Federal Reserve Bulletin, 2001-04
Volume 87 • Number 4 • April 2001 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 183 FINANCIAL SERVICES USED BY SMALL foresee an implicit strengthening of activity after BUSINESSES: EVIDENCE FROM THE 1998 the current rebalancing is over, although the SURVEY OF SMALL BUSINESS FINANCES central tendency of their individual forecasts for real GDP still shows a substantial slowdown, Using newly available data from the 1998 Suron balance, for the year as a whole (Testimony vey of Small Business Finances, this article before the Senate Committee on Banking, Housoffers preliminary findings regarding the characing, and Urban Affairs, February 13, 2001). teristics of small businesses in the United States and their use of credit and other financial ser- 213 Chairman Greenspan presents the second testivices. The main goals of the survey are to pro- mony on the Board's monetary policy report and vide information on credit accessibility for small states that although the sources of long-term businesses, their use of financial services, and strength of our economy remain in place, the sources of those services. The survey also excesses built up in 1999 and early 2000 have provides a general-purpose database that can be engendered a retrenchment that has yet to run its used to study small business financing. Prelimi- full course. He testifies further that the retrenchnary findings suggest that although the financial ment has been prompt, in part because new landscape has changed markedly since the pre- technologies have enabled businesses to respond vious survey in 1993, financing patterns and the more rapidly to emerging excesses, and that the use of particular suppliers have not. Federal Reserve has quickened the pace of adjustment of its policy (Testimony before the House Committee on Financial Services, Febru- 206 INDUSTRIAL PRODUCTION AND CAPACITY ary 28, 2001). UTILIZATION FOR FEBRUARY 2001 Industrial production fell 0.6 percent in Feb- 217 ANNOUNCEMENTS ruary, its fifth consecutive monthly decline. At 146.0 percent of its 1992 average, industrial Statement by Chairman Greenspan on the renomination of Vice Chairman Ferguson to the production was 1.2 percent above its February Board of Governors. 2000 level. The rate of capacity utilization for total industry fell to 79.4 percent in February, Statement by Vice Chairman Ferguson on his its sixth consecutive monthly decline, and is renomination. 2.7 percentage points below its 1967-2000 Amendments to Regulation E regarding discloaverage. sure of ATM fees. 209 TESTIMONY OF FEDERAL RESERVE Availability of Spanish-language consumer OFFICIALS resources on the Board's public web site. Alan Greenspan, Chairman, Board of Gover- Changes in Board staff. nors, presents the Federal Reserve's semiannual Revisions to the money stock data. report on monetary policy and testifies that the slowdown in the economy that began in the 224 MINUTES OF THE MEETING OF THE middle of 2000 intensified, perhaps even to the FEDERAL OPEN MARKET COMMITTEE point of growth stalling out around the turn of HELD ON DECEMBER 19, 2000 the year; against this background, the Federal Open Market Committee reduced its targeted At this meeting, the Committee voted to mainfederal funds rate Vi percentage point on two tain the existing stance of monetary policy, occasions, to its current level of 5VI percent. He keeping its target for the federal funds rate testifies further that the members of the Board at 6V2 percent. The Committee members also of Governors and the Reserve Bank presidents agreed that the risks were weighted mainly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
toward conditions that could generate economic A63 GUIDE TO STATISTICAL RELEASES AND weakness in the foreseeable future. SPECIAL TABLES 231 LEGAL DEVELOPMENTS A64 INDEX TO STATISTICAL TABLES Various bank holding company, bank service A66 BOARD OF GOVERNORS AND STAFF corporation, and bank merger orders; and pending cases. A68 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS A1 FINANCIAL AND BUSINESS STATISTICS These tables reflect data available as of A70 FEDERAL RESERVE BOARD PUBLICATIONS February 26, 2001. All MAPS OF THE FEDERAL RESERVE SYSTEM A3 GUIDE TO TABULAR PRESENTATION A74 FEDERAL RESERVE BANKS, BRANCHES, A4 Domestic Financial Statistics AND OFFICES A42 Domestic Nonfinancial Statistics A50 International Statistics 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
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances Marianne P. Bitler, Alicia M. Robb, and John D. The latest survey gathered data for fiscal year 1998 Wolken, of the Board's Division of Research and from 3,561 firms selected to be representative of Statistics, prepared this article. Courtney Carter, small businesses operating in the United States in Doug Rohde, and Emily Rosenberg provided research December 1998.3 The data show that in 1998, as assistance. in 1987 and 1993, most small businesses were very small (nearly two-thirds had fewer than five employ- Small businesses—firms having fewer than 500 ees) and most (nearly four-fifths) were located in employees—are an integral part of the U.S. economy. urban areas.4 Ownership characteristics had changed They account for about half of private-sector output, somewhat since 1993—nearly 15 percent were employ more than half of private-sector workers, and owned by minorities (up from nearly 12 percent in provide about three-fourths of net new jobs each 1993), and more than 24 percent were owned by year.1 women (up from nearly 21 percent in 1993). Newly available data from the Survey of Small Commercial banks continued to be the supplier Business Finances provide a detailed look at these most commonly used by small businesses for finanfirms—their characteristics and their use of credit and cial services other than leasing, brokerage services, other financial services. The survey is the most and trust and pension services. Finance companies comprehensive source of such information; no other and leasing companies were also important suppliers source provides the breadth and detail of informa- of credit and financial management services, espetion for a nationally representative sample of small cially for the largest firms. The likelihood of using a businesses. service increased with firm size, as did the likelihood Since the first small business survey in 1987, the of using each type of supplier except thrifts and financial landscape in which these firms operate has family and individuals. changed markedly. Restrictions on interstate branch- In the 1998 survey, 55 percent of small businesses ing and banking have been relaxed, and certain finan- reported outstanding loans, capital leases, or lines of cial institutions are now permitted to offer a wider credit at year-end, compared with 59 percent in the range of financial services. Technological innova- 1993 survey. Credit use increased strongly with firm tions (such as the use of small-business credit-scoring size: About 33 percent of the smallest firms had models) and structural changes in the financial ser- outstanding loans, capital leases, or lines of credit, vices industry (such as consolidation of banking and compared with about 92 percent of the largest firms. thrift institutions) have also contributed to the alteration. By comparing the newest survey data with Gregory E. Elliehausen and John D. Wolken, "Banking Markets results from earlier surveys in 1987 and 1993, policy- and the Use of Financial Services by Small and Medium-Sized makers and researchers will be able to assess the Businesses," Federal Reserve Bulletin, vol. 76 (October 1990), pp. 801-17. For more information about the 1993 survey, see Rebel A. effects these marketwide changes may have had on Cole and John D. Wolken, "Financial Services Used by Small Busithe use of financial services by small businesses and nesses: Evidence from the 1993 National Survey of Small Business on the competitive financial environment in which Finances," Federal Reserve Bulletin, vol. 81 (July 1995), pp. 629-67. they operate.2 For more information on the earlier surveys, see the Board's public web site (http://www.federalreserve.gov/pubs/oss/oss3/nssbftoc.htm). 3. Firms whose fiscal years ended between July 1 and Decem- 1. U.S. Small Business Administration, Office of Advocacy, Small ber 31, 1998, reported data for fiscal year 1998; otherwise, firms Business FAQ, December 2000. For more information on small busi- reported data for fiscal year 1999. For simplicity, results from the nesses' role in the economy, see U.S. Small Business Administration, 1998 survey are referred to in this article as 1998 data. Office of Advocacy, 1998 State of Small Business, chap. 2 (http:// 4. The data cited in this article are weighted to adjust for differwww.sba.gov/advo/stats/). ences in sampling and response rates. They reflect population rather 2. The earlier surveys were called National Surveys of Small than sample measures. For further information on the survey process, Business Finances. For more information about the 1987 survey, see see the appendix. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
184 Federal Reserve Bulletin • April 2001 Although the percentage of small businesses with 1. Most important problem facing small businesses in 1998, outstanding loans, capital leases, or lines of credit distributed by size of business was about the same in 1998 as in 1993, the types of Percent credit used changed somewhat over the intervening Number of employees1 period: The percentage that had outstanding vehicle PPrroobblleemm loans, equipment loans, trade credit, and other loans 9 or fewer 10-49 50-499 declined somewhat, whereas the percentage that had Competition (from larger, outstanding mortgages or used personal and business c in o t m er p n a a n ti i o e n s) a l, or Internet 11.0 12.5 12.3 credit cards for business purposes increased. Quality of labor 10.1 24.3 25.2 Cost or availability of labor 3.2 6.5 12.6 The 1998 data are still being edited and are there- 7.6 6.4 7.3 Financing and interest rates 6.9 6.4 3.7 fore subject to revision. However, the descriptive Government regulations and findings reported here are likely to be robust.5 Once red tape 6.9 5.9 8.0 Taxes 7.2 5.8 3.3 the data are final, the database will allow for rigorous Other 47.1 32.2 27.6 analysis that takes into account characteristics of NOTE. In this and subsequent tables, unless otherwise noted, the data are the businesses, their owners, and existing markets. weighted to adjust for differences in sampling and response rates; the weighted data reflect population rather than sample measures. See the appendix for more Researchers will be able to study many aspects of information. small business finance, including, for example, how Also in this and subsequent tables, distributions may not sum to 100 percent because of rounding or because, in a few cases, values for some variables are the proximity of financial institutions affects the mix missing. of financial products the firm uses, which firm and 1. Sum of number of owners working in the business and number of employees (full- and part-time) working in the business. owner characteristics affect the ability of small businesses to obtain credit, and how lending patterns vary with these characteristics.6 example was the 1998 merger between Citicorp, a bank holding company, and Travelers, an insurance and securities firm.8 ECONOMIC AND FINANCIAL SERVICES In 1998, the economy was in the seventh year of a ENVIRONMENT sustained economic expansion. Unemployment was just under 5 percent, the consumer price index (CPI) The financial services industry and the economic rose 1.6 percent, the gross domestic product (GDP) climate were considerably different in 1998 than grew 4.4 percent, and productivity in the business in 1993. Over the period between the surveys, the sector increased 2.7 percent. In 1993, the economy intense consolidation activity that had begun early in was in the early stages of an expansion following two the decade reduced the number of financial institu- years of recession; unemployment was nearly 7 pertions operating in the United States more than 20 per- cent, the CPI and GDP each increased 2.7 percent, cent.7 Indeed, three of the largest bank consolidations and business-sector productivity grew just one-half to that point—BankAmerica and NationsBank, Wells of 1 percent.9 Fargo and Norwest, and Banc One and First Chicago According to the 1998 survey, labor issues (the NBD—occurred in 1998. Cross-industry merger quality, cost, and availability of labor) were the greatactivity was also strong over the period as the tradi- est concern for small businesses, particularly among tional boundaries between three important types of the largest firms (table 1). Another commonly menfirms that make up the financial services industry— tioned concern was competition from larger, internadepository institutions, securities firms, and insur- tional, or Internet firms. Other important problems— ance companies—continued to erode. A notable although mentioned less often—were financing and 5. The remaining data editing work primarily involves imputing missing values. Because the discussion in this article is based on 8. The diminishing separation among these three types of firms questions that were answered by the vast majority of respondents, the culminated in passage in 1999 of the Financial Services Modernstatistics presented here, although based on preliminary data, will not ization Act, which removed most of the remaining barriers. See differ much from those based on final data. The differences reported in Group of Ten, "Report on Consolidation in the Financial Sector" this article are based only on the descriptive statistics presented. (Paris: Organisation for Economic Co-operation and Development, Standard errors for the differences have not yet been calculated, so it January 2001) (http://www.oecd.org/eco/Group-of-Ten/report-onis uncertain whether the differences are statistically significant. consolidation.htm). 6. A final data set will be available to the public through the 9. Economic conditions in 1998 were much more similar to those Board's public web site by summer 2001 (http://www.federalreserve. faced by the businesses surveyed in 1987, when the economy was gov/pubs/oss/oss3/nssbftoc.htm). well into the 1982-90 expansion. Council of Economic Advisors, 7. The number of commercial banks and thrifts operating in the Economic Report of the President, January 2001 (http://w3.access.gpo. United States declined from 13,090 in 1993 to 10,305 in 1998. gov/eop). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 185 interest rates, government regulations, taxes, and A business may organize as a corporation (S-type poor sales. or C-type), a partnership, or a sole proprietorship.13 The primary concerns of small businesses were In 1998, the most common organizational form for markedly different in 1993.10 In that survey, health small businesses was the sole proprietorship, accountcare and health insurance were cited most often, ing for nearly 50 percent of the firms. About 24 perfollowed by general U.S. business conditions—two cent were organized as S corporations, about 20 perissues that received much less attention in 1998. The cent as C corporations, and only 7 percent as other problems mentioned most frequently in 1993 partnerships. were financing and interest rates; profits, cash flow, The primary activity of 43 percent of the busiexpansion, and sales; and taxes. nesses (as classified according to the standard industrial classification (SIC) system used by the U.S. government) was business or professional services. CHARACTERISTICS OF SMALL BUSINESSES An additional 19 percent were in retail trade. Just over 22 percent of the firms had been in Along with information on the availability and use of business under at least one of the current owners for credit and other financial services by small busi- less than five years (firm age less than five years), and nesses, the 1998 Survey of Small Business Finances another 23 percent had been in business five to nine collected information on firm characteristics, includ- years. More than 22 percent had been in business ing number of employees; number of owners; organi- twenty years or more. Average firm age (not shown zational form; location; use of computers; standard in the table) was 13.3 years, slightly less than the industrial classification; credit history; sex, race, and average firm age in 1993 of 14.5 years. ethnicity of the owner(s) with the majority share of The firms were dispersed across the country, with the firm; and income and balance sheet data.11 Also nearly 19 percent located in the Northeast, about collected was information on each firm's primary 27 percent in the West, almost 22 percent in the owner (defined as the owner with the largest owner- Midwest, and nearly 33 percent in the South. The ship share if the firm had more than one owner), vast majority (nearly 80 percent) had their main including age, education, experience in business, offices in urban areas, and the primary sales area for ownership share, credit history, personal net worth, nearly all firms (more than 95 percent) was the United home ownership, and home equity. States. Business size is measured in three ways: number of employees, fiscal year sales, and year-end assets. In terms of employment, most small businesses in 1998 Race, Ethnicity, and Sex of Majority Owners were very small: About 64 percent had fewer than five employees, and just over 83 percent had fewer A firm was classified as being owned by individuals than ten employees (table 2).12 In terms of sales and of a specific race, ethnic group, or sex if more than assets, the businesses were similarly small: About 40 percent had fiscal year sales of less than $100,000, and just over 61 percent had year-end assets of less 13. The organizational forms have different rules about liability and taxes. Sole proprietors receive all the income from the business than $100,000. This general pattern is similar to and bear full liability for its obligations. Partnerships have more than findings from the 1993 survey. one owner; like sole proprietors, the owners receive all the income from the business and, in general, are fully liable for its obligations. Corporations are separate legal entities, and the owners' liability is limited to the amount of their original equity investment. The primary difference between the two types of corporations is how they are 10. The questions were worded slightly differently. The 1998 sur- taxed: S corporations are not subject to corporate income tax, whereas vey asked, "What is the single most important problem facing your C corporations are. S corporations are legally constrained to have business today?" and the 1993 survey asked, "What do you think will more than seventy-five shareholders, are restricted to one class of be the most important issue affecting your firm over the next twelve stock, and must pass all firm income to the owners at the end of each months?" fiscal year. During the 1990s, two other organizational forms gained 11. An important objective of the survey was to provide data to legal status in many states: the limited liability corporation (LLC) and examine credit access by different firm and owner characteristics, the limited liability partnership (LLP). LLCs have many characterisincluding race and ethnicity. Because minority-owned businesses tics of partnerships but have the limited liability of corporations; LLPs constitute a small proportion of the population of small businesses, are partnerships in which an investor's liability is limited to his or her the sample was designed to overrepresent minority-owned firms. As initial investment. LLCs may file taxes as a partnership, a corporation, a result, the sample included sufficient numbers of observations to or a sole proprietorship; LLPs may file taxes as a partnership or a permit comparisons between minority-owned and other types of small corporation. For this survey, LLCs and LLPs were classified accordbusinesses. For details, see the appendix. ing to how they chose to file their taxes. The 1998 data imply that in 12. Number of employees includes owners working in the business the survey universe, 0.2 percent of the firms were LLCs and 1.8 perand both full- and part-time employees. cent were LLPs at year-end 1998. 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186 Federal Reserve Bulletin • April 2001 2. Number and proportion of population of small businesses 2.—Continued in survey sample, distributed by selected category of firm, 1998 MEMO: MEMO: Number Percentage 1993 M Number Percentage 1993 Category in of percentage Category in of percentage sample1 population of « sample' population of population 2 population 2 AH firms 3,561 100.00 100.00 Census region of main office Northeast 595 18.90 22.31 Number of employees3 New England 155 5.21 6.94 O-I IFFREN' 1 607 21.86 18.18 Middle Atlantic 440 13.69 15.37 2-4 1,173 41.78 G 38.75 5 9 584 19.78 22.89 770 21.80 24.13 10-19 281 8.39 10.74 East North Central 485 14.56 15.96 20-49 366 5.47 6.16 West North Central 285 7.24 8.17 50-99 284 1.55 2.14 100-499 261 1.17 1.14 South 1,225 32.71 29.48 South Atlantic 641 16.88 14.84 Fiscal year sales East South Central 202 5.47 4.55 (thousands of dollars) West South Central 382 10.35 10.09 Less than 25 VJ! 478 16.34 10.94 1 25-49 271 9.48 8.50 West 971 26.59 24.08 50-99 IS 419 14.22 12.52 Mountain 238 6.63 5.81 100-249 598 21.72 24.68 Pacific 733 19.96 18.27 250-499 399 13.29 15.72 500-999 329 10.27 11.85 J? Urbanization at main office 1,000-2,499 361 7.83 8.36 2,782 79.91 78.88 2,500-4,999 232 3.28 3.56 Rural 779 20.09 21.12 5,000-9,999 175 1.56 1.96 10,000 or more 292 1.79 1.91 Number of offices One 2,839 87.75 84.35 End-ofyear assets 379 8.55 10.73 (thousands of dollars) Three or more 341 3.63 4.92 Less than 25 1,007 34.72 29.24 25-49 360 12.57 13.96 Sales area 50-99 413 13.94 14.30 Primarily within U.S 3,355 95.43 100-249 498 15.86 17.63 International or global 204 4.51 250-499 v..J 302 8.74 10.45 500-999 253 5.99 6.35 Owners' participation 1,000-2,499 279 4.22 4.61 Owner management 3,188 92.33 86.00 2,500-4,999 159 1.54 1.80 Hired management 369 7.52 14.00 5,000 or more 257 1.51 1.66 Race, ethnicity, and sex Organizational form of majority owners Proprietorship 1,429 49.35 43.22 Nonwhite or Hispanic 756 14.60 11.62 Partnership 226 6.95 8.01 Non-Hispanic white 2,790 84.88 88.38 S corporation 1,019 23.87 20.33 P corporation 887 19.83 28.44 White 3,033 90.12 92.52 Black 273 4.12 2.91 Standard industrial classification Asian or Pacific Islander 214 4.38 3.44 Construction and mining (10-19) . 376 11.87 14.18 American Indian or Primary manufacturing (20-29) ... 172 3.66 3.90 Alaska Native 24 0.81 1.13 Other manufacturing (30-39) 217 4.68 4.16 Transportation (40-49) 144 3.72 2.77 260 5.59 4.27 Wholesale trade (50-51) 247 7.15 8.46 Non-Hispanic 3,292 94.10 95.73 Retail trade (52-59) 704 18.95 21.70 Insurance agents and real estate 796 24.32 20.61 (60-69) 213 6.48 7.09 Male 2,609 71.88 73.92 Business services (70-79) 832 24.83 21.15 Ownership equally divided 1 Professional services (80-89) 650 18.46 16.59 by sex 147 3.67 5.47 Years under current ownership 3. Number of owners working in the business plus number of full- and 0-4 730 22.37 14.74 part-time employees. For the 1993 and 1987 surveys, the number of employees 5-9 745 22.79 8 28.46 was calculated as the sum of owners working in the business plus full-time 10-14 683 19.14 19.16 employees plus one-half of part-time employees; in the 1998 survey, no differen- 15-19 486 13.05 14.40 tiation was made between full- and part-time employees. To make the data for 20-24 331 8.72 8.68 25 or more 579 13.75 14.55 1998 and 1993 comparable, the 1993 numbers have been recalculated as the sum of owners working in the business, full-time employees, and part-time 1. Numbers are unweighted. For some categories, numbers in sample do not employees; therefore, the numbers presented here differ from those reported in sum to the sample total because some firms responded "Do not know" or Cole and Wolken, "Financial Services Used by Small Businesses," 1995. declined to respond. . . . Question not asked in 1993. 2. The percentages reported here are final data and may differ slightly from the preliminary data for 1993 reported in Cole and Wolken, "Financial Services Used by Small Businesses," 1995. cent in 1993. Between 1993 and 1998, the proportion of black-owned firms increased from about 3 percent 50 percent of the firm was owned by such individu- to about 4 percent. Over the same period, the proporals. About 15 percent of small businesses in 1998 tion of Hispanic-owned firms increased from 4 perwere minority-owned (that is, owned by nonwhite or cent to 6 percent and the proportion of Asian-owned Hispanic individuals), compared with about 12 per- firms, from 3 percent to 4 percent. Ownership by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 187 3. Percentage of small businesses that used computers, by selected category of firm, 1998 1. See table 1, note 1. 2. Firms were given a list of tasks and asked to check all that applied. American Indians or Alaska Natives remained at more likely to organize as sole proprietorships or about 1 percent.14 partnerships rather than as corporations. The proportion of firms that were more than 50 percent owned by men declined somewhat, from about 74 percent in 1993 to about 72 percent in 1998, Computer Use within the Firm and the proportion that were more than 50 percent owned by women rose from about 21 percent to More than three-fourths of the firms used computers about 24 percent. The proportion equally owned by in their businesses in 1998 (table 3) (this question men and women fell nearly 2 percentage points, to was not asked in the earlier surveys). Use varied 4 percent. somewhat by size, with larger firms being more likely The survey data suggest that female- and minority- than smaller firms to use computers. For example, owned firms share some characteristics that distin- 89 percent of firms with more than four employees guish them from male- and white-owned firms used computers for business purposes, compared with (table A.l). By all three measures of size, female- 71 percent of firms with four or fewer employees. and minority-owned firms appear to be smaller than Similarly, 86 percent of firms with sales of $100,000 male- and white-owned firms. They also appear to be or more used computers, compared with 63 percent younger, more likely to be sole proprietorships, and with sales of less than $100,000. Firms used computless likely to be corporations. These differences are ers for a variety of purposes: 59 percent used them similar to the findings in 1993. The differences in to access the Internet; about 15 percent for banking; organizational type may simply reflect that minority- and about 74 percent for inventory management or owned and female-owned firms tend to be younger bookkeeping. and smaller than non-minority-owned and maleowned firms—and younger and smaller firms are TYPES OF FINANCIAL SERVICES 14. By U.S. government convention, race and ethnicity are separate USED BY SMALL BUSINESSES categories. Thus, firm owners can be Hispanic (or non-Hispanic) and of any race. The 1998 survey asked about Hispanic ethnicity and race Businesses were asked which of thirteen financial in two separate questions. Firms were asked if the owner (for singleowner firms) or owners of more than 50 percent of the firm (for services they used at up to twenty different institumulti-owner firms) were of Hispanic, Latino, or Spanish descent. tions.15 The services can be grouped into several Firms answering "yes" were classified as Hispanic-owned. Firms were then asked to specify the race of the owner (for single-owner categories: liquid asset services (business checking firms) or the races(s) of the owner(s) of more than 50 percent of the firm (for multi-owner firms) from the following list: white; black; Asian, including Native Hawaiian or other Pacific Islander; and 15. For this article, use of a financial service was measured by the American Indian or Alaska Native. In this article, the category percentage of small businesses that used a specific type or source of minority-owned indicates ownership by individuals who are nonwhite service. Data on use based on dollar amounts or numbers of accounts or Hispanic or both. The few firms reporting that their ownership will be available at a later date. However, previous analysis has shown shares were equally split between minority and non-minority individu- that conclusions based on dollar amounts, or on number of accounts, als were classified as non-minority-owned. are usually qualitatively very similar to conclusions based on the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
188 Federal Reserve Bulletin • April 2001 or savings accounts); credit lines, loans, and capital Because a checking account, including a share draft leases (lines of credit, mortgages, motor vehicle account, is a vehicle for paying suppliers and depositloans, equipment loans, capital leases, and "other" ing sales receipts, it is not surprising that the reported loans); and financial management services (transac- use of "any service" (96 percent) nearly matches the tion, cash-management, credit-related, brokerage, and reported use of "any liquid asset account." The data trust and pension services). Owner loans, credit cards, on business savings accounts, however, reveal some and trade credit are discussed separately and are not interesting differences across firms. Having such an included in the tabulations for "any financial ser- account was highly correlated with firm size. For vice," as no information was collected about the example, about one-fifth of firms with fewer than ten providers of these financial services. employees had a business savings account at the end of 1998, compared with more than one-third of firms with ten or more employees. White-owned firms were Any Financial Service the most likely to have a business savings account, followed by Hispanic- and Asian-owned firms; black- Nearly all small businesses (about 96 percent) used owned firms were the least likely to have a business at least one financial service in 1998, essentially the savings account. Female-owned firms were more same finding (97 percent) as in 1993 (table 4). In likely than male-owned firms to have such an general, use increased with firm size, and almost all account. Having such an account varied little by firms with five or more employees, or with sales or industry. assets of at least $250,000, used some financial service during the year. About 9 percent of firms with fewer than two employees used no financial service Credit Lines, Loans, and Capital Leases in 1998. Proprietorships and partnerships were less likely Overall, the incidence of credit lines, outstanding than corporations to use a financial service. The loans, and outstanding capital leases declined difference may be due to the tendency of many between year-end 1993 and year-end 1998 (from proprietorships and some partnerships to commingle 59 percent of firms to 55 percent). Declines were business and personal finances; for example, the own- recorded for vehicle loans (which fell from 25 perers may use personal savings and checking accounts cent to 21 percent), equipment loans (15 percent to for business purposes.16 Also, young firms (less than 10 percent), and "other" loans (13 percent to 10 perfive years old), firms with single offices, and black-, cent).18 Capital leases were about as common in 1998 Hispanic-, and female-owned firms were less likely as in 1993, and the incidence of credit lines and than other firms to use a financial service. mortgages increased. The slight increase in the percentage of firms with lines of credit (28 percent in 1998 compared with Checking and Savings 26 percent in 1993) may have been the result of an increase in commercial banks' use of credit-scoring Most small businesses (94 percent) had a checking models. Alternatively, the increase may have been account at the end of 1998, the same percentage as due to differences in the economic environment; as used any liquid asset account (checking or savings).17 noted earlier, in 1993 the economy was in the early stages of an expansion following a period during percentages of firms using one or more service or source. See Rebel A. Cole, John D. Wolken, and R. Louise Woodburn, "Bank and Nonbank Competition for Small Business Credit: Evidence from the 1987 and also considered savings accounts were money market accounts that 1993 National Surveys of Small Business Finances," Federal Reserve were limited in either the number or the amount of checks that could Bulletin, vol. 82 (November 1996), pp. 983-95. be written. In comparison with small businesses, 91.5 percent of 16. Respondents were asked to count as a business service any households had some type of transaction account (checking account, personal account that was used at least 50 percent of the time for saving account, money market deposit account, money market mutual business purposes. Most of the firms that reported using no financial fund, or call account at a brokerage) in 1998, according to the 1998 service were extremely small, and it is possible that those firms' Survey of Consumer Finances. For more information, see Arthur B. owners used personal accounts for business purposes, but did so less Kennickell, Martha Starr-McCluer, and Brian J. Surette, "Recent than 50 percent of the time. Changes in U.S. Family Finances: Results from the 1998 Survey 17. Checking accounts were defined as accounts with unlimited of Consumer Finances," Federal Reserve Bulletin, vol. 86 (January check-writing privileges, including share draft accounts; money mar- 2000), pp. 1-29. ket accounts, including money market deposit accounts, were consid- 18. "Other" loans are any loans that could not be classified as ered checking accounts only if they offered unlimited check-writing credit lines, capital leases, mortgages used for commercial purposes, privileges. Savings accounts were defined as passbook savings, credit motor vehicle loans, or equipment loans (generally, unsecured term union share accounts, certificates of deposits, and other time deposits; loans). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 189 which a drop in commercial real estate values erased services, trust and pension services, and brokerage equity against which many firms might have bor- services.20 Fifty percent of small businesses used at rowed. The greater reliance on mortgages in 1998 least one financial management service in 1998, com- (13 percent compared with 8 percent in 1993) may pared with 37 percent in 1993. They were more likely reflect recovery of the commercial real estate market. to use transaction and trust services in 1998, com- As with checking and savings accounts, the inci- pared with 1993, and equally likely to use cashdence of credit lines, loans, and capital leases management and brokerage services. The incidence increased with firm size: More than 90 percent of the of credit-related services fell from about 5 percent of largest firms (100-499 employees) had one of these firms in 1993 to only 3 percent in 1998, a decline types of credit at the end of 1998, compared with consistent with the overall decline in the incidence fewer than 50 percent of very small firms (fewer than of credit lines, loans, and capital leases described five employees). Corporations were more likely than earlier. other types of firms to have credit lines, loans, and The most widely used financial management sercapital leases. Firms in the services industries (busi- vice in 1998, reported by about two-fifths of all firms, ness and professional) were generally less likely than was transaction services. Trust and pension services firms in other industries to have these types of credit, were used by only about one in eight firms, and perhaps because they require less inventory and cash-management services by only one in twenty. As equipment. was the case for other financial services, the use of The incidence of credit also varied somewhat with financial management services increased with firm firm age. The percentage of firms that had credit size. For the smallest firms (as measured by number lines, loans, or leases was smallest for those that of employees), only 34 percent used at least one were less than five years old (51 percent), followed financial management service, and only a very small by those that were more than twenty-five years old percentage used any financial management service (53 percent). The finding for the youngest firms is other than transaction services. In contrast, about consistent with the observation that depository insti- 85 percent of the largest firms used at least one tutions typically require that borrowers have several financial management service; the most commonly years of financial history to qualify for credit. used was transaction services, followed by cash- The incidence of credit lines, loans, and capital management services and trust and pension services. leases also varied somewhat with owner character- Brokerage services were used mainly by the larger istics. At year-end 1998, fewer than 50 percent of firms, but by only about one in twelve. female-, black-, and Asian-owned firms had one of A smaller proportion of proprietorships used finanthese forms of credit, compared with roughly 55 per- cial management services relative to firms with other cent of male- and white-owned firms. By specific organizational forms; they may have less need for loan type, white-owned firms were generally more these services because they tend to be small and more likely than nonwhite-, Hispanic-, or female-owned likely than other types of firms to commingle perfirms to have lines of credit, mortgages, vehicle loans, sonal and business accounts. and equipment loans. Black-owned firms were the Firms differed in their use of financial management most likely to have capital leases and "other" loans. services by the minority status of and, to a somewhat Some of the differences by owner race, ethnicity, and lesser extent, by the sex of the majority owners. sex may be attributable to differences in firm charac- Black-, Hispanic-, and female-owned firms were less teristics, such as size. Attribution of these univariate likely than white-, non-Hispanic-, and male-owned differences to owner race, firm size or age, or other firms to use such services. Asian-owned firms were variables is a topic for additional research.19 the most likely to do so (more than two-thirds used at least one financial management service in 1998). The differences were due largely to differences in the use Financial Management Services 20. Transaction services cover the provision of paper money and Financial management services include transaction coins, the processing of credit card receipts, the collection of night services, cash-management services, credit-related deposits, and wire transfers. Cash-management services include the provision of sweep accounts, zero-balance accounts, lockbox services, and other services designed to automatically invest liquid funds 19. For research on this topic using multivariate analysis, see, for in liquid, interest-bearing assets. Credit-related services are the example, Ken S. Cavalluzzo, Linda C. Cavalluzzo, and John D. provision of bankers acceptances, letters of credit, sales finance, Wolken, "Competition, Small Business Financing, and Discrim- and factoring. Trust and pension services consist of the provision ination: Evidence from a New Survey," Journal of Business of 401(k) plans, pension funds, business trusts, and securities (forthcoming). safekeeping. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
190 Federal Reserve Bulletin • April 2001 4. Percentage of small businesses using selected financial services, by selected category of firm, 1998 A. Any service; liquid asset accounts; and credit lines, loans, and capital leases Liquid asset accounts2 Credit lines, loans, and capital leases AAnnyy CCaatteeggoorryy sseerrvviiccee11 Any Checking Savings Any Credit Mortgage Vehicle Equip- Capital Other3 line ment lease All firms, 1998 96.18 94.43 94.04 22.20 55.09 27.71 13.29 20.55 10.18 10.59 9.92 All firms, 1993 97.03 96.21 95.81 24.35 59.13 25.71 7.83 25.28 14.84 10.25 12.74 Number of employees* I 0-1 91.02 86.41 85.33 16.37 32.79 13.42 6.55 12.80 3.77 3.29 5.82 2-4 95.86 94.34 94.10 19.45 49.80 20.83 12.45 16.89 8.25 7.42 9.35 5-9 99.37 99.05 98.79 23.38 68.53 34.08 16.21 26.92 14.52 14.26 9.19 I 10-19 100.00 99.86 99.86 35.86 78.01 50.59 19.89 32.63 13.97 23.19 14.67 20-49 100.00 100.00 100.00 36.01 83.84 59.07 21.10 31.98 22.96 21.71 20.14 50-99 100.00 97.77 97.77 30.07 86.87 62.67 26.25 34.47 20.25 31.75 20.86 100-499 100.00 100.00 100.00 36.87 92.04 74.81 18.84 29.85 24.69 27.71 22.81 Fiscal year sales (thousands of dollars) Less than 25 82.99 76.62 74.96 11.84 26.76 9.11 7.93 5.80 2.37* 2.82* 6.41 25-49 94.77 91.64 91.12 17.12 33.47 11.25 7.65 14.92 3.70* 2.36* 3.36* 50-99 97.97 97.07 96.96 18.10 45.94 15.20 9.69 14.02 5.76 7.73 8.96 100-249 99.34 98.29 98.29 19.06 56.25 22.48 14.70 19.98 11.50 11.31 10.29 250-499 99.82 99.75 99.75 23.36 67.09 36.82 13.04 25.89 12.00 11.29 11.31 500-999 99.57 99.57 99.07 30.26 74.02 41.74 18.64 30.49 16.45 19.81 10.44 1,000-2,499 100.00 100.00 100.00 37.58 78.34 51.48 21.15 37.15 16.30 17.81 17.79 2,500-4,999 100.00 99.03 99.03 45.48 94.59 68.80 22.65 37.26 23.68 18.60 12.40 5,000-9,999 100.00 99.09 99.09 37.56 88.68 75.74 16.52 37.91 20.26 24.77 22.35 10,000 or more 100.00 100.00 100.00 36.71 88.95 81.36 18.87 30.22 25.40 23.67 17.62 End-of-year assets (thousands of dollars) Less than 25 89.87 86.55 85.77 12.24 32.64 11.35 6.28 10.47 4.77 5.23 5.00 25-49 98.65 96.81 96.69 19.57 49.60 22.83 6.79 19.63 6.27 8.21 643 50-99 99.68 99.31 98.96 20.53 60.06 25.25 10.05 21.80 9.70 10.30 12.26 100-249 99.46 98.40 98.40 28.81 67.85 34.61 17.46 2642 15.55 12.67 13.50 250-499 100.00 100.00 99.41 33.64 71.65 40.97 22.65 28.90 12.41 13.97 11.57 500-999 100.00 99.40 99.40 36.44 88.54 56.01 33.86 33.70 18.32 21.23 19.72 1,000-2,499 100.00 98.79 98.79 36.02 81.15 55.84 25.03 33.48 20.69 18.87 13.65 2,500-4,999 100.00 100.00 10Q.00 37.45 93.09 81.32 26.18 31.71 20.78 34.42 17.00 5,000 or more 100.00 100.00 100.00 45.29 95.66 76.01 31.16 38.77 30.75 22.26 17.22 Organizational form Proprietorship 93.16 89.94 89.16 18.23 45.66 18.51 12.44 16.11 7.13 6.52 8.20 Partnership 95.37 95.24 95.24 18.75 61.18 27.69 19.07 19.43 13.10 12.92 9.54 S corporation 99.85 99.56 99.56 24.68 65.00 37.89 13.91 25.32 12.41 14.75 11.53 C corporation 99.58 99.15 99.15 30.33 64.50 38.35 12.65 26.23 14.05 14.90 12.38 Standard industrial classification Construction and mining (10-19) ... 97.11 96.13 96.04 20.63 66.76 31.98 12.07 38.15 11.93 8.27 10.52 Primary manufacturing (20-29) 95.49 92.87 92.87 19.79 56.49 32.10 8.66 16.31 19.82 20.05 17.36 Other manufacturing (30-39) 94.15 91.98 91.98 23.79 60.15 35.87 6.85 1947 15.30 14.08 17.10 Transportation (40-49) 98.60 98.23 98.23 23.56 62.13 29.70 10.85 28.82 14.16 14.92 12.61 Wholesale trade (50-51) 99.12 96.71 96.71 21.36 64.28 47.26 12.15 27.85 9.81 10.47 10.47 Retail trade (52-59) 96.84 95.85 95.75 18.45 54.11 25.19 17.45 17.87 7.66 6.39 10.26 Insurance agents and real estate (60-69) 96.61 96.13 96.13 25.40 59.77 26.90 24.81 16.63 11.53 9.97 8.94 Business services (70-79) 94.48 92.41 91.18 22.82 49.53 22.41 12.12 18.16 8.85 10.60 7.73 Professional services (80-89) 96.04 93.23 92.95 25.47 47.99 23.86 10.97 13.39 9.16 13.13 8.51 Years under current ownership 0-4 94.50 93.25 92.85 15.38 51.14 19.63 11.95 18.51 10.62 8.90 11.18 5-9 96.05 93.61 93.34 20.87 55.79 26.87 10.91 18.08 10.48 11.95 11.14 10-14 96.59 94.75 93.93 25.74 56.18 30.88 14.01 23.87 9.32 12.10 7.02 15-19 98.45 96.76 96.61 26.31 58.90 33.24 16.06 22.00 12.12 11.32 12.50 20-24 98.03 97.23 97.23 23.07 57.86 29.51 17.43 23.73 8.95 10.93 11.33 25 or more 95.19 93.22 92.79 26.06 53.09 31.37 13.02 19.46 9.23 7.85 6.61 For notes, see end of table. of transaction and trust and pension services, which from the firm's owners (owner loans), borrowing via in turn were probably related to firm size and indus- credit cards, or borrowing from suppliers of goods trial classification. and services (trade credit). These alternative forms of credit are different from credit lines, loans, and leases in a number of ways. Loans from Owners, Credit Cards, For example, owner loans are not arm's-length transand Trade Credit actions, as are institutional loans, because the lender owns some portion of the borrowing firm. The inter- In addition to using credit lines, loans, and leases, est rates charged for credit card credit often exceed many small businesses obtain financing by borrowing the interest rates for other types of loans; moreover, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 191 4.—Continued A.—Continued Liquid asset accounts 2 Credit lines, loans, and capital leases AAnnyy CCaatteeggoorryy sseerrvviiccee11 Any Checking Savings Any Credit Mortgage Vehicle Equip- Capital Other3 line ment lease Census region of main office Northeast 95.81 92.85 92.22 20.36 52.57 26.10 12.90 18.21 8.39 10.99 10.42 New England 94.67 92.95 92.11 23.59 54.33 22.14 12.33 20.97 7.70 11.88 12.58 Middle Atlantic 96.24 92.82 92.26 19.13 51.90 27.60 13.12 17.16 8.65 10.66 9.60 Midwest 96.48 95.04 94.64 23.47 59.19 29.19 15.48 21.74 11.52 9.45 10.70 East North Central 96.54 95.58 94.98 22.88 57.45 28.15 14.53 22.22 10.99 10.99 10.74 West North Central 96.36 93.96 93.96 24.66 62.70 31.29 17.38 20.77 12.58 6.37 10.62 South 96.05 94.24 94.02 16.10 54.56 28.82 12.50 21.66 10.59 10.58 8.65 South Atlantic 96.43 94.12 94.03 14.26 53.90 29.49 11.71 21.69 10.36 10.81 9.13 East South Central 96.51 95.54 95.54 16.69 61.63 34.63 18.09 19.35 15.00 16.31 7.75 West South Central 95.18 93.74 93.19 18.78 51.89 24.64 10.84 22.83 8.61 7.17 8.35 West 96.37 95.29 94.88 29.98 54.16 26.27 12.75 19.86 9.85 11.25 10.47 Mountain 97.25 96.82 96.82 22.42 55.43 22.44 17.90 24.84 11.59 14.44 15.80 Pacific 96.08 94.79 94.24 32.50 53.74 27.54 11.04 18.21 9.27 10.19 8.70 Urbanization at main office Urban 96.45 94.76 94.34 22.30 54.00 27.81 11.16 20.41 9.57 10.97 8.97 Rural 95.12 93.13 92.86 21.82 59.42 27.28 21.76 21.09 12.61 9.07 13.67 Number of offices One 95.68 93.75 93.37 21.10 52.74 25.43 12.65 19.74 9.09 9.78 9.28 Two 100.00 99.37 98.77 30.89 67.60 41.08 16.42 24.23 19.22 14.79 12.17 Three or more 99.13 99.13 99.13 28.76 81.61 51.22 21.75 30.36 15.30 19.20 20.26 Sales area Primarily within U.S 96.10 94.42 94.01 22.19 55.13 27.29 13.60 20.66 10.30 10.45 9.90 International or global 97.81 94.60 94.60 22.88 53.46 36.65 6.92 17.09 7.29 12.67 10.04 Owners' participation Owner management 95.93 94.10 93.68 22.16 53.75 26.87 12.72 19.90 9.91 10.24 9.79 Hired management 99.16 98.40 98.40 22.74 70.60 37.78 20.02 27.81 13.71 14.12 11.59 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic 93.86 92.02 91.61 16.83 49.45 20.43 12.67 16.83 7.52 10.48 9.23 Non-Hispanic white 96.56 94.86 94.48 23.14 56.11 28.96 13.36 21.25 10.69 10.60 10.02 White 96.37 94.67 94.31 22.95 55.92 28.49 13.34 20.99 10.71 10.52 9.93 Black 91.33 88.39 87.24 13.22 48.24 18.64 11.61 14.56 6.49 13.77 11.45 Asian or Pacific Islander 97.50 96.20 95.92 17.90 46.41 22.54 11.84 16.35 5.01 8.39 9.12 American Indian or Alaska Native .. 92.67 92.67 92.67 10.71* 51.04* 16.83* 18.89* 32.78* 4.31* 11.89* 3.98* Hispanic 92.95 91.33 91.33 19.58 52.74 20.98 13.53 16.30 10.31 8.92 8.82 Non-Hispanic 96.36 94.64 94.23 22.37 55.18 28.02 13.26 20.82 10.20 10.66 9.95 Female 91.85 90.32 89.92 23.57 46.13 18.42 12.76 13.56 6.41 8.07 9.72 Male 97.53 95.63 95.23 21.68 57.39 30.33 12.94 22.61 11.40 11.43 9.84 Ownership equally divided by sex .. 98.34 98.02 98.02 23.15 68.42 38.40 22.63 25.90 10.37 11.16 12.99 credit cards, unlike typical loans, provide a conve- loans in 1998, a slightly smaller percentage than in nient means of paying bills and tracking expenses. 1993. Trade credit is generally used in connection with the Because they generally have fewer credit options, purchase of goods and services from a specific sup- smaller firms might seem more likely than larger plier, whereas funds from credit lines, loans, and firms to borrow from their owners. This was not the leases are often available for general purposes and case in 1998. The incidence of owner loans did not are not restricted to purchases from a single supplier. generally vary with firm size. For every size group Also, when outstanding trade credit balances are not except firms with fewer than two employees, sales of repaid in a relatively short period, the finance charges less than $50,000, or assets of less than $25,000, generally exceed those on other loans. more than 25 percent of firms had owner loans at year-end 1998. For the smallest firms (by number of employees), fewer than 18 percent had owner loans. Loans from Owners The information gathered by the survey regarding Of the small businesses that could have received size, capitalization, equity injections, and owner loans loans from owners (that is, those that were organized will enable researchers to examine why the smallest as corporations or partnerships), 28 percent had such firms had the lowest incidence of this type of loan. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
192 Federal Reserve Bulletin • April 2001 4. Percentage of small businesses using selected financial services, by selected category of firm, 1998—Continued B. Financial management services Financial management services5 MEMO: Other credit CCCaaattteeegggooorrryyy CCaasshh TTrruusstt LLooaann Credit card TTrraannss-- CCrreeddiitt-- TTrraaddee AAnnyy mmaannaaggee-- BBrrookkeerraaggee aanndd ffrroomm aaccttiioonn mmeenntt rreellaatteedd ppeennssiioonn oowwnneerr66 Personal Business ccrreeddiitt AH firms, 1998 49.81 41.07 5.21 3.09 4.34 12.62 28.12 45.18 33.31 60.33 All firms, 1993 36.54 24.16 5.13 4.62 4.37 10.52 30.91 40.72 28.83 63.81 Number of employees4 0-1 34.49 28.07 1.57* 1.42* 2.67 5.60 1749 44.91 19.19 42.69 2-4 43.81 35.73 2.75 145 3.21 9.01 26.25 46.75 28.46 56.86 5-9 60.54 53.18 4.00 3.66 4.90 12.49 27.47 44.00 41.93 71.14 10-19 68.69 54.29 11.94 7.93 8.63 24.78 34.24 50.38 51.39 77.90 20-49 73.98 58.99 16.61 7.23 8.94 32.81 33.69 39.51 55.61 80.67 50-99 76.83 56.79 26.95 13.21 8.80 45.08 36.02 30.29 56.52 80.67 100-499 84.75 70.21 50.83 15.37 7.95 50.51 28.76 23.00 59.67 83.37 Fiscal year sales (thousands of dollars) Less than 25 29.31 25.71 2.42* .95* 1.11* 1.81* 21.36 41.10 11.14 30.34 25-49 36.67 31.24 .95* .72* 2.84* 5.57 17.77 45.71* 20.75 46.78 50-99 37.64 32.24 .95* .91* 1.21* 6.13 26.19 47.83 27.11 54.30 100-249 49.67 39.90 2.23* 1.22* 4.41 10.81 29.12 51.84 31.90 63.01 250-499 58.64 46.64 5.04 4.57 5.16 15.18 30.08 47.59 43.06 75.85 500-999 63.58 59.04 5.39 4.98* 4.62 12.82 31.86 41.50 44.04 77.27 1,000-2,499 71.11 51.88 12.63 6.36 11.19 27.49 26.82 45.37 54.45 80.15 2,500-4,999 78.64 63.69 18.42 6.19 9.69 37.70 25.74 33.21 62.68 79.86 5,000-9,999 83.30 64.74 29.95 14.21 11.74 45.43 34.98 24.79 67.66 72.10 10,000 or more 89.97 67.33 45.77 23.83 12.23 62.83 29.26 22.39 62.09 76.58 End-of-year assets (thousands of dollars) Less than 25 33.96 29.33 1.31* .69* 1.33* 5.00 20.55 45.52 21.35 43.22 25^9 45.40 36.85 .98* .46* 4.00* 9.08 26.00 49.80 29.22 59.78 50-99 52.66 43.07 3.65 2.75* 4.04 11.98 33.22 46.71 33.85 67.46 100-249 58.29 49.52 5.96 3.96 5.05 14.55 31.08 48.10 36.54 70.57 250-499 64.83 53.17 6.75 2.83* 5.74 14.75 29.37 41.78 49.33 73.82 500-999 64.31 49.92 7.69 6.64 9.75 23.13 30.03 43.95 42.97 75.30 1,000-2,499 74.13 56.43 16.89 11.88 11.23 34.67 32.35 35.25 57.48 78.88 2,500-4,999 85.79 69.11 37.03 1540 13.69 42.24 31.72 25.38 65.31 80.00 5,000 or more 87.93 62.25 52.27 17.27 14.53 59.16 27.30 26.53 68.11 80.59 Organizational form Proprietorship 39.78 33.24 1.94 1.48 2.78 7.63 49.04 21.63 50.85 Partnership 46.44 43.02 3.83 5.78 2.90* 8.90 13.10 36.92 28.45 57.82 S corporation 59.93 48.89 9.31 4.47 5.73 15.68 30.45 43.24 46.55 71.74 C corporation 63.79 5046 8.89 4.48 7.03 22.69 30.57 40.79 48.12 71.08 Standard industrial classification Construction and mining (10-19) ... 35.71 27.49 6.42 5.39 5.40 8.36 27.61 39.97 33.35 77.29 Primary manufacturing (20-29) 52.83 44.70 6.90 5.77 4.20* 11.96 45.49 48.91 43.18 73.23 Other manufacturing (30-39) 53.83 42.92 8.39 8.43 6.36* 19.23 34.53 45.89 36.00 78.19 Transportation (40-49) 50.14 43.90 5.04 3.26* 3.57* 8.42 25.74 44.10 45.39 44.15 Wholesale trade (50-51) 58.53 46.60 6.01 10.42 4.13 18.76 29.66 45.14 43.56 68.46 Retail trade (52-59) 57.92 55.63 3.65 1.69 2.15 5.63 28.36 40.46 29.15 63.64 Insurance agents and real estate (60-69) 38.45 26.03 7.93 2.56* 3.23* 11.32 24.13 39.68 32.68 34.62 Business services (70-79) 47.19 40.75 4.25 1.45 3.50 9.29 26.91 46.01 28.25 59.14 Professional services (80-89) 53.07 36.64 4.97 .68* 7.19 24.54 24.76 53.39 35.40 49.57 Years under current ownership 0-4 46.59 40.22 4.13 2.71 2.17 5.76 31.66 45.64 28.14 54.11 5-9 48.75 40.71 4.27 2.37 2.92 11.92 31.64 47.75 37.79 59.74 10-14 53.22 44.02 6.06 3.03 4.62 14.17 23.54 46.30 33.09 62.04 15-19 51.42 40.79 5.67 3.99 6.95 18.44 29.47 41.86 36.52 63.94 20-24 52.05 43.90 6.24 2.60 4.72 14.40 22.44 45.07 33.65 67.56 25 or more 49.03 37.20 6.30 441 7.14 16.27 25.40 41.52 31.15 60.91 Credit Cards Credit cards are a convenient means of making payments and tracking expenses. Anecdotal evidence Small businesses were somewhat more likely to use suggests that many smaller and newer businesses also credit cards in 1998 compared with 1993. The per- use credit cards as a source of credit, even though it is centage using personal credit cards for business pur- likely to be more costly than other forms of credit. poses increased from 41 percent to 45 percent, and Lenders sometimes ration credit to high-risk firms. the percentage using business credit cards increased Thus, firms just starting out and those having little from 29 percent to 33 percent. credit history may be perceived as high risk and may Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 193 4.—Continued B.—Continued Financial management services5 MEMO: Other credit CCCaaattteeegggooorrryyy CCaasshh TTrruusstt LLooaann Credit card TTrraannss-- CCrreeddiitt-- TTrraaddee AAnnyy aaccttiioonn mm mm aann ee aa nn gg tt ee -- rreellaatteedd BBrrookkeerraaggee ppee aa nn nn ss dd iioo nn oo ff ww rroo nn mm eerr 66 Personal Business ccrreeddiitt Census region of main office Northeast 48.22 36.52 3.92 2.21 5.77 14.89 28.12 48.87 33.51 60.41 New England 53.59 42.04 4.43 2.36* 7.86 13.57 31.90 50.65 40.82 63.33 Middle Atlantic 46.18 34.42 3.73 2.16 4.98 15.39 26.77 48.19 30.73 59.30 Midwest 52.95 42.63 6.86 3.77 4.44 16.42 28.38 42.20 30.86 64.27 East North Central 54.38 45.10 7.07 2.63 4.40 17.01 29.80 41.04 32.57 65.82 West North Central 50.07 37.66 6.42 6.04 4.51 15.25 25.10 44.52 27.43 61.16 South 48.22 40.56 5.86 3.59 3.93 10.38 25.73 41.15 34.36 58.77 South Atlantic 50.82 41.61 6.28 3.60 4.87 10.81 28.32 42.10 35.89 60.13 East South Central 48.32 38.78 6.13 5.97* 3.83* 11.23 22.54 41.95 34.29 65.81 West South Central 43.93 39.79 5.05 2.30 2.44* 9.24 22.12 39.18 31.90 52.82 West 50.33 43.64 3.96 2.53 3.73 10.66 31.32 49.95 33.87 58.97 Mountain 50.31 45.03 5.10 3.21* 1.87* 8.99 30.55 52.05 34.77 61.68 Pacific 50.34 43.18 3.58 2.31 4.35 11.21 31.67 49.26 33.57 58.06 Urbanization at main office Urban 50.80 41.81 5.41 2.76 4.64 13.49 28.58 46.00 34.05 59.81 Rural 45.89 38.11 4.40 4.39 3.12 9.20 25.74 41.90 30.35 62.39 Number of offices One 47.34 39.08 4.17 2.45 3.87 11.62 27.61 45.20 31.35 58.60 Two 67.01 53.96 9.66 8.14 7.68 19.17 31.20 45.58 45.70 72.60 Three or more 70.10 59.67 19.83 6.69 7.78 21.83 28.28 44.71 51.53 73.75 Sales area Primarily within U.S 49.15 40.30 5.13 2.74 4.33 12.38 28.39 44.82 32.53 60.04 International or global 64.24 57.58 6.84 10.36 4.49 17.95 22.70 53.32 49.89 67.33 Owners' participation Owner management 48.59 40.17 4.79 3.00 4.36 11.72 28.02 46.03 32.92 59.45 Hired management 64.41 51.98 10.47 4.22 4.09 23.20 28.74 35.05 37.96 71.05 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic 46.84 41.04 2.75 3.07 2.54 8.65 27.64 45.17 28.20 50.98 Non-Hispanic white 50.30 41.04 5.66 3.10 4.62 13.38 28.24 45.16 34.21 62.16 White 49.41 40.36 5.54 3.08 4.49 12.97 28.02 44.85 . 33.97 61.19 Black 42.23 36.70 2.01* 1.86* 1.92* 8.75 28.05 44.05 28.78 46.20 Asian or Pacific Islander 67.92 62.83 2.86* 4.03* 2.83 10.33 34.22 52.81 26.94 56.83 American Indian or Alaska Native .. 37.86* 25.97* .32* 6.11* 5.78* 15.16* 10.84 45.19* 19.97* 75.93* Hispanic 35.66 29.54 3.40* 2.60* 2.15* 6.66 22.80 41.75 28.95 46.37 Non-Hispanic 50.68 41.75 5.33 3.12 4.48 13.02 28.46 45.39 33.57 61.24 Female 46.98 39.91 3.00 1.64 4.60 9.75 30.39 46.71 28.21 51.81 Male 50.37 41.17 5.67 3.52 4.38 13.68 27.41 44.77 34.64 63.07 Ownership equally divided by sex .. 55.88 44.91 10.58 4.04* 1.96* 10.97 28.69 42.21 41.12 61.97 1. Excludes owner loans, credit cards, and trade credit. 5. Transaction services: The provision of paper money and coins, the process- 2. Checking accounts: Accounts with unlimited check-writing privileges, ing of credit card receipts, the collection of night deposits, and wire transfers. including share draft accounts used for business purposes and owners' personal Cash-management services: The provision of sweep accounts, zero-balance checking accounts if used primarily for business purposes. Savings accounts: accounts, lockbox services, and other services designed to automatically invest Passbook savings accounts, credit union share accounts, certificates of deposit, liquid funds in liquid, interest-bearing assets. Credit-related services: The proother time deposits, and money market accounts if they were limited in either vision of bankers acceptances, letters of credit, sales finance, and factoring. the number or the amount of checks that could be written. Trust and pension services: The provision of 401(k) plans, pension funds, 3. Includes any loans that could not be classified as credit lines, capital business trusts, and securities safekeeping. leases, mortgages used for commercial purposes, motor vehicle loans, or equip- 6. Percentage of partnerships and corporations using owner loans (excludes ment loans (in general, any unsecured term loan). proprietorships). 4. See table 1, note 1. * Fewer than fifteen firms in this category reported using this service, too small a nunber on which to base a reliable statistic. therefore rely on credit cards as a substitute for other fifty employees or with sales or assets greater than types of loans. $2.5 million) were less likely than others to use The descriptive results are not entirely consistent personal credit cards.21 Likewise, credit card use with these a priori expectations. The use of business did not vary systematically with firm age. Further credit cards in 1998 did increase with firm size, but the use of personal credit cards varied little with size, 21. The amount charged in a typical month and the amount repaid except that the largest firms (those with more than in the same month were also asked in the survey. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
194 Federal Reserve Bulletin • April 2001 research is needed to determine the extent to which, The survey findings seem to suggest that trade and the types of firms for which, credit card balances credit was used mainly for transactions purposes. may be a substitute for other types of credit. However, some firms undoubtedly used it for financ- Proprietorships were the most likely to use per- ing purposes; further research may help to determine sonal credit cards and the least likely to use business the characteristics of these firms. credit cards. Insurance and real estate firms were the least likely to use personal credit cards and, along with firms in business services and retail trade, the SUPPLIERS OF FINANCIAL SERVICES least likely to use business credit cards. USED BY SMALL BUSINESSES The suppliers of financial services to small busi- Trade Credit nesses include financial institutions—depository institutions (commercial banks and thrift institutions, Trade credit is extended when a supplier provides including savings associations, savings banks, and goods and services at one point in time and collects credit unions) as well as nondepository institutions the charges at a later point. If the bills are not paid (finance, leasing, mortgage, brokerage, and insurance promptly, trade credit becomes a form of financing. companies)—and nonfinancial sources (such as indi- Businesses use trade credit for both transaction and viduals, family members, other businesses, and govfinancing purposes. Trade credit reduces the transac- ernment entities). The survey collected information tions costs that businesses would incur if they had to on the sources of checking and saving services; credit make payment at the time of delivery, for example, lines, loans, and capital leases; and financial manageby making funds available for other uses. However, ment services.22 most trade credit is extended for a very short period In 1998, depository institutions and nonfinancial (thirty or sixty days) and is always granted in connec- sources were used by a slightly smaller share of the tion with specific purchases. The interest rates small business population, and nondepository financharged on overdue balances generally are quite high; cial institutions by a slightly larger share, than in 2 percent a month is not uncommon. Thus, it is 1993 (table 5). Among depository institutions, comreasonable to expect that the firms using trade credit mercial bank use was about the same, but thrift for longer-term financing purposes are firms that use—despite the deregulation of thrift lending to would have difficulty obtaining credit from other businesses—was somewhat lower, possibly reflecting sources. the decline in the number of thrift institutions nation- Trade credit was used by 60 percent of small wide. The decline in the use of thrifts was due to a businesses in 1998, an incidence of use that exceeds decline in the use of savings institutions; the use of that for all other financial services except checking. credit unions increased over the period, from 4 per- In 1993, 64 percent of small businesses used the cent to 6 percent of firms. service. Use generally increased with firm size; Among nondepository financial institutions, the use except for the smallest firms, more than half the firms of leasing companies was somewhat less common in each size category used trade credit in 1998. and the use of finance companies and "other" non- Black-, Hispanic-, and female-owned firms were less depository financial institutions (including mortgage likely than others to use the service; the differences in banking and insurance companies) was somewhat use between these groups of firms and others were more common relative to 1993. These changes are similar to the differences in use between smaller and consistent with the finding that the percentage of larger firms. small businesses that had outstanding mortgages The use of trade credit was most common among increased over the period between surveys. firms in manufacturing, construction, and wholesale and retail trade—industries for which nonlabor costs, such as the costs of equipment and inventory, are Depository Financial Institutions large relative to labor costs. Among industries for which labor's share of costs is high, such as business Depository institutions provided at least one financial and professional services, trade credit use was some- service to about 95 percent of small businesses in what less common, but it was still used by at least 1998 (roughly the same percentage of small busihalf the firms. The firms least likely to use trade credit were those whose principal activity involved 22. Information on the sources of trade credit, credit cards, and insurance and real estate or transportation. owner loans was not collected. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 195 nesses that had a business checking or savings among groups were greatest in the use of brokerage account in 1998). Commercial banks were used by a companies; for example, 11 percent of white-owned far larger percentage of firms (89 percent) than were businesses used brokerages, compared with 6 percent thrift institutions (savings institutions and credit of black-owned and Hispanic-owned firms. Femaleunions) (12 percent).23 In general, the percentage of owned firms were less likely than male-owned firms firms using commercial banks increased with firm to use finance companies, brokerages, and leasing size; in contrast, the percentage using thrifts gener- companies. ally declined with firm size. Proprietorships, which are generally the smallest firms, were less likely than firms with other organizational forms to use commer- Nonfinancial Suppliers cial banks but were about twice as likely as corporations to use thrifts. The use of thrift institutions declined between 1993 About 12 percent of the small businesses used nonand 1998, from 15 percent to 12 percent of firms. As financial sources for financial services in 1998. About in 1993, small businesses in New England were more 6 percent used family and individuals and other busilikely to use thrifts than were those in other parts of nesses, and 1 percent used government sources.24 the country, probably because of the relatively large The use of nonfinancial sources did not consisnumber of savings banks in New England. tently increase with firm size. For example, the percentage of firms using such sources increased with Black-, Hispanic-, and female-owned firms were employment for groups of firms with up to forty-nine less likely than non-Hispanic- and white-owned firms employees and with 1998 sales of up to $2,500,000. to use commercial banks. Black- and female-owned For larger firms, the percentage using such sources firms were more likely to use thrifts than were whitegenerally remained at the higher levels. and male-owned businesses. Asian-owned firms were the most likely to use commercial banks and the least Individuals and family were used almost exclulikely to use thrifts compared with other ownership sively for credit lines, loans, and leases (table 6). It groups. was expected that the use of individuals or family members as a source of financial services would be most important for younger firms. These firms sometimes have difficulty borrowing from financial insti- Nondepository Financial Institutions tutions, in part because financial institutions often require that prospective borrowers provide several Nondepository financial institutions were a source of years of financial statements with their loan applicafinancial services for about one-third of small busitions. Nonfinancial sources, especially family memnesses in 1998, somewhat more than the fraction in bers or other individuals familiar with prospective 1993. The most commonly used source was finance borrowers, may be better positioned to evaluate creditcompanies, followed by brokerage companies. worthiness and to monitor the financial condition of The use of each type of nondepository financial younger firms. Alternatively, nonfinancial sources supplier increased with firm size. About 72 percent of may have lower credit standards than financial instismall businesses with more than 100 employees used tutions. The survey results show that in 1998 the use at least one of these sources; about 30 percent used of family or individuals was most common among finance companies and brokerage companies. Use of firms younger than five years and among those that nondepository financial institutions also differed by had been operating for fifteen to nineteen years; it organizational form and ranged from 24 percent of was least common among firms that had been operatproprietorships to 47 percent of C corporations. Proing for more than twenty-five years. Thus, the expecprietorships and partnerships were half as likely as tation regarding firm age and the use of nonfinancial corporations to use brokerage companies. sources is not entirely consistent with the descriptive The use of nondepository financial institutions data from the survey. However, further analysis that varied with the race, ethnicity, and sex of a firm's statistically controls for factors besides age could owners. Female- and black-owned firms were the lead to a different conclusion. least likely to use these sources. The differences 24. This figure may understate the true role of government in 23. The percentage of firms that obtained financial services from providing financial services to small businesses. Many entities, such commercial banks might have been larger had the suppliers of credit as the U.S. Small Business Administration, provide credit guarantees, cards been included in the calculations, as many business and personal which ensure repayment of small business loans made by institutional credit cards are issued by commercial banks. lenders such as commercial banks and thrift institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
