks America, Inc., St. Louis, Missouri First Liberty Capital Corporation First Liberty Capital Corporation, Kansas City September 26, 2000 Employee Stock Ownership Plan, Hugo, Colorado Hugo, Colorado The First National Bank of Hugo, Hugo, Colorado InsCorp, Inc., Insurors Bank of Tennessee, Atlanta October 16, 2000 Nashville, Tennessee Nashville, Tennessee Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 855 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Marquette County Financial Tanis, Inc., Minneapolis October 2, 2000 Corporation, Calumet, Michigan Negaunee, Michigan Mercantile Bancorp, Inc., New Frontier Bancshares, Inc., St. Louis September 27, 2000 Quincy, Illinois St. Charles, Missouri New Frontier Bancshares, Inc. New Frontier Bank, St. Louis September 27, 2000 St. Charles, Missouri St. Charles, Missouri North Valley Bancorp, Six Rivers National Bank, San Francisco September 22, 2000 Redding, California Eureka, California Northwest Financial Corp., Plymouth Bancorporation, Inc., Chicago October 26, 2000 Spencer, Iowa Le Mars, Iowa First National Bank, Sioux City, Iowa Ogden Bancshares, Inc., Ames Community Bank, Chicago October 20, 2000 Ogden, Iowa Ames, Iowa PAB Bankshares, Inc., Baxley Federal Savings Bank, F.S.B., Atlanta October 19, 2000 Valdosta, Georgia Baxley, Georgia PCB Bancorp, Inc., Premier Community Bank of Southwest Atlanta October 13, 2000 Largo, Florida Florida, Lehigh Acres, Florida Premier Bancorp, Inc., Premier Bank, Chicago September 29, 2000 Wilmette, Illinois Wilmette, Illinois Prime Pacific Financial Services, Prime Pacific Bank, N.A., San Francisco October 17, 2000 Inc., Lynnwood, Washington Lynnwood, Washington Quality Bancshares, Inc., Fingal State Bank, Minneapolis October 4, 2000 Fargo, North Dakota Fingal, North Dakota Sterling City Bancshares, Inc., The First National Bank of Sterling Dallas October 25, 2000 Sterling City, Texas City, Sterling City Delaware Financial Sterling City, Texas Corporation, Dover, Delaware UB Financial Corporation, Union Bank of Florida, Atlanta September 28, 2000 Plantation, Florida Plantation, Florida Whitney Holding Corporation, First Ascension Bancorp, Inc., Atlanta October 16, 2000 New Orleans, Louisiana Gonzales, Louisiana Wintrust Financial Corporation, Northbrook Bank & Trust Company, Chicago October 12, 2000 Lake Forest, Illinois Northbrook, Illinois Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Allegiant Bancorp, Inc. Equality Bancorp, Inc., St. Louis October 20, 2000 St. Louis, Missouri St. Louis, Missouri Equality Savings Bank, St. Louis, Missouri Bank of Montreal, Bankmont Financial Corporation, Chicago October 20, 2000 Ontario, Canada Chicago, Illinois Bank of Montreal, Chicago, Illinois Bank One Corporation, To engage in nonbanking activities Chicago October 6, 2000 Chicago, Illinois Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

856 Federal Reserve Bulletin • December 2000 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date F&M Financial Services, Inc., MDS On-line, LLC, Minneapolis October 18, 2000 Preston, Minnesota La Crosse, Wisconsin Uwharrie Capital Corporation, Albemarle Heritage, LLC, Richmond October 13, 2000 Albemarle, North Carolina Albemarle, North Carolina Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Grace Investment Company, The First National Bank in Okeene, Kansas City October 25, 2000 Alva, Oklahoma Okeene, Oklahoma The Sumitomo Bank, Limited, The Sakura Bank, Limited, San Francisco October 20, 2000 Osaka, Japan Tokyo, Japan Manufacturers Bank, Los Angeles, California 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, Arvest United Bank, St. Louis September 27, 2000 Norman, Oklahoma Oklahoma City, Oklahoma BancFirst, First State Bank, Kansas City October 12, 2000 Oklahoma City, Oklahoma Oklahoma City, Oklahoma Bank of Lancaster, First Virginia Bank, Richmond September 29, 2000 Kilmarnock, Virginia Falls Church, Virginia First Virginia Bank-Hampton Roads, Norfolk, Virginia Bank of the Orient, Bank of Honolulu, San Francisco October 13, 2000 San Francisco, California Honolulu, Hawaii Bank of Tazewell County, AmSouth Bank, Richmond October 18, 2000 Tazewell, Virginia Birmingham, Alabama Bankwest of Kansas, Citizens State Bank, Kansas City October 3, 2000 Goodland, Kansas Keenesburg, Colorado Commerce Bank, County Bank of Chesterfield, Richmond October 19, 2000 Petersburg, Virginia Midlothian, Virginia Commerce Bank of Virginia, Richmond, Virginia Community Banks of Southern First National Bank of Walsenburg, Kansas City October 19, 2000 Colorado, Walsenburg, Colorado Rocky Ford, Colorado First American Bank and Trust First American Bank, N.A., Kansas City October 16, 2000 Company, Woodward, Oklahoma Purcell, Oklahoma First Arvest Bank, Arvest Bank, St. Louis September 25, 2000 Siloam, Springs, Arkansas Joplin, Missouri Iron and Glass Bank, Laurel Bank, Cleveland October 5, 2000 Pittsburgh, Pennsylvania Johnstown, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 857 Applications Approved Under Bank Merger Act—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Northern Neck State Bank, First Virginia Bank-Hampton Roads, Richmond October 13, 2000 Warsaw, Virginia Norfolk, Virginia Bank of Lancaster, Kilmarnock, Virginia Peninsula Trust Bank, United Community Bank, Richmond October 4, 2000 Gloucester, Virginia Franklin, Virginia People First Bank, American Heritage Bank, Kansas City October 19, 2000 Hennessey, Oklahoma El Reno, Oklahoma Citizens Bank of Tulsa, Tulsa, Oklahoma Pinnacle Bank, Pinnacle Bank, N.A., Kansas City October 25, 2000 Papillion, Nebraska Wisner, Nebraska Pinnacle Bank-Wyoming, Pinnacle Bank, Kansas City September 29, 2000 Torrington, Wyoming Cody, Wyoming Pinnacle Bank, Newcastle, Wyoming Pinnacle Bank, Mitchell, Nebraska PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Board. On June 30, 2000, the court of appeals denied the Federal Reserve Banks in which the Board of Governors is not appellant's motion for a stay of the district court order. named a party. Bettersworth v. Board of Governors, No. 00-50262 (5th Cir., filed April 14, 2000). Appeal of district court's dismissal of Privacy Act claims. El Bey v. United States, No. 00-5293 (D.C. Cir., filed August 31, 2000). Appeal from district court order dismiss- Hunter v. Board of Governors, No. 00-CV-735 (ESH) (D.D.C., ing pro se action as lacking arguable basis in law. The filed April 5, 2000). Action claiming retaliation for whistlegovernment filed a motion for summary affirmance on Octo- blowing activity. ber 26, 2000. Bennett v. Federal Bureau of Investigation, et al., No. Trans Union LLC v. Board of Governors, et al., No. 00-CV- H-00-0707 (S.D. Texas, filed March 1, 2000). Action alleg- 2087 (ESH) (D.D.C., filed August 30, 2000). Action under ing Board interference with a private investment. On Administrative Procedure Act challenging a portion of inter- August 23, 2000, the government filed a motion to dismiss agency rule regarding Privacy of Consumer Financial Infor- the action. mation. Albrecht v. Board of Governors, No. 00-CV-317 (CKK) Sedgwick v. Board of Governors, No. 00-16525 (9th Cir., filed (D.D.C., filed February 18, 2000). Action challenging the August 7, 2000). Appeal of district court dismissal of action funding of the retirement plan for certain Board employees. under Federal Tort Claims Act alleging violation of bank Folstad v. Board of Governors, No. 00-1056 (6th Cir., filed supervision requirements. January 14, 2000). Appeal of district court order granting Individual Reference Services Group, Inc., v. Board of Goversummary judgment to the Board in a Freedom of Informanors, et al, No. 00-CV-1828 (ESH) (D.D.C., filed July 28, tion Act case. On October 26, 2000, the court of appeals 2000). Action under Administrative Procedure Act chalaffirmed the district court's order. lenging a portion of interagency rule regarding Privacy of Consumer Finance Information. Toland v. Internal Revenue Service, Federal Reserve System, et al., No. CV-S-99-1769-JBR-RJJ (D. Nevada, filed De- Reed Elsevier Inc. v. Board of Governors, No. 00-1289 (D.C. cember 29, 1999). Challenge to income taxation and Fed- Cir., filed June 30, 2000). Petition for review of interagency eral Reserve notes. On February 16, 2000, the government rule regarding Privacy of Consumer Financial Information. filed a motion to dismiss the action. Board of Governors v. Interfinancial Services, Ltd., No. 00-5233 (D.C. Cir., filed June 27, 2000). Appeal of district Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed court order enforcing administrative subpoena issued by the August 3, 1999). Employment discrimination action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

858 Federal Reserve Bulletin • December 2000 Sheriff Gerry Ali v. U.S. State Department, No. 99-7438 (C.D. Enforcement Counsel to show cause why they should not Cal., filed July 21, 1999). Action relating to impounded be ordered to cease and desist from "abusing the public bank drafts. record." The Board denies the request for interlocutory review. Kerr v. Department of the Treasury, No. 99-16263 (9th Cir., Requests for interlocutory review of pre-hearing orders filed April 28, 1999). Appeal of dismissal of action chalof an ALJ are governed by section 263.28 of the Board's lenging income taxation and Federal Reserve notes. Rules of Practice for Hearings, 12 C.F.R. 263.28 ("Rule Fraternal Order of Police v. Board of Governors, No. 28"). Under that rule, the Board "may exercise interlocu- 1:98CV03116 (WBB)(D.D.C„ filed December 22, 1998). tory review" of an ALJ order if the Board finds that at least Declaratory judgment action challenging Board labor pracone of four circumstances exists: tices. On February 26, 1999, the Board filed a motion to (1) The ruling involves a controlling question of law dismiss the action. or policy as to which substantial grounds exist for Board of Governors v. Carrasco, No. 98 Civ. 3474 (LAK) a difference of opinion; (S.D.N.Y., filed May 15, 1998). Action to freeze assets of (2) Immediate review of the ruling may materially individual pending administrative adjudication of civil advance the ultimate termination of the proceedmoney penalty assessment by the Board. On May 26, 1998, ing; the court issued a preliminary injunction restraining the (3) Subsequent modification of the ruling at the contransfer or disposition of the individual's assets and appoint- clusion of the proceeding would be an inadequate ing the Federal Reserve Bank of New York as receiver for remedy; or those assets. Following entry of the Board's order requiring (4) Subsequent modification of the ruling would cause restitution, 85 Federal Reserve Bulletin 142 (1998), the unusual delay or expense. 12 C.F.R. 263.28(b). court granted the Board's motion for judgment in the asset As the Board has previously had occasion to rule in this freeze action and authorized a judicial sale of the seized matter, interlocutory review is discretionary, and the scope property. within which such discretion should be exercised is ex- Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed tremely narrow. In the Matter of Incus Co., 86 Federal May 4, 1998). Appeal and cross-appeal of district court Reserve Bulletin 246 (2000). Thus, a finding of one of the order granting in part and denying in part the Board's four circumstances identified in Rule 28 is necessary, but motion for summary judgment seeking prejudgment interest may not be sufficient, to justify interlocutory review by the and a statutory surcharge in connection with a civil money Board. Id. Rather, the Board will exercise its discretion to penalty assessed by the Board. On February 24, 1999, the grant interlocutory review "where at least one of the precourt granted the Board's appeal and denied the cross- requisites is met, using all of the prerequisites as guideappeal, and remanded the matter to the district court for posts in the exercise of that discretion ."Id. determination of prejudgment interest due to the Board. Here, Respondents have objected in a variety of ways to the consequences of the Board's prior decision not to close the hearing in this matter to the public. See In the Matter of Incus Co., 85 Federal Reserve Bulletin 284 (1999). First, FINAL ENFORCEMENT DECISION ISSUED BY THE they claim that Enforcement Counsel's reference in filings BOARD OF GOVERNORS in this proceeding to financial information relating to vari- In the Matter of ous individuals is an "abuse" of the record, designed to Incus Co., Ltd. embarrass Respondents and the Hank Rhon family. From Tortola, British Virgin Islands this premise they conclude that a stipulated protective and Carlos Hank Rhon order must be revised by the Board to provide protection for deposition testimony, and that Enforcement Counsel An Institution-Affiliated Party must be ordered to "cease and desist" such alleged abuse. Of Incus Co., Ltd., and Respondents provide no support for their allegation of Laredo National Bancshares, abuse apart from the fact that certain information contained Laredo, Texas in Enforcement Counsel's filings was picked up in press reports. Press coverage is one of the consequences of the Docket No. 98-038-B-FHC, 98-038, B-I, 98-038-CMP- Congressional mandate that, absent extraordinary circum- FHC, 98-038-CMP-I, 98-038-E-I stances, enforcement proceedings such as these be open to the public. Moreover, Respondents have not established Determination on Request for Interlocutory Review that this alleged abuse meets any of the criteria for interlocutory review of an ALJ's order. While they argue that the Respondents Incus Co., Ltd. and Carlos Hank Rhon have ALJ's decision not to amend the stipulated protective order requested interlocutory review of an order dated June 8, was based on an erroneous reading of the law, their legal 2000, issued by administrative law judge ('ALJ") Arthur arguments are not persuasive. The Board's regulations L. Shipe, denying Respondents' motions to amend a stipu- relating to release of confidential financial information pursuant to the Freedom of Information Act or in response lated confidentiality order, to strike from the record a to a third-party request have no application to these enmotion filed by Board Enforcement Counsel, and to order Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 859 forcement proceedings and would provide no basis for WRITTEN AGREEMENTS APPROVED BY FEDERAL amending the protective order in this case. And no case RESERVE BANKS cited by Respondents suggests that a court or agency is constitutionally required to seal the record of a public Bay View Capital Corporation proceeding to protect personal financial information rele- San Mateo, California vant to the proceeding.1 Similarly, the Board sees no basis to disturb the ALJ's decision not to strike the so-called "Halmos Motion" from The Federal Reserve Board announced on October 11, the record. Respondents claim that the text of the motion as 2000, the execution of a Written Agreement by and submitted by Enforcement Counsel mischaracterizes a wit- between Bay View Capital Corporation, San Mateo, Caliness's declaration. The declaration speaks for itself and is fornia, and the Federal Reserve Bank of San Francisco. included in the record; moreover, Respondents have pointed out in the record the areas in which they consider the characterizations to be inaccurate. There is no need to Citizens Deposit Bank and Trust Company strike a filing on this basis. Vanceburg, Kentucky For these reasons, Respondents' request for interlocutory review is denied. So ordered, this 11th day of October, 2000. The Federal Reserve Board announced on October 23, 2000, the execution of a Written Agreement by and between the Citizens Deposit Bank and Trust Company, Board of Governors of the Vanceburg, Kentucky, and the Federal Reserve Bank of Federal Reserve System Cleveland. JENNIFER J. JOHNSON Secretary of the Board Independent Southern Bancshares, Inc. Employee Stock Ownership Trust 1. Indeed, Respondents' own cases establish that to whatever extent Brownsville, Tennessee personal financial information is entitled to constitutional protection, that protection is frequently overridden by legitimate governmental interests. See Strathoros v. New York City Taxi and Limousine Comm'n, 198 F.3d 317 (2d Cir. 1999); AFGE v. Dep't of Housing and The Federal Reserve Board announced on October 2, 2000 Urban Dev., 118 F.3d 786 (D.C. Cir. 1997), reversing AFGE v. U.S. the execution of a Written Agreement by and among Dep't of Housing and Urban Dev., 924 F. Supp. 225 (D.D.C. 1996). In Independent Southern Bancshares, Inc. Employee Stock this case, Congress has made the judgment that the public interest in Ownership Trust, and Independent Southern Bancshares, open proceedings outweighs the privacy interests of the individuals Inc., both of Brownsville, Tennessee, and the Federal Reand third parties involved. In the Matter of Incus, 85 Federal Reserve Bulletin 284, 285 (1999). serve Bank of St. Louis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance—Continued All Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, and debt measures A29 U.S. government securities dealers— A5 Reserves of depository institutions and Reserve Bank Positions and financing credit A30 Federal and federally sponsored credit A6 Reserves and borrowings—Depository agencies—Debt outstanding institutions Securities Markets and Corporate Finance Policy Instruments A31 New security issues—Tax-exempt state and local A7 Federal Reserve Bank interest rates governments and corporations A8 Reserve requirements of depository institutions A32 Open-end investment companies—Net sales A9 Federal Reserve open market transactions and assets A32 Corporate profits and their distribution Federal Reserve Banks A32 Domestic finance companies—Assets and liabilities A3 3 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A35 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit A36 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A23 Interest rates—Money and capital markets A42 Nonfinancial business activity A24 Stock market—Selected statistics A42 Labor force, employment, and unemployment A43 Output, capacity, and capacity utilization A44 Industrial production—Indexes and gross value Federal Finance A46 Housing and construction A25 Federal fiscal and financing operations A47 Consumer and producer prices A26 U.S. budget receipts and outlays A48 Gross domestic product and income All Federal debt subject to statutory limitation A49 Personal income and saving Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • December 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 GDP Gross domestic product e Estimated GNMA Government National Mortgage Association 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 IOs Interest only, stripped, mortgage-back securities 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 OCDs Other checkable deposits 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 POs Principal only, stripped, mortgage-back securities CRA Community Reinvestment Act of 1977 REIT Real estate investment trust FFB Federal Financing Bank REMICs Real estate mortgage investment conduits 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 FSA Farm Service Agency SIC Standard Industrial Classification FSLIC Federal Savings and Loan Insurance Corporation VA Department of Veterans Affairs G-7 Group of Seven G-10 Group of Ten GENERAL INFORMATION In many of the tables, components do not sum to totals because of include not fully guaranteed issues) as well as direct obligarounding. tions of the Treasury. Minus signs are used to indicate (1) a decrease, (2) a negative "State and local government" also includes municipalities, figure, or (3) an outflow. special districts, and other political subdivisions. "U.S. government securities" may include guaranteed issues of U.S. government agencies (the flow of funds figures also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A4 Domestic Nonfinancial Statistics • December 2000 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 W99 2000 2000 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q4 Qi Q2 Q3 May June Julyr Aug.r Sept. Reserves of depository institutions~ 1 Total -3.4 1.8 -9.5 -7.1 12.5 -40.6 9.0 -9.4 -2.4 2 Required -4.5 .1 -5.9 -7.5 19.0 -45.1 9.1 -8.0 -5.6 3 Nonborrowed -3.0 2.4 -11.1 -8.8 10.9 -44.4 6.4 -9.8 .7 4 Monetary base3 20.4 4.3 -3.2 2.5 2.5 2.8 3.7 .4 2.9 Concepts of money and debt4 5 Ml 4.8 .0 -1.2 -2.8 -10.9 -1.7 1.1 -3.7 -6.6 6 M2 5.2 6.1 6.3 4.5 -.5 3.8 3.5 7.3 8.5 7 M3 10.4r 11. r 8.5r 8.1 3.9r 1.7 8.6 9.7 8.0 8 Debt 6.3 5.6 6.2r n.a. 5.T 5.6r 5.1 5.4 n.a. Nontransaction components y In M25 5.3 8.0 8.6 6.7 2.7 5.4 4.3 10.5 12.9 10 In M3 only5 24.8r 24.3r 13.9r 17.0 14.9r 17.4r 21.1 15.6 7.0 Time and savings deposits Commercial banks ii Savings, including MMDAs 4.2 3.6 8.1 10.5 -2.4 7.3 10.1 14.5 22.3 12 Small time7 7.0 9.3 13.7 10.3 10.9 17.5 8.2 9.2 3.7 13 Large time8,9 38.5 22.2 17.7 9.5 1.7 19.1 9.7 18.5 -20.4 Thrift institutions 14 Savings, including MMDAs -3.3 -1.7 1.9 2.5 11.5 -1.9 -.5 6.6 3.4 li Small time7 5.1 7.2 3.7 11.6 7.0 9.2 12.0 16.2 9.6 16 Large time8 6.0 17.9 -.7 20.3 -12.7 24.4 26.4 27.0 10.8 Money market mutual funds 17 Retail 10.8 19.3 10.9 -1.2 -1.9 -3.9 -7.9 5.4 11.7 18 Institution-only 22.0 23.8 13.7 33.4 17.0 15.5 51.8 28.2 32.7 Repurchase agreements and eurodollars iy Repurchase agreements10 19.5 22.4 10.8 8.0 33.1 28.8 5.9 -16.9 -1.3 20 Eurodollars'0 10.0r 41. lr 15.4r 1.4 32.7r -5.7r -20.5 16.3 21.8 Debt components4 21 Federal -4.4 -4.8 -7.5 n.a. -18.1 -8.4 -3.7 -7.3 n.a. 22 Nonfederal 9.3 8.4 9.1' n.a. 11.0r 9.0r 7.2 8.4 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 hems in the process of collection and Federal adjusted (that is, discontinuities in the data have been smoothed into the series) and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of month-averaged (that is, the data have been derived by averaging adjacent month-end levels). withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail credit union share draft accounts, and demand deposits at thrift institutions. Seasonally money fund balances, each seasonally adjusted separately. adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities OCDs, each seasonally adjusted separately. (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time term) of U.S. addressees, each seasonally adjusted separately. deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail 7. Small time deposits—including retail RPs—are those issued in amounts of less than money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh $ 100,000. All IRA and Keogh account balances at commercial banks and thrift institutions balances at depository institutions and money market funds. Seasonally adjusted M2 is are subtracted from small time deposits. calculated by summing savings deposits, small-denomination time deposits, and retail money 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those fund balances, each seasonally adjusted separately, and adding this result to seasonally booked at international banking facilities. adjusted Ml. 9. Large time deposits at commercial banks less those held by money market funds, M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) depository institutions, the U.S. government, and foreign banks and official institutions. balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 10. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures 2000 2000 July Aug. Sept. Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 559,982 557,962 561,086 558,150 557,929 556,799 562,878 559.406 562,208 558,792 U.S. government securities" 2 Bought outright—System account3 506.116 509,923 510,925 510,753 509,767 511,147 511,123 512,218 509,013 511,153 3 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 140 140 133 140 140 140 140 136 130 130 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 17,642 12,059 14,427 10,822 13,281 10,761 17,664 11,205 17,286 11,425 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 64 24 52 9 14 54 36 4 135 18 9 Seasonal credit 513 559 424 539 565 586 531 422 384 398 10 Special Liquidity Facility credit 0 0 0 0 0 0 0 0 0 0 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float 469 896 776 899 959 492 -10 1,462 977 677 13 Other Federal Reserve assets 35,038 34,362 34,349 34,988 33,204 33,619 33,394 33,959 34,284 34,991 14 Gold stock 11.046 11,046 11,046 11,046 11,046 11,046 11,046 11,046 11.046 11,046 15 Special drawing rights certificate account 4,200 4,200 3,667 4,200 4,200 4,200 4,200 4,200 3,343 3,200 16 Treasury currency outstanding 30,167 30,444 30,687 30,432 30,471 30,510 30,549 30,657 30,708 30,759 ABSORBING RESERVE FUNDS 17 Currency in circulation 570,798 569,532 570,465 570,072 569,067 568.790 572,637 572,073 569,649 568,349 18 Reverse repurchase agreements—triparty4 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 85 146 170 140 157 161 166 167 164 177 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,172 5,047 6,695 5,226 4,824 5,245 5,594 4,627 8,574 7,357 21 Foreign • 120 87 84 80 101 77 74 80 86 77 22 Service-related balances and adjustments . . 6,784 6,745r 6,704 6,824 6,821r 6,693r 6,788 6,588 6,473 6,894 23 Other 233 239 227 255 234 205 248 237 199 242 24 Other Federal Reserve liabilities and capital . 15,652 15,269 15,260 15,246 15,234 15,301 15,156 15,278 15,261 15,333 25 Reserve balances with Federal Reserve Banks5 6,552 6,588r 6,881 5,984 7,208 6,083r 8,011 6,259 6.899 5,369 End-of-month figures Wednesday figures July Aug. Sept. Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 560,828 562,882r 565,382 557,033 563,303 559,930 564,390 559,863 566,465 561,557 U.S. government securities2 Bought outright—System account3 506,103 510,182 511,413 513,023 510,664 513,095 512,447 510,829 510,434 512,472 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations Bought outright 140 140 130 140 140 140 140 130 130 130 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Repurchase agreements—triparty4 . . . 17,490 18,525 17,320 10,020 18,330 11,935 16,680 11,840 19,885 12.170 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions Adjustment credit 45 30 4 12 7 20 129 8 908 7 Seasonal credit 584 567 368 545 580 586 504 387 392 407 Special Liquidity Facility credit. . . 0 0 0 0 0 0 0 0 0 0 Extended credit 0 0 0 0 0 0 0 0 0 0 Float 1,348 198r 372 280 143 319 741 2,508 124 642 Other Federal Reserve assets 35,119 33,240 35,774 33,012 33,440 33,835 33.749 34,161 34,591 35,728 14 Gold stock 11,046 11,046 11,046 11,046 11.046 11,046 11.046 11,046 11.046 11,046 15 Special drawing rights certificate account . 4,200 4,200 3,200 4,200 4,200 4,200 4,200 4,200 3.200 3.200 16 Treasury currency outstanding 30,283 30,549 30,811 30,432 30,471 30,510 30,549 30,657 30,708 30,759 ABSORBING RESERVE FUNDS 17 Currency in circulation 568,806 571,430 568,612 570,789 569,588 570,948 573,995 571,790 569,742 569,672 18 Reverse repurchase agreements—triparty4 . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 118 166 184 156 161 161 168 162 175 184 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,392 5,961 8,459 3,943 5,150 5,948 4.359 5,348 7,413 7,986 21 Foreign 76 79 139 83 71 99 75 74 66 75 22 Service-related balances and adjustments 6,553 6,788r 6,894 6,824 6,82 r 6,693r 6,788 6,588 6,473 6,897 23 Other 228 214 177 259 203 202 247 188 192 189 24 Other Federal Reserve liabilities and capital 15,331 15,180 15,243 14,908 14,947 14,915 14,928 14.949 15,003 15,034 25 Reserve balances with Federal Reserve Banks 9,852 8,859r 10,731 5,748 12,079 6,720r 9,625 6,667 12,355 6,527 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 NonfinancialS tatistics • December 2000 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1997 1998 1999 2000 Dec. Dec. Dec. Mar. Apr. May June July Aug. Sept. 1 Reserve balances with Reserve Banks2 10,664 9,026 5,263 6,515 7,081 7,661 6,460 6,582 6,875r 6,826 2 Total vault cash3 44,742 44,294 60,630 48,952 46,456 44,643 44,560 45,475 45,322 44,802 3 Applied vault cash4 37,255 36,183 36,392 33,237 33,512 33,898 32,757 33,086 32,61 r 32,435 4 Surplus vault cash5 7,486 8,111 24,238 15,715 12,944 10,745 11,802 12,389 12,71 lr 12,367 5 Total reserves6 47,919 45.209 41,655 39,752 40,593 41,558 39,217 39,668 39,486r 39,261 6 Required reserves 46,235 43,695 40,348 38,547 39,448 40,616 38,153 38,600 38,471 38,144 7 Excess reserve balances at Reserve Banks7 1,685 1,514 1,307 1,205 1,145 943 1,064 1,068 l,014r 1,117 8 Total borrowing at Reserve Banks 324 117 320 179 304 362 479 570 579 477 9 Adjustment 245 101 179 101 184 86 90 60 25 50 10 Seasonal 79 15 67 71 120 276 389 510 554 427 11 Special Liquidity Facility8 74 7 0 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 2000 May 31 June 14 June 28 July 12 July 26 Aug. 9 Aug. 23 Sept. 6r Sept. 20 Oct. 4 1 Reserve balances with Reserve Banks2 7,741 6,498 6,413 6,524 6,388 7,267 6,603 6,911 6,578 7,123 2 Total vault cash3 45,164 43,847 45,098 45,783 44,921 46,291 45,398 44,099 44,814 45,208 3 Applied vault cash4 34,458 32,184 33,333 32,742 33.184 33,638 32,195 32,184 32,077 33,087 4 Surplus vault cash5 10,706 11,663 11,765 13,041 11,737 12,654 13,204 11,915 12,737 12,121 5 Total reserves6 42,199 38,682 39,746 39,266 39,572 40,904 38,797 39,095 38,655 40,209 6 Required reserves 41,223 37,769 38,545 38,103 38,596 39,802 37,818 38,118 37,612 38,906 7 Excess reserve balances at Reserve Banks7 976 913 1,200 1,162 975 1,102 979 977 1,043 1,303 8 Total borrowing at Reserve Banks 440 472 471 589 549 581 564 604 473 409 9 Adjustment 100 134 43 117 22 27 12 45 70 26 10 Seasonal 340 339 428 472 527 555 552 559 403 383 11 Special Liquidity Facility8 12 Extended credit9 0 0 0 0 0 0 0 0 0 0 1. Data in this table also appear in the Board's H.3 (502) weekly statistical release. For 5. Total vault cash (line 2) less applied vault cash (line 3). ordering address, see inside front cover. Data are not break-adjusted or seasonally adjusted. 6. Reserve balances with Federal Reserve Banks (line 1) plus applied vault cash 2. Excludes required clearing balances and adjustments to compensate for float and (line 3). includes other off-balance-sheet "as-of" adjustments. 7. Total reserves (line 5) less required reserves (line 6). 3. Vault cash eligible to satisfy reserve requirements. It includes only vault cash held by 8. Borrowing at the discount window under the terms and conditions established for the those banks and thrift institutions that are not exempt from reserve requirements. Dates refer Century Date Change Special Liquidity Facility in effect from October 1, 1999 through to the maintenance periods in which the vault cash can be used to satisfy reserve require- April 7, 2000. ments. 9. Consists of borrowing at the discount window under the terms and conditions estab- 4. All vault cash held during the lagged computation period by "bound" institutions (that lished for the extended credit program to help depository institutions deal with sustained is, those whose required reserves exceed their vault cash) plus the amount of vault cash liquidity pressures. Because there is not the same need to repay such borrowing promptly as applied during the maintenance period by "nonbound" institutions (that is, those whose vault with traditional short-term adjustment credit, the money market effect of extended credit is cash exceeds their required reserves) to satisfy current reserve requirements. similar to that of nonborrowed reserves. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Policy Instruments A7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit1 Seasonal credit- Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk 11 O /3 n / 00 Effective date Previous rate 11 O /3 n / 00 Effective date Previous rate 11 O /3 n /0 0 Effective date Previous rate Boston 6.00 5/16/00 5.50 6.60 10/5/00 6.55 7.10 10/5/00 7.05 New York 5/19/00 Philadelphia 5/18/00 Cleveland 5/16/00 Richmond 5/16/00 Atlanta 5/17/00 Chicago 5/17/00 St. Louis 5/18/00 Minneapolis 5/18/00 Kansas City 5/17/00 Dallas 5/17/00 San Francisco .... 6.00 5/16/00 5.50 6.60 10/5/00 6.55 7.10 10/5/00 7.05 Range of rates for adjustment credit in recent years4 Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank level)—All of evel)—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 6 6 1982--Oct. 17 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. 77 9-9.5 9 Aug. 16 3.5^t 4 20 6.5 6.5 76 9 9 18 4 4 May II 6.5-7 7 Dec. 14 8.5-9 9 Nov. 15 4-4.75 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-——AApprr.. 9 8.5-9 9 9 5.25 5.25 Sept. 22 8 8 n 9 9 Oct. 16 8-8.5 8.5 Nov. 71 8.5-9 8.5 1996—Jan. 31 5.00-5.25 5.00 20 8.5 8.5 76 8.5 8.5 Feb. 5 5.00 5.00 Nov. 1 8.5-9.5 9.5 Dec. a4 3 9.5 9.5 1998—Oct. 15 4.75-5.00 4.75 1985-—May 70 7.5-8 7.5 16 4.75 4.75 1979—July 20 10 10 74 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. 71 6.5-7 6.5 26 4.75 4.75 Oct. 8 11-12 12 73 6.5 6.5 Nov. 16 4.75-5.00 4.75 10 12 12 Julv 1 1 6 6 18 5.00 5.00 Aug. 7 1 5.5-6 5.5 1980—Feb. 15 12-13 13 77 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-——SSeepptt.. 4 5.5-6 6 Mar. 21 5.25-5.50 5.50 30 12 12 1 1 6 6 23 5.50 5.50 June 13 11-12 11 May 16 5.50-6.00 5.50 16 11 11 1988--Aug. 9 6-6.5 6.5 19 6.00 6.00 July 28 10-11 10 1 1 6.5 6.5 2 9 10 10 In effect Nov. 3, 2000 6.00 6.00 Sept. 26 11 11 1989--Feb. 74 6.5-7 7 Nov. 17 12 12 77 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 8 14 14 4 6 6 Nov. 2 13-14 13 Apr. 30 5.5-6 5.5 6 13 13 May 7 5.5 5.5 Dec. 4 12 12 Sept. 13 5-5.5 5 1 / 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. 70 3.5-4.5 3.5 3 11 11 74 3.5 3.5 16 10.5 10.5 27 10-10.5 10 1992---JJuullyy 7 3-3.5 3 3 0 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 194J-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 • December 2000 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Type of deposit Net transaction accounts' 1 $0 million-$42.8 million3. 12/28/00 2 More than $42.8 million4 . 12/28/00 3 Nonpersonal time deposits^ 12/27/90 4 Eurocurrency liabilities6. . . 12/27/90 1. Required reserves must be held in the form of deposits with Federal Reserve Banks succeeding calendar year by 80 percent of the percentage increase in the total reservable or vault cash. Nonmember institutions may maintain reserve balances with a Federal liabilities of all depository institutions, measured on an annual basis as of June 30. No Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For corresponding adjustment is made in the event of a decrease. The exemption applies only to previous reserve requirements, see earlier editions of the Annual Report or the Federal accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions maintenance period beginning December 28, 2000, for depository institutions that report include commercial banks, savings banks, savings and loan associations, credit unions, weekly, and with the period beginning January 18, 2001, for institutions that report quarterly, agencies and branches of foreign banks, and Edge Act corporations. the exemption was raised from $5.0 million to $5.5 million. 2. Transaction accounts include all deposits against which the account holder is permitted 4. The reserve requirement was reduced from 12 percent to 10 percent on to make withdrawals by negotiable or transferable instruments, payment orders of with- Apr. 2, 1992, for institutions that report weekly, and on Apr. 16, 1992, for institutions that drawal, or telephone or preauthorized transfers for the purpose of making payments to third report quarterly. persons or others. However, accounts subject to the rules that permit no more than six 5. For institutions that report weekly, the reserve requirement on nonpersonal time deposits preauthorized, automatic, or other transfers per month (of which no more than three may be with an original maturity of less than 1 l/i years was reduced from 3 percent to 1 l/i percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 11/2 years was reduced from 3 against which the 3 percent reserve requirement applies be modified annually by 80 percent of percent to zero on Jan. 17, 1991. the percentage change in transaction accounts held by all depository institutions, determined The reserve requirement on nonpersonal time deposits with an original maturity of 1 x/2 as of June 30 of each year. Effective with the reserve maintenance period beginning years or more has been zero since Oct. 6, 1983. December 28, 2000, 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 18. 2001, 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 $44.3 million to $42.8 million. deposits with an original maturity of less than 1 x/l 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 2000 TTyyppee ooff ttrraannssaaccttiioonn 11999977 11999988 11999999 aanndd mmaattuurriittyy Feb. Mar. Apr. May June July Aug. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 9,147 3,550 0 0 0 2,294 0 0 11,,882255 553311 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 435,907 450,835 464,218 38,607 48,459 37.141 36,386 44,008 33,718 42,797 4 For new bills 435,907 450,835 464,218 38,607 48,459 37,141 36,386 44,008 33,718 42,797 5 Redemptions 0 2,000 0 0 198 779 2,297 4,188 4,902 3,438 Others within one year 6 Gross purchases 5,549 6,297 11,895 0 0 0 164 1,875 1,284 22,,777700 7 Gross sales 0 0 0 0 0 0 0 0 0 0 X Maturity shifts 41,716 46.062 50,590 6,877 5,034 0 13,063 4.672 5,152 7,040 9 Exchanges -27,499 -49,434 -53,315 -6,688 -3,515 0 -12,633 -3,109 -3,333 -7,396 10 Redemptions 1,996 2,676 1,429 0 0 568 0 0 367 887 One to five years 11 Gross purchases 20,080 12,901 19,731 0 740 1,723 890 706 2,259 22,,550088 N Gross sales 0 0 0 0 0 0 0 0 0 0 N Maturity shifts -37,987 -37,777 -44,032 -5,210 -5,034 0 -10,334 -4,672 -5,152 -3,439 14 Exchanges 20,274 37,154 42,604 4,348 3,515 0 10,063 3,109 3.333 5,418 Five to ten years 15 Gross purchases 3,449 2,294 4,303 0 489 930 0 0 00 11,,995566 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -1,954 -5,908 -5,841 -949 0 0 -1,552 0 0 -3,601 18 Exchanges 5,215 7,439 7,583 1,170 0 0 2,570 0 0 1,254 More than ten years 19 Gross purchases 5,897 4,884 9,428 0 330 0 528 1.151 500 772277 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -1,775 -2,377 -717 -717 0 0 -1.177 0 0 0 22 Exchanges 2,360 4,842 3,139 1,170 0 0 0 0 0 724 All maturities 23 Gross purchases 44,122 29,926 45,357 0 1,559 4,947 1.582 3.732 5.868 88,,449922 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 1,996 4,676 1,429 0 198 1,347 2,297 4,188 5,269 4,325 Matched transactions 26 Gross purchases 3,591,210 4,430,457 4,413,430 340,127 401,404 336,103r 357,355 368,396 344,935 381,349 27 Gross sales 3,593,530 4,434,358 4,431,685 339,585 401,841 334,75 lr 356,640 369,739 344,384 381,475 Repurchase agreements 28 Gross purchases 810,485 512,671 281,599 0 00 0 0 00 00 00 29 Gross sales 809,268 514,186 301,273 0 0 0 0 0 0 0 30 Net change in U.S. Treasury securities 41,022 19,835 5,999 542 923 4,952 -1 -1,800 1,150 4,041 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 0 00 00 3? Gross sales 0 25 0 0 0 0 0 0 0 0 33 Redemptions 1,540 322 157 25 0 10 0 0 0 0 Repurchase agreements 34 Gross purchases 160,409 284,316 360,069 0 0 0 0 00 0 00 35 Gross sales 159,369 276,266 370,772 0 0 0 0 0 0 0 36 Net change in federal agency obligations -500 7,703 -10,859 -25 0 -10 0 0 0 0 Reverse repurchase agreements 37 Gross purchases 0 0 0 0 00 00 00 00 00 00 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 0 0 304,989 82,998 61,230 79,585 107,375 70,850 6666,,448855 4477,,226655 40 Gross sales 0 0 164,349 81,335 62,253 78,425 105,885 70,315 75,925 46,230 41 Net change in triparty obligations 0 0 140,640 1,663 -1,023 1,160 1,490 535 -9,440 1,035 42 Total net change in System Open Market Account. .. 40,522 27,538 135,780 2,180 -100 6,102 1,489 -1,265 -8,290 5,076 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 NonfinancialS tatistics • December 2000 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements' Millions of dollars Wednesday End of month Account 2000 2000 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 July 31 Aug. 31 Sept. 30 Consolidated condition statement ASSETS 1 Gold certificate account 11.046 11,046 11,046 11,046 11,046 11,046 11,046 2 Special drawing rights certificate account 4.200 4,200 3,200 3,200 4,200 4,200 3,200 3 Coin 729 735 765 790 754 760 831 Loans 4 To depository institutions 6330 3950 1,3000 4140 6280 5970 3720 5 Other 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements Triparty Obligations 7 Repurchase agreements—triparty" 16.680 11,840 19,885 12,170 17,490 Federal agency obligations3 8 Bought outright 1400 1300 1300 1300 1400 1400 1300 9 Held under repurchase agreements 10 Total U.S. Treasury securities3 512,447 510,829 510,434 512,472 506,103 510,182 511,413 11 Bought outright4 512,447 510.829 510,434 512,472 506,103 510,182 511,413 12 Bills 188,995 186,477 184,032 185,416 190,265 187,232 184,356 13 Notes 232,772 233,651 235,256 235,724 228,503 232,770 235,725 14 Bonds 90,6790 90,7000 91,1470 91,3320 87,3350 90,1800 91,3320 15 Held under repurchase agreements 16 Total loans and securities 529,899 523,193 531,750 525,186 524,361 529,444 529,235 17 Items in process of collection 11,517 9,980 7,863 7,072 3,414 5,391 5,424 18 Bank premises 1,419 1,420 1,422 1,425 1,418 1,421 1,430 Other assets 19 Denominated in foreign currencies5 15,092 15,097 15,102 15,777 15,092 15,088 15,642 20 All other6 17.275 17,704 18,175 18,626 18,600 16,755 18,817 21 Total assets 591,178 583,375 589,323 583,123 578,886 584,103 585,625 LIABILITIES 22 Federal Reserve notes 544.3420 542,0300 539,9740 539,8860 539,3960 541,8060 538,8160 23 Reverse repurchase agreements—triparty" 21,932 18,480 27,012 21,276 22,006 21,855 26,399 24 Total deposits 17.250 12,871 19,341 13,027 16,309 15,601 17,624 25 Depository institutions 4,359 5,348 7,413 7,986 5,392 5,961 8,459 26 U.S. Treasury—General account 75 74 66 75 76 79 139 27 Foreign—Official accounts 247 192 189 228 214 177 28 Other 29 Deferred credit items 9.976 7,916 7,334 6,927 2,154 5,263 5,168 4,427 4,369 4,328 4,338 4,839 4,585 4,447 30 Other liabilities and accrued dividends7 580,677 572,794 578,648 572,427 568,394 573,508 574,830 31 Total liabilities CAPITAL ACCOUNTS 6,874 6,920 6,935 6,949 6,881 6,856 6,933 3332 SCuarppiltuals paid in 2,679 2,679 2,679 2,679 2,615 2,679 2,679 34 Other capital accounts 948 982 1,060 1,067 995 1,060 1,184 35 Total liabilities and capital accounts 591,178 583,375 589,323 583,123 578,886 584,103 585,625 MEMO 36 Marketable U.S. Treasury securities held in custody for foreign and international accounts Federal Reserve note statement 37 Federal Reserve notes outstanding (issued to Banks) 767,1 17 766,252 765,862 765,300 765,043 769,994 766,982 764,756 38 LESS: Held by Federal Reserve Banks 225,757 221,910 223.832 225,326 225,157 230,598 225,175 225,940 39 Federal Reserve notes, net 541,360 544,342 542,030 539,974 539,886 539,396 541,806 538,816 Collateral held against notes, net 40 Gold certificate account 11,046 11,046 11,046 11.046 11,046 11,046 11.046 11,046 41 Special drawing rights certificate account 4.200 4,200 4,200 3,200 3,200 4,200 4,200 3,200 4? Other eligible assets 944 0 3,985 0 869 417 0 0 43 U.S. Treasury and agency securities 525,170 529,097 522,799 525.728 524,772 523,733 526,560 524,570 44 Total collateral 541,360 544,342 542,030 539,974 539,886 539,396 541,806 538,816 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 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 July 31 Aug. 31 Sept. 30 1 Total loans 606 633 395 1,300 415 577 597 372 2 Within fifteen days1 538 234 82 1,255 365 371 398 221 3. Sixteen days to ninety days 68 398 313 46 49 206 200 151 4. 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities2 513,095 512,447 510,829 510,434 512,472 506,103 510,182 511,413 6 Within fifteen days' 17,840 15,459 18,333 17,138 19,796 13,568 4,891 8,978 7 Sixteen days to ninety days 111,192 111,753 110,937 109,017 107,557 108,730 111,192 116,776 8 Ninety-one days to one year 129,090 131,447 126,872 128,256 128,442 136,104 140,813 128,981 9 One year to five years 131,290 129,601 130,499 131,337 131,987 125,108 129,601 131,987 10 Five years to ten years 53,071 53,074 53,075 53,525 53,527 53,440 53,072 53,527 11 More than ten years 70,613 71,112 71,113 71,162 71,162 69,153 70,613 71,162 12 Total federal agency obligations 140 140 130 130 130 140 140 130 13 Within fifteen days1 0 10 0 0 0 0 0 0 14 Sixteen days to ninety days 0 0 0 0 0 10 10 0 15 Ninety-one days to one year 0 0 0 0 0 0 0 0 16 One year to five years 10 10 30 30 30 10 10 30 17 Five years to ten years 120 120 100 100 100 120 120 100 18 More than ten years 0 0 0 0 0 0 0 0 1. Holdings under repurchase agreements are classified as maturing within fifteen days in 2. Includes compensation that adjusts for the effects of inflation on the principal of accordance with maximum maturity of the agreements. inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic NonfinancialS tatistics • December 2000 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2000 11999966 11999977 11999988 11999999 IItteemm DDeecc.. DDeecc.. DDeecc.. DDeecc.. Feb. Mar. Apr. May June July Aug.r Sept. Seasonally adjusted AADDJJUUSSTTEEDD FFOORR CCHHAANNGGEESS IINN RREESSEERRVVEE RREEQQUUIIRREEMMEENNTTSS-- 11 TToottaall rreesseerrvveess33 50.17 46.87 45.19 41.74 41.64 40.46 40.93 41.36 39.96 40.26 39.94 39.87 22 NNoonnbboorrrroowweedd rreesseerrvveess44 50.02 46.54 45.07 41.42 41.53 40.28 40.63 41.00 39.48 39.69 39.37 39.39 33 NNoonnbboorrrroowweedd rreesseerrvveess pplluuss eexxtteennddeedd ccrreeddiitt'' 50.02 46.54 45.07 41.42 41.53 40.28 40.63 41.00 39.48 39.69 39.37 39.39 44 RReeqquuiirreedd rreesseerrvveess 48.76 45.18 43.68 40.44 40.53 39.26 39.78 40.41 38.89 39.19 38.93 38.75 55 MMoonneettaarryy bbaassee66 451.62 479.17 512.75 591.18 573.59 571.44 573.08 574.29 575.63 577.41 577.58 578.96 Not seasonally adjusted 6 Total reserves7 51.45 48.01 45.31 41.89 42.10 39.76 40.61 41.58 39.24 39.70 39.52 39.30 7 Nonborrowed reserves 51.30 47.69 45.19 41.57 42.00 39.59 40.31 41.22 38.76 39.13 38.94 38.82 8 Nonborrowed reserves plus extended credit' 51.30 47.69 45.19 41.57 42.00 39.59 40.31 41.22 38.76 39.13 38.94 38.82 9 Required reserves8 50.04 46.33 43.80 40.58 40.99 38.56 39.47 40.64 38.18 38.63 38.50 38.18 10 Monetary base9 456.63 484.98 518.27 600.63 571.86 570.24 571.51 573.26 574.55 577.18 576.48 576.49 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves'1 51.17 47.92 45.21 41.66 42.10 39.75 40.59 41.56 39.22 39.67 39.49 39.26 12 Nonborrowed reserves 51.02 47.60 45.09 41.33 41.99 39.57 40.29 41.20 38.74 39.10 38.91 38.78 13 Nonborrowed reserves plus extended credit5 51.02 47.60 45.09 41.33 41.99 39.57 40.29 41.20 38.74 39.10 38.91 38.78 14 Required reserves 49.76 46.24 43.70 40.35 40.99 38.55 39.45 40.62 38.15 38.60 38.47 38.14 15 Monetary base12 463.40 491.79 525.06 607.94 579.21 577.13 578.33 580.09 581.44 583.98 583.22 583.18 16 Excess reserves13 1.42 1.69 1.51 1.31 1.11 1.21 1.15 .94 1.06 1.07 1.01 1.12 17 Borrowings from the Federal Reserve .16 .32 .12 .32 .11 .18 .30 .36 .48 .57 .58 .48 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 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 . June Julyr Aug.r Sept. Seasonally adjusted Measures" 1 Ml 1,081.1 1,073.9 1,097.4 1,122.9 1,103.4 1,104.4 1,101.0 1,094.9 2 M2 3,821.6 4,040.2 4,395.0 4,656.2 4,783.8 4,797.9 4,826.9 4,860.9 3 M3 4,952.4 5,403.2 5,996.7 6,487,4r 6,749.7' 6,798.3 6,853.3 6,899.1 4 Debt 14,430.8 15,223.1 16,276.4 17,377.2 17,877.2r 17,952.5 18,032.6 n.a. MI components 5 Currency3 394.3 424.8 459.5 515.5 520.8 522.3 523.0 523.9 6 Travelers checks4 8.3 8.1 8.2 8.3 8.8 9.3 9.2 8.8 7 Demand deposits5 402.3 395.3 379.3 355.2 331.9 332.8 328.1 323.8 8 Other checkable deposits6 276.1 245.8 250.3 244.0 241.8r 240.0 240.7 238.3 Nontransaction components 9 In M27 2,740.5 2,966.3 3,297.6 3,533.3 3,680.4 3,693.5 3,725.9 3,766.0 10 In M3 only8 1,130.8 1,363.0 1,601.7 l,831.2r l,965.9r 2,000.4 2,026.4 2,038.2 Commercial banks 11 Savings deposits, including MMDAs 904.0 1,020.5 1,184.8 1,285.7 1,330.7 1,341.9 1.358.1 1,383.3 12 Small time deposits9 593.3 625.4 626.1 634.7 675.3 679.9 685.1 687.2 13 Large time deposits10' " 413.9 488.3 539.3 614.1 656.0 661.3 671.5 660.1 Thrift institutions 14 Savings deposits, including MMDAs 366.6 376.6 413.8 448.7 452.5 452.3 454.8 456.1 15 Small time deposits® 353.6 342.8 325.6 320.6 329.8 333.1 337.6 340.3 16 Large time deposits10 78.3 85.6 88.9 91.5 95.5 97.6 99.8 100.7 Money market mutual funds 17 Retail 523.0 601.1 747.4 843.7 892.2 886.3 890.3 899.0 18 Institution-only 313.3 382.4 520.1 610.1 660.2 688.7 704.9 724.1 Repurchase agreements and eurodollars 19 Repurchase agreements1" 210.7 256.0 300.8 344.2 366.7 368.5 363.3 362.9 20 Eurodollars12 114.6 150.7 152.6 171.3"" 187.6r 184.4 186.9 190.3 Debt components 21 Federal debt 3,781.3 3,800.6 3,751.2 3,660.2 3,521.2 3,510.2 3,488.9 n.a. 22 Nonfederal debt 10,649.5 11,422.5 12,525.2 13,717.0r 14,355.9r 14,442.3 14,543.8 n.a. Not seasonally adjusted Measures" 23 Ml 1,105.1 1,097.7 1,121.3 1,147.4 1,101.0 1,103.2 1,094.8 1,087.5 24 M2 3,843.8 4,063.4 4,420.2 4,684.5 4,764.3r 4,782.2 4,813.6 4,846.8 25 M3 4,973.4 5,427.2 6,026.3 6,522.3r 6,726.2r 6,758.2 6,825.3 6,867.2 26 Debt 14,428.4 15,218.5 16,271.3r 17,372.6 17,810.9r 17,880.6 17,969.8 n.a. MI components 27 Currency3 397.9 428.9 464.1 521.2 520.3 522.4 521.7 522.4 28 Travelers checks4 8.6 8.3 8.4 8.4 8.7 8.9 8.9 8.7 29 Demand deposits5 419.9 412.4 395.9 371.2 330.0 333.6 326.1 320.7 30 Other checkable deposits6 278.8 248.2 252.8 246.7 242.1 238.3 238.1 235.8 Nontransaction components 31 In M27 2,738.7 2,965.7 3,298.9 3,537.0 3,663.3 3,678.9 3,718.9 3,759.3 32 In M3 only8 1.129.6 1,363.8 1,606.1 l,837.9r l,961.9r 1,976.0 2,011.6 2,020.4 Commercial banks 33 Savings deposits, including MMDAs 903.3 1,020.4 1,186.0 1,288.5 1,331.6 1,343.7 1,355.7 1,380.3 34 Small time deposits9 592.7 625.3 626.5 635.5 671.1 677.6 683.1 686.6 35 Large time deposits10' 11 413.2 487.2 537.8 612.2 657.6 662.0 669.6 663.1 Thrift institutions 36 Savings deposits, including MMDAs 366.3 376.5 414.2 449.7 452.8 452.9 454.1 455.1 37 Small time deposits9 353.2 342.8 325.8 321.0 327.7 332.0 336.6 340.0 38 Large time deposits10 78.1 85.4 88.6 91.2 95.7 97.7 99.5 101.2 Money market mutual funds 39 Retail 523.0 600.7 746.3 842.4 880.1 872.6 889.3 897.3 40 Institution-only 316.9 388.4 529.7 621.7 652.9 668.5 693.6 705.6 Repurchase agreements and eurodollars 41 Repurchase agreements 205.7 250.5 295.4 339.4 367.9 365.7 363.0 361.8 42 Eurodollars12 115.7 152.3 154.5 173.4r 187.9r 182.2 185.9 188.7 Debt components 43 Federal debt 3,787.9 3,805.8 33,,775544..99 3,663.1 3,475.5 3,448.3 3,437.7 n.a. 44 Nonfederal debt 10,640.4 11,412.7 12,516.3 13,709.5 14,335.4r 14,432.3 14,532.1 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 DomesticN onfinancialS tatistics • December 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 2000 2000 Sept. Mar. Apr. May June July Aug. Sept. Sept. 6 Sept. 13 Sept. 20 Sept. 27 Seasonally adjusted Assets 1 Bank credit 4,616.3 4,889.5 4,934.8 5,000.2 5,031.2 5,067.6 5,111.6 5,162.1 5,155.6 5,160.6 5,178.8 5,161.1 2 Securities in bank credit 1,244.7 1,280.7 1,291.5 1,309.0 1,306.4 1,311.0 1,314.9 1,325.8 1,331.2 1,333.8 1,323.1 1,320.6 3 U.S. government securities 817.7 815.7 814.3 815.5 817.1 819.2 812.5 807.3 812.0 811.3 804.0 805.5 4 Other securities 426.9 465.0 477.2 493.6 489.3 491.9 502.4 518.5 519.2 522.4 519.2 515.1 5 Loans and leases in bank credit2 . .. 3,371.6 3,608.8 3,643.3 3,691.2 3,724.8 3,756.6 3,796.7 3,836.3 3,824.4 3,826.9 3,855.6 3,840.5 6 Commercial and industrial 976.4 1,027.9 1,037.5 1,057.6 1,066.0 1,072.1 1,081.2 1,082.2 1,083.9 1,077.7 1,084.9 1,083.4 7 Real estate 1,404.6 1,539.0 1.556.0 1,579.0 1,594.1 1,608.8 1,617.7 1,628.8 1,626.7 1,632.6 1,631.8 1,625.2 8 Revolving home equity 100.2 109.1 112.6 115.1 115.7 117.0 118.3 119.9 118.2 120.0 120.5 120.2 9 Other 1,304.4 1,429.9 1,443.4 1,463.9 1,478.4 1,491.8 1,499.5 1,508.9 1,508.5 1,512.6 1,511.3 1,505.0 10 Consumer 482.1 503.3 507.3 510.4 517.2 520.8 530.0 533.7 533.1 531.4 536.1 534.9 11 Security3 118.4 143.3 144.0 145.0 149.7 151.8 159.7 183.4 170.2 180.9 193.0 188.6 12 Other loans and leases 390.1 395.3 398.5 399.3 397.9 403.1 408.2 408.2 410.5 404.3 409.8 408.4 13 Interbank loans 213.5 223.6 221.8 227.0 227.7 241.0 246.3 238.3 233.4 230.7 247.3 241.8 14 Cash assets4 265.8 272.1 281.3 274.3 269.1 269.3 269.6 267.7 278.6 262.7 278.5 254.4 15 Other assets5 359.1 366.1 368.4 377.9 380.1 399.1 400.2 399.6 396.0 401.6 398.9 396.6 16 Total assets6 5,395.7 5,691.8 5,746.4 5,819.2 5,847.6 5,9153 5,965.0 6,004.6 6,000.2 5,9925 6,040.2 5,991.0 Liabilities 17 Deposits 3,413.7 3,575.7 3,626.2 3,631.6 3,660.1 3,717.1 3,744.6 3,762.2 3,781.9 3,757.6 3,762.0 3,746.1 18 Transaction 634.7 626.3 626.1 629.7 617.3 612.8 618.7 611.1 610.1 599.6 621.8 619.2 19 Nontransaction 2,779.0 2,949.4 3,000.1 3,001.9 3,042.7 3,104.4 3,125.8 3,151.1 3,171.7 3,158.0 3,140.2 3,126.9 20 Large time 740.4 851.3 872.1 877.8 894.6 915.2 925.0 914.7 918.5 917.3 912.6 913.1 21 Other 2,038.6 2,098.1 2,127.9 2,124.1 2,148.1 2,189.1 2,200.8 2,236.5 2,253.3 2,240.6 2,227.6 2,213.8 22 Borrowings 1,045.2 1,157.6 1,186.8 1,200.7 1,202.1 1,220.1 1,226.1 1,220.3 1,212.7 1,225.9 1,237.9 1,210.8 23 From banks in the U.S 335.8 377.5 377.4 383.8 375.8 386.6 386.0 372.5 376.9 378.3 368.0 368.9 24 From others 709.4 780.2 809.4 816.9 826.3 833.5 840.1 847.8 835.8 847.7 869.9 841.8 25 Net due to related foreign offices 220.0 233.7 226.2 253.6 262.6 261.7 269.7 269.0 282.6 261.4 270.2 261.1 26 Other liabilities 283.3 293.8 294.2 316.6 308.5 301.2 317.3 337.1 331.0 341.0 341.2 335.0 27 Total liabilities 4,962.2 5,260.8 5,333.4 5,402.6 5,433.2 5,500.1 5357.7 53885 5,608.2 5386.0 5,611.2 5353.0 28 Residual (assets less liabilities)7 433.4 431.0 413.0 416.5 414.4 415.2 407.3 416.1 392.1 406.6 429.0 438.0 Not seasonally adjusted Assets 29 Bank credit 4,603.1 4,883.3 4,935.1 4,992.0 5,014.2 5,036.2 5,082.8 5,148.2 5,131.8 5,141.8 5,168.1 5,151.1 30 Securities in bank credit 1,238.3 1,282.1 1,293.3 1,306.6 1,296.0 1,293.8 1,302.3 1,320.5 1,325.4 1,327.2 1,317.1 1,316.3 31 U.S. government securities 809.3 822.7 823.0 820.8 816.4 810.7 803.6 799.3 805.6 803.2 795.0 797.0 32 Other securities 429.0 459.4 470.3 485.7 479.6 483.1 498.7 521.2 519.8 524.0 522.1 519.3 33 Loans and leases in bank credit2 . . . 3,364.9 3,601.2 3,641.8 3,685.4 3,718.2 3,742.5 3,780.5 3,827.7 3,806.4 3,814.6 3,851.0 3,834.8 34 Commercial and industrial 972.8 1,031.8 1,044.6 1,060.5 1,065.4 1,067.3 1,070.9 1,078.1 1,073.9 1,070.8 1,083.5 1,082.1 35 Real estate 1,405.1 1,534.2 1,551.5 1,576.4 1,590.7 1,605.0 1,617.8 1,629.2 1,626.0 1,633.8 1,631.1 1,625.8 36 Revolving home equity 100.8 108.0 111.8 114.7 115.7 117.1 118.4 120.7 118.7 120.8 121.4 121.1 37 Other 1,304.3 1,426.1 1,439.7 1,461.7 1,475.0 1,487.9 1,499.3 1,508.5 1,507.3 1,513.0 1,509.8 1,504.7 38 Consumer 482.3 501.7 506.2 510.0 515.3 517.3 528.8 534.4 533.1 532.7 538.4 535.7 39 Credit cards and related plans. . n.a. n.a. n.a. n.a. n.a. 195.8 203.8 207.0 206.3 205.8 210.8 207.4 40 Other n.a. n.a. n.a. n.a. n.a. 321.5 325.0 327.4 326.9 326.8 327.6 328.3 41 Security3 113.1 142.3 144.5 143.5 149.5 148.9 154.4 176.1 159.7 172.1 187.7 181.2 42 Other loans and leases 391.5 391.1 395.0 395.1 397.4 404.0 408.6 409.9 413.6 405.2 410.3 410.0 43 Interbank loans 208.0 229.0 228.0 226.9 227.4 237.1 236.4 232.1 234.6 227.2 237.1 229.1 44 Cash assets4 261.6 263.7 278.5 272.1 265.2 260.1 257.3 263.4 288.8 259.6 265.1 247.2 45 Other assets5 358.1 369.4 371.9 380.9 381.5 398.5 398.4 398.0 401.6 399.9 391.7 394.5 46 Total assets6 5371.4 5,686.0 5,754.0 5,811.7 5,827.8 5,870.1 5,912.1 5.978.4 5,9933 5,965.0 5,998.6 5,959.0 Liabilities 47 Deposits 3,399.4 3,579.5 3,644.2 3,617.0 3,648.2 3,692.6 3,712.4 3,746.2 3,792.6 3,751.5 3,725.1 3,710.6 48 Transaction 628.1 619.2 634.7 620.4 616.3 606.3 603.1 604.8 622.3 600.2 600.6 602.7 49 Nontransaction 2,771.3 2,960.3 3,009.4 2,996.6 3,031.9 3,086.3 3,109.3 3,141.4 3.170.3 3,151.4 3,124.4 3.107.9 50 Large time 731.8 859.7 871.7 874.0 883.8 898.6 908.1 903.8 904.3 904.9 902.1 904.6 51 Other 2,039.5 2,100.6 2,137.8 2,122.6 2,148.1 2,187.7 2,201.2 2,237.6 2,266.0 2,246.5 2,222.4 2,203.3 52 Borrowings 1,039.4 1,153.3 1,185.9 1,210.2 1,205.0 1,206.9 1,198.6 1.215.6 1,184.6 1,201.0 1,254.7 1,226.6 53 From banks in the U.S 333.5 377.4 378.9 384.4 376.7 383.5 381.6 372.0 371.4 372.5 374.3 372.5 54 From others 705.9 775.9 806.9 825.7 828.4 823.4 817.0 843.6 813.2 828.5 880.4 854.2 55 Net due to related foreign offices .... 216.1 237.2 215.5 254.2 253.0 253.3 267.0 263.9 265.5 251.2 266.0 275.7 56 Other liabilities 282.8 294.5 293.0 315.1 306.7 298.7 316.8 336.4 330.5 340.5 340.1 334.9 57 Total liabilities 4,937.7 5,264.5 5,338.5 5396.4 5,412.9 5,451.5 5,494.8 5362.1 5373.2 5344.2 5385.8 5347.7 58 Residual (assets less liabilities)7 433.7 421.5 415.5 415.3 414.9 418.6 417.3 416.4 420.0 420.8 412.8 411.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • December 2000 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 1999 2000 2000 Sept. Mar. Apr. May June July Aug. Sept. Sept. 6 Sept. 13 Sept. 20 Sept. 27 Seasonally adjusted Assets 1 Bank credit 4,096.9 4,346.0 4,365.2 4,417.1 4,455.4 4,491.3 4,529.6 4,572.4 4,565.3 4,566.9 4,581.8 4,576.8 2 Securities in bank credit 1,055.3 1,085.1 1,087.1 1,098.5 1,101.1 1.105.9 1,108.7 1,121.3 1,119.0 1,123.5 1,121.5 1,120.5 3 US. government securities 735.0 737.6 734.7 735.8 738.3 739.5 732.6 729.9 731.0 732.3 729.5 727.8 4 Other securities 320.4 347.4 352.4 362.7 362.8 366.4 376.2 391.4 388.0 391.2 392.1 392.6 5 Loans and leases in bank credit2 3,041.6 3,260.9 3,278.1 3,318.5 3,354.3 3,385.4 3,420.9 3,451.1 3,446.3 3,443.4 3,460.3 3,456.4 6 Commercial and industrial 781.6 831.6 838.3 852.6 860.9 868.5 875.4 878.5 878.3 874.6 880.0 880.6 7 Real estate 1,386.8 1,521.0 1,537.5 1,560.3 1,575.0 1.589.9 1,598.9 1,609.4 1,607.6 1,613.2 1,612.2 1,605.9 8 Revolving home equity 100.2 109.1 112.6 115.1 115.7 117.0 118.3 119.9 118.2 120.0 120.5 120.2 9 Other 1,286.6 1,411.9 1,424.9 1,445.2 1,459.4 1.472.9 1,480.7 1,489.5 1,489.5 1,493.2 1,491.7 1,485.7 10 Consumer 482.1 503.3 507.3 510.4 517.2 520.8 530.0 533.7 533.1 531.4 536.1 534.9 11 Security-1 66.4 76.8 66.0 64.0 68.6 70.0 77.4 88.5 85.7 87.4 90.3 92.2 12 Other loans and leases 324.6 328.2 328.9 331.2 332.6 336.2 339.1 340.9 341.6 336.8 341.7 342.7 13 Interbank loans 188.5 195.0 192.4 195.2 199.1 214.8 222.1 212.6 209.0 201.5 219.6 217.5 14 Cash assets4 222.5 224.4 233.9 230.3 224.5 224.4 225.2 223.1 233.5 216.8 233.2 211.8 15 Other assets5 328.6 326.8 328.3 336.7 336.5 356.2 358.1 358.9 352.2 359.4 358.1 359.2 16 Total assets6 4,777.8 5,(133.2 5,060.4 5,119.4 5,1553 5,225.2 5,272.7 5,3043 5,297.2 5,284.8 5329.9 532.7 Liabilities 17 Deposits 3,098.9 3,197.7 3,238.6 3,249.6 3,277.6 3,330.5 3,353.0 3,377.8 3,396.0 3,370.1 3,377.2 3,364.0 18 Transaction 624.4 615.2 615.2 618.5 605.9 601.4 607.9 601.3 600.2 590.1 611.6 610.0 19 Nontransaction 2.474.4 2,582.5 2,623.4 2,631.1 2,671.7 2,729.1 2,745.1 2,776.5 2,795.9 2,780.1 2,765.6 2.754.0 20 Large time 438.6 487.3 498.5 509.6 524.6 542.5 547.0 542.9 545.2 542.3 541.0 543.2 21 Other 2,035.8 2,095.2 2,124.9 2,121.5 2,147.1 2,186.6 2.198.1 2,233.6 2,250.6 2,237.7 2,224.6 2,210.8 22 Borrowings 873.1 980.5 987.2 996.3 996.8 1,014.4 1,024.1 1,002.8 1,005.4 1,007.9 1,005.4 998.3 23 From banks in the U.S 311.6 357.7 356.5 365.9 356.9 365.7 369.1 353.3 357.3 357.9 346.8 352.5 24 From others 561.5 622.8 630.6 630.4 640.0 648.6 654.9 649.5 648.1 649.9 658.7 W5.8 25 Net due to related foreign offices .... 152.7 213.4 211.0 232.3 243.1 243.9 246.2 244.8 248.1 236.9 251.6 241.1 26 Other liabilities 219.3 222.5 218.6 234.5 233.3 228.8 245.7 261.9 253.1 262.3 265.5 264.1 27 Total liabilities 4,343.9 4,614.1 4,655.4 4,712.7 4,750.8 4,817.6 4,868.9 4,8873 4,902.6 4,877.2 4399.7 4,867.5 28 Residual (assets less liabilities)7 433.9 419.2 405.0 406.7 404.5 407.7 403.7 417.1 394.6 407.5 430.2 435.2 Not seasonally adjusted Assets 29 Bank credit 4,085.6 4,341.2 4,371.9 4.417.2 4,448.1 4,470.6 4,510.5 4,559.4 4,548.2 4,552.2 4,571.2 4,562.9 30 Securities in bank credit 1,049.7 1,089.5 1,092.6 1,099.1 1,096.6 1,095.4 1,101.8 1,115.9 1,115.8 1,118.4 1,114.9 1,113.8 31 U.S. government securities 728.6 744.8 742.6 740.1 737.5 732.0 725.3 723.9 727.1 726.5 722.4 721.2 32 Other securities 321.1 344.7 349.9 359.0 359.2 363.4 376.5 392.0 388.8 392.0 392.5 392.6 33 Loans and leases in bank credit2 3,035.9 3,251.7 3.279.3 3,318.1 3,351.5 3,375.1 3.408.7 3,443.5 3,432.3 3,433.7 3,456.3 3,449.0 34 Commercial and industrial 778.1 833.8 847.1 859.8 863.5 866.2 867.7 874.4 870.5 868.8 878.2 877.6 35 Real estate 1,387.5 1,516.0 1,533.2 1.557.7 1,571.8 1,586.4 1,599.2 1,610.1 1,607.3 1,614.8 1,611.8 1,606.6 36 Revolving home equity 100.8 108.0 111.8 114.7 115.7 117.1 118.4 120.7 118.7 120.8 121.4 121.1 37 Other 1,286.7 1,408.0 1,421.5 1.443.1 1,456.1 1,469.3 1,480.7 1,489.4 1,488.6 1,494.0 1,490.4 1,485.5 38 Consumer 482.3 501.7 506.2 510.0 515.3 517.3 528.8 534.4 533.1 532.7 538.4 535.7 39 Credit cards and related plans. . n.a. n.a. n.a. n.a. n.a. 195.8 203.8 207.0 206.3 205.8 210.8 207.4 40 Other n.a. n.a. n.a. n.a. n.a. 321.5 325.0 327.4 326.9 326.8 327.6 328.3 41 Security3 61.3 75.5 66.6 62.6 68.2 67.4 72.0 81.4 75.8 79.0 84.8 84.8 42 Other loans and leases 326.6 324.6 326.1 328.0 332.7 337.9 341.0 343.1 345.6 338.5 343.1 344.3 43 Interbank loans 183.0 200.5 198.7 195.1 198.7 210.9 212.2 206.4 210.3 200.9 209.4 204.9 44 Cash assets4 219.0 217.1 233.2 229.3 221.4 216.8 214.5 219.6 245.4 215.6 221.0 203.7 45 Other assets5 328.1 328.9 332.6 340.4 340.3 357.4 357.0 358.1 357.9 358.2 352.1 357.9 46 Total assets6 4,756.6 5,028.5 5,077.1 5,122.2 5,148.2 5,1943 5,231.7 5,280.6 5,298.6 5,263.9 5,290.6 5,266.8 Liabilities 47 Deposits 3,089.3 3,195.4 3,255.6 3.234.1 3,270.1 3,314.7 3,332.6 3,368.0 3.417.4 3,373.0 3,346.2 3,329.8 48 Transaction 617.3 608.3 624.3 609.6 605.2 595.0 592.2 594.5 612.1 590.2 589.9 592.6 49 Nontransaction 2,472.0 2,587.0 2,631.3 2.624.5 2,664.8 2,719.6 2,740.4 2,773.5 2,805.3 2,782.8 2,756.3 2,737.2 50 Large time 434.8 488.9 496.0 501.3 519.2 534.4 541.6 538.4 541.8 538.8 536.4 536.3 51 Other 2,037.2 2,098.1 2,135.3 2,120.1 2,145.7 2.185.3 2,198.7 2,235.1 2,263.6 2,244.0 2,219.9 2,200.9 52 Borrowings 867.3 976.2 986.2 1.005.8 999.8 1,001.2 996.5 998.1 977.3 982.9 1,022.3 1,014.1 53 From banks in the U.S 309.3 357.7 358.0 366.5 357.7 362.6 364.7 352.8 351.8 352.2 353.1 356.1 54 From others 558.0 618.5 628.2 639.2 642.0 638.5 631.9 645.3 625.5 630.7 669.2 658.1 55 Net due to related foreign offices .... 149.8 216.4 201.9 237.0 234.9 236.4 243.6 240.4 234.8 229.3 247.8 251.4 56 Other liabilities 219.1 222.9 219.3 234.5 233.1 228.0 245.7 261.6 252.9 262.0 265.3 264.0 57 Total liabilities 43255 4,610.8 4,665.9 4,7113 4,737.8 4,780.2 4,818.4 4,868.2 4,882.4 4,8473 4,881.5 4,859.4 58 Residual (assets less liabilities)7 431.1 417.8 411.2 410.8 410.4 414.1 413.3 412.4 416.1 416.6 409.1 407.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 2000 2000 Sept. Mar. Apr. May June July Aug. Sept. Sept. 6 Sept. 13 Sept. 20 Sept. 27 Seasonally adjusted Assets 1 Bank credit 2.299.1 2,428.5 2,443.0 2,479.8 2,496.2 2,506.6 2,524.9 2,549.7 2,548.2 2,548.0 2,558.5 2,550.1 7 Securities in bank credit 544.0 565.4 568.2 578.6 580.1 577.5 575.5 583.6 581.9 586.7 585.9 581.4 3 U.S. government securities 360.7 358.2 356.7 358.5 361.4 362.1 357.9 355.9 354.2 357.2 357.1 355.9 4 Trading account 20.8 20.5 21.3 23.5 22.7 24.3 23.7 23.2 22.9 24.3 22.9 23.7 Investment account 339.9 337.7 335.4 335.0 338.7 337.8 334.2 332.7 331.3 332.9 334.2 332.1 6 Other securities 183.3 207.2 211.5 220.1 218.7 215.4 217.6 227.7 227.7 229.4 228.9 225.5 7 Trading account 77.7 91.1 92.9 101.2 100.2 97.2 102.5 114.5 114.4 115.6 115.2 112.9 8 Investment account 105.5 116.1 118.6 118.9 118.5 118.1 115.1 113.3 113.4 113.8 113.7 112.6 9 State and local government . 23.5 24.7 25.1 25.4 25.6 26.1 25.9 25.8 25.8 25.8 25.8 25.8 10 Other 82.0 91.4 93.5 93.5 92.9 92.0 89.2 87.5 87.6 88.0 87.9 86.8 11 Loans and leases in bank credit2 . . . 1,755.1 1,863.2 1,874.8 1,901.2 1,916.1 1,929.1 1,949.3 1,966.0 1,966.3 1,961.4 1,972.6 1,968.7 12 Commercial and industrial 537.7 564.3 568.7 580.0 584.2 585.3 589.2 590.3 590.3 587.7 592.6 591.4 13 Bankers acceptances 1.1 1.0 1.1 1.1 1.0 1.0 .9 .8 .9 .8 .9 .8 14 Other 536.6 563.3 567.6 579.0 583.2 584.4 588.3 589.5 589.4 586.8 591.8 590.5 15 Real estate 699.2 764.6 779.2 792.3 797.8 805.8 810.6 812.2 816.0 817.2 813.3 805.9 16 Revolving home equity 64.7 69.7 72.5 74.2 74.6 75.5 76.4 74.8 76.4 74.2 74.7 74.3 17 Other 634.5 694.9 706.7 718.1 723.2 730.3 734.3 737.3 739.6 743.0 738.7 731.6 18 Consumer 217.7 224.0 226.9 227.6 228.8 230.1 232.8 234.1 233.6 232.5 234.3 235.9 19 Security3 60.4 70.3 59.3 57.8 62.1 63.2 70.2 81.3 78.2 80.0 83.2 85.2 20 Federal funds sold to and repurchase agreements with broker-dealers 43.4 48.9 38.2 38.9 43.9 44.6 51.5 61.9 59.0 61.7 63.1 65.8 71 Other 17.0 21.4 21.1 18.9 18.2 18.6 18.7 19.3 19.2 18.2 20.1 19.3 22 State and local government 11.6 12.4 12.4 12.4 12.3 12.3 12.4 12.6 12.8 12.5 12.6 12.6 23 Agricultural 8.4 9.5 9.5 9.6 9.6 9.5 9.6 9.5 9.6 9.4 9.4 9.4 24 Federal funds sold to and repurchase agreements with others 11.2 14.5 13.6 13.2 13.6 12.9 13.2 12.7 13.4 1111..99 1122..99 1122..55 75 All other loans 94.9 85.6 85.7 87.6 84.7 84.3 84.2 85.4 84.8 82.6 86.3 88.1 76 Lease-financing receivables 114.1 118.1 119.4 120.7 123.0 125.8 127.1 127.9 127.6 127.6 127.9 127.8 27 Interbank loans 125.8 133.0 124.9 130.2 132.7 140.0 137.9 127.8 126.2 119.6 133.3 131.8 28 Federal funds sold to and repurchase agreements with commercial banks 73.0 64.3 62.1 67.0 68.1 73.8 66.1 56.4 5544..33 4499..11 6611..22 6611..22 79 Other 52.8 68.7 62.8 63.2 64.6 66.2 71.8 71.4 71.9 70.5 72.1 70.6 30 Cash assets4 142.3 146.2 154.9 149.4 145.6 143.6 144.3 141.4 147.9 138.3 151.1 131.0 31 Other assets5 232.2 220.4 219.7 223.7 225.0 245.5 248.2 249.9 243.7 247.8 251.3 251.8 32 Total assets6 2,763.9 2,893.6 2,907.8 2.948.4 2,964.9 3,000.8 3,019.9 3,033.4 3,0303 3,018-3 3,058.7 3,0293 Liabilities 33 Deposits 1,590.1 1,611.8 1,634.8 1,640.5 1,634.0 1,634.4 1,629.8 1,629.3 1,651.3 1,627.5 1,627.8 1,612.8 34 Transaction 325.3 313.1 311.8 315.6 308.3 301.8 304.3 300.4 302.3 294.4 308.4 301.2 35 Nontransaction 1.264.7 1,298.7 1,322.9 1,324.9 1,325.7 1,332.6 1,325.5 1,328.9 1,349.0 1,333.1 1,319.4 1,311.7 36 Large time 213.1 235.7 244.2 251.8 258.5 266.4 265.2 257.1 260.7 256.2 255.6 256.5 37 Other 1,051.6 1,063.0 1,078.7 1,073.1 1,067.1 1,066.1 1,060.3 1,071.8 1,088.2 1,076.9 1,063.8 1,055.2 38 Borrowings 584.6 640.4 649.5 650.9 655.8 678.2 688.4 672.4 670.8 675.9 676.2 670.6 39 From banks in the U.S 168.0 194.0 197.7 202.9 196.7 204.9 207.2 193.8 197.2 198.1 187.2 192.7 40 From others 416.7 446.5 451.8 448.1 459.0 473.3 481.2 478.6 473.7 477.8 489.0 477.9 41 Net due to related foreign offices 149.3 208.0 205.6 226.3 233.9 221.5 222.5 224.4 228.7 216.2 231.4 220.0 42 Other liabilities 161.7 164.0 161.3 174.0 175.7 179.7 195.8 209.8 202.1 210.4 213.2 211.8 43 Total liabilities 2,485.6 2,624.2 2,651.2 2,691.7 2,699.4 2,713.9 2,736.5 2,735.9 2,752.8 2,730.0 2,748.6 2,7153 44 Residual (assets less liabilities)7 278.3 269.3 256.6 256.6 265.5 286.9 283.4 297.5 277.5 288.3 310.1 314.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • December 2000 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued C. Large domestically chartered commercial banks—Continued Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 1999 2000 2000 Sept. Mar. Apr. May June July Aug. Sept. Sept. 6 Sept. 13 Sept. 20 Sept. 27 Not seasonally adjusted Assets 45 Bank credit 2,284.0 2,429.9 2,446.3 2.473.1 2,483.5 2,485.1 2,502.4 2,532.4 2,530.2 2,528.8 2,540.3 2,530.0 46 Securities in bank credit 539.4 568.7 569.3 575.4 573.7 567.9 569.0 579.7 580.7 582.6 579.8 575.9 47 U.S. government securities 355.2 364.0 361.4 359.5 358.3 354.9 351.3 350.9 351.9 352.1 350.0 349.7 48 Trading account 20.2 21.4 21.5 22.0 22.5 22.6 23.0 22.5 23.5 24.1 22.0 21.5 49 Investment account 335.0 342.6 339.8 337.5 335.9 332.3 328.3 328.4 328.4 328.0 328.0 328.1 50 Mortgage-backed securities .. 219.7 223.0 221.5 218.8 217.4 211.9 207.4 207.7 208.2 207.5 206.4 207.4 51 Other 115.3 119.6 118.4 118.7 118.4 120.4 120.9 120.7 120.2 120.5 121.6 120.7 52 One year or less 22.3 29.1 29.0 30.7 30.5 30.5 31.5 32.3 32.3 32.7 32.9 31.5 53 One to five years 55.6 52.9 51.8 51.9 52.7 53.6 52.6 52.1 52.1 52.1 52.3 52.2 54 More than five years . . . 37.3 37.6 37.6 36.1 35.2 36.4 36.8 36.3 35.8 35.7 36.4 37.0 55 Other securities 184.2 204.6 207.9 215.9 215.4 213.1 217.8 228.8 228.8 230.5 229.8 226.2 56 Trading account 77.7 91.1 92.9 101.2 100.2 97.2 102.5 114.5 114.4 115.6 115.2 112.9 57 Investment account 106.5 113.6 115.0 114.7 115.2 115.8 115.2 114.3 114.5 114.9 114.6 113.4 58 State and local government . . 23.4 24.8 25.1 25.3 25.5 25.6 25.6 25.7 25.6 25.6 25.6 25.7 59 Other 83.1 88.8 89.8 89.3 89.7 90.3 89.7 88.6 88.9 89.2 89.0 87.7 60 Loans and leases in bank credit2 . . 1,744.7 1,861.2 1.877.0 1,897.7 1,909.8 1,917.1 1,933.3 1,952.7 1,949.4 1,946.2 1,960.5 1,954.0 61 Commercial and industrial 535.5 566.5 575.3 584.5 584.8 583.0 583.5 587.9 585.2 584.1 591.8 589.5 62 Bankers acceptances 1.1 1.0 1.1 1.1 1.0 1.0 .9 .8 .9 .8 .9 .8 6 3 Other 534.4 565.5 574.3 583.4 583.8 582.0 582.6 587.1 584.3 583.3 591.0 588.7 64 Real estate 697.3 762.8 776.3 789.5 793.6 801.2 808.1 809.8 813.8 815.6 809.6 802.6 65 Revolving home equity 65.1 68.9 71.8 73.9 74.7 75.7 76.7 75.2 76.7 74.7 75.0 74.5 66 Other 381.8 420.9 427.2 435.6 438.3 445.1 448.9 451.8 454.6 458.0 451.9 445.0 67 Commercial 250.4 273.1 277.3 280.0 280.5 280.3 282.5 282.8 282.5 282.9 282.7 283.1 68 Consumer 216.8 224.2 226.8 227.1 227.3 227.6 230.9 233.1 232.4 231.6 233.7 234.9 69 Credit cards and related plans. . n.a. n.a. n.a. n.a. n.a. 72.3 73.4 74.5 73.8 73.6 75.0 75.7 70 Other n.a. n.a. n.a. n.a. n.a. 155.4 157.5 158.6 158.6 158.1 158.7 159.2 71 Security3 55.3 69.0 59.8 56.4 61.7 60.5 64.8 74.1 68.3 71.6 77.6 77.8 72 Federal funds sold to and repurchase agreements with broker-dealers .... 38.6 47.3 38.2 36.8 42.6 41.8 46.5 55.1 50.0 53.5 57.2 58.8 73 Other 16.7 21.7 21.6 19.6 19.1 18.7 18.3 19.0 18.2 18.1 20.5 19.0 74 State and local government .... 11.8 12.2 12.3 12.3 12.2 12.3 12.6 12.8 13.0 12.7 12.8 12.8 75 Agricultural 8.6 9.2 9.3 9.4 9.6 9.7 9.7 9.7 9.8 9.6 9.6 9.6 76 Federal funds sold to and repurchase agreements with others 11.2 14.5 13.6 13.2 13.6 12.9 13.2 12.7 13.4 11.9 12.9 12.5 77 All other loans 95.8 83.1 83.6 84.5 84.3 85.0 84.4 86.3 87.4 83.2 86.6 88.2 78 Lease-financing receivables .... 112.5 119.6 120.1 120.7 122.9 125.1 126.1 126.3 126.3 125.9 125.9 126.1 79 Interbank loans 122.2 135.6 129.7 133.7 135.6 140.1 132.0 124.3 123.4 116.2 129.6 128.0 80 Federal funds sold to and repurchase agreements with commercial banks 70.7 66.2 64.7 67.6 68.6 73.2 62.3 54.7 52.3 47.2 59.3 59.6 81 Other 51.5 69.4 65.0 66.1 67.0 67.0 69.7 69.7 71.1 68.9 70.3 68.4 82 Cash assets4 139.1 140.8 154.8 148.6 143.1 137.4 136.3 138.3 154.1 136.9 142.4 125.5 83 Other assets5 232.0 222.5 223.0 228.2 228.8 244.9 245.4 249.5 245.5 247.2 249.2 251.9 84 Total assets6 2,741.7 2,894.4 2,919.4 2,948.9 2,956.4 2,972.6 2,980.6 3,008.9 3,017.2 2,993.3 3,025.9 3,000.1 Liabilities 85 Deposits 1,582.2 1,611.6 1,644.5 1,625.7 1,629.1 1,623.9 1,614.1 1,621.6 1,659.2 1,627.8 1,607.7 1,592.3 86 Transaction 320.2 308.5 319.0 309.2 307.2 298.1 293.2 295.8 305.6 293.7 295.4 292.8 87 Nontransaction 1,262.0 1,303.0 1,325.5 1,316.5 1,322.0 1,325.8 1,320.9 1,325.8 1,353.6 1,334.2 1,312.2 1,299.5 88 Large time 209.3 237.4 241.8 246.5 253.1 258.3 259.8 252.6 257.3 252.6 251.0 249.6 89 Other 1,052.7 1,065.6 1,083.7 1,070.0 1,068.9 1.067.5 1,061.1 1,073.2 1,096.3 1,081.6 1,061.3 1,049.9 90 Borrowings 575.3 642.4 652.3 659.0 656.8 662.6 657.7 662.0 644.5 651.6 681.4 671.7 91 From banks in the U.S 163.7 197.6 201.6 204.1 195.9 199.5 199.8 189.7 191.4 191.5 187.3 188.8 92 From nonbanks in the U.S 411.5 444.8 450.7 454.9 460.9 463.2 457.9 472.3 453.1 460.0 494.1 482.9 93 Net due to related foreign offices . . . 146.4 211.0 199.6 231.0 225.8 214.0 219.9 220.0 215.4 208.6 227.6 230.3 94 Other liabilities 161.7 164.0 161.3 174.0 175.7 179.7 195.8 209.8 202.1 210.4 213.2 211.8 95 Total liabilities 2,4655 2,628.9 2,657.6 2,689.7 2,687.4 2,6803 2,6875 2,713.4 2,721.2 2,6985 2,729.9 2,706.2 96 Residual (assets less liabilities)7 276.2 265.5 261.8 259.2 269.0 292.3 293.1 295.5 296.0 294.7 295.9 293.9 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 2000 2000 Sept. Mar. Apr. May June July Aug. Sept. Sept. 6 Sept. 13 Sept. 20 Sept. 27 Seasonally adjusted Assets 1 Bank credit 1,797.9 1,917.5 1,922.2 1,937.3 1,959.2 1,984.8 2,004.7 2,022.7 2,017.1 2,018.8 2,023.3 2,026.8 2 Securities in bank credit 511.4 519.7 518.9 519.9 521.0 528.4 533.2 537.7 537.1 536.8 535.6 539.1 3 U.S. government securities 374.3 379.5 378.0 377.3 376.9 377.4 374.7 374.0 376.8 375.0 372.4 372.0 4 Other securities 137.1 140.3 140.9 142.6 144.1 151.1 158.5 163.7 160.3 161.7 163.2 167.1 5 Loans and leases in bank credit2 1,286.5 1,397.7 1,403.4 1,417.4 1,438.2 1,456.3 1,471.5 1,485.0 1,480.0 1,482.1 1,487.7 1,487.7 6 Commercial and industrial 243.9 267.3 269.6 272.6 276.7 283.2 286.2 288.2 288.0 287.0 287.4 289.3 7 Real estate 687.6 756.5 758.4 767.9 777.2 784.1 788.3 797.3 791.6 796.0 798.8 800.0 8 Revolving home equity 35.5 39.4 40.1 40.8 41.1 41.5 41.9 45.1 41.8 45.8 45.9 45.9 9 Other 652.2 717.1 718.2 727.1 736.2 742.6 746.4 752.2 749.8 750.2 753.0 754.1 10 Consumer 264.4 279.4 280.4 282.8 288.4 290.6 297.2 299.6 299.5 298.9 301.8 299.1 11 Security3 6.0 6.5 6.7 6.2 6.5 6.9 7.2 7.3 7.5 7.4 7.1 7.0 12 Other loans and leases 84.5 88.1 88.2 87.8 89.4 91.5 92.6 92.8 93.3 92.8 92.6 92.3 13 Interbank loans 62.7 62.0 67.5 65.0 66.4 74.8 84.2 84.9 82.9 84.9 86.3 85.7 14 Cash assets4 80.3 78.3 79.0 80.9 78.8 80.8 80.9 81.7 85.7 78.6 82.1 80.8 15 Other assets5 96.5 106.4 108.7 113.0 111.6 110.6 109.9 109.0 108.5 111.5 106.8 107.4 16 Total assets6 2,013.9 2,139.6 2,152.6 2,171.1 2,190.4 2,224.5 2,252.8 2,271.0 2,266.8 2,266.5 2,271.2 2,273.4 Liabilities 17 Deposits 1,508.8 1,585.8 1,603.9 1,609.1 1,643.6 1,696.1 1,723.2 1,748.5 1,744.8 1,742.7 1,749.4 1,751.2 18 Transaction 299.1 302.0 303.4 302.9 297.5 299.5 303.6 300.9 297.9 295.7 303.2 308.9 19 Nontransaction 1,209.7 1,283.8 1,300.5 1,306.2 1,346.1 1,396.5 1,419.6 1,447.5 1,446.9 1,447.0 1,446.2 1,442.3 20 Large time 225.5 251.6 254.3 257.8 266.1 276.1 281.8 285.7 284.5 286.1 285.4 286.7 21 Other 984.2 1,032.2 1,046.2 1,048.4 1,080.0 1,120.4 1,137.8 1,161.8 1,162.4 1,160.8 1,160.8 1,155.6 22 Borrowings 288.5 340.1 337.6 345.4 341.1 336.1 335.7 330.5 334.6 332.0 329.2 327.6 23 From banks in the U.S 143.7 163.8 158.9 163.1 160.1 160.8 161.9 159.6 160.2 159.9 159.5 159.8 24 From others 144.8 176.3 178.8 182.4 180.9 175.3 173.7 170.9 174.4 172.1 169.7 167.9 25 Net due to related foreign offices .... 3.4 5.4 5.3 6.0 9.1 22.4 23.7 20.4 19.4 20.7 20.2 21.1 26 Other liabilities 57.6 58.5 57.3 60.5 57.6 49.1 49.9 52.1 51.0 51.8 52.3 52.3 27 Total liabilities 1,8583 1,989.8 2,004.2 2,021.0 2,051.4 2,103.7 2,132.5 2,151.4 2,149.8 2,147.2 2,151.1 2,152.2 28 Residual (assets less liabilities)7 155.6 149.8 148.4 150.1 139.0 120.8 120.3 119.6 117.1 119.3 120.1 121.2 Not seasonally adjusted Assets 29 Bank credit 1,801.5 1,911.3 1,925.6 1,944.1 1,964.6 1,985.5 2,008.1 2,027.0 2,018.0 2,023.4 2,030.8 2,032.9 30 Securities in bank credit 510.3 520.8 523.3 523.7 522.9 527.5 532.7 536.3 535.1 535.8 535.1 537.9 31 U.S. government securities 373.4 380.8 381.3 380.6 379.1 377.2 374.0 373.1 375.2 374.3 372.4 371.5 32 Other securities 136.9 140.0 142.1 143.1 143.8 150.3 158.7 163.2 159.9 161.5 162.7 166.4 33 Loans and leases in bank credit2 1,291.2 1,390.5 1,402.2 1,420.4 1,441.7 1,458.0 1,475.4 1,490.8 1,482.9 1,487.5 1,495.7 1,495.0 34 Commercial and industrial 242.6 267.4 271.8 275.3 278.7 283.3 284.2 286.5 285.4 284.7 286.4 288.1 35 Real estate 690.2 753.2 757.0 768.2 778.3 785.2 791.0 800.4 793.5 799.2 802.2 804.0 36 Revolving home equity 35.7 39.2 40.0 40.8 41.0 41.3 41.8 45.5 42.0 46.2 46.4 46.5 37 Other 654.5 714.0 717.0 727.4 737.3 743.8 749.2 754.9 751.5 753.0 755.8 757.4 38 Consumer 265.5 277.5 279.4 282.9 288.0 289.6 297.9 301.3 300.7 301.0 304.7 300.8 39 Credit cards and related plans. . n.a. n.a. n.a. n.a. n.a. 123.5 130.4 132.6 132.4 132.2 135.8 131.7 40 Other n.a. n.a. n.a. n.a. n.a 166.1 167.5 168.7 168.2 168.8 168.9 169.1 41 Security3 6.0 6.5 6.7 6.2 6.5 6.9 7.2 7.3 7.5 7.4 7.1 7.0 42 Other loans and leases 86.8 85.9 87.3 87.8 90.2 93.1 94.9 95.4 95.7 95.2 95.4 95.1 43 Interbank loans 60.7 64.9 69.0 61.4 63.2 70.7 80.2 82.1 86.9 84.7 79.7 76.9 44 Cash assets4 79.9 76.2 78.4 80.7 78.2 79.4 78.2 81.3 91.4 78.8 78.7 78.2 45 Other assets5 96.1 106.4 109.5 112.1 111.4 112.5 111.6 108.6 112.4 111.1 103.0 106.0 46 Total assets6 2,014.9 2,134.2 2,157.8 2,1733 2,191.8 2,221.7 2^51.1 2,271.7 2,281.4 2,270.6 2,264.7 2,266.7 Liabilities 47 Deposits 1,507.2 1,583.8 1,611.1 1,608.4 1,640.9 1,690.8 1,718.5 1,746.4 1,758.2 1,745.2 1,738.6 1,737.5 48 Transaction 297.2 299.8 305.2 300.5 298.1 296.9 299.1 298.7 306.5 296.6 294.5 299.8 49 Nontransaction 1,210.0 1,284.0 1,305.8 1,307.9 1,342.9 1,393.8 1,419.4 1,447.7 1,451.7 1,448.6 1,444.0 1,437.7 50 Large time 225.5 251.6 254.3 257.8 266.1 276.1 281.8 285.7 284.5 286.1 285.4 286.7 51 Other 984.5 1,032.5 1,051.6 1,050.1 1,076.8 1,117.7 1,137.6 1,162.0 1,167.3 1,162.5 1,158.6 1,151.0 52 Borrowings 292.0 333.8 334.0 346.8 342.9 338.5 338.8 336.2 332.8 331.3 340.8 342.4 53 From banks in the U.S 145.6 160.1 156.4 162.5 161.8 163.2 164.8 163.1 160.4 160.6 165.8 167.2 54 From others 146.5 173.7 177.5 184.3 181.1 175.4 174.0 173.0 172.4 170.7 175.0 175.2 55 Net due to related foreign offices .... 3.4 5.4 5.3 6.0 9.1 22.4 23.7 20.4 19.4 20.7 20.2 21.1 56 Other liabilities 57.4 58.9 58.0 60.5 57.4 48.3 49.9 51.8 50.9 51.5 52.0 52.2 57 Total liabilities 1,860.0 1,981.9 2,0083 2,021.6 2,050.4 2,100.0 2,130.9 2,154.8 2,161.2 2,148.7 2,151.6 2,153.2 58 Residual (assets less liabilities)7 154,9 152.3 149.4 151.6 141.4 121.7 120.2 116.9 120.2 121.9 113.2 113.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic Nonfinancial Statistics • December 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 2000 2000 Sept. Mar. Apr. May June July Aug. Sept. Sept. 6 Sept. 13 Sept. 20 Sept. 27 Seasonally adjusted Assets 1 Bank credit 519.4 543.5 569.6 583.2 575.8 576.3 582.0 589.7 590.2 593.7 596.9 584.3 2 Securities in bank credit 189.3 195.6 204.4 210.5 205.4 205.1 206.1 204.5 212.2 210.3 201.6 200.1 3 U.S. government securities 82.8 78.1 79.6 79.7 78.9 79.7 79.9 77.4 81.0 79.1 74.5 77.6 4 Other securities 106.5 117.5 124.8 130.8 126.5 125.4 126.2 127.1 131.2 131.3 127.1 122.5 5 Loans and leases in bank credit2 . . . 