196 Federal Reserve Bulletin • April 2001 5. Percentage of small businesses using selected suppliers of financial services, by selected category of firm, 1998 A. Any supplier, any financial institution, and depository institutions Financial institution Depository AAAAnnnnyyyy CCCCaaaatttteeeeggggoooorrrryyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any institution union All firms, 1998 96.18 95.74 94.98 88.86 12.06 6.29 5.90 All firms, 1993 97.03 96.84 96.48 89.72 15.37 11.80 4.04 Number of employees1 0-1 91.02 89.85 88.67 79.40 13.46 5.07 840 2-4 95.86 95.50 94.77 88.09 11.93 6.20 5.96 5-9 99.37 99.37 98.50 93.90 13.29 8.57 4.89 10-19 100.00 100.00 99.79 97.33 10.57 4.60* 5.98 20-49 100.00 100.00 100.00 98.06 7.33 5.65 1.68* 50-99 100.00 97.94 97.42 93.23 9.38 8.79 .90* 100-499 100.00 100.00 100.00 98.20 6.39 6.14* .38* Fiscal year sales (thousands of dollars) Less than 25 82.99 81.52 80.64 68.32 14.75 4.33 10.43 25-49 94.77 94.77 93.67 85.80 13.08 5.80 7.27 50-99 97.97 97.58 96.85 88.47 11.81 6.34 5.47 100-249 99.34 98.83 97.59 92.58 12.60 7.64 5.16 250-499 99.82 99.82 99.47 96.40 9.72 4.62 5.11 500-999 99.57 99.57 99.44 96.16 12.47 8.70 4.39 1,000-2,499 100.00 100.00 99.09 96.89 11.00 6.99 4.26* 2,500-4,999 100.00 99.03 98.89 97.43 9.30 8.43* 1.06* 5,000-9,999 100.00 100.00 100.00 100.00 5.78* 3.29* 2.48* 10,000 or more 100.00 100.00 99.80 97.23 5.16* 5.16* .00* End-of-year assets (thousands of dollars) Less than 25 89.87 89.12 88.35 78.96 13.33 5.55 8.01 25-49 98.65 98.65 97.00 91.48 11.75 5.87 5.88 50-99 99.68 98.93 98.29 92.67 11.94 5.84 6.09 100-249 99.46 99.20 98.80 94.71 11.74 7.84 3.91 250-499 100.00 100.00 99.34 96.29 10.56 5.41 5.38 500-999 100.00 100.00 100.00 95.38 13.47 10.29 3.77* 1,000-2,499 100.00 99.24 9848 96.18 10.11 7.39 2.72* 2,500-4,999 100.00 100.00 99.93 99.93 7.26* 7.06* .20* 5,000 or more 100.00 100.00 99.84 99.84 3.58* 3.58* .00* Organizational form Proprietorship 93.16 92.33 91.41 82.24 15.42 7.12 8.53 Partnership 95.37 95.37 95.14 89.50 12.24 6.67* 5.58* S corporation 99.85 99.72 98.88 96.06 9.70 6.05 3.71 C corporation 99.58 99.58 99.13 96.42 6.49 4.39 2.14 Standard industrial classification Construction and mining (10-19) 97.11 96.91 96.51 88.07 15.26 8.56 6.70 Primary manufacturing (20-29) 95.49 94.14 94.11 89.50 12.27 7.74* 4.54* Other manufacturing (30-39) 94.15 94.15 93.47 89.90 4.11* 2.72* 1.39* Transportation (40-49) 98.60 98.60 98.60 93.85 10.41 5.10* 5.31* Wholesale trade (50-51) 99.12 98.88 98.51 95.72 9.92 5.98* 3.94* Retail trade (52-59) 96.84 96.34 95.92 92.64 8.61 5.38 3.63 Insurance agents and real estate (60-69) 96.61 96.02 96.02 93.79 11.49 7.06 4.67* Business services (70-79) 94.48 94.13 92.44 83.16 13.83 5.94 7.90 Professional services (80-89) 96.04 95.33 94.51 87.24 14.64 7.01 7.82 Years under current ownership 0-4 94.50 93.73 93.22 85.83 12.14 4.27 8.15 5-9 96.05 95.97 94.94 89.50 11.18 5.47 5.88 10-14 96.59 96.19 95.22 88.48 12.58 7.85 4.72 15-19 98.45 98.45 97.87 93.01 11.96 6.63 5.44 20-24 98.03 97.52 96.35 89.00 11.60 5.17 6.43 25 or more 95.19 94.27 93.92 89.06 13.23 9.25 4.13 For notes, see end of table. USE OF FINANCIAL SERVICES SUPPLIERS, provided to small businesses by each type of financial BY SERVICE service supplier. The data reviewed thus far have examined separately Suppliers of Checking and Savings Services the use of financial services by firm characteristics and the sources of financial services by firm type. As in 1993, commercial banks dominated the provi- This section reports on the types of financial services sion of checking services to small businesses in 1998, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 197 5.—Continued A.—Continued Financial institution Depository AAAAnnnnyyyy CCCCaaaatttteeeeggggoooorrrryyyy ssssuuuupppppppplllliiiieeeerrrr AAAnnnyyy Thrift CCoommmmeerrcciiaall AAnnyy bbaannkk Savings Credit Any institution union Census region of main office Northeast 95.81 95.40 93.75 86.04 14.40 1111..3388 33..1100 New England 94.67 94.67 93.18 78.74 24.42 17.77 6.68* Middle Atlantic 96.24 95.68 93.97 88.83 10.58 8.94 1.74* Midwest 96.48 96.23 95.71 88.01 13.62 7.41 6.20 East North Central 96.54 96.54 95.76 86.18 15.96 9.72 6.24 West North Central 96.36 95.62 95.62 91.67 8.91 2.78* 6.13 South 96.05 95.43 94.93 90.62 7.77 3.17 4.65 South Atlantic 96.43 95.80 95.10 90.93 7.29 3.67 3.72 East South Central 96.51 95.49 95.49 91.69 6.44* 4.83* 1.61* West South Central 95.18 94.80 94.36 89.55 9.26 1.49* 7.77 West 96.37 95.97 95.33 89.38 14.41 5.60 9.20 Mountain 97.25 97.25 97.21 91.53 15.39 2.59* 12.80 Pacific 96.08 95.54 94.71 88.66 14.09 6.60 8.00 Urbanization at main office Urban 96.45 96.09 95.29 89.35 11.74 5.95 5.93 Rural 95.12 94.37 93.77 86.91 13.34 7.67 5.82 Number of offices One 95.68 95.22 94.42 87.91 12.01 6.00 6.13 Two 100.00 99.63 99.37 94.53 14.17 9.33 5.08 Three or more 99.13 99.13 98.14 98.14 8.61 6.43 2.61* Sales area Primarily within U.S 96.10 95.70 94.97 88.98 12.08 6.26 5.97 International or global 97.81 96.54 95.13 86.08 11.80 7.14* 4.66* Owners' participation Owner management 95.93 95.46 94.66 88.11 12.34 66..2233 66..2244 Hired management 99.16 99.16 98.85 97.80 8.87 7.13 1.93* Race, ethnicity, and sex of majority owners Nonwhite or Hispanic 93.86 93.45 92.96 87.61 11.13 4.84 66..5544 Non-Hispanic white 96.56 96.11 95.35 89.05 12.28 6.57 5.83 White 96.37 95.88 95.14 88.85 12.24 6.40 5.94 Black 91.33 91.33 90.74 85.41 13.99 7.03 7.83 Asian or Pacific Islander 97.50 97.50 96.93 94.36 7.30 4.35* 2.95* American Indian or Alaska Native 92.67 92.67 92.67 77.48 15.19* 3.98* 11.21* Hispanic 92.95 91.88 91.05 85.23 11.25 3.47* 7.77 Non-Hispanic 96.36 95.96 95.25 89.08 12.14 6.47 5.81 Female 91.85 91.34 90.72 82.00 13.67 5.78 8.15 Male 97.53 97.09 96.31 90.99 11.44 6.34 5.20 Ownership equally divided by sex 98.34 98.34 97.00 92.11 13.91 8.82* 5.10* supplying these services to 86 percent of all firms 1998; about 39 percent of small businesses had a surveyed (table 6). Savings institutions and credit credit line, loan, or capital lease from a commercial unions were sources for fewer than 5 percent of bank at the end of 1998 (compared with 41 percent firms. No other single type of supplier provided more of firms at the end of 1993). Nondepository finanthan a trivial share of checking services. Commercial cial institutions and family and individuals were banks were also the dominant supplier of savings also important suppliers; in 1998, as in 1993, about services, far outpacing the next most common provid- 20 percent of firms obtained credit lines from or ers (thrift institutions and brokerage firms). had outstanding loan or capital lease balances with nondepository financial institutions (specifically, finance companies and leasing companies); 6 percent Suppliers of Lines of Credit, Loans, and had loans from family and individuals (compared Capital Leases with 9 percent in 1993). Although suppliers other Commercial banks were also the most common sup- than commercial banks were important sources of plier of lines of credit, loans, and capital leases in credit, commercial banks were three times more Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
198 Federal Reserve Bulletin • April 2001 5. Percentage of small businesses using selected suppliers of financial services, by selected category of firm, 1998—Continued B. Nondepository financial institutions and nonfinancial suppliers Nondepository financial institution Nonfinancial supplier CCaatteeggoorryy Family Any Finance Brokerage Leasing Other Any2 and Other Governcompany company businesses ment individuals All firms, 1998 32.65 14.47 10.88 7.48 7.17 12.46 6.14 5.95 1.04 All firms, 1993 30.80 13.82 10.20 8.56 3.59 15.61 8.90 7.43 .64 Number of employees1 0-1 17.28 6.78 5.84 3.37 3.95 9.04 3.95 4.82 45* 2-4 28.37 13.54 8.75 4.64 5.81 10.02 5.90 4.12 .62* 5-9 38.53 17.02 12.44 10.22 8.91 13.59 6.15 6.88 1.29* 10-19 5346 21.41 17.43 17.80 11.02 20.40 8.66 10.46 2.05* 20-49 57.69 25.59 23.94 12.12 13.28 25.45 12.93 11.82 3.20* 50-99 60.01 27.29 21.45 23.02 17.00 18.85 6.88 9.28 3.29* 100-499 71.66 30.38 32.58 23.42 17.32 18.50 4.63 12.87 2.75* Fiscal year sales (thousands of dollars) Less than 25 11.65 4.90 2.27* 1.44* 3.26 9.46 5.19 3.87 .54* 25-49 20.55 8.41 6.23* 1.93* 5.40 6.21 2.92* 3.03* .26* 50-99 22.73 10.08 4.76 5.29 4.33 9.36 4.78 4.84 .51* 100-249 3248 15.81 11.33 7.41 6.13 13.36 7.52 5.57 .91* 250-499 39.53 14.93 14.49 7.93 8.97 12.52 7.32 4.70 1.32* 500-999 42.86 19.99 11.26 14.84 11.33 16.84 6.29 10.56 .82* 1,000-2,499 57.28 25.47 23.14 12.77 9.82 19.68 8.35 9.86 3.34* 2,500-4,999 60.07 30.76 20.85 18.26 11.96 17.17 741 8.81 1.55* 5,000-9,999 70.25 25.66 28.05 13.49 18.63 20.13 6.20* 11.17 3.72* 10,000 or more 70.95 30.84 41.20 17.49 19.34 15.94 4.82 10.73 1.69* End-of-year assets (thousands of dollars) Less than 25 17.02 7.90 4.45 3.61 4.07 7.93 4.06 3.57 .37* 25-49 25.51 12.29 9.69 4.25 4.01 740 3.71 3.57* .10* 50-99 36.14 16.23 11.23 7.98 7.27 12.68 6.29 6.51 .21* 100-249 41.55 18.09 12.11 9.45 10.46 17.06 8.85 8.18 1.42* 250-499 43.99 18.16 15.22 10.89 8.97 14.39 7.71 6.48 1.89* 500-999 54.74 23.15 21.25 16.26 10.43 19.11 9.85 7.74 2.47* 1,000-2,499 57.01 23.82 22.76 1048 16.00 25.80 9.87 13.90 3.47* 2,500-4,999 64.62 25.90 36.86 26.98 10.44 14.03 4.00* 6.88 3.47* 5,000 or more 68.01 30.11 29.87 16.14 17.28 27.33 5.80 20.93 2.46* Organizational form Proprietorship 23.90 10.75 7.61 3.58 5.06 10.86 5.68 5.13 .57* Partnership 29.60 15.53 6.55 9.42 5.16* 9.00 2.74* 4.27* 1.98* S corporation 39.70 16.84 13.79 11.73 7.65 13.98 6.37 7.43 .93 C corporation 47.03 20.54 17.02 11.39 12.56 15.85 8.18 6.82 2.03 Standard industrial classification Construction and mining (10-19) 31.12 18.06 10.87 3.52 4.50 7.74 3.44 4.35 .92* Primary manufacturing (20-29) 31.79 12.04 6.93 13.00 6.54 18.87 7.81 12.14 1.30* Other manufacturing (30-39) 37.88 11.46 15.79 9.59 8.97 16.99 10.34 5.13 1.76* Transportation (40-49) 34.83 19.38 6.90 7.55 8.65 13.77 6.17* 7.61* .02* Wholesale trade (50-51) 42.10 19.18 13.24 9.66 10.87 13.09 7.19 443 1.77* Retail trade (52-59) 28.71 13.15 5.50 4.21 1144 14.82 5.53 8.18 1.93 Insurance agents and real estate (60-69) 29.88 13.90 10.79 7.43 4.68 12.63 8.33 4.98* .00 Business services (70-79) 29.31 13.38 8.33 9.06 5.59 12.33 6.90 5.24 .74* Professional services (80-89) 38.24 13.77 19.38 8.87 5.50 10.41 4.94 5.31 .68* Years under current ownership 04 28.33 13.72 5.78 6.64 7.70 13.55 7.84 5.33 .92* 5-9 33.84 14.55 9.00 10.44 6.34 10.63 6.44 3.74 .54* 10-14 37.13 16.37 12.97 843 8.56 11.53 4.95 6.51 .96* 15-19 34.33 13.50 13.65 7.29 7.65 13.67 7.19 6.83 1.38* 20-24 30.81 14.02 12.57 5.80 6.76 15.43 5.93 7.17 2.77* 25 or more 30.81 13.67 15.81 3.61 5.65 11.51 3.42 7.99 .80* likely than finance companies, five times more likely of firms) and finance companies (about 8 percent). than leasing companies, and about six times more Equipment loans were also obtained mainly from likely than family or individuals to be the source of these sources, with finance companies used at about these services for small businesses in 1998. half the rate of commercial banks. The only type Credit lines were supplied almost exclusively by of credit service that was not provided mainly by commercial banks: About 25 percent of firms commercial banks was capital leases, which were obtained credit lines from commercial banks, com- twice as likely to be obtained from leasing companies pared with about 2 percent for the next most impor- as from commercial banks or finance companies; tant source, finance companies. Vehicle loans were however, only about 11 percent of small businesses obtained mainly from commercial banks (11 percent had a capital lease in 1998. Finally, family and indi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 199 5.—Continued B.—Continued Nondepository financial institution Nonfinancial supplier CCaatteeggoorryy Family Any Finance Brokerage Leasing Other Any2 and Other Governcompany company businesses ment individuals Census region of main office Northeast 36.04 16.46 14.89 7.14 6.73 12.75 5.92 6.41 .68* New England 35.00 16.91 15.31 6.60 6.31 13.94 7.03* 6.71 .93* Middle Atlantic 36.44 16.29 14.74 7.34 6.89 12.29 5.50 6.29 .59* Midwest 30.15 11.73 11.01 6.69 7.08 12.69 6.10 6.16 1.20* East North Central 31.51 12.21 11.31 6.82 7.63 14.21 7.61 6.59 .79* West North Central 27.41 10.76 10.41 6.44 5.97 9.65 3.08* 5.30 2.02* South 31.16 14.59 8.27 7.95 6.85 11.70 5.18 5.90 .96 South Atlantic 34.37 16.37 8.88 9.56 6.67 14.03 6.95 6.58 .63* East South Central 29.49 13.80 7.91 7.71 6.31 7.29 3.97* 2.49* 1.66* West South Central 26.82 12.11 7.45 5.46 7.43 10.22 2.94 6.59 1.15* West 34.13 15.17 11.12 7.79 7.96 13.02 7.50 5.54 1.26 Mountain 29.71 13.17 8.11 6.55 6.82 17.54 8.89 7.38 3.60* Pacific 35.60 15.83 12.12 8.20 8.33 11.51 7.04 4.93 .49* Urbanization at main office Urban 34.32 15.16 11.98 8.16 7.48 12.00 5.84 6.08 .79 Rural 26.01 11.75 6.49 4.77 5.93 14.33 7.34 5.46 2.05 Number of offices One 30.61 13.43 10.23 6.79 6.64 11.71 5.89 5.46 1.08 Two 45.87 21.88 14.95 10.29 10.21 16.52 6.51 9.67 .47* Three or more 50.30 21.26 17.09 16.40 13.03 20.05 11.35 7.88 1.51* Sales area Primarily within U.S 32.19 14.21 10.82 7.31 6.76 12.35 6.16 5.81 1.05 International or global 41.47 18.94 12.31 10.13 16.04 13.56 5.29 8.10 .87* Owners' participation Owner management 31.69 14.10 10.57 7.09 6.98 12.31 6.17 5.72 1.07 Hired management 43.23 18.19 14.44 11.47 9.26 13.40 5.31 8.36 .71* Race, ethnicity, and sex of majority owners Nonwhite or Hispanic 30.91 14.17 7.09 7.56 9.00 13.47 8.05 5.01 1.08* Non-Hispanic white 32.88 14.54 11.55 7.41 6.85 12.31 5.85 6.15 .99 White 32.69 14.49 11.17 7.45 6.84 12.37 5.95 6.06 1.03 Black 28.74 15.03 6.02 7.89 8.18 16.57 10.32 5.81 1.29* Asian or Pacific Islander 32.73 12.58 9.27 6.13 13.23 12.59 7.21* 5.81* .22* American Indian or Alaska Native 40.50* 22.55* 14.26* 8.67* 6.37* 4.31* 3.98* .32* .32* Hispanic 30.40 13.70 5.63 7.87 7.15 13.57 8.29 4.73* 1.64* Non-Hispanic 32.74 14.51 11.23 7.39 7.20 12.39 6.03 6.05 .96 Female 29.18 12.05 9.71 6.43 7.37 12.29 6.07 5.36 1.22* Male 33.55 15.06 11.43 7.54 7.07 12.56 6.06 6.26 1.01 Ownership equally divided by sex 36.48 18.08 8.06 12.47 7.77* 9.81 6.12* 4.07* .56* 1. See table 1, note 1. * Fewer than fifteen firms in this category reported using this supplier, too 2. Includes a few sources for which the type could not be determined (fewer small a number on which to base a reliable statistic. than 1 percent of the sources identified by respondents). viduals provided "other" loans at about the same rate SUMMARY as did commercial banks. The 1998 Survey of Small Business Finances provides detailed information on the characteristics Suppliers of Financial Management Services of small businesses and on the types and sources Commercial banks were the dominant supplier of of credit and other financial services they use. financial management services, serving about 38 per- Although the discussion in this article is based on cent of small businesses in 1998. Brokerages, the descriptive statistics, the data suggest interesting second most common source of these services, were behavior patterns and differences in the use of credit used by about 10 percent of firms. Brokerages were by small businesses. (Standard errors for the differthe leading provider of both brokerage services and ences have not been calculated, so it is uncertain trust and pension services, and commercial banks whether these differences are statistically significant.) were the leading provider of transaction, cash- The 1998 survey is the third in a series of surveys management, and credit-related services. of small businesses sponsored by the Board of Gov- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
200 Federal Reserve Bulletin • April 2001 6. Percentage of small businesses using selected suppliers of financial services, by selected service, 1998 Financial institution Depository AAAAnnnnyyyy NNoonnddeeppoossiittoorryy SSSSeeeerrrrvvvviiiicccceeee ssssuuuupppppppplllliiiieeeerrrr Thrift AAAnnnyyy CCoommmmeerr-- AAnnyy cciiaall Savings bbaannkk Any insti- Credit Any Finance Broker- Leasing Other i union company age company tution Any 96.18 95.74 94.98 88.86 12.06 6.29 5.90 32.65 14.47 10.88 7.48 7.17 Liquid asset account1 94.43 94.12 93.58 86.67 8.89 4.66 4.26 3.18 .49 2.58 .00* .16* Checking 94.04 93.73 93.19 86.30 8.06 4.28 3.80 1.31 .26* .98 .00* .07* Savings 22.20 21.91 20.56 17.84 3.08 1.08 1.99 2.10 .28 1.73 .00* .10* Credit lines, loans, and capital leases 55.09 51.36 41.96 38.88 4.87 2.45 2.45 20.11 12.62 .31 7.37 1.67 Line of credit 27.71 27.04 25.61 24.70 1.15 .74 .41 2.21 1.64 .23* .34* .14* Mortgage 13.29 11.68 10.16 8.82 1.42 1.18 .24* 1.85 .58 .00* .07* 1.23 Vehicle 20.55 20.11 13.16 11.30 2.07 .48 1.59 8.59 7.91 .04* .61 .07* Equipment 10.18 8.89 5.91 5.36 .55 .28* .27* 3.37 2.14 .00* 1.31 .00* Capital lease 10.59 9.58 2.65 2.40 .25* .16* .10* 7.63 2.30 .05* 5.59 .02* Other2 9.92 5.02 4.45 4.22 .24* .10* .13* .69 .37 .04* .05* .24* Financial management3 49.81 48.10 40.25 38.15 3.00 1.51 1.52 17.29 2.90 9.74 .42 5.68 Transaction 41.07 39.75 37.24 35.27 2.78 1.41 1.39 5.60 1.64 .49 .20* 3.62 Cash-management 5.21 5.09 4.73 4.54 .31* .22* .09* .46 .06* .40 .00* .00* Credit-related 3.09 3.02 2.47 2.39 .12* .00* .11* .67 .51 .00* .14* .02* Brokerage 4.34 4.18 .26 .25 .01* .00* .01* 4.05 .11* 3.84 .05* .07* Trust and pension 12.62 11.65 2.76 2.71 .06* .01* .04* 9.27 .76 6.56 .04* 2.14 For notes, see end of table. ernors. Straightforward comparisons reveal some APPENDIX: SURVEY METHODS remarkable similarities in the findings from the 1998 and 1993 surveys. In particular, commercial banks The 1998 Survey of Small Business Finances, concontinued in 1998 to be the dominant source of ducted in 1999 and 2000 by the National Opinion financial services for small businesses, including Research Center (NORC) for the Board of Goverchecking and savings accounts, loans of all types nors, covered a nationally representative sample of except capital leases, and all financial management small businesses. The target population was U.S. services other than brokerage services and trust and domestic for-profit, nonfinancial, nonsubsidiary, nonagricultural, nongovernmental businesses with fewer pension services. than 500 employees that were in operation on Decem- Comparisons also reveal some changes over the ber 31, 1998. The sample was drawn from the Dun & period between surveys. Minority- and female- Bradstreet Market Identifier file.25 owned firms accounted for a larger proportion of The Market Identifier file is broadly representative small businesses in 1998. The incidence of vehicle, of all businesses in the United States (though it may equipment, and "other" loans declined somewhat underrepresent many of the newest and smallest busiover the period, while the incidence of lines of credit nesses). It has been estimated that the Dun & Bradand mortgages increased. Some of the differences street database covers approximately 93 percent of are undoubtedly due to differences in the economic full-time business activity.26 climate in which small businesses operated during The 1998 Statistics of U.S. Businesses from the 1993 and 1998. U.S. Small Business Administration provides a com- Explaining the differences and, more fundamenparison population (http://www.sba.gov/advo/stats/ tally, understanding the factors that affect small busidata.html) for the population obtained from the ness financing require a rigorous analytical frame- Dun & Bradstreet file. These data are compiled by work that accounts for the financial characteristics of the U.S. Census Bureau and contain virtually the borrowers and the markets in which they operate. Although such analysis is beyond the scope of this article, the final survey data will provide consider- 25. Dun's Marketing Service, Dun & Bradstreet, Inc. able opportunities for more formal and complete 26. See Bruce Phillips and Bruce Kirchhoff, "Formation, Growth, and Survival: Small Firm Dynamics in the U.S. Economy," Small analyses. Business Economics, vol. 1 (1989), pp. 65-74. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 201 6.—Continued lion firms in the Market Identifier file; 27,000 completed the screening process, and nearly 20,000 were Nonfinancial supplier determined to be part of the target population, representing about 5.3 million firms.27 Besides verifying eligibility, the screening was designed to collect in- Service Family Any and Other Govern- formation on minority ownership (where a minoritybusinesses ment individuals owned firm was defined as one more than 50 percent owned by individuals who are Hispanic, Latino, or of Spanish descent; Asian, Native Hawaiian, or other Any 12.46 6.14 5.95 1.04 Pacific Islander; black; or American Indian or Alaska Liquid asset account1 .34* .04* .30* .00* Checking .14* .04* .10* .00* Native), information not reliably available in the Savings .26* .03* .23* .00* Dun & Bradstreet file.28 Credit lines, loans, and In the second stage, the sample was stratified by capital leases 9.82 6.11 3.13 1.04 Line of credit .80 .02* .77 .01* number of employees, Census division, urban/rural Mortgage 1.82 1.29 .25* .33 Vehicle .45 .28* .14* .00* status, and minority ownership (black, Asian, His- Equipment 1.42 .43* .88 .11* panic, and "other"). Like relatively larger small busi- CCaappiittaall lleeaassee 1.17 .27* .86 .03* OOtthheerr22 5.23 4.15 .55 .58 nesses, minority-owned firms account for only a Financial management3 .. 3.25 .31* 2.89 .09* small percentage of the population of small busi- Transaction 2.07 .26* 1.76 .09* nesses but are of special interest to researchers and Cash-management .18* .03* .15* .00* Credit-related .14* .07* .07* .00* policymakers. For these reasons, such firms were Brokerage .14* .01* .14* .00* Trust and pension .95 .02* .93 .00* oversampled to ensure that their numbers would be sufficient to allow for statistical comparisons between 1. See table 4, note 2. 2. See table 4, note 3. them and other firms. 3. See table 4, note 5. * Fewer than fifteen firms reported using this supplier, too small a number on Of the 20,000 firms determined to be part of the which to base a reliable statistic. target population, only 11,000 were asked to participate in the main interview (the second stage), as the entire universe of private-sector businesses with posi- screened sample contained a surplus of small, nontive payroll, excluding farms (SIC 01-02), railroads minority-owned firms. Of these 11,000 firms, 3,561 (SIC 40), the Postal Service (SIC 43), private house- completed the main interview, for a response rate of holds (SIC 88), and pension, health, and welfare 33 percent.29 The results presented in this article have funds with at least 100 employees (SIC 6371). The been weighted to allow for different rates of sampling data show that about 61 percent of firms have fewer and different rates of response. The estimates prothan five employees (compared with 64 percent of the vided are representative of the eligible portion of the survey population), 38 percent were in business and Dun & Bradstreet frame. professional services (compared with 43 percent), Before the screening, firms were mailed a brochure and 21 percent were in retail trade (compared with describing the survey. They were contacted by tele- 19 percent). In addition, about 83 percent were phone and asked to complete a short computerlocated in urban areas (compared with about 80 percent) and 21 percent were in the Northeast, 23 percent in the Midwest, 32 percent in the South, and 27. Of the approximately 13,000 firms that did not complete the 23 percent in the West (compared with 19 percent, screening process, about 6,000 declined to participate. Of the remain- 22 percent, 33 percent, and 27 percent respectively). der, the majority could not be contacted for various reasons. Sampling was done according to a two-stage strati- 28. John D. Wolken, Catherine Haggerty, Karen Grigorian, and Rachel Harter, "The 1998 Survey of Small Business Finances: Samfied random design. In the first stage, the sample was pling and Level of Effort Associated with Gaining Cooperation from stratified by number of employees, Census divi- Minority-Owned Businesses," paper presented at the International sion, and urban/rural status. Because larger small Conference on Establishment Surveys II, June 2000, Buffalo, New York (forthcoming in ICES II conference proceedings). businesses (those with twenty or more employees) 29. The response rate for the 1993 survey was 47 percent. The account for a small proportion of the target popula- decline in response rate is generally consistent with a decline in tion, those firms were sampled at a rate greater than response rates in many recent scientific surveys, including those of the U.S. Census Bureau. There are several possible reasons for the lower their proportion in the population to ensure a large rate. Interviews were conducted several months after screening, allowenough sample to permit comparisons with smaller ing time for businesses to become defunct and also requiring that small businesses. A sample of nearly 40,000 firms businesses cooperate twice instead of once. Also, many of the main interviews were completed near January 1, 2000, when many was selected in this first stage, representing 7.5 milbusinesses were busy and therefore less willing to participate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
202 Federal Reserve Bulletin • April 2001 A.l. Characteristics of small businesses, distributed by selected category of firm, 1998 Majority owners Number of employees1 AAllll CCaatteeggoorryy ffiirrmmss Non- Nonwhite Hispanic Male Female 0-1 2-4 5-19 20-49 50-499 or Hispanic white All firms 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Number of employees1 0-1 21.86 20.78 22.01 20.13 27.34 100.00 2-4 41.78 48.17 40.60 41.04 44.12 100.00 5-9 19.78 18.36 20.04 20.60 17.31 70.22 10-19 8.39 7.46 8.60 8.89 6.62 29.78 20-49 5.47 3.82 5.79 6.27 3.01 100.00 50-99 1.55 1.08 1.63 1.66 1.13 57.01 100-499 1.17 .31 1.32 1.39 .46 42.99 Fiscal year sales (thousands of dollars) Less than 25 16.34 20.84 15.42 12.98 26.85 39.64 16.42 2.73 .26* .99* 25-49 9.48 10.66 9.24 8.38 12.97 18.86 11.69 1.52* .18* 1.50* 50-99 14.22 19.19 13.46 14.16 1440 18.51 20.53 5.46 .54* 1.15* 100-249 21.72 18.43 22.20 22.58 18.99 16.81 29.38 20.22 .94* .66* 250-499 13.29 14.16 13.17 14.19 10.56 3.96 13.22 23.18 6.06 1.58* 500-999 10.27 8.04 10.71 11.00 8.04 1.09* 4.86 24.48 17.65 5.02* 1,000-2,499 7.83 4.98 8.37 8.83 4.74 .71* 2.68 15.16 35.21 13.38 2,500-4,999 3.28 2.00 3.52 3.77 1.62 .32* 4.90 22.26 20.22 5,000-9,999 1.56 .97 1.68 1.89 .55 .23* .33* .94* 11.36 18.03 10,000 or more 1.79 .46 2.02 2.11 .74 .02* .20* 1.32* 5.55 37.47 End-of-year assets (thousands of dollars) Less than 25 34.72 41.57 33.42 30.86 46.91 62.13 40.46 13.92 3.15* 5.41* 25—49 12.57 10.79 12.95 12.86 11.64 13.01 15.77 10.51 2.66* 1.01* 50-99 13.94 16.98 13.45 14.53 12.17 10.44 15.71 16.64 7.10 .52* 100-249 15.86 13.92 16.22 16.38 14.30 8.02 16.42 22.77 12.60 5.13 250-499 8.74 7.36 8.89 9.52 6.37 3.71 5.84 16.46 12.88 5.40 500-999 5.99 3.47 646 6.83 3.26 1.23* 2.77 10.86 22.54 10.15 1,000-2,499 4.22 3.30 4.40 4.61 2.84 .42* 1.70 5.19 26.00 19.62 2,500-4,999 1.54 .72 1.68 1.79 .78 .08* .36* 1.28* 8.09 20.96 5,000 or more 1.51 .30 1.73 1.85 .40 .07* 1.34* 4.47 31.36 Organizational form Proprietorship 49.35 54.63 48.27 46.80 57.53 82.72 55.08 26.98 8.55 7.07* Partnership 6.95 7.94 6.75 7.11 6.48 1.17* 10.00 7.32 3.86 8.96 S corporation 23.87 22.42 24.26 25.15 19.75 9.85 20.50 35.08 39.58 40.77 C corporation 19.83 15.01 20.72 20.94 16.25 6.26 14.42 30.62 48.00 43.20 Standard industrial classification Construction and mining (10-19) ... 11.87 7.42 12.71 13.98 5.41 12.19 10.91 12.59 13.39 13.77 Primary manufacturing (20-29) 3.66 2.52 3.88 3.51 4.11 3.00 3.51 3.68 5.59 7.04 Other manufacturing (30-39) 4.68 3.63 4.89 5.27 2.88 3.03 443 4.63 10.43 10.68 Transportation (40-49) 3.72 4.03 3.69 3.80 3.47 2.98 3.13 4.89 3.98 6.13 Wholesale trade (50-51) 7.15 6.75 7.26 8.13 3.98 4.19 7.21 8.84 9.36 8.13 Retail trade (52-59) 18.95 21.23 18.65 17.51 23.40 13.89 17.42 23.93 24.73 19.77 Insurance agents and real estate (60-69) 6.48 5.00 6.77 6.78 5.57 7.28 6.54 6.76 3.69* 1.81* Business services (70-79) 24.83 31.60 23.49 23.02 30.40 32.08 27.20 18.86 13.85 14.34 Professional services (80-89) 18.46 17.83 18.42 17.95 20.12 21.11 19.39 15.71 14.97 18.16 Years under current ownership 0-4 22.37 29.71 21.01 20.36 28.46 27.62 24.62 17.56 14.80 10.83 5-9 22.79 24.45 22.45 21.68 26.34 24.06 24.08 21.24 19.38 15.53 10-14 19.14 20.59 18.97 19.30 18.74 17.89 19.70 20.21 15.17 17.59 15-19 13.05 10.50 13.55 13.42 11.98 10.45 11.26 16.42 18.24 16.38 20-24 8.72 6.37 9.10 9.60 5.99 7.41 7.97 9.95 13.25 8.60 25 or more 13.75 8.38 14.71 15.45 8.48 12.44 12.15 1445 19.17 30.92 For notes, see end of table. assisted telephone interview to verify their eligibility. Firms selected for the main interview were sent The screening interview took about five minutes. The further information about the survey and a customtotal time required by NORC to contact firms and ized worksheet to help them consult their records administer all interviews, whether completed or not, before the interview. The worksheet requested finanaveraged about thirty-nine minutes per completed cial data for the firm and information about the screening interview.30 financial services used by the firm and the sources of those services. The worksheet differed according to 30. For both the screening and the main interviews, the total time the firm's legal organizational form and directed per completed interview is the total number of interview hours for all respondents to the appropriate lines on their tax cases, whether the interview was completed or not, divided by the forms. The main interview, also a computer assisted number of completed cases. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 203 A. 1.—Continued Majority owners Number of employees1 AAllll CCaatteeggoorryy ffiirrmmss Non- Nonwhite Hispanic Male Female 0-1 2-4 5-19 20-49 50-499 or Hispanic white Census region of main office Northeast 18.90 15.86 19.31 19.65 16.66 20.92 19.63 17.20 15.09 16.75 New England 5.21 .97* 5.87 5.00 5.90 5.98 5.28 4.46 6.48 3.29 Middle Atlantic 13.69 14.88 13.44 14.65 10.75 14.94 14.35 12.75 8.61 13.46 Midwest 21.80 10.44 23.77 22.28 20.37 19.51 22.00 22.36 26.61 21.42 East North Central 14.56 7.23 15.79 15.27 12.41 12.84 14.45 15.91 16.11 12.67 West North Central 7.24 3.21 7.98 7.02 7.96 6.68 7.55 6.45 10.50 8.75 South 32.71 37.01 32.07 32.69 32.59 32.36 33.50 32.31 29.37 34.26 South Atlantic 16.88 19.44 16.45 16.59 17.72 17.59 16.99 16.10 15.89 19.68 East South Central 5.47 2.43 6.03 5.76 4.46 3.70 5.41 7.08 5.35 4.43 West South Central 10.35 15.14 9.59 10.34 10.41 11.07 11.10 9.12 8.13 10.16 West 26.59 36.69 24.85 25.38 30.38 27.21 24.88 28.13 28.93 27.56 Mountain 6.63 7.05 6.54 6.88 5.88 6.56 5.62 8.05 7.87 5.55 Pacific 19.96 29.64 18.31 18.50 24.50 20.65 19.26 20.08 21.06 22.01 Urbanization at main office Urban 79.91 89.63 78.19 79.80 80.33 81.91 78.86 79.42 80.37 84.33 Rural 20.09 10.37 21.81 20.20 19.67 18.09 21.14 20.58 19.63 15.67 Number of offices One 87.75 89.18 87.51 86.47 91.87 96.58 91.10 84.40 66.67 42.52 Two 8.55 7.37 8.76 9.21 6.51 2.89 7.66 10.85 20.19 20.67 Three or more 3.63 3.45 3.64 4.22 1.62 .53* 1.24 4.50 13.14 36.81 Sales area Primarily within U.S 95.43 93.63 95.76 95.20 96.13 95.76 95.31 96.17 94.11 89.69 International or global 4.51 6.37 4.16 4.71 3.87 4.24 4.69 3.66 5.58 10.31 Owners' participation Owner management 92.33 93.36 92.11 92.24 92.97 98.75 94.46 87.04 85.77 75.85 Hired management 7.52 6.64 7.72 7.70 6.79 1.25* 5.44 12.59 14.23 24.15 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic 14.60 100.00 14.18 15.90 13.88 16.83 13.38 10.20 7.49 Non-Hispanic white 84.88 100.00 85.25 83.72 85.48 82.48 86.30 89.80 92.20 White 90.12 35.79 100.00 90.70 88.34 90.58 88.39 90.81 95.49 95.02 Black 4.12 28.21 3.77 5.21 3.88 5.34 3.40 .55* 1.87 Asian or Pacific Islander 4.38 29.97 4.14 5.05 3.86 4.49 4.90 3.74 2.71 American Indian or Alaska Native .. .81 5.58 .77 .95* 1.04* 1.02* .52* .22* .10* Hispanic 5.59 38.29 5.78 5.03 5.27 6.47 4.78 5.68 2.88 Non-Hispanic 94.10 61.51 100.00 93.85 94.85 94.59 92.96 95.06 94.32 97.12 Female 24.32 26.48 23.98 100.00 30.42 25.68 20.67 13.36 14.26 Male 71.88 68.48 72.41 95.14 68.86 69.89 74.46 80.89 82.07 Ownership equally divided by sex .. 3.67 4.90 3.49 4.86 .73* 4.33 4.66 5.64 2.97 telephone interview, took about forty minutes. How- firm and its primary owner; the firm's use of financial ever, the total time spent by NORC, including the services and the sources providing the services; applitime spent trying to contact and convert nonrespon- cations for credit by the firm in the past three years; dents, averaged nearly seven hours per completed balance sheet data; and recent credit history of the case. Most of the time it took to complete the inter- firm and its owners. A public-use version of the data views was spent establishing contact, setting appoint- set and a user's manual will be posted on the Fedments with business owners, reestablishing contact eral Reserve Board's web site after completion of when interviews were broken off by respondents, and data editing and other processing steps (www. trying to persuade reluctant owners to complete the federalreserve.gov/pubs/oss/oss3/nssbftoc.htm). • interview. The information collected from each business fits into the following categories: demographics of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
204 Federal Reserve Bulletin • April 2001 A.l. Characteristics of small businesses, distributed by selected category of firm, 1998—Continued Years under current ownership Urbanizaton at main office Organizational form CCaatteeggoorryy 0-9 10 or more Urban Rural Proprietorship Other All firms 100.00 100.00 100.00 100.00 100.00 100.00 Number of employees1 0-1 25.02 19.27 22.40 19.69 36.64 7.46 2-4 45.06 39.04 41.23 43.98 46.63 37.06 5-9 16.97 22.08 19.53 20.77 13.12 26.26 10-19 7.23 9.37 8.46 8.08 2.27 14.34 20-49 4.14 6.59 5.51 5.35 .95 9.88 50-99 1.15 1.87 1.61 1.29 .29* 2.76 100-499 .43 1.78 1.25 .83 .09* 2.21 Fiscal year sales (thousands of dollars) Less than 25 22.00 11.71 15.85 18.25 26.39 6.54 25-49 10.29 8.80 9.55 9.21 15.39 3.73 50-99 15.03 13.61 14.05 14.93 19.35 9.23 100-249 20.93 22.36 21.50 22.59 21.96 21.48 250-499 12.62 13.80 13.61 12.02 9.40 17.08 500-999 9.19 11.10 10.58 9.01 5.17 15.23 1,000-2,499 6.07 9.32 7.87 7.69 1.79 13.73 2,500-4,999 1.91 4.43 3.10 4.02 .10* 6.38 5,000-9,999 .59 2.36 1.73 .91 .10* 2.99 10,000 or more 1.18 2.29 1.96 1.08 .11* 3.41 End-of-year assets (thousands of dollars) Less than 25 41.64 29.07 35.08 33.32 49.34 20.48 25-49 13.23 12.06 13.07 10.57 12.51 12.62 50-99 13.75 14.13 13.77 14.58 14.38 13.50 100-249 14.31 17.08 15.78 16.14 13.16 1848 250-499 8.33 9.10 8.15 11.06 5.67 11.73 500-999 4.20 7.32 5.70 7.14 2.25 9.64 1,000-2,499 2.45 5.69 4.34 3.75 1.25 7.11 2,500-4,999 .75 2.20 1.52 1.61 .27* 2.78 5,000 or more .73 2.16 1.73 .66 .02* 2.97 Organizational form Proprietorship 50.91 48.18 4477..0000 5588..7722 110000..0000 Partnership 7.12 6.84 6.96 6.93 13.73 S corporation 25.25 22.79 25.20 18.58 47.13 C corporation 16.73 22.19 20.85 15.77 39.15 Standard industrial classification Construction and mining (10-19) 10.14 13.35 11.27 14.30 12.61 11.16 Primary manufacturing (20-29) 3.40 3.88 3.57 4.00 3.18 4.12 Other manufacturing (30-39) 4.75 4.64 4.66 4.75 3.00 6.32 Transportation (40-49) 4.32 3.24 3.90 2.98 2.24 5.16 Wholesale trade (50-51) 6.67 7.47 7.53 5.62 3.92 10.30 Retail trade (52-59) 21.13 17.20 17.19 25.94 19.49 18.42 Insurance agents and real estate (60-69) 5.15 7.51 6.65 5.81 5.40 7.53 Business services (70-79) 26.97 23.08 24.90 24.57 29.48 20.31 Professional services (80-89) 17.24 19.48 20.15 11.74 20.47 16.50 Years under current ownership 0-4 49.54 22.32 22.56 22.86 21.90 5 9 50.46 23.78 18.83 23.72 21.87 10-14 35.02 20.02 15.65 19.39 18.91 15 19 23.88 12.83 13.94 11.75 14.32 20-24 15.94 8.61 9.14 8.18 9.24 25 or more 25.16 12.26 19.67 14.04 13.47 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Financial Services Used by Small Businesses: Evidence from the 1998 Survey of Small Business Finances 205 A. 1.—Continued Years under current ownership Urbanizaton at main office Organizational form CCaatteeggoorryy 0-9 10 or more Urban Rural Proprietorship Other Census region of main office Northeast 16.98 20.46 21.01 10.52 18.91 18.89 New England 5.31 5.15 5.45 4.29 5.47 4.97 Middle AUantic 11.67 15.31 15.56 6.23 13.45 13.92 Midwest 21.31 22.26 19.40 31.34 20.30 23.25 East North Central 14.35 14.77 13.92 17.09 12.82 16.25 West North Central 6.97 7.49 5.48 14.25 7.48 7.01 South 34.91 30.82 31.21 38.65 31.12 34.26 South Atlantic 19.41 14.77 17.21 15.57 14.16 19.54 East South Central 5.34 5.60 3.99 11.39 5.12 5.82 West South Central 10.16 10.44 10.01 11.69 11.84 8.90 West 26.79 26.46 28.38 19.49 29.67 23.60 Mountain 6.66 6.57 5.89 9.56 5.94 7.30 Pacific 20.13 19.88 22.49 9.93 23.72 16.30 Urbanization at main office Urban 81.59 78.54 100.00 76.10 83.63 Rural 18.41 21.46 lOO.OO 23.90 16.37 Number of offices One 89.44 86.41 87.43 89.00 93.19 82.45 Two 7.91 9.10 8.70 7.98 5.65 11.38 Three or more 2.60 4.49 3.78 3.02 1.16 6.03 Sales area Primarily within U.S 94.47 96.30 94.94 97.38 96.86 94.04 International or global 5.53 3.67 5.00 2.54 3.14 5.84 Owners' participation Owner management 93.10 91.84 91.95 93.83 96.15 88.60 Hired management 6.83 8.11 7.92 5.96 3.85 11.11 Race, ethnicity, and sex of majority owners Nonwhite or Hispanic 17.51 12.24 16.37 7.54 16.16 13.08 Non-Hispanic white 81.68 87.46 83.04 92.17 83.01 86.69 White 87.92 91.90 89.11 94.13 88.84 91.36 Black 4.96 3.44 4.53 2.47 4.88 3.38 Asian or Pacific Islander 5.25 3.66 5.05 1.70 4.54 4.21 American Indian or Alaska Native .98* .68* .64 1.50* .90* .73* Hispanic 6.64 4.74 6.45 2.18 6.15 5.04 Non-Hispanic 92.84 95.12 93.23 97.54 93.43 94.75 Female 29.51 20.11 24.44 23.82 28.34 20.39 Male 66.52 76.30 71.79 72.28 71.66 72.11 Ownership equally divided by sex 3.83 3.55 3.67 3.70 7.25 1. See text table 1, note 1. ... Not applicable. * Fewer than fifteen firms in this category reported this characteristic, too small a number on which to base a reliable statistic. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
206 Industrial Production and Capacity Utilization for February 2001 Released for publication March 16 Excluding motor vehicles and parts, manufacturing output decreased 0.5 percent in February. Output at Industrial production fell 0.6 percent in February, its utilities dropped back 2.3 percent, and production in fifth consecutive monthly decline. Manufacturing mining slipped 0.5 percent. At 146.0 percent of its output decreased 0.4 percent; it has fallen about 1992 average, industrial production was 1.2 percent 1V2 percent (not at an annual rate) since September. above its February 2000 level. The rate of capacity 145 125 105 85 Capacity utilization Percent of capacity 85 80 75 70 1977 1979 1981 1983 1985 1987 1991 1993 1995 1997 1999 2001 12-month percent change Percent of capacity Industrial production Total industrial production Excluding high -tech industries \ 1 1 1 t i ll 1995 1997 1999 2001 High-tech industries are defined as semiconductors and related electronic Shaded areas are periods of business recession as defined by the NBER. components (SIC 3672-9), computers (SIC 357), and communications equipment (SIC 366). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
207 Industrial production and capacity utilization, February 2001 Industrial production, index, 1992= 100 Percent change CCCaaattteeegggooorrryyy 22000000 22000011 20001 2001' FFeebb.. 22000000 ttoo Nov.1 Dec/ Jan.r Feb.P Nov/ Dec/ Jan/ Feb.P FFeebb.. 22000011 Total 148.2 147.7 146.8 146.0 -.3 -.3 -.6 -.6 1.2 Previous estimate 148.2 147.4 147.0 -.3 -.5 -.3 Major market groups Products, total2 136.3 136.3 135.6 134.9 .0 .0 -.5 -.5 .5 Consumer goods 122.4 122.8 121.7 121.2 -.3 .4 -.9 -.5 -1.3 Business equipment 200.6 199.4 198.6 198.1 .3 -.6 -.4 -.3 6.0 Construction supplies 141.6 141.5 141.6 140.3 -.5 .0 .0 -.9 -2.2 Materials 169.9 168.4 167.1 166.0 -.7 -.9 -.8 -.6 2.2 Major industry groups Manufacturing 154.1 152.9 152.0 151.3 -.5 -.8 -.6 -.4 .9 Durable 196.7 195.5 193.4 192.6 -.4 -.6 -1.1 -.4 3.4 Nondurable 115.5 114.4 114.4 113.9 -.7 -1.0 .0 -.5 -2.1 Mining 101.1 100.2 102.3 101.8 .9 -.8 2.1 -.5 2.7 Utilities 121.9 129.8 125.5 122.6 1.6 6.4 -3.3 -2.3 2.6 Capacity utilization, percent MEMO Capacity, percent 2000 2001 change, Average, Low, High, Feb. 2000 1967-00 1982 to Feb. Nov.r Dec.' Jan.1 Feb.p Feb. 2001 Total 82.1 71.1 85.4 82.0 81.4 80.8 80.1 79.4 4.5 Manufacturing 81.1 69.0 85.7 81.2 80.5 79.5 78.7 78.1 4.9 Advanced processing 80.6 71.0 84.2 79.4 79.7 79.2 78.8 78.4 2.6 Primary processing . 82.2 65.7 88.3 85.2 82.8 81.1 79.7 78.8 8.5 Mining 87.4 80.3 88.0 84.9 87.3 86.7 88.6 88.2 -1.1 Utilities 87.6 75.9 92.6 91.1 90.7 96.3 92.8 90.4 3.4 NOTE. Data seasonally adjusted or calculated from seasonally adjusted 2. Contains components in addition to those shown, monthly data. r Revised, 1. Change from preceding month. p Preliminary. utilization for total industry fell to 79.4 percent transit equipment, which had decreased considerably in February, its sixth consecutive monthly decline, in the previous two months, fell 0.8 percent because and is 2.7 percentage points below its 1967-2000 of further cuts in the assembly of medium and heavy average. trucks. The output of information processing equipment posted a relatively small gain of 0.7 percent. The gains in this sector, which includes computers, MARKET GROUPS have slowed, on balance, in recent months. The output of construction supplies fell 0.9 percent The index for consumer goods fell 0.5 percent in in February after having been unchanged in the previ- February; the production of nondurables decreased ous two months; the index is now 2.2 percent below 0.7 percent, while the output of durables rose 0.5 per- its year-ago level. The output of materials dropped cent. The output of nondurable consumer goods was 0.6 percent, with similar declines posted for both pulled down by declines in the production of cloth- durable and nondurable materials. Among durable ing, foods and tobacco, paper products, and energy materials industries, the output of semiconductors products. The production of consumer durables and related electronic components increased a modrebounded a bit; a downturn in motor vehicle output est 0.3 percent. However, the production of motorhad contributed to a sharp drop-off during the pre- vehicle-related parts and materials posted another vious four months large decline. Among nondurable materials, the output of textiles dropped 2.2 percent in February; The output of business equipment slipped 0.3 perdeclines in the output of paper and chemicals essencent in February. The index for industrial and other tially reversed gains posted in January. The index for equipment dropped 1.0 percent with declines in energy materials dropped 0.7 percent in February machinery and construction equipment more than after two months of little change. offsetting a rise in farm equipment. The production of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
208 Federal Reserve Bulletin • April 2001 INDUSTRY GROUPS ruary, or 9.4 percentage points below its July 2000 peak. The utilization rate for primary-processing Manufacturing output declined 0.4 percent in Febru- industries fell 0.9 percentage point, to 78.8 percent, ary, with similar decreases in the production of dura- while that for advanced-processing industries dipped ble and nondurable goods; the losses were wide- 0.4 percentage point, to 78.4 percent. The operating spread. Among durable goods industries, the largest rate at utilities fell again, to 90.4 percent from decreases came in stone, clay, and glass products, the high rate of 96.3 percent recorded in December. fabricated metal products, industrial machinery other The operating rate for mining declined slightly to than computers, and miscellaneous manufacturing. 88.2 percent. The output of motor vehicles and parts, which had fallen almost 22 percent (not at an annual rate) between September and January, was little changed NEW RELEASE FORMAT in February. Among nondurables, a 1.3 percent rise in petroleum refining was the only significant Beginning with the February 16 issue, the G.17 statisincrease. tical release has been redesigned. Special aggre- The factory operating rate declined further in Feb- gates have been added. Although some detailed ruary, to 78.1 percent, which is 3.0 percentage points industry data no longer appear in the regular release, below its 1967-2000 average and the lowest level these series continue to be available on the Fedsince late 1991. Capacity utilization in high-tech eral Reserve Board's public web site (www. industries (computers, communications equipment, feder alreser ve. gov/releases/g 17). • and semiconductors) dropped to 80.6 percent in Feb- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
209 Testimony of Federal Reserve Officials Testimony by Alan Greenspan, Chairman, Board of equipment declined in the fourth quarter. Because Governors of the Federal Reserve System, before the the extent of the slowdown was not anticipated by Committee on Banking, Housing, and Urban Affairs, businesses, it induced some backup in inventories, US. Senate, February 13, 2001 despite the more advanced just-in-time technologies that have in recent years enabled firms to adjust I appreciate the opportunity this morning to present production levels more rapidly to changes in demand. the Federal Reserve's semiannual report on monetary Inventory-sales ratios rose only moderately; but policy. relative to the levels of these ratios implied by The past decade has been extraordinary for the their downtrend over the past decade, the emerging American economy and monetary policy. The syner- imbalances appeared considerably larger. Reflecting gies of key technologies markedly elevated prospec- these growing imbalances, manufacturing purchasing tive rates of return on high-tech investments, led to a managers reported last month that inventories in the surge in business capital spending, and significantly hands of their customers had risen to excessively increased the underlying growth rate of productivity. high levels. The capitalization of those higher expected returns As a result, a round of inventory rebalancing boosted equity prices, contributing to a substantial appears to be in progress. Accordingly, the slowdown pickup in household spending on new homes, durable in the economy that began in the middle of 2000 goods, and other types of consumption generally, intensified, perhaps even to the point of growth stallbeyond even that implied by the enhanced rise in real ing out around the turn of the year. As the economy incomes. slowed, equity prices fell, especially in the high-tech When I last reported to you in July, economic sector, where previous high valuations and optigrowth was just exhibiting initial signs of slowing mistic forecasts were being reevaluated, resulting in from what had been an exceptionally rapid and unsus- significant losses for some investors. In addition, tainable rate of increase that began a year earlier. lenders turned more cautious. This tightening of The surge in spending had lifted the growth of the financial conditions, itself, contributed to restraint on stocks of many types of consumer durable goods and spending. business capital equipment to rates that could not Against this background, the Federal Open Market be continued. The elevated level of light vehicle Committee (FOMC) undertook a series of aggressive sales, for example, implied a rate of increase in the monetary policy steps. At its December meeting, the number of vehicles on the road hardly sustainable FOMC shifted its announced assessment of the balfor a mature industry. And even though demand ance of risks to express concern about economic for a number of high-tech products was doubling or weakness, which encouraged declines in market tripling annually, in many cases new supply was interest rates. Then on January 3, and again on Janucoming on even faster. Overall, capacity in high-tech ary 31, the FOMC reduced its targeted federal funds manufacturing industries rose nearly 50 percent last rate Vi percentage point, to its current level of year, well in excess of its rapid rate of increase over 5>A percent. An essential precondition for this type of the previous three years. Hence, a temporary glut in response was that underlying cost and price pressures these industries and falling prospective rates of return remained subdued, so that our front-loaded actions were inevitable at some point. Clearly, some slowing were unlikely to jeopardize the stable, low-inflation in the pace of spending was necessary and expected if environment necessary to foster investment and the economy was to progress along a balanced and advances in productivity. sustainable growth path. The exceptional weakness so evident in a number But the adjustment has occurred much faster than of economic indicators toward the end of last year most businesses anticipated, with the process likely (perhaps in part the consequence of adverse weather) intensified by the rise in the cost of energy that has apparently did not continue in January. But with drained business and household purchasing power. signs of softness still patently in evidence at the time Purchases of durable goods and investment in capital of its January meeting, the FOMC retained its sense Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
210 Federal Reserve Bulletin • April 2001 that the risks are weighted toward conditions that less, compared with the past, much progress is evimay generate economic weakness in the foreseeable dent. A couple of decades ago, inventory data would future. not have been available to most firms until weeks had Crucial to the assessment of the outlook and the elapsed, delaying a response and, hence, eventually understanding of recent policy actions is the role of requiring even deeper cuts in production. In addition, technological change and productivity in shaping the foreshortening of lead times on delivery of capital near-term cyclical forces as well as long-term sustain- equipment, a result of information and other newer able growth. technologies, has engendered a more rapid adjust- The prospects for sustaining strong advances in ment of capital goods production to shifts in demand productivity in the years ahead remain favorable. As that result from changes in firms' expectations of one would expect, productivity growth has slowed sales and profitability. A decade ago, extended backalong with the economy. But what is notable is that, logs on capital equipment meant a more stretched-out during the second half of 2000, output per hour process of production adjustments. advanced at a pace sufficiently impressive to provide Even consumer spending decisions have become strong support for the view that the rate of growth of increasingly responsive to changes in the perceived structural productivity remains well above its pace of profitability of firms through their effects on the value a decade ago. of households' holdings of equities. Stock market Moreover, although recent short-term business wealth has risen substantially relative to income in profits have softened considerably, most corporate recent years—itself a reflection of the extraordinary managers appear not to have altered to any appre- surge of innovation. As a consequence, changes in ciable extent their long-standing optimism about the stock market wealth have become a more important future returns from using new technology. A recent determinant of shifts in consumer spending relative survey of purchasing managers suggests that the to changes in current household income than was the wave of new on-line business-to-business activities case just five to seven years ago. is far from cresting. Corporate managers more gener- The hastening of the adjustment to emerging ally, rightly or wrongly, appear to remain remarkably imbalances is generally beneficial. It means that those sanguine about the potential for innovations to con- imbalances are not allowed to build until they require tinue to enhance productivity and profits. At least this very large corrections. But the faster adjustment prois what is gleaned from the projections of equity cess does raise some warning flags. Although the analysts, who, one must presume, obtain most of newer technologies have clearly allowed firms to their insights from corporate managers. According to make more informed decisions, business managers one prominent survey, the three- to five-year average throughout the economy also are likely responding to earnings projections of more than a thousand ana- much of the same enhanced body of information. As lysts, though exhibiting some signs of diminishing in a consequence, firms appear to be acting in far closer recent months, have generally held firm at a very alignment with one another than in decades past. The high level. Such expectations, should they persist, result is not only a faster adjustment, but one that is bode well for continued strength in capital accumula- potentially more synchronized, compressing changes tion and sustained elevated growth of structural pro- into an even shorter time frame. ductivity over the longer term. This very rapidity with which the current adjust- The same forces that have been boosting growth in ment is proceeding raises another concern, of a differstructural productivity seem also to have accelerated ent nature. While technology has quickened producthe process of cyclical adjustment. Extraordinary tion adjustments, human nature remains unaltered. improvements in business-to-business communica- We respond to a heightened pace of change and its tion have held unit costs in check, in part by greatly associated uncertainty in the same way we always speeding up the flow of information. New technolo- have. We withdraw from action, postpone decisions, gies for supply-chain management and flexible manu- and generally hunker down until a renewed, more facturing imply that businesses can perceive imbal- comprehensible basis for acting emerges. In its ances in inventories at a very early stage—virtually extreme manifestation, many economic decisionmakin real time—and can cut production promptly in ers not only become risk averse but attempt to disenresponse to the developing signs of unintended inven- gage from all risk. This precludes taking any initiatory building. tive, because risk is inherent in every action. In the fall of 1998, for example, the desire for liquidity Our most recent experience with some inventory became so intense that financial markets seized up. backup, of course, suggests that surprises can still Indeed, investors even tended to shun risk-free, preoccur and that this process is still evolving. Nonethe- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Testimony of Federal Reserve Officials 211 viously issued Treasury securities in favor of highly addition to the possibility of a break in confidence, liquid, recently issued Treasury securities. we do not know how far the adjustment of the stocks But even when decisionmakers are only somewhat of consumer durables and business capital equipment more risk averse, a process of retrenchment can has come. Also, foreign economies appear to be occur. Thus, although prospective long-term returns slowing, which could damp demands for exports; and on new high-tech investment may change little, although some sectors of the financial markets have increased uncertainty can induce a higher discount of improved in recent weeks, continued lender nervousthose returns and, hence, a reduced willingness to ness still is in evidence in other sectors. commit liquid resources to illiquid fixed investments. Because the advanced supply-chain management Such a process presumably is now under way and and flexible manufacturing technologies may have arguably may take some time to run its course. It is quickened the pace of adjustment in production and not that underlying demand for Internet, networking, incomes and correspondingly increased the stress on and communications services has become less keen. confidence, the Federal Reserve has seen the need to Instead, as I noted earlier, some suppliers seem to respond more aggressively than had been our wont in have reacted late to accelerating demand, have over- earlier decades. Economic policymaking could not, compensated in response, and then have been forced and should not, remain unaltered in the face of major to retrench—a not-unusual occurrence in business changes in the speed of economic processes. Fortudecisionmaking. nately, the very advances in technology that have A pace of change outstripping the ability of people quickened economic adjustments have also enhanced to adjust is just as evident among consumers as our capacity for real-time surveillance. among business decisionmakers. When consumers As I pointed out earlier, demand has been debecome less secure in their jobs and finances, they pressed by the rise in energy prices as well as by the retrench as well. needed slowing in the pace of accumulation of busi- It is difficult for economic policy to deal with the ness capital and consumer durable assets. The sharp abruptness of a break in confidence. There may not rise in energy costs pressed down on profit margins be a seamless transition from high to moderate to low still further in the fourth quarter. About a quarter of confidence on the part of businesses, investors, and the rise in total unit costs of nonfinancial, non-energy consumers. Looking back at recent cyclical epi- corporations reflected a rise in energy costs. The sodes, we see that the change in attitudes has often 12 percent rise in natural gas prices last quarter been sudden. In earlier testimony, I likened this contributed directly, and indirectly through its effects process to water backing up against a dam that is on the cost of electrical power generation, about onefinally breached. The torrent carries with it most fourth of the rise in overall energy costs for nonfinanremnants of certainty and euphoria that built up in cial, non-energy corporations; increases in oil prices earlier periods. accounted for the remainder. This unpredictable rending of confidence is one In addition, a significant part of the margin squeeze reason that recessions are so difficult to forecast. not directly attributable to higher energy costs prob- They may not be just changes in degree from a period ably has reflected the effects of the moderation in of economic expansion, but a different process engen- consumer outlays that, in turn, has been due in part to dered by fear. Our economic models have never been higher costs of energy, especially for natural gas. particularly successful in capturing a process driven Hence, it is likely that energy cost increases contribin large part by nonrational behavior. uted significantly more to the deteriorating profitabil- Although consumer confidence has fallen, at least ity of nonfinancial, non-energy corporations in the for now it remains at a level that in the past was fourth quarter than is suggested by the energy-related consistent with economic growth. And as I pointed rise in total unit costs alone. out earlier, expected earnings growth over the longer To be sure, the higher energy expenses of houserun continues to be elevated. If the forces contribut- holds and most businesses represent a transfer of ing to long-term productivity growth remain intact, income to producers of energy. But the capital investthe degree of retrenchment will presumably be lim- ment of domestic energy producers, and, very likely, ited. Prospects for high productivity growth should, consumption by their owners, have provided only with time, bolster both consumption and investment a small offset to the constraining effects of higher demand. Before long in this scenario, excess inven- energy costs on spending by most Americans. Moretories would be run off to desired levels. over, a significant part of the extra expense is sent Still, as the FOMC noted in its last announcement, overseas to foreign energy producers, whose demand for the period ahead, downside risks predominate. In for exports from the United States is unlikely to rise Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