330.0 347.9 365.2 372.7 370.4 371.1 375.9 385.2 378.1 383.4 395.3 384.1 6 Commercial and industrial 194.8 196.3 199.2 204.9 205.1 203.5 205.8 203.7 205.6 203.0 204.9 202.7 7 Real estate 17.8 18.0 18.4 18.7 19.0 18.9 18.8 19.3 19.1 19.4 19.6 19.3 8 Security3 52.0 66.5 77.9 81.0 81.0 81.8 82.2 94.8 84.5 93.5 102.7 96.4 9 Other loans and leases 65.5 67.1 69.7 68.0 65.2 66.9 69.0 67.3 68.9 67.5 68.1 65.7 10 Interbank loans 25.0 28.6 29.4 31.8 28.6 26.2 24.2 25.7 24.3 26.3 27.7 24.3 11 Cash assets4 43.3 47.6 47.4 43.9 44.6 44.9 44.4 44.6 45.0 45.9 45.2 42.6 12 Other assets5 30.5 39.2 40.0 41.1 43.5 43.0 42.1 40.6 43.8 42.2 40.7 37.4 13 Total assets6 617.9 658.6 686.0 699.7 692.2 690.0 6923 7003 703.0 707.8 7103 688.2 Liabilities 14 Deposits 314.8 378.0 387.5 382.0 382.4 386.7 391.6 384.5 385.8 387.4 384.8 382.0 15 Transaction 10.2 11.1 10.9 11.2 11.4 11.4 10.9 9.8 9.9 9.5 10.2 9.1 16 Nontransaction 304.6 366.9 376.7 370.8 371.0 375.3 380.7 374.7 375.9 377.9 374.6 372.9 17 Borrowings 172.1 177.1 199.6 204.4 205.3 205.7 202.0 217.4 207.3 218.1 232.4 212.5 18 From banks in the U.S 24.2 19.7 20.9 17.9 18.9 20.8 16.9 19.2 19.6 20.3 21.2 16.4 19 From others 147.9 157.4 178.7 186.5 186.3 184.9 185.1 198.3 187.7 197.7 211.2 196.1 20 Net due to related foreign offices 67.3 20.3 15.3 21.3 19.5 17.8 23.6 24.1 34.6 24.5 18.6 20.0 21 Other liabilities 64.1 71.3 75.6 82.2 75.1 72.4 71.6 75.2 77.9 78.8 75.7 70.9 22 Total liabilities 618-3 646.8 678.1 689.9 682.4 682.5 688.8 7013 705.6 708.7 711.5 685.4 23 Residual (assets less liabilities)7 -.4 11.8 8.0 9.8 9.9 7.5 3.5 -1.0 -2.5 -1.0 -1.2 2.8 Not seasonally adjusted Assets 24 Bank credit 517.5 542.1 563.2 574.7 566.2 565.7 572.3 588.8 583.6 589.6 597.0 588.2 25 Securities in bank credit 188.5 192.7 200.7 207.4 199.4 198.3 200.5 204.5 209.5 208.7 202.2 202.4 26 U.S. government securities 80.7 77.9 80.3 80.7 78.9 78.7 78.3 75.3 78.6 76.7 72.6 75.8 27 Trading account 14.9 9.3 11.8 12.3 11.8 11.8 13.7 14.1 14.7 12.8 12.8 16.5 28 Investment account 65.8 68.6 68.6 68.4 67.1 66.8 64.6 61.3 63.8 63.9 59.8 59.3 29 Other securities 107.8 114.7 120.4 126.7 120.5 119.7 122.2 129.2 131.0 132.0 129.6 126.7 30 Trading account 69.2 71.5 76.5 83.0 77.5 76.8 78.7 87.3 87.8 89.2 88.3 85.5 31 Investment account 38.6 43.2 43.9 43.7 42.9 42.9 43.6 41.9 43.2 42.8 41.3 41.2 32 Loans and leases in bank credit2 . . . 329.0 349.4 362.5 367.3 366.8 367.3 371.8 384.3 374.1 380.9 394.8 385.8 33 Commercial and industrial 194.7 198.0 197.4 200.7 201.8 201.1 203.1 203.7 203.4 202.0 205.3 204.5 34 Real estate 17.6 18.1 18.3 18.7 18.9 18.7 18.6 19.1 18.7 19.0 19.4 19.2 35 Security3 51.8 66.8 77.9 80.8 81.3 81.5 82.4 94.7 83.9 93.2 102.9 96.4 36 Other loans and leases 64.9 66.6 68.8 67.1 64.7 66.1 67.7 66.8 68.1 66.7 67.2 65.7 37 Interbank loans 25.0 28.6 29.4 31.8 28.6 26.2 24.2 25.7 24.3 26.3 27.7 24.3 38 Cash assets4 42.6 46.6 45.3 42.8 43.9 43.3 42.9 43.8 43.4 44.0 44.1 43.5 39 Other assets5 30.0 40.5 39.3 40.6 41.3 41.0 41.4 39.9 43.7 41.7 39.6 36.6 40 Total assets6 614.9 657.5 676.9 689.5 679.6 675.8 680.4 697.8 694.7 701.1 708.0 692.2 Liabilities 41 Deposits 310.1 384.1 388.6 382.9 378.1 378.0 379.8 378.2 375.2 378.5 378.8 380.8 42 Transaction 10.8 10.9 10.5 10.7 11.1 11.3 10.8 10.3 10.2 9.9 10.7 10.1 43 Nontransaction 299.3 373.2 378.1 372.1 367.0 366.7 368.9 367.9 365.0 368.6 368.1 370.7 44 Borrowings 172.1 177.1 199.6 204.4 205.3 205.7 202.0 217.4 207.3 218.1 232.4 212.5 45 From banks in the U.S 24.2 19.7 20.9 17.9 18.9 20.8 16.9 19.2 19.6 20.3 21.2 16.4 46 From others 147.9 157.4 178.7 186.5 186.3 184.9 185.1 198.3 187.7 197.7 211.2 196.1 47 Net due to related foreign offices .... 66.3 20.8 10.6 17.1 18.1 16.9 23.4 23.5 30.7 21.9 18.2 24.2 48 Other liabilities 63.7 71.7 73.7 80.6 73.6 70.7 71.2 74.8 77.5 78.5 74.8 70.9 49 Total liabilities 612.2 653.7 672.6 685.0 675.1 671.2 676.4 693.9 690.8 697.0 7043 688.4 50 Residual (assets less liabilities)7 2.7 3.8 4.3 4.5 4.5 4.6 4.0 3.9 3.9 4.2 3.7 3.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A21 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued E. Foreign-related institutions—Continued Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 1999 2000 2000 Sept. Mar. Apr. May June July Aug. Sept. Sept. 6 Sept. 13 Sept. 20 Sept. 27 Not seasonally adjusted MEMO Large domestically chartered banks, adjusted for mergers 51 Revaluation gains on off-balance-sheet items8 59.9 65.7 65.1 72.4 68.3 63.1 66.5 74.4 75.3 74.9 74.2 72.8 52 Revaluation losses on off-balancesheet items8 59.7 64.0 65.0 72.9 68.5 62.9 67.3 73.9 73.2 73.9 74.1 72.8 53 Mortage-backed securities9 249.2 253.5 255.2 252.4 249.8 242.0 237.5 237.7 238.3 237.6 236.5 237.1 54 Pass-through 170.1 176.5 179.4 177.8 177.6 172.8 169.5 170.1 170.2 169.4 168.6 170.6 55 CMO, REMIC, and other 79.1 77.0 75.8 74.6 72.2 69.2 68.0 67.6 68.1 68.2 67.9 66.5 56 Net unrealized gains (losses) on available-for-sale securities10 .... -7.5 -9.6 -16.3 -16.5 -15.0 -10.8 -11.2 -10.2 -10.3 -10.1 -10.4 -10.3 57 Off-shore credit to U.S. residents". . . . 27.8 24.1 24.4 23.5 22.4 22.2 22.1 22.1 22.1 21.9 22.2 22.3 58 Securitized consumers loans12 n.a. n.a. n.a. n.a. n.a. 87.4 86.7 85.9 86.6 86.7 86.2 86.1 59 Credit cards and related plans n.a. n.a. n.a. n.a. n.a. 72.4 72.0 71.8 72.3 72.5 71.9 71.9 60 Other n.a. n.a. n.a. n.a. n.a. 15.0 14.7 14.2 14.3 14.2 14.2 14.2 61 Securitized business loans'" n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Small domestically chartered commercial banks, adjusted for mergers 67 Mortage-backed securities9 199.6 205.5 206.2 205.7 204.5 204.0 206.8 208.9 209.9 209.5 207.5 208.1 63 Securitized consumer loans12 n.a. n.a. n.a. n.a. n.a. 220.2 220.6 221.2 221.4 221.8 220.5 221.1 64 Credit cards and related plans n.a. n.a. n.a. n.a. n.a. 211.2 211.7 212.6 212.7 213.2 211.9 212.6 65 Other n.a. n.a. n.a. n.a. n.a. 9.0 8.8 8.6 8.7 8.6 8.6 8.5 Foreign-related institutions 66 Revaluation gains on off-balancesheet items8 37.8 39.3 41.7 47.1 41.1 38.1 39.9 45.4 44.6 47.6 46.0 45.0 67 Revaluation losses on off-balancesheet items8 36.9 38.3 38.6 44.5 38.0 35.7 37.7 43.0 42.5 45.9 43.6 41.3 68 Securitized business loans'2 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. NOTE. Tables 1.26, 1.27, and 1.28 have been revised to reflect changes in the Board's H.8 acquiring bank. Balance sheet data for acquired banks are obtained from Call Reports, and a statistical release, "Assets and Liabilities of Commercial Banks in the United States." Table ratio procedure is used to adjust past levels. 1.27, "Assets and Liabilities of Large Weekly Reporting Commercial Banks," and table 1.28, 2. Excludes federal funds sold to, reverse RPs with, and loans made to commercial banks "Large Weekly Reporting U.S. Branches and Agencies of Foreign Banks," are no longer in the United States, all of which are included in "Interbank loans." being published in the Bulletin. Instead, abbreviated balance sheets for both large and small 3. Consists of reverse RPs with brokers and dealers and loans to purchase and carry domestically chartered banks have been included in table 1.26, parts C and D. Data are both securities. merger-adjusted and break-adjusted. In addition, data from large weekly reporting U.S. 4. Includes vault cash, cash items in process of collection, balances due from depository branches and agencies of foreign banks have been replaced by balance sheet estimates of all institutions, and balances due from Federal Reserve Banks. foreign-related institutions and are included in table 1.26, part E. These data are break- 5. Excludes the due-from position with related foreign offices, which is included in "Net adjusted. due to related foreign offices." The not-seasonally-adjusted data for all tables now contain additional balance sheet items, 6. Excludes unearned income, reserves for losses on loans and leases, and reserves for which were available as of October 2, 1996. transfer risk. Loans are reported gross of these items. 1. Covers the following types of institutions in the fifty states and the District of 7. This balancing item is not intended as a measure of equity capital for use in capital Columbia: domestically chartered commercial banks that submit a weekly report of condition adequacy analysis. On a seasonally adjusted basis this item reflects any differences in the (large domestic); other domestically chartered commercial banks (small domestic); branches seasonal patterns estimated for total assets and total liabilities. and agencies of foreign banks, and Edge Act and agreement corporations (foreign-related 8. Fair value of derivative contracts (interest rate, foreign exchange rate, other commodity and institutions). Excludes International Banking Facilities. Data are Wednesday values or pro equity contracts) in a gain/loss position, as determined under FASB Interpretation No. 39. rata averages of Wednesday values. Large domestic banks constitute a universe; data for 9. Includes mortgage-backed securities issued by U.S. government agencies, U.S. small domestic banks and foreign-related institutions are estimates based on weekly samples government-sponsored enterprises, and private entities. and on quarter-end condition reports. Data are adjusted for breaks caused by reclassifications 10. Difference between fair value and historical cost for securities classified as availableof assets and liabilities. for-sale under FASB Statement No. 115. Data are reported net of tax effects. Data shown are The data for large and small domestic banks presented on pp. A17-19 are adjusted to restated to include an estimate of these tax effects. remove the estimated effects of mergers between these two groups. The adjustment for 11. Mainly commercial and industrial loans but also includes an unknown amount of credit mergers changes past levels to make them comparable with current levels. Estimated extended to other than nonfinancial businesses. quantities of balance sheet items acquired in mergers are removed from past data for the bank 12. Total amount outstanding. group that contained the acquired bank and put into past data for the group containing the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A22 Domestic Nonfinancial Statistics • December 2000 1.32 COMMERCIAL PAPER AND BANKERS DOLLAR ACCEPTANCES OUTSTANDING A. Commercial Paper Millions of dollars, seasonally adjusted, end of period Year ending December 2000 IItteemm 1995 1996 1997 1998 1999 Mar. Apr. May June July Aug. 1 All issuers 674,904 775,371 966,699 1,163,303 1,403,023 1,449,143 1,465,697 1,497,712 1,516,205 1,551,668 1,559,054 Financial companies' 2 Dealer-placed paper, total2 275,815 361,147 513,307 614,142 786,643 849,198 860,843 884,299 884,578 900,651 905,634 3 Directly placed paper, total3 210,829 229,662 252,536 322,030 337,240 302,885 294,328 302,305 300,718 309,076 303,307 4 Nonfinancial companies4 188,260 184,563 200,857 227,132 279,140 297,060 310,526 311,109 330,909 341,941 350,113 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 1997 1998 1999 2000 1 Total amount of reporting banks' acceptances in existence 25,774 14,363 10,094 9,881 2 Amount of other banks' eligible acceptances held by reporting banks 736 523 461 462 3 Amount of own eligible acceptances held by reporting banks (included in item 1) 6,862 4,884 4,261 3,789 4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries (included in item 1) 10,467 5,413 3,498 3,689 1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United 2. Data on bankers dollar acceptances are gathered from approximately 40 institutions; States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks; includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal agencies of foreign banks, and Edge and agreement corporations. The reporting group is Reserve Act (12 U.S.C. §372). revised every year. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Average Average rate rate 8.25 1997 8.44 1998—Jan. . 8.50 1999—Jan. ... 8.50 1998 8.35 Feb. 8.50 Feb. .. 1999 8.00 Mar. 8.50 Mar. .. 8.25 Apr. 8.50 Apr. .. 8.00 1997 8.25 May 8.50 May .. 7.75 Feh 8.25 June 8.50 June .. Mar. 8.30 July . 8.50 July ... 8.00 Apr. 8.50 Aug. 8.50 Aug. .. 8.25 May 8.50 Sept. 8.49 Sept. . 8.50 June 8.50 Oct. . 8.12 Oct. ... July . 8.50 Nov. 7.89 Nov. .. 8.75 Aug. 8.50 Dec. 7.75 Dec. .. 9.00 Sept. 8.50 9.50 Oct. . 8.50 2000—Jan Nov. 8.50 Feb. .. Dec. 8.50 Mar. .. Apr. .. May .. June .. July ... Aug. .. Sept. . Oct. ... 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 2000 2000, week ending 11999977 11999988 11999999 June July Aug. Sept. Sept. 1 Sept. 8 Sept. 15 Sept. 22 Sept. 29 MONEY MARKET INSTRUMENTS 1 Federal funds1'2,3 5.46 5.35 4.97 6.53 6.54 6.50 6.52 6.54 6.56 6.50 6.50 6.50 2 Discount window borrowing2'4 5.00 4.92 4.62 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 6.00 Commercial paper',5,6 Nonfinancial 3 1 -month 5.57 5.40 5.09 6.53 6.49 6.47 6.48 6.48 6.47 6.48 6.48 6.49 4 2-month 5.57 5.38 5.14 6.55 6.50 6.48 6.47 6.48 6.47 6.47 6.47 6.48 5 3-month 5.56 5.34 5.18 6.57 6.52 6.49 6.47 6.48 6.47 6.47 6.46 6.47 Financial 6 1-month 5.59 5.42 5.11 6.53 6.50 6.49 6.49 6.47 6.49 6.49 6.50 6.49 7 2-month 5.59 5.40 5.16 6.56 6.51 6.49 6.48 6.49 6.49 6.48 6.48 6.48 8 3-month 5.60 5.37 5.22 6.59 6.54 6.49 6.47 6.49 6.47 6.47 6.46 6.47 Commercial paper (historicalJ3-5-7 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 6.63 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 6-month 5.57 5.30 5.30 6.74 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Certificates of deposit, secondary market3,10 17 1-month 5.54 5.49 5.19 6.60 6.57 6.55 6.56 6.54 6.55 6.56 6.56 6.57 18 3-month 5.62 5.47 5.33 6.73 6.67 6.61 6.60 6.59 6.59 6.59 6.58 6.63 19 6-month 5.73 5.44 5.46 6.91 6.86 6.76 6.68 6.72 6.70 6.69 6.66 6.67 20 Eurodollar deposits, 3-month3,11 5.61 5.45 5.31 6.73 6.67 6.61 6.59 6.59 6.58 6.58 6.58 6.62 U.S. Treasury bills Secondary market3,5 21 3-month 5.06 4.78 4.64 5.69 5.96 6.09 6.00 6.13 6.02 5.95 5.98 6.03 22 6-month 5.18 4.83 4.75 5.97 6.00 6.07 5.98 6.10 6.02 5.94 5.96 6.00 23 1-year 5.32 4.80 4.81 5.83 5.75 5.87 5.79 5.90 5.85 5.80 5.76 5.76 Auction high3,5,12 24 3-month 5.07 4.81 4.66 5.74 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25 6-month 5.18 4.85 4.76 6.02 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 26 I-year 5.36 4.85 4.78 6.00 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities13 27 1-year 5.63 5.05 5.08 6.17 6.08 6.18 6.13 6.23 6.20 6.14 6.09 6.08 28 2-year 5.99 5.13 5.43 6.48 6.34 6.23 6.08 6.20 6.11 6.10 6.08 6.04 29 3-year 6.10 5.14 5.49 6.43 6.28 6.17 6.02 6.13 6.03 6.03 6.03 5.97 30 5-year 6.22 5.15 5.55 6.30 6.18 6.06 5.93 6.02 5.95 5.95 5.95 5.90 31 7-year 6.33 5.28 5.79 6.33 6.22 6.05 5.98 6.01 5.96 5.99 6.02 5.96 32 10-year 6.35 5.26 5.65 6.10 6.05 5.83 5.80 5.76 5.73 5.78 5.88 5.82 33 20-year 6.69 5.72 6.20 6.28 6.20 6.02 6.09 6.00 5.99 6.06 6.19 6.14 34 30-year 6.61 5.58 5.87 5.93 5.85 5.72 5.83 5.71 5.70 5.79 5.94 5.89 Composite 6.67 5.69 6.14 6.23 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 35 More than 10 years (long-term) STATE AND LOCAL NOTES AND BONDS Moody's series14 5.32 4.93 5.28 5.69 5.53 5.43 5.40 5.38 5.35 5.35 5.39 5.50 36 Aaa 5.50 5.14 5.70 6.24 6.09 6.01 6.12 6.00 5.98 6.02 6.20 6.27 37 Baa 5.52 5.09 5.43 5.80 5.63 5.51 5.56 5.49 5.49 5.51 5.59 5.63 38 Bond Buyer series'3 CORPORATE BONDS 7.54 6.87 7.45 8.05 7.98 7.88 7.98 7.90 7.89 7.98 8.08 7.99 39 Seasoned issues, all industries'6 Rating qroup 7.27 6.53 7.05 7.67 7.65 7.55 7.62 7.55 7.54 7.60 7.71 7.65 40 Aaa 7.48 6.80 7.36 7.87 7.81 7.70 7.83 7.71 7.72 7.83 7.93 7.85 41 Aa 7.54 6.93 7.53 8.18 8.11 8.02 8.13 8.05 8.05 8.13 8.23 8.13 42 A 7.87 7.22 7.88 8.48 8.35 8.26 8.35 8.27 8.25 8.35 8.44 8.35 43 Baa MEMO Dividend-price ratio[ 44 Common stocks 1.77 1.49 1.25 1.12 1.10 1.09 1.10 1.08 1.08 1.08 1.10 1.12 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. Al 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 • December 2000 1.36 STOCK MARKET Selected Statistics 2000 IInnddiiccaattoorr 11999977 11999988 11999999 Jan. Feb. Mar. Apr. May June July Aug. Sept. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 456.99 550.65 619.52 634.07 606.03 622.28 646.82 640.07 649.61 653.27 666.14 667.05 2 Industrial 574.97 684.35 775.29 814.73 767.08 790.35 822.76 814.75 819.54 825.28 837.23 829.99 3 Transportation 415.08 468.61 491.62 456.35 398.69 384.39 406.14 411.50 395.09 410.67 419.84 404.23 4 Utility 143.87 190.52 284.82 485.82 482.30 509.59 502.78 487.17 501.93 484.19 459.91 463.76 5 Finance 424.84 516.65 530.97 495.23 471.65 491.29 524.05 523.22 544.51 556.32 597.17 616.89 6 Standard & Poor's Corporation (1941-43 = 10)1 873.43 1,085.50 1,327.33 1,425.59 1,388.88 1,442.21 1,461.36 1,418.48 1,461.96 1,473.00 1,485.46 1,468.06 7 American Stock Exchange (Aug. 31, 1973 = 50)2 628.34 682.69 770.90 878.73 910.00 1,014.03 918.77 917.76 934.90 930.66 920.54 952.74 Volume of trading (thousands of shares) 8 New York Stock Exchange 523,254 666,534 799,554 1,058,021 1,032,791 1,124,097 1,047,960 893,896 971,137 941,694 875,087 1,026,597 9 American Stock Exchange 24,390 28,870 32,629 47,530 51,134 59,449 63,054 44,146 42.490 36,486 35,695 47,047 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 1,361,600 1,685,820 2,130,152 243,490 265,210 278,530 251,700 240,660 247,200 244,970 247,560 250,780 Free credit balances at brokers4 11 Margin accounts5 293,000 405,180 532,500 57,800 56,470 65,020 65,930 66,170 64,970 71,730 68,020 70,959 12 Cash accounts 517,030 633,725 757,345 75,760 79,700 85,530 76,190 73,500 74,140 74,970 72,640r 74,766 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 2000 11999988 11999999 22000000 Apr. May June July Aug. Sept. U.S. budget1 1 Receipts, total 1,721,798 1,827,454 2,025,038 295,148 146,002 214,875 134,074 138,128 219,471 2 On-budget 1,305,999 1,382,986 1,544,455 244,662 107,469 168,319 97,681 101,429 176,692 3 Off-budget 415,799 444,468 480,583 50,486 38,533 46,556 36,393 36,699 42,779 4 Outlays, total 1,652,552 1,702,940 1,788,045 135,651 149,612 158,987 129,013 148,555 153,649 5 On-budget 1,335,948 1,382,262 1,457,280 105,742 114,829 152,308 99,404 115,539 114,748 6 Off-budget 316,604 320,778 330,765 29,909 34,783 6,679 29,609 33,016 38,901 7 Surplus or deficit ( —), total 69,246 124,414 236,993 159,497 -3,611 55,888 5,061 -10,427 65,822 8 On-budget -29,949 724 87,175 138,920 -7,360 16,011 -1,723 -14,110 61,944 9 Off-budget 99,195 123,690 149,818 20,577 3,750 39,877 6,784 3,683 3,878 Source of financing (total) 10 Borrowing from the public -51,211 -88,674 -222,672 -112,667 -53,755 -23,131 -31,307 9,995 -32,334 11 Operating cash (decrease, or increase (—)) 4,743 -17,580 3,799 -47,787 69,470 -34,350 23,384 20,873 -39,479 12 Other 2 -22,778 -18,160 -18,120 957 -12,104 1,593 2,862 -20,441 5,991 MEMO 13 Treasury operating balance (level, end of period) 38,878 56,458 52,659 92,557 23,087 57,437 34,053 13,180 52,659 14 Federal Reserve Banks 4,952 6,641 8,459 15,868 5.445 6,208 5,392 5,961 8,459 15 Tax and loan accounts 33,926 49,817 44,199 76,689 17,642 51,229 28,661 7,218 44,199 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 loan- Survivors, and Disability Insurance) and the U.S. Postal Service. valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCE. Monthly totals: U.S. Department of the Treasury, Monthly Treasury Statement of International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous and Budget, Budget of the U.S. Government. liability (including checks outstanding) and asset accounts; seigniorage; increment on gold; Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A26 Domestic NonfinancialS tatistics • December 2000 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1998 1999 2000 2000 11999999 22000000 H2 HI H2 HI July Aug. Sept. RECEIPTS 1 All sources 1,827,454 2,025,038 825,057 966,045 892,266 1,089,760 134,074 138,128 219,471 2 Individual income taxes, net 879,480 1,004,461 392,332 481,907 425,451 550,208 66,301 68,033 104,402 3 Withheld 693,940 780,397 339,144 351.068 372,012 388,526 64,474 62,057 59,766 4 Nonwithheld 308,185 358,049 65,204 240,278 68,302 281,103 4,066 7,850 48,229 5 Refunds 122,706 134,046 12,032 109,467 14,841 119,477 22,,224411 11,,887744 33,,559933 Corporation income taxes 6 Gross receipts 216,324 235,655 104,163 106.861 110,111 119,166 6,605 6,577 46,183 7 Refunds 31.645 28,367 14,250 17,092 13,996 13,781 1,592 1,903 2,746 8 Social insurance taxes and contributions, net . . . 611,833 652,851 268,466 324,831 292,551 353,514 49,650 52,082 56,293 y Employment taxes and contributions2 580,880 620,447 256,142 306,235 280,059 333,584 47,136 48,132 55,682 10 Unemployment insurance 26,480 27,641 10,121 16.378 10,173 17,562 2.145 3,584 168 n Other net receipts3 4,473 4,763 2.202 2.216 2,319 2,368 369 366 443 12 Excise taxes 70,414 68,866 33,366 31,015 34,262 33,532 6,022 5,580 7,769 13 Customs deposits 18,336 19,913 9,838 8,440 10,287 9,218 1,781 2,071 1,823 14 Estate and gift taxes 27,782 29,010 12,359 14,915 14,001 15,073 1,872 2,304 2,168 15 Miscellaneous receipts4 34,929 42,647 18,735 15,140 19,569 22,831 3,435 3,383 3,579 OUTLAYS 16 All types 1,702,940 1,788,045 877,414 817,227 882,465r 892,947 129,013 148,555 153,649 17 National defense 274,873 293,856 140,196 134,414 149,820 143,476 19,542 24,767 28,243 18 International affairs 15,243 17,252 8,297 6.879 8,530 7,250 3,067 -667 1,553 19 General science, space, and technology 18,125 19,707 10,142 9.319 10,089 9,601 1,524 1,829 1,716 20 Energy 912 -1,020 699 797 -90 -893 42 -223 530 21 Natural resources and environment 23,970 23,295 12,671 10.351 12,100 10,814 1,783 2,267 2,542 22 Agriculture 23,011 38,472 16,757 9.803 20,887 11,164 496 1,449 6,842 23 Commerce and housing credit 2,649 3,321 4,046 -1.629 7,353 -2,497 423 -1,295 4,591 24 Transportation 42,531 46,211 20,836 17.082 22,972 21,054 3,781 4,866 4,209 25 Community and regional development 11,870 11,687 6,972 5,368 7,135 5,050 814 1,007 975 26 Education, training, employment, and social services 56,402 58,364 27,762 29,003 27,532 31,234 3,874 5,576 3,616 27 Health 141,079 154,215 67,838 69.320 74,490 75,871 12,450 14,512 13,566 28 Social security and Medicare 580,488 606,552 316,809 261,146 295,030 306,966 47,415 52,206 50,381 29 Income security 237,707 247,380 109,481 126.552 113,504 133,915 15,343 18,521 20,031 30 Veterans benefits and services 43,212 47,084 22,750 20.105 23,412 23,174 1,910 3,700 5,619 31 Administration of justice 25,924 27,704 12,041 13.149 13,459 13,981 2,051 2,405 2,398 32 General government 15,771 13,721 9,136 6,641 7,006 6,198 960 906 1,017 33 Net interest5 229,735 222,825 116,954 116,655 112,420 115,545 17,660 20,004 12,584 34 Undistributed offsetting receipts6 -40,445 -42,581 -25,793 -17,724 -22,850 -19,346 -3,818 -3,275 -6,766 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 A25 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1998 1999 2000 IItteemm Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 1 Federal debt outstanding 5,556 5,643 5,681 5,668 5,685 5,805 5,802 5,714 5,702 2 Public debt securities 5,526 5,614 5,652 5,639 5,656 5,776 5,773 5,686 5,674 3 Held by public 3,761 3,787 3,795 3,685 3,667 3,716 3,688 n.a. n.a. 4 Held by agencies 1,766 1,827 1,857 1,954 1,989 2,061 2,085 n.a. n.a. 5 Agency securities 29 29 29 29 29 29 28 28 28 6 Held by public 26 29 28 28 28 28 28 n.a. n.a. 7 Held by agencies 4 1 1 1 1 1 0 n.a. n.a. 8 Debt subject to statutory limit 5,440 5,530 5,566 5,552 5,568 5,687 5,687 5,601 5,592 9 Public debt securities 5,439 5,530 5,566 5,552 5,568 5,687 5,686 5,601 5,591 10 Other debt1 0 0 0 0 0 0 0 0 0 MEMO 11 Statutory debt limit 5,950 5,950 5,950 5,950 5,950 5,950 5,950 5,950 5,950 1. Consists of guaranteed debt of U.S. Treasury and other federal agencies, specified SOURCE. U.S. Department of the Treasury, Monthly Statement of the Public Debt of the participation certificates, notes to international lending organizations, and District of Colum- United States and Treasury Bulletin. bia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 1999 2000 TTyyppee aanndd hhoollddeerr 11999966 11999977 11999988 11999999 Q4 Qi Q2 Q3 1 Total gross public debt 5,323.2 5,502.4 5,614.2 5,776.1 5,776.1 5,773.4 5,685.9 5,674.2 By type 2 Interest-bearing 5,317.2 5,494.9 5,605.4 5,766.1 5,766.1 5,763.8 5,675.9 5,622.1 3 Marketable 3,459.7 3,456.8 3,355.5 3,281.0 3,281.0 3,261.2 3,070.7 2,992.8 4 Bills 777.4 715.4 691.0 737.1 737.1 753.3 629.9 616.2 5 Notes 2,112.3 2,106.1 1,960.7 1,784.5 1,784.5 1,732.6 1,679.1 1,611.3 6 Bonds 555.0 587.3 621.2 643.7 643.7 653.0 637.7 635.3 7 Inflation-indexed notes and bonds' n.a. 33.0 67.6 100.7 100.7 107.4 109.0 115.0 8 Nonmarketable2 1,857.5 2,038.1 2,249.9 2,485.1 2,485.1 2,502.6 2,605.2 2,629.3 9 State and local government series 101.3 124.1 165.3 165.7 165.7 161.9 160.4 153.3 10 Foreign issues3 37.4 36.2 34.3 31.3 31.3 28.8 27.7 25.4 11 Government 47.4 36.2 34.3 31.3 31.3 28.8 27.7 25.4 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 182.4 181.2 180.3 179.4 179.4 178.6 177.7 177.7 14 Government account series4 1,505.9 1,666.7 1,840.0 2,078.7 2.078.7 2,103.3 2,209.4 2,242.9 15 Non-interest-bearing 6.0 7.5 8.8 10.0 10.0 9.6 10.1 52.1 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 2,060.6 2,085.4 2,190.2 n.a. 17 Federal Reserve Banks 410.9 451.9 471.7 477.7 477.7 501.7 505.0 n.a. 18 Private investors 3,431.2 3,414.6 3,334.0 3,233.9 3,233.9 3,182.8 2,987.4 n.a. 19 Depository institutions 296.6 300.3 237.3 246.3 246.3 234.9 n.a. n.a. 20 Mutual funds 315.8 321.5 343.2 349.5 349.5 343.7 n.a. n.a. 21 Insurance companies 214.1 176.6 144.5 140.0 140.0 138.7 n.a. n.a. 22 State and local treasuries6 257.0 239.3 269.3 266.8 266.8 257.2 n.a. n.a. Individuals 23 Savings bonds 187.0 186.5 186.7 186.5 186.5 185.3 184.7 n.a. 24 Pension funds 392.7 421.0 434.7 445.5 445.5 432.3 n.a. n.a. 25 Private 189.2 204.1 218.1 234.5 234.5 230.8 n.a. n.a. 26 State and Local 203.5 216.9 216.6 211.0 211.0 201.5 n.a. n.a. 27 Foreign and international7 1,102.1 1,241.6 1,278.7 1,268.8 1,268.8 1,274.0 1,248.9 n.a. 28 Other miscellaneous investors6'8 665.9 527.9 438.5 330.5 330.5 316.7 n.a. 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 • December 2000 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions' Millions of dollars, daily averages 2000 2000, week ending Item June July Aug. Aug. 2 Aug. 9 Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Sept. 27 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 20.474 16,467 21,487 18,878 14,037 26,057 17,685 27,255 31,270 23,896 22,297 22,099 Coupon securities, by maturity 2 Five years or less 102,265 96,709 84,941 92,640 94,852 85,623 78,770 75,257 95,849 90,909 133,824 140,680 3 More than five years 64,492 57,055 62,777 62.388 76,071 72,768 49,068 53,359 62,764 56,674 92,418 63,927 4 Inflation-indexed 955 1,261 1,185 974 1,553 730 1,144 1,219 2,086 1,683 1,043 1,584 Federal agency 5 Discount notes 49,638 53,649 53,668 49,882 48,162 52,526 56,654 58,435 55,704 50,911 46,575 48,146 Coupon securities, by maturity 6 One year or less 864 1,299 1,314 939 1,086 1,290 1,397 1,710 935 1,271 1,208 1,175 7 More than one year, but less than or equal to five years 7,304 7,939 8,879 8,927 11,721 8,571 8,420 7,163 6,995 12,658 10,972 7,646 8 More than five years 9,031 9,286 7,002 12.443 7,651 5,969 6,852 5,534 6,129 7,644 16,190 8,844 9 Mortgage-backed 64,884 68,080 67,487 49,239 78,965 114,415 47,010 37,714 63,208 111,898 79,310 53,823 By type of counterparty With interdealer broker 10 U.S. Treasury 92,504 81,757 81,566 79,015 92,325 88,900 70,397 74,830 85,739 83,155 119,564 112,466 11 Federal agency 8,398 7,497 8,089 7,312 9,255 7,947 9,018 6,690 6,865 10,062 12,497 9,130 12 Mortgage-backed 24,768 22,785 25,460 18,662 28,771 39,793 20,486 16,444 20,792 39,863 25,681 27,664 With other 13 U.S. Treasury 95,682 89,735 88,823 95,865 94,187 96,279 76,270 82,260 106,229 90,006 130,018 115,824 14 Federal agency 58,438 64,677 62,774 64,879 59,364 60,409 64,305 66,152 62,898 62,422 62,448 56,681 15 Mortgage-backed 40,116 45,294 42,027 30,577 50,194 74,622 26,524 21,270 42,416 72,017 53,628 26,159 FUTURES TRANSACTIONS3 By type of deliverable security 16 U.S. Treasury bills 0 0 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coupon securities, by maturity 1177 Five years or less 3,549 2,571 3,467 2,212 2,387 2,930 3,715 5,025 5,032 3,346 3,255 2,185 18 More than five years 13,282 8,991 10,960 10,291 10,456 11,118 10,149 12,228 11,749 9,846 15,512 10,460 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 0 0 0 23 More than five years 245 51 109 29 130 83 118 150 49 138 237 189 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 2266 Five years or less 1,398 1,214 1,149 1,057 991 1,000 1,505 1,201 831 1,569 1,606 1,425 27 More than five years 3,185 2,634 2,821 2.627 3,389 2,656 2,981 2,313 2,923 3,070 4,131 3,117 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 12 34 52 n.a. 0 0 61 38 n.a. n.a. 0 32 More than five years 20 3 2 0 n.a. n.a. 0 n.a. 16 0 n.a. n.a. 33 Mortgage-backed 1,306 898 1,145 1,206 2,527 817 650 581 1,049 1,446 851 832 1. Transactions are market purchases and sales of securities as reported to the Federal Forward transactions are agreements made in the over-the-counter market that specify Reserve Bank of New York by the U.S. government securities dealers on its published list of delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt primary dealers. Monthly averages are based on the number of trading days in the month. securities are included when the time to delivery is more than five business days. Forward Transactions are assumed to be evenly distributed among the trading days of the report week. contracts for mortgage-backed agency securities are included when the time to delivery is Immediate, forward, and futures transactions are reported at principal value, which does not more than thirty business days. include accrued interest; options transactions are reported at the face value of the underlying 3. Futures transactions are standardized agreements arranged on an exchange. All futures securities. transactions are included regardless of time to delivery. Dealers report cumulative transactions for each week ending Wednesday. 4. Options transactions are purchases or sales of put and call options, whether arranged on 2. Outright transactions include immediate and forward transactions. Immediate delivery an organized exchange or in the over-the-counter market, and include options on futures refers to purchases or sales of securities (other than mortgage-backed federal agency securi- contracts on U.S. Treasury and federal agency securities. ties) for which delivery is scheduled in five business days or less and "when-issued" NOTE, "n.a." indicates that data are not published because of insufficient activity. securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A25 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 2000 2000, week ending IItteemm June July Aug. Aug. 2 Aug. 9 Aug. 16 Aug. 23 Aug. 30 Sept. 6 Sept. 13 Sept. 20 Positions" NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 3,514 3,951 2,426 2,938 1,111 17,068 Coupon securities, by maturity 2 Five years or less -38,615 -31,279 -29,287 -33,081 -26,247 -33,122 -29,917 -27,175 -26,519 -27,258 3 More than five years -21,306 -21,335 -18,943 -23,220 -22,566 -18,402 -16,430 -17,471 -16,718 -16,789 4 Inflation-indexed 1,668 2,564 2,711 2,607 2,633 2,784 2,926 2,635 1,982 2,477 Federal agency 5 Discount notes 32.775 35,531 31,912 35,904 34,631 34,206 26,436 31,262 31,726 36,160 Coupon securities, by maturity 6 One year or less 10,016 12,896 13,638 14,075 13,084 13,948 14,028 13,549 12,380 14,792 7 More than one year, but less than or equal to five years 1,925 3,249 5,089 4,441 3,631 5,810 4,975 5,991 6,016 4,327 8 More than five years 899 1,268 1,281 2,378 2,693 1,113 842 197 1,035 34 9 Mortgage-backed 23,442 20,713 18,646 20,035 20,354 21,329 17,537 15,766 13,051 15,083 NET FUTURES POSITIONS4 By type of deliverable security' 10 U.S.'Treasury bills .' Coupon securities, by maturity 11 Five years or less 12,969 14,350 11,726 13,974 12,400 13,275 10,909 10,071 8,981 6,799 12 More than five years -1650 710 -3290 1,3602 540 538 0 -1,9690 -546 0 5440 1204 13 Inflation-indexed Federal agency 0 0 0 0 0 0 0 14 Discount notes Coupon securities, by maturity 0 0 0 0 0 0 0 15 One year or less 16 More than one year, but less than 0 0 0 0 0 0 0 0 0 0 or equal to five years 17 More than five years -740 -2610 -5820 -3090 -713 0 -7090 -5230 -4700 -5280 -638 0 18 Mortgage-backed NET OPTIONS POSITIONS By type of deliverable security 19 U.S." Treasury bills ." Coupon securities, by maturity 20 Five years or less 376 1,143 1,723 1,127 1,688 1,484 1,868 2,052 1,528 3,134 21 More than five years 4000 1,6990 1,3204 2,4980 1,2180 9080 2,0410 7650 1,5202 870 0 22 Inflation-indexed Federal agency 0 0 0 0 0 0 23 Discount notes Coupon securities, by maturity 0 0 0 0 0 0 24 One year or less 25 More than one year, but less than 26 More o r th e a q n u f a i l v e to y f e i a v r e s years 5 1 2 9 2 4 2 3 3 0 3 9 2 1 0 81 8 4 2 0 3 9 3 2 3 3 3 7 6 2 3 2 2 3 7 2730 10 1 8 7 1 2 0 2 5 15 1 0 5 27 Mortgage-backed 929 2,236 5,009 4,008 4,634 5,429 6,177 5,772 3,926 Financing5 Reverse repurchase agreements 28 Overnight and continuing 294,802 282,999 283,661 289,789 282,395 303,063 278,813 267,642 290,528 274,009 289,304 29 Term 850,521 828,512 782,717 884,781 926,331 692,080 732,843 757,389 734,160 773,814 778,606 Securities borrowed 30 Overnight and continuing 292,038 299,289 285,382 294,119 289,814 285,773 287,751 275,653 285,659 283,829 285,836 31 Term 112,854 113,572 114,470 116,718 118,211 112,955 110,811 116,175 108,057 110,917 111,445 Securities received as pledge 32 Overnight and continuing n.a. 2,454 2,367 2,535 n.a. 2,374 2,561 2,109 2,422 2,272 2,057 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 744,475 750,138 748,503 749,157 751,407 786,525 735,461 719,039 758,248 737,204 739,576 35 Term 746,986 736,488 689,557 780,594 834,622 594,522 636,948 671,941 648.849 688,139 720,286 Securities loaned 36 Overnight and continuing 7,698 7,433 7,705 8.214 8,153 8,060 7,237 7,317 7,060 7,290 6,999 37 Term 6,567 5,295 4,295 3,400 3,415 3,734 3,725 6,234 6,594 6,597 6,597 Securities pledged 38 Overnight and continuing 61,667 63,077 60,868 60,855 59,469 60,006 61,715 62,275 60,931 64,044 61,419 39 Term 4,249 4,358 4,203 4,493 4,576 4,086 4,031 4,072 3,952 4,247 4,367 Collateralized loans 40 Total 16,826 20,706 23,695 27,895 25,145 20,826 26,452 21,204 23,375 30,761 18,582 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 • December 2000 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2000 AAggeennccyy 11999966 11999977 11999988 11999999 Mar. Apr. May June July 1 Federal and federally sponsored agencies 925,823 1,022,609 1,296,477 1,616,492 1,644,276 n.a. 193,776 194,673 n.a. 2 Federal agencies 29,380 27.792 26,502 26,376 26,231 26,011 26,052 26,669 26,094 3 Defense Department' 6 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 84 102 205 126 168 173 184 185 205 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 Postal Service6 n.a. 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 26,225 26,005 26,046 26,663 26,088 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 896,443 994,817 1,269,975 1,590,116 1,618,045 164,298 167,726 168,004 n.a. 11 Federal Home Loan Banks 263,404 313,919 382,131 529,005 535,284 541,673 557,506 568,438 565,037 12 Federal Home Loan Mortgage Corporation 156,980 169,200 287,396 360,711 378,006 388,261 392,555 384,286 399,370 13 Federal National Mortgage Association 331,270 369,774 460,291 547,619 557,543 561,700 571,800 578,500 579,448 14 Farm Credit Banks8 60,053 63,517 63,488 68,883 67,154 69,036 70,036 69,541 69,757 15 Student Loan Marketing Association9 44,763 37,717 35,399 41,988 38,089 40,119 43,144 37,263 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 Corporation" 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 39,306 38,700 39,102 38,513 38,143 Lending to federal and federally sponsored agencies + 20 Export-Import Bank3 1,431 552 f 4 f 21 Postal Service6 n.a. n.a. T T 1 1 I 1 F 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 23 Tennessee Valley Authority n.a. n.a. I 1 I I I I 1 24 United States Railway Association6 n.a. n.a. t i I t 1 i Other lending14 25 Farmers Home Administration 18,325 13,530 9,500 6,665 6,350 6,240 6,140 6,040 5,760 26 Rural Electrification Administration 16,702 14,898 14.091 14,085 13,152 13,167 13,221 13,121 13,165 27 Other 21,714 20,110 20,538 21,402 19,804 19,293 19,741 19,352 19,218 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 2000 TTyyppee ooff iissssuuee oorr iissssuueerr,, 11999977 11999988 11999999 oorr uussee Feb. Mar. Apr. May June July Aug. Sept. 1 All issues, new and refunding1 214,694 262,342 215,427 10,905 16,780 14,233 14,136 20,208 12,827 15,284 15,598 By type of issue 2 General obligation 69,934 87,015 73,308 4,473 5,008 4,598 6,051 8,581 4,256 5,194 6,888 3 Revenue 134,989 175,327 142,120 6,433 11,773 9,635 8,086 11,628 8,572 10,090 8,710 By type of issuer 4 State 18,237 23,506 16,376 1,730 1,570 1,371 1,102 2,907 783 1,011 2,022 5 Special district or statutory authority2 134,919 178,421 152,418 7,414 11,098 10,229 9,639 13,520 8,545 10,728 10,152 6 Municipality, county, or township 70,558 60,173 46,634 1,761 4,112 2,633 3,396 3,782 3,500 3,545 3,424 7 Issues for new capital 135,519 160,568 161,065 9,382 13,508 12,029 12,481 16,987 11,297 12,402 13,968 By use of proceeds 8 Education 31,860 36,904 36,563 2,548 3,436 2,484 3,662 4,465 3,185 3,630 3,210 9 Transportation 13,951 19,926 17,394 723 2,723 768 1,778 1,093 1,947 1,979 1,574 10 Utilities and conservation 12,219 21,037 15,098 115 1,086 729 537 1,141 353 1,409 1,408 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 9,099 647 747 762 585 1,150 632 281 387 13 Other purposes 35,095 42,450 47,896 2,804 2,426 3,903 3,557 5,776 2,543 3,564 5,243 1. Par amounts of long-term issues based on date of sale. SOURCE. Securities Data Company beginning January 1990; Investment Dealer's 2. Includes school districts. Digest before then. 1.46 NEW SECURITY ISSUES U.S. Corporations Millions of dollars 2000 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, 11999977 11999988 11999999 oorr iissssuueerr Jan. Feb. Mar. Apr. May June July Aug. 1 All issues' 929,256 1,128,491 1,072,866 55,714 85,679 113,093 61,963 62,939 100,615 65,511 81,964 2 Bonds2 811,376 1,001,736 941,298 44,220 63,391 96,148 40,941 58,233 92,742 57,476 69,875 By type of offering 3 Sold in the United States 708,188 923,771 818,683 30,784 56,727 87,603 36,724 45,986 75,271 40,753 56,132 4 Sold abroad 103,188 77,965 122,615 13,436 6,664 8,545 4,217 12,247 17,471 16,723 13,742 MEMO 5 Private placements, domestic n.a. n.a. n.a. 967 65 0 228 2,694 3,391 1,038 241 By industry group 6 Nonfinancial 222,603 307,935 293,963 14,599 26,598 28,086 8,060 20,832 29,412 15,885 17,947 7 Financial 588.773 693,801 647,335 29,620 36,792 68,062 32,881 37,401 63,331 41,592 51,928 8 Stocks3 173,330 205,605 217,868 11,494 22,288 16,945 21,022 4,706 7,873 8,035 12,265 By type of offering 9 Public 117,880 126,755 131,568 11,494 22,288 16,945 21,022 4,706 7,873 8,035 12,265 10 Private placement4 55,450 78,850 86,300 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 60,386 74,113 110,284 9,247 21,796 15,679 16,763 4,522 6,521 7,773 8,083 12 Financial 57,494 52,642 21,284 2,247 492 1,266 4,259 184 1,352 262 4,182 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data include 144(a) offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data cover only public offerings. exclude secondary offerings, employee stock plans, investment companies other than closed- 4. Data are not available. end, intracorporate transactions, and Yankee bonds. Stock data include ownership securities SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve issued by limited partnerships. System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • December 2000 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2000 IItteemm 11999988 11999999 Feb. Mar. Apr. May June July Aug/ Sept. 1 Sales of own shares2 1,461,430 1,791,894 237,861 269,118 202,248 172,718 181,866 166,815 179,890 160,272 2 Redemptions of own shares 1,217,022 1,621,987 197,423 243,194 176,671 162,984 161,462 151,717 159,027 148,200 3 Net sales3 244,408 169,906 40,438 25,924 25,577 9,735 20,404 15,098 20,864 12,072 4 Assets4 4,173,531 5,233,191 5,375,874 5,606,254 5,391,187 5,232,319 5,458,914 5,392,308 5,745,264 5,551,051 5 Cash5 191,393 219,189 231,480 221,623 254,819 260,426 259,241 258,472 261,967 280,160 6 Other 3,982,138 5,014,002 5,144,394 5,384,630 5,136,368 4,971,892 5,199,673 5,133,836 5,483,298 5,270,891 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 2000 AAccccoouunntt 11999977 11999988 11999999 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2r 1 Profits with inventory valuation and capital consumption adjustment 833.8 815.0 856.0 818.0 803.4 852.0 836.8 842.0 893.2 936.3 963.6 2 Profits before taxes 792.4 758.2 823.0 760.1 742.3 797.6 804.5 819.0 870.7 920.7 942.5 3 Profits-tax liability 237.2 244.6 255.9 249.0 239.4 247.8 250.8 254.2 270.8 286.3 292.0 4 Profits after taxes 555.2 513.6 567.1 511.1 502.9 549.9 553.7 564.8 599.9 634.4 650.4 5 Dividends 335.2 351.5 370.7 351.4 356.1 361.1 367.2 373.9 380.6 387.3 393.0 6 Undistributed profits 220.0 162.1 196.4 159.7 146.9 188.7 186.5 190.9 219.3 247.1 257.4 7 Inventory valuation 8.4 17.0 -9.1 17.7 19.9 11.4 -8.9 -19.7 -19.2 -25.0 -13.6 8 Capital consumption adjustment 32.9 39.9 42.1 40.2 41.2 42.9 41.2 42.7 41.6 40.6 34.7 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1999 2000 AAccccoouunntt 11999977 11999988 11999999 Ql Q2 Q3 Q4 Ql Q2 Q3 ASSETS 1 Accounts receivable, gross2 663.3 711.7 811.5 733.8 756.5 776.3 811.5 848.7 884.4r n.a. 2 Consumer 256.8 261.8 279.8 261.7 269.2 271.0 279.8 285.4 294.1 n.a. 3 Business 318.5 347.5 405.2 362.8 373.7 383.0 405.2 434.6 454. lr n.a. 4 Real estate 87.9 102.3 126.5 109.2 113.5 122.3 126.5 128.8 136.2r n.a. 5 LESS: Reserves for unearned income 52.7 56.3 53.5 52.9 53.4 54.0 53.5 54.0 57.0 n.a. 6 Reserves for losses 13.0 13.8 13.5 13.4 13.4 13.6 13.5 14.0 14.4 n.a. 7 Accounts receivable, net 597.6 641.6 744.6 667.6 689.7 708.6 744.6 780.7 813.1r n.a. 8 All other 312.4 337.9 406.3 363.3 373.2 368.5 406.3 412.7 419.4 n.a. 9 Total assets 910.0 979.5 1,150.9 1,030.8 1,062.9 1,077.2 1,150.9 1,193.4 L,232.4R n.a. LIABILITIES AND CAPITAL 10 Bank loans 24.1 26.3 35.1 24.8 25.1 27.0 35.1 28.5 33.3 n.a. 11 Commercial paper 201.5 231.5 227.9 222.9 231.0 205.3 227.9 230.2 234.2 n.a. Debt 12 Owed to parent 64.7 61.8 123.8 64.6 65.4 84.5 123.8 145.1 136.8 n.a. 13 Not elsewhere classified 328.8 339.7 397.0 366.7 383.1 396.2 397.0 412.0 445.1 n.a. 14 All other liabilities 189.6 203.2 222.7 220.3 226.1 216.0 222.7 247.6 249.6 n.a. 15 Capital, surplus, and undivided profits 101.3 117.0 144.5 131.5 132.2 148.2 144.5 130.1 135.3 n.a. 16 Total liabilities and capital 910.0 979.5 1,150.9 1,030.8 1,062.9 1,077.2 1,150.9 1,193.4 1,234.4 n.a. 1. Includes finance company subsidiaries of bank holding companies but not of retailers 2. Before deduction for unearned income and losses. Excludes pools of securitized assets, 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 2000 TTyyppee ooff ccrreeddiitt 11999977 11999988 11999999 Feb. Mar. Apr. May June July Aug. Seasonally adjusted 1 Total 810.5 875.8 993.9 1,032.2 1,054.1 1,073.3 1,088.7 1,108.5 1,089.1 1,094.1 2 Consumer 327.9 352.8 385.3 395.5 396.7 398.0 400.7 401.4 405.9 411.1 3 Real estate 121.1 131.4 154.7 162.3 167.9 173.1 178.4 185.7 167.5 169.0 4 Business . 361.5 391.6 453.9 474.4 489.4 502.2 509.5 521.4 515.8 514.1 Not seasonally adjusted 5 Total 818.1 884.0 1,003.2 1,031.9 1,057.0 1,073.6 1,088.5 1,114.0 1,082.3 1,087.9 6 Consumer 330.9 356.1 388.8 392.3 392.8 394.4 399.4 403.9 408.3 412.3 7 Motor vehicles loans 87.0 103.1 114.7 121.3 121.1 120.9 124.1 126.5 129.4 130.7 8 Motor vehicle leases 96.8 93.3 98.3 100.7 101.7 102.8 104.1 103.9 104.4 105.4 9 Revolving2 38.6 32.3 33.8 32.9 31.5 31.9 31.6 33.1 33.6 33.6 10 Other3 34.4 33.1 33.1 32.7 31.1 31.2 31.9 30.7 31.5 32.3 Securitized assets4 11 Motor vehicle loans 44.3 54.8 71.1 67.8 71.2 72.1 71.9 74.1 74.5 76.2 12 Motor vehicle leases 10.8 12.7 9.7 9.2 8.8 8.5 8.2 7.9 7.6 7.4 13 Revolving .0 8.7 10.5 10.4 10.3 10.1 11.1 11.1 10.9 10.7 14 Other 19.0 18.1 17.7 17.3 17.1 16.8 16.5 16.6 16.4 16.2 15 Real estate 121.1 131.4 154.7 162.3 167.9 173.1 178.4 185.7 167.5 169.0 16 One- to four-family 59.0 75.7 88.3 91.7 90.4 93.6 97.3 97.2 100.5 101.7 17 Other 28.9 26.6 38.3 38.4 38.4 39.0 39.4 39.6 39.7 40.2 Securitized real estate assets4 18 One- to four-family 33.0 29.0 28.0 32.0 38.9 40.2 41.5 48.6 27.1 26.8 19 Other .2 .1 .2 .2 .2 .2 .2 .2 0.2 0.2 20 Business 366.1 396.5 459.6 477.4 496.3 506.1 510.7 524.5 506.4 506.7 21 Motor vehicles 63.5 79.6 87.8 89.6 90.2 93.6 94.8 94.5 89.4 89.6 22 Retail loans 25.6 28.1 33.2 33.7 32.3 32.7 33.3 33.8 34.1 34.3 23 Wholesale loans5 27.7 32.8 34.7 35.8 37.9 38.9 39.5 38.4 32.9 32.6 24 Leases 10.2 18.7 19.9 20.1 19.9 22.0 22.0 22.3 22.3 22.7 25 Equipment 203.9 198.0 221.9 225.1 238.0 243.1 247.3 250.9 248.6 250.0 26 Loans 51.5 50.4 52.2 52.8 54.9 55.6 55.9 56.7 54.8 54.3 27 Leases 152.3 147.6 169.7 172.3 183.1 187.5 191.5 194.2 193.9 195.8 28 Other business receivables6 51.1 69.9 95.5 101.4 106.4 107.4 106.6 109.8 109.4 108.3 Securitized assets4 29 Motor vehicles 33.0 29.2 31.5 31.0 31.5 32.3 32.0 31.7 29.8 29.6 30 Retail loans 2.4 2.6 2.9 2.8 3.2 3.1 3.0 2.9 2.8 2.7 31 Wholesale loans 30.5 24.7 26.4 26.1 25.9 26.8 26.7 26.4 24.6 24.5 32 Leases .0 1.9 2.1 2.1 2.4 2.4 2.4 2.4 2.4 2.4 33 Equipment 10.7 13.0 14.6 22.5 22.0 21.7 21.5 31.1 22.5 22.4 34 Loans 4.2 6.6 7.9 15.9 15.4 15.2 15.0 15.8 16.0 15.9 35 Leases 6.5 6.4 6.7 6.6 6.5 6.5 6.5 15.2 6.5 6.5 36 Other business receivables6 4.0 6.8 8.4 7.7 8.3 8.0 8.4 6.6 6.8 6.8 NOTE. This table has been revised to incorporate several changes resulting from the before deductions for unearned income and losses. Components may not sum to totals benchmarking of finance company receivables to the June 1996 Survey of Finance Compa- because of rounding. nies. In that benchmark survey, and in the monthly surveys that have followed, more detailed 2. Excludes revolving credit reported as held by depository institutions that are subsidiarbreakdowns have been obtained for some components. In addition, previously unavailable ies of finance companies. data on securitized real estate loans are now included in this table. The new information has 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of resulted in some reclassification of receivables among the three major categories (consumer, consumer goods such as appliances, apparel, boats, and recreation vehicles. real estate, and business) and in discontinuities in some component series between May and 4. Outstanding balances of pools upon which securities have been issued; these balances June 1996. are no longer carried on the balance sheets of the loan originator. Includes finance company subsidiaries of bank holding companies but not of retailers and 5. Credit arising from transactions between manufacturers and dealers, that is, floor plan banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For financing. ordering address, see inside front cover. 6. Includes loans on commercial accounts receivable, factored commercial accounts, and 1. Owned receivables are those carried on the balance sheet of the institution. Managed receivable dealer capital; small loans used primarily for business or farm purposes; and receivables are outstanding balances of pools upon which securities have been issued; these wholesale and lease paper for mobile homes, campers, and travel trailers. balances are no longer carried on the balance sheets of the loan originator. Data are shown Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic NonfinancialS tatistics • December 2000 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2000 IItteemm 11999977 11999988 11999999 Mar. Apr. May June July Aug. Sept. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 180.1 195.2 210.7 226.0 224.2 232.2 238.6 235.8 237.0 241.9 2 Amount of loan (thousands of dollars) 140.3 151.1 161.7 170.7 170.2 176.3 178.3 178.3 179.7 182.5 3 Loan-to-price ratio (percent) 80.4 80.0 78.7 77.7 77.9 78.0 76.9 77.7 77.7 77.1 4 Maturity (years) 28.2 28.4 28.8 29.0 29.1 29.2 29.2 29.3 29.3 29.2 Fees and charges (percent of loan amount)2 1.02 .89 .77 .68 .68 .71 .69 .66 .68 .70 Yield (percent per year) 6 Contract rate1 7.57 6.95 6.94 7.49 7.52 7.44 7.40 7.41 7.44 7.41 7 Effective rate1,3 7.73 7.08 7.06 7.60 7.63 7.55 7.50 7.51 7.54 7.52 8 Contract rate (HUD series)4 7.76 7.00 7.45 8.19 8.29 8.26 n.a. n.a. n.a. n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 7.89 7.04 7.74 8.35 8.33 8.58 n.a. n.a. n.a. n.a. 10 GNMA securities6 7.26 6.43 7.03 7.79 7.64 8.06 7.69 7.59 7.44 7.43 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 316,678 414.515 523,941 538,751 539,181 545,803 552,166 561,045 568,187 574,087 12 FHAA'A insured 31,925 33,770 55,318 58,451 58,899 59,140 59,703 60,397 60,150 59,961 13 Conventional 284,753 380,745 468,623 480,300 480,282 486,663 492,463 500,648 508,037 514,126 14 Mortgage transactions purchased (during period) 70,465 188,448 195,210 8,801 6,257 12,872 12,842 15,128 13,352 11,501 Mortgage commitments (during period) 15 Issued7 69,965 193,795 187,948 10,051 12,524 10,450 11,825 16,660 14,253 16,143 16 To sell8 1,298 1,880 5,900 1,954 1,340 1,594 1,254 436 236 693 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 17 Total 164,421 255,010 324,443 336,338 339,207 347,370 350,836 354,020 357,002 361,624 18 FHAA'A insured 177 785 1.836 2,521 1,987 3,116 2,892 2,858 2,903r 3,517 19 Conventional 164,244 254,225 322,607 333,817 337,220 344,254 347,944 351,162 354,099r 358,107 Mortgage transactions (during period) 20 Purchases 117,401 267.402 239,793 9,323 8,393 15,741 12,271 10,912 16,056 21.748 21 Sales 114,258 250,565 233,031 8,569 8,077 15,261 11,806 10,539 15,558 21,189 22 Mortgage commitments contracted (during period)9 120,089 281,899 228,432 10,122 8,750 13,807 13,596 10,803 17,468 19,481 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 1999 2000 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999966 11999977 11999988 Q2 Q3 Q4 Ql Q2 1 All holders 4,865,412 5,197,838 5,722,645 6,015,365 6,224,771 6,375,447 6,489,770 6,659,097 By type of property 2 One- to four-family residences 3,716,055 3,967,842 4,353,048 4,559,021 4,690,310 4,786,609 4,862,747 4,982,853 3 Multifamily residences 288,579 301,838 329,813 348,658 359,323 373,189 381,699 392,919 4 Nonfarm, nonresidential 773,643 837,859 943,278 1,008,048 1,073,743 1,112,686 1,141,577 1,175,641 5 Farm 87,134 90,299 96,506 99,638 101,395 102,962 103,748 107,685 By type of holder 6 Major financial institutions 1,981,886 2,083,881 2,194,813 2,242,431 2,321,356 2,394,923 2,456,786 2,551,751 7 Commercial banks" 1,145,389 1,245,315 1,337,217 1,361,365 1,418,819 1,495,502 1,546,816 1,614,307 8 One- to four-family 677,603 745,510 797,492 790,372 827,291 879,552 904,581 948,496 9 Multifamily 45,451 49,670 54,116 60,529 63,964 67,591 72,431 75,713 in Nonfarm, nonresidential 397,452 423,148 456,574 479,930 496,246 516,520 537.131 556,382 11 Farm 24,883 26,986 29,035 30,536 31,320 31,839 32,673 33,717 12 Savings institutions' 628,335 631,726 643,957 656,518 676,346 668,634 680,745 701,992 13 One- to four-family 513,712 520,682 533,918 544,962 560,622 549,072 560,046 578,641 14 Multifamily 61,570 59.540 56,821 55,016 57,282 59,138 57,759 59,142 15 Nonfarm, nonresidential 52,723 51,150 52,801 56,096 57,983 59,948 62,447 63,691 16 Farm 331 354 417 443 459 475 493 518 17 Life insurance companies 208,162 206,840 213,640 224,548 226,190 230,787 229,225 235,452 18 One- to four-family 6,977 7,187 6,590 7,292 7,432 5,934 5,874 4,826 19 Multifamily 30,750 30,402 31,522 31,800 31,998 32,818 32,602 33,669 20 Nonfarm, nonresidential 160,315 158,779 164,004 173,495 174,571 179,048 177,870 182,514 21 Farm 10,120 10,472 11,524 11,961 12,189 12,987 12,879 14,444 22 Federal and related agencies 295,192 286,194 293,613 289,519 322,572 322,352 323,145 334,715 23 Government National Mortgage Association 2 8 7 8 8 7 7 7 24 One- to four-family 2 8 7 8 8 7 7 7 25 Multifamily 0 0 0 0 0 0 0 0 26 Farmers Home Administration4 41,596 41,195 40,851 40,766 73,705 73,871 72,899 72,896 27 One- to four-family 17.303 17,253 16,895 16,653 16,583 16,506 16,456 16,435 28 Multifamily 11,685 11,720 11,739 11,735 11,745 11,741 11,732 11,729 29 Nonfarm, nonresidential 6,841 7,370 7,705 7,943 41,068 41,355 40,509 40,554 30 Farm 5,768 4,852 4,513 4,435 4,308 4,268 4,202 4,179 31 Federal Housing and Veterans' Administrations 6,244 3,811 3,674 3,490 3,889 3,712 3,794 3,845 32 One- to four-family 3,524 1,767 1,849 1,623 2,013 1,851 1,847 1,832 33 Multifamily 2,719 2,044 1,825 1,867 1,876 1,86! 1,947 2,013 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 2,431 724 361 189 163 152 98 72 40 One- to four-family 365 109 54 28 24 23 15 11 41 Multifamily 413 123 61 32 28 26 17 12 42 Nonfarm, nonresidential 1,653 492 245 129 111 103 67 49 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 168,813 161,308 157,675 155,637 153,172 151,500 150,312 155,364 45 One- to four-family 155,008 149,831 147,594 145,033 142,982 141,195 139,986 144,335 46 Multifamily 13,805 11,477 10,081 10,604 10,190 10,305 10,326 11,029 47 Federal Land Banks 29,602 30,657 32,983 33,666 34,217 34,187 34,142 34,820 48 One- to four-family 1,742 1,804 1,941 1,981 2,013 2,012 2,009 2,039 49 Farm 0 0 0 0 0 0 0 0 50 Federal Home Loan Mortgage Corporation 46,504 48,454 57,085 54,282 55,695 56,676 57,009 56,972 51 One- to four-family 41,758 42,629 49,106 43,574 44,010 44,321 43,384 42,892 52 Multifamily 4,746 5,825 7,979 10,708 11,685 12,355 13,625 14,080 53 Mortgage pools or trusts5 4,865,412 5,197,838 5,722,645 6,015,365 6,224,771 6,375,447 6,489,770 6,659,097 54 Government National Mortgage Association 506,246 536,879 537,446 553,196 569,038 582,263 589,203 590,903 55 One- to four-family 494,064 523,225 522,498 537,287 552,670 565,189 571,517 572,856 56 Multifamily 12,182 13,654 14,948 15,909 16,368 17,074 17,686 18,047 57 Federal Home Loan Mortgage Corporation 554,260 579,385 646,459 718,085 738,581 749,081 757,106 768,641 58 One- to four-family 551,513 576,846 643,465 714,844 735,088 744,619 752,607 763,890 59 Multifamily 2,747 2,539 2,994 3,241 3,493 4,462 4,499 4,751 60 Federal National Mortgage Association 650,779 709,582 834,517 911,435 938,484 960,883 975,815 995,815 61 One- to four-family 633,209 687,981 804,204 877,863 903,531 924,941 938,898 957,584 62 Multifamily 17,570 21,601 30,313 33,572 34,953 35,942 36,917 38,231 63 Farmers Home Administration4 3 2 1 1 0 0 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 0 0 0 0 68 Private mortgage conduits 329,559 413,502 571,340 627,402 645,084 662,565 678,156 686,037 69 One- to four-family6 258,800 316,400 412,700 447,938 455,276 462,600 471,390 471,000 70 Multifamily 16,369 21,591 34,323 39,435 40,936 42,628 43,835 44,931 71 Nonfarm, nonresidential 54,390 75,511 124,317 140,029 148,873 157,337 162,930 170,106 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 547,486 588,413 644,456 673,297 689,656 703,379 709,560 731,235 74 One- to four-family 360,476 376,574 413,770 428,202 439,219 446,771 449,496 467,572 75 Multifamily 68,572 71,651 73,081 74,090 74,629 77,016 78,074 79,272 76 Nonfarm, nonresidential 100,269 121,409 137,632 150,428 154,892 158,375 160,622 162,345 77 Farm 18,169 18,779 19,974 20,577 20,916 21,217 21,368 22,046 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic Nonfinancial Statistics • December 2000 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2000 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999977 11999988 11999999 Mar. Apr. May June July Aug. Seasonally adjusted 1 Total 1,234,461 1,301,023 1,393,657 l,429,166r l,435,583r l,447,368r l,462,821r 1,469,515 1,481,833 2 Revolving 531,163 560,504 595.610 615,452r 622,223r 628,764r 634,652 638,172 644,856 3 Nonrevolving2 703,297 740,519 798,047 813,715r 813,360r 818,604r 828,170r 831,344 836,976 Not seasonally adjusted 4 Total 1,264,103 1,331,742 1,426,151 l,415,965r l,423,396r l,434,251r l,454,035r 1,462,042 1,483,787 By major holder 5 Commercial banks 512,563 508,932 499,758 497,120 499,696 502,030 506,245 505,314 518,787 6 Finance companies 160,022 168,491 181.573 183,705 184,050 187,610 190,268 194,438 196,555 / Credit unions 152,362 155,406 167,921 169,225r !71,038r 173,471r 176,030r 178,034 180,679 8 Savings institutions 47,172 51,611 61,527 58,968 59,628 60,289 60,951 61,188 61,426 9 Nonfinancial business 78,927 74,877 80.311 72,907' 72,973r 73,523r 73,500r 71,951 73,024 10 Pools of securitized assets3 313,057 372,425 435.061 434,040 436,011 437,328 447,041 451,117 453,316 By major type of credit4 11 Revolving 555,858 586,528 623,245 609.028r 615,354r 621,127r 627,909r 630,402 641,035 12 Commercial banks 219,826 210,346 189.352 184,901 188,691 192,352 194,793 194,591 204,406 13 Finance companies 38,608 32,309 33.814 31,456 31,928 31,628 33,063 33,565 33,558 14 Credit unions 19,552 19,930 20,641 19,706r 19,851r 19,930r 20,172r 20,476 20,796 15 Savings institutions 11,441 12,450 15.838 14,975 15,135 15,295 15,455 15,419 15,383 16 Nonfinancial business 44,966 39,166 42,783 37,430 37,418 37,766 37,098r 36,078 36,669 1/ Pools of securitized assets3 221,465 272,327 320,817 320,560 322,331 324,156 327,328 330,273 330,223 18 Nonrevolving 708,245 745,214 802,906 806,937r 808,042r 813,124r 826,126r 831,640 842,752 19 Commercial banks 292,737 298,586 310,406 312,219 311,005 309,678 311,452 310,723 314,381 20 Finance companies 121,414 136,182 147.759 152,249 152,122 155,982 157,205 160,873 162,997 21 Credit unions 132,810 135,476 147,280 149,519r 151,187' 153,541r 155,858r 157,558 159,883 22 Savings institutions 35,731 39,161 45.689 43,993 44,493 44,994 45,496 45,769 46,043 23 Nonfinancial business 33,961 35,711 37.528 35,477r 35,555r 35,757r 36,402r 35,873 36,355 24 Pools of securitized assets3 91,592 100,098 114.244 113,480 113,680 113,172 119,713 120,844 123,093 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, excluding loans secured by real estate. Data in this table also appear are no longer carried on the balance sheets of the loan originator. in the Board's G.19 (421) monthly statistical release. For ordering address, see inside front 4. Totals include estimates for certain holders for which only consumer credit totals are cover. available. 2. Comprises motor vehicle loans, mobile home loans, and all other loans that are not 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 2000 IItteemm 11999977 11999988 11999999 Feb. Mar. Apr. May June July Aug. INTEREST RATES Commercial banks' 1 48-month new car 9.02 8.72 8.44 8.88 n.a. n.a. 9.21 n.a. n.a. 9.62 2 24-month personal 13.90 13.74 13.39 13.76 n.a. n.a. 13.88 n.a. n.a. 13.85 Credit card plan 3 All accounts 15.77 15.71 15.21 15.47 n.a. n.a. 15.39 n.a. n.a. 15.98 4 Accounts assessed interest 15.57 15.59 14.81 14.32 n.a. n.a. 14.74 n.a. n.a. 15.35 Auto finance companies 5 New car 7.12 6.30 6.66 7.34 6.76 6.38 6.51 6.40r 6.55' 7.46 6 Used car 13.27 12.64 12.60 13.27 13.45 13.52 13.47 13.58 13.64 13.70 OTHER TERMS3 Maturity (months) 1 New car 54.1 52.1 52.7 52.7 53.1 53.8 53.5 55.6r 55.6' 55.7 8 Used car 51.0 53.5 55.9 57.1 57.1 57.1 57.1 57.3 57.2 57.2 Loan-to-value ratio 9 New car 92 92 92 92 93 93 93 92r 92 92 10 Used car 99 99 99 98 99 98 99 99 100 100 Amount financed (dollars) 11 New car 18,077 19,083 19,880 20,206 20,395 20,542 20,621 20,349r 20,406' 20,664 12 Used car 12,281 12,691 13,642 13,697 13,666 13,871 14,132 14,245' 14,269' 14,166 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A37 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1998 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999955 11999966 11999977 Q4 QI Q2 Q3 Q4 QL Q2 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors . . . 559.3 711.3 731.4 804.3 1,042.9 1,065.8 1,278.3 939.4 1,170.7 1,095.5 947.3 994.4 By sector and instrument 2 Federal government 155.9 144.4 145.0 23.1 -52.6 -65.2 -83.4 -98.5 -71.4 -31.5 -215.5 -414.0 3 Treasury securities 155.7 142.9 146.6 23.2 -54.6 -77.4 -81.9 -99.1 -71.5 -31.5 -213.5 -415.8 4 Budget agency securities and mortgages .2 1.5 -1.6 -.1 2.0 12.2 -1.5 .6 .0 .0 -2.1 1.8 5 Nonfederal 403.4 566.9 586.3 781.2 1,095.5 1,131.0 1,361.8 1.037.9 1,242.2 1,126.9 1,162.9 1,408.4 By instrument 6 Commercial paper 21.4 18.1 -.9 13.7 24.4 -43.0 58.3 -2.6 49.8 44.0 36.2 ''111166..99 7 Municipal securities and loans -35.9 -48.2 2.6 71.4 96.8 92.8 92.1 56.8 71.3 52.5 8.9 34.0 8 Corporate bonds 23.3 91.1 116.3 150.5 218.7 193.2 274.0 287.6 202.8 155.2 186.2 153.8 9 Bank loans n.e.c 75.2 103.7 70.5 106.5 108.2 107.5 86.0 24.0 112.3 108.6 131.9 159.7 10 Other loans and advances 34.0 67.2 33.5 69.1 74.3 101.4 148.0 2.3 79.2 55.4 162.1 144.6 11 Mortgages 160.5 196.0 275.7 317.5 505.5 609.2 572.8 608.4 650.7 601.7 494.5 667.6 1? Home 183.2 180.7 242.5 252.3 386.9 444.1 411.8 440.8 480.0 398.9 346.2 500.6 N Multifamily residential -3.6 5.8 9.4 8.3 20.3 26.9 35.5 33.1 44.2 47.9 31.5 36.6 14 Commercial -21.3 7.9 21.3 53.7 92.0 129.6 122.0 125.6 119.4 152.4 109.9 118.5 IS Farm 2.2 1.6 2.6 3.2 6.2 8.6 3.6 9.0 7.0 2.5 6.9 11.9 16 Consumer credit 124.9 138.9 88.8 52.5 67.6 69.9 130.5 61.4 76.2 109.5 143.1 131.8 By borrowing sector 17 Household 313.4 348.8 347.6 333.4 480.5 526.7 554.6 520.7 588.5 509.6 531.4 635.4 1ft Nonfinancial business 136.3 269.5 245.5 391.8 534.7 527.4 727.4 473.5 601.3 583.7 627.7 747.9 19 Corporate 128.7 236.1 157.0 270.6 417.2 404.9 626.3 372.0 467.2 455.4 503.4 615.5 20 Nonfarm noncorporate 3.3 30.6 83.8 115.0 109.8 115.3 96.2 99.8 125.5 122.7 109.5 120.8 ?1 Farm 4.4 2.9 4.8 6.2 7.7 7.2 4.9 1.7 8.5 5.6 14.7 11.6 22 State and local government -46.2 -51.5 -6.8 56.1 80.3 76.9 79.8 43.6 52.5 33.6 3.8 25.0 23 Foreign net borrowing in United States -13.9 78.5 88.4 71.8 43.3 -25.6 30.7 -24.5 77.3 17.6 116.9 -10.5 74 Commercial paper -26.1 13.5 11.3 3.7 7.8 -4.7 18.0 -27.5 41.1 33.6 56.7 10.9 75 Bonds 12.2 57.1 67.0 61.4 34.8 -21.5 15.4 .2 44.0 -2.7 45.7 -29.6 7,6 Bank loans n.e.c 1.4 8.5 9.1 8.5 6.7 9.8 .9 5.6 -6.6 2.3 15.4 6.1 27 Other loans and advances -1.4 -.5 1.0 — 1.8 -6.0 -9.1 -3.5 -2.8 -1.1 -15.5 -.9 2.0 28 Total domestic plus foreign 545.3 789.8 819.8 876.1 1,086.2 1,040.2 1,309.1 914.9 1,248.1 1,113.1 1,064.2 983.8 Financial sectors 29 Total net borrowing by financial sectors 468.4 453.9 545.8 653.7 1,073.9 1,295.7 1,228.8 995.3 1,064.2 1,063.4 618.3 842.9 By instrument 30 Federal government-related 287.5 204.1 231.5 212.8 470.9 677.6 589.5 576.6 651.6 550.3 249.2 356.4 31 Government-sponsored enterprise securities 176.9 105.9 90.4 98.4 278.3 510.5 193.0 304.7 407.1 367.9 104.9 234.8 32 Mortgage pool securities 115.4 98.2 141.1 114.5 192.6 167.1 396.6 271.9 244.5 182.4 144.3 121.6 33 Loans from U.S. government -4.8 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 180.9 249.8 314.4 440.9 603.0 618.1 639.2 418.8 412.6 513.0 369.2 486.5 35 Open market paper 40.5 42.7 92.2 166.7 161.0 130.9 78.7 57.3 89.9 479.0 130.9 77.4 36 Corporate bonds 121.8 195.9 173.8 210.5 296.9 292.6 473.8 254.8 179.5 -21.0 166.5 268.1 37 Bank loans n.e.c -13.7 2.5 12.6 13.2 30.1 9.9 -6.7 11.0 -5.9 -55.6 .3 8.8 38 Other loans and advances 22.6 3.4 27.9 35.6 90.2 154.2 73.3 107.9 139.8 107.5 64.4 122.3 39 Mortgages 9.8 5.3 7.9 14.9 24.8 30.6 20.1 -12.3 9.4 3.2 7.0 10.0 By borrowing sector 40 Commercial banking 20.1 22.5 13.0 46.1 72.9 65.3 46.1 61.5 107.0 54.1 72.4 111155..11 41 Savings institutions 12.8 2.6 25.5 19.7 52.2 88.6 75.2 59.2 51.9 5.8 40.6 . 56.3 42 Credit unions .2 -.1 .1 .1 .6 .4 1.5 1.4 2.8 3.3 -2.9 .9 43 Life insurance companies .3 -.1 1.1 .2 .7 1.8 3.3 3.0 1.1 -4.4 -.7 -1.1 44 Government-sponsored enterprises 172.1 105.9 90.4 98.4 278.3 510.5 193.0 304.7 407.1 367.9 104.9 234.8 45 Federally related mortgage pools 115.4 98.2 141.1 114.5 192.6 167.1 396.6 271.9 244.5 182.4 144.3 121.6 46 Issuers of asset-backed securities (ABSs) 76.5 142.4 150.8 202.2 321.4 340.1 289.7 301.5 220.5 124.2 166.0 193.2 47 Finance companies 48.6 50.2 45.9 48.7 43.0 6.8 77.0 90.5 -17.2 99.2 52.3 157.6 48 Mortgage companies -11.5 -2.2 4.1 -4.6 1.6 3.0 -4.6 5.1 -6.1 6.2 -3.0 2.7 49 Real estate investment trusts (REITs) 10.2 4.5 11.9 39.6 62.7 44.0 25.6 -19.7 7.9 11.3 11.5 9.8 50 Brokers and dealers .5 -5.0 -2.0 8.1 7.2 12.4 -31.1 -17.4 16.9 -37.3 44.4 -.7 51 Funding corporations 23.1 34.9 64.1 80.7 40.7 55.7 156.5 -66.2 27.9 250.6 -11.4 -47.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • December 2000 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 1998 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999955 11999966 11999977 11999988 Q4 Ql Q2 Q3 Q4 Ql Q2 All sectors 52 Total net borrowing, all sectors 1,013.8 1,243.8 1,365.6 1,529.8 2,160.1 2,335.9 2,537.8 1,910.2 2,312.3 2,176.5 1,682.6 1,826.7 53 Open market paper 35.7 74.3 102.6 184.1 193.1 83.2 155.1 27.2 180.7 556.6 223.7 205.1 54 U.S, government securities 448.1 348.5 376.5 235.9 418.3 612.4 506.1 478.1 580.1 518.9 33.6 -57.6 55 Municipal securities -35.9 -48.2 2.6 71.4 96.8 92.8 92.1 56.8 71.3 52.5 8.9 34.0 56 Corporate and foreign bonds 157.3 344.1 357.0 422.4 550.4 464.3 763.1 542.6 426.3 131.5 398.4 392.3 57 Bank loans n.e.c 62.9 114.7 92.1 128.2 145.0 127.1 80.1 40.6 99.8 55.2 147.7 174.6 58 Other loans and advances 50.4 70.1 62.5 102.8 158.5 246.4 217.8 107.5 217.9 147.3 225.7 268.9 59 Mortgages 170.3 201.3 283.6 332.4 530.3 639.8 593.0 596.2 660.0 604.9 501.5 677.6 60 Consumer credit 124.9 138.9 88.8 52.5 67.6 69.9 130.5 61.4 76.2 109.5 143.1 131.8 Funds raised through mutual funds and corporate equities 61 Total net issues 113.4 131.5 231.9 181.2 100.0 9.9 154.2 178.5 120.4 172.8 414.3 125.4 62 Corporate equities 12.8 -16.0 -5.7 -83.9 -174.6 -215.6 -86.4 -33.9 -7.0 .0 105.2 -123.0 63 Nonfinancial corporations -44.9 -58.3 -69.5 -114.4 -267.0 -491.3 -52.1 -338.4 -128.4 -55.0 62.8 -248.0 64 Foreign shares purchased by U.S. residents 48.1 50.4 82.8 57.6 101.2 330.2 -19.8 284.4 121.7 71.3 63.3 135.0 65 Financial corporations 9.6 -8.1 -19.0 -27.1 -8.9 -54.5 -14.5 20.2 -.3 -16.3 -20.8 -10.0 66 Mutual fund shares 100.6 147.4 237.6 265.1 274.6 225.5 240.6 212.4 127.5 172.8 309.0 248.4 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A39 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1998 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999944 11999955 11999966 11999977 11999988 Q4 Ql Q2 Q3 Q4 Ql Q2 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,013.8 1,243.8 1,365.6 1,529.8 2,160.1 2,335.9 2,537.8 1,910.2 2,312.3 2,176.5 1,682.6 1,826.7 ? Domestic nonfederal nonfinancial sectors 210.0 -61.3 80.5 17.1 131.8 -188.6 507.8 380.4 268.7 29.3 -104.3 263.4 Household 246.8 34.1 128.7 31.8 -16.7 -375.6 305.5 280.3 265.1 38.5 -172.9 180.7 4 Nonfinancial corporate business 17.7 -8.8 -10.2 -12.7 14.0 44.5 67.0 17.8 45.2 -13.0 63.8 38.5 5 Nonfarm noncorporate business .6 4.7 -4.3 -2.1 .1 .1 2.8 1.2 .8 1.4 2.6 2.8 6 State and local governments -55.0 -91.4 -33.7 .1 134.5 142.4 132.5 81.0 -42.4 2.4 2.3 41.4 7 Federal government -27.4 -.2 -7.4 5.1 13.5 11.8 17.0 6.7 11.2 -11.8 6.2 8.2 8 Rest of the world 132.3 273.9 414.4 311.3 254.2 388.6 256.9 61.6 385.3 138.7 334.9 185.6 9 Financial sectors 698.8 1,031.4 878.1 1,196.3 1,760.6 2,124.1 1,756.2 1,461.5 1,647.0 2,020.3 1,445.7 1,369.5 10 Monetary authority 31.5 12.7 12.3 38.3 21.1 23.5 64.5 59.8 20.6 -42.2 103.4 -3.9 11 Commercial banking 163.4 265.9 187.5 324.3 305.2 493.3 68.1 166.6 449.4 548.7 377.1 484.7 1? U.S.-chartered banks 148.1 186.5 119.6 274.9 312.0 507.6 131.5 259.4 421.9 457.7 409.2 505.8 N Foreign banking offices in United States 11.2 75.4 63.3 40.2 -11.9 -17.6 -53.1 -102.5 33.2 42.0 4.8 -29.9 14 Bank holding companies .9 -.3 3.9 5.4 -.9 -7.4 -6.0 .4 -12.4 42.6 -42.2 3.5 15 Banks in U.S.-affiliated areas 3.3 4.2 .7 3.7 6.0 10.7 -4.4 9.2 6.6 6.3 5.4 5.4 16 Savings institutions 6.7 -7.6 19.9 -4.7 36.3 111.0 111.0 85.3 58.1 20.2 50.2 72.9 17 Credit unions 28.1 16.2 25.5 16.8 19.0 20.4 30.9 32.7 27.5 18.8 39.9 40.7 18 Bank personal trusts and estates 7.1 -8.3 -7.7 -25.0 -12.8 -13.5 -7.6 -8.4 -8.6 -9.1 -9.5 -9.9 19 Life insurance companies 72.0 100.0 69.6 104.8 76.9 79.0 78.4 68.2 36.8 30.7 57.2 54.1 20 Other insurance companies 24.9 21.5 22.5 25.2 20.4 67.6 -19.7 26.7 -14.4 -9.4 -14.0 -13.6 21 Private pension funds 45.0 20.2 -5.8 19.5 57.8 108.3 57.5 86.6 32.0 54.0 46.1 .2 ?? State and local government retirement funds 30.9 33.6 37.3 63.8 71.5 51.4 76.0 25.1 40.0 58.2 55.3 17.1 73 Money market mutual funds 30.0 86.5 88.8 87.5 244.0 345.7 215.7 -67.0 224.8 354.5 208.8 -156.2 24 Mutual funds -7.1 52.5 48.9 80.9 124.8 106.3 97.4 117.2 -13.0 -12.7 -80.8 55.0 75 Closed-end funds -3.7 10.5 4.7 -2.9 4.5 4.5 3.1 3.1 3.1 3.1 3.1 3.1 26 Government-sponsored enterprises 117.8 86.7 84.2 94.3 261.7 415.2 189.1 251.5 280.7 221.0 138.2 215.1 27 Federally related mortgage pools 115.4 98.2 141.1 114.5 192.6 167.1 396.6 271.9 244.5 182.4 144.3 121.6 78 Asset-backed securities issuers (ABSs) 69.4 120.6 120.5 163.8 281.7 317.2 272.1 284.8 212.0 94.4 145.3 158.7 29 Finance companies 48.3 49.9 18.4 21.9 51.9 75.8 85.3 88.1 91.7 114.4 132.9 145.5 30 Mortgage companies -24.0 -3.4 8.2 -9.1 3.2 6.0 -9.1 10.2 -12.1 12.3 -6.0 5.5 31 Real estate investment trusts (REITs) -.7 1.4 4.4 20.2 -5.1 -40.8 1.7 -2.2 -2.7 -7.0 -16.3 -2.5 3? Brokers and dealers -44.2 90.1 -15.7 14.9 6.8 -210.3 34.6 -119.7 -22.2 -15.9 106.9 33.8 33 Funding corporations -12.1 -15.7 13.6 47.4 -1.0 -3.5 10.5 81.1 -1.1 403.8 -36.3 147.5 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 1,013.8 1,243.8 1,365.6 1,529.8 2,160.1 2,335.9 2,537.8 1,910.2 2,312.3 2,176.5 1,682.6 1,826.7 Other financial sources 35 Official foreign exchange -5.8 8.8 -6.3 .7 66..66 88..66 --1144..00 --55..44 -8.5 --77..00 11..55 -8.8 36 Special drawing rights certificates .0 2.2 -.5 -.5 .0 0 -4.0 .0 -4.0 -4.0 .0 -8.0 .37 Treasury currency .7 .6 .1 .0 .0 -2.3 .0 2.1 2.0 -4.1 2.2 -2.3 38 Foreign deposits 52.9 35.3 85.9 108.9 2.0 -127.6 113.7 110.1 69.4 52.7 258.5 -1.1 39 Net interbank transactions 89.8 10.0 -51.6 -19.7 -32.3 -115.2 48.3 93.4 -33.5 -43.3 -75.8 202.0 40 Checkable deposits and currency -9.7 -12.8 15.7 41.2 47.4 53.2 63.6 37.5 139.3 365.2 -219.1 -61.1 41 Small time and savings deposits -39.9 96.6 97.2 97.1 152.4 298.3 -74.8 106.6 119.1 28.0 109.1 132.2 42 Large time deposits 19.6 65.6 114.0 122.5 92.1 83.6 18.0 42.4 102.7 359.4 149.2 108.5 43 Money market fund shares 40.5 141.2 145.4 155.9 287.2 289.4 221.3 115.3 174.3 485.5 241.0 48.2 44 Security repurchase agreements 78.2 110.5 41.4 120.9 91.3 -207.7 258.0 -26.1 135.9 319.0 276.1 134.8 45 Corporate equities 12.8 -16.0 -5.7 -83.9 -174.6 -215.6 -86.4 -33.9 -7.0 .0 105.2 -123.0 46 Mutual fund shares 100.6 147.4 237.6 265.1 274.6 225.5 240.6 212.4 127.5 172.8 309.0 248.4 47 Trade payables 120.0 128.9 114.1 131.2 27.0 -35.7 121.7 253.3 216.9 137.0 213.7 213.2 48 Security credit -.1 26.7 52.4 111.0 103.3 -19.3 -62.2 139.7 18.9 277.8 566.3 -138.6 49 Life insurance reserves 35.5 45.8 44.5 59.3 48.0 68.9 55.4 42.1 48.1 57.6 38.0 44.3 50 Pension fund reserves 257.4 171.0 163.0 278.8 248.7 282.6 204.5 248.8 266.7 294.6 258.0 240.8 51 Taxes payable 2.6 6.2 16.0 15.6 11.8 8.0 -2.1 42.5 -1.1 22.5 24.8 24.7 5? Investment in bank personal trusts 17.8 4.0 -8.6 -56.3 -48.0 -48.8 -32.0 -25.9 -34.3 -32.3 -40.4 -41.0 53 Noncorporate proprietors' equity 43.1 34.6 -3.4 -43.7 -46.7 -16.3 -19.2 4.1 -71.2 -2.2 -27.4 -28.7 54 Miscellaneous 273.2 489.4 525.7 499.6 836.2 530.5 398.5 1,393.1 499.2 502.2 1,024.6 879.9 55 Total financial sources 2,102.9 2,739.7 2,942.6 3,333.6 4,086.9 3,395.8 3,986.7 4,662.0 4,072.6 5,157.9 4,897.2 3,691.2 Liabilities not identified as assets (—) 56 Treasury currency -.2 -.5 -.9 -.6 -.7 -3.4 -1.5 .6 .2 -6.3 -1.8 --66..22 57 Foreign deposits 43.0 25.1 59.6 107.4 -6.4 -142.5 49.3 96.1 26.4 93.9 179.0 -67.2 58 Net interbank liabilities -2.7 -3.1 -3.3 -19.9 3.4 -38.7 49.7 -4.8 -7.0 -23.7 24.4 -4.1 59 Security repurchase agreements 73.5 25.7 4.1 64.3 61.4 -18.1 213.5 54.3 77.8 -217.3 550.0 -11.5 60 Taxes payable 16.6 21.1 22.9 27.9 13.7 12.8 -9.1 20.1 1.5 -.7 10.0 -.3 61 Miscellaneous -119.2 -180.9 -88.1 -82.0 -54.3 54.1 -533.0 -289.9 -466.9 -71.3 -340.3 -250.2 Floats not included in assets ( —) 62 Federal government checkable deposits -4.8 -6.0 .5 -2.7 2.6 17.1 -2.1 -27.0 8.6 -9.2 28.7 -2.6 63 Other checkable deposits -2.8 -3.8 -4.0 -3.9 -3.1 -1.8 -2.1 -.9 -.3 .0 .6 1.5 64 Trade credit 27.4 15.6 -21.2 -29.4 -42.1 -32.2 45.6 -18.1 60.4 111.4 2.7 10.8 65 Total identified to sectors as assets 2,072.1 2,846.6 2,973.1 3,272.5 4,112.5 3,548.5 4,176.3 4,831.5 4,371.9 5,281.1 4,443.9 4,021.1 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F.l and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • December 2000 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1998 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 Q4 Ql Q2 Q3 Q4 Ql Q2 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 13,712.9 14,444.2 15,247.0 16,289.9 16,289.9 16,605.6 16,785.1 17,105.5 17,445.6 17,680.1 17,865.1 Bx sector and instrument 2 Federal government 3,636.7 3,781.8 3,804.9 3,752.2 3,752.2 3,759.7 3,651.7 3,632.7 3,681.0 3,653.5 3,464.0 3 Treasury securities 3,608.5 3,755.1 3,778.3 3,723.7 3,723.7 3,731.6 3,623.4 3,604.5 3,652.8 3,625.8 3,435.7 4 Budget agency securities and mortgages 28.2 26.6 26.5 28.5 28.5 28.1 28.3 28.3 28.3 27.8 28.2 5 Nonfederal 10,076.1 10,662.5 11,442.1 12,537.7 12,537.7 12,845.9 13,133.4 13,472.8 13,764.5 14,026.6 14,401.2 Bx instrument 6 Commercial paper 157.4 156.4 168.6 193.0 193.0 223.9 232.4 239.3 230.3 260.8 296.8 7 Municipal securities and loans 1,293.5 1,296.0 1,367.5 1,464.3 1,464.3 1,491.0 1,510.0 1,518.6 1,532.5 1,539.2 1,551.6 8 Corporate bonds 1,344.1 1,460.4 1,610.9 1.829.6 1,829.6 1,898.1 1,970.0 2,020.7 2,059.5 2,106.0 2,144.5 y Bank loans n.e.c 863.6 934.1 1,040.5 1,148.8 1,148.8 1,165.2 1,178.5 1,202.9 1,231.5 1,259.1 1,306.4 10 Other loans and advances 736.9 770.4 839.5 913.8 913.8 957.4 956.0 969.8 985.3 1,032.4 1,066.2 n Mortgages 4,557.9 4,833.6 5,151.1 5,656.6 5,656.6 5,791.1 5,946.2 6,151.4 6,299.4 6,412.8 6,582.1 12 Home 3,510.5 3,719.2 3,971.5 4,358.4 4,358.4 4,451.2 4,564.4 4,694.1 4,791.3 4,867.7 4,995.2 13 Multifamily residential 265.5 278.6 286.9 307.3 307.3 316.4 324.6 335.7 347.7 355.5 364.7 14 Commercial 697.3 748.7 802.3 894.4 894.4 926.1 957.5 1,020.3 1,058.4 1,085.8 1,115.5 15 Farm 84.6 87.1 90.3 96.5 96.5 97.4 99.6 101.4 102.0 103.7 106.7 16 Consumer credit 1,122.8 1,211.6 1,264.1 1,331.7 1,331.7 1,319.3 1,340.4 1,370.1 1,426.2 1,416.2 1,453.6 Bx borrowing sector 17 Household 4,782.9 5,105.3 5,442.8 5,924.6 5,924.6 6,004.8 6,147.2 6,313.3 6,469.1 6,541.9 6,710.9 18 Nonfinancial business 4,223.0 4,493.7 4,879.9 5,413.3 5,413.3 5,617.9 5,748.0 5,917.1 6,043.3 6,227.4 6,423.6 19 Corporate 2,925.5 3,107.7 3,372.7 3.788.5 3,788.5 3,970.3 4,071.6 4,207.6 4,302.2 4,457.6 4,617.5 20 Nonfarm noncorporate 1,152.4 1,236.1 1,351.1 1,460.9 1,460.9 1,485.2 1,510.2 1,540.9 1,572.0 1,599.7 1,629.9 21 Farm 145.1 149.9 156.1 163.8 163.8 162.4 166.1 168.6 169.0 170.1 176.1 22 State and local government 1,070.2 1,063.4 1,119.5 1,199.8 1,199.8 1,223.2 1,238.2 1,242.4 1,252.1 1,257.3 1,266.7 23 Foreign credit market debt held in United States 453.7 542.2 608.0 651.4 651.4 659.2 652.7 672.9 676.9 704.6 698.9 24 Commercial paper 56.2 67.5 65.1 72.9 72.9 77.2 70.1 81.8 89.2 101.6 101.2 25 299.4 366.3 427.7 462.5 462.5 466.3 466.4 477.4 476.7 488.1 480.7 26 Bank loans n.e.c 34.6 43.7 52.1 58.9 58.9 59.1 60.5 58.8 59.4 63.3 64.8 27 Other loans and advances 63.6 64.7 63.0 57.2 57.2 56.5 55.8 55.0 51.7 51.7 52.1 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 14,166.5 14,986.4 15,855.0 16,941.3 16,941.3 17,264.7 17,437.8 17,778.5 18,122.5 18,384.7 18,564.0 Financial sectors 29 Total credit market debt owed by financial sectors 4,278.8 4,824.6 5,445.2 6,519.1 6,519.1 6,809.0 7,073.3 7,346.8 7,607.0 7,744.5 7,970.9 By instrument 30 Federal government-related 2,376.8 2,608.3 2,821.1 3,292.0 3,292.0 3,434.1 3,580.7 3,745.9 3,884.0 3,940.3 4,032.0 31 Government-sponsored enterprise securities 806.5 896.9 995.3 1,273.6 1,273.6 1,321.8 1,398.0 1,499.8 1,591.7 1,618.0 1,676.7 32 Mortgage pool securities 1,570.3 1,711.4 1,825.8 2,018.4 2,018.4 2,112.3 2,182.7 2,246.1 2,292.3 2,322.3 2,355.4 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 1,901.9 2,216.3 2,624.1 3,227.1 3,227.1 3,374.9 3,492.6 3,601.0 3,723.0 3,804.2 3,938.9 35 Open market paper 486.9 579.1 745.7 906.7 906.7 926.4 940.9 963.4 1,082.9 1,115.7 1,135.2 36 Corporate bonds 1,204.7 1,378.4 1,555.9 1,852.8 1,852.8 1,968.6 2,042.8 2,091.1 2,074.6 2,114.2 2,192.5 37 Bank loans n.e.c 51.4 64.0 77.2 107.2 107.2 104.1 106.8 105.2 92.9 91.4 93.6 38 Other loans and advances 135.0 162.9 198.5 288.7 288.7 299.1 328.6 365.4 395.8 404.4 436.7 39 Mortgages 24.1 31.9 46.8 71.6 71.6 76.6 73.6 75.9 76.7 78.5 81.0 By borrowing sector 40 Commercial banks 102.6 113.6 140.6 188.6 188.6 187.5 202.7 224.2 230.0 242.2 265.9 41 Bank holding companies 148.0 150.0 168.6 193.5 193.5 202.6 205.5 211.8 219.3 221.4 229.3 42 Savings institutions 115.0 140.5 160.3 212.4 212.4 226.9 241.6 255.4 260.4 266.9 280.0 43 Credit unions .4 .4 .6 1.1 1.1 1.5 1.8 2.5 3.4 2.6 2.9 44 Life insurance companies .5 1.6 1.8 2.5 2.5 3.3 4.0 4.3 3.2 3.0 2.7 45 Government-sponsored enterprises 806.5 896.9 995.3 1,273.6 1,273.6 1,321.8 1,398.0 1,499.8 1,591.7 1,618.0 1,676.7 46 Federally related mortgage pools 1,570.3 1,711.4 1,825.8 2,018.4 2,018.4 2,112.3 2,182.7 2,246.1 2,292.3 2,322.3 2,355.4 47 Issuers of asset-backed securities (ABSs) 712.5 863.3 1,076.6 1,398.0 1,398.0 1,463.1 1,539.9 1,599.1 1,632.0 1,665.8 1,716.0 48 Brokers and dealers 29.3 27.3 35.3 42.5 42.5 34.8 30.4 34.6 25.3 36.4 36.2 49 Finance companies 483.9 529.8 554.5 597.5 597.5 614.4 639.2 628.5 659.9 670.7 712.7 50 Mortgage companies 16.5 20.6 16.0 17.7 17.7 16.5 17.8 16.3 17.8 17.1 17.8 51 Real estate investment trusts (REITs) 44.6 56.5 96.1 158.8 158.8 165.2 160.3 162.2 165.1 167.9 170.4 52 Funding corporations 248.6 312.7 373.7 414.4 414.4 459.1 449.5 462.0 506.6 510.1 505.1 All sectors 53 Total credit market debt, domestic and foreign .. . 