212 Federal Reserve Bulletin • April 2001 enough to compensate for the reduction in domestic ity. Because the market for Treasury securities is spending, especially in the short run. Thus, given the going to become much less deep and liquid if outevident inability of energy users, constrained by standing supplies shrink as projected, we will have to intense competition for their own products, to pass on turn to acceptable substitutes. Last year the Federal much of their cost increases, the effects of the rise Reserve System initiated a study of alternative in energy costs does not appear to have had broad approaches to managing our portfolio. inflationary effects, in contrast to some previous epi- At its late January meeting, the FOMC discussed sodes when inflation expectations were not as well this issue at length, and it is taking several steps to anchored. Rather, the most prominent effects have help better position the Federal Reserve to address been to depress aggregate demand. The recent decline the alternatives. First, as announced on January 31, in energy prices and further declines anticipated by the Committee extended the temporary authority, in futures markets, should they occur, would tend to effect since late August 1999, for the Trading Desk at boost purchasing power and be an important factor the Federal Reserve Bank of New York to conduct supporting a recovery in demand growth over coming repurchase agreements in mortgage-backed securities quarters. guaranteed by the agencies as well as in Treasuries and direct agency debt. Thus, for the time being, the Desk will continue to rely on the same types of ECONOMIC PROJECTIONS temporary open market operations in use for the past year and a half to offset transitory factors affecting The members of the Board of Governors and the reserve availability. Reserve Bank presidents foresee an implicit strength- Second, the FOMC is examining the possibility of ening of activity after the current rebalancing is over, beginning to acquire under repurchase agreements although the central tendency of their individual fore- some additional assets that the Federal Reserve Act casts for real GDP still shows a substantial slow- already authorizes the Federal Reserve to purchase. down, on balance, for the year as a whole. The cen- In particular, the FOMC asked the staff to explore the tral tendency for real GDP growth over the four possible mechanisms for backing our usual repurquarters of this year is 2 to 2Vi percent. Because this chase operations with the collateral of certain debt average pace is below the rise in the economy's obligations of U.S. states and foreign governments. potential, they see the unemployment rate increasing We will also be consulting with the Congress on to about 41/2 percent by the fourth quarter of this year. these possible steps before the FOMC further consid- The central tendency of their forecasts for inflation, ers such transactions. Taking such assets in repuras measured by the prices for personal consump- chase operations would significantly expand and tion expenditures, suggests an abatement to 13A to diversify the assets our counterparties could post 2V4 percent over this year from 2xh percent over in temporary open market operations, reducing the 2000. potential for any impact on the pricing of privatesector instruments. Finally, the FOMC decided to study further the GOVERNMENT DEBT REPAYMENT AND THE even longer-term issue of whether it will ultimately IMPLEMENTATION OF MONETARY POLICY be necessary to expand the use of the discount window or to request the Congress for a broadening of its Federal budget surpluses have bolstered national sav- statutory authority for acquiring assets via open maring, providing additional resources for investment ket operations. How quickly the FOMC will need and, hence, contributing to the rise in the capital to address these longer-run portfolio choices will stock and our standards of living. However, the pro- depend on how quickly the supply of Treasury secuspective decline in Treasury debt outstanding implied rities declines as well as the usefulness of the alternaby projected federal budget surpluses does pose a tive assets already authorized by law. challenge to the implementation of monetary policy. In summary, although a reduced availability of The Federal Reserve has relied almost exclusively on Treasury securities will require adjustments in the increments to its outright holdings of Treasury securi- particular form of our open market operations, there ties as the "permanent" asset counterpart to the is no reason to believe that we will be unable to uptrend in currency in circulation, our primary liabil- implement policy as required. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Testimony of Federal Reserve Officials 213 Testimony by Chairman Alan Greenspan, before the their downtrend over the past decade, the emerging Committee on Financial Services, U.S. House of Rep- imbalances appeared considerably larger. Reflecting resentatives, February 28, 2001 these growing imbalances, manufacturing purchasing managers reported last month that inventories in the I appreciate the opportunity this morning to present hands of their customers had risen to excessively the Federal Reserve's semiannual report on monetary high levels. policy. As a result, a round of inventory rebalancing The past decade has been extraordinary for the appears to be in progress. Accordingly, the slowdown American economy and monetary policy. The syner- in the economy that began in the middle of 2000 gies of key technologies markedly elevated prospec- intensified, perhaps even to the point of growth stalltive rates of return on high-tech investments, led to a ing out around the turn of the year. As the economy surge in business capital spending, and significantly slowed, equity prices fell, especially in the high-tech increased the underlying growth rate of productivity. sector, where previous high valuations and opti- The capitalization of those higher expected returns mistic forecasts were being reevaluated, resulting in boosted equity prices, contributing to a substantial significant losses for some investors. In addition, pickup in household spending on new homes, durable lenders turned more cautious. This tightening of goods, and other types of consumption generally, financial conditions, itself, contributed to restraint on beyond even that implied by the enhanced rise in real spending. incomes. Against this background, the Federal Open Market When I last reported to you in July, economic Committee (FOMC) undertook a series of aggressive growth was just exhibiting initial signs of slowing monetary policy steps. At its December meeting, the from what had been an exceptionally rapid and unsus- FOMC shifted its announced assessment of the baltainable rate of increase that began a year earlier. ance of risks to express concern about economic The surge in spending had lifted the growth of the weakness, which encouraged declines in market stocks of many types of consumer durable goods and interest rates. Then on January 3, and again on Janubusiness capital equipment to rates that could not ary 31, the FOMC reduced its targeted federal funds be continued. The elevated level of light vehicle rate ]/2 percentage point, to its current level of sales, for example, implied a rate of increase in the 51/2 percent. An essential precondition for this type of number of vehicles on the road hardly sustainable response was that underlying cost and price pressures for a mature industry. And even though demand remained subdued, so that our front-loaded actions for a number of high-tech products was doubling or were unlikely to jeopardize the stable, low-inflation tripling annually, in many cases new supply was environment necessary to foster investment and coming on even faster. Overall, capacity in high-tech advances in productivity. manufacturing industries rose nearly 50 percent last With signs of softness still patently in evidence at year, well in excess of its rapid rate of increase over the time of its January meeting, the FOMC retained the previous three years. Hence, a temporary glut in its sense that downside risks predominate. The excepthese industries and falling prospective rates of return tional degree of slowing so evident toward the end of were inevitable at some point. Clearly, some slowing last year (perhaps in part the consequence of adverse in the pace of spending was necessary and expected if weather) seemed less evident in January and Februthe economy was to progress along a balanced and ary. Nonetheless, the economy appears to be on a sustainable growth path. track well below the productivity-enhanced rate of But the adjustment has occurred much faster than growth of its potential and, even after the policy most businesses anticipated, with the process likely actions we took in January, the risks continue skewed intensified by the rise in the cost of energy that has toward the economy's remaining on a path inconsisdrained business and household purchasing power. tent with satisfactory economic performance. Purchases of durable goods and investment in capital Crucial to the assessment of the outlook and the equipment declined in the fourth quarter. Because understanding of recent policy actions is the role of the extent of the slowdown was not anticipated by technological change and productivity in shaping businesses, it induced some backup in inventories, near-term cyclical forces as well as long-term sustaindespite the more advanced just-in-time technologies able growth. that have in recent years enabled firms to adjust The prospects for sustaining strong advances in production levels more rapidly to changes in demand. productivity in the years ahead remain favorable. As Inventory-sales ratios rose only moderately; but one would expect, productivity growth has slowed relative to the levels of these ratios implied by along with the economy. But what is notable is that, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
214 Federal Reserve Bulletin • April 2001 during the second half of 2000, output per hour ment meant a more stretched-out process of producadvanced at a pace sufficiently impressive to provide tion adjustments. strong support for the view that the rate of growth of Even consumer spending decisions have become structural productivity remains well above its pace of increasingly responsive to changes in the perceived a decade ago. profitability of firms through their effects on the value Moreover, although recent short-term business of households' holdings of equities. Stock market profits have softened considerably, most corporate wealth has risen substantially relative to income in managers appear not to have altered to any appre- recent years—itself a reflection of the extraordinary ciable extent their long-standing optimism about the surge of innovation. As a consequence, changes in future returns from using new technology. A recent stock market wealth have become a more important survey of purchasing managers suggests that the determinant of shifts in consumer spending relative wave of new on-line business-to-business activities to changes in current household income than was the is far from cresting. Corporate managers more gener- case just five to seven years ago. ally, rightly or wrongly, appear to remain remarkably The hastening of the adjustment to emerging sanguine about the potential for innovations to con- imbalances is generally beneficial. It means that those tinue to enhance productivity and profits. At least this imbalances are not allowed to build until they require is what is gleaned from the projections of equity very large corrections. But the faster adjustment proanalysts, who, one must presume, obtain most of cess does raise some warning flags. Although the their insights from corporate managers. According to newer technologies have clearly allowed firms to one prominent survey, the three- to five-year average make more informed decisions, business managers earnings projections of more than a thousand ana- throughout the economy also are likely responding to lysts, though exhibiting some signs of diminishing much of the same enhanced body of information. As in recent months, have generally held at a very high a consequence, firms appear to be acting in far closer level. Such expectations, should they persist, bode alignment with one another than in decades past. The well for continued strength in capital accumulation result is not only a faster adjustment, but one that is and sustained elevated growth of structural productiv- potentially more synchronized, compressing changes ity over the longer term. into an even shorter time frame. The same forces that have been boosting growth in This very rapidity with which the current adjuststructural productivity seem also to have accelerated ment is proceeding raises another concern, of a differthe process of cyclical adjustment. Extraordinary ent nature. While technology has quickened producimprovements in business-to-business communica- tion adjustments, human nature remains unaltered. tion have held unit costs in check, in part by greatly We respond to a heightened pace of change and its speeding up the flow of information. New technolo- associated uncertainty in the same way we always gies for supply-chain management and flexible manu- have. We withdraw from action, postpone decisions, facturing imply that businesses can perceive imbal- and generally hunker down until a renewed, more ances in inventories at a very early stage—virtually comprehensible basis for acting emerges. In its in real time—and can cut production promptly in extreme manifestation, many economic decisionmakresponse to the developing signs of unintended inven- ers not only become risk averse but attempt to disentory building. gage from all risk. This precludes taking any initia- Our most recent experience with some inventory tive, because risk is inherent in every action. In the backup, of course, suggests that surprises can still fall of 1998, for example, the desire for liquidity occur and that this process is still evolving. None- became so intense that financial markets seized up. theless, compared with the past, much progress is Indeed, investors even tended to shun risk-free, preevident. A couple of decades ago, inventory data viously issued Treasury securities in favor of highly would not have been available to most firms until liquid, recently issued Treasury securities. weeks had elapsed, delaying a response and, hence, But even when decisionmakers are only somewhat eventually requiring even deeper cuts in produc- more risk averse, a process of retrenchment can tion. In addition, the foreshortening of lead times occur. Thus, although prospective long-term returns on delivery of capital equipment, a result of informa- on new high-tech investment may change little, tion and other newer technologies, has engendered increased uncertainty can induce a higher discount of a more rapid adjustment of capital goods produc- those returns and, hence, a reduced willingness to tion to shifts in demand that result from changes commit liquid resources to illiquid fixed investments. in firms' expectations of sales and profitability. A Such a process presumably is now under way and decade ago, extended backlogs on capital equiparguably may take some time to run its course. It is Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Testimony of Federal Reserve Officials 215 not that underlying demand for Internet, networking, continued nervousness is evident in the behavior of and communications services has become less keen. participants in financial markets, keeping risk spreads Instead, as I noted earlier, some suppliers seem to relatively elevated. have reacted late to accelerating demand, have over- Because the advanced supply-chain management compensated in response, and then have been forced and flexible manufacturing technologies may have to retrench—a not-unusual occurrence in business quickened the pace of adjustment in production and decisionmaking. incomes and correspondingly increased the stress on A pace of change outstripping the ability of people confidence, the Federal Reserve has seen the need to to adjust is just as evident among consumers as respond more aggressively than had been our wont in among business decisionmakers. When consumers earlier decades. Economic policymaking could not, become less secure in their jobs and finances, they and should not, remain unaltered in the face of major retrench as well. changes in the speed of economic processes. Fortu- It is difficult for economic policy to deal with the nately, the very advances in technology that have abruptness of a break in confidence. There may not quickened economic adjustments have also enhanced be a seamless transition from high to moderate to low our capacity for real-time surveillance. confidence on the part of businesses, investors, and As I pointed out earlier, demand has been deconsumers. Looking back at recent cyclical episodes, pressed by the rise in energy prices as well as by the we see that the change in attitudes has often been needed slowing in the pace of accumulation of busisudden. In earlier testimony, I likened this process to ness capital and consumer durable assets. The sharp water backing up against a dam that is finally rise in energy costs pressed down on profit margins breached. The torrent carries with it most remnants of still further in the fourth quarter. About a quarter of certainty and euphoria that built up in earlier periods. the rise in total unit costs of nonfinancial, non-energy This unpredictable rending of confidence is one corporations reflected a rise in energy costs. The reason that recessions are so difficult to forecast. 12 percent rise in natural gas prices last quarter They may not be just changes in degree from a period contributed directly, and indirectly through its effects of economic expansion, but a different process engen- on the cost of electrical power generation, about dered by fear. Our economic models have never been one-fourth of the rise in overall energy costs for particularly successful in capturing a process driven nonfinancial, non-energy corporations; increases in in large part by nonrational behavior. oil prices accounted for the remainder. In addition, a For this reason, changes in consumer confidence significant part of the margin squeeze not directly will require close scrutiny in the period ahead, espe- attributable to higher energy costs probably has cially after the steep falloff of recent months. But for reflected the effects of the moderation in consumer now, at least, the weakness in sales of motor vehicles outlays that, in turn, has been due in part to higher and homes has been modest, suggesting that consum- costs of energy, especially for natural gas. Hence, it ers have retained enough confidence to make longer- is likely that energy cost increases contributed sigterm commitments; and, as I pointed out earlier, nificantly more to the deteriorating profitability of expected earnings growth over the longer run contin- nonfinancial, non-energy corporations in the fourth ues to be elevated. Obviously, if the forces contribut- quarter than is suggested by the energy-related rise in ing to long-term productivity growth remain intact, total unit costs alone. the degree of retrenchment will presumably be lim- To be sure, the higher energy expenses of houseited. In that event, prospects for high productivity holds and most businesses represent a transfer of growth should, with time, bolster both consumption income to producers of energy. But the capital investand investment demand. Before long in this scenario, ment of domestic energy producers, and, very likely, excess inventories would be run off to desired levels. consumption by their owners, have provided only a Higher demand should also facilitate the working-off small offset to the constraining effects of higher of a presumed excess of capital stock, though, doubt- energy costs on spending by most Americans. Moreless, at a more modest pace. over, a significant part of the extra expense is sent Still, as the FOMC noted in its last announcement, overseas to foreign energy producers, whose demand for the period ahead, downside risks predominate. In for exports from the United States is unlikely to rise addition to the possibility of a break in confidence, enough to compensate for the reduction in domestic we do not know how far the adjustment of the stocks spending, especially in the short run. Thus, given of consumer durables and business capital equipment the evident inability of energy users, constrained by has come. Also, foreign economies appear to be intense competition for their own products, to pass on slowing, which could damp demands for exports; and much of their cost increases, the rise in energy costs Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
216 Federal Reserve Bulletin • April 2001 does not appear to have had broad inflationary effects, excesses built up in 1999 and early 2000 have engenin contrast to some previous episodes when inflation dered a retrenchment that has yet to run its full expectations were not as well anchored. Rather, the course. This retrenchment has been prompt, in part most prominent effects have been to depress aggre- because new technologies have enabled businesses to gate demand. The recent decline in energy prices and respond more rapidly to emerging excesses. Accordfurther declines anticipated by futures markets, ingly, to foster financial conditions conducive to the should they occur, would tend to boost purchasing economy's realizing its long-term strengths, the Fedpower and be an important factor supporting a recov- eral Reserve has quickened the pace of adjustment of ery in demand growth over coming quarters. its policy. • In summary, then, although the sources of longterm strength of our economy remain in place, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
217 Announcements CHAIRMAN GREENSPAN ON RENOMINATION OF pleting the transaction, the ATM operator must also VICE CHAIRMAN FERGUSON TO BOARD OF disclose that a fee will be imposed, together with the GOVERNORS amount of the fee, either on the ATM screen or on a paper notice. No fee may be imposed unless proper Federal Reserve Board Chairman Alan Greenspan notice is provided and the consumer elects to comissued the following statement on March 5, 2001: plete the transaction. In addition, when the consumer contracts for an EFT service, the financial institution Roger Ferguson has been a distinguished and respected holding the consumer's account must provide initial member of the Federal Reserve Board, exercising sound disclosures, including a notice that a fee may be judgment and benefiting our work on a wide range of imposed by an ATM operator not holding the condomestic and international policy matters. I welcome his nomination to another term on the Board. sumer's account or by any national, regional, or local network used to complete the transaction. The revisions are effective immediately; compliance is mandatory as of October 1, 2001. VICE CHAIRMAN FERGUSON ON HIS RENOMINATION TO BOARD OF GOVERNORS Federal Reserve Board member Roger W. Fergu- SPANISH-LANGUAGE CONSUMER RESOURCES son, Jr. issued the following statement on March 5, ON VEHICLE LEASING AND HOME MORTGAGES 2001: The Federal Reserve Board on March 8, 2001, I am pleased that President Bush has announced his announced two new Internet resources for Spanishintention to nominate me to a full term on the Federal speaking consumers. Reserve Board. My experience on the Board has been enormously gratifying. I'm delighted to have the opportunity to continue my work with Chairman Greenspan and Consejos para arrendar un vehiculo: Guia del our colleagues on the Board. consumidor {Keys to Vehicle Leasing: A Consumer Guide) at www.federalreserve.gov/pubs/leasing/ guide_spanish.htm. The site provides an overview of AMENDMENT TO REGULATION E REGARDING the most common type of vehicle lease used by the DISCLOSURE REQUIREMENT FOR ATM FEES automotive industry, a closed-end lease. The four key messages of the consumer guide are the following: The Federal Reserve Board published on March 1, 2001, a final rule amending Regulation E (Electronic • Arrendar un vehiculo es distinto a comprarlo. Fund Transfers) to implement provisions of the (Leasing is different from buying.) Gramm-Leach-Bliley (GLB) Act requiring disclo- • Considere los costos al inicio, durante y al final sure of automated teller machine (ATM) fees. del contrato de arrendamiento. (Consider beginning, The GLB Act amended Regulation E by requiring middle, and end-of-lease costs.) disclosure of fees imposed by ATM operators (some- • Se puede comparar distintas ofertas de arrendatimes referred to as "surcharges"). Many ATM miento y negociar algunas de las condiciones. (Comoperators that impose such fees already disclose pare different lease offers and negotiate terms.) information about the fee to satisfy existing Regula- • Conozca sus derechos y responsabilidades. tion E and ATM interchange network requirements. (Know your rights and responsibilities.) Under the amendments to the GLB Act, an ATM operator that imposes a fee on a consumer for an A sample consumer leasing form (muestra del electronic fund transfer (EFT) service is required to formulario de arrendamiento para el consumidor) is provide notice of that fact in a prominent and con- included so consumers can become more familiar spicuous location on or at the ATM where the EFT is with the documents they will receive when leasing initiated. Before the consumer is committed to com- a vehicle. An English-language version of the same Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
218 Federal Reserve Bulletin • April 2001 material is available at www.federalreserve.gov/pubs/ reason why it is important for consumers to ask leasing/guide.htm. questions about costs and negotiate for the best deal. The brochure also contains a worksheet that consum- Buscando la hipoteca mas favorable: Compare, ers can use to compare costs while shopping. The Verifique, Negocie (Looking for the Best Mortgage: worksheet lists commonly charged fees and closing Shop, Compare, Negotiate) is available at www. costs, as well as useful questions consumers may ask federalreserve. go v/pubs/mortgage/mortb_ 1 _spanish. lenders when they shop for a loan. htm. The site describes how comparing and negotiat- The publication outlines common sources for home ing interest rates, fees, and other payment terms may loans and explains rates, points, and fees. The brohelp consumers get the best financing and possibly chure highlights some of the laws that protect consave thousands of dollars, whether the purpose is for sumers from unfair lending practices. It also emphaa home purchase, refinancing, or home equity loan. sizes that even consumers with past credit problems The site outlines key steps to take in the mortgage- should shop around and negotiate for the best deal. shopping process: Finally, the brochure includes a mortgage loan shopping form that consumers can use to record loan • Obtenga informacion de varias fuentes de quotes from two or more lenders or brokers for later credito. (Obtain information from several lenders.) data comparison to help identify or negotiate the best • Obtenga toda la informacion sobre los costos. deal. (Obtain all important cost information.) The members of the interagency task force are the • Negocie el trato mas favorable. (Negotiate for Department of Housing and Urban Development, the best deal.) Department of Justice, Federal Deposit Insurance Corporation, Federal Housing Finance Board, Fed- A mortgage-shopping worksheet (hoja de calculo eral Reserve Board, Federal Trade Commission, para prestamos hipotecarios) helps consumers com- National Credit Union Administration, Office of pare different loans and different lenders to obtain the Federal Housing Enterprise Oversight, Office of the best deal. Comptroller of the Currency, and Office of Thrift An English-language version of the material is Supervision. available at www.federalreserve.gov/pubs/mortgage/ Single printed copies of the brochure are availmortb_l.htm. able free of charge upon request from the member Print copies of both the Spanish and English ver- agencies. The brochure can also be printed from sions of Consejos para arrendar un vehiculo: Guia the U.S. Consumer Gateway web site (http:// del consumidor (Keys to Vehicle Leasing: A Con- www.consumer.gov) and from the following agency sumer Guide) and Buscando la hipoteca mas favo- web sites: rable: Compare, Verifique, Negocie (Looking for the Best Mortgage: Shop, Compare, Negotiate) are avail- • Department of Housing and Urban Development able by contacting the Federal Reserve Board, Pub- (HUD): http://www.hud.gov. Or call HUD at 800lications Services, Mail Stop 127, Washington, DC 767-7468. 20551. Or phone 202-452-3245. The first 100 copies • Department of Justice: http://www.usdoj.gov/crt/ are free of charge. housing/hcehome.html. Or contact Jane Dyer, U.S. In conjunction, the Federal Interagency Task Force Department of Justice, Civil Rights Division, Houson Fair Lending has also published in brochure form ing and Civil Enforcement Section, P.O. Box 65998, the Spanish-language version of Looking for the Best Washington, DC 20035. Phone: 202-514-4744. Mortgage: Shop, Compare, Negotiate (Buscando • Federal Deposit Insurance Corporation (FDIC): la hipoteca mas favorable: Compare, Verifique, http://www.fdic.gov/publish/coaffpr.html. Or contact Negocie). the FDIC's Public Information Center, 801 17th The brochure notes that lenders and brokers may Street, NW, Room 100, Washington, DC 20434. offer different prices for the same loan to different Phone: 800-276-6003 or 202-416-6940. consumers, even if consumers have the same credit • Federal Housing Finance Board (FHFB): http:// qualifications. These different prices may result when www.fhfb.gov. Or contact the FHFB, 1777 F Street, loan officers and brokers are allowed to keep some or Washington, DC 20006. Or phone Roberta Youmans: all of the difference between the lowest available 202-408-2581. price and any higher price that the consumer agrees • Federal Trade Commission (FTC): http:// to pay. The effect of this type of compensation www.ftc.gov. Or write to the FTC's Consumer arrangement on the price of the loan is just one Response Center, Room 130, 600 Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Announcements 219 Avenue, NW, Washington, DC 20580. Or phone Technology (IT). In conjunction with the reorgani- 877-FTC-HELP (877-382-4357, toll-free); TDD zation, the Board announced the following official for the hearing impaired: 202-326-2502. staff actions: the promotion of Raymond H. Massey • National Credit Union Administration (NCUA): to associate director, a rotational assignment of http://www.ncua.gov. Or contact Bob Loftus, Direc- Tillena G. Clark to the Division of Reserve Bank tor of Public Affairs, NCUA, 1775 Duke Street, Alex- Operations and Payment Systems (RBOPS) as assisandria, VA 22314. Phone: 703-518-6330. tant director for Bank Planning and Control and • Office of Federal Housing Enterprise Oversight: Federal Reserve Bank Financial Accounting, the http://www.ofheo.gov, under "Public Documents." appointment of Susan F. Marycz to the official staff Or contact Stefanie Mullin, Deputy Associate Direc- as assistant director, and the appointment of tor for Public Affairs, 700 G Street, NW, Washing- Wayne A. Edmondson to the official staff as assistant ton, DC 20552. Phone: 202-414-6922. director. • Office of the Comptroller of the Currency Mr. Massey will oversee three branches of the (OCC): http://www.occ.treas.gov. Or contact the division: Financial Systems, Telecommunications, OCC, Communications, Mail Stop 3-2, 250 E Street, and Security, Systems & Data Center. He has previ- SW, Washington, DC 20219. Phone: 202-874-4700. ously managed many of the division's and FFIEC's • Office of Thrift Supervision (OTS): http:// complex software projects as well as the IT infrawww.ots.treas.gov. Or contact OTS, Publications, structure. Mr. Massey was appointed an assistant 1700 G Street, NW, Washington, DC 20552. Phone: director in 1990. 202-906-6410 (OTS Publications Hotline). Ms. Clark will serve a rotational assignment in the • Federal Consumer Information Center (FCIC): RBOPS Division from March 2001 through April http://www.pueblo.gsa.gov. Print copies of the bro- 2002. She joined the Board in 1995 and currently chure are also available at 50 cents per copy; write to serves as the IT Division's chief financial officer; she the FCIC, Pueblo, CO 81009. was appointed an assistant director in 1999. She will complete work at the Stonier School of Banking in June 2001. CHANGES IN BOARD STAFF Ms. Marycz will oversee the Telecommunications The Board of Governors approved on February 12, Branch. She joined the Board in 1985 and has held 2001, the appointment of two new officers in the several management positions in the division. She is Office of Board Members: Michelle A. Smith as responsible for planning, evaluation, and integra- Assistant to the Board and John Lopez as Special tion of new technologies for the Board's electronic Assistant to the Board. network services. Ms. Marycz holds a B.A. from Michelle A. Smith, who joined the Board on Feb- Millersville University and a B.S. from the Univerruary 20, will oversee the internal management of sity of Maryland. She is enrolled in the Stonier the public affairs office and assist Board members School of Banking. and officials in their communications activities. Mr. Edmondson will oversee the Consumer and Ms. Smith spent the last eight years at the Treasury Community Affairs and FFIEC Systems Branch. He Department, most recently as the Assistant Secretary joined the Board in 1984 and has managed many of for Public Affairs. She is a graduate of Baylor Uni- the Board's key information systems. Mr. Edmondversity, where she also earned a master's degree in son holds a B.A. from Morehouse College and a B.S. journalism. from the University of Maryland. He will complete John Lopez supports the Board's congressional work at the Stonier School of Banking in June 2002. liaison program, which facilitates effective communication between the Board and the Congress. He currently serves as the Congressional Liaison Assis- REVISION TO THE MONEY STOCK DATA tant and worked previously as Senior Counsel to the Domestic and International Monetary Policy Sub- Measures of the money stock aggregates and compocommittee of the House Banking Committee. nents were revised in February 2001 to incorporate Mr. Lopez is a graduate of Princeton University and the results of the annual benchmark and seasonal received a law degree from the University of factor review. Data in table 1.10 and table 1.21 in the Virginia. statistical appendix to the Federal Reserve Bulletin reflect these changes beginning with this issue. For The Board of Governors approved on February 12, 2000, the revisions raised the annual growth rate of 2001, a restructuring of the Division of Information M2 and M3 0.2 percentage point. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
220 Federal Reserve Bulletin • April 2001 The benchmark incorporates revisions to vault cash seasonal factors also reduced the M3 growth rate in that reflect a new estimation method for credit unions the first quarter of 2000 but increased growth in the that do not file the Federal Reserve's deposit reports final three quarters of the year. either weekly or quarterly. The revisions begin in Revised historical data are available in printed April 1984, and the maximum absolute revision is form from the Monetary and Reserve Analysis Sec- $1 billion. The benchmark also incorporates revised tion, Mail Stop 72, Board of Governors of the Fedhistorical data on the holdings of large time deposits eral Reserve System, Washington, DC 20551. Phone: by money market mutual funds, an item that is sub- 202-452-3062. Complete historical data are released tracted from gross large time deposits when calculat- each week in the H.6 statistical release on the Board's ing the large time deposit component of M3. These web site (http://www.federalreserve.gov/releases/). revisions begin in March 1980, and the maximum Current and historical data are also on the Economic absolute revision is about $43 billion. The revised Bulletin Board of the U.S. Department of Commerce. data also incorporate the receipt of historical informa- For paid electronic access to the bulletin board, call tion from other routine data flows. STAT-USA at 1-800-782-8872 or 202-482-1986. Seasonally adjusted measures of the monetary The benchmark in February 2001 is the last at the stock and components also incorporate revised sea- annual frequency. Beginning in March 2001, benchsonal factors produced from benchmarked data marks are conducted at a quarterly frequency in order through December 2000. The X-12-ARIMA proce- to provide more timely updates of published data. dure was used to derive monthly seasonal factors. The quarterly benchmark review incorporates revised The monthly and weekly seasonal factors were historical data for depository institutions and money derived after excluding the estimated effects of the market mutual funds, data from the Call Reports filed century date change. These adjustments were made to by depository institutions, and data on money market ensure that unusual movements around the century mutual funds that began reporting data for the first date change did not influence the estimated seasonal time during the quarter. factors. The revisions to seasonal factors lowered M2 The review of seasonal factors for the monetary growth rates in the first two quarters of 2000 and aggregates will continue to be performed annually, raised them in the last two quarters. The revisions to with the results released in early February. • 1. Monthly seasonal factors used to construct Ml, January 2000-March 2002 Other checkable deposits1 NNoonnbbaannkk ttrraavveelleerrss YYeeaarr aanndd mmoonntthh CCuurrrreennccyy DDeemmaanndd ddeeppoossiittss cchheecckkss Total j At banks 2000—January .9965 1.0193 1.0066 1.0104 1.0158 February .9972 1.0242 .9729 .9919 .9981 March .9998 1.0187 .9836 .9998 1.0026 April 1.0013 1.0204 1.0036 1.0196 1.0196 May .9999 1.0122 .9835 .9964 .9984 June 1.0001 .9802 .9928 .9996 1.0000 July 1.0014 .9539 1.0054 .9938 .9900 August .9981 .9619 .9995 .9917 .9899 September .9974 .9797 .9942 .9912 .9902 October .9975 .9987 1.0002 .9944 .9913 November 1.0011 1.0194 1.0169 1.0004 .9954 December 1.0099 1.0191 1.0491 1.0147 1.0090 2001—January .9959 1.0188 1.0002 1.0091 1.0158 February .9972 1.0254 .9712 .9906 .9978 March 1.0000 1.0191 .9837 .9987 1.0023 April 1.0009 1.0211 1.0001 1.0177 1.0199 May 1.0001 1.0115 .9834 .9961 .9987 June 1.0013 .9785 .9962 1.0005 1.0000 July 1.0013 .9535 1.0041 .9936 .9899 August .9986 .9579 1.0009 .9926 .9899 September .9969 .9794 .9971 .9914 .9900 October .9972 .9996 1.0003 .9950 .9914 November 1.0014 1.0213 1.0170 1.0014 .9954 December 1.0086 1.0199 1.0481 1.0148 1.0091 2002—January .9956 1.0202 .9984 1.0089 1.0159 February .9971 1.0262 .9695 .9897 .9978 March 1.0008 1.0193 .9861 .9984 1.0021 1. Seasonally adjusted other checkable deposits at thrifts are derived as the difference between total other checkable deposits, seasonally adjusted, and seasonally adjusted other checkable deposits at commercial banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Announcements 221 2. Monthly seasonal factors used to construct M2 and M3, January 2000-March 2002 SSaavviinnggss aanndd SSmmaallll-- LLaarrggee-- Money market mutual funds YYeeaarr aanndd mmoonntthh MMMMDDAA ddeennoommiinnaattiioonn ddeennoommiinnaattiioonn RRPPss EEuurrooddoollllaarrss ddeeppoossiittss11 ttiimmee ddeeppoossiittss11 ttiimmee ddeeppoossiittss11 In M2 In M3 only 2000—January .9991 1.0020 .9899 1.0092 1.0328 1.0000 1.0114 February .9948 1.0031 .9999 1.0178 1.0343 1.0127 1.0077 March 1.0042 1.0021 1.0074 1.0270 1.0195 1.0089 1.0032 April 1.0167 1.0004 1.0069 1.0236 .9967 .9927 1.0017 May .9972 .9970 1.0081 .9904 .9867 1.0139 1.0122 June 1.0009 .9952 1.0040 .9859 .9797 1.0099 1.0012 July .9999 .9976 .9979 .9795 .9713 .9985 .9861 August .9964 .9987 .9935 .9928 .9846 .9983 .9891 September .9983 1.0001 .9938 .9931 .9778 .9910 .9877 October .9932 1.0015 .9957 .9902 .9873 .9859 .9926 November .9970 1.0020 1.0016 .9887 1.0050 .9978 .9959 December 1.0033 1.0004 .9991 .9976 1.0233 .9916 1.0120 2001—January .9984 1.0018 .9914 1.0108 1.0335 .9983 1.0092 February .9944 1.0033 1.0006 1.0195 1.0350 1.0129 1.0057 March 1.0046 1.0026 1.0080 1.0287 1.0199 1.0080 1.0048 April 1.0165 1.0008 1.0069 1.0252 .9955 .9908 1.0029 May .9971 .9967 1.0082 .9911 .9858 1.0138 1.0094 June 1.0016 .9946 1.0044 .9854 .9786 1.0126 1.0025 July .9991 .9974 .9975 .9784 .9731 .9997 .9883 August .9962 .9989 .9942 .9914 .9860 .9989 .9892 September .9988 1.0003 .9932 .9921 .9793 .9924 .9890 October .9926 1.0015 .9946 .9897 .9872 .9866 .9940 November .9968 1.0020 1.0004 .9876 1.0041 .9959 .9969 December 1.0032 1.0002 .9992 .9979 1.0216 .9910 1.0085 2002—January .9986 1.0015 .9923 1.0118 1.0333 .9970 1.0080 February .9941 1.0034 1.0009 1.0203 1.0350 1.0121 1.0048 March 1.0054 1.0029 1.0084 1.0293 1.0198 1.0065 1.0059 1. Seasonal factors are applied to deposits data at both commercial banks and thrift institutions. 3. Weekly seasonal factors used to construct Ml, December 4, 2000-April 1, 2002 Other checkable deposits' NNoonnbbaannkk ttrraavveelleerrss WWeeeekk eennddiinngg CCuurrrreennccyy DDeemmaanndd ddeeppoossiittss cchheecckkss Total At banks 2000—December 4 1.0024 1.0297 1.0431 1.0129 1.0019 11 1.0057 1.0247 1.0087 .9939 .9872 18 1.0070 1.0197 1.0376 1.0033 1.0023 25 1.0183 1.0148 1.0586 1.0239 1.0208 22000011——JJaannuuaarryy 1 1.0114 1.0100 1.1147 1.0451 1.0376 8 1.0034 1.0134 1.0179 1.0206 1.0202 15 .9973 1.0168 .9922 1.0040 1.0107 22 .9931 1.0203 .9822 1.0020 1.0132 29 .9889 1.0238 .9890 1.0029 1.0139 FFeebbrruuaarryy 5 .9951 1.0273 .9747 1.0000 1.0045 12 .9980 1.0262 .9662 .9865 .9945 19 .9985 1.0251 .9680 .9844 .9933 26 .9958 1.0241 .9772 .9928 1.0008 March 5 1.0004 1.0230 .9711 .9951 .9983 12 1.0019 1.0211 .9696 .9904 .9944 19 .9999 1.0191 .9818 .9932 .9988 26 .9981 1.0172 .9877 1.0021 1.0081 AApprriill 2 .9981 1.0153 1.0269 1.0225 1.0197 9 1.0046 1.0177 .9886 1.0121 1.0115 16 1.0024 1.0202 1.0056 1.0173 1.0219 23 .9984 1.0227 1.0032 1.0255 1.0328 30 .9981 1.0253 .9959 1.0151 1.0158 MMaayy 7 1.0031 1.0202 .9635 1.0007 .9984 14 1.0018 1.0152 .9779 .9884 .9928 21 .9999 1.0102 .9856 .9915 .9962 28 .9993 1.0053 .9943 .9985 1.0019 June 4 .9983 1.0004 .9948 1.0033 1.0004 11 1.0033 .9897 .9821 .9943 .9936 18 1.0010 .9792 .9898 .9980 .9994 25 .9993 .9689 .9941 1.0018 1.0045 JJuullyy 2 1.0010 .9589 1.0387 1.0110 1.0067 9 1.0064 .9566 1.0038 .9946 .9885 16 1.0020 .9544 .9875 .9843 .9834 23 .9995 .9522 .9918 .9887 .9871 30 .9973 .9500 1.0205 1.0005 .9960 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
222 Federal Reserve Bulletin • April 2001 3. Weekly seasonal factors used to construct Ml, December 4, 2000-April 1, 2002—Continued Other checkable deposits1 NNoonnbbaannkk ttrraavveelleerrss WWeeeekk eennddiinngg CCuurrrreennccyy DDeemmaanndd ddeeppoossiittss cchheecckkss Total At banks August 6 1.0015 .9478 .9875 .9938 .9882 13 1.0010 .9532 .9904 .9856 .9819 20 .9983 .9586 1.0068 .9900 .9892 27 .9952 .9641 1.0182 .9977 .9972 September 3 .9986 .9696 1.0103 .9995 .9943 10 .9994 .9740 .9896 .9916 .9860 17 .9965 .9785 .9897 .9866 .9881 24 .9942 .9830 .9904 .9890 .9914 October 1 .9946 .9875 1.0147 .9973 .9942 8 1.0005 .9922 .9780 .9906 .9828 15 .9985 .9969 .9893 .9863 .9835 22 .9965 1.0016 1.0000 .9927 .9915 29 .9949 1.0064 1.0216 1.0042 1.0018 November 5 .9992 1.0113 1.0002 1.0006 .9936 12 1.0017 1.0164 1.0000 .9948 .9875 19 1.0001 1.0216 1.0201 .9994 .9963 26 1.0030 1.0269 1.0442 1.0080 1.0043 December 3 1.0026 1.0322 1.0355 1.0125 1.0025 10 1.0049 1.0267 1.0114 .9993 .9920 17 1.0072 1.0213 1.0297 1.0012 .9985 24 1.0141 1.0159 1.0543 1.0193 1.0169 31 1.0089 1.0106 1.1015 1.0410 1.0338 2002—January 7 1.0025 1.0141 1.0255 1.0239 1.0211 14 .9976 1.0176 .9928 1.0062 1.0128 21 .9943 1.0211 .9875 1.0033 1.0139 28 .9911 1.0247 .9901 1.0043 1.0151 February 4 .9955 1.0283 .9751 .9987 1.0059 11 .9981 1.0272 .9600 .9857 .9947 18 .9978 1.0261 .9666 .9846 .9931 25 .9952 1.0250 .9760 .9925 1.0003 March 4 .9999 1.0239 .9762 .9921 .9991 11 1.0019 1.0218 .9726 .9893 .9948 18 1.0006 1.0196 .9843 .9924 .9970 25 .9991 1.0175 .9906 1.0013 1.0062 April 1 .9995 1.0153 1.0138 1.0194 1.0178 1. Seasonally adjusted other checkable deposits at thrifts are derived as the difference between total other checkable deposits, seasonally adjusted, and seasonally adjusted other checkable deposits at commercial banks. 4. Weekly seasonal factors used to construct M2 and M3, December 4, 2000-April 1, 2002 SSaavviinnggss aanndd SSmmaallll-- LLaarrggee-- Money market mutual funds WWeeeekk eennddiinngg MMMMDDAA ddeennoommiinnaattiioonn ddeennoommiinnaattiioonn RRPPss EEuurrooddoollllaarrss ddeeppoossiittss11 ttiimmee ddeeppoossiittss11 ttiimmee ddeeppoossiittss11 In M2 In M3 only 2000—December 4 1.0017 1.0014 .9987 .9914 1.0102 .9936 .9997 11 1.0090 1.0010 1.0022 1.0003 1.0316 1.0021 1.0056 18 1.0029 1.0004 1.0025 .9995 1.0304 .9933 1.0046 25 .9926 .9997 .9980 1.0005 1.0288 .9894 1.0118 22000011——JJaannuuaarryy 1 .9962 1.0002 .9915 .9934 1.0081 .9789 1.0363 8 1.0242 1.0015 1.0000 .9992 1.0089 .9831 1.0190 15 1.0144 1.0018 .9972 1.0142 1.0369 1.0026 1.0079 22 .9920 1.0018 .9868 1.0166 1.0437 .9996 1.0051 29 .9734 1.0020 .9827 1.0145 1.0486 1.0062 1.0049 FFeebbrruuaarryy 5 .9914 1.0028 .9895 1.0142 1.0317 1.0138 .9959 12 .9976 1.0033 .9976 1.0176 1.0378 1.0195 1.0036 19 .9940 1.0036 1.0037 1.0197 1.0342 1.0129 1.0071 26 .9887 1.0035 1.0055 1.0242 1.0372 1.0069 1.0149 March 5 1.0125 1.0033 1.0104 1.0225 1.0281 1.0085 1.0009 12 1.0115 1.0030 1.0115 1.0287 1.0310 1.0158 1.0041 19 1.0041 1.0027 1.0082 1.0308 1.0218 1.0134 1.0018 26 .9898 1.0020 1.0043 1.0304 1.0177 1.0065 1.0133 AApprriill 2 1.0011 1.0018 1.0058 1.0296 .9968 .9914 1.0019 9 1.0287 1.0021 1.0090 1.0373 1.0062 .9871 .9986 16 1.0301 1.0012 1.0068 1.0352 1.0083 .9909 .9879 23 1.0105 1.0002 1.0058 1.0246 .9886 .9887 1.0075 30 .9960 .9993 1.0065 1.0027 .9789 .9965 1.0180 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Announcements 223 4. Weekly seasonal factors used to construct M2 and M3, December 4, 2000-April 1, 2002—Continued Savings and Small- Large- Money market mutual funds Week ending MMDA denomination denomination RPs Eurodollars deposits' time deposits1 time deposits1 In M2 In M3 only May 7 1.0096 .9986 1.0133 .9915 .9799 1.0076 1.0011 14 1.0049 .9976 1.0113 .9910 .9864 1.0119 .9978 21 .9940 .9963 1.0056 .9904 .9894 1.0112 1.0095 28 .9862 .9952 1.0044 .9921 .9883 1.0203 1.0279 June 4 1.0114 .9945 1.0044 .9893 .9836 1.0231 1.0126 11 1.0142 .9943 1.0067 .9932 .9912 1.0175 1.0059 18 1.0039 .9942 1.0070 .9875 .9785 1.0149 .9982 25 .9838 .9943 1.0051 .9817 .9746 1.0069 .9984 July 2 .9887 .9960 .9966 .9738 .9627 1.0021 1.0011 9 1.0154 .9970 .9931 .9773 .9712 1.0009 .9867 16 1.0078 .9972 .9982 .9781 .9777 .9975 .9829 23 .9920 .9977 1.0009 .9791 .9741 .9987 .9877 30 .9817 .9978 .9979 .9796 .9725 1.0011 .9923 August 6 1.0085 .9982 .9977 .9843 .9734 1.0003 .9863 13 1.0040 .9985 .9963 .9910 .9864 1.0061 .9820 20 .9943 .9989 .9923 .9934 .9893 .9957 .9849 27 .9810 .9991 .9914 .9953 .9945 .9937 1.0024 September 3 .9994 .9999 .9933 .9922 .9836 .9984 .9908 10 1.0124 1.0002 .9925 .9967 .9877 .9960 .9818 17 1.0056 1.0003 .9920 .9960 .9851 .9965 .9894 24 .9850 1.0002 .9941 .9899 .9735 .9912 .9872 October 1 .9865 1.0010 .9944 .9847 .9677 .9818 .9980 8 1.0081 1.0019 .9974 .9864 .9741 .9811 .9883 15 1.0044 1.0015 .9954 .9924 .9891 .9865 .9944 22 .9876 1.0013 .9935 .9924 .9916 .9870 .9926 29 .9761 1.0011 .9918 .9896 .9948 .9903 1.0011 November 5 1.0019 1.0018 .9961 .9848 .9942 .9944 .9912 12 1.0022 1.0023 1.0022 .9865 1.0042 .9957 .9908 19 .9964 1.0022 1.0024 .9866 1.0026 .9966 .9951 26 .9835 1.0019 1.0001 .9899 1.0096 .9967 1.0078 December 3 .9988 1.0013 .9997 .9905 1.0089 .9951 .9990 10 1.0100 1.0009 1.0029 .9981 1.0255 1.0004 .9977 17 1.0043 1.0002 1.0036 1.0000 1.0261 .9957 1.0034 24 .9950 .9997 .9992 1.0010 1.0237 .9854 1.0085 31 .9984 .9997 .9909 .9958 1.0167 .9808 1.0282 2002—January 7 1.0236 1.0008 .9930 1.0000 1.0097 .9824 1.0145 14 1.0140 1.0015 .9998 1.0127 1.0344 .9970 1.0075 21 .9937 1.0015 .9902 1.0172 1.0418 .9984 1.0063 28 .9779 1.0017 .9863 1.0158 1.0470 1.0038 1.0086 February 4 .9919 1.0025 .9926 1.0153 1.0334 1.0120 .9965 11 .9981 1.0033 .9979 1.0192 1.0377 1.0178 1.0016 18 .9942 1.0038 1.0031 1.0198 1.0342 1.0135 1.0053 25 .9867 1.0037 1.0037 1.0241 1.0365 1.0073 1.0141 March 4 1.0050 1.0035 1.0070 1.0218 1.0295 1.0069 1.0000 11 1.0108 1.0033 1.0107 1.0286 1.0308 1.0129 1.0035 18 1.0055 1.0030 1.0100 1.0306 1.0208 1.0121 1.0014 25 .9949 1.0024 1.0067 1.0318 1.0184 1.0058 1.0117 April 1 1.0014 1.0027 1.0068 1.0307 1.0010 .9933 1.0112 1. Seasonal factors are applied to deposits data at both commercial banks and thrift institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
224 Minutes of the Meeting of the Federal Open Market Committee Held on December 19, 2000 A meeting of the Federal Open Market Committee Messrs. Oliner, Slifman, and Struckmeyer, Associate was held in the offices of the Board of Governors of Directors, Division of Research and Statistics, Board of Governors the Federal Reserve System in Washington, D.C., on Tuesday, December 19, 2000, at 9:00 a.m. Mr. Whitesell, Assistant Director, Division of Monetary Affairs, Board of Governors Present: Mr. Greenspan, Chairman Ms. Low, Open Market Secretariat Assistant, Mr. McDonough, Vice Chairman Division of Monetary Affairs, Board of Mr. Broaddus Governors Mr. Ferguson Mr. Gramlich Mr. Lyon, First Vice President, Federal Reserve Bank Mr. Guynn of Minneapolis Mr. Jordan Mr. Kelley Ms. Browne, Messrs. Hakkio, Hunter, Kos, Mr. Meyer Ms. Mester, Messrs. Rolnick and Rosenblum, Mr. Parry Senior Vice Presidents, Federal Reserve Banks of Boston, Kansas City, Chicago, New York, Philadelphia, Minneapolis, and Dallas Mr. Hoenig, Ms. Minehan, Messrs. Moskow respectively and Poole, Alternate Members of the Federal Open Market Committee Messrs. Cunningham and Gavin, Vice Presidents, Federal Reserve Banks of Atlanta and St. Louis Messrs. McTeer, Santomero, and Stern, Presidents respectively of the Federal Reserve Banks of Dallas, Philadelphia, and Minneapolis respectively By unanimous vote, the minutes of the meeting of the Federal Open Market Committee held on Novem- Mr. Kohn, Secretary and Economist ber 15, 2000, were approved. Mr. Bernard, Deputy Secretary Ms. Fox, Assistant Secretary The Manager reported on developments in domes- Mr. Gillum, Assistant Secretary tic financial markets and on System open market Mr. Mattingly, General Counsel transactions in government securities and federal Mr. Baxter, Deputy General Counsel agency obligations during the period November 15, Ms. Johnson, Economist 2000, through December 18, 2000. By unanimous Mr. Stockton, Economist vote, the Committee ratified these transactions. Mr. Beebe, Ms. Cumming, Messrs. Goodfriend, The Manager of the System Open Market Account Howard, Lindsey, Reinhart, Simpson, and also reported on recent developments in foreign Sniderman, Associate Economists exchange markets. There were no open market operations in foreign currencies for the System's account Mr. Fisher, Manager, System Open Market Account in the period since the previous meeting. The Committee then turned to a discussion of the Mr. Winn, Assistant to the Board, Office of Board economic situation and outlook and the implementa- Members, Board of Governors tion of monetary policy over the intermeeting period ahead. Mr. Ettin, Deputy Director, Division of Research and The information reviewed at this meeting provided Statistics, Board of Governors evidence that economic activity, which had expanded at an appreciably lower pace since midyear, might Mr. Madigan, Associate Director, Division of Monetary Affairs, Board of Governors have slowed further in recent months. Consumer Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
225 spending and business purchases of equipment and lays on services continued to grow at a moderate rate software had decelerated markedly after having regis- through October (latest data). tered extraordinary gains in the first half of the year. Against the backdrop of declining interest rates Housing construction, though still relatively firm, on fixed-rate mortgages, residential building activity was noticeably below its robust pace of earlier in the had leveled out since midyear, and October starts year. With final spending rising at a reduced rate, remained at the third-quarter level. Sales of new inventory overhangs had emerged in a number of homes edged down in October, though they were still goods-producing industries, most visibly in the slightly above their third-quarter level; sales of existmotor vehicle sector. Manufacturing production had ing homes slipped somewhat in October but were declined as a consequence, and the rate of expansion near the middle of their range over the past year. In in employment had moderated further. Evidence on the multifamily sector, starts moved up slightly furcore price inflation was mixed; by one measure, it ther in October, though they remained appreciably appeared to be increasing very gradually, in part below their elevated level during the first half of the reflecting the indirect effects of higher energy costs, year. Continuing relatively low vacancy rates for but by another it had remained at a relatively subdued multifamily units suggested that the prospects for level. additional construction were favorable. Growth in private nonfarm payroll employment Business investment in equipment and software moderated a little further on balance in October and increased at a sharply lower, though still relatively November. Manufacturing payrolls changed little robust, rate in the third quarter, and information on over the two months, and job gains in the construc- shipments of nondefense capital goods indicated tion, retail trade, and services industries were smaller another moderate increase in business investment in than those of earlier in the year. By contrast, the pace October. Shipments of communications, computing, of hiring remained relatively brisk in the finance, and office equipment were well above their thirdinsurance, and real estate sectors. With growth in the quarter averages, and shipments of non-high-tech demand for labor slowing, initial claims for unem- equipment turned up in October after having fallen ployment insurance continued to trend upward, and appreciably in earlier months. On the downside, sales the civilian unemployment rate edged up to 4 percent of medium and heavy trucks declined further over in November, its average thus far this year. October and November, and new orders for such Industrial production declined slightly in October trucks remained weak. Investment in nonresidential and November following a moderate third-quarter structures continued to rise briskly in October, and all increase that was well below the pace of expansion the major subcategories of construction put in place recorded during the first half of the year. Utilities were up substantially on a year-over-year basis. Maroutput surged in November in response to unseason- ket fundamentals, including rising property values ably cold weather across much of the country while and low vacancy rates, suggested that further expanmining activity changed little. In manufacturing, sion of nonresidential building activity, particularly motor vehicle output was scaled back further in office construction, was likely. November, and there also were widespread declines Inventory investment on a book-value basis picked in industries not directly affected by conditions in the up in October from the third-quarter pace, and the motor vehicle sector. Although the production of aggregate inventory-sales ratio edged up to its highhigh-tech equipment was still trending up, growth est level in the past twelve months. In manufacturing, continued to slow from the extraordinarily rapid sizable increases in stocks were led by large accuincreases of earlier in the year. The weakening of mulations at producers of industrial and electrical factory output in November was reflected in a further machinery. As a result, the stock-sales ratio for decline in the rate of capacity utilization in manu- manufacturing reached its highest level in a year; facturing to a point somewhat below its long-term advances in stock-sales ratios were widespread average. among makers of durable goods while ratios Consumer spending appeared to be decelerating remained high for a number of categories of nonduranoticeably further in the fourth quarter in an environ- ble products. At the wholesale level, inventory accument of diminished consumer confidence, smaller job mulation inched up from its third-quarter rate, and gains, and lower stock prices. Retail sales were down the sector's inventory-sales ratio was at the top of its somewhat on balance in October and November after range for the past twelve months. Total retail stocks a substantial third-quarter increase; sales of light rose in line with sales in October, and the inventoryvehicles dropped over the two months, and growth in sales ratio for this sector also remained at the upper expenditures on other consumer goods slowed. Out- end of its range over the past year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
226 Federal Reserve Bulletin • April 2001 The U.S. trade deficit in goods and services reached clear indications of a more moderate expansion in a new record high in September and on a quarterly economic activity, persisting risks of heightened average basis was up appreciably further in the third inflation pressures remained a concern, particularly quarter. The value of exports continued to grow in the context of a gradual upward trend in core strongly in the latest quarter, led by advances in inflation. In these circumstances, a steady monetary exported machinery and industrial supplies. The policy was the best means to promote price stability value of imports rose at an even faster rate than and sustainable economic expansion. While recognizexports, with increases in all major trade categories, ing that growth was slowing more than had been especially industrial supplies, semiconductors, and anticipated and that developments might be moving services. Economic growth in the foreign industrial in a direction that would require a shift to a balanced countries slowed moderately in the third quarter, and risk statement, members agreed that such a change the available information suggested a further reduc- would be premature. As a result, they agreed that the tion in the fourth quarter. Economic expansion eased statement accompanying the announcement of their in the euro area despite continued strong growth decision should continue to indicate that the risks of investment and exports, as consumer spending remained weighted mainly in the direction of rising appeared to be damped by earlier interest rate inflation. increases and by the drain on spendable income of Open market operations throughout the intermeethigher prices for oil and imported goods more gener- ing period were directed toward maintaining the fedally. In addition, weak consumption appeared to be eral funds rate at the Committee's targeted level of an important factor in continued sluggish economic 6V2 percent, and the average rate remained close to growth in Japan. Economic activity also decelerated the intended level. Against the background of detein some developing countries in the third quarter, riorating conditions in some segments of financial with recent indicators suggesting a slowdown in markets, slower economic expansion, and public expansion in many parts of East Asia. comments by Federal Reserve officials about the Incoming data indicated that, on balance, price implications of those developments, market expectainflation had picked up only a little, if at all. Con- tions about the future course of the federal funds rate sumer prices, as measured by the consumer price were revised down appreciably over the intermeeting index (CPI) on a total and a core basis, rose mildly in period, and market interest rates on Treasury and October and November after a sizable September private investment-grade securities declined someincrease, but on a year-over-year basis core CPI what over the intermeeting interval. The weaker outprices increased noticeably more in the twelve look for economic growth, coupled with growing months ended in November than in the previous market concerns about corporate earnings, weighed twelve-month period. When measured by the per- down equity prices and boosted risk spreads on sonal consumption expenditure (PCE) chain-type lower-rated investment-grade and high-yield bonds. index, however, consumer price inflation was modest Equity prices were quite volatile during the interin both October (latest data) and the twelve months meeting period, and reflecting numerous dour reports ended in October, with little change year over year. on corporate earnings and incoming information indi- At the producer level, core prices edged down on cating slower growth in economic activity in the balance in October and November; moreover, pro- United States, broad indexes of stock market prices ducer inflation eased somewhat on a year-over- dropped considerably on balance over the intermeetyear basis, though the deceleration was more than ing period. accounted for by an earlier surge in tobacco prices In foreign exchange markets, the trade-weighted during the year ended in November 1999. With value of the dollar edged lower on balance over the regard to labor costs, average hourly earnings of intermeeting interval in terms of the currencies of a production or nonsupervisory workers increased in broad group of U.S. trading partners. Among the November at the slightly higher rate recorded in major foreign currencies, the dollar fell moderately October. For the twelve months ended in October, against the euro but moved up by a roughly compaaverage hourly earnings rose somewhat more than in rable extent in terms of the yen. The dollar's decline the previous twelve months. against the euro reflected a growing perception that At its meeting on November 15, 2000, the Com- economic expansion in the euro area would cool mittee adopted a directive that called for maintaining comparatively less than in the United States. Correconditions in reserve markets consistent with an spondingly, the slide of the yen seemed to be related unchanged federal funds rate of about 6V2 percent. In to weak economic data, stagnant business sentiment, taking that action, the members noted that despite and political uncertainties in Japan. The dollar posted Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Minutes of the Federal Open Market Committee 227 a small gain against an index of the currencies of improved the outlook for inflation. The question at other important trading partners, largely reflecting this juncture was whether the expansion would weaker financial conditions in some emerging remain near its recent pace or continue to moderate. economies. While the former still seemed to be the most likely The broad monetary aggregates decelerated further outcome, the very recent information on labor marin November. The slowing growth of M2 in October kets, sales and production, business and consumer and November following strong expansion in August confidence, developments in financial markets, and and September apparently reflected the moderating growth in foreign economies suggested that the risks rates of increase in nominal income and spending in to the economy had shifted rapidly and perceptibly to recent months and perhaps some persisting effects of the downside. Concerning the outlook for inflation, the rise in opportunity costs earlier in the year. M3 members commented that the upside risks clearly had growth slowed less than that of M2 in November, in diminished in the wake of recent developments and part because of stepped-up issuance of large time that, with pressures on resources likely to abate at deposits as banks reduced their reliance on funding least a little, subdued inflation was a reasonable from overseas offices. The growth of domestic non- prospect. financial debt slowed in October (latest data), reflect- Weakening trends in production and employment ing a larger further paydown of federal debt and a were most apparent in the manufacturing sector. reduced pace of private borrowing. There were widespread anecdotal reports of produc- The staff forecast prepared for this meeting sug- tion cutbacks, notably in industries related to motor gested that the economic expansion had slowed vehicles, and of associated declines in manufacturing considerably, to a rate somewhat below the staff's employment. However, many of the factory workers current estimate of the growth of the economy's losing their jobs were readily finding employment potential output, but that it would gradually gain elsewhere in what generally continued to be characstrength over the next two years. The forecast antici- terized as very tight labor markets across the country. pated that the expansion of domestic final demand The softening in manufacturing reflected weak sales would be held back to some extent by the diminish- and prompt efforts to limit unwanted buildups in ing influence of the wealth effects associated with inventories. Even so, business contacts reported curpast outsized gains in equity prices but also by the rently undesired levels of inventories in a range of relatively high interest rates and the somewhat strin- industries, not only in motor vehicles. In the aggregent credit terms and conditions on some types of gate, cutbacks in inventory investment or runoffs of loans by financial institutions. As a result, growth of existing inventories accounted for a significant part spending on consumer durables was expected to be of the recent moderation in the growth of the overall appreciably below that in recent quarters, and hous- economy. ing demand to be slightly weaker. Business fixed The slowing in the growth of consumer spending investment, notably outlays for equipment and soft- that had prompted much of the backup in inventories ware, was projected to remain relatively robust; was evident from a wide variety of information, growth abroad would support the expansion of U.S. including anecdotal reports from various parts of the exports; and fiscal policy was assumed to continue its country. Consumer sentiment seemed to have deteriomoderate expansionary trend. Core price inflation rated appreciably in recent weeks, though from a was projected to rise only slightly over the forecast very high level, and retail sales were widely indicated horizon, partly as a result of higher import prices but to have softened after a promising spurt early in the also as a consequence of some further increases in holiday season. Factors cited to account for the relanominal labor compensation gains that would not be tively sudden emergence of this weakness, and also fully offset by the expected growth of productivity. as possible harbingers of developments in coming In the Committee's discussion of current and pro- quarters, were the negative wealth effects of further spective economic developments, members com- declines in stock market prices, the impact of very mented that recent statistical and anecdotal informa- high energy costs on disposable incomes, and some tion provided clear indications of significant slowing increase in caution about the outlook for employment in the expansion of business activity and also pointed opportunities and incomes. The extent to which such to appreciable erosion in business and consumer con- developments would persist and perhaps foster more fidence. The deceleration in the economy had aggressive retrenchment in consumer spending occurred from an unsustainably high growth rate in clearly was uncertain, but the members nonetheless the first half of the year, and the resulting contain- anticipated that over time underlying employment ment in demand pressures on resources already had and income trends would be consistent with further Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