18,445.3 19,811.0 21,300.2 23,460.4 23,460.4 24,073.7 24,511.1 25,125.3 25,729.5 26,129.2 26,534.9 54 Open market paper 700.4 803.0 979.4 1,172.6 1,172.6 1,227.6 1,243.3 1,284.5 1,402.4 1,478.1 1,533.3 55 U.S. government securities 6.013.6 6,390.0 6,626.0 7,044.3 7,044.3 7,193.8 7,232.4 7,378.6 7,565.0 7,593.8 7,496.0 56 Municipal securities 1,293.5 1,296.0 1,367.5 1,464.3 1,464.3 1,491.0 1,510.0 1,518.6 1,532.5 1,539.2 1,551.6 57 Corporate and foreign bonds 2,848.1 3,205.1 3,594.5 4,144.9 4,144.9 4,333.0 4,479.2 4,589.1 4,610.8 4,708.3 4,817.7 58 Bank loans n.e.c 949.6 1,041.7 1,169.8 1,314.9 1,314.9 1,328.3 1,345.7 1,366.9 1,383.8 1,413.7 1,464.7 59 Other loans and advances 935.4 998.0 1,101.0 1,259.6 1,259.6 1,313.0 1,340.3 1,390.1 1,432.7 1,488.5 1,555.0 60 Mortgages 4,581.9 4,865.5 5,197.9 5,728.2 5,728.2 5,867.7 6,019.8 6,227.3 6,376.1 6,491.3 6,663.1 61 Consumer credit 1,122.8 1,211.6 1,264.1 1,331.7 1,331.7 1,319.3 1,340.4 1,370.1 1,426.2 1,416.2 1,453.6 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1998 1999 2000 Transaction category or sector 1995 1996 1997 11999988 Q4 Ql Q2 Q3 Q4 Ql Q2 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 18,445.3 19,811.0 21,300.2 23,460.4 23,460.4 24,073.7 24,511.1 25,125.3 25,729.5 26,129.2 26,534.9 2 Domestic nonfederal nonfinancial sectors 2,905.5 3,031.3 3,004.7 3,108.2 3,108.2 3,208.2 3,277.3 3,343.4 3,474.9 3,418.7 3,459.0 Household 1,944.3 2,118.3 2,106.4 2,061.4 2,061.4 2,133.5 2,172.2 2,235.9 2,353.9 2,304.6 2,319.1 4 Nonfinancial corporate business 280.4 270.2 257.5 271.5 271.5 266.1 273.3 288.4 300.7 293.0 305.2 5 Nonfarm noncorporate business 42.3 38.0 35.9 35.9 35.9 36.6 36.9 37.1 37.5 38.1 38.8 6 State and local governments 638.6 604.8 605.0 739.4 739.4 772.1 794.8 781.9 782.8 782.9 795.8 7 Federal government 207.5 200.2 205.5 219.1 219.1 223.3 225.0 260.7 258.0 259.6 261.6 8 Rest of the world 1,531.1 1,926.6 2,257.3 2,539.8 2,539.8 2,608.3 2,621.3 2,718.1 2,678.0 2,765.9 2,809.7 9 Financial sectors 13,801.1 14,652.9 15,832.7 17,593.3 17,593.3 18,033.8 18,387.5 18,803.0 19,318.6 19,685.1 20,004.6 10 Monetary authority 380.8 393.1 431.4 452.5 452.5 466.0 485.1 489.3 478.1 501.9 505.1 11 Commercial banking 3,520.1 3,707.7 4,031.9 4,335.7 4,335.7 4,338.4 4,383.4 4,488.3 4,643.9 4,725.0 4,847.4 12 U.S.-chartered banks 3,056.1 3,175.8 3,450.7 3,761.2 3,761.2 3,782.9 3,847.6 3.944.3 4,078.9 4,171.3 4,295.4 13 Foreign banking offices in United States 412.6 475.8 516.1 504.2 504.2 487.8 465.7 475.3 484.1 482.0 478.1 14 Bank holding companies 18.0 22.0 27.4 26.5 26.5 25.0 25.1 22.0 32.7 22.1 23.0 15 Banks in U.S.-affiliated areas 33.4 34.1 37.8 43.8 43.8 42.7 45.0 46.7 48.3 49.6 51.0 16 Savings institutions 913.3 933.2 928.5 964.8 964.8 990.8 1,011.4 1,030.8 1,033.4 1,044.5 1,061.7 17 Credit unions 263.0 288.5 305.3 324.2 324.2 330.2 341.0 348.5 351.7 360.0 372.9 18 Bank personal trusts and estates 239.7 232.0 207.0 194.1 194.1 192.2 190.1 188.0 185.7 183.3 180.8 19 Life insurance companies 1,587.5 1,657.0 1,751.1 1,828.0 1,828.0 1,853.5 1,869.6 1,880.4 1,886.0 1,901.5 1,913.9 20 Other insurance companies 468.7 491.2 515.3 535.7 535.7 530.8 537.5 533.9 531.6 528.0 524.6 21 Private pension funds 633.1 627.3 646.8 704.7 704.7 719.0 740.7 748.7 762.2 773.7 773.8 22 State and local government retirement funds 531.0 568.2 632.0 703.6 703.6 722.6 728.9 738.9 753.4 767.2 771.5 23 Money market mutual funds 545.5 634.3 721.9 965.9 965.9 1,036.2 1,001.8 1,049.7 1,147.8 1,217.1 1,159.4 24 Mutual funds 771.3 820.2 901.1 1,025.9 1,025.9 1,050.8 1,083.7 1,083.0 1,073.1 1,053.0 1,070.9 25 Closed-end funds 96.4 101.1 98.3 102.8 102.8 103.6 104.3 105.1 105.9 106.7 107.4 26 Government-sponsored enterprises 750.0 807.9 902.2 1,163.9 1,163.9 1,203.1 1,268.4 1,340.2 1,399.5 1,426.4 1,481.7 27 Federally related mortgage pools 1,570.3 1,711.4 1,825.8 2,018.4 2,018.4 2,112.3 2,182.7 2,246.1 2,292.3 2,322.3 2,355.4 28 Asset-backed securities issuers (ABSs) 653.4 773.9 937.7 1,219.4 1,219.4 1,280.1 1,352.7 1,409.8 1,435.3 1,463.9 1,505.4 29 Finance companies 526.2 544.5 566.4 618.4 618.4 639.9 660.9 678.2 713.3 747.0 782.2 30 Mortgage companies 33.0 41.2 32.1 35.3 35.3 33.0 35.6 32.5 35.6 34.1 35.5 31 Real estate investment trusts (REITs) 26.0 30.4 50.6 45.5 45.5 45.9 45.3 44.7 42.9 38.8 38.2 32 Brokers and dealers 183.4 167.7 182.6 189.4 189.4 211.4 162.9 167.0 158.6 201.1 188.2 33 Funding corporations 108.4 122.0 164.7 165.2 165.2 174.1 201.4 200.1 288.4 289.6 328.5 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 18,445.3 19,811.0 21,300.2 23,460.4 23,460.4 24,073.7 24,511.1 25,125.3 25,729.5 26,129.2 26,534.9 Other liabilities 35 Official foreign exchange 63.7 53.7 48.9 60.1 60.1 53.6 50.9 52.1 50.1 49.4 46.5 36 Special drawing rights certificates 10.2 9.7 9.2 9.2 9.2 8.2 8.2 7.2 6.2 6.2 4.2 37 Treasury currency 18.2 18.3 18.3 18.3 18.3 18.3 18.8 19.3 18.3 18.8 18.1 38 Foreign deposits 418.8 521.7 619.7 639.0 639.0 667.4 694.9 712.3 725.8 790.4 790.2 39 Net interbank liabilities 290.7 240.8 219.4 189.0 189.0 182.0 207.1 198.9 203.2 165.6 219.5 40 Checkable deposits and currency 1,229.1 1,244.8 1,286.1 1,333.4 1,333.4 1,310.5 1,353.1 1,353.8 1,484.8 1,392.9 1,410.7 41 Small time and savings deposits 2,279.7 2,377.0 2,474.1 2,626.5 2,626.5 2.637.6 2,644.6 2,665.9 2,671.2 2,729.2 2,740.5 42 Large time deposits 476.9 590.9 713.4 805.5 805.5 804.3 809.0 837.5 936.1 966.5 987.4 43 Money market fund shares 741.3 886.7 1,042.5 1,329.7 1,329.7 1.411.7 1,393.5 1,444.9 1,578.8 1,666.0 1,627.1 44 Security repurchase agreements 660.0 701.5 822.4 913.7 913.7 980.3 970.8 999.3 1,085.4 1,155.8 1,186.2 45 Mutual fund shares 1,852.8 2,342.4 2,989.4 3,610.5 3,610.5 3.758.1 4,049.1 3,931.5 4,553.4 4,864.5 4,740.7 46 Security credit 305.7 358.1 469.1 572.3 572.3 552.7 589.3 593.2 665.9 803.7 770.8 47 Life insurance reserves 566.2 610.6 665.0 718.3 718.3 735.9 749.8 756.2 783.9 796.9 802.8 48 Pension fund reserves 5,812.7 6,548.4 7,817.1 8,912.7 8,912.7 9,064.9 9,479.5 9,150.5 9,999.4 10,227.4 10,139.0 49 Trade payables 1,698.0 1,812.1 1.943.3 1,970.3 1,970.3 1.973.9 2,038.1 2,098.4 2,152.6 2,179.6 2,233.3 50 Taxes payable 107.6 123.6 139.2 151.0 151.0 158.2 160.6 165.3 166.4 180.3 178.0 51 Investment in bank personal trusts 803.0 871.7 942.5 1,001.0 1,001.0 1,012.5 1,059.8 998.3 1,116.6 1,135.2 1,085.0 52 Miscellaneous 5,838.0 6,231.3 6,571.9 7,133.9 7,133.9 7,131.6 7,310.8 7,318.7 7,638.2 7,851.6 8,059.6 53 Total liabilities 41,617.9 45,354.2 50,091.7 55,454.8 55,454.8 56,535.3 58,099.0 58,428.7 61,565.7 63,109.3 63,574.5 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights 22.1 21.4 21.1 21.6 21.6 20.7 20.8 21.3 21.4 21.4 21.5 55 Corporate equities 8,495.7 10,255.8 13,201.3 15,427.8 15,427.8 15,919.1 17,060.4 16,214.9 19,576.3 20,231.8 19,298.5 56 Household equity in noncorporate business 3,671.6 3,876.6 4,151.1 4,400.8 4,400.8 4,460.5 4,523.0 4,582.8 4,643.5 4,695.1 4,764.9 Liabilities not identified as assets (-) 57 Treasury currency -5.8 -6.7 -7.3 -8.0 -8.0 -8.4 -8.2 -8.2 -9.7 -10.2 -11.9 58 Foreign deposits 360.2 437.0 538.3 548.2 548.2 560.5 584.5 591.1 614.9 659.7 642.9 59 Net interbank transactions -9.0 -10.6 -32.2 -27.0 -27.0 -11.3 -10.6 -13.2 -25.5 -13.9 -11.5 60 Security repurchase agreements 107.4 111.5 175.8 237.2 237.2 296.7 308.2 327.7 269.3 413.4 408.8 61 Taxes payable 62.4 76.7 92.3 101.5 101.5 89.2 110.3 94.2 94.5 88.9 101.1 62 Miscellaneous -1,167.5 -1,630.7 -1,996.0 -2,539.2 -2,539.2 -2,755.0 -2,824.4 -3,133.2 -3,008.0 -3,149.6 -3,169.7 Floats not included in assets (—) 63 Federal government checkable deposits 3.1 -1.6 -8.1 -3.9 -3.9 -7.2 -12.4 -10.2 -9.9 -6.5 -5.2 64 Other checkable deposits 34.2 30.1 26.2 23.1 23.1 18.9 22.1 14.5 22.3 18.7 22.5 65 Trade credit 196.8 174.6 135.5 94.5 94.5 56.3 30.8 44.7 141.7 92.6 73.1 66 Total identified to sectors as assets 54,225.6 60,327.7 68,540.7 76,878.6 76,878.6 78,696.0 81,502.8 81,340.1 87,717.2 89,964.3 89,609.3 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. L. 1 and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A42 Domestic Nonfinancial Statistics • December 2000 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 2000 MMeeaassuurree 11999977 11999988 11999999 Jan. Feb. Mar. Apr. May Juner Julyr Aug. Sept.p 1 Industrial production1 127.1 132.4 137.1 141.1 141.6 142.4 143.5 144.7 145.3 145.0 145.6 146.0 Market groupings 2 Products, total 119.6 123.7 126.5 129.7 130.1 130.3 131.0 131.2 131.6 131.7 131.7 132.1 3 Final, total 121.1 125.4 128.0 131.6 131.8 132.0 132.8 133.1 134.0 134.3 134.5 135.0 4 Consumer goods 115.1 116.2 116.9 118.8 118.7 118.0 118.6 118.8 119.4 119.0 119.1 120.1 5 Equipment 132.1 142.7 148.9 154.2 155.0 156.9 158.1 158.8 160.1 161.7 162.2 161.8 6 Intermediate 115.3 118.8 122.1 123.7 124.8 125.1 125.3 125.1 124.3 123.7 122.9 123.4 7 Materials 139.0 146.5 154.8 160.5 161.2 163.1 165.0 168.1 169.1 168.0 169.9 169.9 Industry groupings 8 Manufacturing 130.1 136.4 142.3 146.7 147.2 148.4 149.3 150.3 151.0 151.0 151.3 151.8 9 Capacity utilization, manufacturing (percent)2. . 82.4 80.9 79.8 80.7 80.7 81.1 81.3 81.5 81.6 81.3 81.3 81.2 10 Construction contracts3 144.2 161.3 177.5r 176.0 180.0r 194.0r 186.0 178.0r 186.0 184.0 181.0 181.0 11 Nonagricultural employment, total4 120.3 123.4 126.2 127.9 128.0 128.5 128.9 129.1 129.1 129.1 129.0 129.2 12 Goods-producing, total 101.2 102.7 102.3 104.1 103.9 104.3 104.3 104.1 104.2 104.4 103.9 103.8 13 Manufacturing, total 98.3 98.8 97.0 97.4 97.2 97.3 97.3 97.3 97.3 97.6 97.0 96.7 14 Manufacturing, production workers 99.6 99.8 97.8 98.2 98.0 97.9 98.0 97.9 97.9 98.4 97.5 97.1 15 Service-producing 126.5 130.0 133.8 135.5 135.7 136.2 136.8 137.0 137.1 137.0 137.0 137.3 16 Personal income, total 175.1 186.5 196.6 203.3 204.4 206.0 207.2r 207.9r 208.9 209.5 210.3 212.6 17 Wages and salary disbursements 171.3 184.6 196.9 204.3 205.2 206.4 208.21 208.4T 209.8 210.9 211.4 212.6 18 Manufacturing 144.6 152.3 157.4 161.1 161.6 162.0 163.6r 162.9r 164.3 165.8 164.9 164.5 19 Disposable personal income5 172.5 182.7 191.9 197.4 198.3 199.8 200.6r 201.3r 202.1 202.6 203.1 205.3 20 Retail sales5 169.8 178.4 194.6 205.5 208.3 209.3 208.3 208.5 209.3 211.1 211.2 213.1 Prices6 21 Consumer (1982-84=100) 160.5 163.0 166.6 168.8' 169.8r 171.2r 171.3' 171.5r 172.4 172.8 172.8 173.7 22 Producer finished goods (1982= 100) 131.8 130.7 133.0 134.7 136.0 136.8 136.7 137.3r 138.4 138.3 138.1 139.2 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 US. 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 2000 CCaatteeggoorryy 11999977 11999988 11999999 Feb. Mar. Apr. May June Julyr Aug. Sept.p HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 136,297 137,673 139,368 141,165 140,867 141,230 140,489 140,762 140,399 140,742 140,639 7 Nonagricultural industries' 126,159 128,085 130,207 131,954 131,801 132,351 131,417 131,858 131,450 131,569 131,821 3 Agriculture 3.399 3,378 3,281 3.408 3,359 3,355 3,298 3,321 3,299 3,344 3,340 Unemployment 4 Number 6.739 6,210 5,880 5,804 5.708 5,524 5,774 5,583 5,650 5,829 5,477 5 Rate (percent of civilian labor force) 4.9 4.5 4.2 4.1 4.1 3.9 4.1 4.0 4.0 4.1 3.9 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 122,690 125,826 128,616 130,482 131,009 131,419 131,590 131,647 131,607 131,516 131,768 7 Manufacturing 18.675 18,772 18,431 18,473 18,476 18,492 18,479 18,493 18,548 18,431 18,365 8 Mining 596 590 535 533 536 539 539 539 538 537 536 9 Contract construction 5.691 5,985 6,273 6,618 6,726 6,694 6,666 6,668 6,670 6,675 6,705 10 Transportation and public utilities 6.408 6,600 6,792 6.937 6,953 6,970 6,962 6,985 7,010 6,941 7,046 11 Trade 28.614 29,127 29,792 29,989 30,060 30,252 30,112 30,171 30,246 30,250 30,254 12 Finance 7.109 7,407 7,632 7,624 7,621 7,610 7,600 7,588 7,586 7,606 7,622 13 Service 36.040 37,526 39,000 39,914 40,090 40,195 40,220 40,401 40,403 40,578 40,778 14 Government 19.557 19,819 20,161 20,394 20,547 20,667 21,012 20,802 20,606 20,498 20,462 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 Q4 Qi Q2r Q3 Q4 Ql Q2 Q3 Q4 Ql Q2r Q3 Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 139.5 141.7 144.5 145.5 172.3 173.8 175.5 177.1 81.0 81.5 82.3 82.2 2 Manufacturing 144.9 147.4 150.2 151.4 180.6 182.4 184.4 186.3 80.3 80.8 81.5 81.3 3 Primary processing3 125.4 126.0 125.8 124.1 149.8 150.4 150.9 151.2 83.7 83.8 83.4 82.1 4 Advanced processing4 155.2 158.7 163.1 165.8 196.1 198.7 201.6 204.3 79.1 79.9 80.9 81.2 5 Durable goods 177.4 182.5 188.9 191.7 221.0 224.8 229.1 233.2 80.3 81.2 82.5 82.2 6 Lumber and products 120.6 121.3 119.1 114.9 148.4 149.0 149.1 149.0 81.2 81.4 79.9 77.2 7 Primary metals 130.9 132.4 133.1 129.4 150.1 150.7 151.5 152.2 87.2 87.9 87.9 85.0 8 Iron and steel 129.1 130.9 132.4 126.3 152.5 153.5 154.4 155.3 84.6 85.3 85.7 81.3 9 Nonferrous 133.3 134.3 134.0 133.0 147.2 147.5 148.0 148.6 90.5 91.0 90.5 89.5 10 Industrial machinery and equipment 239.9 252.3 263.4 270.1 295.8 306.1 315.2 323.5 81.1 82.4 83.6 83.5 11 Electrical machinery 419.0 458.1 514.3 555.8 514.6 537.2 570.7 607.0 81.4 85.3 90.1 91.6 12 Motor vehicles and parts 154.7 155.2 158.0 149.4 185.0 185.7 186.7 187.7 83.6 83.6 84.6 79.6 13 Aerospace and miscellaneous transportation equipment 89.9 88.0 87.2 88.0 125.8 125.2 124.5 123.9 71.5 70.3 70.0 71.0 14 Nondurable goods 113.4 113.7 113.3 113.1 140.3 140.5 140.6 140.6 80.9 80.9 80.6 80.4 15 Textile mill products 111.4 111.3 109.7 105.6 131.8 131.9 131.9 131.9 84.5 84.4 83.2 80.0 16 Paper and products 117.9 117.0 117.2 113.1 136.1 136.6 136.7 136.5 86.6 85.6 85.8 82.9 17 Chemicals and products 121.8 121.7 120.3 121.3 151.0 151.4 151.7 152.1 80.7 80.4 79.3 79.7 18 Plastics materials 132.3 134.0 131.3 124.2 139.6 140.8 141.9 143.0 94.8 95.2 92.5 86.9 19 Petroleum products 114.1 115.8 117.9 117.2 123.1 123.4 123.6 123.7 92.7 93.9 95.4 94.8 20 Mining 99.5 100.4 102.1 102.4 120.2 119.8 119.3 118.8 82.8 83.8 85.5 86.1 71 Utilities 113.2 113.6 117.5 117.3 128.2 128.6 129.0 129.4 88.3 88.3 91.1 90.7 22 Electric 116.5 115.5 120.4 120.1 126.1 126.6 127.1 127.7 92.4 91.2 94.7 94.0 1973 1975 Previous cycle5 Latest cycle6 1999 2000 High Low High Low High Low Sept. Apr. May Juner July1" Aug. Sept.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 80.6 82.0 82.4 82.5 82.1 82.2 82.2 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 79.7 81.3 81.5 81.6 81.3 81.3 81.2 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 82.8 83.8 83.3 83.2 82.4 81.9 81.9 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 78.7 80.5 81.0 81.1 81.1 81.2 81.2 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 80.0 82.1 82.6 82.7 82.2 82.3 82.1 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 81.0 81.0 80.1 78.5 78.2 76.2 77.1 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73,7 85.8 88.5 87.8 87.3 85.3 84.8 84.9 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 83.0 86.1 85.5 85.5 81.0 81.7 81.4 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 89.3 91.5 90.7 89.3 90.6 88.6 89.4 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 81.6 83.4 83.6 83.7 83.5 83.5 83.4 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 79.8 88.7 90.5 91.2 92.2 91.2 91.4 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 84.1 83.9 85.4 84.7 77.0 81.9 79.8 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 73.1 69.8 69.2 71.1 72.3 71.0 69.8 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 79.9 80.8 80.5 80.5 80.5 80.3 80.5 IS Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 84.1 84.4 82.4 82.7 81.3 78.9 79.9 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 86.4 86.2 84.5 86.7 83.1 82.6 82.9 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 77.8 79.3 79.3 79.2 79.0 79.9 80.3 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 90.5 93.4 92.3 91.8 85.9 88.1 86.5 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 93.3 94.8 95.8 95.6 94.5 95.0 94.8 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 81.8 84.7 85.7 86.3 86.3 86.4 85.7 21 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 92.0 89.2 92.3 91.9 88.4 91.5 92.1 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 95.2 92.9 95.9 95.3 91.6 95.0 95.5 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; latest historical revision of the industrial production index and the capacity utilization rates primary metals; and fabricated metals. was released in November 1999. The recent annual revision 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 • December 2000 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 1999 2000 GGrroouupp pro- 1999 por- avg. tion Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June' July' Aug. Sept.p Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 137.1 138.1 139.1 139.4 140.1 141.1 141.6 142.4 143.5 144.7 145.3 145.0 145.6 146.0 2 Products 60.5 126.5 127.6 128.5 128.0 128.5 129.7 130.1 130.3 131.0 131.2 131.6 131.7 131.7 132.1 3 Final products 46.3 128.0 129.1 130.2 129.8 130.3 131.6 131.8 132.0 132.8 133.1 134.0 134.3 134.5 135.0 4 Consumer goods, total 29.1 116.9 117.1 118.2 117.6 118.1 118.8 118.7 118.0 118.6 118.8 119.4 119.0 119.1 120.1 5 Durable consumer goods 6.1 152.6 153.5 157.4 154.4 155.7 158.9 156.4 156.8 159.1 156.9 158.4 153.5 152.9 155.3 6 Automotive products 2.6 144.7 145.5 147.9 146.2 144.4 149.1 145.4 146.0 148.7 146.8 149.3 139.6 142.0 144.2 7 Autos and trucks 1.7 151.8 152.8 155.1 154.3 148.7 155.0 150.7 151.9 155.8 154.0 157.2 139.5 145.6 147.2 y8 Autos, consumer .9 102.6 105.5 103.9 107.2 99.8 105.4 105.0 103.1 107.4 106.2 105.5 100.3 104.3 103.6 Trucks, consumer .7 202.4 201.9 207.8 203.6 199.0 206.3 198.3 202.3 206.2 203.8 210.5 181.4 189.6 193.3 10 Auto parts and allied goods .... .9 133.9 134.4 136.7 133.8 137.1 139.6 136.9 136.6 137.6 135.7 137.2 137.5 135.5 138.3 11 Other 3.5 158.6 159.7 165.0 160.7 164.9 166.6 165.4 165.5 167.5 165.1 165.6 165.5 161.8 164.4 12 Appliances, televisions, and air conditioners 1.0 324.3 326.3 363.1 348.4 357.6 361.6 362.8 367.3 373.3 367.1 375.6 356.0 354.6 374.3 13 Carpeting and furniture .8 121.7 124.1 124.8 117.4 123.0 126.9 122.6 122.6 125.0 122.4 122.7 127.5 120.4 122.8 14 Miscellaneous home goods 1.6 114.7 114.4 114.8 115.0 116.7 116.6 116.6 115.9 116.5 115.3 114.3 115.0 113.5 112.7 15 Nondurable consumer goods 23.0 108.7 108.7 109.3 109.1 109.5 109.7 110.0 109.1 109.4 110.0 110.5 110.9 111.2 111.8 16 Foods and tobacco 10.3 107.3 106.2 106.8 107.3 107.4 107.6 107.9 107.8 108.3 107.8 107.9 108.7 107.8 108.4 17 Clothing 2.4 90.6 89.9 89.4 90.6 89.1 89.3 89.6 89.2 89.5 89.3 86.8 87.1 85.8 84.9 18 Chemical products 4.5 121.8 120.9 123.1 126.0 126.5 125.8 125.1 125.8 124.2 124.6 125.2 126.0 128.2 130.0 19 Paper products 2.9 102.3 104.7 106.3 105.1 103.1 104.3 104.5 103.0 103.3 104.1 106.9 107.7 107.6 107.6 20 Energy 2.9 114.0 117.6 114.5 106.7 112.0 113.0 114.8 108.8 111.1 117.2 118.8 116.0 119.5 120.4 21 Fuels .8 111.3 112.0 112.4 110.1 111.7 108.4 111.5 114.8 112.3 113.3 113.4 112.8 114.8 114.5 22 Residential utilities 2.1 115.0 119.7 114.9 104.3 111.6 114.6 115.8 105.2 109.9 118.5 120.8 116.9 121.2 122.6 23 Equipment 17.2 148.9 150.2 151.2 151.4 151.8 154.2 155.0 156.9 158.1 158.8 160.1 161.7 162.2 161.8 24 Business equipment 13.2 171.6 173.7 174.8 175.0 175.5 179.4 180.6 183.0 185.0 185.7 187.2 188.6 189.7 190.3 25 Information processing and related 5.4 248.6 261.3 265.6 266.7 270.1 277.9 281.2 285.7 290.3 295.7 297.1 304.1 308.1 311.6 26 Computer and office equipment 1.1 840.1 926.9 950.5 970.0 985.6 1,015.3 1,059.5 1,093.5 1,126.1 1,162.3 1,194.2 1,224.3 1,255.9 1,288.8 27 Industrial 4.0 135.3 133.9 134.9 134.6 135.0 138.4 140.1 140.0 140.1 140.4 139.8 140.9 143.8 141.0 228y Transit 2.5 126.9 124.0 122.3 121.2 118.5 119.9 117.6 118.7 118.7 116.2 118.0 115.0 113.6 112.4 Autos and trucks 1.2 131.4 132.0 133.4 134.2 127.8 134.3 134.0 133.9 136.9 135.7 133.8 122.2 123.1 121.4 30 Other 1.3 131.4 126.4 125.1 127.5 128.1 126.8 128.6 136.4 140.9 137.7 144.8 143.2 135.7 144.9 31 Defense and space equipment 3.3 74.4 73.6 73.7 73.0 72.4 70.6 69.7 69.8 69.3 69.3 70.5 72.0 70.3 67.5 32 Oil and gas well drilling .6 106.8 111.3 115.7 121.3 124.3 125.5 129.9 130.6 129.0 135.0 134.0 140.9 143.8 137.5 33 Manufactured homes .2 155.2 144.4 142.6 139.3 138.3 135.4 129.6 129.3 123.4 118.2 118.5 110.0 108.5 107.0 34 Intermediate products, total 14.2 122.1 122.6 123.2 122.4 123.1 123.7 124.8 125.1 125.3 125.1 124.3 123.7 122.9 123.4 35 Construction supplies 5.3 133.4 134.1 135.4 134.3 134.9 136.4 137.5 139.0 139.2 137.4 136.8 136.9 135.5 135.9 36 Business supplies 8.9 115.3 115.8 115.9 115.2 116.0 116.1 117.2 116.9 117.1 117.7 116.8 115.8 115.4 115.9 37 Materials 39.5 154.8 155.7 156.8 158.8 159.7 160.5 161.2 163.1 165.0 168.1 169.1 168.0 169.9 169.9 38 Durable goods materials 20.8 198.9 202.3 203.4 206.7 208.8 211.7 213.1 217.5 220.6 227.0 229.2 229.5 232.4 232.6 39 Durable consumer parts 4.0 150.7 156.0 153.7 154.8 155.0 156.0 153.1 154.7 152.8 160.5 155.1 149.4 158.0 154.6 40 Equipment parts 7.6 360.9 371.4 377.5 386.8 394.9 404.9 418.0 435.4 453.2 472.6 490.6 502.4 508.9 518.5 41 Other 9.2 131.3 131.2 131.7 133.4 134.0 134.8 134.1 134.7 134.6 135.2 135.0 134.6 133.8 133.0 42 Basic metal materials 3.1 121.8 122.1 123.5 125.6 126.3 126.2 124.2 126.3 126.9 126.9 126.3 124.2 123.7 123.9 43 Nondurable goods materials 8.9 114.6 114.7 117.4 119.1 118.7 117.0 117.6 116.8 116.6 116.7 116.6 114.3 114.0 114.0 44 Textile materials 1.1 101.0 100.3 102.3 103.3 100.9 99.3 101.9 102.7 100.7 100.2 101.7 96.1 96.4 97.0 45 Paper materials 1.8 117.0 118.6 118.5 119.3 118.5 117.9 116.6 118.3 119.3 117.4 119.2 114.7 113.4 113.3 46 Chemical materials 3.9 117.3 117.7 122.0 125.1 124.2 122.1 124.5 121.5 121.5 122.8 121.9 119.4 120.7 120.2 47 Other 2.1 113.5 112.5 114.9 114.9 116.8 114.8 112.7 113.3 112.3 112.2 111.6 112.7 110.2 110.9 48 Energy materials 9.7 101.7 101.8 101.5 101.6 101.4 101.2 100.5 100.6 102.5 102.8 102.6 100.8 102.6 102.5 49 Primary energy 6.3 99.2 99.6 98.8 100.1 99.5 98.3 96.7 98.0 100.4 100.5 100.7 99.9 100.5 100.2 50 Converted fuel materials 3.3 107.0 106.1 106.5 104.1 104.8 106.8 108.2 105.5 106.6 107.1 106.0 102.1 106.6 106.8 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 137.0 138.0 138.9 139.3 140.2 141.0 141.6 142.4 143.5 144.7 145.4 145.5 146.0 146.3 52 Total excluding motor vehicles and parts 95.1 136.4 137.2 138.3 138.7 139.5 140.4 141.1 141.8 143.0 144.0 144.8 145.1 145.3 145.8 53 Total excluding computer and office equipment 98.2 131.1 131.5 132.4 132.7 133.2 134.1 134.4 135.0 136.0 137.0 137.4 137.0 137.4 137.7 54 Consumer goods excluding autos and trucks . 27.4 115.0 115.2 116.3 115.6 116.4 116.9 117.0 116.2 116.6 116.9 117.4 117.8 117.6 118.6 55 Consumer goods excluding energy 26.2 117.3 117.1 118.7 118.8 118.8 119.5 119.1 119.0 119.5 119.0 119.5 119.3 119.1 120.1 56 Business equipment excluding autos and trucks 12.0 176.2 178.5 179.5 179.7 181.1 184.5 186.0 188.7 190.5 191.5 193.4 196.6 197.6 198.6 57 Business equipment excluding computer and office equipment 12.1 143.8 143.6 144.0 143.7 143.8 146.8 146.9 148.4 149.4 149.2 149.9 150.6 150.9 150.8 58 Materials excluding energy 29.8 172.0 173.0 174.7 177.4 178.6 179.8 181.0 183.5 185.5 189.6 191.0 190.3 192.1 192.2/ 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 Monthly data seasonally adjusted 1992 Group S co IC de - p p o ro r- - 1 a 9 v 9 g 9 . tion Sept. Feb. Mar. Apr. May Juner Julyr Aug. Sept Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 137.1 138.1 139.1 139.4 140.1 141.1 141.6 142.4 143.5 144.7 145.3 145.0 145.6 146.0 60 Manufacturing 85.4 142.3 142.9 144.2 145.0 145.6 146.7 147.2 148.4 149.3 150.3 151.0 151.0 151.3 151.8 61 Primary processing 26.5 123.3 123.6 124.8 125.6 125.9 126.0 125.9 126.1 126.3 125.6 125.6 124.5 123.8 123.9 62 Advanced processing 58.9 151.8 153.1 154.5 155.2 155.9 157.5 158.4 160.1 161.5 163.3 164.4 165.0 165.9 166.5 63 Durable goods 45.0 172.8 175.0 176.5 177.4 178.4 181.0 181.8 184.6 186.8 189.2 190.8 190.7 191.9 192.5 64 Lumber and products " ' 24 2.0 121.6 119.7 120.5 119.8 121.4 122.1 121.2 120.5 120.8 119.4 117.0 116.5 113.5 114.8 65 Furniture and fixtures 25 1.4 125.5 127.9 127.0 125.2 128.6 126.9 126.8 126.3 126.4 128.1 127.0 129.0 127.9 128.2 66 Stone, clay, and glass products 32 2.1 130.5 129.6 131.2 132.4 131.4 130.9 131.7 132.7 131.9 132.2 132.3 132.6 133.3 133.1 67 Primary metals 33 3.1 126.6 128.3 129.0 131.1 132.8 132.8 130.9 133.6 133.8 133.0 132.4 129.6 129.0 129.5 68 Iron and steel 331,2 1.7 123.2 125.9 124.9 130.7 131.7 130.8 129.1 132.9 132.7 132.1 132.4 125.6 126.8 126.6 69 Raw steel 331PT .1 113.3 112.4 121.8 124.0 124.2 123.1 118.7 121.1 124.1 123.9 124.6 122.3 119.6 119.6 70 Nonferrous 333-6,9 1.4 130.9 131.4 134.0 131.7 134.1 135.2 133.2 134.5 135.3 134.2 132.4 134.5 131.6 133.0 71 Fabricated metal products . . 34 5.0 128.7 128.4 128.8 129.7 129.0 130.8 130.4 130.6 131.0 131.4 130.6 131.2 130.7 130.7 72 Industrial machinery and equipment 35 8.0 230.1 235.5 238.3 239.7 241.8 247.7 252.6 256.7 260.5 263.5 266.2 268.0 270.2 272.2 73 Computer and office equipment 357 1.8 1,061.4 1,167.5 1.196.6 1,222.8 1,244.6 1,284.5 1,342.2 1,389.6 1,428.4 1,467.7 1,509.0 1,549.7 1,591.6 1,634.2 74 Electrical machinery 36 7.3 390.2 402.1 412.6 418.1 426.4 443.5 455.6 475.2 494.8 516.3 532.0 548.5 553.1 565.7 75 Transportation equipment. . . 37 9.5 122.4 123.1 122.3 121.8 120.4 121.7 119.6 120.9 120.7 121.7 122.5 116.5 120.0 117.4 76 Motor vehicles and parts . 371 4.9 151.0 155.6 155.7 155.8 152.7 156.6 153.4 155.6 156.2 159.4 158.4 144.3 153.7 150.1 77 Autos and light trucks . 371PT 2.6 137.8 139.4 140.7 141.0 135.0 141.0 137.7 138.1 142.1 140.5 142.7 128.4 133.9 134.9 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 94.9 92.2 90.6 89.5 89.7 88.6 87.5 88.0 87.0 86.1 88.4 89.7 88.0 86.3 79 Instruments 38 5.4 116.5 117.2 118.3 118.9 119.7 118.4 117.3 117.4 117.3 117.4 117.9 119.0 118.9 118.8 80 Miscellaneous 39 1.3 124.7 125.1 125.0 125.0 126.4 126.9 125.5 124.8 125.2 124.5 124.0 125.6 124.3 124.2 81 Nondurable goods 40.4 111.8 111.8 113.0 113.6 113.7 113.5 113.8 113.6 113.5 113.2 113.2 113.3 112.9 113.2 82 Foods "20 9.4 110.1 109.6 110.1 110.3 110.0 109.8 110.7 111.1 111.6 111.0 111.1 112.0 110.8 111.0 83 Tobacco products 21 1.6 94.3 90.9 91.9 93.1 94.7 96.7 94.5 91.4 92.7 92.4 90.9 92.9 93.4 95.2 84 Textile mill products 22 1.8 110.9 110.8 112.7 111.4 110.1 111.5 110.8 111.6 111.3 108.8 109.1 107.2 104.1 105.5 85 Apparel products 23 2.2 90.7 89.0 89.1 89.1 89.1 89.0 89.7 89.5 90.1 88.9 86.8 87.5 85.7 84.5 86 Paper and products 26 3.6 116.2 117.2 118.0 118.1 117.7 117.1 116.5 117.3 117.8 115.5 118.5 113.5 112.7 113.1 87 Printing and publishing .... 27 6.7 104.4 104.6 106.0 105.7 105.3 105.3 105.7 105.9 105.4 106.0 105.3 106.3 105.5 105.7 88 Chemicals and products .... 28 9.9 117.5 117.4 119.8 122.7 122.9 121.6 122.4 121.2 120.2 120.3 120.3 120.0 121.5 122.3 89 Petroleum products 29 1.4 114.7 114.6 114.5 112.8 114.9 113.2 115.6 118.7 117.1 118.4 118.2 116.9 117.5 117.3 90 Rubber and plastic products . 30 3.5 137.7 139.3 138.9 139.3 141.4 142.2 141.2 140.5 141.6 140.4 141.0 142.6 141.2 140.3 91 Leather and products 31 .3 69.8 69.5 68.2 67.7 65.4 68.1 66.2 64.6 63.7 64.9 63.1 63.5 63.1 62.4 92 Mining 6.9 98.0 98.3 99.2 99.7 99.5 99.7 100.0 101.3 101.2 102.3 102.8 102.7 102.7 101.7 93 Metal 10 .5 97.1 91.4 94.2 94.5 95.2 95.5 94.1 92.7 93.4 96.3 94.7 94.1 93.8 94.4 94 Coal 12 1.0 108.1 109.4 108.8 110.0 109.5 106.3 101.9 109.3 112.0 110.1 114.4 110.8 109.8 107.5 95 Oil and gas extraction 13 4.8 92.5 93.0 94.0 94.5 94.6 95.7 96.2 96.0 95.9 98.0 98.2 98.8 99.0 98.0 96 Stone and earth minerals 14 .6 124.4 125.5 126.3 125.0 122.4 120.8 127.5 133.0 128.8 124.5 124.4 122.5 122.6 121.9 97 Utilities 7.7 115.6 117.7 115.2 110.9 113.5 114.6 115.3 110.8 114.9 119.0 118.7 114.3 118.4 119.3 98 Electric 491.493PT 6.2 118.2 119.8 116.9 115.8 116.9 116.0 116.0 114.4 117.9 122.0 121.3 116.8 121.3 122.1 99 Gas 492.493PT 1.6 104.8 108.5 107.9 88.2 98.1 108.4 112.6 94.4 101.2 105.7 107.2 102.9 105.4 106.6 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 141.7 142.3 143.6 144.5 145.2 146.2 146.9 148.0 149.0 149.8 150.6 151.5 151.3 115522..00 101 Manufacturing excluding computer and office equipment 83.6 135.3 135.3 136.5 137.1 137.6 138.5 138.7 139.7 140.5 141.2 141.8 141.6 141.8 142.1 102 Computers, communications equipment, and semiconductors 5.9 794.1 843.0 863.9 887.7 908.5 952.4 994.7 1,043.7 1,093.0 1,144.2 1,182.2 1,228.6 1,256.8 1,288.5 103 Manufacturing excluding computers and semiconductors 81.1 121.6 121.7 122.6 122.9 123.1 123.6 123.4 123.8 123.9 124.1 124.1 123.7 123.7 123.7 104 Manufacturing excluding computers, communications equipment and semiconductors 79.5 119.3 119.3 120.1 120.4 120.6 120.9 120.7 121.0 121.0 121.0 121.1 120.5 120.4 120.4 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total 2,001.9 2,726.1 2,740.2 2,762.6 2,740.0 2,751.5 2,781.7 2,791.9 2,795.8 2,811.3 2,813.9 2,826.3 2,811.5 2,814.2 2,826.3 106 Final 1,552.1 2.101.6 2,112.5 2,132.5 2,115.8 2,122.4 2,147.5 2,152.5 2,155.2 2,168.6 2,172.3 2,189.1 2,178.9 2,185.9 2,194.9 107 Consumer goods 1,049.6 1,294.9 1,297.0 1,311.7 1,294.7 1,301.5 1,309.9 1,309.9 1,302.9 1,308.9 1,309.9 1,319.8 1,307.4 1,310.8 1,321.3 108 Equipment 502.5 808.3 817.5 822.5 823.4 822.9 840.3 845.6 856.0 863.5 866.4 873.4 876.3 880.0 877.9 109 Intermediate 449.9 623.3 626.4 628.9 623.0 627.9 633.0 638.1 639.3 641.5 640.3 636.1 631.6 627.5 630.6 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 • December 2000 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 1999 2000 item 11999999 Nov. Dec. Jan. Feb. Mar. Apr. May June Julyr Aug. Private residential r ;al estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,441 1,612 1,664 1,678 1,683 1,762 1,661 1,597 1,559 1,511 1,528 1,511 1,486 2 One-family 1,062 1,188 1,247 1,238 1,266 1,317 1,223 1,238 1,164 1,150 1,127 1,117 1,140 3 Two-family or more 379 425 417 440 417 445 438 359 395 361 401 394 346 4 Started 1,474 1,617 1,667 1,663 1,769 1,744 1,822 1,630 1,652 1,591 1,571 1,527 1,525 One-family 1,134 1,271 1,335 1,344 1,441 1,361 1,324 1,327 1,310 1,258 1,227 1,201 1,249 6 Two-family or more 340 346 332 319 328 383 498 303 342 333 344 326 276 / Under construction at end of period1 847 971 993 1,022 1.025 1,033 1,041 1,031 1,029 1,023 1,024 1,021 1,014 8 One-family 555 659 679 708 710 712 712 706 703 697 696 691 690 9 Two-family or more 292 312 314 314 315 321 329 325 326 326 328 330 324 10 Completed 1,400 1,474 1,636 1.653 1,675 1,599 1,732 1,728 1,660 1,705 1,545 1,539 1,619 11 One-family 1,116 1,160 1,307 1,345 1,340 1,296 1,382 1,375 1,354 1,377 1,222 1,224 1,274 12 Two-family or more 284 315 329 308 335 303 350 353 306 328 323 315 345 13 Mobile homes shipped 354 374 348 316 304 307 291 287 271 265 262 251 249 Merchant builder activity in one-family units 14 Number sold 804 886 907 895 916 927 905 947 865 875 824 921 893 15 Number for sale at end of period1 287 300 326 317 320 321 309 321 305 308 309 303 303 Price of units sold (thousands of dollars)2 16 Median 146.0 152.5 160.0 172.9 165.0 163.0 162.3 165.7 163.1 165.0 160.0 166.1 165.0 17 Average 176.2 181.9 195.8 212.4 203.0 200.1 199.6 205.3 207.5 200.1 196.0 197.1 203.0 EXISTING UNITS (one-family) 18 Number sold 4,382 4,970 5,197 5,150 5,140 4,450 4,760 5,200 4,880 5,090 5,310 4,820 5,280 Price of units sold (thousands of dollars)2 19 Median 121.8 128.4 133.3 133.2 133.7 132.2 133.7 134.7 136.1 137.6 140.2 143.3 143.2 20 Average 150.5 159.1 168.3 168.9 168.8 168.9 168.1 171.5 173.3 176.0 178.9 177.7 183.0 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 656,084 710,104 765,719 776,476 791,698 806,099 816,012 829,517 816,156r 811,816 798,860 783,468 794,517 22 Private 501,426 550,983 592,037 596,942 605,802 614,584 629,590 637,743 629,49 LR 629,820 624,383 613,831 619,269 23 Residential 289,101 314,058 348,584 353,854 358,223 365,149 368,745 372,118 368,948r 367,653 363,756 354,982 355,666 24 Nonresidential 212,325 236,925 243,454 243,088 247,579 249,435 260,845 265,625 260,543r 262,167 260,627 258,849 263,603 25 Industrial buildings 36,696 40,464 35,016 32,244 33,262 33,947 38,538 39,030 38,670r 39,814 39,951 41,731 41,095 26 Commercial buildings 86,151 95,753 103,759 107,305 107,187 107,961 115,440 116,030 115,042r 113,381 112,834 112,616 114,056 27 Other buildings 37,193 39,607 41,279 42,095 43,392 43,350 45,553 45,808 44,136r 45,540 44,559 45,076 45,224 28 Public utilities and other 52,287 61,101 63,400 61,444 63,738 64,177 61,314 64,757 62,695r 63,432 63,283 59,426 63,228 29 Public 154,657 159,121 173,682 179,534 185,895 191,515 186,422 191,774 186,665r 181,995 174,477 169,637 175,248 30 Military 2,561 2,538 2,122 1,944 2,332 1,782 3,011 2,249 2,180r 2,246 2,157 2,092 2,359 31 Highway 43,886 48,339 54,447 56,547 60,218 63,368 53,145 59,007 55,923 51,966 48,148 48,540 48,310 32 Conservation and development 5,708 5,421 6,002 6,585 7,001 6,223 6,975 6,494 5,840r 5,363 5,832 4,708 5,534 33 Other 102,502 102,823 111,110 114,458 116,344 120,142 123,291 124,024 122,722r 122,420 118,340 114,297 119,045 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 A113 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) IIInnndddeeexxx llleeevvveeelll,,, IIIttteeemmm 1999 2000 2000 SSSeeepppttt... 11999999 22000000 222000000000111 SSeepptt.. SSeepptt.. Dec. Mar. June Sept. May June July Aug. Sept. CONSUMER PRICES2 (1982-84=100) 1 All items 2.6 3.5 2.4 6.1R 2.6 2.8 .1 •5R .2 -.1 .5 173.7 7 Food 2.2 2.6 2.2 1.7 2.7 3.9 .5 .1 .5 .2 .2 168.9 Energy items 10.2 15.4 7.8 50.5 6.6 3.5 -1.9 5.6 .1 -2.9 3.8 130.6 4 All items less food and energy 2.0 2.6 1.8 3.4r 2.2r 2.7 .2 .2 .2 .2 .3 182.3 5 Commodities 1.0 .3 -.6 .3 .0 1.7 .0 -.2 .0 -.1 .5 145.1 6 Services 2.5 3.5 3.1 4.7r 3.0r 3.0 ,3r .3 ,3r .3 .1 203.5 PRODUCER PRICES (1982=100) 7 Finished goods 3.1 3.3 .9 7.9 1.8 2.6 .R ,7r .0 -.2 .9 139.2 8 Consumer foods 1.0 .3 -2.0 3.6 1.8 -1.4 -,2r — ,4r .0 -.7 .4 137.1 9 Consumer energy 13.8 17.2 5.9 51.8 5.7 11.4 — .2' 5.8r -.7 -.2 3.7 100.6 10 Other consumer goods 2.9 1.3 1.1 .8 .8 2.4 ,3r -.1 .1 .1 .4 153.6 11 Capital equipment .0 1.2 1.2 .9 1.5 1.4 .2' .R .1 .0 .2 138.4 Intermediate materials 12 Excluding foods and feeds 2.1 4.8 3.6 9.5 2.8 3.4 -.1 .9 .3 -.2 .7 132.1 13 Excluding energy .6 2.3 2.1 4.2 2.7 .3 .R ,lr .2 -.1 .0 137.0 Crude materials 14 Foods -1.2 -2.5 -3.6 21.5 -11.1 -13.3 - 1.4r -2.9r -2.7 -4.5 3.9 97.6 15 Energy 53.4 40.8 -27.9 84.9 106.7 42.6 8.8r 15.4r .4 .6 8.1 134.3 16 Other .9 2.5 26.2 9.9 -10.5 -10.7 -.2' — 1.5r -1.8 -1.3 .3 142.6 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics • December 2000 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1999 2000 AAccccoouunntt 11999977 11999988 11999999 Q2 Q3 Q4 Ql Q2R GROSS DOMESTIC PRODUCT 1 Total 8,318.4 8,790.2 9,299.2 9,191.5 9,340.9 9,559.7 9,752.7 9,945.7 By source 2 Personal consumption expenditures 5,529.3 5.850.9 6,268.7 6,213.2 6,319.9 6,446.2 6,621.7 6,706.3 3 Durable goods 642.5 693.9 761.3 756.3 767.2 787.6 826.3 814.3 4 Nondurable goods 1,641.6 1,707.6 1,845.5 1,825.3 1,860.0 1,910.2 1,963.9 1,997.6 5 Services 3.245.2 3.449.3 3,661.9 3,631.5 3,692.7 3,748.5 3,831.6 3,894.4 6 Gross private domestic investment 1,390.5 1.549.9 1,650.1 1,607.9 1,659.1 1,723.7 1,755.7 1,852.6 7 Fixed investment 1,327.7 1,472.9 1,606.8 1,593.4 1,622.4 1,651.0 1,725.8 1,780.5 8 Nonresidential 999.4 1,107.5 1.203.1 1,188.0 1,216.8 1,242.2 1,308.5 1,359.2 9 Structures 255.8 283.2 285.6 283.7 281.2 290.4 308.9 315.1 10 Producers' durable equipment 743.6 824.3 917.4 904.3 935.6 951.8 999.6 1,044.1 11 Residential structures 328.2 365.4 403.8 405.4 405.6 408.8 417.3 421.3 12 Change in business inventories 62.9 77.0 43.3 14.5 36.7 72.7 29.9 72.0 13 Nonfarm 60.0 76.4 43.6 13.4 42.0 71.8 32.4 72.2 14 Net exports of goods and services -89.3 -151.5 -254.0 -240.4 -280.5 -299.1 -335.2 -355.4 15 Exports 966.4 966.0 990.2 973.0 999.5 1,031.0 1,051.9 1,092.9 16 Imports 1,055.8 1,117.5 1,244.2 1,213.4 1,280.0 1,330.1 1,387.1 1,448.3 17 Government consumption expenditures and gross investment 1,487.9 1,540.9 1.634.4 1,610.9 1,642.4 1,688.8 1,710.4 1,742.2 18 Federal 538.2 540.6 568.6 558.3 570.4 591.6 580.1 604.5 19 State and local 949.7 1,000.3 1,065.8 1,052.6 1,072.1 1,097.3 1,130.4 1,137.7 By major type of product 20 Final sales, total 8.255.5 8,713.2 9,255.9 9,177.0 9,304.2 9,486.9 9,722.8 9,873.7 21 Goods 3,082.5 3,239.3 3,467.0 3,436.7 3,490.6 3,566.0 3,680.3 3,734.1 22 Durable 1.436.2 1,532.3 1,651.1 1,635.9 1,669.4 1,701.8 1,773.7 1,809.6 23 Nondurable 1,646.4 1,707.1 1,815.8 1,800.8 1,821.1 1,864.1 1,906.6 1,924.5 24 Services 4,442.1 4,673.0 4,934.6 4,891.2 4,965.2 5,050.3 5,135.2 5,231.4 25 Structures 730.9 800.9 854.3 849.1 848.5 870.7 907.4 908.2 26 Change in business inventories 62.9 77.0 43.3 14.5 36.7 72.7 29.9 72.0 27 Durable goods 33.1 45.8 27.2 5.0 27.6 47.5 20.7 48.3 28 Nondurable goods 29.8 31.2 16.1 9.5 9.1 25.2 9.2 23.7 MEMO 29 Total GDP in chained 1996 dollars 8,159.5 8,515.7 8,875.8 8,783.2 8,905.8 9,084.1 9,191.8 9,318.9 NATIONAL INCOME 30 Total 6,618.4 7,038.1 7,469.7 7,392.3 7,493.1 7,680.7 7,833.5 7,983.2 31 Compensation of employees 4,651.3 4,984.2 5,299.8 5,255.4 5,340.9 5,421.1 5,512.2 5,603.5 32 Wages and salaries 3.886.0 4,192.8 4,475.1 4,435.5 4,512.2 4,583.5 4,660.4 4,740.1 33 Government and government enterprises 664.3 692.7 724.4 720.3 727.5 734.5 749.9 760.2 34 Other 3,221.7 3,500.1 3,750.7 3,715.2 3,784.7 3,849.0 3,910.5 3,980.0 35 Supplement to wages and salaries 765.3 791.4 824.6 819.9 828.7 837.7 851.8 863.3 36 Employer contributions for social insurance 289.9 305.9 323.6 321.2 325.9 330.3 337.8 342.9 37 Other labor income 475.4 485.5 501.0 498.7 502.8 507.4 514.0 520.5 38 Proprietors' income' 581.2 620.7 663.5 660.4 659.7 689.6 693.9 709.5 39 Business and professional' 551.5 595.2 638.2 631.4 644.2 657.9 674.8 688.1 40 Farm1 29.7 25.4 25.3 29.0 15.5 31.7 19.1 21.5 41 Rental income of persons2 128.3 135.4 143.4 145.7 136.6 146.2 145.6 140.8 42 Corporate profits' 833.8 815.0 856.0 836.8 842.0 893.2 936.3 963.6 43 Profits before tax3 792.4 758.2 823.0 804.5 819.0 870.7 920.7 942.5 44 Inventory valuation adjustment 8.4 17.0 -9.1 -8.9 -19.7 -19.2 -25.0 — 13.6 45 Capital consumption adjustment 32.9 39.9 42.1 41.2 42.7 41.6 40.6 34.7 46 Net interest 423.9 482.7 507.1 494.1 513.8 530.6 545.4 565.9 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1999 2000 AAccccoouunntt 11999977 11999988 11999999 Q2 Q3 Q4 Ql Q2r PERSONAL INCOME AND SAVING 1 Total personal income 6,937.0 7,391.0 7,789.6 7,729.7 7,828.5 7,972.3 8,105.8 8,242.1 2 Wage and salary disbursements 3,888.9 4,190.7 4,470.0 4,430.4 4,507.0 4,578.3 4,660.4 4,740.1 3 Commodity-producing industries 975.1 1,038.6 1,089.2 1,081.6 1,097.8 1,111.2 1,130.9 1,147.1 4 Manufacturing 718.4 756.6 782.4 777.4 789.0 795.1 802.8 813.1 Distributive industries 879.6 949.1 1,020.3 1,009.9 1,029.9 1,049.4 1,070.9 1,095.7 6 Service industries 1,369.9 1,510.3 1,636.0 1,618.6 1,651.8 1,683.2 1,708.6 1,737.2 7 Government and government enterprises 664.3 692.7 724.4 720.3 727.5 734.5 749.9 760.2 8 Other labor income 475.4 485.5 501.0 498.7 502.8 507.4 514.0 520.5 9 Proprietors' income1 581.2 620.7 663.5 660.4 659.7 689.6 693.9 709.5 10 Business and professional' 551.5 595.2 638.2 631.4 644.2 657.9 674.8 688.1 11 Farm' 29.7 25.4 25.3 29.0 15.5 31.7 19.1 21.5 12 Rental income of persons 128.3 135.4 143.4 145.7 136.6 146.2 145.6 140.8 13 Dividends 334.9 351.1 370.3 366.8 373.5 380.2 386.9 392.6 14 Personal interest income 864.0 940.8 963.7 951.3 969.4 989.0 1,011.6 1,031.3 15 Transfer payments 962.2 983.0 1,016.2 1,012.2 1,020.3 1,027.4 1,046.9 1,066.1 16 Old age survivors, disability, and health insurance benefits 565.8 578.0 588.0 586.1 589.7 592.8 607.9 624.3 17 LESS: Personal contributions for social insurance 297.9 316.2 338.5 335.8 341.0 345.9 353.4 358.8 18 EQUALS: Personal income 6,937.0 7,391.0 7,789.6 7,729.7 7,828.5 7,972.3 8,105.8 8,242.1 19 LESS: Personal tax and nontax payments 968.8 1,070.9 1,152.0 1,133.4 