228 Federal Reserve Bulletin • April 2001 expansion in consumer expenditures, though at a exchange value of the dollar as the economy slowed pace well below that of earlier in the year. would help to bolster exports. Growth in business expenditures for equipment Against the backdrop of slowing economic growth, and software had moderated substantially in recent core inflation had remained quiescent. Views regardmonths from very high rates of increase over an ing the outlook for inflation were somewhat mixed, extended period. The slowdown reflected a mix of though all the members agreed that the risks of higher interrelated developments including flagging growth inflation had diminished materially. Nonetheless, in demand and tightening financial conditions in the some members noted that while recent anecdotal form of declining equity prices and stricter credit reports pointed to a modest reduction in labor market terms for many business borrowers. The re-evaluation strains in some areas and industries, labor markets in of prospects was most pronounced in the high-tech general were still very tight and likely would remain industries. The profitability of using and producing taut relative to historical experience. In such circumsuch software and equipment had been overestimated stances, if structural productivity growth leveled out, to a degree, and disappointing sales and a better worker efforts to catch up to past increases in producappreciation of risks had resulted in much slower tivity could put pressures on labor compensation growth in production of such equipment and sharp costs. The latter could well be augmented by sharply deterioration in the equity prices of high-tech compa- rising medical costs and by attempts to protect the nies. At the same time, nonresidential construction purchasing power of wages from the erosion caused activity appeared to have been well maintained in by the rise in energy prices. Further depreciation of many parts of the country, though there were reports the dollar in relation to major foreign currencies of softening in some regions and of some reductions would add to import prices and domestic inflation or delays in planned projects. Against this back- pressures. But there were also a number of reasons ground, risks of further retrenchment in capital spend- for optimism about the outlook for consumer prices ing persisted, but to date there was no evidence to over coming quarters. Growth in economic activity at suggest that the underlying pace of advances in tech- a pace somewhat below that of the economy's output nology and related productivity growth had abated. potential would lessen pressures on labor and other Over time, further increases in productivity would resources from levels that had, in the past few years, undergird continuing growth in demand for high-tech been associated with at most a small uptick in core equipment. In the nonresidential construction area, inflation. Indications that rapid growth in structural members noted that high occupancy rates and high productivity would persist and widespread reports rents were supportive elements in the construction that strong competitive pressures in most markets outlook. continued to inhibit business efforts to increase prices With regard to the prospects for housing activity, in the face of rising costs also were favorable factors members provided anecdotal reports of some weak- in the outlook. Further declines in oil prices, as ening in a number of regions, though homebuilding evidenced by quotations in futures markets, would if was holding up well in others. Housing demand was, realized have effects not only on so-called headline of course, responding to many of the same factors inflation but would help hold down core prices over that were affecting consumer spending, including the time. Despite previous increases in headline inflation, negative wealth effects of declining stock market survey and other measures of inflation expectations prices. On the positive side, further growth in continued to suggest that long-run inflation expectaincomes and declines in mortgage rates were key tions had not risen and might even have fallen a bit of elements of underlying strength for the housing sec- late as the economy softened. tor. On balance, housing construction at a pace near In the Committee's discussion of policy for the current levels appeared to be a reasonable prospect in intermeeting period ahead, all the members indicated association with forecasts of moderate growth in the that they could support an unchanged policy stance, overall economy. consistent with a federal funds rate averaging about Growth in foreign economic activity likely would 6V2 percent. However, they also endorsed a proposal continue to foster expansion in U.S. exports, though calling for a shift in the balance of risks statement to members noted that there were signs of softer busi- be issued after this meeting to express the view that ness conditions in some foreign nations. In addition, most members believed the risks were now weighted members referred to some anecdotal evidence of toward conditions that could generate economic increasing concern among business contacts about weakness in the foreseeable future. In their evaluafuture prospects for exports of manufactured goods. tion of the appropriate policy for these changing On the other hand, any depreciation in the foreign circumstances, the members agreed that the critical Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Minutes of the Federal Open Market Committee 229 issue was whether the expansion would stabilize near by recent developments. In one view, even though its recent growth rate or was continuing to slow. In the risks of a weakening economy had increased, a the view of almost all the members, the currently statement of balanced risks would be preferable available information bearing on this issue was not because further moderation in the expansion might sufficient to warrant an easing at this point. Much of well fail to materialize. the usual aggregative data on spending and employ- At the conclusion of this discussion, the Commitment, although to be sure available only with a lag, tee voted to authorize and direct the Federal Reserve continued to suggest moderate economic expansion. Bank of New York, until it was instructed other- The information pointing to further weakness was wise, to execute transactions in the System Account very recent and to an important extent anecdotal. As in accordance with the following domestic policy a consequence, most of the members were persuaded directive: that a prudent policy course would be to await further confirmation of a weakening expansion before eas- The Federal Open Market Committee seeks monetary ing, particularly in light of the high level of resource and financial conditions that will foster price stability and promote sustainable growth in output. To further its longutilization and the experience of recent years when run objectives, the Committee in the immediate future several lulls in the growth of the economy had been seeks conditions in reserve markets consistent with mainfollowed by a resumption of very robust economic taining the federal funds rate at an average of around expansion. Additional evidence of slowing economic 6V2 percent. growth might well materialize in the weeks immediately ahead—from the regular aggregated monthly The vote also encompassed approval of the sendata releases, but also from weekly readings on the tence below for inclusion in the press statement to be labor market and reports from businesses on the released shortly after the meeting: strength of sales and production—and the members agreed that the Committee should be prepared to Against the background of its long-run goals of price respond promptly to indications of further weakness stability and sustainable economic growth and of the information currently available, the Committee believes that in the economy. Those few members who expressed the risks are weighted mainly toward conditions that may a preference for easing at this meeting believed that, generate economic weakness in the foreseeable future. with unit labor costs and inflation expectations contained, enough evidence of further weakness already Votes for this action: Messrs. Greenspan, McDonough, existed to warrant an immediate action. Nonetheless, Broaddus, Ferguson, Gramlich, Guynn, Jordan, Kelley, Meyer, and Parry. Votes against this action: None. they could accept a delay in light of prevailing uncertainties about the prospective performance of the This meeting adjourned at 1:35 p.m. with the economy and the intention of the Committee to act understanding that the next regularly scheduled meetpromptly in coming weeks, including the possibility ing of the Committee would be held on Tuesdayof an easing move early in the intermeeting period, Wednesday, January 30-31, 2001. should confirming information on weakening trends in the economy emerge. With regard to the consensus in favor of moving from an assessment of risks weighted toward rising TELEPHONE CONFERENCE MEETING inflation to one that was weighted toward economic weakness, with no intermediate issuance of a bal- A telephone conference meeting was held on Januanced risks assessment, some members observed that ary 3, 2001, for the purpose of considering a policy such a change was likely to be viewed as a relatively easing action. In keeping with the Committee's Rules rapid shift by some observers. The revised statement of Organization, the members at the start of the of risks, even though it would not be associated meeting unanimously re-elected Alan Greenspan as with an easing move, could strengthen expectations Chairman of the Federal Open Market Committee regarding future monetary policy easing to an extent and William J. McDonough as Vice Chairman. Their that was difficult to predict and could generate sizable terms of office were extended for one year until the reactions in financial markets. At the same time, it first meeting of the Committee after December 31, might raise questions about why the Committee did 2001. By unanimous vote, the Federal Reserve Bank not alter the stance of policy. Nonetheless, the Com- of New York was selected to execute transactions for mittee's reasons for not easing today were deemed the System Open Market Account until the adjournpersuasive by most members, while shifting its state- ment of the first meeting of the Committee after ment about economic risks seemed clearly justified December 31, 2001. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
230 Federal Reserve Bulletin • April 2001 At its meeting on December 19, 2000, the Commit- Against this background, all the members suptee had contemplated the possibility that ongoing ported a proposal for an easing of reserve conditions economic and financial developments might warrant consistent with a reduction of 50 basis points in the a reassessment of the stance of monetary policy federal funds rate to a level of 6 percent. The Combefore the next scheduled meeting in late January. mittee voted to authorize and direct the Federal Information that had become available since the Reserve Bank of New York, until it was instructed December meeting tended to confirm that the eco- otherwise, to execute transactions in the System nomic expansion had continued to weaken. The Account in accordance with the following domestic manufacturing sector was especially soft, reflecting policy directive: apparent efforts in a number of industries to readjust inventories that were now deemed to be too high, The Federal Open Market Committee seeks monetary notably those related to motor vehicles. Retail sales and financial conditions that will foster price stability and promote sustainable growth in output. To further its longwere appreciably below business expectations for the run objectives, the Committee in the immediate future holiday season despite some pickup in the latter half seeks conditions in reserve markets consistent with a reducof December, apparently largely induced by price tion in the federal funds rate to an average of around discounting, and sales of motor vehicles evidenced 6 percent. significant further weakness as the month progressed. Business confidence appeared to have deteriorated The vote encompassed approval of the sentence further since the December meeting amid widespread below for inclusion in the press statement to be reports of reductions in planned production and capi- released shortly after the meeting: tal spending. Elevated energy costs were continuing Against the background of its long-run goals of price to drain consumer purchasing power and were adding stability and sustainable economic growth and of the inforto the costs of many business firms, with adverse mation currently available, the Committee believes that effects on profits and stock market valuations. Inter- the risks are weighted mainly toward conditions that may acting with these developments were forecasts of generate economic weakness in the foreseeable future. further declines in business profits over coming quar- Votes for this action: Messrs. Greenspan, McDonough, ters. On the more positive side, housing activity Ferguson, Gramlich, Hoenig, Kelley, Meyer, Minehan, appeared to be responding to lower mortgage interest Moskow, and Poole. Votes against this action: None. rates, and on the whole nonresidential construction activity seemed to be reasonably well maintained. Chairman Greenspan indicated that shortly after Moreover, while the expansion had weakened and this meeting the Board of Governors would consider economic activity might remain soft in the near term, pending requests by several Federal Reserve Banks the longer-term outlook for reasonably sustained eco- to reduce the discount rate by 25 basis points. At the nomic expansion, supported by easier financial condi- time of this conference call meeting, no pending tions and the response of investment and consump- requests for a 50 basis point reduction were outstandtion to rising productivity and living standards, was ing, but the press release would indicate that the still quite good. Inflation expectations appeared to be Board would be prepared to consider requests for declining, with businesses continuing to encounter further reductions of 25 basis points if they were marked and even increased resistance to their efforts received. to raise prices. On balance, the information already in hand indicated that the expansion clearly was weak- Donald L. Kohn ening and by more than had been anticipated. In the Secretary circumstances, prompt and forceful policy action sooner and larger than expected by financial markets seemed called for. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
231 Legal Developments FINAL RULE—AMENDMENT TO REGULATION A ATM operators that impose a fee for providing electronic fund transfer services to post a notice in a prominent and The Board of Governors is amending 12 C.F.R. Part 201, conspicuous location on or at the ATM. The operator must its Regulation A (Extensions of Credit by Federal Reserve also disclose that a fee will be imposed and the amount of Banks; Change in Discount Rate), to reflect its approval of the fee, either on the screen of the machine or on a paper a decrease in the basic discount rate at each Federal Re- notice, before the consumer is committed to completing the serve Bank. The Board acted on requests submitted by the transaction. In addition, when the consumer contracts for Boards of Directors of the twelve Federal Reserve Banks. an electronic fund transfer service, financial institutions are The amendments to Part 201 (Regulation A) were effec- required to provide initial disclosures, including a notice tive January 31, 2001. The rate changes for adjustment that a fee may be imposed for electronic fund transfers credit were effective on the dates specified below: initiated at an ATM operated by another entity. Effective March 9, 2001, 12 C.F.R. Part 205 is amended Part 201—Extensions of Credit by Federal Reserve as follows: Banks (Regulation A) Part 205—Electronic Fund Transfers (Regulation E) 1. The authority citation for 12 C.F.R. Part 201 continues to read as follows: 1. The authority citation for Part 205 would continue to read as follows: Authority: 12 U.S.C. 343 et seq., 347a, 347b, 347c, 347d, 348 et seq., 357, 374, 374a and 461. Authority: 15 U.S.C. 1693-1693r. 2. Section 201.51 is revised to read as follows: 2. Section 205.7 is amended by adding a new paragraph (b)(l 1) to read as follows: Section 201.51—Adjustment credit for depository institutions. Section 205.7—Initial disclosures. The rates for adjustment credit provided to depository institutions under section 201.3(a) are: (b) Content of disclosures. * * * (11) ATM fees. A notice that a fee may be imposed by Federal Reserve Bank Rate Effective an automated teller machine operator as defined Boston 5.0 January 31, 2001 in section 205.16(a)(1), when the consumer ini- New York 5.0 January 31, 2001 Philadelphia 5.0 January 31, 2001 tiates an electronic fund transfer or makes a bal- Cleveland 5.0 January 31, 2001 ance inquiry, and by any network used to com- Richmond 5.0 January 31, 2001 Atlanta 5.0 January 31, 2001 plete the transaction. Chicago 5.0 January 31, 2001 St. Louis 5.0 February 1, 2001 Minneapolis 5.0 January 31, 2001 Kansas City 5.0 February 1, 2001 Dallas 5.0 January 31, 2001 3. A new section 205.16 is added to read as follows: San Francisco 5.0 January 31, 2001 Section 205.16—Disclosures at automated teller machines. FINAL RULE—AMENDMENT TO REGULATION E The Board of Governors is amending 12 C.F.R. Part 205, (a) Definition. Automated teller machine operator means its Regulation E, implementing the Electronic Fund Trans- any person that operates an automated teller machine fer Act. The revisions implement amendments to the act at which a consumer initiates an electronic fund transcontained in the Gramm-Leach-Bliley Act that require the fer or a balance inquiry and that does not hold the disclosure of certain fees associated with automated teller account to or from which the transfer is made, or about machine (ATM) transactions. The amendments require which an inquiry is made. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
232 Federal Reserve Bulletin • April 2001 (b) General. An automated teller machine operator that c. A new Section 205.16—Disclosures at Automated imposes a fee on a consumer for initiating an elec- Teller Machines is added. The additions and revision tronic fund transfer or a balance inquiry shall: read as follows: (1) Provide notice that a fee will be imposed for providing electronic fund transfer services or a balance inquiry; and Supplement I to Part 205—Official Staff (2) Disclose the amount of the fee. Interpretations (c) Notice requirement. An automated teller machine operator must comply with the following: (1) On the machine. Post the notice required by para- Section 205.7—Initial Disclosures graph (b)(1) of this section in a prominent and conspicuous location on or at the automated teller machine; and (2) Screen or paper notice. Provide the notice re- 7(b) Content of Disclosures quired by paragraphs (b)(1) and (b)(2) of this section either by showing it on the screen of the automated teller machine or by providing it on paper, before the consumer is committed to paying Paragraph 7(b)(5)-Fees a fee. (d) Temporary exemption. Through December 31, 2004, the notice requirement in paragraph (c)(2) of this sec- 3. Interchange system fees. Fees paid by the accounttion does not apply to any automated teller machine holding institution to the operator of a shared or interthat lacks the technical capability to provide such change ATM system need not be disclosed, unless they are information. imposed on the consumer by the account-holding institu- (e) Imposition of fee. An automated teller machine opera- tion. Fees for use of an ATM that are debited directly from tor may impose a fee on a consumer for initiating an the consumer's account by an institution other than the electronic fund transfer or a balance inquiry only if account-holding institution (for example, fees included in (1) The consumer is provided the notices required the transfer amount) need not be disclosed. (See section under paragraph (c) of this section, and 205.7(b)(ll) for the general notice requirement regarding fees that may be imposed by ATM operators and by a (2) The consumer elects to continue the transaction or network used to complete the transfer.) inquiry after receiving such notices. 4. Under Appendix A, A-2 is amended by adding a new paragraph (j) to read as follows: Section 205.9—Receipts at Electronic Terminals; Appendix A to Part 205—Model Disclosure Clauses Periodic Statements and Forms Paragraph 9(a)(1)-Amount A-2-Model Clauses for Initial Disclosures (Section 205.7(B)) 1. Disclosure of transaction fee. The required display of a fee amount on or at the terminal may be accomplished by displaying the fee on a sign at the terminal or on the (j) ATM fees (section 205.7(b)(l 1)). When you use an terminal screen for a reasonable duration. Displaying ATM not owned by us, you may be charged a fee by the the fee on a screen provides adequate notice, as long as ATM operator [or any network used] (and you may be a consumer is given the option to cancel the transaction charged a fee for a balance inquiry even if you do not after receiving notice of a fee. (See section 205.16 for complete a fund transfer). the notice requirements applicable to ATM operators that impose a fee for providing EFT services.) 2. Relationship between section 205.9(a)(1) and section 5. In Supplement I to Part 205, the following amendments 205.16. The requirements of sections 205.9(a)(1) and would be made: 205.16 are similar but not identical. a. Under Section 205.7—Initial Disclosures, under Para- i. Section 205.9(a)( 1) requires that if the amount of the graph 7(b)(5)-Fees, paragraph 3. is revised; transfer as shown on the receipt will include the fee, b. Under Section 205.9-Receipts at Electronic Terminals; then the fee must be disclosed either on a sign on or Periodic Statements, under Paragraph 9(a)(1)-Amount, at the terminal, or on the terminal screen. Section paragraph 1. is revised and a new paragraph 2 is added; 205.16 requires disclosure both on a sign on or at and the terminal (in a prominent and conspicuous loca- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 233 tion) and on the terminal screen. Section 205.16 quire Resource's subsidiary bank, Resource Trust Compermits disclosure on a paper notice as an alterna- pany, both in Minneapolis, Minnesota.1 tive to the on-screen disclosure. Notice of the proposal, affording interested persons an ii. The disclosure of the fee on the receipt under sec- opportunity to submit comments, has been published tion 205.9(a)(1) cannot be used to comply with the (66 Federal Register 798 (2001)). The time for filing alternative paper disclosure procedure under section comments has expired, and the Board has considered the 205.16, if the receipt is provided at the completion proposal in light of the factors set forth in section 3 of the of the transaction because, pursuant to the statute, BHC Act. the paper notice must be provided before the con- Schwab, with total consolidated assets of $35.5 billion, sumer is committed to paying the fee. is the 43rd largest commercial banking organization in the iii. Section 205.9(a)(1) applies to any type of electronic United States, controlling less than 1 percent of the total terminal as defined in Regulation E (for example, to assets of insured commercial banks in the United States.2 POS terminals as well as to ATMs), while section Schwab, through U.S. Trust, operates depository institu- 205.16 applies only to ATMs. tions in California, Connecticut, the District of Columbia, Florida, New Jersey, New York, Oregon, Pennsylvania, and Texas. Resource operates only in Minnesota. It controls the 82nd largest depository institution in the state, with Section 205.16—Disclosures at Automated Teller $100.3 million in deposits, representing less than 1 percent Machines of total deposits in depository institutions in Minnesota.3 After consummation of the proposal, Schwab would remain the 43rd largest commercial banking organization 16(b) General in the United States, with total consolidated assets of $35.6 billion. Paragraph 16(b)(1) Interstate Analysis Section 3(d) of the BHC Act allows the Board to approve 1. Specific notices. An ATM operator that imposes a fee an application by a bank holding company to acquire for a specific type of transaction such as a cash withcontrol of a bank located in a state other than the home drawal, but not a balance inquiry, may provide a general state of such bank holding company if certain conditions statement that a fee will be imposed for providing EFT are met.4 For purposes of the BHC Act, the home state of services or may specify the type of EFT for which a fee Applicants is New York, and Schwab proposes to acquire is imposed. Resource Trust Company, which is located in Minnesota. All the conditions for an interstate acquisition enumerated in section 3(d) are met in this case.5 In light of all the facts ORDERS ISSUED UNDER BANK HOLDING COMPANY ACT 1. Applicants propose to merge Resource into U.S. Trust, with U.S. Trust as the surviving corporation. In addition, Applicants propose to Orders Issued Under Section 3 of the Bank Holding merge Resource Trust Company into U.S. Trust Company, Greenwich, Connecticut ("UST-Connecticut"), with UST-Connecticut as Company Act the surviving corporation. The merger of Resource Trust Company and UST-Connecticut is subject to review by the Federal Deposit The Charles Schwab Corporation Insurance Corporation ("FDIC") under the Bank Merger Act San Francisco, California (12 U.S.C. § 1828(c)). 2. All data used for purposes of calculating nationwide rankings are as of September 30, 2000. All other banking data are as of June 30, U.S. Trust Corporation 2000. New York, New York 3. In this context, depository institutions include commercial banks, savings banks, and savings associations. 4. See 12 U.S.C. § 1842(d). A bank holding company's home state Order Approving Acquisition and Merger of Bank is the state in which the total deposits of all banking subsidiaries of Holding Companies such company were the largest on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). The Charles Schwab Corporation ("Schwab") and its 5. 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A) and (B). wholly owned subsidiary, U.S. Trust Corporation ("U.S. Applicants meet the capital and managerial requirements established Trust"), each a bank holding company within the meaning under applicable law. Resource Trust Company has been in existence of the Bank Holding Company Act ("BHC Act") (together and operated for the minimum period of time required by applicable state law. On consummation, Schwab would control less than 10 per- "Applicants"), have requested the Board's approval under cent of the total amount of deposits of insured depository institutions section 3 of the BHC Act (12U.S.C. 1842) to acquire in the United States. All other requirements under section 3(d) of the Resource Companies, Inc. ("Resource"), and thereby ac- BHC Act would be met on consummation of the proposal. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
234 Federal Reserve Bulletin • April 2001 of record, the Board is permitted to approve the proposal As provided in the CRA, the Board has evaluated the under section 3(d) of the BHC Act. convenience and needs factor in light of examinations of the CRA performance records of the relevant depository Competitive Considerations institutions by their appropriate Federal banking agencies.7 United States Trust Company of New York, New York, Section 3 of the BHC Act prohibits the Board from approv- New York ("UST-New York"), the lead depository instituing a proposal that would result in a monopoly or be in tion of Applicants, received an "outstanding" rating at its furtherance of a monopoly. The BHC Act also prohibits the most recent CRA performance examination by the Federal Board from approving a proposal that would substantially Reserve Bank of New York, as of April 3, 2000. USTlessen competition in any relevant banking market unless Connecticut received a "satisfactory" rating from the the anticompetitive effects of the proposal in that banking FDIC, as of February 23, 1998.8 Resource Trust Company market are clearly outweighed in the public interest by the received an "outstanding" rating at its most recent CRA probable effect of the proposal in meeting the convenience performance examination by the FDIC, as of July 15, 1998. and needs of the community to be served.6 The Board received comments from a single commenter The proposal involves the acquisition of a bank in Min- ("Protestant") objecting to the proposal. Protestant asnesota, a state in which Applicants do not have banking serted that neither Applicants' subsidiary depository instioperations. Based on this and all the facts of record, the tutions nor Resource Trust Company are serving the credit Board concludes that consummation of the proposal would needs of their communities, especially low- and moderatenot result in any significantly adverse effects on competi- income ("LMI") communities. Protestant also claimed that tion or on the concentration of banking resources in any the CRA performance examinations of Applicants' subsidrelevant banking market. iaiy depository institutions, particularly UST-Connecticut, and Resource Trust Company are out-of-date and should not Financial and Managerial Considerations be relied on to assess the CRA performance of the depository institutions. In addition, Protestant asserted that the The BHC Act requires the Board to consider the financial CRA performance examination of UST-Connecticut is inand managerial resources and future prospects of the com- adequate because it does not assess the activities conducted panies and banks involved in the proposal and certain other by UST-Connecticut at offices opened since its last examisupervisory factors. The Board has reviewed these factors nation, particularly the bank's Pennsylvania and District of in light of all the facts of record, including supervisory Columbia offices. reports of examination, other confidential supervisory in- In assessing the convenience and needs factor in this formation assessing the financial and managerial resources case, the Board has carefully considered all the facts of of the organizations, and financial information provided by record. As noted above, this includes review of the CRA Applicants. The Board notes that Applicants and Resource performance examinations of the depository institutions and their subsidiary banks currently are well capitalized involved in the proposal. In addition, the Board has considand are expected to remain so on consummation of the ered confidential supervisory information provided by the proposal. Based on all the facts of record, the Board appropriate Federal banking agencies for the institutions concludes that the financial and managerial resources and involved, and information provided by the Applicants on the future prospects of Applicants, Resource, and their the record of their depository institutions in meeting the respective subsidiary banks, are consistent with approval, convenience and needs of their communities since their as are the other supervisory factors the Board must con- last CRA performance examinations. sider under section 3 of the BHC Act. Convenience and Needs Factor 7. The Interagency Questions and Answers Regarding Community In acting on a proposal under section 3 of the BHC Act, the Reinvestment provides that an institution's most recent CRA perfor- Board is required to consider the effect of the proposal on mance evaluation is an important and often controlling factor in the the convenience and needs of the communities to be consideration of an institution's CRA record because it represents a detailed evaluation of the institution's overall record of performance served. The Board has long held that consideration of the under the CRA by its appropriate Federal banking agency. 65 Federal convenience and needs factor includes a review of the Register 25,088 and 25,107 (2000). records of the relevant depository institutions under the 8. The other subsidiary depository institutions of Applicants also Community Reinvestment Act (12U.S.C. § 2901 et seq.) received "satisfactory" ratings at their most recent CRA performance ("CRA"). Accordingly, the Board has carefully considered examinations. U.S. Trust Company of California, N.A., Los Angeles, California, received a "satisfactory" rating from the Office of the the effect of the proposed merger on the convenience and Comptroller of the Currency ("OCC"), as of July 19, 1999; U.S. Trust needs of the communities to be served and the CRA Company of Florida Savings Bank, Palm Beach, Florida, received a records of performance of the institutions involved in light "satisfactory" rating from the Office of Thrift Supervision, as of of all the facts of record. November 12, 1997; U.S. Trust Company of New Jersey, Princeton, New Jersey, received a "satisfactory" rating from the FDIC, as of April 27, 1999; and U.S. Trust Company of Texas, N.A., Dallas, Texas, received a "satisfactory" rating from the OCC, as of June 25, 6. See 12 U.S.C. § 1842(c). 1997. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 235 The subsidiary depository institutions of Applicants and In its review of the convenience and needs factor under Resource Trust Company are wholesale banking institu- the BHC Act, the Board has carefully considered the entire tions that provide investment management, corporate trust, record in this case. Based on all the facts of record, and for financial and estate planning, fiduciary, and private bank- the reasons discussed above, the Board concludes that ing services for institutions and high net worth individuals. considerations relating to the convenience and needs fac- Each of the depository institutions involved in the proposal tor, including the CRA performance records of the relevant has been designated a "wholesale bank" and has been insured depository institutions, are consistent with apevaluated as such under the CRA regulations of the federal proval of the proposal. banking agencies.9 Protestant questioned the appropriateness of the whole- Conclusion sale bank designations of the subsidiary depository institutions of Applicants and Resource Trust Company. Protes- Based on the foregoing, and in light of all the facts of tant asserted that UST-New York, UST-Connecticut, and record, the Board has determined that the application the other subsidiary depository institutions of Applicants should be, and hereby is, approved.12 The Board's approval make a substantial volume of mortgage loans and hold is specifically conditioned on compliance by Applicants themselves out to the public as mortgage lenders and, with all the commitments and representations made in therefore, should not be accorded wholesale bank status connection with this application. For purposes of this acunder the CRA. tion, the commitments and conditions relied on by the The Board recently considered the wholesale bank desig- Board in reaching its decision are deemed to be conditions nations of the subsidiary depository institutions of U.S. imposed in writing by the Board in connection with its Trust in response to comments submitted by Protestant in connection with Schwab's application under the BHC Act to acquire U.S. Trust.10 The initial determination of the wholesale bank status of a depository institution is made racial disparities in the loans made by Applicants and Resource. The by the institution's appropriate Federal banking agency and Board has recognized that HMDA data alone provide an incomplete measure of an institution's lending in its community, and that these is reviewed by the agency during each CRA performance data have limitations that make them an inadequate basis, absent other examination of the institution. The Board gives great information, for concluding that an institution has engaged in illegal weight to the determination made by examiners because lending discrimination. The limitations of HMDA data are even that review is made on-site and encompasses an evaluation greater when, as in this case, the relevant institutions are not engaged of all the activities of the institution by the agency charged in the business of mortgage lending. For example, Resource Trust Company originated only ten loans totaling $2.1 million from 1997 by the CRA with responsibility for assessing the CRA through 1999 that were reported under HMDA. In light of the limitaperformance of the institution. As noted above, examiners tions of HMDA data, particularly as applied to wholesale banks, the reaffirmed the wholesale bank status of each depository Board has carefully reviewed other information, particularly examinainstitution involved in the proposal at its most recent CRA tion reports that provide an on-site evaluation of compliance with the performance examination. The Board has also consulted fair lending laws by Applicants' subsidiary depository institutions and Resource Trust Company. Examiners found no substantive violations with the appropriate Federal banking agencies for deposiof antidiscrimination laws or other illegal credit practices at any of the tory institutions involved in the proposal concerning their depository institutions involved in this proposal, and the Board incorcurrent status as wholesale banks. Based on this informa- porates those findings in this order. Protestant also requested that the tion, the Board has considered the CRA record of each Board consider the HMDA data of the Applicants and Resource for depository institution involved in the proposal pursuant to 2000. However, these data are not required to be submitted until March 1,2001. the community development test appropriate for wholesale 12. Protestant also requested that the Board hold a public meeting or banks. The Board has forwarded the comments of Proteshearing on the proposal. Section 3 of the BHC Act does not require tant to the appropriate Federal banking agencies for the the Board to hold a public hearing on an application unless the depository institutions so that they can be considered in the appropriate supervisory authority for the bank to be acquired makes a next examinations of the institutions.11 timely written recommendation of denial. The Board has not received such a recommendation from the appropriate supervisory authorities. Under its rules, the Board also may, in its discretion, hold a public meeting or hearing on an application to acquire a bank if a meeting or 9. Designation as a wholesale bank requires the appropriate Federal hearing is necessary or appropriate to clarify factual issues related to banking agency to evaluate a bank's record of CRA performance the application and to provide an opportunity for testimony. 12 C.F.R. under a separate "community development test." See, e.g., 12 C.F.R. 225.16(e). The Board has carefully considered the request for a public 228.25(a). This test evaluates a wholesale bank on its record of meeting or hearing in light of all the facts of record. In the Board's community development services, community development invest- view, the public has had ample opportunity to submit comments on ments, and community development lending. See, e.g., 12 C.F.R. the proposal and, in fact, Protestant has submitted written comments 228.25(c). The primary purpose of any service, investment, or loan that have been carefully considered by the Board in acting on the considered under the test must be "community development," which proposal. The Protestant's request fails to identify disputed issues of is defined in terms of specific categories of activities that benefit LMI fact that are material to the Board's decision and that may be clarified individuals, LMI areas, or small businesses or farms. See, e.g., by a public meeting or hearing. The Protestant's request also fails to 12 C.F.R. 228.12(h). show why a public meeting or hearing is necessary for the proper 10. See The Charles Schwab Corporation, 86 Federal Reserve presentation or consideration of the Protestant's views. For these Bulletin 494 (2000). reasons, and based on all the facts of record, the Board has determined 11. Protestant also maintained that Home Mortgage Disclosure Act that a public meeting or hearing is not required or warranted in this (12 U.S.C. § 2801 et seq.) ("HMDA") data for 1999 demonstrate case. Accordingly, the request is hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
236 Federal Reserve Bulletin • April 2001 findings and decision and, as such, may be enforced in nois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Misproceedings under applicable law. souri, Ohio, Tennessee, and Wisconsin. The acquisition of Resource shall not be consummated U.S. Bancorp, with total consolidated assets of $86 bilbefore the fifteenth calendar day after the effective date of lion, is the 11th largest commercial banking organization this order, or later than three months after the effective date in the United States, controlling approximately 1.7 percent of this order, unless such period is extended for good cause of total US. banking assets. U.S. Bancorp operates subsidby the Board or by the Federal Reserve Bank of iary banks in 16 western and midwestern states. San Francisco, acting pursuant to delegated authority. On consummation of the proposal and after accounting By order of the Board of Governors, effective Febru- for the proposed divestitures discussed in this order, New ary 26, 2001. U.S. Bancorp would become the ninth largest commercial banking organization in the United States, with total con- Voting for this action: Chairman Greenspan, Vice Chairman Fergu- solidated assets of $160 billion, representing approxison, and Governors Meyer and Gramlich. Absent and not voting: mately 3.1 percent of total U.S. banking assets.4 The com- Governor Kelley. bined organization would have a significant presence in the Midwest and Northwest. ROBERT DEV. FRIERSON Associate Secretary of the Board Interstate Analysis Firstar Corporation Section 3(d) of the BHC Act allows the Board to approve Milwaukee, Wisconsin an application by a bank holding company to acquire control of a bank located in a state other than the home U.S. Bancorp state of the bank holding company if certain conditions are Minneapolis, Minnesota met. For purposes of the BHC Act, the home state of Firstar is Wisconsin,5 and the subsidiary banks of U.S. Order Approving Merger of Bank Holding Companies Bancorp are located in California, Colorado, Illinois, Idaho, Iowa, Minnesota, Montana, Nebraska, Nevada, North Da- Firstar Corporation ("Firstar"), a bank holding company kota, Oregon, South Dakota, Utah, Washington, Wisconwithin the meaning of the Bank Holding Company Act sin, and Wyoming.6 The Board has reviewed the interstate ("BHC Act"), has requested the Board's approval under banking laws of each state in which Firstar would acquire section 3 of the BHC Act (12 U.S.C. § 1842) to merge with banking operations and consulted with the appropriate U.S. Bancorp and thereby acquire control of U.S. Banbanking regulator in each of those states regarding the corp's subsidiary banks, including its lead subsidiary bank, permissibility of the proposed transaction under applicable U.S. Bank National Association, Minneapolis, Minnesota state law. ("U.S. Bank").1 The resulting bank holding company All the conditions for an interstate acquisition enumerwould be named U.S. Bancorp ("New U.S. Bancorp") and ated in section 3(d) are met in this case. Firstar is adehave its headquarters also in Minneapolis.2 quately capitalized and adequately managed, as defined by Notice of the proposal, affording interested persons an applicable law.7 In addition, the subsidiary banks of U.S. opportunity to submit comments, has been published Bancorp that Firstar would acquire in an interstate transac- (65 Federal Register 68,134 (2000)). The time for filing tion have been in existence for the minimum period of time comments has expired, and the Board has considered the required by applicable law.8 On consummation of the proposal and all comments received during the comment period in light of the factors set forth in section 3 of the BHC Act. 4. Firstar and U.S. Bancorp are financial holding companies that are Firstar, with total consolidated assets of $74 billion, is engaged in various nonbanking activities in the United States and the 17th largest commercial banking organization in the abroad. Firstar intends to acquire the domestic nonbanking operations of US. Bancorp in accordance with section 4(k)(4) of the BHC Act United States, controlling approximately 1.4 percent of and the post-transaction notice procedures of section 225.87 of Regutotal banking assets of insured commercial banks in the lation Y. Firstar also has informed the Board that it intends to acquire United States ("total U.S. banking assets").3 Firstar oper- U.S. Bancorp's foreign nonbanking operations in accordance with ates subsidiary banks in Arizona, Arkansas, Florida, Illi- section 4(c)(13) of the BHC Act and the general consent provisions of section 211.5 of the Board's Regulation K. 5. A bank holding company's home state is that state in which the total deposits of all banking subsidiaries of the company were the 1. U.S. Bancorp's other subsidiary banks are U.S. Bank National largest on the later of July 1, 1966, or the date on which the company Association ND, Fargo, North Dakota ("U.S. Bank ND"); U.S. Bank became a bank holding company. 12 U.S.C. § 1841(o)(4)(C). National Association MT, Billings, Montana ("U.S. Bank MT"); and 6. For purposes of section 3(d), the Board considers a bank to be U.S. Bank National Association OR, Canby, Oregon ("U.S. Bank located in the states in which the bank is chartered, headquartered, or OR"). operates a branch. 2. Firstar and U.S. Bancorp also have requested the Board's ap- 7. See 12 U.S.C. § 1842(d)(1)(A). proval to exercise options to purchase up to 19.9 percent of each 8. See 12 U.S.C. § 1842(d)(1)(B). With the exception of U.S. Bank other's common stock if certain events occur. These options would ND, which was chartered in 1997 and primarily engages in credit card expire on consummation of the proposed merger. operations, each subsidiary bank of U.S. Bancorp has been in exis- 3. Asset and ranking data are as of June 30, 2000. tence for at least five years and, therefore, may be acquired without Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 237 proposal and after accounting for the proposed divestitures, of market deposits and the increase in this level as mea- New U.S. Bancorp and its affiliates would control less than sured by the Herfindahl-Hirschman Index ("HHI") under 10 percent of the total amount of deposits of insured the Department of Justice Guidelines ("DOJ Guidedepository institutions in the United States and less than 30 lines"),13 and other characteristics of the markets. percent, or the applicable percentage established by state law, of total deposits in each state in which the insured A. Certain Banking Markets without Divestitures depository institutions of both Firstar and U.S. Bancorp are located.9 All other requirements of section 3(d) would be Consummation of the proposal without divestitures would met on consummation of the proposal. Accordingly, based be consistent with Board precedent and the DOJ Guideon all the facts of record, the Board is permitted to approve lines in eight banking markets.14 After consummation of the proposed transaction under section 3(d) of the BHC the proposal, two of these banking markets would remain Act. unconcentrated and two other banking markets would remain moderately concentrated as measured by the HHI.15 Competitive Considerations The remaining four markets without divestitures would be highly concentrated as measured by the HHI, but the Section 3 of the BHC Act prohibits the Board from approv- increase in the HHI would be within the threshold levels ing a proposal that would result in a monopoly or would be established by the DOJ Guidelines and Board precedent.16 in furtherance of any attempt to monopolize the business of banking in any relevant banking market. The BHC Act also B. The Minneapolis-St. Paul, Minnesota Banking Market prohibits the Board from approving a proposed bank acquisition that substantially would lessen competition in any Consummation of the proposal without divestitures would relevant banking market, unless the Board finds that the exceed the thresholds in the DOJ Guidelines in the anticompetitive effects of the proposal clearly are out- Minneapolis-St. Paul banking market. Firstar is the fourth weighed in the public interest by the probable effect of the largest competitor in the Minneapolis-St. Paul banking proposal in meeting the convenience and needs of the market, controlling deposits of $1.9 billion, representing community to be served.10 4.7 percent of market deposits.17 U.S. Bancorp is the larg- Firstar and U.S. Bancorp compete directly in nine local est competitor in the Minneapolis-St. Paul banking market, banking markets in four states.11 The Board has reviewed controlling deposits of $13.4 billion, representing 32.4 percarefully the competitive effects of the proposal in each of cent of market deposits. To reduce the potential for adverse these banking markets in light of all the facts of record, competitive effects in this banking market, Firstar has including the number of competitors that would remain in committed to divest 11 branches (the "divestiture branchthe markets, the relative share of total deposits in deposi- es") that account for approximately $718 million in depostory institutions controlled by Firstar and U.S. Bancorp in its.18 Firstar has entered into a sale agreement with an the markets ("market deposits"),12 the concentration level thrift deposits in the market share calculation on a 50-percent weighted regard to any state age requirement. North Dakota law provides that basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 an out-of-state bank holding company may acquire a North Dakota (1991). bank if a North Dakota holding company would be permitted to 13. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), acquire a bank in the acquiring bank holding company's home state a market is considered unconcentrated if the post-merger HHI is under under the same circumstances. N.D. Cent. Code § 6-08.3.3-13. Thus, 1000, moderately concentrated if the post-merger HHI is between the age requirement provisions of the interstate banking statute of the 1000 and 1800, and highly concentrated if the post-merger HHI is acquirer's home state, in this case Wisconsin, effectively govern an more than 1800. The Department of Justice has informed the Board interstate acquisition of a North Dakota bank. Wisconsin's interstate that a bank merger or acquisition generally will not be challenged (in banking statute allows an out-of-state bank holding company to ac- the absence of other factors indicating anticompetitive effects) unless quire a bank that has been in existence for fewer than five years, but it the post-merger HHI is at least 1800 and the merger increases the HHI requires the acquirer to divest any such bank within two years of the by more than 200 points. The Department of Justice has stated that the acquisition. Wis. Stat. Ann. § 221.0901. The Commissioner of Bank- higher than normal HHI thresholds for screening bank mergers for ing and Financial Institutions for the State of North Dakota has anticompetitive effects implicitly recognize the competitive effects of confirmed that Firstar's proposed acquisition of U.S. Bank ND is limited-purpose lenders and other nondepository financial institutions. consistent with North Dakota's interstate banking provisions if Firstar 14. These markets are Chicago and Rock Island-Davenport, Illinois; divests the bank within two years of acquiring U.S. Bancorp. Firstar Ames, Des Moines, Johnson, and Marengo, Iowa; Omaha-Council has committed to divest the bank within that period. Bluffs, Nebraska; and Milwaukee, Wisconsin. The effects of the 9. See 12 U.S.C. § 1842(d)(2). proposal on the concentration of banking resources in these markets 10. 12 U.S.C. § 1842(c)(1). are described in Appendix B. 11. These banking markets are described in Appendix A. 15. The unconcentrated markets are Chicago and Marengo, and the 12. Market share data are as of June 30, 1999, and are based on moderately concentrated markets are Milwaukee and Rock Islandcalculations in which the deposits of thrift institutions, which include Davenport. savings banks and savings associations, are weighted at 50 percent. 16. These markets are Ames, Des Moines, Johnson, and Omaha- The Board previously has indicated that thrift institutions have Council Bluffs. become, or have the potential to become, significant competitors of 17. Deposit data are as of June 30, 1999, and have been adjusted to commercial banks. See, e.g., Midwest Financial Group, 75 Federal reflect subsequent mergers and acquisitions. Reserve Bulletin 386 (1989); National City Corporation, 70 Federal 18. Firstar has committed to execute, before consummation of the Reserve Bulletin 743 (1984). Thus, the Board regularly has included proposal, a sales agreement for the proposed divestiture with a pur- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
238 Federal Reserve Bulletin • April 2001 existing competitor in the Minneapolis-St. Paul banking In this case, the Board believes that a number of factors market regarding the divestiture branches.19 On consum- indicate that consummation of the proposed merger is not mation of the proposal, and after accounting for the dives- likely to have a significantly adverse effect on competition titure to the proposed purchaser, the combined organization in the Minneapolis-St. Paul banking market. With the would become the largest competitor in the Minneapolis- proposed divestiture of at least $700 million in deposits, St. Paul banking market. New U.S. Bancorp would control the combined relative strength of the two largest competideposits of $14.6 billion, representing approximately tors in the Minneapolis banking market would not increase 35.4 percent of market deposits,20 and the HHI would significantly.23 The sizable divestiture proposal also would increase by 187 points to 2308. significantly strengthen the competitive position of the Although 114 depository institutions compete in the proposed in-market competitor that has agreed to purchase Minneapolis-St. Paul banking market, U.S. Bancorp and the divestiture branches.24 Wells Fargo & Company, San Francisco, California In addition, the record of de novo entry into the ("Wells Fargo"), through their respective predecessor or- Minneapolis-St. Paul banking market in the last five years ganizations, consistently have led the banking market since has been unprecedented when compared with other bankat least I960.21 The Board previously has recognized the ing markets nationwide and confirms the attractiveness of unique structure of the Minneapolis-St. Paul banking mar- the Minneapolis-St. Paul banking market to new entry. ket and has indicated that mergers involving one of the two Since 1995, 35 depository institutions have entered the largest depository institutions in the market warrant close market de novo by either chartering a new bank or estabreview because of the size of these institutions relative to lishing a new branch in the market. Of these de novo other market competitors. The Board, therefore, has con- entrants, 11 have entered the market since June 1999. In sidered whether other factors mitigate the competitive addition, 11 depository institutions have expanded their effects of the proposal or indicate that the proposal would existing branch networks in the market. have a significantly adverse effect on competition in the Other factors indicate that the Minneapolis-St. Paul market.22 banking market remains attractive for entry. From 1990 to 2000, the average increase in population for the Minneapolis-St. Paul Metropolitan Statistical Area ("MSA") exceeded that of both the State of Minnesota and chaser determined by the Board to be competitively suitable and to the entire United States.25 In addition, for each year during complete the divestiture within 180 days after consummation of the that same period, the unemployment rate in the proposal. Firstar further has committed that the divestiture will in- Minneapolis-St. Paul MSA was lower than that of Minneclude at least $700 million in deposits in the Minneapolis-St. Paul sota and the entire United States. Moreover, for the year banking market as of the divestiture date. In addition, Firstar has committed that, if it is unsuccessful in completing any divestiture that ended on June 30, 1999, the percentage increase in within 180 days of consummation, Firstar will transfer the unsold deposits in the Minneapolis-St. Paul MSA was more than branch(es) to an independent trustee that is acceptable to the Board three times that of other MS As in Minnesota and more than and will instruct the trustee to sell the branch(es) promptly to one four times that of the entire United States.26 or more alternative purchasers acceptable to the Board. See Based on all the facts of record and for the reasons BankAmerica Corporation, 78 Federal Reserve Bulletin 338 (1992); United New Mexico Financial Corporation, 77 Federal Reserve Bulle- discussed above, the Board believes that competitive contin 484 (1991). siderations in the Minneapolis-St. Paul banking market are 19. Because of the structure of the Minneapolis-St. Paul banking consistent with approval in this case. However, the Board market, described herein, Firstar has committed that it will not sell any continues to have concerns about the structure of the branches to the second largest competitor in the market. 20. A commenter expressed concern that the Minneapolis-St. Paul Minneapolis-St. Paul banking market and believes that banking market already was highly concentrated and asserted that future mergers involving either of the two largest competi- Firstar's proposed divestitures in that market were inadequate to tors in that banking market would warrant special consideraddress competitive concerns. The commenter contended that the ation. The Board intends to scrutinize carefully any future merger as structured violated antitrust laws. This commenter also acquisition proposal that would increase the market share criticized Firstar for omitting the identity of the specific branches to be divested from the public portion of its application, and asserted that this omission impeded his ability to comment on the proposal's competitive effects. The Board has concluded, however, that the increase in market concentration. See NationsBank Corporation, public information on the proposed divestitures that Firstar provided, 84 Federal Reserve Bulletin 129 (1998). including the structural effects in the Minneapolis-St. Paul banking 23. The combined market share percentage of the two largest market, was sufficient for interested persons to evaluate and comment competitors would increase from 64 percent to 67 percent. on the competitive effects of the proposal. 24. The acquirer of the divestiture branches would almost triple its 21. See, e.g., Norwest Corporation, 82 Federal Reserve Bulletin market share and would become the fourth largest competitor in the 580 (1996); First Bank System, Inc., 79 Federal Reserve Bulletin 50 Minneapolis-St. Paul banking market. (1993). Wells Fargo is the second largest competitor in the market, 25. The population of the Minneapolis-St. Paul MSA increased by controlling deposits of approximately $13 billion, representing 13.4 percent, compared with an increase of 9.7 percent for the State of 31.6 percent of market deposits. The third largest competitor controls Minnesota and 10.9 percent for the entire United States. 6 percent of market deposits, the fifth largest competitor controls 26. Deposits in the Minneapolis-St. Paul MSA increased by 2.2 percent of market deposits, and the remaining competitors each 16.9 percent, compared with an increase of 2 percent in the Duluthcontrol less than 2 percent of market deposits. Superior MSA, 3.3 percent in the St. Cloud MSA, and 5 percent in 22. The number and strength of factors necessary to mitigate the the Rochester MSA. Deposits in the entire United States increased by competitive effects of a proposal depend on the level of and size of the 3.4 percent. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 239 of one of the two largest competitors in the Minneapolis- In evaluating financial factors in expansion proposals by St. Paul banking market. banking organizations, the Board consistently has considered capital adequacy to be especially important. The C. Views of Other Agencies and Conclusion Board notes that Firstar, U.S. Bancorp, and each of their subsidiary banks are and on consummation of the proposal The Department of Justice also has conducted a detailed would continue to be well capitalized, as defined in the review of the anticipated competitive effects of the pro- relevant regulations of federal banking agencies. The proposal. The Department has advised the Board that, in light posed acquisition is structured as an exchange of shares of of the proposed divestitures, the Department believes that Firstar and U.S. Bancorp for shares of New U.S. Bancorp, consummation of the proposal likely would not have a and neither Firstar nor New U.S. Bancorp would incur any significantly adverse effect on competition in any relevant debt as a result of the transaction.29 banking market.27 The Office of the Comptroller of the The Board also has considered the managerial resources Currency ("OCC") and the Federal Deposit Insurance of Firstar and U.S. Bancorp and the examination reports of Corporation ("FDIC") have been afforded an opportunity the federal financial supervisory agencies that supervise to comment and have not objected to consummation of the these organizations, including their subsidiary banks.30 proposal. Firstar, U.S. Bancorp, and their subsidiary banks are well After carefully reviewing all the facts of record, includ- managed, with appropriate risk management systems in ing public comments on the competitive factors, and for place.31 New U.S. Bancorp would select its senior managethe reasons discussed in this order, the Board has con- ment from the senior executives of Firstar and U.S. Bancluded that consummation of the proposal likely would not corp, which would provide the combined organization with result in a significantly adverse effect on competition or on officers that are experienced and knowledgeable in the the concentration of banking resources in any of the nine operations and markets of both companies.32 In addition, banking markets in which Firstar and U.S. Bancorp com- the Board has considered Firstar's recent record of successpete directly or in any other relevant banking market. fully integrating acquired organizations and remaining well Accordingly, based on all the facts of record and subject to managed. Moreover, Firstar and U.S. Bancorp have indicompletion of the proposed divestitures, the Board has cated that they are devoting significant resources to address determined that competitive factors are consistent with all aspects of the merger process. approval of the proposal. Financial, Managerial, and Other Supervisory Factors Reinvestment Act, and other relevant banking statutes. See Deutsche Section 3 of the BHC Act requires the Board to consider Bank Order. the financial and managerial resources and future prospects 29. A commenter indicated that the proposed merger was motivated of the companies and banks involved in the proposal and by the personal interests of the senior management officials at Firstar and U.S. Bancorp, rather than by the interests of the shareholders of certain other supervisory factors. The Board has carefully those companies. The Board notes that the shareholders of Firstar and considered these factors in light of all the facts of record, U.S. Bancorp have the opportunity to vote on the proposed transaction including public comments, reports of examination and at the special meetings scheduled for shareholders. other confidential supervisory information assessing the 30. Several commenters criticized Firstar's management for lobbyfinancial and managerial resources of the organizations, ing the Wisconsin legislature to amend the state's bankruptcy laws to give bank liens for secured loans a preference in corporate bankruptcy and other information provided by Firstar and U.S. Banproceedings over wage claim liens filed by workers. The Board notes corp.28 that these commenters' contentions do not allege any illegal activity or other action that would affect the safety and soundness of the institutions. This matter also is outside the limited statutory factors that the Board is authorized to consider when reviewing an application under the BHC Act. 27. To address concerns expressed by the Department of Justice, 31. One commenter alleged that inadequate management at Firstar also will divest branches in the Omaha-Council Bluffs banking U.S. Bancorp was evidenced by the enforcement action of the Securimarket. These branches are subject to the divestiture commitments ties and Exchange Commission ("SEC") and lawsuits by investors Firstar has made to the Board. against Piper Capital Management, Inc. ("PCM"), a nonbanking 28. A commenter asserted that U.S. Bancorp had a poor record of subsidiary of U.S. Bancorp. The violations alleged by the SEC related employment and third-party vendor development in the African- to PCM's investment advisory activities in connection with a regis- American community. The commenter also expressed concern that tered investment company and occurred in 1994, before U.S. Firstar lent money to a company that allegedly has a history of Bancorp's acquisition of PCM in 1998. U.S. Bancorp has provided employment discrimination on the basis of race. The Board previously detailed information about the steps both PCM and U.S. Bancorp have has noted that neither the racial composition of management nor the taken since 1994 to resolve the issues raised by the SEC and investor effect of a proposed transaction on employment in a community is litigation. among the factors included in the BHC Act. See, e.g., Deutsche Bank 32. One commenter cited press reports about the loss of personnel at AG, 85 Federal Reserve Bulletin 509 (1999) ("Deutsche Bank one of Firstar's nonbanking subsidiaries. According to these and other Order")-, Norwest Corporation, 84 Federal Reserve Bulletin 1088 press reports, Firstar has filed lawsuits against certain employees who (1998). Although the Board fully supports programs designed to left this subsidiary, alleging breach of a noncompete clause. In evalucreate and stimulate employment opportunities for all members of ating the managerial factor, the Board has reviewed the current society, the Board also considers the third-party contracting of U.S. managerial resources and future prospects of Firstar's entire organiza- Bancorp to be beyond the scope of the BHC Act, the Community tion, including the nonbank subsidiary cited by the commenter. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