1,164.0 1,197.3 1,239.3 1,277.2 20 EQUALS: Disposable personal income 5,968.2 6,320.0 6,637.7 6,596.3 6,664.5 6,775.0 6,866.5 6,964.9 21 LESS: Personal outlays 5,715.3 6,054.7 6,490.1 6,432.8 6,543.3 6,674.1 6,855.6 6,944.3 22 EQUALS: Personal saving 252.9 265.4 147.6 163.6 121.1 101.0 11.0 20.6 MEMO Per capita (chained 1996 dollars) 23 Gross domestic product 30,434.4 31,469.5 32,511.9 32,220.0 32,586.0 3333,,115533..55 3333,,448855..66 33,874.7 24 Personal consumption expenditures 20,230.9 20,985.4 21,900.4 21,791.0 22,004.4 22,266.4 22,635.5 22,757.7 25 Disposable personal income 21,838.0 22,672.0 23,191.0 23,133.0 23,203.0 23,404.0 23,472.0 23,639.0 26 Saving rate (percent) 4.2 4.2 2.2 2.5 1.8 1.5 .2 .3 GROSS SAVING 27 Gross saving 1,502.3 1,654.4 1,717.6 1,691.7 1,716.8 1,746.3 1,777.0 1,844.5 28 Gross private saving 1,343.7 1,375.7 1,343.5 1,338.5 1,321.1 1,331.4 1,279.2 1,328.8 29 Personal saving 252.9 265.4 147.6 163.6 121.1 101.0 11.0 20.6 30 Undistributed corporate profits 261.3 218.9 229.4 218.7 214.0 241.7 262.7 278.5 31 Corporate inventory valuation adjustment 8.4 17.0 -9.1 -8.9 -19.7 -19.2 -25.0 -13.6 Capital consumption allowances 3? Corporate 581.5 624.3 676.9 670.7 687.7 669944..88 771111..55 773311..11 33 250.9 265.1 284.5 280.3 293.1 288.7 294.1 298.7 34 Gross government saving 158.6 278.7 374.1 353.3 395.7 414.9 497.7 515.7 35 33.4 137.4 217.3 209.5 240.6 238.4 333.0 339.9 36 Consumption of fixed capital 86.8 88.4 92.8 92.0 93.4 95.0 97.2 98.9 37 Current surplus or deficit (—), national accounts -53.3 49.0 124.4 117.5 147.3 143.3 235.8 240.9 38 State and local 125.2 141.3 156.8 143.7 155.1 176.6 164.7 175.8 39 Consumption of fixed capital 94.2 99.5 106.8 105.8 107.7 109.9 112.7 115.6 40 Current surplus or deficit (-), national accounts 31.0 41.7 50.0 38.0 47.4 66.6 52.0 60.1 4) Gross investment 1,532.1 1,629.6 1,645.6 1,614.9 1,627.3 1,678.5 1,699.3 1,771.9 42 Gross private domestic investment 1,390.5 1,549.9 1,650.1 1,607.9 1,659.1 1,723.7 1,755.7 1,852.6 43 Gross government investment 264.6 278.8 308.7 303.5 308.0 324.4 334.2 331.9 44 Net foreign investment -123.1 -199.1 -313.2 -296.5 -339.8 -369.6 -390.7 -412.5 45 Statistical discrepancy 29.7 -24.8 -71.9 -76.8 -89.5 -67.8 -77.7 -72.5 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 • December 2000 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 1999 2000 IItteemm ccrreeddiittss oorr ddeebbiittss 11999977 11999988 11999999 Q2 Q3 Q4 Ql Q2 1 Balance on current account -140.540 -217.138 -331,479 -78,982 -89,649 -96,223 -101,505 -106,138 ? Balance on goods and services -105,932 -166,898 -264.971 -63,300 -72,718 -76,280 -85,117 -89,259 3 Exports 936,937 932,977 956,242 234,297 241,969 249,653 255,977 265,133 4 Imports -1,042,869 -1.099,875 -1,221,213 -297.597 -314,687 -325,933 -341,094 -354,392 5 Income, net 6,186 -6,211 -18,483 -4.145 -5,535 -5,683 -4.364 -4.543 6 Investment, net 11,050 -1,036 -13,102 -2,813 -4,193 -4,319 -2.987 -3.145 7 Direct 71,935 67,728 62,704 14,698 15,701 16,275 17,068 18,421 8 Portfolio -60.885 -68,764 -75,806 -17,511 -19,894 -20,594 -20,055 -21,566 9 Compensation of employees -4,864 -5,175 -5,381 -1,332 -1,342 -1,364 -1,377 -1,398 10 Unilateral current transfers, net -40,794 -44,029 -48,025 -11,537 -11,396 -14.260 -12,024 -12.336 11 Change in U.S. government assets other than official reserve assets, net (increase, —) 68 -422 2,751 -392 -686 3,711 -131 --557722 12 Change in U.S. official reserve assets (increase, —) -1,010 -6.783 8,747 1,159 1,951 1,569 -554 2,020 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -350 -147 10 -190 -184 -178 -180 -180 15 Reserve position in International Monetary Fund -3,575 -5,119 5,484 1,413 2,268 1,800 -237 2,328 16 Foreign currencies 2,915 -1,517 3,253 -64 -133 -53 -137 -128 17 Change in U.S. private assets abroad (increase, -) -487,998 -328,231 -441,685 -171,609 -124,174 -120,162 -178.273 -75,096 18 Bank-reported claims3 -141,118 -35,572 -69,862 -41,786 -11,259 -45,304 -55,511 14,861 19 Nonbank-reported claims -122.888 -10,612 -92,328 -25,734 -27,943 -24,428 -52,563 -26,112 70 U.S. purchases of foreign securities, net -118,976 -135,995 -128,594 -71,131 -41,420 -17,150 -27,236 -26,350 21 U.S. direct investments abroad, net -105,016 -146,052 -150,901 -32,958 -43,552 -33,280 -42,963 -37,495 22 Change in foreign official assets in United States (increase, +) 18.876 -20,127 42,864 -1,096 12,191 27,495 22,015 5,905 7.3 U.S. Treasury securities -6,690 -9,921 12,177 -6,708 12,963 5,122 16,198 -4,000 24 Other U.S. government obligations 4,529 6,332 20,350 5,792 1,835 6.730 8,107 10,334 25 Other U.S. government liabilities3 -1,041 -3,550 -3,255 -1,099 -760 89 -644 -772 26 Other U.S. liabilities reported by U.S. banks3 22,286 -9,501 12,692 1.436 -2,032 14,427 -2,577 -561 27 Other foreign official assets -208 -3,487 900 -517 185 1,127 931 904 28 Change in foreign private assets in United States (increase, +) 738,086 502,362 710,700 273,104 182,019 157,072 214,520 216,831 79 U.S. bank-reported liabilities2 149,026 39,769 67,403 37,151 24,585 19.618 -8,824 48,660 30 U.S. nonbank-reported liabilities 113,921 -7,001 34,298 13.663 -8,085 792 58,061 21,597 31 Foreign private purchases of U.S. Treasury securities, net 146,433 48,581 -20,464 -5,407 9,639 -17,191 -9,248 -20,661 37 U.S. currency flows 24,782 16,622 22,407 3,057 4,697 12,213 -6,847 989 33 Foreign purchases of other U.S. securities, net 197,892 218,075 331,523 80.838 95,620 92,250 132,416 86,547 34 Foreign direct investments in United States, net 106,032 186,316 275,533 143,802 55,563 49,390 48.962 79,699 35 Capital account transactions, net5 350 637 -3,500 165 171 -3,993 166 163 36 Discrepancy -127,832 69,702 11,602 -22,349 18,177 30.531 43,762 -43,113 37 Due to seasonal adjustment -1,511 -9,739 5.738 5,724 -2,505 38 Before seasonal adjustment -127,832 69,702 11,602 -20,838 27,916 24.793 38,038 -40.608 MEMO Changes in official assets 39 U.S. official reserve assets (increase, —) -1,010 -6,783 8,747 1,159 1,951 1.569 -554 22,,002200 40 Foreign official assets in United States, excluding line 25 (increase, +) 19,917 -16,577 46,119 3 12,951 27,406 22,659 6.677 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 12,124 -11,531 1,331 1,632 -783 -1,673 6,109 11,,992222 t. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38^tl. 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 2000 IItteemm 11999977 11999988 11999999 Feb. Mar. Apr. May June Julyr Aug." 1 Goods and services, balance -105,932 -166,898 -264,971 -27,481 -30,370 -29,637 -29,794 -29,846 -31,692 -29,440 2 Merchandise -196,665 -246,854 -345,559 -34,641 -37,148 -36,894 -36,475 -36,862 -38,523 -36,408 3 Services 90,733 79,956 80,588 7,160 6,778 7,257 6,681 7,016 -6,831 6,968 4 Goods and services, exports 936,937 932,977 956,242 85,312 86,975 87,268 86,846 90,991 89,799 93,022 5 Merchandise 679,702 670,324 684,358 60,894 62,513 62,566 62,749 66,468 65,096 67,963 6 Services 257,235 262,653 271,884 24,418 24,462 24,702 24,097 24,523 24,703 25,059 7 Goods and services, imports 1,042,869 1,099,875 1,221,213 -112,793 -117,345 -116,905 -116,640 -120,837 -121,492 -122,462 8 Merchandise 876,367 917,178 1,029,917 -95,535 -99,661 -99,460 -99,224 -103,330 -103,620 -104,371 9 Services 166,502 182,697 191,296 -17,258 -17,684 -17,445 -17,416 -17,507 -17,872 -18,091 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 2000 AAsssseett 11999977 11999988 11999999 Mar. Apr. May June July Aug. Sept. Oct.p 1 Total 69,954 81,755 71,516 70,789 66,587 67,160 67,957 66,516 65,333 66,256 65,257 2 Gold stock, including Exchange Stabilization Fund' 11,050 11,041 11,089 11,048 11,048 11,048 11,048 11,046 11,046 11,046 11,046 3 Special drawing rights2'3 10,027 10,603 10,336 10,335 10,122 10,310 10,444 10,257 10,371 10,316 10,169 4 Reserve position in International Monetary Fund2 18,071 24,111 17,950 17,871 15,403 15,373 15,428 15,083 13,798 13,685 13,528 5 Foreign currencies4 30,809 36,001 32,182 31,535 30,014 30,429 31,037 30,130 30,118 31,209 30,514 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 2000 AAsssseett 11999977 11999988 11999999 Mar. Apr. May June July Aug. Sept. Oct.p 1 Deposits 457 167 71 125 142 110 104 76 78 139 115 Held in custody 2 U.S. Treasury securities2 620,885 607,574 632,482 641,830 632,216 623,553 627,081 624,177 628,001 611,641 595,591 3 Earmarked gold3 10,763 10,343 9,933 9,711 9,711 9,711 9,688 9,688 9,674 9,620 9,565 1. Excludes deposits and U.S. Treasury securities held for international and regional 3. Held in foreign and international accounts and valued at $42.22 per fine troy ounce; not organizations. included in the gold stock of the United States. 2. Marketable U.S. Treasury bills, notes, and bonds and nonmarketable U.S. Treasury securities, in each case measured at face (not market) value. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A52 International Statistics • December 2000 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2000 IItteemm 11999988 11999999 Feb. Mar. Apr. May June July Aug." 1 Total1 759,928 806,288 812,353 828,947 834,154 826,302 836,075 848,298 849,722 By type 2 Liabilities reported by banks in the United States* 125,883 138,817 130,268 136,240 137,724 135,802 136,129 141,186 137,242 3 U.S. Treasury bills and certificates3 134,177 156.177 156,995 164,781 157,607 148,820 157,190 160,093 159,781 U.S. Treasury bonds and notes 4 Marketable 432.127 422,266 430,806 430,237 436,640 435,235 433,823 433,184 433,633 5 Nonmarketable4 6.074 6,111 6,191 5,734 5,770 5,808 5,740 5,180 5,213 6 U.S. securities other than U.S. Treasury securities5 61,667 82,917 88,093 91,955 96,413 100,637 103,193 108,655 113,853 By area 7 Europe1 256.026 244,805 248,792 251,571 249,685 250,306 253,416 258,923 255,820 8 Canada 10.552c 12,503c 13,195c 13,683c 13,338c 13,027° 13,542c 13,728L 12,992c 9 Latin America and Caribbean 79.503 73.518 71,180 77,014 72,407 69,508 71,220 73,616 76,317 10 Asia 400,631 463,673 466,087 474,355 486,133 482,134 485,424 487,490 490,210 11 Africa 10,059 7,523 7,976 7,979 8,024 7,709 7,849 8,656 8,706 12 Other countries 3,157r 4,266r 5,123r 4,345r 4,567r 3,618r 4,624r 5,884r 5,677r 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 2000 IItteemm 11999966 11999977 11999988 Sept. Dec. Mar. June 1 Banks' liabilities 103,383 117,524 101,125 100,112 88,537 85,649 78,603 2 Banks' claims 66.018 83,038 78,162 67,032 67,365 63,492 62,631 3 Deposits 22,467 28,661 45,985 32,713 34,426 32,967 31,224 4 Other claims 43,551 54,377 32,177 34,319 32,939 30,525 31,407 5 Claims of banks' domestic customers2 10.978 8,191 20,718 11,534 20,826 21,753 18,802 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 2000 IItteemm 11999977 11999988 11999999 Feb. Mar.r Apr. May June July Aug.? BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,283,027 1,347,837 l,413,622r l,409,358r 1,407,854 l,408,223r l,457,629c 1,456,560° l,486,294c l,449,669c 2 Banks' own liabilities 882,980 884,939 976,400 972,870r 961,754 976,662r l,036,677c l,017,559c l,056,443c l,018,607c 3 Demand deposits 31,344 29,558 42,884 39,611 29,255 30,202 29.097 30,719r 34,914r 30,100 4 Time deposits2 198,546 151,761 163,595r 165.657r 167,001 182,657r 176,927 182,787r 186,305r 184,634 5 Other3 168,011 140,752 162,749 163.884 161,906 165,626 179,090 175,905r 178,880r 179,510 6 Own foreign offices4 485,079 562,868 607,172r 603,718r 603,592 598,177r 651,563 628,148 656,344' 624,363 7 Banks' custodial liabilities5 400,047 462,898 437,222r 436,488r 446,100 43 l,561r 420,952 439,001 429,851 431,062 8 U.S. Treasury bills and certificates6 193,239 183,494 185,736r 184,553r 194,987 184,159r 174,310 180,951 182,699 180,925 9 Other negotiable and readily transferable instruments7 93,641 141,699 132,575 128,67 lr 127,628 124,207r 123,580 124,670 120,624 119,212 10 Other 113,167 137,705 118,911 123,264r 123,485 123,195' 123,062 133,380 126,528 130,925 11 Nonmonetary international and regional organizations8 . . 11,690 11,883 15,276 20,436 18,729 20,590 22.807 21,366 16,689 14,630 12 Banks' own liabilities 11,486 10,850 14,357 19,513 17,954 19,800 22,109 20,924 16,294 14,377 13 Demand deposits 16 172 98 148 71 58 36 34 30 26 14 Time deposits" 5,466 5,793 10,349 9,251 9,741 11,338 11,393 12,545 10,305 9,062 15 Other3 6,004 4,885 3,910 10,114 8,142 8,404 10,680 8,345 5,959 5,289 16 Banks' custodial liabilities5 204 1,033 919 923 775 790 698 442 395 253 17 U.S. Treasury bills and certificates6 69 636 680 704 695 623 582 432 371 217 18 Other negotiable and readily transferable instruments7 133 397 233 213 71 77 113 10 21 26 19 Other 2 0 6 6 9 90 3 0 3 10 20 Official institutions9 283,685 260,060 294,994 287,263 301,021 295,331 284,622 293,319 299,775r 297,023 21 Banks' own liabilities 102,028 80,256 97,615 79.652 87,187 87,379 87,931 88,449 92,794r 91,238 22 Demand deposits 2,314 3,003 3,341 3,306 2,381 2,620 2,781 2,887 4,063r 4,573 23 Time deposits' 41,396 29,506 28,942 27,690 30,117 36,587 31,645 33,520 34,463r 31,841 24 Other3 58,318 47,747 65,332 48,656 54,689 48,172 53,505 52,042 54,268r 54,824 25 Banks' custodial liabilities5 181,657 179,804 197.379 207,611 213,834 207.952 196,691 204,870 206,981 205,785 26 U.S. Treasury bills and certificates6 148,301 134,177 156,177 156,995 164,781 157,607 148,820 157,190 160,093 159,781 27 Other negotiable and readily transferable instruments7 33,151 44,953 41,152 50,298 48,689 50,118 47,734 47,611 46,363 45,644 28 Other 205 674 50 318 364 227 137 69 525 360 29 Banks10 815,247 885,336 905,347r 895,134r 888,905 892,804r 941,920 930,663r 960,487r 925,495 30 Banks' own liabilities 641,447 676,057 733,381r 733,010r 724,870 732,303r 781,795 759,887r 797,353r 758,407 31 Unaffiliated foreign banks 156,368 113,189 126,209 129,292 121,278 134,126 130,232 131,739r 141,009r 134,044 32 Demand deposits 16,767 14,071 17,583 12,424 13,930 14,404 13,254 14,543r 17,508r 11,961 33 Time deposits2 83,433 45,904 48,140 51,510 49,712 57,240 55,167 58,095r 60,703 62,841 34 Other3 56,168 53,214 60,486 65.358 57,636 62,482 61,811 59,101r 62,798r 59,242 35 Own foreign offices4 485,079 562,868 607,172r 603,718r 603,592 598,177r 651,563 628,148 656,344r 624,363 36 Banks' custodial liabilities5 173,800 209,279 171,966r 162,124r 164,035 160,501 160,125 170,776 163,134 167,088 37 U.S. Treasury bills and certificates6 31,915 35,359 16,875r 14,584r 15,708 13,931 14,179 13,239 12,657 12,251 38 Other negotiable and readily transferable instruments7 35,393 45,332 45,695 34,629 35,453 33,790 33,667 34,657 34,018 33,893 39 Other 106,492 128,588 109,396 112,911 112,874 112,780 112,279 122,880 116,459 120,944 40 Other foreigners 172,405 190,558 198,005r 206,525R 199,199 199,498' 208,280 21 L,212r 209,343r 212,521 41 Banks' own liabilities 128,019 117,776 131,047r 140,695r 131,743 137,180r 144,842 148,299r 150,002R 154,585 42 Demand deposits 12,247 12,312 21,862 23,733 12,873 13,120 13,026 13,255r 13,313r 13,540 43 Time deposits2 68,251 70,558 76,164r 77,206r 77,431 77,492r 78,722 78,627' 80.834r 80,890 44 Other3 47,521 34,906 33,021 39,756 41,439 46,568 53,094 56,417 55,855r 60,155 45 Banks' custodial liabilities5 44,386 72,782 66,958 65,830r 67,456 62,318r 63,438 62,913 59,381 57,936 46 U.S. Treasury bills and certificates6 12,954 13,322 12,004 12,270 13,803 1 l,998r 10,729 10,090 9,579 8,676 47 Other negotiable and readily transferable instruments7 24,964 51,017 45,495 43,53 lr 43,415 40,222r 42,066 42,392 40,222 39,649 48 Other 6,468 8,443 9,459 10,029r 10,238 10,098r 10,643 10,431 9,541 9,611 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 16,083 27,026 30,345 27,266 28,056 26,087 27,238 26,571 26,186 25,911 1. Reporting banks include all types of depository institutions as well as some brokers and 6. Includes nonmarketable certificates of indebtedness and Treasury bills issued to official dealers. Excludes bonds and notes of maturities longer than one year. institutions of foreign countries. 2. Excludes negotiable time certificates of deposit, which are included in "Other negotia- 7. Principally bankers acceptances, commercial paper, and negotiable time certificates of ble and readily transferable instruments." deposit. 3. Includes borrowing under repurchase agreements. 8. Principally the International Bank for Reconstruction and Development, the Inter- 4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiar- American Development Bank, and the Asian Development Bank. Excludes "holdings of ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory dollars" of the International Monetary Fund. agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists 9. Foreign central banks, foreign central governments, and the Bank for International principally of amounts owed to the head office or parent foreign bank, and to foreign Settlements. branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. 10. Excludes central banks, which are included in "Official institutions." 5. Financial claims on residents of the United States, other than long-term securities, held by or through reporting banks for foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • December 2000 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1—Continued Payable in U.S. dollars Millions of dollars, end of period 2000 IItteemm 11999977 11999988 11999999 Feb. Mar. Apr. May June July Aug.? AREA 50 Total, all foreigners 1,283,027 1,347,837 l,413,622r l,409,358r l,407,854r l,408,223r 1,457,629° 1,456,560° 1,486,294° 1,449,669° 51 Foreign countries 1,271,337 1,335,954 l,398,346r l,388,922r l,389,125r l,387,633r 1,434,822° l,435,194r 1,469,645° 1,435,039° 52 Europe 419,672 427,375 448,070 451,020r 449,812r 433,782r 435,694 448,745 481,999 456,986 53 Austria 2,717 3,178 2,789 2,997 2,570 2,302 2,468 2,697 3,226r 2,772 54 Belgium and Luxembourg 41,007 42,818 44,692 38,783 36.385 33,100 31,656 31,246 33,372 31,381 55 Denmark 1,514 1,437 2,196 2,533 3,235 2,601 3,629 3,444 3,522 3,692 56 Finland 2,246 1,862 1,658 1,479 2,015 1,744 1,529 1,380 1,745 1,612 57 France 46,607 44,616 49,790 49,839 43,666 45,324 43,577 42,105 42,386r 42,729 58 Germany 23,737 21,357 24,748 23,916 25,176 23,710 24,875 28,943 26,489r 25,895 59 Greece 1,552 2,066 3,748 4,000 3,216 3,188 3,030 2,765 2,916r 3,455 60 Italy 11,378 7,103 6,775 5,404r 5,277r 4,788r 7,142 6,676 5,704r 5,584 61 Netherlands 7,385 10,793 8,310 7,797 7,67 r 7,277 6,823 8,728 12,339 13,112 62 Norway 317 710 1,327 1,169 1,336 1,197 963 2,189 2,374 1,671 63 Portugal 2,262 3,236 2,228 2,113 2,006 1,913 1,964 2,373 2,172 2,128 64 Russia 7,968 2,439 5,475 7,543 7,360 10,065 11,716 11,884 14,965r 1144,,225577 65 Spain 18,989 15,781 10,426 12,130 12,518 11,208 10,796 9,999 8,878 88,,886644 66 Sweden 1,628 3,027 4,652 4,792 5,425 5,165 4,390 5,434 5,091 5,994 67 Switzerland 39,023 50,654 65,985 61,335 81,934 69,208 63,700 59,561 78,197 77,570 68 Turkey 4,054 4,286 7,842 7,714 7,995 8,016 7,501 8,472 8,341r 7,999 69 United Kingdom 181,904 181,554 176,234 187,346r 169,155r 169,22 lr 176,824 187,806 197,31 r 175,739 70 Yugoslavia" 239 233 286 294 270 265 275 276 277r 277 71 Other Europe and other former U.S.S.R.12 25,145 30,225 28,909 29,836 32,602 33,490 32,836 32,767 32,694r 32,255 72 Canada 28,341 30,212 34,119 33,387 36,147 40,562 36,229 37,256 37,253 33,735 73 Latin America and Caribbean 536,393 554,866 577,737 598,391r 597,235r 606,768r 663,827 641,087r 644,215r 632,823 74 Argentina 20,199 19,014 18,633 16,548 17,906 18,487 16,496 16,540 19,099r 17,560 75 Bahamas 112,217 118,085 134,407 155,720 141,370 159,115 173,589r 181,673r 170,544r 176,140 76 Bermuda 6,911 6,846 7,877 9,106 10,108 9,710 8,713 8,021 7,074r 8,157 77 Brazil 31,037 15,815 12,860 12,785 14,889 10,305 9,945 10,905 1 l,919r 12,337 78 British West Indies 276,418 302,486 312,779 314,10Sr 321,144r 317,044r 360,314r 325,537r 340,388r 321,461 79 Chile 4,072 5,015 7,008 6,244 5,752 5,933 6,095 6,192 5,439 5,296 80 Colombia 3,652 4,624 5,669 4,304 4,314 4,243 4,237 4,360 4,622 4,732 81 Cuba 66 62 75 75 100 77 77 85 122r 91 82 Ecuador 2,078 1,572 1,956 2,035 2,141 2,193 2,274 2,272 2,218r 2,077 83 Guatemala 1,494 1,336 1,626 1,617 1,706 1,628 1,669 1,649 l,717r 1,638 84 Jamaica 450 577 520 571 671 670 706 674 709r 900 85 Mexico 33,972 37,157 30,717 32,216 31,393 32,832 33,915 33,937 33,379r 33,290 86 Netherlands Antilles 5,085 5,010 3,997 3,692 4,528 5,108 6,561 7,885 7,165 6,370 87 Panama 4,241 3,864 4,415 3,737 4,157 3,788 3,764 3,822 3,349r 3,557 88 Peru 893 840 1,142 1,051 975 1,021 1.100 1,125 l,095r 1,064 89 Uruguay 2,382 2,486 2,386 2,262 2,377 2,431 2,520 2,680 2,160 2,526 90 Venezuela 21,601 19,894 20,189 21,297 22,572 21,140 20.469 22,263 21,457r 23,889 91 Other 9,625 10,183 11,481 11,023 11,132 11,043 11,383 1 l,467r ll,759r 11,738 92 Asia 269,379 307,960 319,302r 287,318r 287,572r 288,739r 282,325 229900,,001166rr 228855,,008844rr 229911,,005566 China 93 Mainland 18,252 13,441 12,325 1 l,659r 8,094r 8,529r 7,824 9,930 9,383 11,796 94 Taiwan 11,840 12,708 13,600 11,207r 14,637r 14,483r 14,113 13,584 13,156 14,675 95 Hong Kong 17,722 20,900 27,697 24,038 22,672 22,873 23,951 23,952 25,693 26,760 96 India 4,567 5,250 7,367 5,405 6,258 5,586 5,703 5,558 5,689 5,497 97 Indonesia 3,554 8,282 6,567 7,495 7,837 7,275 7,064 7,400 7,472 7,430 98 Israel 6,281 7,749 7,488 7,680 8,338 7,058 5,541 6,123 5,793 5,950 99 Japan 143,401 168,563 159,075 145.314 145,074 147,409 148,668 153,662 147,553r 146,378 100 Korea (South) 13,060 12,524 12,853 12,625 16,425' 16,820 12,941 10,324 8,624 8,822 101 Philippines 3,250 3,324 3,253 2,540 2,277 2,290 1,750 1,999 1,649 1,679 102 Thailand 6,501 7,359 6,050 5,134 4,370 3,628 3,428 3,529 3,900 3,504 103 Middle Eastern oil-exporting countries13 14,959 15,609 21,284 15,811 16,132 19,005 18,647 18,538 22,126r 21,918 104 Other 25,992 32,251 41,743r 38,410r 35,458r 33,783 32,695 35,417r 34,046 36,647 105 Africa 10,347 8,905 9,468 8,270 8,614 8,576 8,437 8,718r 9,738 9,613 106 Egypt 1,663 1,339 2,022 1,703 1,770 1,663 1,722 1,962 1,778 1,621 107 Morocco 138 97 179 262 115 106 122 149 118 109 108 South Africa 2,158 1,522 1,495 698 673 687 662 595 793 710 109 Zaire 10 5 14 13 13 7 13 6 5 7 110 Oil-exporting countries14 3,060 3,088 2,914 3,098 3,318 3,558 3,298 3,405 4,258 4,469 111 Other 3,318 2,854 2,844 2,496 2,725 2,555 2,620 2,601r 2,786 2,697 112 Other 7,205 6,636 9,650 10,536r 9,745r 9,206r 8,310 9,372 11,356 10,826 113 Australia 6,304 5,495 8,377 9,333r 8,667r 8,413r 7,586 8,564 10,347 9,824 114 Other 901 1,141 1,273 1.203 1,078 793 724 808 1,009 1,002 115 Nonmonetary international and regional organizations .. 11,690 11,883 15,276 20,436 18,729r 20,590 22,807 21,366 16,689 14,630 116 International15 10,517 10,221 12,876 17,561 16,674r 19,207 21,375 20,106 15,295 13,118 117 Latin American regional16 424 594 1,150 1,858 1,244 518 624 768 786 1,146 118 Other regional17 749 1,068 1,250 1,017 811 865 808 492 608 366 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 States' Payable in U.S. Dollars Millions of dollars, end of period 2000 AArreeaa oorr ccoouunnttrryy 11999977 11999988 11999999 Feb. Mar. Apr. May June July Aug.P 1 Total, all foreigners 708,225 734,995 795,377 750,972 813,890 815,083 820,782 825,898 827,987 800,707 2 Foreign countries 705,762 731,378 790,814 746,305 809,581 810,081 816,439 820,887 824,111 796,930 3 Europe 199,880 233,321 315,905 314,504 361,470 350,067 359,895 357,243 361,814 331,612 4 Austria 1,354 1,043 2,643 2,471 2,493 2,429 2,242 2,148 2,646 1,985 5 Belgium and Luxembourg 6,641 7,187 10,193 9,777 8,022 7,939 5,959 6,393 6,261 5,814 6 Denmark 980 2,383 1,669 1,743 1,625 1,940 2,001 3,440 3,349 3,271 7 Finland 1,233 1,070 2,020 1,846 2,093 2,087 2,414 2,650 2,946 2,750 8 France 16,239 15,251 29,142 28,303 28,127 30,958 35,217 28,633 25,848 23,232 9 Germany 12,676 15,923 29,205 28,890 35,371 33,991 31,521 33,585 30,454 31,800 10 Greece 402 575 806 683 842 864 828 837 754 557 1 1 Italy 6,230 7,284 8,496 6,785 7,048 7,034 6,565 7,724 6,483 7,393 12 Netherlands 6,141 5,697 11,810 11,484 14,089 13,932 14,377 15,668 13,155 14,998 13 Norway 555 827 1,000 1,146 1,132 1,499 1,832 1,935 2,404 1,451 14 Portugal 777 669 1,571 1,155 1,043 1,085 1,268 1,424 1,454 1,273 15 Russia 1,248 789 713 743 709 709 715 744 718 666 16 Spain 2,942 5,735 3,796 4,339 3,187 3,217 3,126 3,844 4,768 3,521 17 Sweden 1,854 4,223 3,264 5,382 7,492 8,100 7,112 8,744 8,460 8,811 18 Switzerland 28,846 46,874 79,158 70,250 111,544 97,688 105,573 86,284 94,549 87,172 19 Turkey 1,558 1,982 2,617 3,031 3,053 3,148 3,269 3,189 2,736 4,413 20 United Kingdom 103,143 106,349 120,190 128,252 125,162 125,935 128,259 141,769 147,138 125,897 71 Yugoslavia2 52 53 50 50 50 51 49 49 69 49 22 Other Europe and other former U.S.S.R.3 7,009 9,407 7,562 8,174 8,388 7,461 7,568 8,183 7,622 6,559 23 Canada 27,189 47,037 37,206 38,541 42,686 43,300 45,481 42,591 40,383 37,872 74 Latin America and Caribbean 343,730 342,654 353,416 314,839 323,816 328,769 321,219 328,629 329,170 338,811 75 Argentina 8,924 9,552 10,167 10,095 9,845 9,732 9,507 9,386 9,428 10,549 76 Bahamas 89,379 96,455 99,324 68,914 74,018 72,312 71,459 80,393 73,275 78,896 77 Bermuda 8,782 5,011 8,007 11,771 7,441 5,685 6,478 6,285 6,906 4,684 7.8 Brazil 21,696 16,184 15,706 15,382 14,981 16,210 16,376 16,544 16,902 18,555 79 British West Indies 145,471 153,749 167,189 156,776 166,284 173,907 165,920 164,969 172,262 176,032 30 Chile 7,913 8,250 6,607 6,224 6,511 6,447 6,399 6,213 6,072 5,985 31 Colombia 6,945 6,507 4,524 4,176 3,937 3,907 4,032 3,796 3,907 3,952 37 Cuba 0 0 0 0 0 0 0 0 0 3 33 Ecuador 1,311 1,400 760 730 688 662 640 613 610 607 34 Guatemala 886 1,127 1,135 1,170 1,181 1,252 1,245 1,235 1,215 1,277 35 Jamaica 424 239 295 332 328 316 300 291 299 305 36 Mexico 19,428 21,212 17,899 17,489 16,998 16,944 16,771 17,066 16,432 16,840 37 Netherlands Antilles 17,838 6,779 5,982 6,341 6,385 6,388 6,579 6,502 6,652 5,804 38 Panama 4,364 3,584 3,387 2,972 2,912 2,844 2,984 3,063 2,981 2,882 39 Peru 3,491 3,275 2,529 2,414 2,223 2,356 2,515 2,458 2,488 2,487 40 Uruguay 629 1,126 801 777 761 714 708 620 649 777 41 Venezuela 2,129 3,089 3,494 3,524 3,580 3,474 3,595 3,471 3,357 3,410 42 Other 4,120 5,115 5,610 5,752 5,743 5,619 5,711 5,724 5,735 5,766 43 Asia 125,092 98,607 74,914 69,074 72,692 78,257 80,221 82,415 83,137 79,013 China 44 Mainland 1,579 1,261 2,090 2,726 3,161 4,532 2,611 1,688 1,822 1,596 45 Taiwan 922 1,041 1,390 1,501 925 1,080 1,732 1,339 926 794 46 Hong Kong 13,991 9,080 5,893 4,453 4,519 4,546 4,573 4,266 5,782 5,408 47 India 2.200 1,440 1,738 1,802 1,749 1,786 1,941 1,905 2,013 2,037 48 Indonesia 2,651 1,942 1,776 1,743 1,817 1,821 1,819 1,856 1,940 1,880 49 Israel 768 1,166 1,875 1,832 3,412 3,293 2,857 1,610 1,982 2,261 50 Japan 59,549 46,713 28,636 25,559 27,310 30,381 31,689 33,256 31,207 32,494 51 Korea (South) 18,162 8,289 9,262 12,066 11,466 12,209 14,018 15,866 18,924 16,931 52 Philippines 1,689 1,465 1,410 1,058 1,698 1,714 1,884 1,865 1,802 1,483 53 Thailand 2,259 1,807 1,515 1,275 1,154 1,081 1,137 1,255 1,051 1,059 54 Middle Eastern oil-exporting countries4 10,790 16,130 14,252 10,947 11,612 10,765 11,666 12,128 10,366 10,006 55 Other 10,532 8,273 5,077 4,112 3,869 5,049 4,294 5,381 5,322 3,064 56 Africa 3,530 3,122 2,268 2,453 1,991 2,054 2,109 2,494 2,517 2,227 57 Egypt 247 257 258 207 243 206 218 230 217 186 58 Morocco 511 372 352 313 279 300 271 259 272 247 59 South Africa 805 643 622 889 428 360 341 772 423 370 60 Zaire 0 0 24 0 0 0 0 0 0 0 61 Oil-exporting countries5 1,212 936 276 228 198 394 508 430 751 866 62 Other 755 914 736 816 843 794 771 803 854 558 63 Other 6,341 6,637 7,105 6,894 6,926 7,634 7,514 7,515 7,090 7,395 64 Australia 5,300 6,173 6,824 6,682 6,674 7,225 7,139 7,240 6,890 7,036 65 Other 1,041 464 281 212 252 409 375 275 200 359 66 Nonmonetary international and regional organizations6. . . 2,463 3,617 4,563 4,667 4,309 5,002 4,343 5,011 3,876 3,777 1. Reporting banks include all types of depository institutions as well as some brokers and 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab dealers. Emirates (Trucial States). 2. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 5. Comprises Algeria, Gabon, Libya, and Nigeria. 3. Includes the Bank for International Settlements. Since December 1992, has included all 6. Excludes the Bank for International Settlements, which is included in "Other Europe." parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • December 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 2000 TTyyppee ooff ccllaaiimm 11999977 11999988 11999999 Feb. Mar. Apr. May June July Aug." 1 Total 852,852 875,891 947,176 1,010,415 1,010,005 2 Banks' claims 708,225 734,995 795,377 750,972 813,890 815,083 820,782 825,898 827,987 800,707 3 Foreign public borrowers 20,581 23,542 35,090 36,541 36,036 37,300 43,092 41,461 48,499 41,406 4 Own foreign offices2 431,685 484,535 528,397 496,771 552,218 557,339 549,165 553,262 553,133 544,118 Unaffiliated foreign banks 109,230 106,206 101,227 87,666 96,030 91,849 92,280 92,911 89,236 82,469 6 Deposits 30,995 27,230 34,360 21,275 24,361 22,399 24,769 22,373 21,861 21,674 7 Other 78,235 78,976 66,867 66,391 71,669 69,450 67,511 70,538 67,375 60,795 8 All other foreigners 146,729 120,712 130,663 129,994 129,606 128,595 136,245 138,264 137,119 132,714 9 Claims of banks' domestic customers3 144,627 140,896 151,799 196,525 184,107 10 Deposits 73,110 79,363 88,006 128,490 106,055 11 Negotiable and readily transferable instruments4 53,967 47,914 51,161 56,032 62,975 12 Outstanding collections and other claims 17,550 13,619 12,632 12,003 15,077 MEMO 13 Customer liability on acceptances 9,624 4,520 4,553 4,464 5,082 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 33,816 39,978 31,125 48,225 53,657 45,383 44,868 44,139 46,337R 55,164 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 2000 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999966 11999977 11999988 Sept. Dec. Mar. June 1 Total 258,106 276,550 250,418 270,098 266,309 261,056 273,022 By borrower 2 Maturity of one year or less 211,859 205,781 186,526 196,772 187,383 180,453 187,028 3 Foreign public borrowers 15,411 12,081 13,671 22,526 22,811 23,436 25,289 4 All other foreigners 196,448 193,700 172,855 174,246 164,572 157,017 161,739 5 Maturity of more than one year 46,247 70,769 63,892 73,326 78,926 80,603 85,994 6 Foreign public borrowers 6,790 8,499 9,839 12,162 12,013 12,802 15,484 7 All other foreigners 39,457 62,270 54,053 61,164 66,913 67,801 70,510 By area Maturity of one year or less 8 Europe 55,690 58,294 68,679 82,566 80,842 79,639 76,366 9 Canada 8,339 9,917 10,968 8,544 7,859 8,408 7,353 10 Latin America and Caribbean 103,254 97,207 81,766 78,063 68,987 62,325 66,065 11 Asia 38,078 33,964 18,007 20,859 21,802 23,002 29,231 12 Africa 1,316 2,211 1,835 1,119 1,122 957 1,569 13 All other3 5,182 4,188 5,271 5,621 6,771 6,122 6,444 Maturity of more than one year 14 Europe 6,965 13.240 14,923 18,619 22,951 23,951 25,116 15 Canada 2,645 2,525 3,140 3,193 3,192 3,127 3,323 16 Latin America and Caribbean 24,943 42,049 33,442 38,154 38,789 39,194 41,758 17 Asia 9,392 10,235 10,018 10,641 11,257 11,612 12,446 18 Africa 1,361 1,236 1,232 1,087 1,065 965 924 19 All other3 941 1,484 1,137 1,632 1,672 1,754 2,427 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 1998 1999 2000 AArreeaa oorr ccoouunnttrryy 11999966 11999977 June Sept. Dec. Mar. June Sept. Dec. Mar. June 1 Total 645.8 721.8 1017.2 1071.9 1051.6 992.8 939.4 936.8r 936.7 952.7 991.0 2 G-10 countries and Switzerland 228.3 242.8 273.9 240.0 217.7 208.7 223.1 206.4r 236.5 284.1 323.3 3 Belgium and Luxembourg 11.7 11.0 14.0 11.7 10.7 15.6 16.1 15.7 14.3 14.2 13.8 4 France 16.6 15.4 21.7 20.3 18.4 21.6 20.4 19.9 29.0 27.1 32.6 5 Germany 29.8 28.6 30.5 31.4 30.9 34.7 32.1 37.4 38.7 37.3 31.5 6 Italy 16.0 15.5 21.1 18.5 11.5 17.8 16.4 15.0 18.1 20.0 20.0 7 Netherlands 4.0 6.2 8.6 8.4 7.8 10.7 13.3 10.6 12.3 17.1 16.1 8 Sweden 2.6 3.3 3.1 2.1 2.3 4.0 2.6 3.6 3.0 3.9 3.5 9 Switzerland 5.3 7.2 7.0 7.6 8.5 7.8 8.2 8.8 10.3 10.1 13.8 10 United Kingdom 104.7 113.4 125.9 100.1 85.4 56.1 74.3 51.9r 72.4 113.5 148.3 11 Canada 14.0 13.7 16.7 15.9 16.8 15.9 17.1 17.9r 16.3 17.5 18.2 12 Japan 23.7 28.6 25.3 23.9 25.4 24.6 22.6 25.6 22.0 23.5 25.4 13 Other industrialized countries 66.1 65.5 78.7 78.5 69.0 80.1 79.7 71.7 68.4 62.8 76.2 14 Austria 1.1 1.5 1.9 2.1 1.4 2.8 2.8 3.0 3.5 2.6 2.8 15 Denmark 1.5 2.4 2.2 3.0 2.2 3.4 2.9 2.1 2.6 1.5 1.2 16 Finland .8 1.3 1.4 1.6 1.4 1.5 .9 .9 .9 .8 1.3 17 Greece 6.7 5.1 5.8 5.8 5.9 6.5 5.9 6.6 6.0 5.7 6.8 18 Norway 8.0 3.6 3.4 3.2 3.2 3.1 3.0 3.8 3.3 3.0 4.6 19 Portugal .9 .9 1.4 1.1 1.4 1.4 1.2 1.2 1.0 1.0 2.0 20 Spain 13.3 12.6 17.5 19.5 13.7 15.7 16.6 15.1 12.1 11.3 12.2 21 Turkey 2.7 4.5 6.5 5.2 4.8 5.2 4.9 4.7 4.8 5.1 5.6 22 Other Western Europe 4.9 8.3 9.9 10.4 10.4 10.2 10.2 9.2 6.8 8.3 8.8 23 South Africa 2.0 2.2 6.9 5.4 4.4 4.8 4.7 4.0 3.8 4.8 4.6 24 Australia 24.0 23.1 21.8 21.4 20.3 25.4 26.6 21.1 23.5 18.6 26.3 25 OPEC2 19.8 26.0 25.5 26.0 27.1 26.2 26.1 30.1 31.4 28.9 32.3 26 Ecuador 1.1 1.3 1.2 1.2 1.3 1.2 1.1 .9 .8 .7 .7 27 Venezuela 2.4 2.5 3.3 3.1 3.2 3.5 3.2 3.0 2.8 3.0 2.9 28 Indonesia 5.2 6.7 5.1 4.7 4.7 4.5 5.0 4.4 4.2 3.9 4.1 29 Middle East countries 10.7 14.4 15.6 16.1 17.0 16.7 16.5 21.4 23.0 21.1 24.0 30 African countries .4 1.2 .3 .8 1.0 .4 .4 .5 .5 .2 .7 31 Non-OPEC developing countries 130.3 139.2 146.1 140.4 143.4 146.7 148.6 142.5 147.3 152.5 155.6 Latin America 32 Argentina 14.3 18.4 20.9 22.9 23.1 24.3 22.8 22.1 22.4 21.3 20.3 33 Brazil 20.7 28.6 30.3 24.0 24.7 24.2 25.1 22.1 26.4 26.9 27.0 34 Chile 7.0 8.7 9.1 8.5 8.3 8.6 8.2 7.7 7.4 8.2 8.1 35 Colombia 4.1 3.4 3.6 3.4 3.2 3.3 3.1 2.7 2.5 2.5 2.4 36 Mexico 16.2 17.4 18.1 18.7 18.9 19.7 18.5 19.4 18.7 18.3 20.5 37 Peru 1.6 2.0 2.2 2.2 2.2 2.2 2.1 1.8 1.7 1.9 2.1 38 Other 3.3 4.1 4.4 4.6 5.4 5.3 5.5 5.5 5.9 6.5 6.7 Asia China 39 Mainland 2.5 3.2 3.9 2.8 3.0 5.0 5.3 3.3 3.6 4.6 3.8 40 Taiwan 10.3 9.5 11.8 12.5 13.3 11.8 12.6 12.3 12.0 12.6 12.6 41 India 4.3 4.9 4.9 5.3 5.5 5.5 6.7 7.0 7.7 7.9 8.2 42 Israel .5 .7 .9 .9 1.1 1.1 2.0 1.0 1.8 3.3 1.5 43 Korea (South) 21.5 15.6 14.6 13.1 13.7 13.7 15.3 16.0 15.1 17.4 21.2 44 Malaysia 6.0 5.1 4.7 5.0 5.6 5.9 6.0 6.1 6.1 6.5 6.8 45 Philippines 5.8 5.7 5.4 4.7 5.1 5.4 5.7 5.8 6.2 5.3 5.3 46 Thailand 5.7 5.4 5.0 5.3 4.7 4.5 4.2 4.0 4.1 4.3 4.0 47 Other Asia 4.1 4.3 3.7 3.1 2.9 3.0 2.8 2.8 2.9 2.6 2.5 Africa 48 Egypt .7 .9 1.5 1.7 1.3 1.4 1.4 1.3 1.4 1.4 1.3 49 Morocco .7 .6 .6 .5 .5 .5 .5 .5 .4 .3 .3 50 Zaire .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .9 .8 .8 1.1 1.0 1.2 1.0 1.0 1.0 .9 .9 52 Eastern Europe 6.9 9.1 11.3 6.3 5.5 7.1 5.8 5.4 5.2 6.3 9.4 53 Russia4 3.7 5.1 6.9 2.8 2.2 2.3 2.1 2.0 1.6 1.7 1.5 54 Other 3.2 4.0 4.4 3.5 3.3 4.8 3.7 3.4 3.6 4.7 7.9 55 Offshore banking centers 135.1 140.2 130.0 121.0 93.9 93.6 75.9 89.4r 60.1 42.0 52.4 56 Bahamas 20.5 24.2 28.6 30.7 35.4 32.6 20.4 28.6r 13.9 2.4 .5 57 Bermuda 4.5 9.8 9.4 10.4 4.6 3.9 5.7 8.2 8.0 7.3 6.3 58 Cayman Islands and other British West Indies 37.2 43.4 34.3 27.8 12.8 13.9 7.2 6.3 1.3 .0 5.1 59 Netherlands Antilles 26.1 14.6 10.5 6.0 2.6 2.7 1.3 9.1 1.7 2.5 2.6 60 Panama5 2.0 3.1 3.3 4.0 3.9 3.9 3.9 3.9 3.9 3.4 3.3 61 Lebanon .1 .1 .1 .2 .1 .1 .1 .2 .1 .1 .1 62 Hong Kong, China 27.9 32.2 30.0 30.6 23.3 22.8 22.0 22.4 21.0 22.2 20.7 63 Singapore 16.7 12.7 13.6 11.1 11.1 13.5 15.2 10.6 10.1 4.1 13.6 64 Other6 .1 .1 .2 .2 .2 .2 .1 .2 .1 .1 .1 65 Miscellaneous and unallocated7 59.6 99.1 351.7 459.9 495.1 430.4 380.2 391.2 387.9 376.1 341.9 1. The banking offices covered by these data include U.S. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Soviet Union. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 5. Includes Canal Zone. branch of the same banking institution. 6. Foreign branch claims only. These data are on a gross claims basis and do not necessarily reflect the ultimate country 7. Includes New Zealand, Liberia, and international and regional organizations. risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • December 2000 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1999 2000 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999966 11999977 11999988 Mar. June Sept. Dec. Mar. Junep 1 Total 61,782 57,382 46,570 46,663 49,337 52,979 53,044 52,555 70,534 2 Payable in dollars 39,542 41,543 36,668 34,030 36,032 36,296 37,605 34,680 47,864 3 Payable in foreign currencies 22,240 15,839 9,902 12,633 13,305 16,683 15,415 17,875 22,670 By type 4 Financial liabilities 33,049 26,877 19,255 22,458 25,058 27,422 27,980 28,246 44,068 5 Payable in dollars 11,913 12,630 10,371 11,225 13,205 12,231 13,883 11,924 22,803 6 Payable in foreign currencies 21,136 14,247 8,884 11,233 11,853 15,191 14,097 16,322 21,265 7 Commercial liabilities 28,733 30,505 27,315 24,205 24,279 25,557 25,064 24,309 26,466 8 Trade payables 12,720 10,904 10,978 9,999 10,935 12,651 12,857 12,401 13,764 9 Advance receipts and other liabilities 16,013 19,601 16,337 14,206 13,344 12,906 12,207 11,908 12,702 10 Payable in dollars 27,629 28,913 26,297 22,805 22,827 24,065 23,722 22,756 25,061 11 Payable in foreign currencies 1,104 1,592 1,018 1,400 1,452 1,492 1,318 1,553 1,405 By area or country Financial liabilities 12 Europe 23,179 18,027 12,589 16,098 19,578 21,695 23,241 23,116 30,332 13 Belgium and Luxembourg 632 186 79 50 70 50 31 4 163 14 France 1,091 1,425 1,097 1,178 1,287 1,675 1,659 1,405 1,702 15 Germany 1,834 1,958 2,063 1,906 1,959 1,712 1,974 1,390 1,671 16 Netherlands 556 494 1,406 1,337 2,104 2,066 1,996 1,970 2,035 17 Switzerland 699 561 155 141 143 133 147 97 137 18 United Kingdom 17,161 11,667 5,980 9,729 13,097 15,096 16,521 16,579 21,463 19 Canada 1,401 2,374 693 781 320 344 284 313 714 20 Latin America and Caribbean 1,668 1.386 1,495 1,528 1,369 1,180 892 846 2,874 21 Bahamas 236 141 7 1 1 1 1 1 78 22 Bermuda 50 229 101 78 52 26 5 1 1,016 23 Brazil 78 143 152 137 131 122 126 128 146 24 British West Indies 1,030 604 957 1,064 944 786 492 489 463 25 Mexico 17 26 59 22 19 28 25 22 26 26 Venezuela 1 1 2 2 1 0 0 0 0 27 Asia 6,423 4,387 3,785 3,475 3,217 3,622 3,437 3,275 9,453 28 Japan 5,869 4,102 3,612 3,337 3,035 3,384 3,142 2,985 6,024 29 Middle Eastern oil-exporting countries' 25 27 0 1 2 3 3 4 5 30 Africa 38 60 28 31 29 31 28 28 33 31 Oil-exporting countries2 0 0 0 2 0 0 0 0 0 32 All other3 340 643 665 545 545 550 98 668 662 Commercial liabilities 33 Europe 9,767 10,228 10,030 8,580 8,718 9,265 9,262 8,646 9,293 34 Belgium and Luxembourg 479 666 278 229 189 128 140 78 178 35 France 680 764 920 654 656 620 672 539 711 36 Germany 1,002 1,274 1,392 1,088 1,143 1,201 1,131 914 948 37 Netherlands 766 439 429 361 432 535 507 648 562 38 Switzerland 624 375 499 535 497 593 626 536 565 39 United Kingdom 4,303 4,086 3,697 3,008 2,959 3,175 3,071 2,661 2,982 40 Canada 1,090 1,175 1,390 1,597 1,670 1,753 1,775 2,024 2,053 41 Latin America and Caribbean 2,574 2,176 1,618 1,612 1,674 1,957 2,310 2,286 2,607 42 Bahamas 63 16 14 11 19 24 22 9 10 43 Bermuda 297 203 198 225 180 178 152 287 300 44 Brazil 196 220 152 107 112 120 145 115 119 45 British West Indies 14 12 10 7 5 39 48 23 22 46 Mexico 665 565 347 437 490 704 887 805 1,073 47 Venezuela 328 261 202 155 149 182 305 193 239 48 Asia 13,422 14,966 12,342 10,428 10,039 10,428 9,886 9,681 10,965 49 Japan 4,614 4,500 3,827 2,715 2,753 2,689 2,609 2,274 2,200 50 Middle Eastern oil-exporting countries' 2,168 3,111 2,852 2,479 2,209 2,618 2,551 2,308 3,489 51 Africa 1,040 874 794 727 832 959 950 943 950 52 Oil-exporting countries2 532 408 393 377 392 584 499 536 575 53 Other3 840 1,086 1,141 1,261 1,346 1,195 881 729 598 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 1999 2000 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999966 11999977 11999988 Mar. June Sept. Dec. Mar. Junep 1 Total 65,897 68,128 77,462 69,054 63,884 67,566 76,669 84,266 80,685 2 Payable in dollars 59,156 62,173 72,171 64,026 57,006 60,456 69,170 74,331 72,254 3 Payable in foreign currencies 6,741 5,955 5,291 5,028 6,878 7,110 7,472 9,935 8,431 By type 4 Financial claims 37,523 36,959 46,260 38,217 31,957 33,877 40,231 47,798 44,303 5ft De P p a o y s a it b s le in dollars 2 2 1 0 , , 6 8 2 5 4 2 2 2 2 1 , , 9 0 0 6 9 0 3 2 0 8 , , 1 5 9 4 9 9 1 17 8 , , 1 6 0 8 1 6 1 1 3 1 , , 3 6 5 3 0 6 1 1 5 3 , , 1 2 9 4 2 0 1 1 8 6 , , 5 3 6 7 6 3 2 2 3 1 , , 3 4 1 4 6 2 1 1 7 5 , , 4 3 6 6 2 1 7 Payable in foreign currencies 772 1,849 1,650 1,585 1,714 1,952 2,193 1,874 2,101 8 Other financial claims 15,899 14,050 16,061 19,531 18,607 18,685 21,665 24,482 26,841 9 Payable in dollars 12,374 11,806 14,049 17,457 14,800 15,718 18,593 19,659 22,384 10 Payable in foreign currencies 3,525 2,244 2,012 2,074 3,807 2,967 3,072 4,823 4,457 11 Commercial claims 28,374 31,169 31,202 30,837 31,927 33,689 36,438 36,468 36,382 12 Trade receivables 25,751 27,536 27,202 26,724 27,791 29,397 32,629 31,443 31,237 13 Advance payments and other claims 2,623 3,633 4,000 4,113 4,136 4,292 3,809 5,025 5,145 14 Payable in dollars 25,930 29,307 29,573 29,468 30,570 31,498 34,204 33,230 34,509 15 Payable in foreign currencies 2,444 1,862 1,629 1,369 1,357 2,191 2,207 3,238 1,873 By area or country Financial claims 16 Europe 11,085 14,999 12,294 12,881 13,978 13,878 13,023 16,789 18,254 17 Belgium and Luxembourg 185 406 661 469 457 574 529 540 317 18 France 694 1,015 864 913 1,368 1,212 967 1,835 1,292 19 Germany 276 427 304 302 367 549 504 669 576 20 Netherlands 493 677 875 993 997 1,067 1,229 1,981 1,984 21 Switzerland 474 434 414 530 504 559 643 612 624 22 United Kingdom 7,922 10,337 7,766 8,400 8,631 8,157 7,561 9,044 11,668 23 Canada 3,442 3,313 2,503 3,111 2,828 3,172 2,553 3,175 5,799 24 Latin America and Caribbean 20,032 15,543 27,714 18,825 11,486 12,749 18,206 21,945 14,874 25 Bahamas 1,553 2,308 403 666 467 755 1,593 1,299 655 26 Bermuda 140 108 39 41 39 524 11 11 34 27 Brazil 1,468 1,313 835 1,112 1,102 1,265 1,476 1,646 1,666 7.8 British West Indies 15,536 10,462 24,388 14,621 7,393 7,263 12,099 15,814 7,751 7.9 Mexico 457 537 1,245 1,583 1,702 1,791 1,798 1,979 2,048 30 Venezuela 31 36 55 72 71 47 48 65 78 31 Asia 2,221 2,133 3,027 2,648 2,801 3,205 5,457 4,430 3,923 32 Japan 1,035 823 1,194 942 949 1,250 3,262 2,021 1,410 33 Middle Eastern oil-exporting countries' 22 11 9 8 5 5 21 29 42 34 Africa 174 319 159 174 228 251 286 232 320 35 Oil-exporting countries2 14 15 16 26 5 12 15 15 39 36 All other3 569 652 563 578 636 622 706 1,227 1,133 Commercial claims 37 Europe 10,443 12,120 13,246 12,782 12,961 14,367 16,389 16,118 15,910 38 Belgium and Luxembourg 226 328 238 281 286 289 316 271 425 39 France 1,644 1,796 2,171 2,173 2,094 2,375 2,236 2,520 2,690 40 Germany 1,337 1,614 1,822 1,599 1,660 1,944 1,960 2,034 1,902 41 Netherlands 562 597 467 415 389 617 1,429 1,337 1,241 42 Switzerland 642 554 483 367 385 714 610 611 563 43 United Kingdom 2,946 3,660 4,769 4,529 4,615 4,789 5,827 5,354 4,928 44 Canada 2,165 2,660 2,617 2,983 2,855 2,638 2,757 3,088 3,246 45 Latin America and Caribbean 5,276 5,750 6,296 5,930 6,278 5,879 5,959 5,899 5,789 46 Bahamas 35 27 24 10 21 29 20 15 48 47 Bermuda 275 244 536 500 583 549 390 404 380 48 Brazil 1,303 1,162 1,024 936 887 763 905 849 894 49 British West Indies 190 109 104 117 127 157 181 95 51 50 Mexico 1,128 1,392 1,545 1,431 1,478 1,613 1,678 1,529 1,564 51 Venezuela 357 576 401 361 384 365 439 435 465 52 Asia 8,376 8,713 7,192 7,080 7,690 8,579 9,165 9,101 9,168 53 Japan 2,003 1,976 1,681 1,486 1,511 1,823 2,074 2,082 1,881 54 Middle Eastern oil-exporting countries' 971 1,107 1,135 1,286 1,465 1,479 1,625 1,533 1,241 55 Africa 746 680 711 685 738 682 631 716 765 56 Oil-exporting countries2 166 119 165 116 202 221 171 82 160 57 Other3 1,368 1,246 1,140 1,377 1,405 1,544 1,537 1,546 1,504 1. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 2. Comprises Algeria, Gabon, Libya, and Nigeria. Emirates (Trucial States). 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A60 International Statistics • December 2000 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2000 2000 Transaction, and area or country 1998 1999 J A a u n g .- . Feb. Mar. Apr. May June July Aug.? U.S. corporate securities STOCKS 1 Foreign purchases 1,574,192 2,340,659 2,395.465 293,110 402,373 309,778 268,454 300,356 270,618r 286,830 2 Foreign sales 1,524,203 2,233,137 2,266,311 265,365 378,141 306,474 262,142 282,563 255,478r 262,783 3 Net purchases, or sales (—) 49,989 107,522 129,154 27,745 24,232 3,304 6,312 17,793 15,140r 24,047 4 Foreign countries 50,369 107,578 129,089 27,626 24,414 3,243 6,291 17,823 15,130r 24,023 5 Europe 68,124 98,060 121,811 24,375 18,594 12.289 7,496 14,853 12,822r 15,678 6 France 5,672 3,813 4,088 529 1,831 1,341 -588 -653 1,293 575 7 Germany 9,195 13,410 27,913 5,425 4,532 3,431 3,355 2,544 323r 2,670 8 Netherlands 8,249 8,083 2.236 516 277 113 -113 584 546 594 9 Switzerland 5,001 5.650 11,974 4,804 -913 1,689 585 67 l,703r 1,113 10 United Kingdom 23,952 42,902 35,822 6,685 4,794 558 1,440 7,026 5,975r 7,098 11 Canada -4,689 -335 3,532 890 286 9 834 -46 -145 1,038 12 Latin America and Caribbean 757 5,187 -4.258 1,989 4,840 -11,441 -2,633 1,898 1,369 4,910 13 Middle East1 -1,449 -1,066 7,766 1.179 2,124 2,071 705 4 98 908 14 Other Asia -12,351 4,445 -807 -860 -1,716 52 -121 870 823 1,790 15 Japan -1.171 5,723 -5,309 -1,115 -2,604 -446 -1,045 439 497 568 16 Africa 639 372 521 -2 205 228 -50 54 -66 2 17 Other countries -662 915 524 55 81 35 60 190 229 -303 18 Nonmonetary international and regional organizations -380 -56 65 119 -182 61 21 -30 10 24 BONDS2 19 Foreign purchases 905,782 856.804 766,010 99,605 106,302 88,155 89,760 107.281 87,302r 108,560 20 Foreign sales 727,044 602,109 557,284 69,476 76,979 70,900 68,212 75,117 67,943r 69,768 21 Net purchases, or sales (—) 178,738 254,695 208,726 30,129 29,323 17,255 21,548 32,164 19,359r 38,792 22 Foreign countries 179,081 255,097 208,648 30,147 29,422 17,260 21,490 32,215 19,271r 38,682 23 Europe 130.057 140,674 113,004 17,063 19,454 7,640 9,475 19,378 7.573r 22,338 24 France 3,386 1,870 2,278 1,124 620 -34 104 159 85 334 25 Germany 4,369 7,723 3,129 702 348 288 175 897 152 1,185 26 Netherlands 3,443 2,446 642 -97 94 279 283 -169 -575 850 27 Switzerland 4,826 4,553 2,751 526 202 -18 9 324 998 757 28 United Kingdom 99,637 106,344 86,413 13,478 15,479 4,274 6,237 16,218 3,774r 16,629 29 Canada 6,121 6,043 9,986 1,324 689 764 1,076 1,092 943 1,965 30 Latin America and Caribbean 23,938 60,861 37.221 9,659 3,680 4,724 2,786 4,390 3,748 3,576 31 Middle East1 4,997 1,979 1,124 -177 670 347 -47 99 264 54 32 Other Asia 12,662 42,842 45,645 2,545 4,506 3,753 7,996 7,059 6,601r 10,562 33 Japan 8,384 17.541 21,296 1,173 2,010 580 3,491 3,945 3,320r 5,664 34 Africa 190 1,411 730 -130 -11 35 40 72 10 37 35 Other countries 1,116 1,287 938 -137 434 -3 164 125 132 150 36 Nonmonetary international and regional organizations -343 -402 78 -18 -99 -5 58 -51 88 110 Foreign securities 37 Stocks, net purchases, or sales (—) 6,227 15,640 -22,616 -8,884 -8,173 723 8,535 -2,046 - 14,860r 982 38 Foreign purchases 929,923 1,177,303 1,214,678 176.940 177,090 154,322 145,408 152,149 132,247r 141,573 39 Foreign sales 923,696 1,161.663 1,237,294 185,824 185,263 153,599 136,873 154,195 147,107r 140,591 40 Bonds, net purchases, or sales (—) -17,350 -5.676 2,218 -1,986 -3,431 798 4,263 5,770 2,831r -2,529 41 Foreign purchases 1,328,281 798,267 589,751 74,380 83,838 63,916 79,534 82,951 68,151 74,795 42 Foreign sales 1,345,631 803,943 587,533 76,366 87,269 63,118 75,271 77,181 65,320r 77,324 43 Net purchases, or sales (—), of stocks and bonds .... -11,123 9,964 -20,398 -10,870 -11,604 1,521 12,798 3,724 — 12,029r -1,547 44 Foreign countries -10,778 9,679 -20,382 -10,899 -11,703 1,356 12,722 3,874 — ll,788r -1,393 45 Europe 12,632 59,247 -21,288 -4,969 -5,923 1,628 10,113 -1,434 — 15,454r -6,003 46 Canada -1,901 -999 -2,759 -1.865 -1,400 -422 -1,234 1,399 239 995 47 Latin America and Caribbean -13,798 -4,726 -13,767 -4.252 -701 -5,155 -845 1,981 262 -189 48 Asia -3,992 -42,961 16,191 -713 -4,086 5,695 4,971 1,878 3,235r 3,256 49 Japan -1.742 -43,637 17,950 -879 -1,458 4,688 5,978 3,243 3,985 1,527 50 Africa -1,225 710 890 184 384 -143 -51 -33 531 -81 51 Other countries -2,494 -1.592 351 716 23 -247 -232 83 -601 629 52 Nonmonetary international and regional organizations -345 285 -16 29 99 165 76 -150 -241 -154 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, 2. Includes state and local government securities and securities of U.S. government Saudi Arabia, and United Arab Emirates (Trucial States). agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions A61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions' Millions of dollars; net purchases, or sales ( —) during period 2000 2000 AArreeaa oorr ccoouunnttrryy 11999988 11999999 Jan.— Feb. Mar. Apr. May June July Aug.p Aug. 1 Total estimated 49,039 -9,953 -18,349 5,563 -16,871 14,520 -7,018 -17,932 -6,068 -86 2 Foreign countries 46,570 -10,518 -17,520 5,770 -17,092 14,484 -6,820 -17,597 -5,753 -90 3 Europe 23,797 38,228 -27,917 -2,443 -9,971 -632 -2,526 -9,935 -6,358 3,734 4 Belgium and Luxembourg 3,805 -81 -77 65 116 -498 -743 252 -138 138 5 Germany 144 2,285 -3,740 -866 -1,352 -1,676 74 609 -2,199 -36 6 Netherlands -5,533 2,122 2,479 2,475 539 700 -1,159 -389 -584 91 7 Sweden 1,486 1,699 762 -100 263 -289 266 -47 114 56 8 Switzerland 5,240 -1,761 -9,068 -1,382 5 -288 -337 -1,928 -1,393 -338 9 United Kingdom 14,384 -20,232 -17,789 -1,261 -5.150 -533 178 -9.243 -4,384 3,054 10 Other Europe and former U.S.S.R 4,271 -22,260 -484 -1,374 -4,392 1,952 -805 811 2,226 769 11 Canada 615 7,348 780 8 640 1,819 -681 226 -872 222 12 Latin America and Caribbean -3,662 -7,523 -3,146 6,844 -4.789 2.509 -3,122 -3,839 1,415 245 13 Venezuela 59 362 271 13 24 26 4 16 89 45 14 Other Latin America and Caribbean 9,523 1,661 -6,667 2,482 -1,596 258 -548 -4,748 1,261 61 15 Netherlands Antilles -13,244 -9,546 3,250 4,349 -3,217 2,225 -2,578 893 65 139 16 27,433 29,359 11,388 1,064 -2,943 11,166 -908 -3,988 -488 -4,918 17 Japan 13,048 20,102 6,665 -1,874 494 10,855 -2,486 -2,660 672 367 18 Africa 751 -3,021 -209 80 -19 4 -114 -130 4 9 19 Other -2,364 1,547 1,584 217 -10 -382 531 69 546 618 20 Nonmonetary international and regional organizations 2,469 565 -829 -207 221 36 -198 -335 -315 4 21 International 1,502 190 -782 -194 151 30 -158 -286 -333 15 22 Latin American regional 199 666 42 0 70 6 -14 -9 -1 -10 MEMO 23 Foreign countries 46.570 -10,518 -17,520 5,770 -17,092 14,484 -6,820 -17,597 -5,753 -90 24 Official institutions 4,123 -9,861 11,367 1,777 -569 6,403 -1,405 -1,412 -639 449 25 Other foreign 42,447 -657 -28,887 3,993 -16,523 8,081 -5,415 -16,185 -5,114 -539 Oil-exporting countries 26 Middle East ~ -16,554 2,207 6,092 170 283 811 572 859 267 217 27 2 0 0 0 0 0 0 0 0 0 1. Official and private transactions in marketable U.S, Treasury securities having an 2. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab original maturity of more than one year. Data are based on monthly transactions reports. Emirates (Trucial States). Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign 3. Comprises Algeria, Gabon, Libya, and Nigeria. countries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • December 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 2000 May June July Aug. Sept. Oct. Exchange Rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 74.37 62.91 64.54 57.84 59.49 58.70 58.08 55.21 52.80 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 1.8278 1.8099 1.7982 1.8091 1.8397 1.8813 5 Canada/dollar 1.3849 1.4836 1.4858 1.4957 1.4770 1.4778 1.4828 1.4864 1.5125 6 China, P.R./yuan 8.3193 8.3008 8.2781 8.2781 8.2772 8.2794 8.2796 8.2785 8.2785 7 Denmark/krone 6.6092 6.7030 6.9900 8.2329 7.8501 7.9471 8.2459 8.5849 8.7276 8 European Monetary Union/euro3 n.a. n.a. 1.0653 0.9059 0.9505 0.9386 0.9045 0.8695 0.8525 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 273.28 295.70 306.30 371.63 354.14 359.04 372.97 389.67 398.29 13 Hong Kong/dollar 7.7431 7.7467 7.7594 7.7907 7.7934 7.7969 7.7995 7.7985 7.7977 14 India/rupee 36.36 41.36 43.13 44.08 44.76 44.84 45.77 45.97 46.43 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 121.06 130.99 113.73 108.32 106.13 108.21 108.08 106.84 108.44 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 9.506 9.834 9.419 9.272 9.362 9.537 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 47.08 47.05 45.97 44.52 41.71 40.01 22 Norway/krone 7.0857 7.5521 7.8071 9.0533 8.6807 8.7185 8.9526 9.2331 9.3794 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 1.7286 1.7277 1.7414 1.7206 1.7406 1.7525 25 South Africa/rand 4.6072 5.5417 6.1191 7.0238 6.9147 6.8971 6.9570 7.1805 7.4902 26 South Korea/won 947.65 1,400.40 1,189.84 1,119.49 1,117.94 1,115.08 1,114.47 1,117.57 1,131.10 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 74.867 76.736 78.852 78.283 78.731 79.291 29 Sweden/krona 7.6446 7.9522 8.2740 9.0925 8.7471 8.9640 9.2771 9.6853 9.9930 30 Switzerland/franc 1.4514 1.4506 1.5045 1.7190 1.6420 1.6519 1.7149 1.7586 1.7745 31 Taiwan/dollar 28.775 33.547 32.322 30.772 30.831 30.984 31.106 31.198 31.846 32 Thailand/baht 31.072 41.262 37.887 38.951 39.087 40.318 40.889 41.992 43.334 33 United Kingdom/pound2 163.76 165.73 161.72 150.90 150.92 150.76 148.89 143.36 145.06 34 Venezuela/bolivar 488.87 548.39 606.82 680.00 680.96 685.86 689.17 690.39 692.86 Indexes4 NOMINAL 35 Broad (January 1997= 100)5 104.44 116.48 116.87 120.70 119.43 119.86 120.65 122.08 123.83 36 Major currencies (March 1973= 100)6 91.24 95.79 94.07 99.31 96.74 97.68 99.16 100.76 102.35 37 Other important trading partners (January 1997= 100)7 104.67 126.03 129.94 130.43 131.62 131.08 130.51 131.39 133.03 REAL 38 Broad (March 1973=100)' 91.24 99.25 98.66 102.77 102.02r 102.46r 103.01 104.04r 105.54 39 Major currencies (March 1973= 100)6 92.26 97.25 96.74r 103.70 101.3 LR 102.42' 104.01r 105.66r 107.60 40 Other important trading partners (March 1973= 100)7 95.58 108.20 107.44 107.95 109.35 108.90r 108.09r 108.39r 109.41 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 December 2000 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks September 30, 1999 February 2000 A64 December 31, 1999 May 2000 A64 March 31, 2000 August 2000 A64 June 30, 2000 November 2000 A64 Terms of lending at commercial banks November 1999 February 2000 A66 February 2000 May 2000 A66 May 2000 August 2000 A66 August 2000 November 2000 A66 Assets and liabilities of U.S. branches and agencies of foreign banks September 30, 1999 February 2000 A72 December 31, 1999 May 2000 A72 March 31, 2000 August 2000 A72 June 30, 2000 November 2000 A72 Pro forma balance sheet and income statements for priced service operations September 30, 1999 January 2000 A64 March 31, 2000 August 2000 A76 June 30, 2000 November 2000 A76 Residential lending reported under the Home Mortgage Disclosure Act 1998 September 1999 A64 1999 September 2000 A64 Disposition of applications for private mortgage insurance 1998 September 1999 A73 1999 September 2000 A73 Small loans to businesses and farms 1998 September 1999 A76 1999 September 2000 A76 Community development lending reported under the Community Reinvestment Act 1998 September 1999 A79 1999 September 2000 A79 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

64 Federal Reserve Bulletin • December 2000 Index to Statistical Tables References are to pages A3-A62, although the prefix " " 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 of Commercial banks, 15-21 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, 51-4, 58, 60, 61 Construction, 42, 46 Consumer credit, 36 Consumer prices, 42 GOLD Consumption expenditures, 48, 49 Certificate account, 10 Corporations Stock, 5, 51 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, 36, 37—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 • December 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 DAVID W. SKIDMORE, Special Assistant to the Board DONALD B. ADAMS, Senior Adviser DIANE E. WERNEKE, Special Assistant to the Board RICHARD T. FREEMAN, Assistant Director WILLIAM L. HELKIE, Assistant Director STEVEN B. KAMIN, Assistant Director LEGAL DIVISION RALPH W. TRYON, Assistant Director J. VIRGIL MATTINGLY, JR., General Counsel SCOTT G. ALVAREZ, Associate General Counsel DIVISION OF RESEARCH AND STATISTICS RICHARD M. ASHTON, Associate General Counsel DAVID J. STOCKTON, Director KATHLEEN M. O'DAY, Associate General Counsel EDWARD C. ETTIN, Deputy Director ANN E. MISBACK, Assistant General Counsel WILLIAM R. JONES, Associate Director SANDRA L. RICHARDSON, Assistant General Counsel MYRON L. KWAST, Associate Director STEPHEN L. SICILIANO, Assistant General Counsel STEPHEN D. OLINER, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel PATRICK M. PARKINSON, Associate Director LAWRENCE SLIFMAN, Associate Director CHARLES S. STRUCKMEYER, Associate Director OFFICE OF THE SECRETARY MARTHA S. SCANLON, Deputy Associate Director JENNIFER J. JOHNSON, Secretary JOYCE K. ZICKLER, Deputy Associate Director ROBERT DEV. FRIERSON, Associate Secretary> WAYNE S. PASSMORE, Assistant Director BARBARA R. LOWREY, Associate Secretary and Ombudsman DAVID L. REIFSCHNEIDER, Assistant Director JANICE SHACK-MARQUEZ, Assistant Director ALICE PATRICIA WHITE, Assistant Director DIVISION OF BANKING GLENN B. CANNER, Senior Adviser SUPERVISION AND REGULATION DAVID S. JONES, Senior Adviser RICHARD SPILLENKOTHEN, Director THOMAS D. SIMPSON, Senior Adviser STEPHEN C. SCHEMERING, Deputy Director HERBERT A. BIERN, Associate Director DIVISION OF MONETARY AFFAIRS ROGER T. COLE, Associate Director DONALD L. KOHN, Director WILLIAM A. RYBACK, Associate Director DAVID E. LINDSEY, Deputy Director GERALD A. EDWARDS, JR., Deputy Associate Director BRIAN F. MADIGAN, Associate Director STEPHEN M. HOFFMAN, JR., Deputy Associate Director RICHARD D. PORTER, Deputy Associate Director JAMES V. HOUPT, Deputy Associate Director WILLIAM C. WHITESELL, Assistant Director JACK P. JENNINGS, Deputy Associate Director NORMAND R.V. BERNARD, Special Assistant to the Board MICHAEL G. MARTINSON, Deputy Associate Director SIDNEY M. SUSSAN, Deputy Associate Director DIVISION OF CONSUMER MOLLY S. WASSOM, Deputy Associate Director AND COMMUNITY AFFAIRS HOWARD A. AMER, Assistant Director 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. HLJRT, 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, Associate Director MANAGEMENT DIVISION KENNETH D. BUCKLEY, Assistant Director JOSEPH H. HAYES, JR., Assistant Director STEPHEN J. CLARK, Associate Director, Finance Function DARRELL R. PAULEY, Associate Director, Human Resources JEFFREY C. MARQUARDT, Assistant Director Function EDGAR A. MARTINDALE, Assistant Director SHEILA CLARK, EEO Programs Director MARSHA REIDHILL, Assistant Director JEFF J. STEHM, Assistant Director DIVISION OF SUPPORT SERVICES OFFICE OF THE INSPECTOR GENERAL ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director BARRY R- SNYDER, Inspector General DAVID L. WILLIAMS, Assistant Director DONALD L. ROBINSON, Deputy Inspector General DIVISION OF INFORMATION TECHNOLOGY RICHARD C. STEVENS, Director MARIANNE M. EMERSON, Deputy Director 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 • December 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 DAVID J. STOCKTON, Economist MARK S. SNIDERMAN, Associate Economist JACK H. BEEBE, 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, St. Louis, Missouri 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, Jackson, Mississippi MARTA RAMOS, San Juan, Puerto Rico ROBERT F. ELLIOTT, Prospect Heights, Illinois DAVID L. RAMP, St. Paul, Minnesota LESTER W. FIRSTENBERGER, Hopkinton, Massachusetts 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 • December 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, 2000. 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 James T. Fergus and John L. Goodman, Jr. July 1993. BULLETIN 20 pp. Studies and papers on economic and financial subjects that are of 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANKgeneral interest. Requests to obtain single copies of the full text or ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING to be added to the mailing list for the series may be sent to PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, Publications Services. by Stephen A. Rhoades. July 1994. 37 pp. 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- Staff Studies 1-158, 161, 163, 165, 166, 168, and 169 are out LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH of print. Staff Studies 167-174 are available on line at IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. www.federalreserve.gov/pubs/staffstudies. Lowrey. December 1997. 17 pp. 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- DENCE, by Gregory Elliehausen. April 1998. 35 pp. ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and 172. USING SUBORDINATED DEBT AS AN INSTRUMENT OF MAR- Donald Savage. February 1990. 12 pp. KET DISCIPLINE, by Study Group on Subordinated Notes 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- and Debentures, Federal Reserve System. December 1999. VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by 69 pp. Gregory E. Elliehausen and John D. Wolken. September 173. IMPROVING PUBLIC DISCLOSURE IN BANKING, by Study 1990. 35 pp. Group on Disclosure, Federal Reserve System. March 2000. 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- 35 pp. GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. 174. BANK MERGERS AND BANKING STRUCTURE IN THE UNITED Rhoades. February 1992. 11 pp. STATES, 1980-98, by Stephen Rhoades. August 2000. 33 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

72 Federal Reserve Bulletin • December 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 rate rate days1 which data refer table numbers2 Weekly Releases H.2. Actions of the Board: $55.00 Friday Week ended Applications and Reports previous Received Saturday H.3. Aggregate Reserves of $20.00 Thursday Week ended 1.20 Depository Institutions and previous the Monetary Base3 Wednesday H.4.1. Factors Affecting Reserve Balances $20.00 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 Thursday Week ended 1.21 Measures3 Monday of previous week H.8. Assets and Liabilities of $30.00 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 5.00 First Tuesday of Previous month 1.35 G.13. Selected Interest Rates $ 5.00 month G.17. Industrial Production and $15.00 Midmonth Previous month 2.12, 2.13 Capacity Utilization3 5.00 Fifth working day Second month 1.55, 1.56 G.19. Consumer Credit3 $ 5.00 of month previous End of month Second month 1.51, 1.52 G.20. Finance Companies $ 5.00 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.ll. 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.l. 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 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 • December 2000 Maps of the Federal Reserve System ALASk\ HAWAII " LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A75 1—A 2-B 3-C 4-D 5-E Ml Pittsburgh Baltimore MD NY vtFJ X JfH MBKI C'T VT NC NH Cincinnati • Charlotte Bullaln ; / M A" / NY sc: C'r ^-RI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 7-G S-H „ •Nashville IN KY Ml / W1 II- ) IN Detroit • sville IA _ TN LA Jackson \ i lie AR • Memphis New Orleans II . IN Miami ATLANTA CHICAGO ST. LOUIS 9-1 ,,NNII>> MMNN • Helena • • • H HI Si> • W( I^iwsiiiasil^pli " MINNEAPOLIS 10-J 12-L wy hjm CO Omaha® MO 9 • Denver M \SK \ Seattle NM 1 (>klaluim•u Cit\ Portland OK OR KANSAS CITY • CA NV 7 11-K IX ( Salt L?tke City — • FV •Los Angeles • I San Antonio HAWAII AZ DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

76 Federal Reserve Bulletin • December 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 Barbara L. Walter1 PHILADELPHIA 19105 Joan Carter Anthony M. Santomero Charisse R. Lillie William H. Stone, Jr. CLEVELAND* 44101 David H. Hoag Jerry L. Jordan Robert W. Mahoney 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 Kaaren 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. Gambs 1 Oklahoma City 73125 Patricia B. Fennell 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. Gaylord Robert Smith III1 San Antonio 78295 Patty P. Mueller James L. Stull1 SAN FRANCISCO 94120 Gary G. Michael Robert T. Parry Nelson C. Rising John F. Moore Los Angeles 90051 Lonnie Kane Mark L. Mullinix2 Portland 97208 Nancy Wilgenbusch Raymond H. Laurence1 Salt Lake City 84125 Barbara L. Wilson Andrea P. Wolcott Seattle 98124 Richard R. Sonstelie Gordon R. G. Werkema2 * Additional offices of these Banks are located at Windsor Locks, Connecticut 06096; East Rutherford, New Jersey 07016; Utica at Oriskany, New York 13424; Columbus, Ohio 43216; Columbia, South Carolina 29210; Charleston, West Virginia 25311; Des Moines, Iowa 50306; Indianapolis, Indiana 46204; Milwaukee, Wisconsin 53202; and Peoria, Illinois 61607. 1. Senior Vice President. 2. Executive Vice President Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A77 Index to Volume 86 GUIDE TO PAGE REFERENCES IN MONTHLY ISSUES Issue Text "A" Pages Issue Text "A" pages Index to Index to tables tables January 1- 80 1-76 66 July 441-538 1-74 64 February 81-160 1-92 76 August 539-622 1-88 78 March 161-250 1-74 64 September 623-664 1-90 80 April 251-300 1-74 64 October 665-710 1-78 64 May 301-366 1-90 76 November 711-796 1-94 78 June 367^140 1-82 64 December 797-860 1-92 64 The "A" pages consist of statistical tables and reference information. Statistical tables are indexed separately (see p. A64 of this issue). Pages Pages ACCOUNTING POLICY, audits 735-7 Bank Holding Company Act of 1956—Continued All institutions estimate, calculation 716 Applications approved under—Continued Annual Report: Budget Review, 2000 653 Alpena Banking Corporation 854 Anticounterfeiting strategies 322 American Bancshares, Inc 507 Articles American River Holdings 660 CRA special lending programs 711-31 ANB Bankcorp, Inc 76 Credit cards: use and consumer attitudes, 1970-2000 623-34 ANB Delaware Financial Corporation 660 Domestic open market operations during 1999 511-37 ANB Financial Corporation 660 Effects of recent mortgage refinancing 441-50 ANB Holdings, Inc 854 Federal Reserve Banks as fiscal agents and depositories Anderson Bancshares, Inc 435 of the United States 251-9 Andover Bancorp, Inc 437 Industrial production and capacity utilization: Anita Bancorporation 789 1999 annual revision 188-205 Antioch Holding Company 660 Monetary policy reports to the Congress 161-87, 539-65 Apalachicola State Banking Corporation 435 Mutual funds and the U.S. equity markets 797-812 Ardmore Merger Corporation 789 Productivity developments abroad 665-81 Area Bancshares Corporation 72, 618 Profits and balance sheet developments at U.S. Arvest Bank Group, Inc 73, 240, 660 commercial banks in 1999 367-95 ASB Management Corp 240 Recent changes in U.S. family finances: results from Associated Banc-Corp 242 the 1998 Survey of Consumer Finances 1-29 Associated Community Bancorp, Inc 240 Treasury and Federal Reserve foreign Atlantic National Corporation 854 exchange operations 206-11, 396-99, 635-9, 813-7 Avant Financial, LLC 854 U.S. bank exposure to emerging-market countries Avoca Company 854 during recent financial crises 81-96 BancFirst Corporation 151 U.S. international transactions in 1999 301-14 BancFirst Ohio Corp 437 Assets, family 4 Banco Bilbao Vizcaya Argentaria, S.A., Bilbao, Spain — 791 Assets, mutual fund 797-812 Banco Santander Central Hispano, S.A., Auditor independence, statement 735-7 Madrid, Spain 76, 240 Automated clearinghouse transactions (ACH) — 40, 253, 466, 821 Bancorp Rhode Island, Inc 435 Automated teller machines, fee disclosures 653 Bancorp.com, Inc 615 Automobile production 192 BancWest Corporation 295, 791 Avery, Robert B., article 711-31 Bank of America Corporation 73, 154, 295, 791 Bank of Kentucky Financial Corporation 508 BANK FAILURES, statement 265-9 Bank of Montreal, Chicago, Illinois 856 Bank for International Settlements 91 Bank of Montreal, Montreal, Canada 154 Bank holding companies, financial holding company, Bank of Montreal, Toronto, Ontario, Canada 348, 856 procedures 219 Bank of New York Company, Inc 154, 706 Bank Holding Company Act of 1956 Bank of Whitman Employee Stock Ownership Plan 298 Applications approved under Bank One Corporation 788, 856 ABN AMRO Bank, N.V., Amsterdam, The Netherlands .. 244 Bankmont Financial Corp 154, 348 ABN AMRO Holding N.V., Amsterdam, Banknorth Group, Inc 151 The Netherlands 244 Bankoelwein, Inc 615 ABN AMRO North America, Inc 244 Banque Nationale de Paris, Paris, France 240 Admiral Family Banks, Inc 708 Bar Harbor Bankshares 242 Advantage Bancorp, Inc 789 Barclays Bank, pic, London, England 297 Advantage Bankshares, Inc 435 Barclays, pic, London, England 297 Allegiant Bancorp, Inc 856 Basile Bancshares, Inc 854 Almanij, N.V., Antwerp, Belgium 243 Bay Banks of Virginia, Inc 76 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • December 2000 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Bay National Corporation 435 Cleveland Holding Company 151 Bayerische Hypo- und Vereinsbank AG, Clintonville Bancshares, Inc 241 Munich, Germany 243 CNB Financial Services, Inc 663 Baytree Bancorp, Inc 347 Coastal Banking Company, Inc 151 BB&T Corporation 295, 791, 854 ColoEast Bankshares, Inc 506 BBV Securities, Inc 791 Colorado County Investment Holdings, Inc 789 Belvedere Capital Partners, LLC 240 Columbia Bancorp 296 Benchmark Bancorp, Inc 506 Commerce Bancorp, Inc 76 Berkshire Bancorp, Inc 297 Commerce Financial Corporation Employee Stock BGC Bancorp, Inc 435 Ownership Plan 792 Big Mac Bancshares, Inc 854 CommerceFirst Bancorporation, Inc 615 Bob S. Prince Insurance Agency, Inc 153 Commercial Capital Corporation 508 BOE Financial Services of Virginia, Inc 506 Commerica Incorporated 705 BOK Financial Corporation 854 Commfirst Bancorporation, Inc 707 Bootheel Bancorp, Inc 243 Commonwealth Bancshares, Inc 296 Border Bancshares, Inc 436 Community Bancshares Spring Green and Plain, Inc 789 Boston Private Financial Holdings, Inc 791 Community Bancshares, Inc 152 BostonFed Bancorp, Inc 76 Community Bank Group, Inc 662 BOU Bancorp 854 Community First Bancshares, Inc 73, 662 Branson Bancshares, Inc 347 Community First Financial Corporation 662 Bremer Financial Corporation 242 Community First National Bank 73 Brookline Bancorp, Inc 436 Community Investment Group, Ltd 615 Brookline Bancorp, MHC 436 Community National Bancorporation 241 Bruning Bancshares, Inc 240 Community Pride Bank Corporation 506 Bryan Family Management Trust 241 CommunityOne BancShares, Inc 854 Bryan-Heritage, Limited Partnership 241 Compass Bancshares, Inc 72 Burton Bancshares, Inc 436 Concord Bancshares, Inc 347 Burton Holdings, Inc 436 Concord EFS, Inc 243 Business Bancorporation, Inc 506 Cornerstone Bancorp, Inc 789 Byron Bancshares, Inc 662 Coronado Financial Corporation 854 Caixa Geral de Depositos, S.A., Lisbon, Portugal 789 Corpus Christi Bancshares, Inc 506 California Community Financial Institutions Fund, Cortez Investment Company 615 Limited Partnership 240 CorTrust Bank National Association 707 Calvert Financial Corporation 295 CountryBanc Holding Company 152 Camden National Corporation 73 CPB, Inc 662 Capital Bancorp, Ltd 73, 347, 660, 706, 854 Crown Bankshares, Inc 347 Cardinal Financial Corporation 436, 706 CSB Bancshares, Inc.'s Amended Employee Stock Castle Creek Capital Partners Fund I, LP 296, 615 Ownership Plan 152 Castle Creek Capital Partners Fund Ha, LP 296, 615 Cumberland Bancorp, Inc 152, 854 Castle Creek Capital Partners Fund lib, LP 296, 615 Cumberland Bancshares, Inc 707 Castle Creek Capital, LLC 296, 615. 616 Custer Bancorp 854 CB Bancshares 662 Dacotah Banks, Inc 241, 707 CBCT Bancshares, Inc 706 Dai-Ichi Kangyo Bank, Limited, Tokyo, Japan ... 76, 789, 791 Centerstate Banks of Florida, Inc 296 Dai-Ichi Kangyo Fuji Trust and Banking Centra Financial Holdings, Inc 296 Company, Ltd., Tokyo, Japan 789 Central Banc, Inc 854 Dakota Bancshares, Inc 297 Central Financial Corporation 347, 506, 615, 854 Davis Trust Financial Corporation 347 Central Progressive Bancshares, Inc 297 Dentel Bancorporation 436 Central Texas Bankshare Holdings, Inc 789 Deutsche Bank AG, Frankfurt am Main, Federal Central Valley Bancorp 660 Republic of Germany 154, 298 Central Valley Community Bancorp 789 Deutsche Financial Services, Inc 298 Centura Banks, Inc 346 Dinsdale Brothers, Inc 854 Century Bancshares, Inc 660 Downing Partnership, L.P. 615 Century South Banks, Inc 243, 296, 662 Eagle Bancshares, Inc 76 Cera Ancora, N.V., Leuven, Belgium 243 EastBank Corporation 707 Cera Beheersmaatschappij, NV, Leuven, Belgium 76 Eggemeyer Advisory Corp 615, 616 Cera Foundation, VZW, Leuven, Belgium 243 Eggemeyer Advisory, Inc 296 Cera Holding, C.V., Leuven, Belgium 243 Ellingson Corporation 508 Cera Management, N.V., Leuven, Belgium 243 Ellis Bankshares, Inc 241 Cera Stichting, VZW, Leuven, Belgium 76 Elmer Bancorp, Inc 854 Chambers Bancshares, Inc 708 Employee Stock and Ownership Trust of First Grayson Charter Banking Corp 73 Bancshares, Inc 73 Chase Manhattan Bank 348 Enterbank Holdings, Inc 616 Chase Manhattan Bank Delaware 348 eOneBanc Corp 616 Chase Manhattan Corporation 151, 706 ETN Leasing, Inc 436 Cheaha Financial Group, Inc 660 Exchange Bankshares, Inc 298, 789 Chesapeake Bancorp Employee Stock Ownership Plan Exchange National Bancshares, Inc 152 with 401 (k) Provisions 151 F&A Financial Holding Company 296 Chestatee Bancshares, Inc 241 F&M Financial Services, Inc 660, 856 China Trust Holdings, N.V., Curacao, F&M National Corporation 152 Netherlands Antilles 151 F.F. Holding Corporation 854 Citizens Bancshares, Inc 706 F.N.B. Corporation 73 Citizens Bankshares, Inc 297 FAB Merger Corporation 436 Citizens Community Bancorp, Inc 243, 791 Fairfield Holdings 76 Citizens Financial Corporation 615 Farmers & Merchants Financial Services, Inc 789 Citizens Financial Group, Inc 706 Farmers and Merchants Bancshares, Inc 73, 789 City Savings Bancshares, Inc 615 Farmers and Merchants Investment, Inc 73 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 86 A79 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Farmers Bancshares, Inc 244 Grace Investment Company 856 Farmers National Banc Corp 789 Graff Family, Inc 77 Fanners State Bank of Nebraska 854 Grain Valley Bancshares, Inc 152 FCB Bancorp, Inc 506 Grand Valley Corporation 241 FCB Financial, Inc 707 GrandSouth Bancorporation 790 Fentura Bancorp, Inc 152 Grant County State Bancshares, Inc., Employees Stock Fidelity D & D Bancorp, Inc 154 Ownership Plan 707 First Ada Bancshares, Inc 152 Great River Banshares Corporation 74 First Bancshares Corporation 73, 660 Greater Bay Bancorp 152, 436, 616, 790 First Bancshares, Inc 660 Greenville First Bancshares, Inc 74 First Banks America, Inc 241, 855 Gulf Coast Community Bancshares, Inc 241 First Banks, Inc 241, 437, 616, 855 Gwinnett Commercial Group, Inc 241 First Business Bancshares, Inc 507 Hancock Park Acquisition, L.L.C 661 First Central Bancshares, Inc 616 Hancock Park Acquisition, L.P. 661 First Charter Corporation 347 Hanmi Financial Corporation 507 First Citizens Bancorporation of South Carolina, Inc 155 Harleysville Savings Financial Corporation 241 First Community Banc Holding Company 660 Hartford Financial Corporation 76 First Community Bancorp 296 Heartland Bancshares, Inc 349, 618, 790 First Delta Bankshares, Inc 73 Heritage Bancshares, Inc 153 First Farmers Financial Corporation 298 Heritage Commerce Corp 74, 707 First Graham Bancorp, Inc 660 Heritage Financial Holding Corporation 661 First Home Bancorp, Inc 707 Heritage Group, Inc 661 First Interstate BancSystem, Inc 660 Home Town Banking Corporation 616 First Liberty Capital Corporation Employee Stock Hometown Banc Corp 155 Ownership Plan 855 Hometown Bancorp, Ltd 76 First Manitowoc Bancorp, Inc 73 Hopkins Financial Corporation 707 First Merchants Corporation 508, 662 HSB Bancorp, Inc 296 First Minden Bancshares, Inc 73 HSBC Financing (Netherlands), London, England 706 First Mountain Company, KSOP Plan 296 HSBC Holdings, BV, Amsterdam, Netherlands 706 First National Banc, Inc 76 HSBC Holdings, PLC, London, England 706 First National Bancshares, Inc 241 HSBC North America, Inc 706 First National of Nebraska, Inc 151, 155 HSBC USA, Inc 706 First Niagara Financial Group, Inc 788 Hunter Holding Company 241 First Northern Community Bancorp 347 IBT Bancorp, Inc 661 First Pryor Bancorp, Inc 152 Ida Grove Bancshares, Inc 507 First Rainsville Bancshares, Inc., Employee Stock Independent Bankers Life Reinsurance Company Ownership Plan 707 of Indiana, Ltd., Turks and Caicos Islands 298 First Security Corporation 347 Indiana Community Bancorp, Limited 706 First Security Group, Inc 507, 616 Indiana United Bancorp 298, 436 First Security, Inc 660 Industrial Bank of Japan, Ltd., Tokyo, Japan 790 First State Bancshares, Inc 618 InsCorp, Inc 855 First State Bank of Rushmore, KSOP Plan and Trust 241 Integrity Bancshares, Inc 707 First State Financial Corporation 73 Inter-Mountain Bancorp, Inc 661, 790 First Sterling Bank, Inc 436 Interbancorp 74 First Union Corporation 295, 705, 791 Interim First Capital Corporation 74 First Volunteer Corporation 791 Intermountain First Bancorp 74 First Western Bancorp, Inc 298 Intervest Bancshares Corporation 298 First-West Texas Bancshares, Inc 707 Iowa State Bank Holding Company 76, 349 Firstbank Corporation 508, 616 Iowa State Financial Services Corporation 241, 243 Flathead Holding Company of Bigfork 790 Island Bancorp, Inc 616 FleetBoston Financial Corporation 706 Islands Bancorp 507 Florida Community Bankshares, Inc 507 Jack and Katherine Dickey, Family Limited Partnership ... 707 FMB Equibanc, Inc 707 JD Financial Group, Inc 74 FNB Bancorp 790 Jonesboro Bancompany, Inc 662 FNB Corp 295 JTB Bancshares, Inc 661 FNB Financial Services, Inc 616 Kane Commerce Co 347 Franklin Bancorp, Inc., d/b/a Sunrise Community Banks .. 