240 Federal Reserve Bulletin • April 2001 Based on all the facts of record, including confidential A number of local government agencies involved in reports of examination and other supervisory information, community development also commented favorably on the Board has concluded that considerations relating to the their experiences with Firstar and U.S. Bancorp. In addifinancial and managerial resources of Firstar, U.S. Ban- tion, a number of private organizations commended Firstar corp, and their respective banking subsidiaries are consis- and US. Bancorp for supporting the development of affordtent with approval, as are the other supervisory factors that able housing for low-income individuals and individuals the Board must consider under section 3 of the BHC Act.33 with disabilities through loans, grants, and technical assistance. Other private organizations supported the proposal Convenience and Needs Considerations based on Firstar's and U.S. Bancorp's records of financing community development projects in neighborhoods with In acting on a proposal under section 3 of the BHC Act, the predominantly LMI and minority residents, and their Board is required to consider the effects of the proposal on records of financing businesses owned by women and the convenience and needs of the communities to be served minorities ("women-owned businesses" and "minorityand take into account the records of the relevant depository owned businesses") directly and through financial intermeinstitutions under the Community Reinvestment Act diaries. Some community-based organizations observed ("CRA").34 The CRA requires the federal financial super- that innovative products and services for LMI communities visory agencies to encourage financial institutions to help were developed through partnerships with Firstar and U.S. meet the credit needs of local communities in which they Bancorp. operate, consistent with safe and sound operation, and Approximately 16 commenters either opposed the prorequires the appropriate federal supervisory agency to take posal, requested that the Board approve the merger subject into account an institution's record of meeting the credit to conditions suggested by the commenter, or expressed needs of its entire community, including low- and concerns about the records of Firstar, U.S. Bancorp, or both moderate-income ("LMI") neighborhoods, in evaluating in meeting the convenience and needs of the communities bank expansion proposals. The Board has carefully consid- they serve. Some commenters generally asserted that ered the convenience and needs factor and the CRA perfor- Firstar and U.S. Bancorp had low and declining levels of mance records of the subsidiary depository institutions of home mortgage, small business, and small farm lending, Firstar and U.S. Bancorp in light of all the facts of record, particularly to LMI or minority individuals or in predomiincluding public comments received on the effect the pro- nantly minority communities. Based on data submitted posal would have on the communities to be served by the under the Home Mortgage Disclosure Act ("HMDA"), combined organization. several commenters alleged that Firstar and U.S. Bancorp engaged in disparate treatment of LMI and minority indi- A. Summary of Public Comments viduals in home mortgage lending.35 A commenter also criticized the level of participation by Firstar and U.S. The Board received approximately 209 comments on the Bancorp in government credit enhancement and guaranproposal. Approximately 193 commenters supported the teed loan programs, particularly in Wisconsin. In addition, proposal or commented favorably on Firstar's or U.S. commenters expressed concerns that the proposal would Bancorp's CRA-related activities. Many of these comment- result in branch closings, less lending and local decisioners commended Firstar for providing credit or other ser- making in rural communities, or the termination or reducvices to small businesses, sponsoring community develop- tion of the affordable housing and community development ment activities, participating in programs that provide products and programs of Firstar and U.S. Bancorp. affordable housing and mortgage financing for LMI indi- Several commenters expressed concern about Firstar's viduals, and providing support to nonprofit organizations. record of home mortgage lending to LMI or minority Other commenters related their favorable experiences with individuals and in LMI or predominantly minority commuspecific programs or services offered by Firstar or U.S. nities, particularly in Chicago, Illinois; Cleveland, Ohio; Bancorp. St. Louis, Missouri; and Milwaukee, Wisconsin. Some commenters criticized Firstar's level of small business lending in LMI and predominantly minority communities in Chicago. In addition, a commenter alleged that Firstar 33. A commenter cited press reports that U.S. Bancorp had settled provides a low level of banking services and reinvestment claims alleging violations of consumer protection laws related to its in LMI communities in Cleveland.36 Another commenter arrangement with telemarketing organizations for marketing nonfinancial products to consumers, including a claim brought by the Minne- asserted that Firstar has reduced its banking services and sota Attorney General. Based on these press reports, the commenter lending to rural LMI individuals and communities, particuasserted that U.S. Bancorp had violated such laws. U.S. Bancorp larly in Wisconsin. A commenter also expressed concerns discontinued the marketing arrangements and customer information sharing practices at issue soon after commencement of the Attorney General's action, settled the various claims, and was not convicted of any offense in connection with the consumer protection law claims. In addition, U.S. Bancorp has implemented various changes to its con- 35. 12 U.S.C. § 2801 et seq. sumer banking policies and procedures to address heightened con- 36. This commenter also asserted that Firstar management has cerns over consumer privacy issues. failed to ascertain the financial resources needed in LMI and predomi- 34. 12 U.S.C. § 2901 et seq. nantly minority communities in Cleveland. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 241 regarding Firstar's record of closing branches in LMI and subsidiary banks also received either "outstanding" or predominantly minority communities.37 "satisfactory" ratings at the most recent examinations of In addition, a commenter criticized U.S. Bancorp's their CRA performance. In particular, U.S. Bank, which is record of home mortgage and small business lending in U.S. Bancorp's lead bank and now represents approxi- LMI and predominantly minority communities in Minneap- mately 94 percent of the total consolidated assets conolis. The commenter further expressed concern that US. trolled by US. Bancorp, received a "satisfactory" rating at Bancorp's level of community development and affordable its most recent CRA performance evaluation by the OCC, housing investments was declining.38 as of April 1998.41 Examiners found no evidence of prohibited discrimina- B. CRA Performance Examinations tion or other illegal credit practices at any of the insured depository institutions involved in this proposal and found As provided in the CRA, the Board has evaluated the no violations of substantive provisions of the fair lending convenience and needs factor in light of examinations by laws.42 Examiners also reviewed the assessment areas dethe appropriate federal supervisors of the CRA perfor- lineated by the subsidiary banks of Firstar and U.S. Banmance records of the relevant institutions. An institution's most recent CRA performance evaluation is a particularly son, Wisconsin, which received an "outstanding" rating from the important consideration in the applications process because FRB Chicago, as of April 1997; and Firstar Bank Milwaukee, N.A., it represents a detailed, on-site evaluation of the institu- Milwaukee, Wisconsin, which received a "satisfactory" rating from tion's overall record of performance under the CRA by its the OCC, as of November 1997. The other two current subsidiary appropriate federal supervisor.39 banks of Firstar include Firstar Bank Midwest, N.A. (formerly Mercantile Bank, Overland Park, Kansas), which received an "outstand- All Firstar's subsidiary banks received either "outstanding" rating in its most recent CRA performance evaluation by the ing" or "satisfactory" ratings at the most recent examina- OCC, as of September 1998, and Firstar Bank U.S.A., N.A., Wauketions of their CRA performance. In particular, Firstar's gan, Illinois ("Firstar USA"), which received a "satisfactory" rating lead bank, Firstar Bank, National Association, Cincinnati, in its most recent CRA performance evaluation by the OCC, as of Ohio ("Firstar Bank"), which now accounts for approxi- November 1997. 41. In 1997, US. Bancorp was acquired by First Bank System, Inc., mately 93 percent of the total consolidated assets of Firstar, which retained the U.S. Bancorp name, and U.S. Bank was formerly received a "satisfactory" rating at its most recent CRA named First Bank National Association. U.S. Bancorp has acquired a performance evaluation by the OCC, as of July 1998 number of banks in recent years and has merged and renamed the ("1998 Firstar Bank Evaluation").40 All U.S. Bancorp's banks controlled by the combined organization. See First Bank System, Inc., 83 Federal Reserve Bulletin 689 (1997). All the banks that have been merged into U.S. Bank have received at least a "satisfactory" rating at the most recent examinations of their CRA performance 37. Several commenters opposed the proposal based on unfavorable by the appropriate federal financial supervisory agency. In addition, experiences with Firstar in particular loan transactions or business U.S. Bank MT (formerly named First Bank Montana, N.A., Billings, dealings with the organization. The Board has reviewed these com- Montana), received a "satisfactory" rating from the OCC, as of July ments in light of the facts of record, including information provided 1995. U.S. Bank ND (formerly named First Bank National Associaby Firstar. The Board has provided copies of these comments to the tion, ND, Fargo, North Dakota), a limited-purpose credit card bank, appropriate federal supervisor of the subsidiary involved for its con- was chartered on July 31, 1997, and changed its name in March 1998. sideration. The OCC has not rated its record of CRA performance to date. US. 38. One commenter alleged generally that U.S. Bancorp had a poor Bancorp's other subsidiary bank, U.S. Bank OR, is a limited-purpose record of philanthropy and marketing banking services in the African- cash management bank that is not subject to the CRA. American community. 42. One commenter contended that New Century Financial Corpora- 39. See Interagency Questions and Answers Regarding Community tion, Irvine, California ("New Century"), a nondepository mortgage Reinvestment, 65 Federal Register 25,088 and 25,107 (2000). company, is a subsidiary of U.S. Bancorp and that it engages in 40. Firstar Bank formerly was named Star Bank, N.A. ("Star predatory lending by making subprime loans and imposing prepay- Bank"), and was acquired by Firstar in 1998 through a merger with ment penalties more frequently than its competitors. The commenter Star Banc Corporation, Cincinnati, Ohio ("SBC"). See Firstar Corpo- also alleged that New Century engages in a higher level of subprime ration, 84 Federal Reserve Bulletin 1083 (1998) {"Firstar/SBC lending to African Americans in certain metropolitan areas than its Order"). The most recent CRA performance evaluation for Firstar competitors. U.S. Bancorp has indicated that it currently does not own Bank was the evaluation of Star Bank conducted by the OCC before or control, in the aggregate, 25 percent or more of the shares of New the merger. Firstar adopted SBC's CRA program. See Firstar/SBC Century, or otherwise control New Century. Consequently, New Cen- Order at 1084. Firstar has engaged in a number of other acquisitions, tury is not a subsidiary of U.S. Bancorp for purposes of the BHC Act. such as the acquisition of Mercantile Bancorporation, St. Louis, The Board, however, has carefully considered these comments in light Missouri ("Mercantile"), and recently has merged and renamed vari- of the relationships between New Century and U.S. Bancorp. ous banks under the combined organization. See Firstar Corporation, The Board has forwarded copies of the comments regarding New 85 Federal Reserve Bulletin 738 (1999) ("Firstar/Mercantile Order"). Century to the Department of Housing and Urban Development Each of the banks that has been merged into Firstar Bank received at ("HUD"), the Department of Justice, and the Federal Trade Commisleast a "satisfactory" rating at the most recent CRA performance sion, which have responsibility for fair lending law compliance by evaluation by its appropriate federal financial supervisory agency. nondepository companies like New Century. The Board also has Among these predecessor banks are Firstar Bank Illinois, Chicago, consulted with these agencies. In addition, the Board has considered Illinois, which received a "satisfactory" rating from the Federal information submitted by U.S. Bancorp on New Century's consumer Reserve Bank of Chicago ("FRB Chicago"), as of June 1998; lending practices, including the processes by which New Century Mercantile Bank, N.A., St. Louis, Missouri, which received a "satis- makes credit available to consumers, the compliance procedures estabfactory" rating from the OCC, as of June 1997; Firstar Bank Minne- lished by New Century, the methodology employed by New Century sota, N.A., St. Paul, Minnesota, which received a "satisfactory" rating in setting risk-based interest rates, and the relationship of New Cenfrom the OCC, as of December 1997; Firstar Bank Wisconsin, Madi- tury with loan brokers and correspondents. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
242 Federal Reserve Bulletin • April 2001 corp and did not report that these assessment areas were has lent $3.6 billion, including approximately $161 million unreasonable or arbitrarily excluded LMI areas. in small business loans to businesses in LMI census tracts. In recent years, Firstar and U.S. Bancorp have acquired Examiners commended Firstar Bank for the amount of other banking organizations and consolidated their subsid- community development loans that the bank and its affiliiary banks. The most recent CRA performance evaluations ates had originated. Examiners also determined that Firstar of their respective subsidiary banks predate the current Bank's qualified community development investments genstructure of the organizations. Therefore, the Board also erally showed good responsiveness to the community dehas evaluated extensive information submitted by Firstar velopment needs of its assessment areas.45 and U.S. Bancorp about their CRA performance since the Firstar represented that, since its latest CRA evaluations, dates of their most recent CRA performance evaluations. it has maintained a high level of community development activity in the communities it serves, participated in a C. Firstar's CRA Performance Record number of loan pools and equity funds to finance affordable housing and small business development, and pro- Overview. Examiners commended Firstar Bank for its re- vided financial support to organizations that engage in such sponsiveness to the credit needs in its assessment areas, activities. For example, Firstar stated that, in 1999, it particularly the needs of LMI communities and borrowers. originated more than $300 million in community develop- Examiners reported that Firstar Bank offered a variety of ment loans throughout its assessment areas. Firstar also products and programs to assist in meeting the housing- represented that, during the first six months of 2000, related credit needs of LMI individuals and communities. it made qualified community development investments to- Firstar has implemented its American Dream Home taling more than $165 million, including more than Loan program, which offers portfolio mortgage loan prod- $120 million that were eligible for low-income housing tax ucts designed for LMI borrowers that feature more flexible credits. credit requirements, low down payments, and reduced in- Examiners found that Firstar Bank provided a good level terest rates and fees. Firstar represented that, in 1998 and of banking services in its assessment areas and that the 1999, it originated $68 million in loans under this program. bank's delivery systems were accessible to all portions of Firstar also has participated in a number of government- its assessment areas, including LMI areas. In addition, the sponsored home mortgage loan programs. Firstar stated Department of the Treasury advised Firstar that, as of that, in 1999, it originated loans totaling approximately October 2000, Firstar Bank was the largest institution in $548.6 million under government mortgage programs, such the United States to implement successfully the Electronic as those sponsored by the Federal Housing Authority Transfer Account for recipients of federal government ("FHA") and the Veterans Administration ("VA"). From payments at all its branch locations. January through September 2000, Firstar reportedly made Chicago, Illinois. Firstar Bank Illinois, Chicago, Illinois loans totaling more than $372 million under these pro- ("Firstar IL"), which was merged into Firstar Bank in May grams. Firstar stated that it also provided $83 million in 1999, received a "satisfactory" rating in its last CRA loans under programs sponsored by the Federal National performance evaluation by the FRB Chicago, as of June Mortgage Association ("FNMA"), the Federal Home 1998 46 Examiners reported that Firstar IL demonstrated a Mortgage Corporation ("FHMC"), and HUD, between strong overall level of lending to LMI individuals and in January 1998 and September 2000. LMI areas.47 Although noting that the bank's level of Examiners generally commended the distribution of Firstar Bank's small businesses lending.43 Firstar reported that, from January 1998 through 2000, it made small 45. For example, during 1996 and 1997, Firstar Bank originated business loans nationwide totaling more than $5.4 billion, 16 community development loans, totaling $17.9 million in the Cinincluding more than $110 million in loans sponsored by cinnati MSA, most of which were dedicated to housing for LMI individuals and families. During this time period, Firstar also made the Small Business Administration ("SBA") and more than qualified community development investments totaling $8.3 million in $46.6 million in loans sponsored by the Farm Service this area. Agency ("FSA").44 46. Before that merger, Firstar IL served the Chicago MSA. Firstar In addition, Firstar noted that, in 1998, it introduced a USA, a limited-purpose bank primarily engaged in retail consumer lending, also is in the Chicago MSA. As noted, Firstar USA received a five-year lending initiative (the "Star Bank Initiative"), "satisfactory" rating in its most recent CRA performance evaluation through which it intends to provide $5.5 billion for mort- by the OCC, as of November 1997. Examiners noted that Firstar USA gage loans to LMI individuals and for small business and adequately provided qualified community development investments, small farm loans in LMI areas of Ohio and Kentucky. services, and loans in its assessment area, which included 14 LMI Firstar represented that, since introducing the initiative, it census tracts out of a total of 32 census tracts. 47. A commenter alleged that Firstar has arbitrarily defined its CRA assessment area in Chicago to exclude LMI communities. Although a bank's assessment area delineation is not a separate criterion for CRA performance, examiners review whether an institution's assessment 43. For example, examiners reported that the bank's geographic area meets regulatory requirements, including whether it arbitrarily distribution of small loans to businesses in the low-income communi- excludes LMI areas. In the 1998 CRA performance evaluation of ties in its Cincinnati assessment areas was excellent. Firstar IL, examiners reviewed the bank's assessment area delineation 44. In this context, "small business loans" means loans with an and concluded that the assessment area for Firstar IL complied with original principal amount of less than $1 million to businesses. applicable regulatory requirements. Firstar Bank recently expanded its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 243 HMDA-reportable lending in LMI census tracts in 1997 Evaluation. Examiners found that Firstar Bank's lending was lower than that of lenders in the aggregate, examiners performance was excellent in the Cleveland MSA, the found that 20 percent of Firstar IL's HMDA-reportable bank's largest market in Ohio. In particular, examiners loans in LMI census tracts were in low-income census commended Firstar Bank for its home-purchase and small tracts, compared with 10 percent of the HMDA-reportable business lending performance in the Cleveland MSA, espeloans by lenders in the aggregate. cially for its distribution of home loans in LMI census In 1999, Firstar Bank and Firstar USA originated tracts and high level of lending to LMI individuals. HMDA-reportable loans totaling more than $73 million to From January 1996 through December 1997, Firstar LMI borrowers in the Chicago MSA, including more than Bank originated 37 percent of its home-purchase loans in $13 million in loans to low- income borrowers. Firstar the Cleveland MSA in LMI census tracts, which was stated that its home mortgage lending to LMI individuals significantly higher than the percentage of owner-occupied in the Chicago MSA, from January 1998 through 2000, housing units in LMI census tracts. Similarly, examiners included approximately $2.5 million under its American noted that Firstar Bank's origination of 40 percent of its Dream Home Loan program and approximately $7.3 mil- home-purchase loans in the Cleveland MSA to LMI borlion through FNMA and FHMC loan programs. rowers compared favorably with the percentage of LMI Examiners determined that Firstar Bank was responsive families in the general population of the Cleveland MSA. to the borrowing needs of small businesses in its Chicago Since the 1998 performance evaluation, Firstar has used assessment areas. In addition, examiners found that Firstar its various lending programs to increase its level of lending IL's level of small business lending in LMI census tracts in to LMI borrowers and in LMI communities. In 1999, its assessment areas had improved during the evaluation Firstar Bank originated HMDA-reportable loans totaling period and generally was comparable with aggregate lend- more than $39 million to LMI borrowers in the Cleveland ing levels in 1997. Firstar stated that it originated more MSA, including more than $13 million in loans to lowthan 4,600 small business loans, totaling $513 million, in income borrowers. Firstar reported that, in 1999 and 2000, the Chicago MSA during 1998 through 2000. This in- the dollar amount of home mortgage loans it originated cluded more than $48 million in small business loans in under its American Dream Home Loan program in the LMI census tracts in the Chicago MSA. Cleveland MSA included $3.3 million to borrowers in LMI Examiners noted that, during the evaluation period of the census tracts and $6.9 million to LMI borrowers. In addi- 1998 performance examination, Firstar IL actively sought tion, Firstar represented that, from January 1998 through opportunities throughout the Chicago MSA to lend in 2000, it provided a total of more than $70 million HMDAsupport of community development. From January 1996 reportable loans to LMI individuals in the Cleveland MSA through June 1998, Firstar IL originated 21 community through its Star Bank Initiative. development loans totaling approximately $15 million. Of In the 1998 Firstar Bank Evaluation, examiners also this amount, approximately $8 million supported the devel- commended Firstar Bank for its distribution of small busiopment of affordable housing for LMI individuals and nesses loans in LMI census tracts in the Cleveland MSA. approximately $6 million supported economic develop- In 1997, Firstar Bank originated 18 percent of its small ment activities to help revitalize or stabilize LMI census business loans in the Cleveland MSA to businesses in LMI tracts. Examiners also commended the community devel- census tracts. opment investments of Firstar IL in Chicago, noting that Since the 1998 Firstar Bank evaluation, Firstar has con- Firstar IL made community development investments total- tinued its efforts in making small business loans to busiing approximately $1.4 million from January 1996 through nesses in LMI census tracts in the Cleveland MSA. Firstar June 1998. stated that, from January 1998 through 2000, it provided Firstar has continued its active involvement in commu- more than $266 million in small business loans in the nity development in the Chicago area. For example, Firstar Cleveland MSA. Approximately 20 percent of this amount, stated that since 1997 it has provided more than measured by number and dollar amount, was made to $3.7 million in loans to organizations that provide multi- businesses in LMI census tracts. Firstar also reported that it family affordable rental units and has invested more than provided small business loans totaling $1.3 million under $500,000 in a Chicago neighborhood housing organization SBA-sponsored loan programs in the Cleveland area in that provides affordable housing opportunities to LMI fam- 1999, and that this amount increased to $27 million in ilies. In addition, Firstar has made a $1 million equity 2000. investment in a minority-owned community bank and has Examiners noted that Firstar Bank provided adequate made significant deposits in a credit union that serves a levels of community development lending in the Cleveland low-income neighborhood. MSA and commended the bank for its responsiveness to Cleveland, Ohio. Examiners evaluated Firstar Bank's community development needs through its investment CRA performance record in the Cleveland-Lorain-Elyria activity, which totaled approximately $2.4 million in 1997. MSA ("Cleveland MSA"), as part of the 1998 Firstar Bank Since the 1998 Firstar Bank Evaluation, Firstar has expanded its community development programs. Firstar stated that, as part of the Star Bank Initiative, it provided more than $27 million in community development loans assessment area in Chicago to include six counties in their entirety in and more than $874,000 in grants to organizations inthe Chicago MSA. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
244 Federal Reserve Bulletin • April 2001 volved in community development activities in the Cleve- rowers in LMI census tracts, $2.2 million to borrowers in land MSA during 1998, 1999, and 2000. predominantly minority census tracts, and $13 million to In the 1998 First Bank Evaluation, examiners also deter- minority borrowers. mined that Firstar Bank provided a good level of services In 1999, Firstar announced the St. Louis Loan Initiative, in the Cleveland MSA, including in LMI communities, and a five-year $7.6 billion lending program in the St. Louis that the bank's delivery systems were conveniently located MSA to provide home mortgage loans to LMI individuals and accessible to all portions of the bank's assessment and in LMI communities and small business loans to area. Examiners also commended the bank's variety of businesses in LMI areas 49 Firstar represented that, through services, including its branch and full-service ATM net- November 2000, it has lent more than $1.7 billion in work and its 24-hour telephone banking, bank-by-mail, and connection with its St. Louis Loan Initiative, including Internet banking services. In particular, examiners noted $91 million in HMDA-reportable loans to LMI individuals, that 16 percent of the bank's branches were in LMI areas $23 million in HMDA-reportable loans to borrowers in and that the bank augmented the availability of branches LMI census tracts, and $129 million in small business through the accessibility of its ATMs in LMI areas. Exam- loans.50 iners also found that, during the evaluation period, Firstar Examiners commended Mercantile Bank for its level of Bank's record of opening and closing branches in the community development lending, which totaled $7.9 mil- Cleveland MSA resulted in increased services in LMI lion from May 1995 through June 1997. These loans areas and to LMI individuals. financed the construction and rehabilitation of affordable St. Louis, Missouri. The predecessor of Firstar Bank in housing for LMI families, promoted economic developthe St. Louis, Missouri-Illinois MSA ("St. Louis MSA") ment through financing a construction loan for a business was Mercantile Bank National Association, St. Louis, Mis- that primarily serves LMI individuals, and helped fund souri ("Mercantile Bank"), which Firstar acquired in nonprofit organizations that provide community services 1999.48 As previously noted, Mercantile Bank received a for LMI families. "satisfactory" rating in its most recent CRA performance Firstar has continued to provide a significant level of evaluation by the OCC, as of June 1997. In particular, community development lending. For example, in 1999 examiners commended Mercantile Bank for its very good and 2000, Firstar Bank provided approximately $4.5 mildistribution of HMDA-reportable loans and small business lion in loans to a developer to construct low-income housloans among borrowers of different income levels. ing in St. Louis, and a loan of more than $5.4 million to a Examiners determined that Mercantile Bank's volume of not-for-profit organization to develop affordable, low- HMDA-reportable loans reflected a good responsiveness to income rental housing in St. Louis. In addition, Firstar area credit needs. In 1995 and 1996, Mercantile Bank reported that it has made low-income housing tax credit originated or purchased more than $943 million in HMDA- investments exceeding $27 million in the St. Louis MSA reportable loans, of which 26 percent were made to LMI since January 1998. borrowers. Examiners noted that Mercantile Bank's distri- Milwaukee, Wisconsin. Before its merger into Firstar bution of government-sponsored home-purchase loans to Bank in October 1999, Firstar Bank Milwaukee, National LMI borrowers represented 43 percent of all such loans it Association, Milwaukee, Wisconsin ("Firstar Milwaumade in 1996 and exceeded the percentage of LMI families kee"), was Firstar's largest subsidiary bank in Wisconsin. in the general population of the St. Louis MSA. Firstar Milwaukee received a "satisfactory" rating in its Since its acquisition of Mercantile Bank, Firstar has last CRA performance evaluation by the OCC, as of Nocontinued a high level of home mortgage lending to LMI vember 1997. Examiners found that Firstar Milwaukee was borrowers in the St. Louis MSA. Firstar stated that, in responsive to the credit needs of all segments of its service 1999, it originated or purchased more than 2,500 HMDA- community. In particular, examiners commended the bank reportable loans to LMI borrowers, totaling approximately for the level of its home mortgage and home improvement $91.8 million. During the first 10 months of 2000, Firstar lending in LMI census tracts. Examiners also commended reported that it originated or purchased HMDA-reportable Firstar Milwaukee for making 38 percent of its consumer loans to LMI borrowers in the St. Louis MSA, totaling loans to LMI borrowers in 1996, a level that exceeded the $89.8 million. Firstar also reported that, since Firstar's percentage of LMI borrowers in the general population of acquisition of Mercantile, it has lent $2.7 million to bor- the bank's assessment area. rowers in LMI census tracts and $2.4 million to minority Since that performance evaluation, Firstar has continued borrowers in the St. Louis MSA through its American to strengthen its record of providing credit to LMI borrow- Dream Home Loan program. Under its Open Doors pro- ers and in LMI communities. In 1999, Firstar originated gram, a home mortgage program designed for LMI borrowers that Mercantile Bank introduced in the St. Louis area, Firstar Bank reported that it has lent $5.9 million to bor- 49. In 2000, Firstar also announced that this initiative would include at least $10 million in mortgage loans and $10 million in small business loans each year for five years in the LMI neighborhoods of 48. Firstar acquired Mercantile Bank in 1999 through a merger with North St. Louis. Mercantile Bancorporation and renamed the bank Firstar Missouri, 50. Firstar stated that approximately $7.5 million of the small N.A. In 2000, Firstar merged the bank into Firstar Bank. See Firstar/ business loans were made to businesses in LMI census tracts in North Mercantile Order. St. Louis. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 245 HMDA-reportable loans totaling approximately $52 mil- more than 10 percent of their housing-related loans to lion to LMI borrowers in the Milwaukee MSA, including borrowers in LMI census tracts.53 more than $12 million in loans to low-income borrowers. Firstar represented that it has maintained a strong record Firstar reported that it also increased its level of home- of lending to LMI borrowers and in LMI communities. In purchase lending in LMI census tracts by approximately particular, Firstar stated that it has continued to provide a 40 percent during the last three years. Many of these high level of home-purchase financing and other HMDAhome-purchase loans were made through Firstar's Ameri- reportable lending in its rural assessment areas in Wisconcan Dream Home Loan program. In 1999, Firstar report- sin and that the dollar amount of home-purchase loans to edly made housing-related loans through this program in LMI individuals and in LMI communities in its rural the Milwaukee, Wisconsin MSA ("Milwaukee MSA"), assessment areas has increased each year since 1998.54 totaling $3.5 million to borrowers in LMI census tracts, The CRA performance evaluation of Firstar WI found $5.8 million to LMI individuals, and $4.4 million to minor- that the bank had a strong record of small business and ity borrowers.51 Firstar stated that, in 2000, its housing- small farm lending in Wisconsin. Examiners noted that, in related lending under this program included $6.3 million in 1996, Firstar WI made more than 3,600 small business loans to borrowers in LMI census tracts, $9.1 million in loans and originated more than 230 small farm loans. loans to LMI individuals, and $9.5 million in loans to Examiners stated that approximately 500 of these small minority borrowers.52 business and farm loans, totaling approximately $42 mil- Examiners commended Firstar Milwaukee for its lend- lion, were made in LMI areas. Firstar reported that, in ing to small businesses, including those in LMI census 1998, Firstar WI originated small business loans in tracts. Examiners noted that Firstar Milwaukee had intro- amounts of $100,000 or less, totaling $83.5 million, in duced a small business line- of-credit program designed for Wisconsin. emerging small businesses trying to build a credit history, In addition, the CRA performance evaluation concluded and had originated small business credit lines totaling more that Firstar WI offered a variety of governmentally insured, than $3.5 million under this program. guaranteed, and subsidized loans to small businesses, small Firstar stated that its small business lending activity in farms, and LMI borrowers. For example, examiners noted the Milwaukee MSA has remained strong since the evalua- that, in 1996, Firstar WI originated SB A loans totaling tion. For example, Firstar reported that, in 1998, Firstar $35.4 million and FSA loans totaling $11.7 million. Exam- Milwaukee originated small business loans totaling iners also commended the bank for participating in a HUD $81.2 million. Firstar also stated that 17.5 percent of these lending program that offered nontraditional mortgage loans small business loans were made to businesses in LMI on real property located on the Lac Courte Oreille Reservacensus tracts compared with 12.5 percent of the small tion where conventional mortgage lending was difficult business loans made by lenders in the aggregate. In 1999, because of certain issues related to perfecting liens on real Firstar made small business loans totaling approximately property. $38 million to businesses in LMI census tracts, including Firstar stated that, since the CRA performance evaluamore than $16 million in small business loans to busi- tion, Firstar Bank has continued to participate actively in nesses in low-income census tracts. various government-sponsored loan programs. For exam- State of Wisconsin. Firstar Bank Wisconsin, Madison, ple, Firstar reported that it made SBA loans totaling Wisconsin ("Firstar WI"), which was merged into Firstar $21.7 million in Wisconsin (excluding the Milwaukee Bank in September 1999, received an "outstanding" rating MSA) in 1998 and 1999. Firstar also represented that in its last CRA performance evaluation by the FRB Chi- Firstar Bank has continued to participate in various lending cago, as of April 1997. The examiners commended Firstar programs operated by the Wisconsin Housing and Eco- WI's responsiveness to the credit needs of LMI individuals nomic Development Authority ("WHEDA"). Firstar reand communities and favorably characterized the distribu- ported that it originated housing-related and farm loans tion of the bank's housing-related loans to LMI borrowers under WHEDA programs that totaled $7.6 million in 1998, and in LMI census tracts. For example, examiners found $5.2 million in 1999, and $7.8 million in 2000.55 that the bank and its affiliates made approximately 21 percent of their housing-related loans to LMI borrowers and 53. Firstar stated that 10 percent of its home mortgage loans in 1997, and 9 percent of its home mortgage loans in 1998, were made to borrowers in LMI census tracts, which generally was consistent with the percentage of home mortgage loans made by lenders in the aggregate to borrowers in LMI census tracts. 54. Firstar reported that it provided $6.5 million in home-purchase 51. Firstar stated that, in 1999, its housing-related lending in Wis- lending to borrowers in LMI census tracts and $13.3 million to LMI consin (including the Milwaukee MSA) under the American Dream individuals in 1998. By 2000, Firstar's lending level had increased Home Loan program included $3.5 million in loans to borrowers in to $8.8 million in loans to borrowers in LMI census tracts and LMI census tracts, $6.5 million in loans to LMI individuals, and $15.4 million in loans to LMI individuals in its rural assessment areas $4.6 million in loans to minority borrowers. in Wisconsin. 52. Firstar reported that its housing-related lending throughout 55. One commenter disagreed with the examiners' conclusions that Wisconsin during 2000 included $7.8 million in loans to borrowers in Firstar WI had a strong record of small farm lending, and expressed LMI census tracts, $13.5 million in loans to LMI borrowers, and concern about Firstar's commitment to small farm lending in Wiscon- $11.8 million in loans to minority borrowers. sin, particularly to LMI borrowers or to small farms in LMI communi- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
246 Federal Reserve Bulletin • April 2001 D. U.S. Bancorp's CRA Performance Record pie, the bank's Home Advantage Mortgage program provides a mortgage loan to LMI borrowers with a reduced Overview. As noted previously, U.S. Bancorp's lead bank interest rate and includes funds for down payment assissubsidiary, U.S. Bank (formerly First Bank, National Asso- tance and financing for any property rehabilitation that ciation) received a "satisfactory" rating in its most recent may be needed. In 1995 and 1996, U.S. Bank and its CRA performance evaluation by the OCC, as of April affiliates made Home Advantage Mortgage loans totaling 1998. In addition, the lead subsidiary bank of U.S. Bancorp more than $41 million. Examiners also noted that U.S. before the merger with First Bank System, United States Bank participated in a number of home lending programs National Bank of Oregon, Portland, Oregon ("U.S. sponsored by state housing and finance agencies, such as National Bank"), received an "outstanding" rating in its the Colorado Housing and Finance Authority ("CHFA") most recent CRA performance evaluation by the OCC, as and the Nebraska Investment Finance Authority of April 1997. The combined organization adopted First ("NIFA").57 Bank System's affordable housing loan program and U.S. Since the CRA performance evaluations of U.S. Bank Bancorp's small business lending program. As noted and U.S. National Bank, U.S. Bank has continued to offer above, the Board also has carefully reviewed data on the the Home Advantage loans and has adopted U.S. National lending activities of U.S. Bancorp's subsidiary banks after Bank's flexible home lending program, Home Partners. the examination. This program for LMI borrowers incorporates flexible Examiners commented favorably on U.S. Bank's respon- underwriting guidelines and down payments as low as siveness to community lending needs and its distribution of 1 percent, without requiring private mortgage insurance. loans, particularly in LMI communities and to LMI indi- US. Bank's level of lending under these programs has viduals.56 Examiners noted that U.S. Bank demonstrated increased in each of the last three years. U.S. Bancorp excellent distribution of HMDA-reportable loans in LMI stated that, in 1999, it originated loans under these progeographies. For example, in six of U.S. Bank's nine grams totaling $81.9 million and that, in 2000, it increased markets, U.S. Bank's percentage of loans made to borrow- the total amount lent to more than $87 million. ers in LMI census tracts exceeded 80 percent of the per- Examiners of U.S. National Bank commended the bank centage of owner-occupied units in those census tracts. In for responding aggressively to the needs of small busi- 1996, U.S. Bank made almost 16,000 HMDA-reportable nesses and participating in innovative small business loan loans nationwide, of which 15 percent were made to LMI programs. U.S. National Bank developed the Commercial borrowers and 23 percent were made to borrowers in LMI Opportunity Loan Program to provide financing to womencommunities. owned and minority-owned businesses and to businesses in Examiners found that U.S. Bank originated or partici- economically distressed areas. The program provides flexipated in a number of flexible lending programs. For exam- ble underwriting and collateral requirements. Examiners noted that, from 1994 through 1996, U.S. National Bank originated loans totaling $24 million under this program and originated SBA loans totaling $31 million. Examiners ties. The commenter also expressed concern about Firstar's participafurther commended U.S. National Bank for its excellent tion in government-sponsored programs like the WHEDA or the FSA programs. The number of small farm loans originated by Firstar and distribution of small business loans in LMI areas. In 1996, its subsidiaries in Wisconsin decreased by 43 percent from 1997 to U.S. National Bank extended 22.4 percent of the total 1998 and decreased by approximately 8 percent from 1998 to 1999. number and 25.8 percent of the total dollar amount of its Although Firstar's level of small farm lending has declined somewhat small business loans to businesses in LMI census tracts. in Wisconsin, Firstar has continued its high level of distribution of small farm loans in LMI areas. Firstar reported that, in 1998, it Examiners also reported that U.S. Bancorp's distribution of originated small farm loans in Wisconsin, totaling approximately small business and small farm loans based on annual $11.4 million. In 1998, 64 percent of Firstar's small farm loans in revenues was good. Wisconsin were made to borrowers in LMI census tracts. Similarly, Since the CRA performance evaluations, U.S. Bancorp 62.7 percent of Firstar's small farm loans in Wisconsin in 1999 were has continued to provide a large number of small business made to borrowers in LMI census tracts. In 2000, Firstar made small farm loans totaling at least $5.9 million in LMI census tracts in loans to businesses in LMI areas.58 U.S. Bancorp stated Wisconsin. that, from January 1998 through October 2000, it provided Firstar represented that it continues to be committed to agricultural lending in Wisconsin and to programs sponsored by WHEDA and the FSA. For example, Firstar stated that it increased its level of originations under the WHEDA farm program by approximately 450 percent 57. The CHFA and NIFA programs offer mortgage loans with from 1999 to 2000. It also participated in a number of FSA programs below-market interest rates to LMI first-time homebuyers. Under in 2000. According to Firstar, it was the fourth largest agricultural these programs, U.S. Bank provided loans totaling almost $3.5 million lender in the United States in 1999, with total agricultural loan in 1996. Examiners also noted the participation of U.S. National Bank originations of more than $1 billion. Firstar stated that it continues to in the Oregon State Bond Mortgage Loan Program and found that, employ local relationship managers with expertise in agricultural from 1994 through 1996, US. National Bank originated loans totaling lending who are available to process the most difficult agricultural $19 million under this program. credits. Firstar added that it has implemented a simplified small loan 58. A commenter criticized U.S. Bancorp's volume of farm lending. agricultural policy, featuring a streamlined application process for U.S. Bancorp stated that it engaged in minimal farm lending, particuloans under $100,000. larly outside certain northwestern states. Although the Board has 56. Examiners especially commended U.S. Bank for its CRA lend- recognized that banks help to serve the banking needs of communities ing performance in Chicago, Illinois, and Denver, Colorado. by making a variety of products and services available, the CRA does Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 247 more than 31,000 small business loans, totaling more than representing 15.8 percent of its total small business lending $2 billion, to businesses in LMI areas nationwide.59 in the Minneapolis MSA. Examiners commended U.S. National Bank for its com- Examiners noted that, in the Minneapolis MSA during mitment to community development activities and deter- 1995 and 1996, U.S. Bank made $32 million in community mined that U.S. Bank had an adequate level of community development loans and $11.3 million in qualified commudevelopment loans and investments. Examiners noted that, nity development investments. These community developfrom 1994 through 1996, U.S. National Bank made com- ment activities included a revolving $4 million loan to a munity development loans and investments totaling more community development corporation that constructs and than $143 million. During the same time period, examiners rehabilitates owner-occupied, single-family residences for reported that U.S. Bank made approximately $92.6 million LMI families, and investments of more than $7 million in in community development loans. programs designed to provide affordable housing for LMI U.S. Bancorp has increased its community development individuals and communities. lending and investment activity since the CRA perfor- U.S. Bancorp represented that, from January 1998 mance evaluations. U.S. Bancorp stated that, from January through October 2000, U.S. Bank made approximately 1998 through October 2000, U.S. Bank and U.S. Bank MT $50.1 million in community development loans in the made more than $526 million in CRA community develop- Minneapolis MSA, which facilitated the development of ment loans that facilitated the development of new afford- more than 1,700 new affordable housing units. During this able housing units. During this same period, U.S. Bancorp time period, U.S. Bank also reportedly made $40 million in and its subsidiaries reportedly made qualified community qualified community development investments, including development investments totaling more than $305 million, investments in a project designed to provide living-wage including more than $217 million in low-income housing jobs to residents of a North Minneapolis LMI neighbortax credits.60 hood and in an organization that provides venture capital to Minneapolis, Minnesota. Examiners commended U.S. minority-owned businesses in Minnesota. Bank's lending performance in the Minneapolis MSA, State of Wisconsin. Examiners noted that U.S. Bank's noting that the geographic distribution of its HMDA- geographic distribution of HMDA-reportable loans and reportable loans was excellent. Since its CRA performance small business and small farm loans in Wisconsin was evaluation, U.S. Bank has continued to provide significant excellent. In 1996, 22 percent of U.S. Bank's HMDAlevels of home mortgage lending in LMI communities in reportable loans in Wisconsin were made in LMI census the Minneapolis MSA. U.S. Bancorp reported that, from tracts. This compared favorably to the 15 percent of owner- January 1999 through October 2000, U.S. Bank originated occupied units in Wisconsin that were located in LMI approximately $64 million in HMDA-reportable loans to census tracts. In 1996, U.S. Bank made 25 percent of its borrowers in LMI communities in the Minneapolis MSA, HMDA-reportable loans in Wisconsin to LMI individuincluding $9.8 million in loans under its Home Advantage als.61 and Home Partnership programs and approximately U.S. Bancorp represented that, from January 1998 $10.5 million in loans sponsored by the FHA and the VA. through October 2000, U.S. Bank lent approximately Examiners noted that U.S. Bank's distribution of its $6.2 million through its Home Advantage and Home Partsmall business and small farm loans to borrowers of differ- nership loan programs. During this time period, U.S. Bank ent revenue levels was good, and that its level of small also made other HMDA-reportable loans totaling approxibusiness and small farm lending in LMI census tracts was mately $10.2 million to borrowers in LMI census tracts in adequate. In 1996, U.S. Bank provided 14 percent of its Wisconsin. small business loans in the Minneapolis MSA to business Examiners noted that U.S. Bank adequately responded to in LMI census tracts. U.S. Bancorp reported that, from community needs in Wisconsin through its community January 1998 through October 2000, U.S. Bank provided development loans and its significant level of qualified more than $149 million in small business loans to busi- community development investments. In 1995 and 1996, nesses in LMI census tracts in the Minneapolis MSA, U.S. Bank made ten community development loans in Wisconsin totaling approximately $4.5 million, including approximately $1.5 million in loans to a Milwaukee-based not require an institution to provide any specific types of products and organization that focuses on providing social and human services, such as farm loans, in its assessment area. services to LMI women. In 1995 and 1996, U.S. Bank 59. This represents 22.6 percent of the total number and 28.2 percent of the total dollar amount of U.S. Bancorp's small business loans. made approximately $1.9 million in qualified community 60. U.S. Bancorp reported that its subsidiary, U.S. Affordable Hous- development investments in Wisconsin. ing Community Development Corporation ("U.S. Affordable Housing U.S. Bancorp stated that, from January 1998 through CDC"), has facilitated the development of more than 5,000 affordable October 2000, U.S. Bank made community development housing units and currently has low-income tax-credit equity investment commitments of more than $370 million. Another subsidiary, loans totaling $2.9 million that financed the development U.S. Bancorp Community Development Corporation, has invested more than $21 million in various small business and economic development efforts since 1985. U.S. Bancorp also reported that, during 1999 and 2000, it made investments of more than $13.3 million in 61. In particular, examiners noted that, in 1996, U.S. Bank made mortgage-backed securities that support affordable housing for LMI 10 percent of its HMDA-reportable loans in Wisconsin to low-income individuals and communities. individuals, compared with 6 percent by lenders in the aggregate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
248 Federal Reserve Bulletin • April 2001 of almost 500 affordable housing units in LMI communi- LMI communities generally was comparable with or exties in Wisconsin. During the same time period, U.S. Bank ceeded that of lenders in the aggregate. reportedly made $3.9 million in qualified community The Board is concerned when the record of an institution development investments in Wisconsin. indicates disparities in lending and believes that all banks are obligated to ensure that their lending practices are E. HMDA Data based on criteria that ensure not only safe and sound lending, but also equal access to credit by creditworthy The Board also has considered the records of Firstar and applicants regardless of their race or income level.64 The U.S. Bancorp in light of comments on HMDA data reported Board recognizes, however, that HMDA data alone provide by their subsidiaries.62 Data for 1998 and 1999 indicate an incomplete measure of an institution's lending in its that Firstar's HMDA lending volume decreased in 1999. community because these data cover only a few categories However, this same pattern was evident for lenders in the of housing-related lending. HMDA data, moreover, proaggregate, reflecting the decline in home mortgage loan vide only limited information about the covered loans.65 demand during a period of rising interest rates. The data HMDA data, therefore, have limitations that make them an show that some categories of Firstar's housing-related inadequate basis, absent other information, for concluding lending to LMI and minority borrowers and in LMI and that an institution has not assisted adequately in meeting its predominantly minority communities were below the lend- community's credit needs or has engaged in illegal lending ing levels of HMDA-reporting lenders in the aggregate in discrimination. some of Firstar's CRA assessment areas, while in others it Because of the limitations of HMDA data, the Board has exceeded the lending levels of those lenders. For instance, considered these data carefully in light of other informaduring 1999 Firstar originated a lower percentage of tion. As noted above, examiners found no evidence of HMDA-reportable loans in LMI census tracts and to LMI prohibited discrimination or other illegal credit practices at individuals in its Chicago assessment areas, while in its any of the subsidiary banks of Firstar and U.S. Bancorp. Cleveland assessment area Firstar's percentage of HMDA- The record also indicates that Firstar and U.S. Bancorp reportable loans exceeded that of lenders in the aggregate have taken a number of affirmative steps to ensure compliin these respects. Firstar's percentage of HMDA-reportable ance with fair lending laws. Firstar has instituted a corpoloans to African-American applicants and to borrowers in rate fair lending review program, and independent tests are predominantly minority census tracts in its Nashville as- periodically performed to verify that its subsidiary banks sessment area lagged the percentage for lenders in the are in compliance with the program.66 US. Bancorp has aggregate in 1999, while Firstar's percentage of home established policies and procedures to ensure compliance mortgage originations to African Americans and to borrow- with all fair lending laws and regulations by conducting ers in predominantly minority census tracts in Cleveland underwriting reviews of all retail loan applications, perexceeded the percentage for those lenders. Firstar's denial forming periodic comparative file analyses, and presenting disparity ratios for African-American and Hispanic individ- a comprehensive fair lending training program. The Board uals generally were somewhat higher than the denial dis- also has considered the HMDA data in light of Firstar's parity ratios for that of lenders in the aggregate in its and U.S. Bancorp's overall lending records, which show assessment areas.63 The 1999 HMDA data for U.S. Bancorp in the MS As reviewed indicate that U.S. Bancorp's percentage of 64. One commenter alleged that U.S. Bancorp has indirectly suphousing-related loans to minority individuals generally ported predatory lending through the business relationships of U.S. approximated or exceeded the percentage achieved by Bank with a number of subprime lenders that the commenter characlenders in the aggregate. Moreover, U.S. Bancorp's denial terized as predatory lenders. According to the applicant, U.S. Bandisparity ratios for African-American and Hispanic individ- corp's and Firstar's lending and trust affiliates have corporate loans to non-affiliated subprime lenders and act as trustee, registrar, and/or uals generally were somewhat lower than the denial disparpaying agent for securitization transactions. Some trust clients have ity ratios for lenders in the aggregate in the areas reviewed. securitizations that may have subprime assets as collateral. Firstar and In addition, the data indicate that the percentage of U.S. US. Bancorp have represented that neither has a role, formal or Bancorp's housing-related loans to LMI individuals and in otherwise, in the lending practices and review processes of their loan and trust customers nor has any knowledge of the lending practices followed by the party originating the loans. 65. For example, the data do not account for the possibility that an 62. Commenters criticized Firstar's record of home mortgage lend- institution's outreach efforts may attract a larger proportion of margining to LMI and minority individuals or in LMI and predominantly ally qualified applicants than other institutions attract and do not minority communities in the Chicago, Cleveland, Milwaukee, and provide a basis for an independent assessment of whether an applicant St. Louis MSAs. Commenters also criticized Firstar's record of home who was denied credit was, in fact, creditworthy. Credit history mortgage lending to minority individuals in the Minneapolis and problems and excessive debt levels relative to income (reasons most Nashville MSAs. In addition, commenters criticized U.S. Bancorp's frequently cited for a credit denial) are not available from HMDA record of home mortgage lending to minority applicants in the Denver data. HMDA data also may be incomplete and may not identify all and Minneapolis MSAs, and to LMI and minority individuals and in applicants with regard to income level, ethnicity, or other demo- LMI and predominantly minority communities in the Milwaukee graphic factors. MSA. 66. Firstar's fair lending review program describes the underwriting 63. The denial disparity ratio compares the denial rate for minority standards, training programs, and review procedures that are designed loan applicants with that for nonminority applicants. to ensure compliance with all fair lending laws and regulations. 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Legal Developments 249 that their subsidiary banks significantly assist in helping to had not negatively affected customers residing in LMI meet the credit needs of the communities served, including communities. LMI areas. The Board expects that the subsidiary banks of New U.S. Bancorp would continue to use a satisfactory branch clos- F. Branch Closings ing policy for any branch closings that might result from the proposed transaction. The Board also has considered Two commenters expressed concern about the effect of that federal banking law provides a specific mechanism for possible branch closings that might result from this pro- addressing branch closings. Federal law requires an inposal. Firstar and U.S. Bancorp have provided the Board sured depository institution to provide notice to the public with their branch closing policies, and the Board has con- and to the appropriate federal supervisory agency before sidered the public comments about potential branch clos- closing a branch.69 The Board also notes that the appropriings in light of all the facts of record, including information ate federal supervisor for each of Firstar's subsidiary banks provided by Firstar and U.S. Bancorp. will, in the course of conducting CRA performance exami- Firstar has indicated that it has no specific plans for any nations, continue to review the branch closing record of branch closings or consolidations in connection with this these banks. proposal. Firstar also indicated that it has not completed the analysis necessary to determine which, if any, branch G. Conclusion on Convenience and Needs closings or consolidations would be needed, and that it has not made any final decisions about branch closings or In reviewing the effects of the proposal on the convenience consolidations. Firstar has stated that any decisions to close and needs of the communities to be served, the Board has or consolidate branches would be made in accordance with carefully considered the entire record, including all the the interagency policy statement on branch closings and information provided by commenters, Firstar, and U.S. would be attentive to the need for financial services in LMI Bancorp, evaluations of the CRA performance of each of communities to be served by the combined organization.67 Firstar's and U.S. Bancorp's insured depository institution The Board has carefully considered the branch closing subsidiaries, and confidential supervisory information. policies of Firstar and U.S. Bancorp and their records of Based on all the facts of record and for the reasons opening and closing branches. The Board notes that the discussed above, the Board concludes that considerations branch closing policies of the subsidiary banks of Firstar relating to the convenience and needs factor, including the and US. Bancorp provide that the banks must review the CRA performance records of the relevant depository instiimpact that each proposed branch closing would have on tutions, are consistent with approval of the proposal.70 the community and develop a plan to minimize any adverse impact. Conclusion Examiners have reviewed the performance of Firstar's subsidiary banks under the branch closing policy on sev- Based on the foregoing and in light of all the facts of eral occasions. Examiners noted that changes in Firstar record, the Board has determined that the application Bank's branch locations did not adversely affect the avail- should be, and hereby is, approved.71 In reaching its conability of services in its assessment areas and that the bank had opened branches in LMI communities in some assessment areas. In addition, the most recent CRA performance 69. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. evaluations of Firstar Bank's predecessors noted generally § 183 lr-1), as implemented by the Joint Policy Statement Regarding that the bank's branch closings did not affect LMI commu- Branch Closings, requires that a bank provide the public with at least nities in a materially adverse manner and concluded that 30 days' notice and the appropriate federal supervisory agency with at the banks' delivery systems were reasonably accessible to least 90 days' notice before the date of the proposed branch closing. LMI individuals and areas.68 Examiners also found that The bank also is required to provide reasons and other supporting data for the closing, consistent with the institution's written policy for U.S. Bank's delivery systems were reasonably accessible to branch closings. all portions of its assessment areas and that branch closures 70. Firstar has represented that it would honor the existing CRA commitments made by Firstar and U.S. Bancorp. Several commenters requested that Firstar and U.S. Bancorp provide certain commitments and answer certain questions, or that the Board impose specific 67. Joint Policy Statement Regarding Branch Closings (64 Federal conditions. The Board notes that the CRA requires that, in considering Register 34,844 (1999). an acquisition proposal, the Board carefully review the actual perfor- 68. Two commenters alleged that Firstar had a poor record of mance records of the relevant depository institutions in helping to closing branches in LMI and predominantly minority communities in meet the credit needs of their communities. Neither the CRA nor the Illinois and Kentucky. In recent years Firstar has participated in a federal banking agencies' CRA regulations require depository institunumber of bank mergers and acquisitions and is still in the process of tions to make pledges concerning future performance under the CRA. integrating the institutions involved in these transactions and reconfig- The Board also notes that future activities of New U.S. Bancorp's uring its branch system. From 1999 to 2000, this process resulted in a subsidiary banks will be reviewed by the appropriate federal supervinet loss (the number of opened branches minus the number of closed sors in future performance examinations, and their CRA performance branches) of 12 branches nationwide, but no reduction in the number records will be considered by the Board in any subsequent applicaof branches in LMI census tracts. In Illinois and Kentucky, there has tions by New US. Bancorp to acquire a depository institution. been a net loss of one branch in a moderate-income neighborhood in 71. Several commenters requested that the Board hold a public each state. meeting or hearing on the proposal. Section 3(b) of the BHC Act does Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
250 Federal Reserve Bulletin • April 2001 elusion, the Board has considered all the facts of record in Appendix A light of the factors that it is required to consider under the BHC Act and other applicable statutes.72 The Board's Banking Markets in which Firstar and U.S. Bancorp approval is specifically conditioned on compliance by Compete Directly Firstar with all the commitments made in connection with the application, including the branch divestiture commit- Illinois ments discussed in this order. These commitments are deemed to be conditions imposed in writing by the Board Chicago Cook, DuPage, and Lake Counties. in connection with its findings and decision and, as such, may be enforced in proceedings under applicable law. Davenport- Rock Island County, excluding the The acquisition of the subsidiary banks of U.S. Bancorp Rock towns of Drury and Buffalo Prairie, in may not be consummated before the fifteenth calendar day Island Illinois; the towns of Colona, Edford, after the effective date of this order, and the proposal may Geneseo, Hanna, and Western in Henry not be consummated later than three months after the County, all in Illinois; and Scott County effective date of this order, unless such period is extended for and the town of Farmington in Cedar good cause by the Board or by the Federal Reserve Bank of County, all in Iowa. Minneapolis, acting pursuant to delegated authority. By order of the Board of Governors, effective Febru- Iowa ary 12, 2001. Ames Boone and Story Counties and the towns Voting for this action: Chairman Greenspan, Vice Chairman Ferguof Marion, Clear Lake, Ellworth, Scott, son, and Governors Kelley, Meyer, and Gramlich. Lyon, and Lincoln in Hamilton County. ROBERT DEV. FRIERSON Des Moines Polk County and the town of Linn in Associate Secretary of the Board Warren County. Johnson Johnson County, excluding the town of Jefferson; the northern portion of Washington County; and the town of Springdale in Cedar County. Marengo Iowa County and the southern portion of not require the Board to hold a public hearing on an application unless the appropriate supervisory authority for the bank to be acquired Benton County. makes a timely written recommendation of denial of the application. The Board has not received such a recommendation from the appropri- Nebraska ate supervisory authorities. Under its rules, the Board in its discretion also may hold a public meeting or hearing on an application to acquire a bank if a meeting or Omaha-Council Omaha-Council Bluffs Ranally Metro hearing is necessary or appropriate to clarify factual issues related to Bluffs Area ("RMA"); portions of Douglas the application and to provide an opportunity for testimony. 12 C.F.R. County, east of the Elkhora River that 225.16(e). The Board has considered carefully the commenters' re- are contiguous to the RMA, in Nequests in light of all the facts of record. In the Board's view, commentbraska; and Pottawattamie County, exers have had ample opportunity to submit their views, and numerous commenters have submitted written comments that have been consid- cluding the eastern portion of the ered carefully by the Board in acting on the proposal. The comment- county, in Iowa. ers' requests fail to demonstrate why their written comments do not present their views adequately. For these reasons, and based on all the Minnesota facts of record, the Board has determined that a public meeting or hearing is not required or warranted in this case. Accordingly, the requests for a public meeting on the proposal are denied. Minneapolis- Anoka, Hennepin, Ramsey, Washing- 72. Several commenters requested that the Board delay action or St. Paul ton, Carver, Scott, and Dakota Counties; extend the comment period on the proposal. The Board has accumu- Lent, Chisago Lake, Shafer, Wyoming, lated a significant record in this case, including reports of examinaand Franconia Townships in Chisago tion, supervisory information, public reports and information, and considerable public comment. In the Board's view, for the reasons County, all in Minnesota; Blue Hill, discussed previously, commenters have had ample opportunity to Baldwin, Orrock, Livonia, and Big Lake submit their views and, in fact, have provided substantial written Townships and the City of Elk River in submissions that have been considered carefully by the Board in Sherburne County; Monticello, Otsego, acting on the proposal. Moreover, the BHC Act and Regulation Y require the Board to act on proposals submitted under those provisions Buffalo, Frankfort, Rockford, and Frankwithin certain time periods. Based on a review of all the facts of lin Townships in Wright County, all in record, the Board has concluded that the record in this case is Minnesota; and Lanesburgh Township sufficient to warrant Board action at this time and that a further delay in Le Sueur County, all in Minnesota; in considering the proposal, an extension of the comment period, or a denial of the proposal on the grounds discussed above or for informa- and the Town of Hudson in St. Croix tional insufficiency is not warranted. County, Wisconsin. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 251 Wisconsin Des Moines Firstar operates the fourth largest depository institution in the market, controlling Milwaukee Milwaukee RMA. deposits of $475.5 million, representing approximately 8.8 percent of market deposits. U.S. Bancorp operates the ninth largest de- Appendix B pository institution in the market, controlling deposits of $137.4 million, represent- Banking Markets Consistent with DOJ Guidelines ing approximately 2.5 percent of market without Divestitures deposits. On consummation of the proposal, Firstar would operate the second largest de- Illinois pository institution in the market, controlling deposits of $612.9 million, represent- Chicago Firstar operates the 12th largest depository ing approximately 11.3 percent of market institution in the market, controlling deposits deposits. The HHI would increase by 45 of $2 billion, representing approximately 1.5 points to 1949. percent of market deposits. U.S. Bancorp operates the 36th largest depository institution Johnson Firstar operates the second largest deposiin the market, controlling deposits of $531.8 tory institution in the market, controlling million, representing less than 1 percent of deposits of $330.4 million, representing apmarket deposits. On consummation of the proximately 22.8 percent of market deposproposal, Firstar would operate the ninth its. U.S. Bancorp operates the 12th largest largest depository institution in the market, depository institution in the market, controlcontrolling deposits of $2.6 billion, representling deposits of $10.5 million, representing ing approximately 1.8 percent of market less than 1 percent of market deposits. On deposits. The HHI would increase by 1 point consummation of the proposal, Firstar to 838. would operate the second largest depository institution in the market, controlling deposits of $340.9 million, representing approxi- Rock Island- Firstar operates the second largest deposimately 23.6 percent of market deposits. The Davenport tory institution in the market, controlling HHI would increase by 33 points to 2309. deposits of $974.4 million, representing approximately 21.1 percent of market depos- Marengo Firstar operates the seventh largest deposiits. U.S. Bancorp operates the 32nd largest tory institution in the market, controlling depository institution in the market, control- deposits of $21.6 million, representing apling deposits of $700,000, representing less proximately 6.5 percent of market deposits. than 1 percent of market deposits. On con- U.S. Bancorp operates the 11th largest desummation of the proposal, Firstar would pository institution in the market, controloperate the second largest depository insti- ling deposits of $15.6 million, representing tution in the market, controlling deposits of approximately 4.7 percent of market depos- $975.1 million, representing approximately its. On consummation of the proposal, 21.1 percent of market deposits. The HHI Firstar would operate the third largest dewould increase by 1 point to 1112. pository institution in the market, controlling deposits of $37.2 million, representing Iowa approximately 11.2 percent of market deposits. The HHI would increase by 61 points to 976. Ames Firstar operates the second largest depository institution in the market, controlling deposits of $186.9 million, representing ap- Nebraska proximately 14.5 percent of market deposits. U.S. Bancorp operates the 10th largest Omaha- Firstar operates the seventh largest deposdepository institution in the market, control- Council itory institution in the market, controlling ling deposits of $25.3 million, representing Bluffs deposits of $229.7 million, representing apapproximately 2 percent of market deposits. proximately 2.7 percent of market deposits. On consummation of the proposal, Firstar U.S. Bancorp operates the third largest dewould operate the second largest depository pository institution in the market, controlinstitution in the market, controlling depos- ling deposits of $1.2 billion, representing its of $212.2 million, representing approxi- approximately 14 percent of market deposmately 16.5 percent of market deposits. The its. On consummation of the proposal, HHI would increase by 57 points to 1896. Firstar would operate the second largest de- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
252 Federal Reserve Bulletin • April 2001 pository institution in the market, control- (65 Federal Register 69,109 (2000)). The time for filing ling deposits of $1.4 billion, representing comments has expired, and the Board has considered the approximately 16.7 percent of market de- proposal and all comments received during the comment posits. The HHI would increase by 75 period in light of the factors set forth in the BHC Act and points to 1901.1 the Federal Reserve Act. FleetBoston, with total consolidated assets of approxi- Wisconsin mately $179 billion, is the eighth largest commercial banking organization in the United States.3 FleetBoston oper- Milwaukee Firstar operates the second largest depository ates subsidiary banks in Connecticut, Florida, Maine, institution in the market, controlling deposits Massachusetts, New Hampshire, New Jersey, New York, of $4.8 billion, representing approximately and Rhode Island. FleetBoston operates the fourth largest 19.9 percent of market deposits. U.S. Ban- depository institution in New Jersey, controlling deposits corp operates the 17th largest depository in- of $8.8 billion, representing approximately 6.3 percent of stitution in the market, controlling deposits of total deposits in insured depository institutions in the state $288.1 million, representing approximately ("state deposits").4 In Connecticut, FleetBoston operates 1.2 percent of market deposits. On consum- the largest depository institution, controlling deposits of mation of the proposal, Firstar would operate $15 billion, representing approximately 25.5 percent of the second largest depository institution in state deposits. the market, controlling deposits of $5 billion, Summit, with total consolidated assets of approximately representing approximately 21.1 percent of $39.5 billion, is the 27th largest commercial banking orgamarket deposits. The HHI would increase by nization in the United States. Summit operates subsidiary 48 points to 1348. banks in Connecticut, New Jersey, and Pennsylvania. Summit operates the largest depository institution in New Jer- FleetBoston Financial Corporation sey, controlling deposits of $20.8 billion, representing ap- Boston, Massachusetts proximately 14.8 percent of state deposits. In Connecticut, Summit operates the 12th largest depository institution, Order Approving the Merger of Bank Holding controlling deposits of $909 million, representing approxi- Companies mately 1.6 percent of state deposits. In Pennsylvania, Summit operates the 10th largest depository institution, control- FleetBoston Financial Corporation ("FleetBoston"), a fi- ling deposits of $2.8 billion, representing approximately nancial holding company within the meaning of the Bank 1.5 percent of state deposits. Holding Company Act ("BHC Act"), has requested the On consummation of the proposal and after accounting Board's approval under the BHC Act (12 U.S.C. § 1841 for the proposed divestiture discussed in this order, Fleet et seq.) to merge with Summit Bancorp., Princeton ("Sum- would become the seventh largest commercial banking mit"), and thereby acquire Summit's subsidiary banks, organization in the United States, with total consolidated including its lead subsidiary bank, Summit Bank, Hacken- assets of approximately $218.6 billion. On consummation, sack, both in New Jersey ("Summit-NJ").1 FleetBoston FleetBoston would become the largest banking organizaalso provided notice under section 25 of the Federal Re- tion in New Jersey, controlling deposits of $29.6 billion, serve Act (12 U.S.C. § 601 ^ seq.) and the Board's Regula- representing approximately 20.9 percent of state deposits. tion K (12 C.F.R. 211) of its intention to acquire Summit In Connecticut, FleetBoston would control deposits of International Trade Finance Corp., also in Princeton $15.9 billion, representing approximately 27.1 percent of ("Summit International"), an agreement corporation sub- state deposits. sidiary of Summit-NJ.2 Notice of the proposal, affording interested persons an Interstate Analysis opportunity to submit comments, has been published Section 3(d) of the BHC Act allows the Board to approve an application by a bank holding company to acquire control of a bank located in a state other than the home 1. The proposal would be consistent with the DOJ Guidelines and state of the bank holding company if certain conditions are Board precedent without divestitures. However, as noted previously, Firstar has agreed to divest branches in the Omaha- Council Bluffs met. For purposes of the BHC Act, the home state of banking market to address concerns expressed by the Department of Justice. After accounting for the proposed divestitures, Firstar would operate the second largest depository institution in the market, controlling deposits of $1.4 billion, representing approximately 16.3 percent 3. Asset data are as of September 30, 2000. National ranking data of market deposits. The HHI would increase by 60 points to 1886. are as of September 30, 2000, adjusted for transactions consummated 1. FleetBoston also would acquire Summit's other subsidiary banks: since that date. Summit Bank, Norwalk, Connecticut ("Summit-CT"); and Summit 4. State deposit and ranking data are as of June 30, 1999, and reflect Bank, Bethlehem, Pennsylvania ("Summit-PA"). acquisitions as of October 2, 2000, for Connecticut, as of Septem- 2. In addition, FleetBoston has requested the Board's approval to ber 27, 2000, for New Jersey, and as of February 5, 2001, for exercise an option to acquire up to 19.9 percent of Summit's voting Pennsylvania. In this context, depository institutions include commershares. The option would expire on consummation of the proposal. cial banks, savings banks, and savings associations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 253 FleetBoston is Rhode Island,5 and Summit's subsidiary prohibits the Board from approving a proposal that would banks are located in Connecticut, New Jersey, and Pennsyl- substantially lessen competition in any relevant banking vania.6 market unless the anticompetitive effects of the proposal in The Board may not approve a proposal subject to section that banking market are clearly outweighed in the public 3(d) if, after consummation, the applicant would control interest by the probable effect of the proposal in meeting more than 10 percent of the total deposits of insured the convenience and needs of the community to be depository institutions in the United States.7 In addition, served.13 the Board may not approve a proposal if, on consummation The Board has reviewed carefully the competitive effects of the proposal, the applicant would control 30 percent or of the proposal in the relevant banking markets in light of more of the total deposits of insured depository institutions comments received14 and all the facts of record. In particuin any state in which both the applicant and the organiza- lar, the Board has considered the number of competitors tion to be acquired operate an insured depository institu- that would remain in the markets, the relative shares of tion, or such higher or lower percentage as established by total deposits in depository institutions in the markets state law.8 ("market deposits") controlled by the companies involved On consummation of the proposal, FleetBoston would in this transaction,15 the concentration levels of market control 2.8 percent of the total deposits of insured deposi- deposits and the increase in these levels as measured by the tory institutions in the United States.9 FleetBoston would Herfindahl-Hirschman Index ("HHI") under the Departcontrol less than 30 percent of total deposits held by ment of Justice Merger Guidelines ("DOJ Guidelines"), insured depository institutions in Connecticut and New and other characteristics of the markets.16 Jersey,10 and would not exceed the state deposit caps of FleetBoston and Summit compete directly in five bank- Connecticut or New Jersey.11 ing markets. Consummation of the proposal without dives- All other requirements of section 3(d) of the BHC Act titures would be consistent with Board precedent and the also are met. FleetBoston is adequately capitalized and DOJ Guidelines in four of these markets.17 On consummaadequately managed, as defined by applicable law. In addi- tion, three of these markets would remain moderately tion, Summit's subsidiary banks have been in existence for the minimum age requirements established by applicable state law.12 In view of all the facts of record, the Board is 13. 12 U.S.C. § 1842(c)(1). permitted to approve the proposal under section 3(d) of the 14. Two commenters expressed concern that the proposal would BHC Act. have anticompetitive effects in certain banking markets. 15. Market share data are as of June 30, 1999, and are based on calculations that include the deposits of thrift institutions at 50 per- Competitive Considerations cent. The Board previously has indicated that thrift institutions have become, or have the potential to become, significant competitors of Section 3 of the BHC Act prohibits the Board from approv- commercial banks. See, e.g., Midwest Financial Group, 75 Federal ing a proposal that would result in a monopoly or would be Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board has regularly included in furtherance of an attempt to monopolize the business of thrift deposits in the calculation of market share on a 50-percent banking in any part of the United States. Section 3 also weighted basis. See, e.g., First Hawaiian, Inc., 11 Federal Reserve Bulletin 52(1991). 16. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a market is considered unconcentrated if the post-merger HHI is 5. A bank holding company's home state is that state in which the below 1000, moderately concentrated if the post-merger HHI is betotal deposits of all banking subsidiaries of the company were the tween 1000 and 1800, and highly concentrated if the post-merger HHI largest on July 1, 1966, or the date on which the company became a is above 1800. The Department of Justice has informed the Board that bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). a bank merger or acquisition generally will not be challenged (in the 6. For purposes of section 3(d), the Board considers a bank to be absence of other factors indicating anticompetitive eifects) unless the located in the states in which the bank is chartered, headquartered, or post merger HHI is at least 1800 and the merger increases the HHI by operates a branch. more than 200 points. The Department of Justice has stated that the 7. 12 U.S.C. § 1842(d)(2)(A). For this purpose, insured depository higher than normal HHI thresholds for screening bank mergers for institutions include all insured banks, savings banks, and savings anticompetitive effects implicitly recognize the competitive effects of associations. limited-purpose lenders and other nondepository financial institutions. 8. 12 U.S.C. § 1842(d)(2)(B)-(D). 17. These markets are the Fairfield Area, Connecticut; Waterbury, 9. Data as of June 30, 2000. Connecticut; Metropolitan New York-New Jersey; and Philadelphia, 10. On consummation, FleetBoston would control 27.1 percent of Pennsylvania-New Jersey banking markets. Definitions of these bankinsured depository institution deposits in Connecticut and 20.9 percent ing markets and the effects of the proposal on the concentration of of insured depository institution deposits in New Jersey. FleetBoston banking resources in these markets, are described in the Appendix. currently does not control an insured depository institution in Pennsyl- One commenter expressed concern about the elimination of competivania. tion in Burlington, Camden, Gloucester, and Mercer Counties in New 11. See Conn. Gen. Stat. Ann. § 36a-411 (West 2000) (30 percent); Jersey. Burlington, Camden, and Gloucester counties are part of the N.J. Stat. Ann. § 17:9A-413 (West 2000) (30 percent). Pennsylvania Philadelphia banking market. First Union Corp., 84 Federal Reserve does not have a deposit cap that is applicable to the proposal. Bulletin 489 (1998). Mercer County is divided between the Philadel- 12. 12 U.S.C. § 1842(d)(2)(A). See Conn. Gen. Stat. Ann. § 36a-411 phia and the Metropolitan New York-New Jersey banking markets. Id. (West 2000) (5 year minimum age requirement). Neither New Jersey and FleetBoston Financial Corp., 86 Federal Reserve Bulletin 751 nor Pennsylvania has an age requirement that is applicable to the (2000). As discussed in the Appendix, these markets would remain proposal. The Board also has taken into account FleetBoston's record unconcentrated or moderately concentrated after consummation, and of compliance with applicable state community reinvestment laws. there are numerous competitors in these markets. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
254 Federal Reserve Bulletin • April 2001 concentrated and one market would be unconcentrated as After carefully reviewing all the facts of record, and for measured by the DOJ Guidelines. Numerous banking com- the reasons discussed in this order, the Board concludes petitors would remain in each of these markets. that consummation of the proposal would not likely result In the Atlantic City, New Jersey, banking market, a in a significantly adverse effect on competition or on the subsidiary bank of Summit is the largest insured depository concentration of banking resources in any of the banking institution in the market, controlling deposits of $ 1 billion, markets in which FleetBoston and Summit directly comrepresenting 27.8 percent of the deposits of insured depos- pete or in any other relevant banking market. Accordingly, itory institutions in the market ("market deposits").18 A based on all the facts of record, and subject to completion subsidiary bank of FleetBoston is the fourth largest insured of the proposed divestitures and compliance with the redepository institution in the market, controlling deposits of lated commitments, the Board has determined that compet- $370 million, representing 10 percent of market deposits. itive factors are consistent with approval of the proposal. Without any divestiture, the proposal would cause the HHI in the market to increase by 557 points to 1,917. Managerial and Financial Considerations and Future In order to mitigate the potential anticompetitive effects Prospects of the proposal in the Atlantic City market, FleetBoston has committed to divest five branches in the market, with at Section 3(c) of the BHC Act requires the Board to consider least $100 million in deposits, and the customer relation- the financial and managerial resources and future prospects ships associated with these branches.19 On consummation of the companies and depository institutions involved in a and taking into account the effect of the proposed divesti- proposal and certain other supervisory factors. The Board ture, the HHI for the market would increase by 161 points has carefully considered the financial and managerial reto 1,517, and 16 competitors would remain in the market. sources and future prospects of FleetBoston, Summit, and Consummation of the proposal would be consistent with their respective subsidiary depository institutions, and other Board precedent and the DOJ Guidelines. supervisory factors in light of all the facts of record. As The Department of Justice has conducted a detailed part of that consideration, the Board has reviewed confireview of the proposal and advised the Board that, condi- dential reports of examination and other supervisory infortioned on completion of the proposed divestiture, consum- mation received from the primary federal supervisors of mation of the proposal would not be likely to have a the organizations. significantly adverse effect on competition in the Atlantic In evaluating financial factors in expansion proposals by City or any other relevant banking market. The Office of banking organizations, the Board consistently has considthe Comptroller of the Currency ("OCC") and the Federal ered capital adequacy to be especially important. FleetBos- Deposit Insurance Corporation also have been afforded an ton, Summit Bancorp, and all of their subsidiary banks are opportunity to comment and have not objected to consum- and on consummation of the proposal would remain well mation of the proposal. capitalized, as defined in the relevant regulations of federal banking agencies. The proposed acquisition is structured as an exchange of shares, and FleetBoston would incur no 18. The Atlantic City banking market is defined as Atlantic and debt as a result of the transaction. Cape May Counties, both in New Jersey. The Board received one The Board also has considered the managerial resources comment challenging the market definition of the Atlantic City bank- of FleetBoston and Summit and the federal financial supering market, but that comment did not provide any evidence to support visory agencies' examination records in supervising these an alternative market definition. The Board has considered the comorganizations, including their subsidiary banks. FleetBosment, and has reviewed commuting data, commercial, and employment data and other information in defining the Atlantic City banking ton, Summit, and their subsidiary banks are well managed, market. Atlantic and Cape May Counties are linked by a major with appropriate risk management systems in place. The highway that is the area's major north-south commuting thoroughfare. Board also has considered the plans made by FleetBoston Atlantic City is the regional commercial and employment center for to complete the proposed merger, including the managerial the area, and a substantial percentage of the Cape May County resources available to FleetBoston and the experience workforce commutes to Atlantic County. After a review of these data and other facts of record, the Board concludes that the Atlantic City gained by FleetBoston in completing past mergers.20 banking market should be defined as Atlantic and Cape May Counties, New Jersey. 19. FleetBoston has committed to divest the greater of (1) $100 million or (2) the amount of deposits in the branches as of the 20. The Board has received a comment from the Massachusetts date the branches are divested. FleetBoston has committed to execute Commissioner of Banks stating that the office received a number of sales agreements for the proposed divestitures with a purchaser deter- complaints from customers during bank mergers and branch divestimined by the Board to be competitively suitable, prior to consumma- tures related to the 1999 merger of Fleet Financial Group, Inc. and tion of the proposal, and has committed to complete these divestitures BankBoston Corp. to form FleetBoston. The comment suggested that within 180 days of consummation of the proposal. FleetBoston also these complaints might indicate problems with FleetBoston's ability has committed that, if it is unsuccessful in completing any divestiture to expand its operations without adversely affecting its existing cuswithin 180 days of consummation, it will transfer the unsold offices to tomers. In response to this comment, the Board has obtained informaan independent trustee that is acceptable to the Board and will instruct tion from FleetBoston and the OCC, the federal banking agency the trustee to sell the offices promptly to one or more alternative responsible for FleetBoston's subsidiary banks. FleetBoston believes purchasers acceptable to the Board. See BankAmerica Corporation, that most of the complaints concern branches that it was required to 78 Federal Reserve Bulletin 338 (1992); United New Mexico Finan- divest in connection with its acquisition of BankBoston Corporation. cial Corporation, 77 Federal Reserve Bulletin 484 (1991). FleetBoston has informed the Board of the steps it has taken to resolve Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 255 Based on this review and all of the facts of record, the posal would result in FleetBoston increasing fees for prod- Board concludes that considerations relating to the finan- ucts used by LMI individuals, and reducing basic banking cial and managerial resources and future prospects of Fleet- services provided to LMI individuals.24 Commenters also Boston, Summit, and their respective subsidiaries are con- express concerns about possible branch closures and consistent with approval of the proposal, as are the other tend that FleetBoston should be required to negotiate comsupervisory factors that the Board must consider under munity reinvestment agreements pertaining to certain geosection 3 of the BHC Act. graphic areas in the assessment areas of the combined organization. Convenience and Needs Considerations B. CRA Performance Examinations Section 3 of the BHC Act requires the Board, in every case involving the acquisition of a bank by a bank holding As provided in the CRA, the Board has evaluated the company, to consider the effects of the proposal on the convenience and needs factor in light of examinations of convenience and needs of the communities to be served. the CRA performance records of the relevant institutions The Board has long held that this analysis includes a by the appropriate federal supervisors. An institution's review of performance under the Community Reinvest- most recent CRA performance evaluation is a particularly ment Act (12 U.S.C. § 2901 et seq.) ("CRA"). The CRA important consideration in the application process because requires the federal financial supervisory agencies to en- it represents a detailed on-site evaluation of the institucourage financial institutions to help meet the credit needs tion's overall record of performance under the CRA by its of the local communities in which they operate. To accom- appropriate federal supervisor.25 plish this end, the CRA requires the appropriate supervi- FleetBoston was formed by the 1999 merger of Banksory authority for an insured depository institution to "as- Boston Corporation ("BankBoston") with and into Fleet sess the institution's record of meeting the credit needs of Financial Group, Inc. ("Fleet"), both in Boston, Massachuits entire community, including low- and moderate-income setts. Before their merger to form Fleet National Bank, neighborhoods, consistent with the safe and sound opera- Boston, Massachusetts ("New Fleet Bank"), all Fleet's tions of such institution,"21 and requires that this record be subsidiary insured depository institutions received ratings taken into account in the Board's evaluation of bank hold- of "satisfactory" at their most recent examinations of CRA ing company applications involving the institution.22 performance26 and all BankBoston's subsidiary insured depository institutions received ratings of "satisfactory" or A. Summary of Public Comments better as of their most recent examinations of CRA performance.27 FleetBoston's other subsidiary insured depository The Board has reviewed the record of performance of the institution, Fleet Bank (Rhode Island), N.A., Providence, subsidiary banks of FleetBoston and Summit in light of all Rhode Island, which engages primarily in credit card operthe facts of record, including timely comments received. ations, received a "satisfactory" CRA performance rating Based in part on their analyses of data filed under the Home Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.) ("HMDA"), several commenters criticize the records of FleetBoston and Summit of serving minorities and low- taken steps to help provide checking accounts for underserved individand moderate-income ("LMI") communities and LMI in- uals. dividuals.23 In addition, commenters contend that the pro- 24. One commenter has suggested that FleetBoston might be engaged in subprime lending that has an adverse effect on minority borrowers. FleetBoston has stated that it currently conducts no lending activities that are subject to the Home Ownership and Equity Protecthe most common disputes that have arisen after its recent acquisitions tion Act (HOEPA), and that controls are in place to ensure that no and has an established process to respond to customers' complaints, HOEPA-covered transactions are initiated. including those forwarded by the OCC to FleetBoston. FleetBoston 25. The Interagency Questions and Answers Regarding Community states that its employees have received special training in preparation Reinvestment provide that a CRA examination is an important and for integrating Summit into its operations, and that it is retaining often controlling factor in the consideration of an institution's CRA Summit's most popular checking account product to minimize prob- record. See 65 Federal Register 25,088 and 25,107 (2000). lems for these customers. 26. Fleet's former lead subsidiary bank, Fleet National Bank, Provi- 21. 12 U.S.C. § 2903(1). dence, Rhode Island ("Fleet-RI"), and Fleet Bank, N.A., Jersey City, 22. 12 U.S.C. §§ 2903(2), 2902(3)(F). New Jersey ("Fleet-NJ"), were examined by the OCC for CRA 23. One commenter contends that FleetBoston has failed to ade- performance, as of February 1998. Fleet Bank of New Hampshire, quately serve the needs of LMI individuals and communities under the Manchester, New Hampshire ("Fleet-NH"), and Fleet Bank of Maine, CRA because FleetBoston's subsidiary banks have discontinued the Portland, Maine, were examined by the Federal Reserve Bank of deposit accounts of check cashing businesses. FleetBoston states that Boston for CRA performance, as of April 1998. Fleet Bank, F.S.B., in May 1999, it decided to discontinue customer relationships with Boca Raton, Florida, was examined by the Office of Thrift Supervimoney transmitters, check cashers, and similar entities because of sion for CRA performance, as of April 1998. concerns over costs required for FleetBoston to monitor such custom- 27. BankBoston's lead subsidiary bank, BankBoston, N.A., Boston, ers to ensure compliance with laws against money laundering and Massachusetts, received an "outstanding" CRA performance rating similar illicit activity. The CRA does not require financial institutions from the OCC at its examination, as of March 1999. Bank of Bostonto provide any particular type of product or service to its customers. Florida, N.A., Boca Raton, Florida, received a "satisfactory" CRA As discussed, examiners found that FleetBoston's subsidiary banks performance rating from the OCC at its examination, as of December have served the LMI areas of their communities. FleetBoston also has 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
256 Federal Reserve Bulletin • April 2001 from the OCC at its most recent examination, as of March these census tracts and higher than the percentage of such 2000. loans made by lenders in the aggregate. At the time of the Summit's lead subsidiary bank, Summit-NJ, which rep- CRA examination, the bank used several programs to resents approximately 85 percent of the banking assets provide affordable home mortgage loans. For example, controlled by Summit, received an "outstanding" CRA Fleet-RI offered its proprietary affordable housing properformance rating from the Federal Reserve Bank of New gram, which featured reduced down payment require- York at its most recent examination, as of October 1999 ments, flexible underwriting standards, and no mortgage ("1999 Summit-NJ Examination"). Summit's other subsid- insurance requirement for borrowers unable to meet tradiiary banks also received "outstanding" ratings at their tional secondary market credit standards. In addition, Fleetmost recent examinations for CRA performance.28 RI was engaged in local partnership programs offered in cooperation with organizations, such as the Association of C. FleetBoston's CRA Performance Record Community Organization for Reform Now, Neighborhood Assistance Corporation of America, and Hartford Areas In the past two years, the Board has reviewed the CRA Rally Together, that offered flexible underwriting standards performance record of Fleet and FleetBoston in connection and extensive financial and homebuyer counseling. with two large acquisition proposals.29 In both cases, the Fleet-RI also offered several government-sponsored pro- Board received extensive public comment and the Board grams, such as Federal Housing Administration and Vetercarefully reviewed the records of the subsidiary banks ans Administration loan programs and the state-sponsored involved in light of the public comments, the applicant's Jumpstart program in Massachusetts, New York, and response to those comments, and supervisory reports. For Rhode Island,31 and participated in the Fannie Mae Comreasons set forth in detail in those orders, the Board con- munity Home Buyers program, that featured reduced down cluded that the CRA performance records of Fleet and payment requirements, flexible underwriting standards, and FleetBoston, respectively, were consistent with approval of flexible financing of closing costs. Examiners noted favorthe two proposals under the BHC Act. Many of the com- ably that the geographic distribution of Fleet-RI's conments received in this case raise the same contentions and sumer loans generally was consistent with population disarguments raised by commenters in previous cases. Conse- tribution. quently, the Board adopts and incorporates in this case the For small business lending, examiners reported that relevant findings made in the two previous orders. Fleet-RI was particularly active in Massachusetts and Con- Fleet-RI. At the time of its February 1998 CRA perfor- necticut, where the percentage of the bank's small business mance examination, Fleet-RI operated in Massachusetts, loans in LMI census tracts was generally 3 to 4 percentage Connecticut, portions of upstate New York, and Rhode points higher than the comparable percentage for lenders in Island.30 During 1996 and 1997, the bank made 53,305 the aggregate. Examiners found that in New York, the HMDA-reported loans, totaling $4.4 billion, and 27,827 distribution of Fleet-RI's small business loans generally loans to small businesses in amounts less than $1 million corresponded to the distribution of businesses throughout ("small business loans"), totaling $4.2 billion, in its assess- the assessment areas, and that there was good distribution ment area. of small business loans to very small businesses in LMI Examiners considered Fleet-RI's lending performance to census tracts.32 Through the Fleet INCITY Business and be particularly strong in home purchase lending. In every Entrepreneurial Services Group, Fleet-RI offered small state, and in most MSAs in its assessment area, the percent- business loans featuring reduced documentation, flexible age of the bank's loans made in LMI census tracts was underwriting, and no minimum loan amount in LMI areas. higher than the percentage of owner-occupied housing in Fleet CDC also supported small businesses through lowinterest loans, longer-term loans, and equity investments in financial intermediaries and nonprofit organizations that 28. Summit-PA received an "outstanding" CRA performance rating from the Federal Reserve Bank of Philadelphia at its examination, as of March 2000 ("2000 Summit-PA Examination"). Summit-CT received an "outstanding" CRA performance rating from the Federal 31. Under the Jumpstart program, Fleet-RI made 2,173 loans Deposit Insurance Corporation ("FDIC") at its examination, as of in 1998, totaling $254.1 million; 1,950 loans in 1997, totaling August 1999. $202.7 million; and 3,338 loans in 1996, totaling $325.9 million. 29. See Fleet Financial Group, Inc., 85 Federal Reserve Bulletin 32. One commenter criticized FleetBoston's HMDA and small 747 (1999) ("Fleet-BankBoston Order"); FleetBoston Financial business lending in the Rochester MSA. FleetBoston acknowledges Corp., 86 Federal Reserve Bulletin 751 (2000) ("North Fork Order"). that its share of HMDA-reportable loans in the MSA has declined, but In addition, the Board held a public meeting in connection with the asserts that the decrease was due to the large increase in the number of Fleet-BankBoston application. HMDA lenders in the MSA from 1995 to 1999. Although FleetBos- 30. At the time of its most recent CRA performance examination, ton's HMDA lending to minority and LMI borrowers declined in the Fleet-RI owned several subsidiaries, including Fleet Mortgage Group, Rochester MSA from 1995 to 1998, in 1999 the number of its loans Inc., Columbia, South Carolina ("Fleet Mortgage"), and Fleet Com- originated to African-American and Hispanic applicants increased. munity Development Corporation, Providence, Rhode Island ("Fleet The number and dollar volume of FleetBoston's small business loans CDC"), which engaged in community development lending and in- declined from 1997 through 1999 in the Rochester MSA. The number vestments. Home mortgage loans by Fleet Mortgage and loans and and dollar amount of FleetBoston's small business loans in LMI investments by Fleet CDC and Fleet-RI's affiliated banks that were census tracts as percentages of FleetBoston's total small business made in Fleet-RI's assessment area were considered by the OCC in its lending in 1999 in the Rochester MSA exceeded the percentages for examination of the bank's CRA performance. lenders in the aggregate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 257 focused their efforts on small businesses in LMI areas. tracts per dollar of assets. In southern New Jersey, Summit- Fleet-RI was an active lender through Small Business NJ's performance in these categories was found to be Administration ("SBA") programs. Overall, Fleet was the adequate, generally in line with or slightly below that of largest SBA lender in New England in 1997 and the second similarly situated financial institutions. largest in 1998. In the first six months of 1999, Fleet made Summit-NJ's loan distribution was found to reflect good more small business loans under a new SBA express ap- penetration in its assessment areas, and examiners particuproval program than in all of 1998. larly commended the geographic distribution of the bank's Examiners also judged Fleet-RI's performance in mak- lending in the LMI census tracts in these areas.34 Examining community development investments to be particularly ers found Summit-NJ's multifamily lending to be responstrong. In 1996 and 1997, the bank made $253 million of sive to the housing needs in its assessment areas and to be qualified investments and grants and committed to make an evenly distributed in light of the population patterns in additional $269 million. In 1997, Fleet-RI entered into an those areas. The bank originated 86 multifamily loans agreement with Neighborhood Housing Services of Amer- during the examination period,35 23 of which were made in ica ("NHSA") to purchase up to $10 million in affordable LMI census tracts. Those 23 loans represented 1,207 housfirst and second mortgages and home improvement loans ing units, including 802 units that qualified as affordable originated and underwritten by NHSA's local affiliates in housing. Examiners also found that the overall distribution the bank's assessment area. Fleet-RI also committed to of Summit-NJ's loans among individuals of different inmake grants of $1.4 million of working capital over three come levels and businesses with different revenues was years to NHSA's affiliated Neighbor Works Organizations good throughout its assessment areas. to support neighborhood revitalization and affordable hous- Examiners concluded that Summit-NJ had an excellent ing development. level of community development lending. Summit-NJ's According to examiners, Fleet-RI's branch network, community development lending commitments totaled ATMs, and its alternative delivery systems provided consis- $197.4 million, which represented an increase of 139 pertent service and reached consumers in all geographic areas, cent over the amount during the previous examination and its products and services were designed to serve all period, and included $88.2 million in support of affordable consumers, including LMI individuals. Approximately 600 housing initiatives that constructed or rehabilitated 1,479 companies participated in the bank's Workplace Banking affordable housing units in the bank's assessment areas. program, which provided basic banking services at reduced Summit-NJ also lent $85.7 million for community service cost to approximately 53,000 households. The program initiatives, $11.3 million in support of economic developwas provided through branches, ATMs, and telephone ment, and $12.2 million for revitalization and stabilization banking systems, thereby enhancing access to services for activities. certain predominantly minority communities. The bank Examiners found Summit-NJ to have an excellent level also offered seminars for first-time LMI homebuyers and of qualified community development investments and to small business owners.33 exhibit an excellent level of responsiveness to credit and community development needs. Summit-NJ had a total of D. Summit's CRA Performance Record $65.9 million of qualified investments, including $65.1 million invested in community development organi- Summit-NJ. The 1999 Summit-NJ Examination concluded zations, and $859,000 in charitable grants and contributhat the overall lending activity of Summit-NJ reflected tions to such organizations. This represented an increase excellent responsiveness to the credit needs of its northern of 217 percent over Summit-NJ's qualified investments New Jersey assessment area and adequate responsiveness during the previous examination period. The qualified into the credit needs of its southern New Jersey assessment vestments made by Summit-NJ were noted for showing area. Summit-NJ originated 93 percent of its loans in its excellent responsiveness to affordable housing developassessment areas, and examiners found this lending to be ment, which was a persistent community development well distributed throughout those areas, in light of the need in its assessment area. Examiners also found that number of residents in these areas and the number of the Summit-NJ made excellent use of complex investments, bank's branches. In northern New Jersey, where 80 percent of its branches are located, Summit-NJ was a leader in total lending activity, loan volume in LMI census tracts, number 34. One commenter asserts that Summit-NJ has failed to originate a of loans per dollar of assets, and loans made in LMI census sufficient number of mortgages in Asbury Park, New Jersey, for the period 1998-99. The commenter also contends that Summit-NJ has not followed through on assurances, allegedly given by officers of the 33. Two commenters express concern that FleetBoston would in- bank to the commenter in a meeting in late 1999, that the bank would crease fees for banking products and services or eliminate or alter increase its lending in Asbury Park. In reviewing the lending of banking products and services after consummation of the proposal. Summit-NJ in the Monmouth-Ocean, New Jersey Metropolitan Statis- FleetBoston offers a full range of affordable banking products and tical Area ("MSA"), which includes Asbury Park, examiners conservices. Although the Board has recognized that banks help serve the cluded that the geographic distribution of the bank's lending in this banking needs of communities by making basic services available at MSA was good, including the penetration of its home purchase nominal or no charge, the CRA does not require an institution to lending in LMI areas of the MSA. provide any specific types of products or services or limit the fees it 35. The examination generally covered the period from October 1, charges for them. 1997, to June 30, 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
258 Federal Reserve Bulletin • April 2001 such as low-income housing tax credits, in supporting assessment areas was considered to be consistent with the community development initiatives. bank's asset size, lending capacity, and business objec- Summit-NJ was considered by examiners to be a leader tives. in providing community development services in its assess- Examiners considered Summit-PA's level of community ment areas. These services included sponsoring educa- development lending to be outstanding and the bank to be a tional seminars for first- time homebuyers and small busi- leader in making community development loans and an nesses, permitting Summit-NJ employees to serve as active participant in economic development initiatives. directors or officers of community development organiza- Summit-PA's loans to community development organizations, and participating in the Affordable Housing Program tions and initiatives totaled $51 million, and a substantial ("AHP") of the Federal Home Loan Bank ("FHLB") of number of those loans were made in the bank's Philadel- New York. The AHP finances homeownership for house- phia and Allentown-Bethlehem-Easton assessment areas. holds with incomes that are 80 percent or less of the area Summit-PA also made extensive use of innovative and median income, and finances rental housing in which flexible lending practices to meet the credit needs of its 20 percent of the units will be occupied by tenants who community, including home purchase, home improvement, earn 50 percent or less of the area median. At the time of and business loan products designed to meet the credit the examination, Summit-NJ was overseeing 28 affordable needs of LMI borrowers and small businesses. Summit-PA housing projects it had sponsored through the AHP. participated in the FHLB of Pittsburgh's AHP by sponsor- Examiners concluded that Summit-NJ used delivery sys- ing eight affordable housing projects and overseeing the tems for its products and services that were reasonably distribution of $1.7 million in grant funds during the examaccessible to essentially all portions of its assessment area. ination period.37 In addition, examiners concluded that Of the 372 branches that Summit-NJ maintained at the Summit-PA had a good record of serving the credit needs close of the examination period, 53 (14 percent) were in of significantly disadvantaged areas and borrowers in its LMI census tracts. Summit-NJ had 55 branches in super- assessment areas, while also encouraging the bank to conmarkets and all these branches offered third-party check tinue to explore alternative ways to respond to these credit cashing and were open seven days a week. Ninety percent needs, particularly in its Philadelphia assessment area. of all the bank's branches had extended hours once a week. Examiners found that Summit-PA had an excellent level Examiners noted that Summit-NJ offered a variety of alter- of qualified community development investments and pronative delivery systems, including ATMs, and banking by vided some investments that were not routinely offered by telephone and home computer. Eight percent of Summit- other financial institutions. Summit-PA also made exten- NJ's 388 ATMs (primarily those in supermarkets) offered a sive use of innovative and complex investments, such as check cashing feature, and 16 percent of the bank's ATMs low-income housing tax credit projects, to support commuoffered Spanish language transactions. Examiners also nity development initiatives. The bank demonstrated an found that Summit-NJ's record of opening and closing excellent responsiveness to community credit and developbranches had not adversely affected the accessibility of its ment needs, principally by investing in organizations that delivery systems, including those in LMI areas or to LMI promote affordable housing and economic development. individuals. Examiners also did not identify any credit Examiners found that Summit-PA was a leader in providpractices of Summit-NJ that violated the substantive provi- ing community development services in its assessment sions of any antidiscrimination laws or regulations. areas, primarily by offering affordable housing programs, Summit-PA. The 2000 Summit-PA Examination found that the bank had an excellent level of overall lending, and that a substantial majority of its home mortgage, small ments, particularly in LMI areas. During the examination period, business, and unsecured consumer loans were made in its Summit-PA made 566 HMDA-reportable loans in this MSA, includassessment areas. In addition, the geographic distribution ing 148 (26 percent) to LMI borrowers, and 52 (9 percent) in LMI census tracts. The examiners did not consider the number of loans to of Summit-PA's lending, including home purchase, small be inappropriate because only 8 percent of the owner-occupied housbusiness, and consumer lending, was found to demonstrate ing in the MSA was in LMI census tracts. By contrast, 20 percent of good penetration throughout its assessment areas, includ- Summit-PA's small business loans in this MSA were made in LMI ing LMI geographies. Examiners also found that the distri- census tracts. The percentage of Summit-PA's loans to businesses with less than $1 million in revenues ("loans to small businesses") and bution of Summit-PA's lending among borrowers of differloans of less than $1 million to businesses ("small business loans") in ent income levels was excellent, and, in particular, noted the MSA that were made in LMI areas exceeded the percentages for that the bank was effective in reaching LMI borrowers in lenders in the aggregate for every year from 1997 through 1999. its Philadelphia and Allentown-Bethlehem-Easton assess- 37. One commenter recommends withholding approval of the proment areas.36 Summit-PA's small business lending in all its posal until FleetBoston decides that the merged New Fleet Bank/ Summit-PA would maintain Summit-PA's membership in the FHLB of Pittsburgh, or otherwise compensates the entities that the commenter believes would be harmed if New Fleet Bank is not a member. 36. One commenter criticizes Summit-PA for making too few home New Fleet Bank, however, would be ineligible to be a member of the purchase loans to LMI individuals in the Scranton/Wilkes-Barre/ FHLB of Pittsburgh because the bank would be based in Massachu- Hazelton MSA, a portion of which is included in the bank's assess- setts. New Fleet Bank is a member of the FHLB of Boston and has ment area. Another commenter, based on the bank's 1998 CRA proposed to petition the FLHB of Boston to amend its policies to examination, argues that the ScrantonAVilkes-Barre/Hazelton MSA accept applications for affordable housing programs from members has not received an equitable share of Summit-PA's loans or invest- for projects outside that FHLB's district boundaries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 259 technical assistance by bank employees to community de- combined FleetBoston-Summit organization engage pursuvelopment organizations, educational seminars for first- ant to CRA pledges and agreements, will be reviewed by time homebuyers, and deposit accounts designed for LMI the appropriate federal supervisors of those institutions in individuals. The examination also concluded that future CRA performance examinations. Those CRA perfor- Summit-PA used its branch network, ATMs, and Internet mance records will be considered by the Board in any and telephone banking systems to deliver services to its future applications by FleetBoston to acquire a depository customers. Examiners found that Summit-PA's branch sys- institution.40 tem was accessible to essentially all portions of the bank's assessment areas, and noted that 17 percent of the bank's F. FleetBoston's HMDA Data 109 branches were in LMI geographies. Summit-PA had 126 ATMs at the time of the examination, and examiners The Board has carefully considered the lending records of noted that several of the bank's ATMs offered Spanish FleetBoston and Summit in light of comments about and/or Russian language transactions, particularly ATMs in HMDA data reported by the organizations' subsidiaries.41 Philadelphia. Summit-PA's record of opening and closing The Board has reviewed HMDA data from 1997 through branches was not found to have affected the accessibility of 1999 for FleetBoston in five states and eight MS As and for the bank's delivery systems. Since its previous CRA exam- Summit in three states and two MSAs. ination, Summit-PA had opened 42 additional branches The HMDA data indicate that FleetBoston's originations (23 of which were related to its September 1999 merger to African American applicants as a percentage of its total with Prime Bank, Philadelphia, Pennsylvania), and closed originations (the "origination rate") was below the pertwo branches. Neither of the closed branches was in an centage for lenders in the aggregate (the "aggregate") in LMI area. some areas, and was above it in others. The HMDA data Examiners found no credit practices of Summit-PA that for these years also indicate that FleetBoston's origination violated the substantive provisions of any antidiscrimina- rates for Hispanics were below the origination rates for the tion laws or regulations. aggregate in most states and MSAs examined, except for the MSAs of Bridgeport, Connecticut MSA and Trenton, E. FleetBoston CRA Pledge New Jersey MSA. In addition, the HMDA data indicate that FleetBoston's denial disparity ratios with respect to Two commenters request that the Board delay action on minority applicants were generally equivalent to or better this application until FleetBoston enters into a CRA agree- than the aggregate's denial disparity ratios.42 The HMDA ment pertaining to portions of Pennsylvania. New Fleet data also indicate that Summit's origination rates to LMI Bank has entered into a community development agree- areas generally lagged the aggregate's origination rate of ment with two organizations in New Jersey. HMDA-reportable loans to LMI areas. In the Scranton/ The CRA requires the Board, in considering a bank Wilkes-Barre/Hazelton MSA, Summit's origination rate to holding company's application to acquire another bank LMI individuals was below the aggregate's origination rate holding company, to review carefully the actual record of to LMI individuals for each year from 1997 through 1999. past performance of the insured depository institutions In the Allentown-Bethlehem-Easton MSA in 1999, Sumcontrolled by each bank holding company in helping to mit's orgination rates to African Americans and to Hispanmeet the credit needs of their communities. Consistent with ics were below the aggregate's origination rates. this requirement, the Board previously has held that, for The Board is concerned when an institution's record approval of a proposal to acquire an insured depository indicates such disparities in lending and believes that all institution, an applicant must demonstrate a satisfactory banks are obligated to ensure that their lending practices record of performance under the CRA without reliance on are based on criteria that ensure not only safe and sound plans or commitments for future action.38 banking, but also equal access to credit by creditworthy The Board previously has noted that, although communi- applicants, regardless of their race or income level. The cations by depository institutions with community groups Board recognizes, however, that HMDA data alone provide provide a valuable method of assessing and determining how an institution may best address the credit needs of the community, neither the CRA nor the CRA regulations of 40. One commenter contends that FleetBoston is not making adethe federal financial supervisory agencies require deposiquate progress in fulfilling a pledge made in connection with a tory institutions to enter into agreements with any organiza- previous acquisition. This pledge was not a commitment made to the tion.39 The Board notes that the future activities of Fleet- Board and, therefore, is not enforceable by the Board. Boston, including any lending and community 41. Commenters criticize FleetBoston's record of home mortgage lending to minority individuals in 15 MSAs. Commenters also critidevelopment activities in which the subsidiary banks of the cize FleetBoston's lending to LMI and minority individuals or in communities in the Rochester, New York MSA. In addition, Commenters criticize Summit's record of home mortgage lending to LMI 38. See Totalbank Corp. of Florida, 81 Federal Reserve Bulletin individuals in the Scranton/Wilkes-Barre/Hazelton MSA, and Sum- 876 (1995); First Interstate Bank Systems of Montana, Inc., 77 Fed- mit's record of home mortgage lending to minority individuals in the eral Reserve Bulletin 1007 (1991). Allentown-Bethlehem-Easton MSA. 39. See Fifth Third Bancorp., 80 Federal Reserve Bulletin 838 42. The denial disparity ratio compares the denial rate for minority (1994). loan applicants with that for white applicants. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
260 Federal Reserve Bulletin • April 2001 an incomplete measure of an institution's lending in its The Board has carefully considered all the facts of community because the data cover only a few categories of record concerning branch closings, including the branch housing-related lending.43 HMDA data, moreover, provide closing policy of New Fleet Bank and Fleet's record of only limited information about the covered loans. HMDA opening and closing branches. The Board notes that New data, therefore, have limitations that make the data an Fleet Bank's lbranch closing policy provides that the iminadequate basis, absent other information, for concluding pact of any branch closing on the local community should that an institution has not adequately assisted in meeting its be considered as part of the branch closing process. This communities' credit needs or has engaged in illegal dis- includes an assessment of how local banking needs might crimination in making lending decisions. be addressed by other New Fleet Bank branches, a review Because of the limitations of HMDA data, the Board has of comments from community leaders regarding the impact carefully considered the data in light of other information, of any proposed closure, and consideration of steps by the including examination reports that provide an on-site eval- bank to minimize any adverse impact. The policy is consisuation of compliance by the subsidiary banks of FleetBos- tent with federal law, which requires an insured depository ton and Summit with fair lending laws and the overall institution to provide notice to the public and to the approlending and community development activities of the priate federal supervisory agency before closing a branch 45 banks, as well as fair lending examinations of Fleet Mort- In addition, the most recent CRA examination of BankBosgage, which is a subsidiary of New Fleet Bank. Examiners ton, N.A. noted that branch closings generally had not found no evidence of prohibited discrimination or illegal adversely affected the accessibility of the bank's products credit practices at the subsidiary banks of FleetBoston or and services, particularly in LMI census tracts or to LMI Summit. Fleet Mortgage's fair lending policies, proce- individuals. Examiners made similar findings with respect dures, training programs, and internal monitoring pro- to Summit Bank-NJ and Summit Bank-PA. The Board grams were considered to be satisfactory. expects that the subsidiary banks of the combined organiza- The Board also considered the HMDA data in light of tion would continue to use a satisfactory branch closing the overall lending record of FleetBoston, including the policy for any branch closings that might result from the lending and other programs outlined above. As the discus- proposed transaction 46 sion illustrates, FleetBoston and Summit have implemented a variety of programs that help to meet the credit needs of H. Conclusion on Convenience and Needs the community in the home mortgage lending area as well as other areas of credit need, including, in particular, small For the reasons discussed above, the record demonstrates business loans and consumer credit. that FleetBoston and Summit have established records of performance in helping to meet the convenience and needs G. Branch Closings of the communities they serve. On balance, and based on a review of the entire record, the Board concludes that con- The Board has received comments that express concern venience and needs considerations, including the records about branch closings that might result from consumma- of CRA performance by both organizations' subsidiary tion of the proposal, and about the criteria that the merged depository institutions, are consistent with approval of the organization might use to determine which branches to proposal. close or consolidate. FleetBoston has estimated that 85 branches of the subsidiary banks of the merged organization might be closed as a result of the proposal. FleetBoston has indicated that this estimate is the result of a preliminary analysis of the two organizations' branch structures that identified 97 cities or communities in which FleetBoston and Summit banks both have branches.44 45. Section 42 of the Federal Deposit Insurance Act (12 U.S.C. § 1831r-l), as implemented by the Joint Policy Statement Regarding Branch Closings (64 Federal Register 34,844 (1999)) ("Joint Policy Statement"), requires that a bank provide the public with at least 43. The data, for example, do not account for the possibility that an 30 days' notice and the appropriate federal supervisory agency with at institution's outreach efforts may attract a larger proportion of margin- least 90 days' notice before the date of the proposed branch closing. ally qualified applicants than other institutions attract and do not The bank also is required to provide reasons and other supporting data provide a basis for an independent assessment of whether an applicant for the closure, consistent with the institution's written policy for who was denied credit was, in fact, creditworthy. Credit history branch closings. The law does not authorize federal regulators to problems and excessive debt levels relative to income (reasons most prevent the closing of any branch. frequently cited for a credit denial) are not available from HMDA 46. One commenter criticizes Summit-PA for closing a branch in data. Allentown, Pennsylvania, in 1997. The closure of this branch was 44. As part of its community development agreement with New reviewed as part of the Federal Reserve Bank of Philadelphia's April Jersey Citizen Action and the Housing and Community Development 1998 CRA examination of Summit-PA. At that time, two other Network of New Jersey, New Fleet Bank has agreed not to close any branches remained open in Allentown, and examiners found that the branches in LMI census tracts in 13 cities in New Jersey for four closure of that Allentown branch had not adversely affected the years. In several other cities, New Fleet Bank has agreed not to close accessibility of loan products and banking services to residents of any branch if the next closest branch is more than one-half mile away. LMI areas or LMI individuals. The branch was closed in accordance FleetBoston also has indicated that it does not currently plan to close with Summit-PA's branch closing policy, which conformed to proviany branches in Pennsylvania as a result of the proposal. sions of the Joint Policy Statement in effect at that time. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 261 Conclusion Appendix As required by section 25 of the Federal Reserve Act and Banking Markets Without Divestitures section 211.4(f) of the Board's Regulation K (12 C.F.R. 211.4(f)), FleetBoston also provided notice of its intention Fairfield Area banking market. The Fairfield Area market to acquire Summit International, which is organized under is defined as the Connecticut portion of the Metropolitan section 25A of the Federal Reserve Act. The Board con- New York Ranally Metro Area ("RMA"), plus the towns cludes that all the factors it is required to consider under of Kent, Roxbury, Warren, and Washington in Litchfield the Federal Reserve Act and Regulation K are consistent County in Connecticut. FleetBoston operates the largest with approval of the notice. depository institution in the market, controlling deposits of Based on the foregoing and all the facts of record, the approximately $3.4 billion, representing 24 percent of mar- Board has determined that the application and notice ket deposits. Summit operates the fifth largest depository should be, and hereby are, approved.47 The Board's ap- institution in the market, controlling deposits of approxiproval is specifically conditioned on compliance by Fleet- mately $898 million, representing 6.4 percent of market Boston with all the commitments made in connection with deposits. On consummation of the proposal, FleetBoston the proposal and with the conditions stated or referred to in would control deposits of approximately $4.3 billion, repthis order, including FleetBoston's divestiture commit- resenting 30.4 percent of market deposits. The HHI would ments. For purposes of this action, the commitments and increase by 308 points to 1,560 and 37 competitors would conditions relied on by the Board in reaching its decision remain in the market. are deemed to be conditions imposed in writing by the Waterbury banking market. The Waterbury market is de- Board in connection with its findings and decision and, as fined as the Waterbury RMA. FleetBoston operates the such, may be enforced in proceedings under applicable fourth largest depository institution in the market, controllaw. ling deposits of approximately $230 million, representing The acquisition shall not be consummated before the 10.1 percent of market deposits. Summit operates the fifteenth calendar day after the effective date of this order, 13th largest depository institution in the market, controland the proposal shall not be consummated later than three ling deposits of approximately $10 million, representing months after the effective date of this order, unless such less than 1 percent of market deposits. On consummation, period is extended for good cause by the Board or by the FleetBoston would operate the fourth largest depository Federal Reserve Bank of Boston, acting pursuant to dele- institution in the market, controlling deposits of approxigated authority. mately $240 million, representing 10.5 percent of market By order of the Board of Governors, effective Febru- deposits. The HHI would increase 9 points to 1,659 and ary 12, 2001. 15 competitors would remain in the market. Metropolitan New York-New Jersey banking market. The Voting for this action: Chairman Greenspan, Vice Chairman Fergu- Metropolitan New York-New Jersey market is defined as son, and Governors Kelley, Meyer, and Gramlich. New York City; Dutchess, Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, Ulster, and Westchester Counties in ROBERT DEV. FRIERSON New York; Bergen, Essex, Hudson, Hunterdon, Middlesex, Associate Secretary of the Board Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, Warren, and portions of Mercer Counties in New Jersey; Pike County in Pennsylvania; and Fairfield and 47. The Board received two requests to hold a public meeting or portions of Litchfield and New Haven Counties in Conhearing on the proposal. Section 3(b) of the BHC Act does not require necticut. FleetBoston operates the sixth largest depository the Board to hold a public hearing on an application unless the institution in the market, controlling deposits of approxiappropriate supervisory authority for a bank to be acquired makes a mately $23 billion, representing 5.3 percent of market timely written recommendation of denial of the application. The Board has not received such a recommendation from any of the deposits. Summit operates the seventh largest depository appropriate supervisory authorities. institution in the market, controlling deposits of approxi- Under its rules, the Board also may, in its discretion, hold a public mately $18.2 billion, representing 4.2 percent of market meeting or hearing on an application to acquire a bank if a meeting or deposits. On consummation, FleetBoston would operate hearing is necessary or appropriate to clarify factual issues related to the third largest depository institution in the market, conthe application and to provide an opportunity for testimony. 12 C.F.R. 225.16(e). The Board has considered carefully the hearing requests in trolling deposits of approximately $41.2 billion, representlight of all the facts of record. In the Board's view, commenters have ing 9.6 percent of market deposits. The HHI would inhad ample opportunity to submit their views, and, in fact, have crease 45 points to 931 and 296 competitors would remain submitted written comments that have been considered carefully by in the market. the Board in acting on the proposal. The requests fail to demonstrate why their written comments do not present their views adequately and Philadelphia banking market. The Philadelphia banking fail to identify disputed issues of fact that are material to the Board's market is defined as Bucks, Chester, Delaware, Montgomdecision and that would be clarified by a public meeting or hearing. ery, and Philadelphia Counties in Pennsylvania; and Burl- For these reasons, and based on all the facts of record, the Board has ington, Camden, Gloucester, Salem Counties, and a portion determined that a public meeting or hearing is not required or warranted in this case. Accordingly, the requests for a public meeting or of Mercer County in New Jersey. FleetBoston operates the hearing on the proposal are denied. 23rd largest depository institution in the market, control- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
262 Federal Reserve Bulletin • April 2001 ling deposits of approximately $293 million, representing enumerated in section 3(d) are met in this case.4 In view of less than 1 percent of market deposits. Summit operates the all the facts of record, the Board is permitted to approve fourth largest depository institution in the market, control- the proposal under section 3(d) of the BHC Act. ling deposits of approximately $3.5 billion, representing 5.2 percent of market deposits. On consummation of the Competitive, Financial, and Managerial Considerations proposal, FleetBoston would operate the fourth largest depository institution in the market, controlling deposits of CUB and Dupont do not compete directly in any banking approximately $3.8 billion, representing 5.7 percent of market. Based on all the facts of record, the Board conmarket deposits. The HHI would increase by 4 points to cludes that consummation of the proposal would not have a 1,540 and 115 competitors would remain in the market. significant adverse effect on competition or on the concentration of banking resources in any relevant banking mar- Lea M. McMullan Trust ket. Shelbyville, Kentucky The Board also has considered the financial and managerial resources and future prospects of CUB and its subsid- Citizens Union Bancorp of Shelbyville, Inc. iaries in light of all the facts of record, including a com- Shelbyville, Kentucky ment letter, reports of examination and other supervisory information assessing the financial and managerial re- Order Approving Acquisition of a Bank sources of the organizations, and information provided by CUB.5 The Board notes that CUB and its subsidiaries are Lea M. McMullan Trust ("McMullan Trust") and its sub- well capitalized and are expected to remain so after considiary, Citizens Union Bancorp of Shelbyville, Inc. (col- summation of the proposal. The Board also has considered lectively, "CUB"), bank holding companies within the other aspects of the financial condition and resources of meaning of the Bank Holding Company Act ("BHC Act"), CUB, its subsidiary banks, and Dupont, and the structure have requested the Board's approval under section 3 of the of the proposed transaction. In addition, the Board has BHC Act (12 U.S.C. § 1842(a)(3)) to acquire all the out- reviewed the current managerial resources and future prosstanding voting shares of Dupont State Bank, Dupont, pects of CUB's entire organization, including confidential Indiana ("Dupont").1 supervisory examination information. Based on these and Notice of the proposal, affording interested persons an all the facts of record, including confidential reports of opportunity to submit comments, has been published examination, the Board has concluded that the financial (65 Federal Register 80,864 (2000)). The time for filing and managerial resources and the future prospects of CUB, comments has expired, and the Board has considered the its subsidiary banks, and Dupont are consistent with approposal and all comments received in light of the factors proval, as are the other supervisory factors the Board must set forth in section 3 of the BHC Act. consider under section 3 of the BHC Act. CUB operates two subsidiary banks in Kentucky. CUB is the 33rd largest commercial banking organization in Kentucky, Convenience and Needs Considerations controlling approximately $210.9 million in deposits, representing less than 1 percent of total deposits in commercial In acting on a proposal under section 3 of the BHC Act, the banking organizations in the state ("state deposits"). Dupont Board is required to consider the effect of the proposal on is the 126th largest commercial banking organization in the convenience and needs of the community to be served Indiana, controlling approximately $16.9 million in deposits, and to take into account the records of the relevant deposirepresenting less than 1 percent of state deposits.2 Interstate Analysis 4. See 12 U.S.C. §§ 1842(d)(1)(A) and (B), 1842(d)(2)(A) and (B). CUB is adequately capitalized and adequately managed, as defined by applicable law. In addition, on consummation of the proposal, CUB Section 3(d) of the BHC Act allows the Board to approve would control less than 10 percent of the total amount of deposits of an application by a bank holding company to acquire insured depository institutions in the United States. The state law control of a bank located in a state other than the home requirements also are satisfied in this case. See Ind. Code Ann. § 28—2-16—17(f) and Ky. Rev. Stat. Ann. §§ 287.900(2) and (3). All state of such bank holding company if certain conditions other requirements under section 3(d) of the BHC Act are met in this are met.3 For purposes of the BHC Act, the home state of case. CUB is Kentucky, and CUB would acquire a bank in 5. As part of its review, the Board carefully considered a comment Indiana. All the conditions for an interstate acquisition about the management of CUB and one of its subsidiary banks from a former management official of CUB, who is a minority shareholder. The commenter also alleged without supporting facts that CUB had violated shareholders' rights. State law and federal securities law 1. McMullan Trust is a registered bank holding company that owns generally govern the rights of shareholders in a bank holding com- 35.6 percent of the voting stock of Citizens Union Bancorp. pany. The Board and the courts have generally found that matters 2. State deposit and ranking data are as of June 30, 1999. concerning the rights of shareholders are not among the factors that 3. A bank holding company's home state is that state in which the the Board is entitled to consider under the BHC Act. See, e.g., First total deposits of all banking subsidiaries of such company were the National Bank Group, Inc., 84 Federal Reserve Bulletin 959 (1998) largest on the later of July 1, 1966, or on the date on which the (citing Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 company became a bank holding company. 12 U.S.C. § 1841(o)(4)(C). (10th Cir. 1973)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 263 tory institutions under the Community Reinvestment Act neglected houses in the downtown area of Shelbyville. ("CRA").6 The Board has carefully considered the conve- Examiners also reported that the bank financed a project to nience and needs factor and the CRA performance records help fund a hospital that cares for LMI families in Shelby of CUB's subsidiary banks and Dupont in light of all the County. In addition, examiners noted that Citizens had facts of record, including allegations that CUB has failed to invested in nine low-income real estate tax credits for the meet the need for credit and banking services in Shelby renovation or construction of LMI housing in Shelby and County, Kentucky. Shelby County is in the assessment area Jefferson Counties, Kentucky. of CUB's largest subsidiary bank, Citizens Union Bank of In the 1999 Citizens Evaluation, examiners also noted Shelbyville, Shelbyville, Kentucky ("Citizens"). Cur- that the bank's delivery of services reflected an excellent rently, Citizens' main office and four of its five branches responsiveness to the needs of the community and that its operate in Shelby County. delivery systems were reasonably accessible to most areas As provided in the CRA, the Board has evaluated the of the bank's assessment area.9 In addition, examiners convenience and needs factor in light of examinations of commended Citizens' employees for their involvement in the CRA performance records of the relevant institutions numerous organizations in the bank's assessment area to by their appropriate federal supervisor.7 Citizens received help attract new businesses, promote the expansion of an "outstanding" rating from its primary federal supervi- existing businesses, provide housing for LMI residents, or sor, the Federal Deposit Insurance Corporation ("FDIC"), provide educational or other services to LMI individuals or at its most recent evaluation for CRA performance, as of families. March 29, 1999 ("1999 Citizens Evaluation"). First Farm- The Board has considered carefully the entire record in ers Bank and Trust Company, Owenton, Kentucky ("First its review of the convenience and needs factor under the Farmers"), CUB's other subsidiary bank, and Dupont re- BHC Act. Based on all the facts of record, including the ceived "satisfactory" ratings from the FDIC at their most relevant CRA performance evaluations, the comment rerecent evaluation for CRA performance.8 The reports of ceived, and information provided by CUB, the Board conexamination of CUB's subsidiary banks and Dupont indi- cludes that considerations relating to convenience and cate that the examiners found no evidence of substantive needs, including the CRA performance records of the violations of the antidiscrimination laws. banks involved in the proposal, are consistent with ap- In the 1999 Citizens Evaluation, examiners noted that proval. Citizens offered a full line of deposit and loan products, including special loan products designed for first-time Conclusion homebuyers, small business owners, and small farmers through various government-sponsored loan programs. Based on all the facts of record, the Board has determined These included products through programs offered by the that this application should be, and hereby is, approved. Small Business Administration, the Farm Service Agency, The Board's approval is specifically conditioned on the the Federal Housing Administration, and the Kentucky compliance by CUB with all the commitments made in Housing Corporation. Examiners also found that a majority connection with the application. For purposes of this acof Citizens' home mortgage and business loans were in the tion, the commitments relied on by the Board in reaching bank's assessment area. In addition, examiners reported its decision are deemed to be conditions imposed in writing that Citizens had a reasonable distribution of home mort- by the Board in connection with its findings and decision gage loans to individuals of varying income levels and an and, as such, may be enforced in proceedings under appliexcellent record of consumer lending to low- and cable law. moderate-income ("LMI") borrowers. The acquisition of Dupont shall not be consummated Examiners also commended Citizens for its community before the fifteenth calendar day after the effective date of development lending activities and determined that the this order, and not later than three months after the effeclevel of community development investments held by Citi- tive date of this order, unless such period is extended for zens to address affordable housing and other credit needs good cause by the Board or the Federal Reserve Bank of was outstanding. For example, examiners noted that Citi- St. Louis, acting pursuant to delegated authority. zens served as the lead bank in a loan participation to By order of the Board of Governors, effective Februprovide $500,000 in financing to purchase and redevelop ary 12, 2001. Voting for this action: Chairman Greenspan, Vice Chairman Fergu- 6. 12 U.S.C. § 2901 et seq. son, and Governors Kelley, Meyer, and Gramlich. 7. The Interagency Questions and Answers Regarding Community Reinvestment provides that an institution's most recent CRA performance evaluation is an important consideration in the application process, because it represents a detailed, on-site evaluation of the institution's overall record of performance under the CRA by its 9. Examiners noted that, at the time of the most recent CRA appropriate federal supervisor. 65 Federal Register 25,088 and 25,107 evaluation, Citizens maintained a strong presence in Shelby County, (2000). controlling 40 percent of the deposits in the county, which was the 8. First Farmers received a "satisfactory" rating, as of Septem- largest share of any single financial institution. As noted, Citizens ber 10, 1998, and Dupont received a "satisfactory" rating, as of Janu- currently has its main office and four out of five branch offices in ary 6, 1997. Shelby County. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
264 Federal Reserve Bulletin • April 2001 ROBERT DEV. FRIERSON tition or tend to create a monopoly in any relevant banking Associate Secretary of the Board market, unless the Board finds that the anticompetitive effects of the proposal are clearly outweighed in the public Prosperity Banc shares, Inc. interest by the probable effect of the proposal in meeting Houston, Texas the convenience and needs of the community to be served.3 Prosperity and Commercial compete directly in two Order Approving the Acquisition of a Bank Holding banking markets in Texas, the Houston banking market and Company the Wharton County banking market.4 The Board has carefully reviewed the competitive effects of the proposal in Prosperity Bancshares, Inc. ("Prosperity"), a bank holding each of these banking markets in light of all the facts of company within the meaning of the Bank Holding Com- record, including, among other market characteristics, the pany Act ("BHC Act"), has requested the Board's ap- share of total deposits in depository institutions ("market proval under section 3 of the BHC Act (12 U.S.C. § 1842) deposits") controlled by each competitor in the markets,5 to merge with Commercial Bancshares, Inc., Houston, the concentration level of market deposits, and the increase Texas ("Commercial"), and thereby acquire Heritage in this level as measured by the Herfindahl-Hirschman Bancshares, Inc., Wilmington, Delaware ("Heritage Index ("HHI").6 Holdco"), a bank holding company that is a wholly owned subsidiary of Commercial, and its subsidiary bank, Heri- Houston Banking Market tage Bank, Wharton, Texas.1 Notice of the proposal, affording interested persons an Consummation of the proposal in the Houston banking opportunity to submit comments, has been published market would be consistent with the DOJ Guidelines and (65 Federal Register 70,911 (2000)). The time for filing Board precedent.7 Prosperity operates the 51st largest decomments has expired, and the Board has considered the pository institution in the market, controlling less than proposal in light of the factors set forth in section 3 of the 1 percent of market deposits. Commercial operates the BHC Act. 26th largest depository institution in the market, control- Prosperity operates the 35th largest depository institu- ling less than 1 percent of market deposits. On consumtion in Texas, controlling $519 million in deposits, which mation of the proposal, Prosperity would operate the represent less than 1 percent of total deposits in depository 20th largest depository institution in the market, controlinstitutions in the state.2 Commercial operates the ling deposits of $330 million, representing less than 1 54th largest depository institution in Texas, controlling percent of market deposits. The HHI for the market would $356 million in deposits. On consummation of this pro- increase 1 point to 869. The market would remain unconposal, Prosperity would control the 23rd largest depository centrated after consummation of the proposal, and numerinstitution in Texas, with deposits of $875 million, repre- ous competitors would remain in the market. senting less than 1 percent of the total deposits in depository institutions in the state. Competitive Considerations 3. 12 U.S.C. § 1842(c). 4. The Houston banking market is defined as the Houston Ranally Metropolitan Area. The Wharton County banking market is defined as The BHC Act prohibits the Board from approving an Wharton County, Texas. application under section 3 of the BHC Act if the proposal 5. Market share data are based on calculations that take into account would result in a monopoly or would be in furtherance of the deposits of thrift institutions, which include savings banks and any attempt to monopolize the business of banking. The savings associations, weighted at 50 percent. The Board previously BHC Act also prohibits the Board from approving a pro- has indicated that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See, e.g., posed combination that would substantially lessen compe- Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board regularly has included thrift deposits in the calcula- 1. Under the proposal, Commercial would be merged into Prosper- tion of market share at a weighting of 50 percent. See, e.g., First ity, which would be the surviving corporation. Immediately following Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991). that merger, Prosperity's wholly owned subsidiary, Prosperity Hold- 6. Under the Department of Justice Merger Guidelines ("DOJ ings, Inc., Wilmington, Delaware ("Prosperity Holdco"), which is Guidelines"), 49 Federal Register 26,823 (June 29, 1984), a market in also a bank holding company, would be merged into Heritage Holdco. which the post-merger HHI is more than 1800 is considered to be Heritage Holdco would be the surviving corporation of this second highly concentrated. The Department of Justice has informed the transaction. In addition, Heritage Bank, currently a state nonmember Board that a bank merger or acquisition generally will not be chalbank subsidiary of Heritage Holdco, would be merged into First lenged (in the absence of other factors indicating anticompetitive Prosperity Bank, which is a subsidiary of Prosperity Holdco and effects) unless the post-merger HHI is at least 1800 and the merger which would be the surviving corporation of this transaction. The increases the HHI by more than 200 points. The Department of Justice merger of Heritage Bank and First Prosperity Bank is subject to has stated that the higher than normal HHI thresholds for screening review by the Federal Deposit Insurance Corporation ("FDIC") under bank mergers for anticompetitive effects implicitly recognize the the Bank Merger Act (12 U.S.C. § 1828(c)). competitive effects of limited-purpose lenders and other nondeposi- 2. All data are as of June 30, 2000. In this context, depository tory financial institutions. institutions include commercial banks, savings banks, and savings 7. Under the DOJ Guidelines, a market in which the post-merger associations. HHI is less than 1000 points is considered to be unconcentrated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 265 Wharton County Banking Market tractive market for entry. The percentage increases in per capita income and market deposits are more than the In the Wharton County banking market, consummation of average percentage increases in these categories for all the proposal would increase the level of market concentra- non-MSA counties in Texas. The attractiveness of entry tion, as measured by the HHI, to levels that, according to into the Wharton County banking market is also demonthe DOJ Guidelines and Board precedent, exceed the strated by the de novo entry into the market of a depository threshold for in-depth review of the transaction. Prosperity institution in May 2000. In addition, the market gained an operates the largest of the ten depository institutions in the additional bank competitor in April 1999 when an out-ofmarket, and controls deposits of 139.3 million, represent- market bank acquired a savings association operating in ing 25.3 percent of market deposits. Commercial operates the market. the third largest depository institution in the market, and The Department of Justice has reviewed the proposal controls deposits of $69.4 million, representing 12.6 per- and advised the Board that consummation of the proposal cent of market deposits. On consummation of the proposal, would not likely have any significantly adverse competi- Prosperity would operate the largest depository institution tive effects in the Wharton County banking market or any in the market with deposits of $208.7 million, representing other relevant banking market. The FDIC has also not 37.9 percent of market deposits. The HHI for the market objected to the proposal. would increase 639 points to 2,078. After carefully reviewing all the facts of record, and for The Board believes that a number of circumstances the reasons discussed in the order, the Board concludes that mitigate the potential anticompetitive effects of the transac- consummation of the proposal would not likely result in a tion.8 In considering the competitive effects of this pro- significantly adverse effect on competition or on the conposal in the Wharton County banking market, the Board centration of banking resources in any of the banking has evaluated the presence of two savings associations markets in which Prosperity and Commercial directly comoperating in the market and has concluded that deposits pete or in any other relevant banking market. Accordingly, controlled by the institutions should be weighted at based on all the facts of record, the Board has determined 100 percent in market share calculations.9 Each of these that the competitive factors are consistent with approval of savings associations engages actively in commercial lend- the proposal. ing activities and offers a wide variety of business loan products and other banking services. Accounting for the Other Considerations revised weighting of these deposits, Prosperity would control 32.8 percent of market deposits, and the HHI would The BHC Act requires the Board, in acting on an applicaincrease 480 points to 1900 on consummation of the pro- tion, to consider the financial and managerial resources and posal. future prospects of the companies and banks involved in The Board has also taken account of other market char- the proposal, the convenience and needs of the communiacteristics. For example, after consummation of the pro- ties to be served, and certain supervisory factors. The posal, nine competitors would remain in the market. Two Board has reviewed these factors in light of the record, competitors, in addition to Prosperity, would each control including supervisory reports of examination assessing the more than 10 percent of market deposits and four others financial and managerial resources of the organizations and would control between 5 and 10 percent of market depos- financial information provided by Prosperity. Based on all its. In addition, the proximity of the Wharton County the facts of record, the Board concludes that the financial banking market to the Houston banking market and other and managerial resources and the future prospects of Prosfactors make the Wharton County banking market an at- perity, Commercial, and their respective depository institutions, are consistent with approval, as are the other supervisory factors that the Board must consider under section 3 of the BHC Act. In addition, considerations relating to 8. As the Board has indicated in previous cases, in a market in the convenience and needs of the communities to be which the competitive effects of a proposal exceed the DOJ Guidelines, the Board will consider whether other factors tend to mitigate served, including the records of performance of the instituthe proposal's competitive effects. The number and strength of factors tions involved under the Community Reinvestment Act necessary to mitigate the competitive effects of a proposal depend on (12 U.S.C. § 2901 et seq.), are consistent with approval of the level of market concentration and the size of the increase in market the application.10 concentration after consummation of the proposal. See NationsBank Corporation, 84 Federal Reserve Bulletin 129 (1998). 9. The Board previously has indicated that, when analyzing the Conclusion competitive effects of a proposal, it may consider the competitiveness of savings associations based on a deposit weighting greater than Based on the foregoing, and in light of all the facts of 50 percent if appropriate. See, e.g., Banknorth Group, Inc., 75 Federal Reserve Bulletin 703 (1989). Of the two savings associations in the record, the Board has determined that the application Wharton County banking market, one maintains 7.7 percent and the other maintains 4.6 percent of the loan assets in commercial loans. This level of commercial lending at these institutions compares favorably with the national average of 3.8 percent of the loan assets in thrift 10. First Prosperity Bank received a "satisfactory" rating from the portfolios that are commercial loan holdings. See First Union Corpo- FDIC, as of March 1, 2000, and Heritage Bank received a "satisfactoration, 84 Federal Reserve Bulletin 489 (1998). ry" rating from the FDIC, as of July 1, 2000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
266 Federal Reserve Bulletin • April 2001 should be, and hereby is, approved. The Board's approval Federal Bancshares, Inc., Springfield, Missouri ("Guaranis specifically conditioned on compliance by Prosperity ty"). Guaranty controls Guaranty Federal Savings Bank, a with all the commitments and representations made in federal savings bank. Great Southern expects that the perconnection with this application. For purposes of this ac- centage of its ownership interest in Guaranty will increase tion, the commitments and conditions relied on by the largely as the result of the repurchase by Guaranty of Board in reaching its decision are deemed to be conditions shares owned by other shareholders. imposed in writing by the Board in connection with its Notice of the proposal, affording interested persons an findings and decision and, as such, may be enforced in opportunity to submit comments, has been published proceedings under applicable law. (65 Federal Register 71,322 (2000)), and the time for filing The acquisition of Commercial shall not be consum- comments has expired. The Board has considered the nomated before the fifteenth calendar day following the effec- tice and all comments received in light of the factors set tive date of this order, or later than three months after the forth in section 4(j)(2) of the BHC Act. effective date of this order, unless such period is extended Great Southern, with total consolidated assets of for good cause by the Board or by the Federal Reserve $1.1 billion, operates the 12th largest depository institution Bank of Dallas, acting pursuant to delegated authority. in Missouri, controlling deposits of approximately By order of the Board of Governors, effective Febru- $436.3 million, representing less than 1 percent of total ary 5, 2001. deposits in depository institutions in the state.1 Guaranty controls the 67th largest depository institution in Missouri, Voting for this action: Chairman Greenspan, Vice Chairman Fergu- which has deposits of $70.4 million. son, and Governors Kelley, Meyer, and Gramlich. The Board previously has determined by regulation that the ownership of a savings association by a bank holding ROBERT DEV. FRIERSON company is closely related to banking for purposes of Associate Secretary of the Board section 4(c)(8) of the BHC Act.2 Guaranty has objected to the increase in percentage Concurring Statement of Governor Meyer ownership interest by Great Southern. Guaranty has adopted anti-takeover provisions designed to discourage a I believe the proposed acquisition presents a close case takeover attempt not approved by Guaranty's board of because it allows a very large change in the HHI of the directors.3 Wharton County banking market that will take the market Great Southern seeks the Board's approval to allow the into the highly concentrated range based on the DOJ percentage of outstanding shares of Guaranty owned by Guidelines. I believe we should pay attention to the rela- Great Southern to increase primarily as the result of stock tions hip between the change in the HHI and the post- repurchases by Guaranty. Great Southern has indicated that merger level of the HHI. For example, only modest miti- it does not intend to exercise control over Guaranty for gating factors would suffice when a modest change in the purposes of the BHC Act, and, in this connection, has HHI takes the post-merger level of the HHI into the highly agreed to abide by certain commitments that the Board has concentrated range. On the other hand, when a larger relied on in other cases to determine that an investing bank change in the HHI brings about this result, I would expect correspondingly more compelling mitigating factors. The relationship between the change in the HHI and the post- 1. Asset and state deposit data are as of June 30, 1999. In this merger level in this case is uncomfortably high and the context, depository institutions include commercial banks, savings relative strength of the mitigating factors make this an banks, and savings associations. extremely close case. 2. 12 C.F.R. 225.28(b)(4). 3. Guaranty states that the current ownership interest by Great Southern violates Guaranty's articles of incorporation, which Guar- Orders Issued Under Section 4 of the Bank Holding anty asserts would prohibit any person from acquiring more than Company Act 10 percent of Guaranty's shares, before December 2002. Guaranty's articles of incorporation recognize shareholdings in excess of 10 per- Great Southern Bancorp, Inc. cent under certain circumstances, and impose restrictions on the voting rights of shareholders with more than a 10-percent ownership Springfield, Missouri interest. The courts have indicated that the Board must analyze all the proposals under the BHC Act in light of the factors enumerated in the Order Approving the Acquisition of Shares of a Thrift BHC Act and may consider matters related to shareholders' rights Holding Company only to the extent those matters relate to the factors enumerated in the BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th Cir. 1973). The questions whether the ownership of Great Southern Bancorp, Inc. ("Great Southern"), a finan- more than 10 percent of the shares of Guaranty may be prohibited by cial holding company within the meaning of the Bank its articles of incorporation or whether the ownership of shares is Holding Company Act ("BHC Act"), has requested the permissible and voting rights associated with those shares are restricted are questions of state corporate law, as is the question whether Board's approval under sections 4(c)(8) and 4(j) of the Great Southern can be placed in violation of the articles of incorpora- BHC Act (12 U.S.C. § 1843(c)(8) and 18430)) and section tion by stock redemptions made by Guaranty. The Board has analyzed 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to this proposal under the factors that the Board is required to consider own up to 20 percent of the voting shares of Guaranty under the BHC Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 267 holding company would not be able to exercise a control- record, the Board concludes that consummation of the ling influence over a depository institution for purposes of proposal would not result in any significantly adverse the BHC Act.4 effects on competition or on the concentration of banking Based on these commitments and all other facts of resources in the Springfield banking market or any other record, it is the Board's judgment that Great Southern relevant banking market. would not acquire control of Guaranty for purposes of the BHC Act through consummation of this proposal. Financial, Managerial, and Supervisory Considerations The Board is required by section 4(j)(2)(A) of the BHC Act to determine that the proposal "can reasonably be The Board also has carefully reviewed the financial and expected to produce benefits to the public . . . that out- managerial resources of Great Southern and Guaranty and weigh possible adverse effects, such as undue concentra- their respective subsidiaries and the effect the transaction tion of resources, decreased or unfair competition, conflicts would have on such resources in light of all the facts of of interests, or unsound banking practices."5 record. The Board has reviewed, among other things, confiden- Competitive Considerations tial reports of examination and other supervisory information received from the primary federal supervisors of the As part of its consideration of the public interest factors organizations. The Board has also considered the limited under section 4 of the BHC Act, the Board has considered relationship Great Southern proposes to have with Guarcarefully the competitive effects of the proposal in light of anty and the matters raised by Guaranty to the extent they all the facts of record.6 Great Southern and Guaranty bear on the managerial resources of Great Southern. In compete directly in the Springfield, Missouri, banking mar- reviewing managerial resources, the Board consulted with ket ("Springfield banking market").7 If this proposal were the OTS, which is the appropriate federal banking agency considered an acquisition of control of Guaranty by Great for Guaranty. The OTS has indicated no objection to Board Southern, Great Southern would control the second largest approval of this notice. Based on all the facts of record, the depository institution in the Springfield banking market, Board concludes that the financial and managerial rerepresenting approximately 14.4 percent of total deposits sources of the organizations involved in the proposal are in depository institutions in the market ("market depos- consistent with approval. its").8 The Herfindahl-Hirschman Index ("HHI") would This proposal is designed to ensure that Great Southincrease by 57 points to 952, and the market would remain ern's interest in Guaranty remains in compliance with the unconcentrated.9 Based on these and all other facts of BHC Act after Guaranty repurchases its shares, and consummation of the proposal would have minimal adverse effects on concentration of resources, decreased or unfair 4. For example, Great Southern has committed not to exercise or competition, conflicts of interests, or unsound banking attempt to exercise a controlling influence over the management or practices. Based on the foregoing and all the facts of policies of Guaranty or any of its subsidiaries, and not to have any record, including consultations with OTS staff, and comemployees or representatives of Great Southern serve as an officer, mitments made by Great Southern that prevent it from employee, or agent of Guaranty. Great Southern also has committed not to attempt to influence the dividend policies, loan decisions, or exercising control over Guaranty, the Board has deteroperations of Guaranty or any of its subsidiaries. These commitments mined that consummation of the proposal can reasonably were made in connection with the Federal Reserve System's approval be expected to produce benefits to the public that outweigh of Great Southern's request in April 1999 to acquire up to 15 percent any potential adverse effects of the proposal under the of the voting shares of Guaranty and are incorporated by reference. standard of section 4(j)(2) of the BHC Act. 5. 12 U.S.C. 1843(j)(2)(A). 6. See First Hawaiian, Inc., 79 Federal Reserve Bulletin 966 (1993). Conclusion 7. The Springfield banking market consists of Christian, Green, and Webster Counties, all in Missouri. 8. Market share data are as of June 30, 1999, and are based on Based on the foregoing and all the facts of record, the calculations in which the deposits of thrift institutions are included at Board has determined that the notice should be, and hereby 50 percent before consummation. The Board previously has indicated is, approved. The Board's approval of the proposal is that thrift institutions have become, or have the potential to become, specifically conditioned on compliance by Great Southern significant competitors of commercial banks. See WM Bancorp, with the commitments made in connection with this notice. 76 Federal Reserve Bulletin 788 (1990); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Because the Board has The Board's determination also is subject to the Board's analyzed the competitive factors in this case as if Great Southern and authority to require such modification or termination of the Guaranty were a combined entity, the deposits of Guaranty are in- activities of a holding company or any of its subsidiaries as cluded at 100 percent in the calculation of Great Southern's postconsummation share of market deposits. See Norwest Corporation, 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal Reserve Bulletin 669 (1990). absence of other factors indicating anticompetitive effects) unless the 9. Under the revised Department of Justice Merger Guidelines, post-merger HHI is at least 1800 and the merger increases the HHI by 49 Federal Register 26,823 (June 29, 1984), a market in which the more than 200 points. The DOJ has stated that the higher than normal post-merger HHI is less than 1000 points is considered to be uncon- HHI thresholds for screening bank mergers for anticompetitive effects centrated. The Department of Justice has informed the Board that a implicitly recognize the competitive effects of limited-purpose lenders bank merger or acquisition generally will not be challenged (in the and other nondepository financial institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
268 Federal Reserve Bulletin • April 2001 the Board finds necessary to ensure compliance with, or to ments, has been published (65 Federal Register 60,671 prevent evasion of, the provisions and purposes of the (2000)). The time for filing comments has expired, and the BHC Act and the Board's regulations and orders issued Board has considered the proposal and all comments rethereunder. The commitments relied on by the Board in ceived in light of the factors set forth in section 3 of the reaching this decision are deemed to be conditions im- BHC Act. posed in writing by the Board in connection with its MetLife, with total consolidated assets of $258 billion, is findings and decisions and, as such, may be enforced in an insurance and financial services firm engaged principroceedings under applicable law. pally in the business of underwriting life and property and This transaction shall not be consummated later than casualty insurance.2 MetLife also engages in a variety of three months after the effective date of this order, unless other financial activities in the United States and internasuch period is extended for good cause by the Board or the tionally, including investment advisory and securities bro- Federal Reserve Bank of St. Louis, acting pursuant to kerage activities, and offers annuity, mutual fund, pension, delegated authority. retirement, and other investment products and related ser- By order of the Board of Governors, effective Febru- vices. ary 26, 2001. Bank, with total consolidated assets of $83.8 million, is the 126th largest depository institution in New Jersey, Voting for this action: Chairman Greenspan, Vice Chairman Fergu- controlling deposits of approximately $51.9 million in the son, and Governors Meyer and Gramlich. Absent and not voting: state, representing less than 1 percent of the state's depos- Governor Kelley. its.3 ROBERT DEV. FRIERSON Factors Governing Board Review of Transaction Associate Secretary of the Board The BHC Act sets forth the factors that the Board must Orders Issued Under Sections 3 and 4 of the Bank consider when reviewing the formation of a bank holding Holding Company Act company or the acquisition of a bank. These factors are the competitive effects of the proposal in the relevant geo- MetLife, Inc. graphic markets; the financial and managerial resources New York, New York and future prospects of the companies and banks involved in the proposal; the convenience and needs of the commu- Order Approving Formation of a Bank Holding Company nities to be served, including the records of performance and Determination on a Financial Holding Company Elecunder the Community Reinvestment Act (12 U.S.C. § 2901 tion MetLife, Inc. ("MetLife") has requested the Board's et seq.) ("CRA") of the insured depository institutions approval under section 3 of the Bank Holding Company involved in the transaction; and the availability of informa- Act ("BHC Act") (12 U.S.C. § 1842) to become a bank tion needed to determine and enforce compliance with the holding company by acquiring all the shares of Grand BHC Act and other applicable federal banking laws.4 Bank, National Association, Kingston, New Jersey ("Bank").1 As part of its proposal to become a bank Competitive Considerations holding company, MetLife has also filed with the Board an election to become a financial holding company pursuant Section 3 of the BHC Act prohibits the Board from approvto section 4(k) and (1) of the BHC Act (12 U.S.C. § 1843(k) ing a proposal that would result in a monopoly. The BHC & (1)) and section 225.82 of the Board's Regulation Y Act also prohibits the Board from approving a proposed (12 C.F.R. 225.82). bank acquisition that would substantially lessen competi- Notice of the proposal under section 3 of the BHC Act, tion in any relevant banking market unless the anticompetiaffording interested persons an opportunity to submit comtive effects of the proposal are clearly outweighed in the public interest by the probable effect of the proposal in meeting the convenience and needs of the community to be 1. MetLife's principal subsidiary, Metropolitan Life Insurance Com- served.5 pany, New York, New York ("Metropolitan Life"), converted from The proposal involves the acquisition of a bank by mutual to stock organization in April 2000 (the "Demutualization"). MetLife, which owns a limited-purpose trust company and As part of the Demutualization, MetLife established a policyholder trust (the "Trust") to permit the administration of stockholder a variety of nonbanking companies but does not own a accounts created through the conversion of Metropolitan Life to stock form. Based on the special circumstances regarding the formation, duration, voting rights and transferability of shares held by the Trust, the 2. Asset data for MetLife are as of September 30, 2000. Board has determined that the Trust, which currently holds the major- 3. Asset data for Bank are as of September 30, 2000, and deposit ity of the shares of MetLife, is not a "company" for purposes of the and ranking data are as of June 30, 2000. BHC Act at the present time. The Board may revisit this determina- 4. In cases involving interstate bank acquisitions by bank holding tion if the facts at a later date indicate that the terms or operation of companies, the Board also must consider the concentration of deposits the Trust have changed to cause the Trust to become in form more like nationwide and within relevant individual states, as well as complia company, or become a vehicle for exercising control over MetLife ance with the other provisions of section 3(d) of the BHC Act. or for conducting other activities. 5. 12 U.S.C. § 1842(c)(1). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 269 commercial bank or savings association.6 Based on all the The Board notes further that a substantial proportion of facts of record, the Board concludes that consummation of MetLife's activities are conducted in subsidiaries that are the proposal would not result in any significantly adverse subject to functional regulation by state insurance commiseffects on competition or on the concentration of banking sions or by the Securities and Exchange Commission resources in any relevant market. Accordingly, the Board ("SEC"). The Board will, consistent with the provisions of has determined that the competitive factors under section 3 section 5 of the BHC Act as amended by the Grammof the BHC Act are consistent with approval of the pro- Leach-Bliley Act, rely heavily on the appropriate state posal. insurance regulators and the SEC for examination and other supervisory information in fulfilling the Board's re- Financial and Managerial Considerations sponsibilities as holding company supervisor. The Board has carefully considered the financial and man- Convenience and Needs Considerations agerial resources and future prospects of the companies and bank involved in the proposal, the effect the proposed The Board also has carefully considered the effect of the transaction would have on such resources, and other super- proposal on the convenience and needs of the communities visory factors in light of all the facts of record. In evaluat- to be served in light of all the facts of record, including ing the financial and managerial factors, the Board has comments received on the effect the proposal would have reviewed confidential examination and other supervisory on the communities to be served. information evaluating the financial and managerial The Board has long held that consideration of the convestrength of MetLife and its affiliates, including its regulated nience and needs factor includes a review of the records of subsidiaries, and of Bank. the relevant depository institutions under the CRA. As The Board consistently has considered capital adequacy provided in the CRA, the Board evaluates the record of to be an especially important aspect of the analysis of performance of an institution in light of examinations by financial factors.7 Bank and all the subsidiaries of MetLife the appropriate federal supervisors of the CRA perforthat are subject to regulatory capital requirements currently mance records of the relevant institutions. An institution's exceed those relevant minimum regulatory capital require- most recent CRA performance evaluation is a particularly ments. In addition, Bank is currently well capitalized under important consideration in the applications process because relevant federal guidelines. Other financial factors also are it represents a detailed, on-site evaluation of the instituconsistent with approval. tion's overall record of performance under the CRA by its The Board has carefully considered the managerial re- appropriate federal supervisor.9 sources of MetLife and Bank in light of all the facts of MetLife currently does not control an institution subject record, including confidential examination and other super- to evaluation under the CRA. The Board has reviewed in visory information, information submitted by state insur- detail, however, the record of performance of Bank under ance regulators and enforcement authorities in response to the CRA as well as information presented by MetLife requests by the Board, and information provided by related to the convenience and needs factor.10 Bank re- MetLife regarding its existing and proposed risk manage- ceived an overall rating of "satisfactory" from its primary ment policies and procedures.8 Based on all the facts of federal supervisor, the Office the Comptroller of the Currecord, the Board concludes that considerations relating to rency ("OCC"), at its most recent evaluation for CRA the financial and managerial resources and future prospects performance, as of February 2000. OCC examiners reof the organizations involved are consistent with approval. viewed Bank under the CRA small bank performance test,11 and MetLife has requested that the OCC continue to evaluate Bank under that test after consummation of the 6. MetLife owns MetLife Trust Company, N.A., Bedminster, New proposal.12 Based on all the facts of record, the Board Jersey ("MTC"), a limited-purpose trust company that is not a bank for purposes of the BHC Act. See 12 U.S.C. § 1841(c). 7. See Chemical Banking Corporation, 82 Federal Reserve Bulletin 230(1996). 9. The Interagency Questions and Answers Regarding Community 8. Two commenters urged the Board to consider recent settlements Reinvestment ("CRA Q&A") provide that a CRA examination is an that Metropolitan Life entered in connection with a class-action suit important and often controlling factor in the consideration of an and several administrative actions that state insurance regulators initi- institution's CRA record. See 65 Federal Register 25,088 and 25,107 ated following charges that Metropolitan Life agents employed decep- (2000). tive practices in selling whole life insurance policies. These comment- 10. One commenter asked the Board to consider, as part of its ers, and another commenter, also noted a recent joint administrative review of the convenience and needs factor, the actions of a MetLife sanction from Florida and Georgia insurance regulators directed subsidiary in raising rents in an apartment complex in Waltham, against 29 insurance companies, including Metropolitan Life, concern- Massachusetts. Such actions by MetLife are, however, outside the ing alleged racial discrimination in pricing small-value life insurance scope of the convenience and needs factor, which has been interpreted policies that were sold in the 1950s and 1960s. The Board has consistently by the federal banking agencies, the courts, and Congress considered these matters in light of all the facts of record, including in to relate to the effect of a proposal on the availability and quality of particular the comments of state insurance regulators and information banking services in the community. See Wells Fargo & Company, that MetLife provided about its compliance operations, such as en- 82 Federal Reserve Bulletin 445, 457 (1996). hancements that MetLife has made to its compliance program in 11 .See 12 C.F.R. 25.26(a). response to the problems identified in these investigations and law- 12. MetLife initially proposed that Bank be designated as a wholesuits. sale bank for CRA purposes. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
270 Federal Reserve Bulletin • April 2001 concludes that considerations related to the convenience Financial Holding Company Declaration and needs of the communities to be served are consistent with approval.13 MetLife also has filed with the Board an election to become a financial holding company pursuant to section 4(k) Conclusion Regarding Bank Acquisition and (1) of the BHC Act and section 225.82 of Regulation Y. MetLife has certified that Bank and MTC are well capital- Based on the foregoing, and in light of all the facts of ized and well managed, and has provided all the informarecord, the Board has determined that the application tion required under Regulation Y.15 should be, and hereby is, approved.14 In reaching its con- The Board has reviewed the examination ratings reclusion, the Board has considered all the facts of record in ceived by Bank under the CRA and other relevant examilight of the factors the Board is required to consider under nations and information. Based on all the facts of record, the BHC Act and other applicable statutes. The Board's the Board has determined that this election to become a approval is specifically conditioned on compliance by financial holding company will become effective on con- MetLife with all the commitments made in connection summation of the acquisition of Bank by MetLife, as long with the application. For the purpose of this action, the as Bank and MTC continue to be well capitalized, well commitments relied on by the Board in reaching its deci- managed, and Bank has at least a satisfactory CRA rating sion are deemed to be conditions imposed in writing by the on that date. Board in connection with its findings and decision and, as By order of the Board of Governors, effective Februsuch, may be enforced in proceedings under applicable ary 12, 2001. law. The transaction shall not be consummated before the Voting for this action: Chairman Greenspan, Vice Chairman Fergufifteenth calendar day after the effective date of this order, son, and Governors Kelley, Meyer, and Gramlich. or later than three months after the effective date of this order, unless such periods are extended for good cause by ROBERT DEV. FRIERSON Associate Secretary of the Board the Board or the Federal Reserve Bank of New York, acting pursuant to delegated authority. UFJ Holdings, Inc. (In Formation) Osaka, Japan One commenter requested that the Board identify a larger CRA Order Approving Formation of a Bank Holding assessment area for Bank to use after consummation of the proposal Company and Acquisition of Nonbanking Companies than the one currently used. The appropriateness of Bank's designated assessment area is, however, determined by the OCC as Bank's UFJ Holdings, Inc. (in formation) ("UFJ"), has requested primary federal supervisor. 13. One commenter requested that the Board require MetLife to the Board's approval under section 3 of the Bank Holding devote at least 2 percent of its assets to lending and investments in Company Act (12 U.S.C. § 1842) ("BHC Act") to become low-income communities nationwide as a condition of approval of the a bank holding company by indirectly acquiring the U.S. proposal. Although Bank's lending and investment in low-income subsidiary banks of The Sanwa Bank, Limited, Osaka, communities has been and will continue to be reviewed by the OCC in Japan ("Sanwa"), and The Tokai Bank, Limited, Nagoya, assessing Bank's performance under the CRA, neither the CRA nor the applicable regulations of the federal supervisory authorities re- Japan ("Tokai").1 UFJ also has requested the Board's quire a bank or its affiliates to meet specific lending or investment approval under sections 4(c)(8) and 4(j) of the BHC Act targets based on the size of the institution. (12 U.S.C. § 1843(c)(8) and 4(j)) and section 225.24 of the 14. Two commenters requested that the Board hold a public meeting Board's Regulation Y (12 C.F.R. 225.24) to acquire the or hearing on the proposal. Section 3(b) of the BHC Act does not require the Board to hold a public hearing on an application unless the U.S. nonbanking subsidiaries of Sanwa and The Toyo Trust appropriate supervisory authority for the bank to be acquired makes a and Banking Company, Limited, Tokyo, Japan ("Toyo"), timely written recommendation of denial of the application. The and thereby engage in certain permissible nonbanking ac- Board has not received such a recommendation from the appropriate tivities.2 supervisory authority. Under its rules, the Board also may, in its discretion, hold a public meeting or hearing on an application to acquire a bank if a meeting or hearing is necessary or appropriate to clarify factual issues related to the application and to provide an opportunity for testimony. 12 C.F.R. 15. Although MTC is not a bank for purposes of the BHC Act, it is a 225.16(e). The Board has considered carefully the commenters' re- depository institution as defined in the Federal Deposit Insurance Act quest in light of all the facts of record. In the Board's view, comment- and, therefore, MetLife must certify that MTC is well capitalized and ers have had ample opportunity to submit their views, and they did well managed as part of MetLife's election to become a financial submit written comments that have been considered carefully by the holding company. See 12 U.S.C. § 1813(c)(1), 1843(1)(1). As noted Board in acting on the proposal. The commenters' requests fail to above, MTC is not subject to CRA. demonstrate why their written comments do not present their views adequately and fail to identify disputed issues of fact that are material 1. The U.S. subsidiary banks are Sanwa Bank California, San to the Board's decision that would be clarified by a public meeting or Francisco, California ("Sanwa Bank"), and Tokai Bank of California, hearing. For these reasons, and based on all the facts of record, the Los Angeles, California ("Tokai Bank"). Board has determined that a public meeting or hearing is not required 2. The nonbanking activities of Sanwa and Toyo for which UFJ has or warranted in this case. Accordingly, the requests for a public sought Board approval under sections 4(c)(8) and 4(j) of the BHC Act meeting or hearing on the proposal are denied. are listed in the Appendix. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 271 Notice of the proposal, affording interested persons an The Board has considered these factors in light of a opportunity to submit comments, has been published record that includes information provided by UFJ, Sanwa, (65 Federal Register 64,445 (2000). The time for filing Tokai, and Toyo; confidential supervisory and examination comments has expired, and the Board has considered the information; and publicly reported financial and other inproposal and all comments received in light of the factors formation. The Board also has considered information colset forth in sections 3 and 4 of the BHC Act. lected from the primary home country supervisor of Sanwa, UFJ is a corporation that would be formed under the Tokai, and Toyo, and from various federal and state agenlaws of Japan to acquire Sanwa, Tokai, and Toyo.3 On cies, including the California Department of Banking and consummation of the proposal, UFJ would become the other relevant agencies. second largest banking organization in Japan, with total consolidated assets of $783 billion.4 Competitive Considerations Sanwa, with total consolidated assets of $429 billion, is the fifth largest bank in Japan. In the United States, Sanwa Section 3 of the BHC Act prohibits the Board from approvowns Sanwa Bank and operates branches in Los Angeles ing a proposal that would result in a monopoly. The BHC and San Francisco, California; Chicago, Illinois; and New Act also prohibits the Board from approving a proposed York, New York; and representative offices in Houston, bank acquisition that would substantially lessen competi- Texas, and New York, New York. tion in any relevant banking market unless the anticompeti- Tokai, with total consolidated assets of $278 billion, is tive effects of the proposal are clearly outweighed in the the eighth largest bank in Japan. In the United States, Tokai public interest by the probable effect of the proposal in owns Tokai Bank and operates branches in Chicago, Illi- meeting the convenience and needs of the community to be nois, and New York, New York; an agency in Los Angeles, served.6 California; and representative offices in Florence, Ken- Sanwa and Tokai control banking operations that comtucky, and New York, New York. pete directly in the Los Angeles, Sacramento, San Diego, Toyo, with total consolidated assets of $76 billion, is the and San Francisco-Oakland-San Jose banking markets, all 17th largest bank in Japan. In the United States, Toyo in California.7 In each of these markets, the Herfindahloperates a representative office in New York, New York. Hirschman Index ("HHI") would increase by 5 points or In addition, Sanwa, Tokai, and Toyo engage in a broad less,8 UFJ would control less than 5 percent of total deposrange of permissible nonbanking activities in the United its in insured depository institutions in the market ("market States through subsidiaries. deposits"), and the banking market would remain unconcentrated or moderately concentrated with numerous com- Factors Governing Board Review of the Proposal petitors remaining in the market.9 Based on these and all the facts of record, the Board concludes that consummation The BHC Act sets forth the factors that the Board must consider when reviewing the formation of a bank holding 6. 12 U.S.C. § 1842(c)(1). company or the acquisition of banks. These factors are the 7. The Los Angeles banking market includes the Los Angeles competitive eifects of the proposal in the relevant geo- Ranally Metropolitan Area ("RMA") and the towns of Rancho Santa graphic markets; the financial and managerial resources Margarita and Rosamond. The Sacramento banking market includes and future prospects of the companies and banks involved the Sacramento RMA and the town of Cool. The San Diego banking market includes the San Diego RMA and the town of Pine Valley. The in the proposal; the convenience and needs of the commu- San Francisco-Oakland-San Jose banking market includes the nity to be served, including the records of performance San Francisco-Oakland-San Jose RMA and the towns of Hollister, under the Community Reinvestment Act (12 U.S.C. § 2901 Pescadero, Point Reyes Station, and San Juan Bautista. et seq.) ("CRA") of the insured depository institutions 8. Under the Revised Department of Justice Merger Guidelines, involved in the transaction; the availability of information 49 Federal Register 26,823 (June 29, 1984), a market is considered unconcentrated if the post-merger HHI is less than 1000 and moderneeded to determine and enforce compliance with the BHC ately concentrated if the post-merger HHI is between 1000 and 1800. Act and other applicable federal banking law; and, in the The Department of Justice has informed the Board that a bank merger case of applications involving foreign banks, whether the or acquisition generally will not be challenged (in the absence of other foreign banks involved are subject to comprehensive super- factors indicating anticompetitive eifects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than vision and regulation on a consolidated basis by their home 200 points. The Department of Justice has stated that the higher than country supervisor.5 normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the competitive effects of limitedpurpose lenders and other nondepository financial entities. 3. The transaction would be effected through the exchange of 9. Market share data are as of June 30, 1999. In the Los Angeles shares. UFJ's corporate existence would begin on its commercial banking market, the HHI would increase by 5 points to 979 and UFJ registration after consummation of the exchange of shares. See Japa- would control 3.6 percent of market deposits. In the Sacramento nese Commercial Code, art. 370. banking market, the HHI would increase by 1 point to 1197 and UFJ 4. All asset and ranking data are as of March 31, 2000, and are would control 1.7 percent of market deposits. In the San Diego based on exchange rates then applicable. banking market, the HHI would remain unchanged at 1207 and UFJ 5. In cases, unlike this proposal, involving interstate bank acquisi- would control less than 1 percent of market deposits. In the San tions, the Board also must consider the concentration of deposits in Francisco-Oakland-San Jose banking market, the HHI would remain the United States and relevant individual states, and compliance with unchanged at 1495 and UFJ would control 1.3 percent of market other provisions of section 3(d) of the BHC Act. deposits. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
272 Federal Reserve Bulletin • April 2001 of the proposal would not result in any significantly ad- the BHC Act and other applicable federal law. UFJ also verse effects on competition or on the concentration of has committed to cooperate with the Board to obtain any banking resources in these or any other relevant banking waivers or exemptions that may be necessary in order to markets. enable UFJ to make any such information available to the Board. In light of these commitments and other facts of Certain Supervisory Considerations record, the Board has concluded that UFJ has provided adequate assurances of access to any appropriate informa- Under section 3 of the BHC Act, the Board may not tion the Board may request. For these reasons, and based approve an application involving a foreign bank unless the on all the facts of record, the Board has concluded that the bank is "subject to comprehensive supervision or regula- supervisory factors it is required to consider under section tion on a consolidated basis by the appropriate authorities 3 of the BHC Act are consistent with approval. in the bank's home country."10 The Board has determined previously, in applications under the BHC Act, that certain Financial, Managerial, and Convenience and Needs Japanese commercial banks, including Sanwa, were sub- Considerations ject to comprehensive consolidated supervision by their home country supervisor.11 In this case, the Board has The Board also has considered carefully the financial and determined that Tokai and Toyo are supervised on substan- managerial resources and future prospects of UFJ and the tially the same terms and conditions as other Japanese banks involved in the proposal, the effect the proposed banks reviewed by the Board. In addition, Japan's Finan- transaction would have on such resources, and other supercial Services Agency ("FSA") has supervisory authority visory factors in light of all the facts of record. The Board with respect to UFJ and its nonbanking subsidiaries. The has consulted with and considered the views regarding this FSA may conduct inspections of UFJ and its subsidiaries transaction of the home country supervisor for the banking and require UFJ to submit reports about its operations on a organizations involved. The Board notes that the proposal consolidated basis. The FSA also may review transactions is intended to enhance the overall financial strength and between UFJ and its subsidiaries and has authority to future prospects of the combined organization. The transacrequire UFJ to take measures necessary to ensure the safety tion would occur through an exchange of shares, and and soundness of the UFJ organization. Based on all the Sanwa, Tokai, and Toyo would issue no debt as part of the facts of record, the Board has concluded that Sanwa, Tokai, transaction. UFJ's stated pro forma capital levels would and Toyo are subject to comprehensive supervision and exceed the minimum levels that would be required under regulation on a consolidated basis by their home country the Basle Capital Accord, and its capital levels are considsupervisor. ered equivalent to the capital levels that would be required The BHC Act also requires the Board to determine that of a U.S. banking organization under similar circumthe applicants have provided adequate assurances that they stances. will make available to the Board such information on their In addition, the Board has reviewed supervisory informaoperations and activities and those of their affiliates that the tion from the home country authorities responsible for Board deems appropriate to determine and enforce compli- supervising Sanwa, Tokai, and Toyo concerning the proance with the BHC Act. The Board has reviewed the posal and the condition of the parties; confidential financial restrictions on disclosures in jurisdictions where Sanwa, information from Sanwa, Tokai, and Toyo; and reports of Tokai, and Toyo have and UFJ would have material opera- examination from the appropriate federal and state supervitions and has communicated with relevant government sors of the affected organizations assessing the financial authorities concerning access to information. UFJ has com- and managerial resources of the organizations. Based on all mitted that, to the extent not prohibited by applicable law, the facts of record, the Board has concluded that the it will make available to the Board such information on the financial and managerial resources and future prospects of operations of UFJ and any of its affiliates that the Board the organizations involved in the proposal are consistent deems necessary to determine and enforce compliance with with approval. Sanwa Bank received an "outstanding" CRA performance rating from the Federal Deposit Insurance Corpora- 10. 12 U.S.C. § 1842(c)(3)(B). As provided in Regulation Y, the tion ("FDIC") at its most recent examination, as of August Board determines whether a foreign bank is subject to consolidated 1998. Tokai Bank also received an "outstanding" CRA home country supervision under the standards set forth in Regulation K. 12 C.F.R. 225.13(a)(4). Regulation K provides that a foreign performance rating from the FDIC at its most recent exambank may be considered subject to consolidated supervision if the ination, as of June 2000. Toyo has no operation in the Board determines that the bank is supervised or regulated in such a United States that is subject to examination under the manner that its home country supervisor receives sufficient informa- CRA.12 In light of all the facts of record, the Board has tion on the worldwide operations of the foreign bank, including the relationships of the bank to its affiliates, to assess the foreign bank's overall financial condition and compliance with law and regulation. 12 C.F.R. 211.24(c)(l)(ii). 12. Until recently, Toyo Trust Company of New York, New York, 11. See Mizuho Holdings, Inc., 86 Federal Reserve Bulletin 776 New York ("Toyo Trust"), which performs trust company functions, (2000); The Sanwa Bank, Limited, 86 Federal Reserve Bulletin 54 was an insured depository institution. Toyo Trust received an "out- (2000); The Fuji Bank, Limited, 85 Federal Reserve Bulletin 338 standing" CRA performance rating from the FDIC at its last examina- (1999). tion, as of September 1998. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 273 concluded that considerations relating to the convenience their bank-ineligible securities activities subject to the Opand needs of the communities to be served, including the erating Standards established for section 20 subsidiaries records of performance of the relevant depository institu- ("Operating Standards").16 tions under the CRA, are consistent with approval. Other Activities Approved by Regulation or Order Nonbanking Activities The Board determined by regulation before November 12, UFJ also has filed notices under section 4(c)(8) and 4(j) of 1999, that extending credit and engaging in activities rethe BHC Act to acquire the U.S. nonbanking subsidiaries lated to extending credit; leasing activities; trust company of Sanwa and Toyo and to engage in the United States in functions; providing financial and investment advisory servarious permissible nonbanking activities. Sanwa engages vices; providing securities brokerage, riskless principal, in bank-ineligible securities activities in the United States private placement, futures commission merchant, and other through its section 20 subsidiary, Sanwa Universal Securi- agency transactional services; and engaging in investment ties Co, L.L.C., New York, New York ("Sanwa Univer- transactions as a principal are closely related to banking for sal"). Sanwa Universal is and would continue to be regis- purposes of section 4(c)(8) of the BHC Act.17 UFJ has tered as a broker-dealer with the Securities and Exchange committed that it will conduct these activities in accor- Commission ("SEC") under the Securities Exchange Act dance with the Board's regulations and prior Board deciof 1934 ("1934 Act").13 Accordingly, Sanwa Universal is sions relating to the activities. and would continue to be subject to the recordkeeping and In order to approve the notice, the Board also must reporting obligations, fiduciary standards, and other re- determine that the acquisition of the U.S. nonbanking subquirements of the SEC and the 1934 Act. sidiaries of Sanwa, Tokai, and Toyo and the performance of the proposed activities by UFJ can reasonably be ex- Underwriting and Dealing in Bank-Ineligible Securities pected to produce benefits to the public that outweigh possible adverse effects, such as undue concentration of The Board determined by order before November 12, resources, decreased or unfair competition, conflicts of 1999, that, subject to the prudential framework of limita- interests, or unsound banking practices.18 tions established in previous decisions to address the poten- UFJ has indicated that the proposal would improve the tial for conflicts of interests, unsound banking practices, or financial position and future business prospects of the other adverse effects, underwriting and dealing in bank- current banking and nonbanking subsidiaries of Sanwa, ineligible securities are so closely related to banking as to Tokai, and Toyo. In addition, the proposal would make be a proper incident thereto within the meaning of section available a broader range of services to customers of 4(c)(8) of the BHC Act.14 The Board has permitted such Sanwa, Tokai, and Toyo. securities activities on the condition that the company The Board has carefully considered the competitive efengaged in the activities derives no more than 25 percent fects of the proposed transaction under section 4 of the of its gross revenues from underwriting and dealing in BHC Act.19 To the extent that Sanwa, Tokai, and Toyo bank- ineligible securities over a two-year period.15 UFJ offer different types of nonbanking products, the proposal has committed that it will conduct its bank-ineligible secu- would result in no loss of competition. Certain nonbanking rities underwriting and dealing activities subject to the subsidiaries of Sanwa, Tokai, and Toyo compete, however, 25-percent revenue limitation and the limitations previ- in the market for providing trust company functions. The ously established by the Board. As a condition of this market for this nonbanking activity is regional or national. order, UFJ and Sanwa Universal are required to conduct The record in this case also indicates that there are numerous providers of trust services and that the market for trust services is unconcentrated. For these reasons, and based on 13. 15 U.S.C. § 78a et seq. all the facts of record, the Board concludes that consumma- 14. See Canadian Imperial Bank of Commerce, et al., 76 Federal Reserve Bulletin 158 (1990); J.P. Morgan & Co., Incorporated, et al., tion of the proposal would have a de minimis effect on 75 Federal Reserve Bulletin 192 (1989), aff'd sub nom. Securities competition. Industry Ass 'n v. Board of Governors of the Federal Reserve System, The Board also believes that the conduct of the proposed 900 F.2d 360 (D.C. Cir. 1990); Citicorp, et al., 73 Federal Reserve nonbanking activities within the framework established in Bulletin 473 (1987), aff'd sub nom. Securities Industry Ass'n v. Board of Governors of the Federal Reserve System, 839 F.2d 47 (2d Cir. 1988), cert, denied, 486 U.S. 1059 (1988) (collectively, "Section 20 Orders"). 16. 12C.F.R. 225.200. Sanwa Universal may provide services that 15. See Section 20 Orders. Compliance with the revenue limitation are necessary incidents to the proposed underwriting and dealing shall be calculated in accordance with the method stated in the Section activities. Unless Sanwa Universal receives specific approval under 20 Orders, as modified by the Order Approving Modifications to the section 4(c)(8) of the BHC Act to conduct the incidental activities Section 20 Orders, 75 Federal Reserve Bulletin 751 (1989), and independently, any revenues from such activities must be treated as 10 Percent Revenue Limit on Bank-Ineligible Activities of Subsidiaries ineligible revenues subject to the Board's revenue limitation. of Bank Holding Companies Engaged in Underwriting and Dealing in 17. See 12 C.F.R. 225.28(b)(1), (2), (3), (5), (6), (7), and (8). Securities, 61 Federal Register 48,953 (1996); and Revenue Limit on 18. See 12 U.S.C. § 1843(j)(2)(A). Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies 19. The Board approved previously the acquisition by Sanwa of up Engaged in Underwriting and Dealing in Securities, 61 Federal to 32 percent of the voting shares of Toyo. See The Sanwa Bank, Register 68,750 (1996) (collectively, "Modification Orders"). Limited, 86 Federal Reserve Bulletin 54 (2000). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
274 Federal Reserve Bulletin • April 2001 this order, prior orders, and Regulation Y is not likely to proposal may not be consummated later than three months result in adverse effects, such as undue concentration of after the effective date of this order, unless such period is resources, decreased or unfair competition, conflicts of extended for good cause by the Board, or by the Federal interests, or unsound banking practices, that would not be Reserve Bank of San Francisco, acting pursuant to deleoutweighed by the public benefits of the proposal, such as gated authority. increased customer convenience and gains in efficiency. By order of the Board of Governors, effective Febru- Accordingly, based on all the facts of record, the Board ary 5, 2001. has determined that the balance of public interest factors that the Board must consider under the standard of section Voting for this action: Chairman Greenspan, Vice Chairman Fergu- 4(j) of the BHC Act is favorable and consistent with son, and Governors Kelley, Meyer, and Gramlich. approval of the proposal. ROBERT DEV. FRIERSON Associate Secretary of the Board Conclusion Appendix Based on the foregoing, the Board has determined that the transaction should be, and hereby is, approved, subject to Nonbanking Activities of Sanwa, Tokai, and Toyo in all the terms and conditions in this order and the Section 20 which UFJ Proposes to Engage Orders, as modified by the Modification Orders. The Board's approval of the proposal extends only to activities (1) Extending credit and servicing loans, in accordance conducted within the limitations of those orders and this with section 225.28(b)(1) of the Board's Regulation Y order, including the Board's reservation of authority to (12 C.F.R. 225.28(b)(1)); establish additional limitations to ensure that the activities (2) Activities related to extending credit, in accordance of UFJ are consistent with safety and soundness, avoidance with section 225.28(b)(2) of the Board's Regulation Y of conflicts of interests, and other relevant considerations (12 C.F.R. 225.28(b)(2)); under the BHC Act. Underwriting and dealing in any (3) Providing leasing services, in accordance with section manner other than as approved in this order and the Sec- 225.28(b)(3) of the Board's Regulation Y (12 C.F.R. tion 20 Orders (as modified by the Modification Orders) is 225.28(b)(3)); not within the scope of the Board's approval and is not (4) Performing trust company functions, in accordance authorized for UFJ or Sanwa Universal. with section 225.28(b)(5) of the Board's Regulation Y In reaching its conclusion, the Board has considered all (12 C.F.R. 225.28(b)(5)); the facts of record in light of the factors that the Board is (5) Providing financial and investment advisory services, required to consider under the BHC Act and other applica- in accordance with section 225.28(b)(6) of the Board's ble federal statutes. The Board's approval is specifically Regulation Y (12 C.F.R. 225.28(b)(6)); conditioned on compliance by UFJ with all the commit- (6) Providing securities brokerage, riskless principal, priments made in connection with this application and notice, vate placement, futures commission merchant, and including the commitments discussed in this order, and the other agency transactional services, in accordance with conditions set forth in the order and the above- noted section 225.28(b)(7)(i)- (v) of Regulation Y (12 C.F.R. Board regulations and orders, and on the Board's receiving 225.28(b)(7)(i)-(v)); access to information on the operations or activities of UFJ (7) Engaging in investment transactions as principal, in and any of its affiliates that the Board determines to be accordance with section 225.28(b)(8) of Regulation Y appropriate to determine and enforce compliance by UFJ (12 C.F.R. 225.28(b)(8)); and and its affiliates with applicable federal statutes. The (8) Engaging in underwriting and dealing to a limited Board's approval of the nonbanking aspects of the pro- extent in municipal revenue bonds, 1-4 family posal also is subject to all the conditions set forth in mortgage-related securities, commercial paper, and Regulation Y, including those in sections 225.7 and consumer receivable-related securities, as approved by 225.25(c) of Regulation Y (12 C.F.R. 225.7 and 225.25(c)), the Board in The Sanwa Bank, Limited, 76 Federal and to the Board's authority to require such modification or Reserve Bulletin 568 (1990). termination of the activities of a bank holding company or any of its subsidiaries as the Board finds necessary to ensure compliance with, and to prevent evasion of, the ORDERS ISSUED UNDER BANK MERGER ACT provisions of the BHC Act and the Board's regulations and orders issued thereunder. These commitments and condi- Allfirst Bank tions are deemed to be conditions imposed in writing by Baltimore, Maryland the Board in connection with its findings and decision and, as such, may be enforced in proceedings under applicable Order Approving Establishment of Branches law. The acquisition of the subsidiary banks of Sanwa and Allfirst Bank, Baltimore, Maryland ("Allfirst"), a state Tokai may not be consummated before the fifteenth calen- member bank, has given notice under section 9 of the dar day after the effective date of this order, and the Federal Reserve Act ("Act") (12 U.S.C. § 321 et seq.), of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 275 its intention to establish branches at Central Avenue & record of the institution. An institution's most recent CRA Campus Way South, Largo, Maryland; and Broadcast performance evaluation is a particularly important consid- Square Center, Broadcast Road & Papermill Road, Read- eration in the applications process because it represents a ing, Pennsylvania. detailed, on-site evaluation of the institution's overall Notice of the proposal, affording interested persons an record of performance under the CRA by its appropriate opportunity to submit comments, has been published in federal supervisor.3 Allfirst received a "satisfactory" rating accordance with the Board's Rules of Procedure (12 C.F.R. at its most recent CRA examination by its then primary 262.3(b)). The time for filing comments has expired, and federal supervisory agency, the Office of the Comptroller the Board has considered the notices and all comments of the Currency, as of October 1998.4 received in light of the factors specified in the Act. Allfirst is the largest commercial banking organization in B. CRA Performance Record Maryland, controlling deposits of approximately $11.6 billion, representing 34.6 percent of commercial banking Examiners found that Allfirst was responsive to the credit deposits in the state.1 Allfirst is a wholly owned subsidiary needs of its assessment area, including the Baltimore Metof Allfirst Financial Inc., Baltimore, Maryland, and Allied ropolitan Statistical Area ("Baltimore MSA").5 Examiners Irish Banks, P.L.C., Dublin, Ireland. commended Allfirst for its responsiveness to the credit needs of borrowers of all income levels, including LMI Community Reinvestment Act Considerations borrowers. For example, while LMI families accounted for 36 percent of all families in its assessment area, and In acting on an application to establish a branch, the Board lenders in the aggregate made 25 percent of all their is required to take into account the bank's record under the housing-related loans to LMI families in 1997, Allfirst Community Reinvestment Act ("CRA").2 The CRA re- made 40 percent of its housing-related loans to LMI famiquires the federal financial supervisory agencies to encour- lies during this period.6 Allfirst also had a good record of age financial institutions to help meet the credit needs of lending in LMI census tracts. Allfirst made 16 percent by the local communities in which they operate, consistent number and 13 percent by dollar volume of its housingwith their safe and sound operation, and requires the appro- related loans in LMI census tracts in its assessment area in priate federal supervisory authority to assess the institu- 1997, compared with 14 percent and 9 percent, respection's record of meeting the credit needs of its entire tively, by lenders in the aggregate.7 In addition, Allfirst's community, including low- and moderate-income ("LMI") lending to small businesses in LMI census tracts exceeded neighborhoods, in evaluating branch applications. The Board has received a comment from the Maryland Center for Community Development ("MCCD"), a statewide nonprofit organization, that criticizes Allfirst's record of opening branches in Baltimore. MCCD alleges that 3. See Interagency Questions and Answers Regarding Community Reinvestment, 64 Federal Register 23,618 and 23,641 (1999). Allfirst has failed to serve the LMI areas of the city, and 4. Allfirst, formerly The First National Bank of Maryland, conthat residents in these areas must obtain transportation to verted from a national charter to a state charter in December 1998. reach a bank branch or use check cashing outlets when 5. Allfirst's assessment area consists of all Maryland counties, seeking financial services. MCCD also encourages Allfirst except Allegheny and Garrett Counties; Washington, D.C.; and Arlington, Fairfax, and Loudoun Counties and the cities of Alexanto establish alternative delivery systems to provide banking dria, Fairfax, and Falls Church in Virginia. services in low-income areas. Allfirst has responded that 6. In the Baltimore MSA, LMI households accounted for 26 percent most of its branches serve LMI neighborhoods and that it of all households, and Allfirst made 34 percent of all its housinghas loaned more than $30 million to finance the construc- related loans in the MSA to LMI households during the CRA examition of multifamily residences and approximately $10 mil- nation period, which covered all of 1997 and the first nine months of 1998 ("CRA examination period"). Allfirst also made 53 percent of lion in equity investments to support affordable housing in its home purchase mortgage loans in the Baltimore MSA to LMI Baltimore. Allfirst also has represented that it has worked borrowers in 1997, and it made 62 percent of these loans to LMI successfully with community groups and nonprofit organi- borrowers in the first nine months of 1998. zations to provide credit products and services in disadvan- 7. LMI census tracts accounted for 28 percent of all census tracts in Allfirst's assessment area. Allfirst made 16 percent by number and taged areas and to revitalize underserved communities in 13 percent by dollar volume of its housing-related loans in the its assessment area. Baltimore MSA in LMI census tracts in 1997, compared with 15 percent by number and 8 percent by dollar volume for lenders in the A. CRA Performance Examination aggregate. LMI census tracts accounted for 31 percent of all census tracts in the Baltimore MSA. For the City of Baltimore, the area addressed by MCCD in its comments, data collected under the Home As provided in the CRA, the Board evaluates the perfor- Mortgage Disclosure Act (12 U.S.C. § 2801 et seq.) for 1998 and 1999 mance of an institution in light of examinations by the indicate that Allfirst has maintained a similar record. Allfirst made appropriate federal supervisors of the CRA performance 55 percent of its housing-related loans to borrowers in LMI census tracts in 1998 and 55.2 percent in 1999, compared with 57.5 percent and 60.1 percent by lenders in the aggregate during these periods. LMI census tracts accounted for 72 percent of all census tracts in the 1. Deposit and state ranking data are as of June 30, 2000. city and 70 percent of the total population of the city resided in these 2. 12 U.S.C. § 2901 etseq. areas. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
276 Federal Reserve Bulletin • April 2001 the distribution of small business loans in these census Baltimore and surrounding counties to promote home owntracts by lenders in the aggregate.8 ership and small business development. Allfirst was found by examiners to be an active commu- A fair lending review of Allfirst conducted during the nity development lender. During the CRA examination CRA examination period did not identify any violations of period, Allfirst extended 25 community development loans antidiscrimination laws and regulations. Examiners stated and lines of credit, totaling $52.5 million, throughout that the bank had an effective system in place to ensure its assessment area. Seventeen of these loans, totaling compliance with fair lending laws and regulations. $41.6 million, were made in the Baltimore MSA. Allfirst also made $8.6 million of qualified community develop- C. Conclusion on CRA Performance ment investments in its assessment area, and made commitments to invest an additional $30 million. These projects The Board has considered carefully the entire record of included a commitment made in 1998 to invest $2.7 mil- Allfirst's CRA performance, including MCCD's comlion, of which $1.5 million was funded during the CRA ments, Allfirst's response, Allfirst's most recent CRA perexamination period, to create an affordable elderly housing formance examination, and supplemental information confacility in a moderate-income census tract in Baltimore cerning Allfirst's housing-related lending and small County, Maryland, and a commitment of $250,000 to a business lending. Based on all the facts of record, the nonprofit organization to help to purchase and renovate a Board concludes that CRA considerations are consistent shopping center in a low-income area of the City of Balti- with approval of the proposal. more.9 Qualified investments in the Baltimore MSA totaled $2.6 million, which was a reasonable amount according to Other Considerations examiners. Allfirst's distribution of branches and ATMs was consid- The Board also has concluded that the factors it is required ered by examiners to be reasonable and to serve all income- to consider under section 9 of the Act, including Allfirst's level areas of its assessment area. Twenty-six percent of financial condition, the general character of its manage- Allfirst's branches and 29 percent of its nonbranch ATMs ment, and the proposed exercise of corporate powers, are were in LMI census tracts. Branch openings and closings consistent with approval of these notices.11 did not adversely effect accessibility by LMI individuals. In the City of Baltimore, ten of Allfirst's 14 branches are in Conclusion LMI census tracts, and a bank branch operates within one mile of each of the LMI neighborhoods identified by Based on the foregoing and all the facts of record, the MCCD in its comment. Examiners found that all branches Board has determined that the notices should be, and offered a common set of traditional banking products and hereby are, approved. The Board's approval is specifically services.10 During the CRA examination period, Allfirst conditioned on Allfirst's compliance with all commitments also participated in 24 community development events in made in connection with the proposal. The commitments and conditions relied on by the Board are deemed to be conditions imposed in writing by the Board in connection with its findings and decision and, as such, may be en- 8. In 1997, Allfirst made 21 percent by number and dollar volume of forced in proceedings under applicable law. its loans to small businesses in its assessment area to small businesses The Board's approval is subject to the establishment of located in LMI census tracts, compared with 17 percent by number and dollar volume for lenders in the aggregate. Data collected after the the proposed branches within one year of the date of this CRA examination period indicate that Allfirst has maintained this Order, unless such period is extended by the Board or the level of performance in Baltimore. In 1998, Allfirst made 77.8 percent Federal Reserve Bank of Richmond, acting pursuant to by number of its loans to small businesses in the city to small delegated authority, and to approval of the proposal by the businesses located in LMI census tracts, compared with 67.2 percent for lenders in the aggregate. In 1999, Allfirst made 78.8 percent of appropriate state authorities. these loans in LMI census tracts, compared with 65.7 percent for By order of the Board of Governors, effective Februlenders in the aggregate. ary 5, 2001. 9. According to Allfirst, it has made $39.9 million of community development loans after the CRA examination period, including $18.4 million to finance the construction of 947 affordable housing Voting for this action: Chairman Greenspan, Vice Chairman Ferguunits in LMI areas in Baltimore. son, and Governors Kelley, Meyer, and Gramlich. 10. Deposit products included a basic checking account that requires no minimum balance and allows limited check writing for a nominal ROBERT DEV. FRIERSON fee; a direct deposit checking account that requires no minimum Associate Secretary of the Board balance, charges no monthly fee, and allows unlimited check writing; and a checking account for customers over age 50 that requires a minimum balance of $100 and charges no monthly fee. 11. 12 U.S.C. § 322 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 277 INDEX OF ORDERS ISSUED OR ACTIONS TAKEN BY THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM ( OCTOBER 1, 2000- DECEMBER 31, 2000) Bulletin Volume Applicant Merged or Acquired Bank or Activity Date of Approval and Page Banco Itau S.A., To establish a representative office in October 16, 2000* 86, 851 Sao Paolo, Brazil Miami, Florida The Chase Manhattan Corporation, J.P. Morgan & Co. Incorporated, December 11, 2000 87,76 New York, New York New York, New York Morgan Guaranty Trust Company of New York, New York, New York Euroclear Bank, To establish a representative office in December 21, 2000 87,90 Brussels, Belgium New York, New York Queens County Bancorp, Inc., Haven Bancorp, Inc., November 29, 2000 87, 30 Flushing, New York Westbury, New York CFS Bank, Woodhaven, New York CFS Investments, Inc., Woodhaven, New York Columbia Preferred Capital Corporation, Woodhaven, New York UniCredito Italiano S.p.A., The Pioneer Group, Inc., October 23, 2000 86, 825 Milan, Italy Boston, Massachusetts Wells Fargo & Company, Brenton Banks, Inc., October 23, 2000 86, 828 San Francisco, California Des Moines, Iowa Brenton Bank, Des Moines, Iowa Brenton Savings Bank, FSB, Ames, Iowa Wells Fargo & Company, First Security Corporation, October 10, 2000 86, 832 San Francisco, California Salt Lake City, Utah First Security Bank, National Association, West Covina, California First Security Bank of Nevada, Las Vegas, Nevada First Security Bank of New Mexico National Association, Albuquerque, New Mexico 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) Elfective Date Colorado Business Bancshares, Inc., First Capital Bank of Arizona, February 15, 2001 Denver, Colorado Phoenix, Arizona Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
278 Federal Reserve Bulletin • April 2001 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 American Bancorporation, The Newburg Corporation, Chicago February 16, 2001 Cedar Falls, Iowa Saint Ansgar, Iowa Cedar Valley State Bank, Saint Ansgar, Iowa American National Corporation, American National Bank, Kansas City January 31, 2001 Omaha, Nebraska Lincoln, Nebraska Century Bancshares, Inc., GrandBanc, Inc., Richmond January 29, 2001 Washington, D.C. Rockville, Maryland Colorado Business Bankshares, Inc.. First Capital Bank of Arizona, Kansas City January 31, 2001 Denver, Colorado Phoenix, Arizona Comanche National Corporation, Comanche National Bank, Dallas January 4, 2001 Commanche, Texas Comanche, Texas Comanche National Corporation of Delaware, Wilmington, Delaware CreditAmerica Holding Company, CreditAmerica Savings Company, Minneapolis February 5, 2001 Brainerd, Minnesota Brainerd, Minnesota American National Bank of Minnesota, Brainerd, Minnesota First Bancorp, Century Bancorp, Inc., Richmond February 16, 2001 Troy, North Carolina Thomasville, North Carolina Home Savings, Inc., SSB, Thomasville, North Carolina First BancTrust Corporation, First Bank & Trust, S.B., Chicago February 16, 2001 Paris, Illinois Paris, Illinois First Capital Bankshares, Inc., Community Bank of Lemont, Chicago February 8, 2001 Peoria, Illinois Lemont, Illinois Firstrust Corporation, Metro Bank, Atlanta February 13, 2001 New Orleans, Louisiana Kenner, Louisiana Frandsen Financial Corporation, Oslo Bancorporation, Inc., Minneapolis February 6, 2001 Forest Lake, Minnesota Oslo, Minnesota Valley State Bank of Oslo, Oslo, Minnesota Midwest Community Bancshares, The Egyptian State Bank, St. Louis February 6, 2001 Inc., Carrier Mills, Illinois Marion, Illinois MountainBank Financial MountainBank, Richmond February 15, 2001 Corporation, Hendersonville, North Carolina Hendersonville, North Carolina Palm Beach National Holding Park National Corporation, Cleveland February 8, 2001 Company Newark, Ohio Palm Beach Bank, Florida Security Banc Corporation, Springfield, Ohio Republic Bancorp, Inc., Republic Bank & Trust Company of St. Louis February 1, 2001 Louisville, Kentucky Indiana, Clarksville, Indiana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 279 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Savings Bancorp, Inc., Savings Bank, Circleville, Ohio Cleveland January 24, 2001 Circleville, Ohio Security Bancshares, Inc., Security National Bank, St. Louis February 2, 2001 Witt, Illinois Witt, Illinois Sierra Bancorp, Bank of the Sierra, San Francisco February 2, 2001 Porterville, California Porterville, California Summit Bank Corporation, Global Commerce Bank, Atlanta February 8, 2001 Atlanta, Georgia Doraville, Georgia Thumb National Bank & Trust Thumb Bancorp, Inc., Chicago February 1, 2001 Company Employee Stock Pigeon, Michigan Ownership Plan and Trust, Thump National Bank and Trust Pigeon, Michigan Company, Pigeon, Michigan Urban Financial Group, Inc., The Community's Bank, New York February 8, 2001 Bridgeport, Connecticut Bridgeport, Connecticut Viking Corporation, K.B.J. Enterprises, Inc., Kansas City January 31, 2001 Omaha, Nebraska Omaha, Nebraska Waukomis Bancshares, Inc., Covington First State Bancshares, Inc., Kansas City February 1, 2001 Yukon, Oklahoma Covington, Oklahoma First State Bank, Covington, Oklahoma Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Boston Private Financial Holdings, E.R. Taylor Investments, Inc., Boston February 14, 2001 Inc., Concord, New Hampshire Boston, Massachusetts Glacier Bancorp, Inc., COAD Limited Partnership #2, Minneapolis February 16, 2001 Kalispell, Montana Missoula, Montana COAD Limited Partnership #3, Missoula, Montana Highlands Bankshares, Inc., Highlands Bankshares Trust Company, Richmond February 1, 2001 Petersburg, West Virginia Petersburg, West Virginia National Australia Bank Limited, thinkorswim, Inc., Chicago February 16, 2001 Melbourne, Australia Melbourne, Australia 02-e Limited, Melbourne, Australia Northern Trust Corporation, myCFO, Inc., Chicago February 8, 2001 Chicago, Illinois Mountain View, California Northwest Suburban Bancorp, Inc. To engage in the activity of purchasing Chicago February 5, 2001 Mount Prospect, Illinois loan participations from its subsidiary banks PSB Bancorp, Inc., Jade Financial Corp., Philadelphia January 26, 2001 Philadelphia, Pennsylvania Feasterville, Pennsylvania Regions Financial Corporation, Morgan Keegan Inc., Atlanta February 8, 2001 Birmingham, Alabama Memphis, Tennessee Morgan Keegan Trust Company, F.S.B., Memphis, Tennessee Westdeutsche Landesbank Boullioun Aviation Services, Inc., New York February 15, 2001 Gironzentrale, Bellevue, Washington Duesseldorf, Germany Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
280 Federal Reserve Bulletin • April 2001 Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Alpha Financial Group, Inc. Alpha Financial Group, Inc., Chicago February 8, 2001 Employee Stock Ownership Plan, Minonk, Illinois Toluca, Illnois Alpha Community Bank, Toluca, Illinois Alpha Insurance Services, Inc., Washburn, Illinois Gateway Financial Corporation, Gateway Bank & Trust Co., Richmond February 2, 2001 Elizabeth City, North Carolina Elizabeth, North Carolina Humboldt Bancorp, Tehama Bancorp, San Francisco February 1, 2001 Eureka, California Red Bluff, California Tehama Bank Red Bluff, California Bancorp Financial Services, Sacramento, 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 Security State Bank, Security State Bank, Chicago February 20, 2001 New Hampton, Iowa Calmar, Iowa SouthTrust Bank, Bayshore National Bank, Atlanta February 2, 2001 Birmingham, Alabama La Porte, Texas PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Barnes v. Reno, No. 1:00CV02900 (D.D.C., filed December 4, Federal Reserve Banks in which the Board of Governors is not 2000). Civil rights action. named a party. El Bey v. United States, No. 00-5293 (D.C. Cir., filed August 31, 2000). Appeal from district court order dismiss- Artis v. Greenspan, No. 01-CV-0400(ESG) (D.D.C., complaint ing pro se action as lacking arguable basis in law. On filed February 22, 2001. Employment discrimination action. January 11, 2001, the court dismissed the appeal. Dime Bancorp, Inc. v. Board of Governors 00-4249 (2d Cir., Trans Union LLC v. Board of Governors, et al., No. 00-CVfiled December 11, 2000). Petition for review of a Board 2087(ESH) (D.D.C., filed August 30, 2000). Action under order dated September 27, 2000, approving the applications Administrative Procedure Act challenging a portion of interof North Fork Corporation, Inc., Melville, New York, to agency rule regarding Privacy of Consumer Financial Inforacquire control of Dime Bancorp, Inc. and to thereby acmation. quire its wholly owned subsidiary, The Dime Savings Bank of New York, FSB, both of New York, New York. Sedgwick v. Board of Governors, No. 00-16525 (9th Cir., filed Nelson v. Greenspan, No. 99-215(EGS) (D.D.C., amended August 7, 2000). Appeal of district court dismissal of action under Federal Tort Claims Act alleging violation of bank complaint filed December 8, 2000). Employment discrimisupervision requirements. nation action. Howe v. Bank for International Settlements, No. OOCV12485 Individual Reference Services Group, Inc., v. Board of Gover- RCL (D. Mass., filed December 7, 2000). Action seeking nors, et al., No. 00-CV-1828 (ESH) (D.D.C., filed July 28, damages in connection with gold market activities and the 2000). Action under Administrative Procedure Act chalrepurchase of privately-owned shares of the Bank for Inter- lenging a portion of interagency rule regarding Privacy of national Settlements. Consumer Finance Information. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Legal Developments 281 Reed Elsevier Inc. v. Board of Governors, No. 00-1289 (D.C. Fraternal Order of Police v. Board of Governors, No. Cir., filed June 30, 2000). Petition for review of interagency 1:98CV03116 (WBB)(D.D.C„ filed December 22, 1998). rule regarding Privacy of Consumer Financial Information. Declaratory judgment action challenging Board labor practices. On February 26, 1999, the Board filed a motion to Bettersworth v. Board of Governors, No. 00-50262 (5th Cir., dismiss the action. filed April 14, 2000). Appeal of district court's dismissal of Board of Governors v. Pharaon, No. 98-6101 (2d Cir., filed Privacy Act claims. May 4, 1998). Appeal and cross-appeal of district court Albrecht v. Board of Governors, No. 00-CV-317 (CKK) order granting in part and denying in part the Board's (D.D.C., filed February 18, 2000). Action challenging the motion for summary judgment seeking prejudgment interest method of funding of the retirement plan for certain Board and a statutory surcharge in connection with a civil money employees. penalty assessed by the Board. On February 24, 1999, the court granted the Board's appeal and denied the cross- Guerrero v. United States, No. CV-F-99-6771(OWW) (E.D. appeal, and remanded the matter to the district court for Cal., filed November 29, 1999). Prisoner suit. determination of prejudgment interest due to the Board. On Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed January 29, 2001, the District Court approved a settlement August 3, 1999). Employment discrimination action. and terminated the action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Al 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 A3 2 Corporate profits and their distribution Federal Reserve Banks A32 Domestic finance companies—Assets and liabilities A33 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables A11 Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes All Aggregate reserves of depository institutions A35 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit A3 6 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A23 Interest rates—Money and capital markets A42 Nonfinancial business activity A24 Stock market—Selected statistics A42 Labor force, employment, and unemployment A43 Output, capacity, and capacity utilization A44 Industrial production—Indexes and gross value Federal Finance A46 Housing and construction A25 Federal fiscal and financing operations A47 Consumer and producer prices A26 U.S. budget receipts and outlays A48 Gross domestic product and income 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 • April 2001 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 G-7 Group of Seven e Estimated G-10 Group of Ten n.a. Not available GDP Gross domestic product n.e.c. Not elsewhere classified GNMA Government National Mortgage Association P Preliminary HUD Department of Housing and Urban r Revised (Notation appears on column heading Development when about half of the figures in that column IMF International Monetary Fund are changed.) IOs Interest only, stripped, mortgage-back securities * Amounts insignificant in terms of the last decimal IPCs Individuals, partnerships, and corporations place shown in the table (for example, less than IRA Individual retirement account 500,000 when the smallest unit given is millions) MMDA Money market deposit account 0 Calculated to be zero MSA Metropolitan statistical area Cell not applicable NOW Negotiable order of withdrawal ABS Asset-backed security 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 FAMC Federal Agricultural Mortgage Corporation REMICs Real estate mortgage investment conduits FFB Federal Financing Bank RHS Rural Housing Service FHA Federal Housing Administration RP Repurchase agreement FHLBB Federal Home Loan Bank Board RTC Resolution Trust Corporation FHLMC Federal Home Loan Mortgage Corporation SCO Securitized credit obligation FmHA Farmers Home Administration SDR Special drawing right FNMA Federal National Mortgage Association SIC Standard Industrial Classification FSA Farm Service Agency VA Department of Veterans Affairs FSLIC Federal Savings and Loan Insurance Corporation 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 NonfinancialS tatistics • April 2001 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 2000 2000 2001 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Qi Q2 Q3 Q4 Sept. Oct. Nov. Dec. Jan. Resen'es of depository institutions2 1 Total 1.8 -9.5 -7.1 — 8.0 -2.5 -9.7 -3.0 -22.9 8.2 2 Required .1 -5.9 -7.4 -9.8 -5.3 -10.8 -5.3 -27.5 10.9 3 Nonborrowed 2.4 -11.1 -8.8 -5.7 .6 -8.0 1.1 -20.8 12.5 4 Monetary base 4.5 -3.9 2.7 2.8 3.3 3.2 .3 7.1 14.0 Concepts of money and debt4 5 Ml 2.0 -1.8 -3.7 -2.7 -4.3 .7 -7.8 2.3 12.1 6 M2 5.8 6.4 5.8 6.7 8.2 5.6 4.3 9.7 12.3 7 M3 10.6 9.0 8.9 7.1 9.2 4.6 4.4 12.7 16.6 8 Debt 5.6 6.1 4.8 4.0 5.1 2.8 4.2 4.7 n.a. Nontransaction components 9 In M25 7.0 8.9 8.6 9.4 11.9 7.1 7.9 11.9 12.4 10 In M3 only6 22.6 15.3 16.4 8.3 11.4 2.1 4.5 19.7 26.4 Time and savings deposits Commercial banks 11 Savings, including MMDAs 2.5 7.8 11.8 12.0 19.4 5.1 10.5 16.4 13.1 12 Small time7 9.4 13.2 10.5 5.7 4.9 3.3 7.0 8.6 4.6 13 Large time8'9 20.2 17.1 11.5 2.4 -4.1 -8.2 4.8 26.2 27.8 Thrift institutions 14 Savings, including MMDAs -2.9 1.6 3.2 .6 .0 4.2 -2.4 -8.2 2.1 15 Small time7 7.2 3.3 11.2 10.1 10.0 10.2 9.5 5.6 13.8 16 Large time8 14.5 .4 20.8 16.1 14.5 22.6 11.7 1.2 37.0 Money market mutual funds 17 Retail 17.6 13.3 4.2 12.6 12.6 13.3 9.2 19.6 21.4 18 Institution-only 23.0 18.0 29.4 18.7 28.8 10.2 12.9 24.7 52.4 Repurchase agreements and eurodollars 19 Repurchase agreements10 20.2 11.1 8.2 -3.5 2.3 -3.3 -14.5 12.7 -11.3 20 Eurodollars10 39.8 15.6 .6 9.1r 19.3 7.6 3.1 - I.9r -17.6 Debt components4 21 Federal -4.8 -7.5 -7.2 -7.9 -4.8 -10.0 -9.2 -6.7 n.a. 22 Nonfederal 8.4 9.6 7.8 6.8 7.4 5.8 7.3 7.3 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- depository institutions, and (4) eurodollars (overnight and term) held by U.S. residents at ing during preceding month or quarter. foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with and Canada. Excludes amounts held by depository institutions, the U.S. government, money regulatory changes in reserve requirements. (See also table 1.20.) market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally by summing large time deposits, institutional money fund balances, RP liabilities, adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency and eurodollars, each seasonally adjusted separately, and adding this result to seasonally component of the money stock, plus (3) (for all quarterly reporters on the "Report of adjusted M2. Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference sectors—the federal sector (U.S. government, not including government-sponsored enterbetween current vault cash and the amount applied to satisfy current reserve requirements. prises or federally related mortgage pools) and the nonfederal sectors (state and local 4. Composition of the money stock measures and debt is as follows: governments, households and nonprofit organizations, nonfinancial corporate and nonfarm Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, commercial banks other than those owed to depository institutions, the U.S. government, and which are derived from the Federal Reserve Board's flow of funds accounts, are breakforeign banks and official institutions, less cash items in the process of collection and Federal adjusted (that is, discontinuities in the data have been smoothed into the series) and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of month-averaged (that is, the data have been derived by averaging adjacent month-end levels). withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail credit union share draft accounts, and demand deposits at thrift institutions. Seasonally money fund balances, each seasonally adjusted separately. adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities OCDs, each seasonally adjusted separately. (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time term) of U.S. addressees, each seasonally adjusted separately. deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail 7. Small time deposits—including retail RPs—are those issued in amounts of less than money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions balances at depository institutions and money market funds. Seasonally adjusted M2 is are subtracted from small time deposits. calculated by summing savings deposits, small-denomination time deposits, and retail money 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those fund balances, each seasonally adjusted separately, and adding this result to seasonally booked at international banking facilities. adjusted Ml. 9. Large time deposits at commercial banks less those held by money market funds, M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) depository institutions, the U.S. government, and foreign banks and official institutions. balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 10. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures 2000 2001 2000 2001 Nov. Dec. Jan. Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Jan. 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 568,061 578,891r 577,991 578,282 584,314 590,821 578,350 577,821 577,550 573,706 U.S. government securities2 2 Bought outright—System account3 512,368 514,072 515,712 514,737 515,595 512,158 514,112 516,288 5)6,988 516,799 3 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 130 130 130 130 130 130 130 130 130 130 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 19,549 27,923 24,662 25,021 31,759 40,939 27,116 24,228 22,429 18,986 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 121 96 43 295 41 25 85 4 79 12 9 Seasonal credit 157 114 32 121 112 73 36 26 23 31 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 962 1,502' 873 2,975 1,182 1,105 752 731 1,172 675 13 Other Federal Reserve assets 34,774 35,054 36,539 35,002 35,494 36,390 36,119 36,415 36,730 37,072 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 3,200 2,652 2,200 2,343 2,200 2,200 2,200 2,200 2,200 2,200 16 Treasury currency outstanding 31,286 31,528 31,800 31,543 31,593 31,643 31,745 31,793 31,841 31,888 ABSORBING RESERVE FUNDS 17 Currency in circulation •,•••• 576,006 584,582 584,006 583,205 589,803 593,612 588,511 584,339 580,581 578,487 18 Reverse repurchase agreements—triparty 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 289 403 452 404 416 450 454 456 445 455 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,093 5,758 6,682 8,105 4,340 5,312 4,795 6,529 7,078 8,903 21 Foreign 86 115 104 160 103 156 108 106 85 110 22 Service-related balances and adjustments . . 6,767 6,959 6,843 6,697' 7,237r 7,428 6,956 6,632 6,947 6,578 23 Other 234 355 305 222 258 1,054 179 199 267 277 24 Other Federal Reserve liabilities and capital . 17,529 18,401 18,124 18,581 18,417 17,884 17,982 18,265 18,248 18,198 25 Reserve balances with Federal Reserve Banks' 7,589 7,543r 6,520 5,840 8,578r 9.812 4,356 6,333 8,985 5,832 End-of-month figures Wednesday figures Nov. Dec. Jan. Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Jan. 31 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 575,908 593,092 573,194 579,269 597,301 581,870 579,624 578,853 589,511 573,194 U.S. government securities2 2 Bought outright—System account3 512,327 511,703 516,018 514,539 515,491 513,278 515,478 516,778 518,441 516,018 3 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 130 130 130 130 130 130 130 130 130 130 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 27,270 43,375 18,920 25,710 43,985 30,475 27,875 22,520 33,000 18,920 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 6 33 5 5 21 10 7 1 4 5 9 Seasonal credit 130 77 30 120 96 49 25 24 24 30 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 2,096 901 1,536 3,541 1,828 2,158 -209 2,902 924 1,536 13 Other Federal Reserve assets 33,949 36,873 36,555 35,225 35,750 35,771 36,318 36,498 36,989 36,555 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 3,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 16 Treasury currency outstanding 31,401 31,643 31,888 31,543 31,593 31,643 31,745 31,793 31,841 31,888 ABSORBING RESERVE FUNDS 17 Currency in circulation 579,782 593,694 579,781 586,969 593,356 593,133 586,085 583,690 580,073 579,781 18 Reverse repurchase agreements—triparty . . . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 344 450 477 410 450 453 458 445 451 477 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 4,382 5,149 5,256 4,781 5,320 3,832 5,160 7,979 7,357 5,256 21 Foreign 104 216 199 227 83 76 122 103 69 199 22 Service-related balances and adjustments . . 6,606 7,428 6,578 6,697r 7,237r 7,428 6,956 6,632 6,947 6,578 23 Other 276 1,382 306 211 235 204 174 283 262 306 24 Other Federal Reserve liabilities and capital . 18.199 17,962 17,648 18,140 18,062 17,543 17,985 17,936 17,937 17,648 25 Reserve balances with Federal Reserve Banks' 11,861 11,701 8,082 6,625 17,395r 4,090 7,675 6,824 21,502 8,082 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 • April 2001 1.12 RESERVES AND BORROWINGS Depository Institutions' Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1998 1999 2000 2000 2001 Dec. Dec. Dec. July Aug. Sept. Oct. Nov. Dec. Jan. 1 Reserve balances with Reserve Banks2 9.026 5.263 7.160 6,582 6,875 6,829 6,782 7,157 7,160 7,195 2 Total vault cash3 44.294 60,619 45,120 45,473 45,319 44,807 45,178 44,546 45,120 47,506 3 Applied vault cash4 36,183 36,392 31,381 33,086 32.611 32,429 32,072 31,632 31,381 32,605 4 Surplus vault cash5 8,111 24,227 13,739 12,387 12,708 12,378 13,106 12,914 13,739 14,902 Total reserves6 45,209 41,655 38,541 39.668 39,486 39,257 38,854 38,789 38,541 39,800 6 Required reserves 43.695 40,348 37,215 38,600 38,471 38,155 37,725 37,587 37,215 38,547 7 Excess reserve balances at Reserve Banks7 1.514 1,307 1.325 1,068 1,014 1,102 1.129 1,202 1,325 1,252 8 Total borrowing at Reserve Banks 117 320 210 570 579 477 418 283 210 73 9 Adjustment 101 179 99 60 25 50 119 124 99 39 10 Seasonal 15 67 111 510 554 427 299 159 111 34 11 Special Liquidity Facility8 0 74 0 0 0 0 0 0 0 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 Oct. 4 Oct. 18 Nov. 1 Nov. 15 Nov. 29 Dec. 13 Dec. 27 Jan. 10 Jan. 24 Feb. 7 1 Reserve balances with Reserve Banks" 7.131 6,502 6,976 6,709 7,620 7,131 7,208 7,085 7,656 6.431 2 Total vault cash' 45,210 45,778 44,523 44,633 44,539 43,452 46.220 46,696 45,558 52,561 3 Applied vault cash4 33.068 31,601 32,274 31,056 32,261 30,255 32.370 31,579 32,316 34,648 4 Surplus vault cash5 12.142 14,177 12,249 13.577 12,278 13,197 13,850 15,117 13,243 17,913 5 Total reserves6 40,198 38,103 39,250 37,765 39,881 37,386 39,578 38,664 39,972 41,079 6 Required reserves 38.938 37,073 38,056 36.762 38,474 36,253 38,124 37,165 38,866 39,887 7 Excess reserve balances at Reserve Banks7 1,260 1.030 1.194 1,003 1,407 1,133 1,454 1,499 1,106 1,191 8 Total borrowing at Reserve Banks 409 480 355 190 380 159 285 110 66 34 9 Adjustment 26 167 97 25 232 37 169 56 42 9 10 Seasonal 383 313 259 165 148 123 117 55 25 25 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 Federal Reserve Bank 3/1 O 6 n / 01 Previous rate 3/1 O 6 n / 01 3/1 O 6 n / 01 Boston 1/31/01 5.50 New York . . . 1/31/01 5.50 Philadelphia . 1/31/01 5.50 Cleveland . . . 1/31/01 5.50 Richmond . . . 1/31/01 5.50 Atlanta 1/31/01 5.50 Chicago 1/31/01 5.50 St. Louis 2/1/01 5.50 Minneapolis . 1/31/01 5.50 Kansas City . . 2/1/01 5.50 Dallas 1/31/01 5.50 San Francisco 1/31/01 5.50 Range of rates for adjustment credit in recent years Range (or F.R. Bank Range (or F.R. Bank Range (or level)—All of level)—All of level)—All F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks In effect Dec. 31, 1977 6 6 1982—Oct. 12 9.5-10 9.5 1994—May 17 3-3.5 3.5 13 9.5 9.5 18 3.5 3.5 1978—Jan. 9 6-6.5 6.5 Nov. 22 9-9.5 9 Aug. 16 3.5-t 4 20 6.5 6.5 26 9 9 18 4 4 May 11 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 1 7 4.75 4.75 July 3 7-7.25 7.25 17 8.5 8.5 10 7.25 7.25 1995—Feb. 1 4.75-5.25 5.25 Aug. 21 7.75 7.75 1984—Apr. 9 8.5-9 9 5.25 5.25 Sept. 22 8 8 13 9 Oct. 16 8-8.5 8.5 Nov. 21 8.5-9 1996—Jan. 31 5.00-5.25 5.00 20 8.5 8.5 26 8.5 Feb. 5 5.00 5.00 Nov. 1 8.5-9.5 9.5 Dec. 24 3 9.5 9.5 1998—Oct. 15 4.75-5.00 4.75 1985—May 20 7.5-8 7.5 16 4.75 4.75 1979—July 20 10 10 24 7.5 7.5 Nov. 17 4.50-4.75 4.50 Aug. 17 10-10.5 10.5 19 4.50 4.50 20 10.5 10.5 1986—Mar. 7 7-7.5 7 Sept. 19 10.5-11 11 10 7 7 1999—Aug. 24 4.50-4.75 4.75 21 11 11 Apr. 21 6.5-7 6.5 26 4.75 4.75 Oct. 8 11-12 12 23 6.5 6.5 Nov. 16 4.75-5.00 4.75 10 12 12 July 11 6 6 1 8 5.00 5.00 Aug. 21 5.5-6 5.5 1980—Feb. 15 12-13 13 22 5.5 5.5 2000—Feb. 2 5.00-5.25 5.25 19 13 13 4 5.25 5.25 May 29 12-13 13 1987—Sept. 4 5.5-6 6 Mar. 21 5.25-5.50 5.50 30 12 12 11 6 6 23 5.50 5.50 June 13 11-12 11 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 11 6.5 6.5 29 10 10 2001—Jan. 3 5.75-6.00 5.75 Sept. 26 11 11 1989—Feb. 24 6.5-7 7 4 5.50-5.75 5.50 Nov. 17 12 12 27 7 7 5 5.50 5.50 Dec. 5 12-13 13 31 5.00-5.50 5.00 8 13 13 1990—Dec. 19 6.5 Feb. 1 5.00 5.00 1981—May 5 13-14 14 1991—Feb. 1 6-6.5 6 In effect Mar. 16, 2001 5.00 5.00 14 14 4 6 6 Nov. 2 13-14 13 Apr. 30 5.5-6 5.5 6 13 13 May 2 5.5 5.5 Dec. 4 12 12 Sept. 13 5-5.5 5 17 5 5 1982—July 20 11.5-12 11.5 Nov. 6 4.5-5 4.5 23 11.5 11.5 7 4.5 4.5 Aug. 2 11-11.5 11 Dec. 20 3.5-4.5 3.5 3 11 11 24 3.5 3.5 16 10.5 10.5 27 10-10.5 10 11999922——JJuullyy 2 3-3.5 3 30 10 10 7 3 3 1. Available on a short-term basis to help depository institutions meet temporary needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that cannot be met through reasonable alternative sources. The highest rate established flexible rate somewhat above rates charged on market sources of funds is charged. The rate for loans to depository institutions may be charged on adjustment credit loans of unusual size ordinarily is reestablished on the first business day of each two-week reserve maintenance that result from a major operating problem at the borrower's facility. period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis 2. Available to help relatively small depository institutions meet regular seasonal needs for points. funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 4. For earlier data, see the following publications of the Board of Governors: Banking and that cannot be met through special industry lenders. The discount rate on seasonal credit takes Monetary Statistics, 1914-1941, and 1941-1970; and the Annual Statistical Digest, 1970into account rates charged by market sources of funds and ordinarily is reestablished on the 1979. first business day of each two-week reserve maintenance period; however, it is never less than In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit the discount rate applicable to adjustment credit. borrowings by institutions with deposits of $500 million or more that had borrowed in 3. May be made available to depository institutions when similar assistance is not successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was reasonably available from other sources, including special industry lenders. Such credit may in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed be provided when exceptional circumstances (including sustained deposit drains, impaired on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to access to money market funds, or sudden deterioration in loan repayment performance) or 4 percent on May 5, 1981. The surcharge was reduced to 3 percent etfective 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 NonfinancialS tatistics • April 2001 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 1.5 years was reduced from 3 percent to 1.5 percent for by check, draft, debit card, or similar order payable directly to third parties) are savings the maintenance period that began Dec. 13, 1990, and to zero for the maintenance period that deposits, not transaction accounts. began Dec. 27, 1990. For institutions that report quarterly, the reserve requirement on 3. The Monetary Control Act of 1980 requires that the amount of transaction accounts nonpersonal time deposits with an original maturity of less than 1.5 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 1.5 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 1.5 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 aanndd mmaattuurriittyy 11999988 11999999 22000000 June July Aug. Sept. Oct. Nov. Dec. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 3,550 0 8,676 0 1,825 531 231 779 22,,550077 550099 7 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 450,835 464,218 477,904 44,008 33,718 42,797 37,006 38,142 45,182 39,428 4 For new bills 450,835 464,218 477,904 ' 44,008 33,718 42,797 37,006 38,142 45,182 39,428 5 Redemptions 2,000 0 24,522 4,188 4,902 3,438 3,898 2,656 1,021 1,145 Others within one year Gross purchases 6,297 11,895 8,809 1,875 1,284 2,770 716 0 580 1,420 7 Gross sales 0 0 0 0 0 0 0 0 0 0 Maturity shifts 46,062 50,590 62,025 4,672 5,152 7,040 0 8,663 7,957 0 9 Exchanges —49,434 -53,315 -54,656 -3,109 -3,333 -7,396 0 -6,608 -7,012 0 10 Redemptions 2,676 1,429 3,779 0 367 887 0 787 780 0 One to five years 11 Gross purchases 12,901 19,731 14,482 706 2,259 2,508 2,385 734 1,332 1,045 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -37,777 -44,032 -52,068 -4,672 -5,152 -3,439 0 -8,663 -5.997 0 14 Exchanges 37,154 42,604 46,177 3,109 3,333 5,418 0 6,608 5,737 0 Five to ten years 15 Gross purchases 2,294 4,303 5,871 0 0 1,914 448 0 510 771 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,908 -5,841 -6,801 0 0 -3,601 0 0 -699 0 18 Exchanges 7,439 7,583 6,585 0 0 1,254 0 0 1,275 0 More than ten years 19 Gross purchases 4,884 9,428 5,833 1,151 500 727 547 982 0 0 70 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -2,377 -717 -3,155 0 0 0 0 0 -1,261 0 22 Exchanges 4,842 3.139 1,894 0 0 724 0 0 0 0 All maturities 7.3 Gross purchases 29,926 45,357 43,670 3,732 5,868 8,450 4,326 2,495 4,929 3,745 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 4,676 1,429 28,301 4,188 5,269 4,325 3,898 3,443 1,802 1,145 Matched transactions 76 Gross purchases 4,430,457 4,413,430 4,399,257 368,396 344,935 381,349 335,321 344,920 351,391 345,680 27 Gross sales 4,434,358 4,431,685 4,381,188 369,739 344,384 381,475 334,530 346,428 351,232 348,917 Repurchase agreements 28 Gross purchases 512,671 281,599 0 0 0 00 00 00 00 00 29 Gross sales 514,186 301,273 0 0 0 0 0 0 0 0 30 Net change in U.S. Treasury securities 19,835 5,999 33,439 -1,800 1,150 3,999 1,219 -2,457 3,286 -637 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 0 0 00 37 Gross sales 25 0 0 0 0 0 0 0 0 0 33 Redemptions 322 157 51 0 0 0 10 0 0 0 Repurchase agreements 34 Gross purchases 284,316 360,069 0 0 0 0 00 00 00 00 35 Gross sales 276,266 370,772 0 0 0 0 0 0 0 0 36 Net change in federal agency obligations 7,703 -10,859 -51 0 0 0 -10 0 0 0 Reverse repurchase agreements 37 Gross purchases 0 0 0 0 0 0 0 00 00 00 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 0 304,989 890,236 70,850 66,485 47,265 66,080 64,428 87,125 9955,,447700 40 Gross sales 0 164,349 987,501 70,315 75,925 46,230 67,285 62,308 79,295 79,365 41 Net change in triparty obligations 0 140,640 -97,265 535 -9,440 1,035 -1,205 2,120 7,830 16,105 42 Total net change in System Open Market Account . . . 27,538 135,780 -63,877 -1,265 -8,290 5,034 4 -337 11,116 15,468 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 2. Transactions exclude changes in compensation for the effects of inflation on the principal Account; all other figures increase such holdings. of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A10 Domestic Nonfinancial Statistics • April 2001 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 2001 2000 2001 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Jan. 31 Nov. 30 Dec. 31 Jan. 31 Consolidated condition statement ASSETS 1 Gold certificate account 11,046 11,046 11,046 11,046 11,046 11,046 11,046 11,046 2 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 3,200 2,200 2,200 3 935 955 987 1,028 1,066 901 949 1,066 Loans 4 To depository institutions 58 32 25 28 35 136 110 35 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Triparty Obligations 7 Repurchase agreements—triparty" 30,475 27,875 22,520 33,000 18,920 27,270 43,375 18,920 Federal agency obligations3 8 Bought outright 130 130 130 130 130 130 130 130 9 Held under repurchase agreements 0 0 0 0 0 0 0 0 10 Total U.S. Treasury securities3 513,278 515,478 516,778 518,441 516,018 512,327 511,703 516,018 11 Bought outright4 513,278 515,478 516,778 518,441 516,018 512,327 511,703 516,018 1? Bills 181,876 183,365 184,010 184,510 182,949 182,615 178,741 182,949 13 Notes 238,618 239,192 239,847 240,586 239,725 237,025 240,178 239,725 14 Bonds 92,784 92,921 92,921 93,345 93,345 92,687 92,784 93,345 15 Held under repurchase agreements 0 0 0 0 0 0 0 0 16 Total loans and securities 543,941 543,516 539,453 551,598 535,103 539,863 555,318 535,103 17 Items in process of collection 13,884 8,148 15,495 8,815 10,023 5,237 7,105 10,023 18 Bank premises 1,461 1,462 1,463 1,463 1,467 1,440 1,461 1,467 Other assets 19 Denominated in foreign currencies5 15,672 15,680 15,688 15,695 15,495 15,348 15,670 15,495 20 All other6 18,732 19,184 19,401 19,860 19,673 17,083 19,766 19,673 21 Total assets 607,871 602,190 605,734 611,706 596,072 594,118 613,514 596,072 LIABILITIES 22 Federal Reserve notes 562,879 555,753 553,329 549,711 549,436 549,627 563,450 549,436 23 Reverse repurchase agreements—triparty2 0 0 0 0 0 0 0 0 24 Total deposits 16,169 20,334 21,990 36,366 21,182 20,621 25,792 21,182 25 Depository institutions 12,058 14,878 13,624 28,678 15,420 15.858 19,045 15,420 26 U.S. Treasury—General account 3,832 5,160 7,979 7,357 5,256 4,382 5,149 5,256 27 Foreign—Official accounts 76 122 103 69 199 104 216 199 28 Other 204 174 283 262 306 276 1,382 306 79 Deferred credit items 11,280 8,118 12.479 7,692 7,806 5,672 6,310 7,806 30 Other liabilities and accrued dividends 4,091 4,139 4,079 4,023 3,960 4,590 4,170 3,960 31 Total liabilities 594,419 588,345 591,877 597,792 582,384 580,510 599,723 582,384 CAPITAL ACCOUNTS 3? Capital paid in 6,997 6,999 7,000 7,011 7,014 7,076 6,997 7,014 33 Surplus 6,188 6,189 6,190 6,298 6,265 2,679 6,794 6,265 34 Other capital accounts 267 658 667 605 409 3,853 0 409 35 Total liabilities and capital accounts 607,871 602,190 605,734 611,706 596,072 594,118 613,514 596,072 MEMO 36 Marketable U.S. Treasury securities held in custody for foreign and international accounts n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Federal Reserve note statement 37 Federal Reserve notes outstanding (issued to Banks) 751,176 750,186 749,177 748,172 746,920 756,527 751,714 746,920 38 LESS: Held by Federal Reserve Banks 188,297 194,433 195,848 198,461 197,484 206,900 188,264 197,484 39 Federal Reserve notes, net 562,879 555,753 553,329 549,711 549,436 549,627 563,450 549,436 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 2,200 2,200 2,200 2,200 2,200 3,200 2,200 2,200 4? Other eligible assets 5,750 0 655 0 1,122 0 0 1,122 43 U.S. Treasury and agency securities 543,883 542,508 539,428 536,465 535,068 535,381 550,205 535,068 44 Total collateral 562,879 555,753 553,329 549,711 549,436 549,627 563,450 549,436 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 2001 2000 2001 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Nov. 30 Dec. 31 Jan. 31 1 Total loans 117 58 33 25 28 136 110 35 2 Within fifteen days' 110 28 13 25 0 86 96 30 3. Sixteen days to ninety days 7 31 20 0 0 50 14 5 4. 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities2 515,491 513,278 515,478 516,778 518,441 512,327 511,702 516,018 6 Within fifteen days' 19,889 17.020 14,881 20,094 22,272 4,706 18,053 20,921 7 Sixteen days to ninety days 110,832 113,973 116,369 112