791 KBC Bank & Insurance Company, N.V., Frankston Bancorp, Inc 790 Brussels, Belgium 243 Frontier Financial Corporation 616 KBC Bank, N.V., Brussels, Belgium 243 Fuji Bank, Limited, Tokyo, Japan 151 Keene Bancorp, Inc., 401(k) Employee Stock Fulton Financial Corporation 614 Ownership Plan & Trust 616 Futura Banc Corp 155 Klein Financial, Inc 349, 437 Futurus Financial Services, Inc 507 Lafayette Community Bancorp 790 G.A.C., Inc 616 Lake Michigan Financial Corporation 74 GB&T Bancshares, Inc 152 Lamar Capital Corporation 662 GBT Bancorp 76 Landmark Financial Group, Inc 616 General Savings Bank of Washington 152 LandMark Financial Holding Company 153 German American Capital Corporation 298 Larch Bancorporation, Inc 76 Gideon Enterprises, L.P. 73 Leackco Bank Holding Company, Inc 507 Glacier Bancorp, Inc 152 Leaders Group, Inc 347 Glenwood Bancorporation 241 Ledyard Bancorporation, Inc 616 Gold Banc Acquisition Corp. XI, Inc 152 Lewisville Bancorp, Inc 297 Gold Banc Acquisition Corp. XIII, Inc 152 Lima Bancshares, Inc 618 Gold Banc Acquisition Corporation VIII, Inc 74 Lisco State Company 507 Gold Banc Acquisition Corporation XII, Inc 296 Lizton Financial Corporation 708 Gold Banc Corporation 74 M&F Bancorp, Inc 76 Gold Banc Corporation, Inc 152, 296 M&T Bank Corporation 708, 790 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • December 2000 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued Maham Beteiligungsgesellschaft, AG, Patapsco Bancorp, Inc 791 Zurich, Switzerland 707 PCB Bancorp, Inc 855 Mahaska Investment Company, ESOP 616, 661 Peoples Bancshares of Tallassee, Inc 153 Main Street Trust, Inc 156 Peoples Financial Group, Inc 661 Maries County Bancorp, Inc 347, 436 Peregrine Corporation 153 Marion Bancshares, Inc 153 Pierce County Bancorp 708 Marquette Bancshares, Inc 349, 437, 508 Pilot Bancorp, Inc 707 Marquette County Financial Corporation 855 Pilot Grove Savings Bank Employee Stock Marshall & Ilsley Corporation 155 Ownership Plan 707 MBT Bancshares, Inc 153 Pine Island Bancshares, Inc 298 McCook National Company 76 Pinnacle Bancorp, Inc 242 Mercantile Bancorp, Inc 855 Pinnacle Financial Partners, Inc 853 Merchants & Manufacturers Bancorp 74 Plains Bancorp, Inc 661 Merchants Merger Corp 74 PNC Bank Corp 76 Mesquite Financial Services, Inc 297 Popular International Bank, Inc., Hato Rey, Puerto Rico ..617 Mid State Banks, Inc 155, 437 Popular North America, Inc 617 Midland Bancshares, Inc 297 Popular, Inc., Hato Rey, Puerto Rico 617 Midland States Bancorp, Inc 507 Port Financial Corp 297 Miles Bancshares, Inc 74 Praesidium Capital Corporation 153 Miles Independent Bancorporation, Inc 74 Premier Bancorp, Inc 855 Minnwest Corporation 617 Premier Capital Corp 348 Monmouth Community Bancorp 617 Prime Pacific Financial Services, Inc 855 MSB Financial, Inc 661 Private Bancorp, Inc 619 MSB Holding Company 349 Progress Bancshares, Inc 436 Murphy-Payne Investments, Ltd 617 Provident Financial Group, Inc 77 NASB Shares, Inc 617 Quality Bancshares, Inc 855 National Bank of Greece, S.A., Athens, Greece 618 RBSG International Holdings, Ltd., National Commerce Bancorporation 297, 348, 349, Edinburgh, Scotland 706 508, 618, 662 Regal Bancorp, Inc 74 National Westminster Bank, pic, London, England 155 Regent Bancorp, Inc 507 NB Holdings Corporation 73, 295 Regions Financial Corporation 75, 617, 661 NBG Bancorp, Inc 297 Republic Bancorp Co 349 NBG International, Limited, London, England 618 Ridgeway Bancshares, Inc 242 NBM Corporation Employee Stock Ownership Plan 436 Rivers Ridge Holding Company 242 NBT Bancorp, Inc 74, 436 Riverside Banking Company 662 NCT Holdings, Inc 241, 243 Rockhold-Brown Bancshares, Inc 153 Nebraska Bankshares, Inc 662 Royal Bank of Scotland Group, pic, Network Bancorp, USA 153 Edinburgh, Scotland 77, 706 Nevada Community Bancorp, Limited 347 Royal Bank of Scotland, pic, Edinburgh, Scotland 77, 706 New Frontier Bancshares, Inc 855 RSB Financial, Inc 436 New Mexico First Financial, Inc 348 Ruff Partners, Ltd 153 Niagara Bancorp, MHC 788 S&C Banco, Inc 661 North American Bancshares, Inc 74 Sacramento Capital Co 242 North Bay Bancorp 661 Salem Community Bankshares, Inc 661 North Central Bancorp, Inc 77 Scottsdale Bancorp 348 North Georgia Community Financial Partners, Inc 617 Shamrock Bancshares, Inc 507 North Street Finance, LLC 244 Sherman County Management, Inc 243 North Valley Bancorp 855 Shorebank Advisory Services, Inc 790 Northern Missouri Bancshares, Inc 297 Shorebank Corporation 790 Northern Plains Investment, Inc 74 SI Bancorp, Inc 617 Northern Trust Corporation 437, 708 Silicon Valley Bancshares 662 NorthStar Bancshares, Inc 74, 348 Skandinaviska Enskilda Banken, AB, Northwest Bancorporation, Inc 617 Stockholm, Sweden 155 Northwest Financial Corp 661, 855 Smith River Bankshares, Inc 153 Norton Bancshares, Inc 153 SNB Bancorp, Inc 436 Oak Financial, Inc 241 SNB Holdings, Inc 75 Ogden Bancshares, Inc 855 Societe Generale Investment Corporation 298 Ohio Legacy Corp 348 Societe Generale, Paris, France 298 Old Kent Financial Corporation 346 Old National Bancorp 240 Somerset Trust Holding Company, Inc 661 Olivia Bancorporation, Inc 297 Sooner Southwest Bankshares, Inc 662 Olympia Financial Corporation 708, 790 South Branch Valley Bancorp, Inc 153 Olympic Equities Corporation 708 South Central Bancshares of Kentucky, Inc 77 Omni Financial Services, Inc 348 South Financial Group, Inc 507 Oswego Community Bank Employee Stock Southern Financial Bancorp, Inc 155, 708 Ownership Plan 507 Southern Michigan Bancorp, Inc 790, 791 Otto Bremer Foundation 242 SouthernBank Holdings, Inc 507 Overton Merger Corporation 153 Spectrum Bancorporation, Inc 242 PAB Bankshares, Inc 76, 855 Speed Bankshares, L.P. 617 Pacific Capital Bancorp 617 St. Elizabeth Bancshares, Inc 75 Pacific Crest Capital, Inc 74 Stamford Banco, Inc 662 Pacific Mercantile Bancorp 297 Star Systems, Inc 347, 791 Panola National Bancshares of Delaware, Inc 242 State Bank Hoxie Employee Stock Ownership Plan 617 Panola National Bancshares, Inc 242 State Bank of Cokato Employee Stock Ownership Paradigm Bancorporation, Inc 74 Plan and Trust 75 Park Meridian Financial Corporation 661 State Bank of Cokato Employee Stock Ownership Park National Corporation 348 Plan and Trust II 75 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 86 A81 Pages Pages Bank Holding Company Act of 1956—Continued Bank Holding Company Act of 1956—Continued Applications approved under—Continued Applications approved under—Continued State Bank of Slater Employee Stock Ownership Wilson and Muir Bancorp, Inc 75 Plan & Trust 507 Wintrust Financial Corporation 855 State National Bancshares, Inc 617 WJR Corp 296, 615, 616 Steinauer Bancorp 153 Wyoming National Bancorporation, Inc 618 Sterling City Bancshares, Inc 855 Zions Bancorporation 295, 659 Sterling City Delaware Financial Corporation 855 Zumbrota Agency, Inc 298 Sterling Financial Corporation 617 Orders issued under Stichting Administratiekantoor ABN AMRO Holding, ABN AMRO Bank, NV, Amsterdam, Amsterdam, The Netherlands 244 The Netherlands 56-61 Stichting Prioriteit ABN AMRO Holding, Amsterdam, ABN AMRO Holding NV, Amsterdam, The Netherlands 244 The Netherlands 56-61 Stockmens Financial Corporation 662 Australia & New Zealand Banking Group, Limited, Sumitomo Bank, Limited, Osaka, Japan 856 Melbourne, Australia 695 Summit Bancorp 244, 706 Banco Comercial Portugues, S.A., Oporto, Portugal 593-5 Summitt Bank Corporation 349 Banco Espirito Santo, S.A., Lisbon, Portugal 418-20 Sun Community Bancorp, Limited 73, 347, 660, 854 Banco Popular, National Association 601 Sunrise Capital Corporation 347 Banco Portugues do Atlantico (USA), Inc 593-5 SunTrust Banks, Inc 295, 791 Banco Portugues do Atlantico, S.A., Oporto, Portugal .. 593-5 Susquehanna Bancshares, Inc 244, 349 Banque Nationale de Paris, Paris, France 118-22 SVB&T Corporation 619 Bayerische Hypo- und Vereinsbank, AG, Synovus Financial Corp 155, 437, 617 Munich, Germany 56-61 Team Financial Acquisition Subsidiary, Inc 75, 242 BB&T Corporation 116-8, 491-4 Team Financial Employees Stock Ownership Plan 242 BCP-IF S.G.P.S., Lda, Lisbon, Portugal 593-5 Team Financial, Inc 75, 242 Bespar-Sociedade Gestora de Participacoes Sociais, S.A., Tennessee Commerce Bancorp 436 Lisbon, Portugal 418-20 Terre Haute Savings, M.H.C 436 BPA Internacional, S.G.P.S. Sociedade Unipessoal Lda, Texas Capital Bancshares, Inc 662 Funchal, Madeira, Portugal 593-5 Texas Independent Bancshares, Inc 75 Brookline Bancorp, Inc. 52-4 Three Rivers Bancorp., Inc 348 Brookline Bancorp, MHC 52-4 Three Rivers Bankshares, Inc 617 Caisse Nationale de Credit Agricole, Paris, France 412 Tompkins Trustco, Inc 75 Canadian Imperial Bank of Commerce, Toronto, Canada .. 424 Toronto-Dominion Bank, Toronto, Canada 244 Centura Bank 232-7 Tradition Bancshares of Delaware, Inc 790 Centura Banks, Inc 232-7 Tradition Bancshares, Inc 790 Charles Schwab Corporation 494-500 Tri County Investment Company, Inc 244 CIBC Delaware Holdings, Inc 424 Troy Financial Corporation 507 CIBC World Markets Corporation, Toronto, Canada 424 Truman Bancshares, Inc 153 CIBC World Markets, Inc., Toronto, Canada 424 TrustBanc Financial Group, Inc 436 Compass Bancshares, Inc 595-7 TrustCo Bank Corp. NY 508 Compass Bank 595-7 Twenty-First Century Financial Services Company 153 Deutsche Bank AG, Frankfurt, Germany 56-61 U.S. Trust Corporation 242 Dime Bancorp, Inc 413-8 UB Financial Corporation 855 E.S. Control Holding, S.A., Luxembourg 418-20 UBS AG, Zurich and Basel, Switzerland ... 154, 155, 244, 349 E.S. International Holding, S.A., Luxembourg 418-20 Umpqua Holdings Corporation 155 Espirito Santo Financial (Portugal) Sociedade Gestora de Union Bancshares, MHC 617 Participacoes Sociais, S.A., Lisbon, Portugal 418-20 Union Bankshares Company 791 Espirito Santo Financial Group, S.A., Luxembourg .... 418-20 United Bancshares, Inc 154 Exchange Bancshares of Moore, Inc 115 United Community Banks, Inc 508 First Bancorp 696-9 United Financial Corp 154 First National Corp. of Ardmore, Inc 225 United Financial Holdings Corporation 508 First Security Corporation 122-40 United Financial Holdings, Inc 244 FleetBoston Financial Corporation 751-66 USB Bankshares, Inc 617 FSF of Delaware, Inc 432 USBANCORP, Inc 437 HSBC Finance Netherlands, London, Utah Bancshares, Inc 242 United Kingdom 140-50 Uwharrie Capital Corporation 75, 856 HSBC Holdings, BV, Amsterdam, The Netherlands .... 140-50 Vail Banks, Inc 618 HSBC Holdings, pic, London, United Kingdom 140-50 Valley Capital Corporation 618 J.P. Morgan & Co., Incorporated 61-5 Valley National Bancorp 708 Mizuho Holdings, Inc., Tokyo, Japan 776-83 Van Deusen Bancorp, Inc 297 National Commerce Bancorporation 597-601 VIB Corp 75 North Fork Bancorporation, Inc 226-30, 230-2, 767-76 Virginia Commonwealth Financial Corporation 242 Northern Star Financial, Inc 609 Vision Bancshares, Inc 348 Old Kent Financial Corporation 223-5 Wachovia Corporation 239, 295, 508, 791 Paribas, Paris, France 118-22 Walden Financial Group, Inc 156 Peoples Heritage Financial Group, Inc 425-32 Washington Trust Bancorp, Inc 619 Popular International Bank, Hato Rey, Puerto Rico 601 Waumandee Bancshares, Ltd 437 Popular North America, Inc 601 Wells Fargo & Company ... 154, 156, 297, 348, 349, 618, 790 Popular, Inc., Hato Rey, Puerto Rico 601 Westar Financial Services Corporation 437 Republic National Bank of New York 140-50 Westborough Bancorp, M.H.C 75 Republic New York Corporation 140-50 Westborough Financial Services, Inc 75 Royal Bank of Scotland Group, pic, Westdeutsche Landesbank Girozentrale, Edinburgh, Scotland 655-8 Dusseldorf, Germany 244, 791 Sanwa Bank, Limited, Osaka, Japan 54-6 Western Acquisition Partners, L.P. 662 SierraCities.com, Inc 432 Western Acquisitions, L.L.C 662 Stichting Administratiekantoor ABN AMRO Holding, Wewahitchka State Bank Employee Stock Amsterdam, The Netherlands 56-61 Ownership Plan 297 Stichting Prioriteit ABN AMRO Holding, Whitney Holding Corporation 242, 855 Amsterdam, The Netherlands 56-61 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • December 2000 Pages Pages Bank Holding Company Act of 1956—Continued Bank Merger Act—Continued Orders issued under—Continued Applications approved under—Continued UBS AG, Zurich, Switzerland 61-5 Springdale Bank & Trust 299 UniCredito Italiano, S.p.A., Milan, Italy 825-8 State Bank 792 Valley View Bancshares, Inc 420-4 SunTrust Bank, Atlanta 78 Wells Fargo & Company 341-4, 500-3, 602-9, Union Trust Company 792 828-32, 832-51 UnionBank/West 78 Westamerica Bancorporation 699 United States Trust Company of New York 245 Zions Bancorporation 122^10 Valencia Bank & Trust 78 Bank Holding Company Supervision Manual 104, 585 Weldon State Bank and Trust 350 Bank Merger Act Wesbanco Bank Wheeling 158 Applications approved under Westamerica Bank 663 AmSouth Bank 77, 349 WestStarBank 620 AmTrade International Bank of Georgia 156 Orders issued under Arvest Bank 438, 856 Chase Manhattan Bank 610-3 Atlantic Bank 349 Highlands Union Bank 708 BancFirst 856 Manufacturers and Traders Company 708 Banco Popular North America 619 Southern Financial Bank 708 Bank of Colorado 245, 509 SunTrust Bank 65-7 Bank of Lancaster 856 Bank mergers and banking structure in the United States, Bank of Orange County 78, 619 1980-98, staff study 640 Bank of Tazewell County 856 Bank Reserves Modernization Act of 2000, H.R. 4209 454-8 Bank of the Orient 856 Banking industry and activities Bank, The 438 Fraud 267 Bankwest of Kansas 856 Private organizations 36 CalWest Bank 78 Public disclosure working group 409 Citizens Bank 350 Banks, U.S. Citizens Trust Bank 350 Claims on foreign counterparties 81-91 CivicBank of Commerce 245, 299 Exposure to emerging-market countries, article 81-96 Columbia Bank 156 Foreign operations 383 Commerce Bank 856 Safety and soundness standards 51 Community Banks of Southern Colorado 857 Basel Committee on Banking Supervision, risk management ... 742 Community State Bank 509 Bassett, William F„ article 367-95 Compass Bank 77 Benchmark Survey of U.S. Ownership of Foreign CSB Bank 350 Long-Term Securities, 1997 311 Dacotah Bank 509 Best Practices for Credit Risk Disclosure 742 Eastern Virginia Bankshares, Inc 509 Bettge, Paul, promoted to Associate Director, Effingham State Bank 619 Division of Reserve Bank Operations and European American Bank 299 Payment Systems 743 F&M Bank-Emporia 663 Board of Governors (See also Federal Reserve System) F&M Bank-Highlands 619 Consumer Advisory Council F&M Bank-Kaukauna 157 Meetings 276, 466, 742 F&M Bank-Massanutten 619 New members 218, 466 F&M Bank-Northeast 157 Employees, ethical conduct standards 115 F&M Bank-Winchester 619 Final enforcement decisions and orders (See Litigation, First American Bank and Trust Company 857 Final enforcement decisions and orders issued First Arvest Bank 663, 857 by Board of Governors) First Liberty Bank and Trust 619 Index of orders and actions taken 71, 293, 505, 703-5 First State Bank 663 Information Technology Division, restructuring 164 First Virginia Bank-Mountain Empire 509 Public web site, wireless access 686 FNB Southeast 509 Research and Statistics Division, restructuring 654 Gold Bank 157, 245, 299 Staff changes Grant County Bank 157 Bettge, Paul 743 Harris Trust Bank of Montreal 509 Cunningham, Geary L 278 HSBC Bank, USA 509 Dennis, Jack, Jr 743 Investors Fiduciary Trust Company 792 Hannan, Maureen T 278 Iron and Glass Bank 857 Ireland, Oliver 823 James River Bank 663 Martindale, Edgar A 221 James River Bank/Colonial 663 Misback, Ann E 278 Legacy Bank, ACB 438 Mowry, Sharon L 278 M&I Marshall & Ilsley Bank 792 Mulrenin, Edward T 278 Manufacturers and Traders Trust Company 792 Oliner, Stephen D 654 Merrill Merchants Bank 299 Passmore, Wayne S 654 Mid State Bank 619 Pianalto-Cameron, Rosanna 278 Midwest Bank of Western Illinois 157 Prell, Michael J 411 Northern Neck State Bank 857 Reifschneider, David L 654 Old Kent Bank 349, 619 Richardson, Sandra L 278 Patapsco Bank 792 Siciliano, Stephen L 278 Peapack-Gladstone Bank 78 Stockton, David J 411 Peninsula Trust Bank 857 Struckmeyer, Charles S 654 People First Bank 509, 857 Wilcox, David 654 Peoples Bank and Trust Company 620 Zickler, Joyce K 654 Pinnacle Bank, Aurora, Nebraska 792 Thrift Institutions Advisory Council, new members 101 Pinnacle Bank, Lexington, Nebraska 792 Book-entry securities 255 Pinnacle Bank, Papillion, Nebraska ... 245, 509, 620, 792, 857 Borrowing practices by families 22-4 Pinnacle Bank-Wyoming 857 Bostic, Raphael W„ article 711-31 Potomac Valley Bank 157 Brady, Peter J., article 441-50 Ravalli County Bank 299 Bulletin table, residential-mortgage originations, errata .... 743, 744 Somerset Trust Company 663 Business loans 369-72 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 86 A83 Pages Pages Business sector, economic developments 169-71, 545-8 Disclosures, public, by banks—Continued Businesses, private, and family assets 18 Staff study 260 Working group 409 CANNER, Glenn B„ articles 441-50, 711-31 Discount rate 40, 51, 217, 289, 324, 339, 466, 475 Capacity utilization, article 194—7 Dollar, gold coin 277 Capital Dollar, exchange value 304, 396-9 Accounts, U.S 174, 313, 376 Domestic open market operations during 1999 511-37, 533 Flows, U.S 313, 552 Domestic policy directives, FOMC 101, 111, 287, 329, Growth 668 336, 337, 474, 511, Requirements, non-complex institutions 822 582, 592, 685, 740 Spending 545 Durkin, Thomas A., article 623-34 CEA (See Commodity Exchange Act) Century Date Change (See Year 2000) ECONOMIC DEVELOPMENTS, by sector Chairmen and deputy chairmen, 2001, Federal Reserve Banks . 740 Business 169-71, 545-8 Check collection, electronic, proposal 742 Financial markets 161^, 178-80, 557-60 Civil penalty adjustments 825 Foreign 173, 550 Coin demand 321 Government 172, 548-50 Coins and currency, statement 320-3 Household 167, 543 Commercial and industrial loans 369 Labor markets 175, 552-5 Commercial bank Prices 177, 179, 555 Balance sheet developments 370 Economy, U.S. Capital 375 Foreign transactions 303 Deposits 375 Monetary policy reports 161-87, 271-5, Income and expenses, tables 385-95 539-65, 648-51 Interest income and expense 378 Projections 164, 273, 541 International operations 383 Education, needed improvements, statement 737-9 Liabilities 375 Electronic check presentment, proposal 742 Noninterest expense and income 379 Electronic Fund Transfers (Reg. E) 583, 653 Profitability 377 Emerging-market countries, financial crises, article 81-96 Commercial Bank Examination Manual 410 Employment 552 Commercial banks, article on developments 367-95 Employment cost index 553 Commodity Exchange Act (CEA) 269-71, 577-9 Enforcement actions (See Litigation, Final enforcement Commodity Futures Modernization Act of 2000, decisions and orders issued by Board of Governors) statements 579, 644, 646-8 Engen, Eric M„ article 797-812 Commodity prices 303 Equity Community Reinvestment Act (CRA) Capital, commercial banks 375 Lending programs 711-31 Family assets 18 Mortgage loans, profitability 721, 723 Investment, merchant banking 583 Regulations 712 Markets 405-8, 797-812 Computer production 191 Prices 179, 559 Conduct, ethical standards for Board employees 115 Euro exchange value 206-11, 396-9, 635-9, 813-7 Consumer Advisory Council Export prices 307 Meetings 276, 466, 742 Extensions of Credit by Federal Reserve Banks New members 218, 466 (Reg. A) 51, 289, 339, 475 Consumer Handbook to Credit Protection Laws 409 Consumer price index (CPI) 556 FEDERAL BUDGET POLICY 274 Consumer protection 686, 822 Federal Deposit Insurance Corporation Examination Consumer spending 543 Enhancement and Insurance Fund Protection Act 268 Counterfeiting, report 276, 322 Federal funds rate 324, 466, 524 CRA Sunshine Requirements, proposal 467 Federal Open Market Committee Credit card Disclosure of procedures 217, 288 Debt 623 Discount rate, increase 40, 217, 324 Distribution 625 Domestic policy directives 101, 111, 287, 329, Solicitations, disclosure requirements 466, 741 336, 474, 511, 582, Terms, consumer awareness 630-3 592, 685, 740 Credit cards: use and consumer attitudes, 1970-2000, Foreign currency directives 331 article 623-34 Foreign currency operations 330 Crimes, financial in banking, statements 35-9, 267, 322 Meeting minutes Cross-border claims 81-96 Oct. 5, 1999 44-9 Cunningham, Geary L., appointed Assistant Director, Nov. 16, 1999 106-11 Division of Information Technology 278 Dec. 21, 1999 283-8 Customer information security, proposal 583 Feb. 1-2, 2000 328-38 Mar. 21, 2000 469-74 DEBT May 16, 2000 587-92 Credit card 623 June 27-28, 2000 688-93 Family 19, 25 Aug. 22, 2000 745-50 U.S 180, 560 Notation vote, Legion of Honor award 685, 693 Debt Collection Improvement Act of 1996 253 Federal Reserve Banks Dennis, Jack, Jr., Assistant Director, Division of Reserve Bank Chairmen and deputy chairmen, 2001 740 Operations and Payment Systems, retirement 743 Depositories and fiscal agents 251-9 Depository institutions 40, 101, 102, 114 Directors, list 353-65 Direct mail disclosure requirements 741 Fee schedules 102, 220 Directors, Federal Reserve Banks and Branches 353-65 Government payments processors 253 Disclosures, Federal Open Market Committee 217, 288 Operating income 220 Disclosures, public, by banks Securities services 254-7 Automated teller machine fees 653 Tax collectors, federal funds 252 CRA-related agreements 467 Federal Reserve System Credit and charge card solicitations 466 Balances 513, 517 Electronic delivery 102 Hedge funds, supervision 313 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

84 Federal Reserve Bulletin • December 2000 Pages Pages Federal Reserve System—Continued Humphrey Hawkins Report (See Monetary Policy Reports Required reserves 518 to the Congress) Federal Reserve System Study Group on Disclosure 260 Fees for Federal Reserve services to depository IMPORT PRICES 308 institutions 102, 220 Income Fifty States Commemorative Quarter program 320-3 Commercial bank, tables 385-95 Finances, family, article 1-29 Family 2 Financial crimes, statements 35-9, 267, 322 Federal Reserve Banks 220 Financial crises, emerging-market countries, article 81-96 Industrial production and capacity utilization Financial holding companies 219, 324, 325, 652, 685 Article 188-205 Financial markets Index weights 193 Economic developments 161-4, 178-80, 557-60 Releases 32-4, 97-100, 212-4, 262-4, Mutual funds 804 315-7, 401-3, 451-3, 566-8, Financial netting legislation 404, 647 641-3, 682-4, 732-4, 818-20 Financial subsidiaries 326 Revision 192 Fisher index, weighted 193 Tables 198-205 Fisher, Peter R„ articles 206-11, 396-9, 511-37. Information, personal, access 475, 490 635-9, 813-7 Insurance policies and family savings 13 Flood hazard areas, regulations on loans 113 Insurance products, protection for consumers 686 Flow of Funds Accounts, Guide to, publication 327 Interagency Financial Institution Web Site Foreign banks, U.S. operations 821 Privacy Survey Report 42 Foreign currency operations, FOMC authorization 330 Interest income and expenses, commercial banks 378, 379 Foreign exchange operations, articles 206-11, 396-9, Interest rates 178, 386-95, 557-9 635-9, 813-7 International Banking Act of 1978 Foreign exchange, reserves 210 Orders issued under Foreign Money Laundering Deterrence and Banca Antoniana Popolare Veneta, S.c.p.a.r.l., Anticorruption Act 39 Padua, Italy 783 Foreign sector, economic developments 173, 182-7, 302, Banca Intesa, S.p.A., Milan, Italy 433-5 550-2, 562-5 Banca Sella, S.p.A., Biella, Italy 503-5 Foreign transactions in 1999, article 301-14 Banco Comercial Portugues, S.A., Oporto, Portugal 613 Fraud, banking organizations 35-9, 267, 322 Banco Itaf S.A., Sao Paolo, Brazil 852 Futures exchanges, U.S 578, 580, 644, 646 Banco Venezolano de Credito, S.A.C.A., Caracas, Venezuela 785 GILBERT, Charles, article 188-205 Bank Austria Aktiengesellschaft, Vienna, Austria 67-9 Golden Dollars 277 Caixa Economica Montepio Geral, Lisbon, Portugal 700-2 Goods and services, trade developments 305 Chuo Mitsui Trust & Banking Co., Ltd., Tokyo, Japan .... 702 Government sector, economic developments 172 Deutsche Hyp Deutsche Hypothekenbank Gramlich, Governor Edward M., predatory Frankfurt-Hamburg AG, Frankfurt, Germany 658 lending statement 462-5 Dexia Project and Public Finance International Bank, Gramm-Leach-Bliley Act 467, 569, 584, 823 Paris, France 289-91 Greenspan, Chairman Alan E. Sun Commercial Bank, Limited, Taipei, Taiwan 238 Fourth four-year term 582 Kookmin Bank, Seoul, Korea 291-3 Statements National Bank of Egypt, Cairo, Egypt 344-6 Commodity Exchange Act 269-71 Turkiye Is Bankasi, A.S., Ankara, Turkey 786-8 Commodity Futures Modernization Act of 2000 579-81 UBS AG, Basel, Switzerland 69 Education, needed improvements 737-9 International developments, monetary policy 183-7, 562-5 Equity markets 405-8 International operations 301-14, 384 Monetary policy 271-5, 648-51 Internet privacy 42 Social security and Medicare 318-20 Investment income 309, 311 Technological change and financial services 215 Investments, inventory 546 Guide to Business Credit for Women, Minorities, and Small IRA mutual funds 802 Businesses 410 Ireland, Oliver, Associate General Counsel, resignation 823 Guide to Flow of Funds Accounts, publication 327 Gust, Christopher, article 665-81 KENNICKELL, Arthur B„ article 1-29 Keys to Vehicle Leasing: A Consumer Guide 653 H.R. BILLS Keys to Vehicle Leasing: A Consumer Resource 653 1161 578 3374, Federal Deposit Insurance Corporation Examination LABOR MARKETS, economic Enhancement and Insurance Fund Protection Act 268 developments 175, 552-5, 665, 668 4209, Bank Reserves Modernization Act of 2000 454-8 Lehnert, Andreas, article 797-812 4541, Commodity Futures Modernization Act Leonard, Deborah L., article 206-11 of 2000 577, 644. 64(^8 Liabilities 19, 376 Hannan, Maureen T., promoted to Associate Director, Litigation Division of Information Technology 278 Final enforcement decisions and orders issued Hearings, public by Board of Governors Predatory practices, home equity loans 652 Barber, Adele 42, 79 Rules of Practice, Amendment to 825 Barber, Robert 42, 79 Hedge funds, statement 404 Benton, Oren L 439 Hillery, Paula V., article 251-9 Callahan, Matthew J 43, 79 Hilton, Spence, article 511-37 Drummond, Charles A 220, 250 Home equity loans 374, 441-50, 463, 652 Incus Co., Ltd., Tortola, British Virgin Islands ... 246-50, 858 Home Mortgage Disclosure (Reg. C) 114 King, Solomon 220, 250 Home Ownership and Equity Protection Act of 1994 Korea Exchange Bank, Seoul, Korea 510 (HOEPA) 462, 652 Laredo National Bancshares 246-50, 858 Home-secured loans, predatory lending 462-5 Malhotra, Vinay B., Tokyo, Japan 327, 351 Homes, building new 544 Michaelessi, Lawrence 585, 621 Household assets and loans 372, 800 Nelson, Carolyn D 793-5, 823 Household sector, economic developments 167 New Century Bank 326 Housing and Urban Development, U.S. Department of 463 Professional Bank 439 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Index to Volume 86 A85 Pages Pages Litigation—Continued Meyer, Governor Laurence H., statements Final enforcement decisions and orders—Continued Auditor independence 735-7 R&T Foundation 351 Bank failures 265-9 Rhon, Carlos Hank 246-50, 858 Bank Reserves Modernization Act of 2000 454-8 Scott, Edward D 439 Merchant banking activities 569-77 Sellers, James R 327, 351 Misback, Ann E., appointed Assistant General Counsel, Smith, Bertram 43, 79 Legal Division 278 Sunshine Financial 326, 351 Monetary aggregates 181, 561 Wall, Frederick K 326, 351 Monetary policy reports to the Congress 161-87, 271-5, Woods, Christopher J 220, 250 539-65, 648-51 Index of orders and actions taken 71, 293, 505, 703-5 Money growth 165, 181 Pending cases involving the Board of Governors, Money laundering, statement 35-9 lists of 78, 158, 245, 299, Money stock data, revision 278-82 350, 438, 510, 620, Morin, Norman, article 188-205 663, 709, 792, 933 Mortgage loans Termination of enforcement actions issued by Board of CRA special programs 717 Governors Debt 22, 544 Adairsville Bancshares, Inc 79 Disclosure requirement 40 Banco Internacional, S.A., Mexico City, Refinancing 441-50 Mexico 327, 351 Mowry, Sharon L., appointed Assistant Director, Banco Nacional de Mexico, Mexico City, Division of Information Technology 278 Mexico 327, 351 Mulrenin, Edward T., Assistant Director, Division of Banco Santander, Madrid, Spain 327, 351 Information Technology, retirement 278 Bank of Adairsville 79 Mutual fund assets 12, 797-812 California Center Bank 79 Farmers & Merchants Bank 687 NATIONAL INCOME ACCOUNTING SYSTEMS 676 First Utah Bancorp 105, 159 Netting, financial 404, 647 First Utah Bank 105, 159 Notes and debentures, subordinated, staff study summary 30 Mercantile Capital Corp 79 Notes, Federal Reserve, high denomination 322 National Bank of Greece, S.A., Athens, Greece 687 National Mortgage Bank of Greece, S.A 687 OIL IMPORTS AND PRICES 303, 308 PanAmerican Bank 79 Oliner, Stephen D., promoted to Associate Director, Premier Data Corporation 105, 159 Division of Research and Statistics 654 TransAlliance, L.P. 105, 159 Open market operations 511-37, 533 Written agreements approved by Over-the-counter derivatives 269, 404, 405, 577, Arab American Bank 105, 159 579, 644, 646 Banco Bilbao Vizcaya Argentaria, S.A., Madrid, Spain 585, 621 PARKINSON, Patrick M„ statements 644, 646-8 Banco Bilbao Vizcaya, S.A 585 Passmore, Wayne S., appointed Assistant Director, Banco Bilbao Vizcaya, S.A., Miami Agency 585 Division of Research and Statistics 654 Banco Popular de Puerto Rico, Hato Rey, Payday loans 324, 339 Puerto Rico 326, 351 Personal information, access to 475, 490 Banco Union, S.A.C.A 687, 709 Pianalto-Cameron, Rosanna, appointed Special Assistant Banco Union, S.A.C.A., Caracas, Venezuela 687, 709 Bank of New York 277, 300 to the Board for Public Information 278 Bay View Capital Corporation 823, 859 Predatory lending practices 462-5, 652 Citizens Deposit Bank and Trust 823, 859 Prell, Michael J., Director, Division of Research and Consolidated Bank and Trust Company 743, 759 Statistics, retirement 411 Foxdale Bank 105, 159 Priced services to depository institutions 102, 220 Heritage Bancorp Company, Inc 43, 79 Prices, economic developments 177, 179, 555 Independent Southern Bancshares, Inc 743 Principles for the Management of Credit Risk 742 Independent Southern Bancshares, Inc., Employee Privacy Act 490 Stock Ownership Trust 743, 859 Privacy of Consumer Financial Information New Century Bancorp 653, 664 (Reg. P) 220, 276, 467 New Century Bank 653, 664 Privacy Olathe Bancorporation, Inc 743, 795 Consumer 220, 822 Olathe State Bank 743 On the web, report 42 Security Dollar Bank 327, 351 Rules 475-90 United Bancshares, Inc 277, 300 Private sector operations (PSOs) 821 Unity Bancorp, Inc 686, 710 Productivity growth, article 665-81 Loan-to-deposit ratios of host states 326 Profitability, commercial banks 377 Loans Proposed actions Bank, adverse ratings on syndicated 42 Disclosures, electronic delivery 102 Business 369-72 Financial holding companies, "finders" 652 Commercial and industrial 372 Privacy of Consumer Financial Information (Reg. P) ... 220, 276 CRA special program 711-31 Regulation E 583, 653 Home equity 372, 374, 462-5 Truth in lending (Reg. Z) 41, 466 Performance, commercial banks 377 Public web site, Board of Governors, wireless access to 686 Local country claims 81-96 Publications Love bug computer virus, statement 459-62 Activities review 41 Annual Report: Budget Review, 2000 653 MAKI, Dean M„ article 441-50 Bank Holding Company Supervision Manual 104, 585 Malphrus, Stephen R., statement 459-62 Commercial Bank Examination Manual 410 Marquez, Jaime, article 665-81 Consumer Handbook to Credit Protection Laws 409 Martindale, Edgar A., appointed Assistant Director, Guide to Business Credit for Women, Minorities, Division of Reserve Bank Operations and and Small Businesses 410 Payment Systems 221 Guide to Flow of Funds Accounts 327 Medicare programs, statement 318-20 Keys to Vehicle Leasing: A Consumer Guide 653 Merchant banking activities 325, 569-77, 583 Keys to Vehicle Leasing: A Consumer Resource 653 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • December 2000 Pages Pages RADDOCK, Richard, article 188-205 Statements and testimony to the Congress—Continued Real estate loans 373 Commodity Futures Modernization Act of 2000 Real estate, family asset 15, 18 Chairman Greenspan 579-81 Regulations (See also Rules) Patrick M. Parkinson, Associate Director, Board of Governors Division of Research and Statistics 644, 646-8 A, Extensions of Credit by Federal Equity markets (Chairman Greenspan) 405-8 Reserve Banks 51, 289, 339, 475 Hedge funds and OTC derivatives (Patrick M. Parkinson, Associate Director, Division of Research and C, Home Mortgage Disclosure 114 Statistics) 404 E, Electronic Fund Transfers 583, 653 Improving education (Chairman Greenspan) 737-9 P, Privacy of Consumer Financial Information .. 220, 276, 467 Love bug computer virus (Stephen R. Malphrus, Z, Truth in lending 324, 339, 466, 740, 741 Staff Director for Management) 459-62 Joint agency Merchant banking activities (Governor Meyer) 569-77 Flood hazard areas, loans 113 Monetary policy (Chairman Greenspan) 271-5, 648-51 Privacy rules 475 Money laundering (Richard A. Small, Assistant Director, Safety and soundness standards 51 Division of Banking Supervision and Regulation) 35-9 Reifschneider, David L., appointed Assistant Director, Predatory lending (Governor Gramlich) 462-5 Division of Research and Statistics 654 Social security (Chairman Greenspan) 318-20 Required balances, Federal Reserve 517 Technological change and financial services (Chairman Reserves, required 518, 524 Greenspan) 215 Residual interests, rules 741 Stocks and family savings 9, 12, 15 Residential-mortgage originations table, errata 743, 744 Stockton, David J., appointed Director, Division of Retirement accounts and assets 12, 802 Research and Statistics 411 Rhoades, Stephen A., staff study summary 640 Struckmeyer, Charles S., promoted to Associate Director, Richardson, Sandra L., appointed Assistant General Division of Research and Statistics 654 Counsel, Legal Division 278 Study Group on Disclosure, Federal Reserve System 260 Risk analysis and management 266, 742 Study Group on Subordinated Notes and Debentures, Risk-based capital requirements 276 Federal Reserve System 30 Roseman, Louise L., Director, Division of Reserve Bank Subordinated debentures, staff study 30 Operations, statement 318-20 Supervisory Guidance for Managing Settlement Risk Rules of Practice for Hearings, amendment 825 in Foreign Exchange Transactions 742 Rules Regarding Access to Personal Information Supplemental standards of ethical conduct for employees Under the Privacy Act 490 of the Board 115 Rules, interim Surette, Brian J., article 1-29 Financial holding companies 324, 325 Survey of Consumer Confidence, Y2K 103 Financial subsidiaries 325, 326 Survey of Consumer Finances, article on results 1-29 Merchant banking activities 325, 570 Suspicious Activity Report (SAR) form, revised 584 System of National Accounts 676 S. BILL, 2697, Commodity Futures Modernization System open market account, security holdings, tables 535-7 Act of 2000 579 Safety and soundness standards 51 TAX COLLECTION, electronic 252 Tax payments, collected by Federal Reserve Banks 252 Sarlo, Laura, articles 396-9, 635-9 Technological changes in banking 273 Savings bonds 9, 257 Thompson, Stephen E., article 251-9 Savings, family 3, 8-19 Thrift Institutions Advisory Council, new members, Securities appointments 101 Book-entry 255 Trade deficit, U.S 305, 550 Federal Reserve Bank services 254-7 Trade, goods and services 173, 305, 306 Foreign long-term 312 Transaction accounts and family savings 8 Investment accounts 374, 375 Treasury and Federal Reserve foreign exchange Savings bonds 257 operations, articles 206-11, 396-9, 635-9, 813-7 Securitization activities, guidance 102 Treasury Direct system 256 Shad-Johnson Accord 578 Treasury, U.S. Department of the 251, 515 Shared National Credit (SNC) program 821 Trucks, light, production 192 Siciliano, Stephen L., appointed Assistant General Counsel, Truth in lending (Reg. Z) 324, 339, 466, 740, 741 Legal Division 278 Truth in Lending Act 40, 462 Single-stock futures 578, 580, 645, 647 Small, Richard A., statements 35-9 UNILATERAL TRANSFERS 309 Social security, statement 318-20 Use and Counterfeiting of United States Currency Staff studies, summaries Abroad, report 276 Bank mergers and banking structure in the United States, VEHICLES, family assets 15 1980-98 640 Improving public disclosure in banking 260 WARNOCK, Francis E., article 301-14 Using subordinated debt as an instrument Web site privacy, report 42 of market discipline 30 Wilcox, David, appointed Deputy Director, Division Starr-McCluer, Martha, article 1-29 of Research and Statistics 654 State and local government spending 550 Wireless access, Board's public web site 686 Statements and testimony to the Congress (including Working Group on Public Disclosure 409 reports and letters) Auditor independence (Governor Meyer) 735-7 YEAR 2000 Bank failures (Governor Meyer) 265-9 Business lending 372 Bank Reserves Modernization Act of 2000 Century date change, Treasury balance 515, 528 (Governor Meyer) 454-8 Financial markets at year-end 209 Coins and currency (Louise Roseman, Director, Preparations, consumer confidence 41, 103 Division of Reserve Bank Operations) 320-3 Yen exchange value 206-11, 396-9, 635-9, 813-7 Commodity Exchange Act Chairman Greenspan 269-71 ZAKRAJSEK, Egon, article 367-95 Patrick M. Parkinson, Associate Director, Zickler, Joyce K., promoted to Deputy Associate Director, Division of Research and Statistics 577-9 Division of Research and Statistics 654 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A87 Publications of Interest FEDERAL RESERVE REGULATORY SERVICE To promote public understanding of its regulatory func- The Payment System Handbook deals with expedited tions, the Board publishes the Federal Reserve Regu- funds availability, check collection, wire transfers, and latory Service, a four-volume loose-leaf service con- risk-reduction policy. It includes Regulations CC, J, and taining all Board regulations as well as related statutes, EE, related statutes and commentaries, and policy interpretations, policy statements, rulings, and staff statements on risk reduction in the payment system. opinions. For those with a more specialized interest in For domestic subscribers, the annual rate is $200 for the Board's regulations, parts of this service are pub- the Federal Reserve Regulatory Service and $75 for lished separately as handbooks pertaining to monetary each handbook. For subscribers outside the United policy, securities credit, consumer affairs, and the pay- States, the price including additional air mail costs is ment system. $250 for the service and $90 for each handbook. These publications are designed to help those who The Federal Reserve Regulatory Service is also availmust frequently refer to the Board's regulatory materi- able on CD-ROM for use on personal computers. For a als. They are updated monthly, and each contains cita- standalone PC, the annual subscription fee is $300. For tion indexes and a subject index. network subscriptions, the annual fee is $300 for 1 con- The Monetary Policy and Reserve Requirements current user, $750 for a maximum of 10 concurrent Handbook contains Regulations A, D, and Q, plus users, $2,000 for a maximum of 50 concurrent users, related materials. and $3,000 for a maximum of 100 concurrent users. The Securities Credit Transactions Handbook con- Subscribers outside the United States should add $50 tains Regulations T, U, and X, dealing with exten- to cover additional airmail costs. For further informasions of credit for the purchase of securities, together tion, call (202) 452-3244. with related statutes, Board interpretations, rulings, All subscription requests must be accompanied by a and staff opinions. Also included is the Board's list of check or money order payable to the Board of Goverforeign margin stocks. nors of the Federal Reserve System. Orders should be The Consumer and Community Affairs Handbook addressed to Publications Services, mail stop 127, Board contains Regulations B, C, E, M, Z, AA, BB, and DD, of Governors of the Federal Reserve System, Washingand associated materials. ton, DC 20551. GUIDE TO THE FLOW OF FUNDS ACCOUNTS 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

88 Federal Reserve Bulletin • December 2000 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.l Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis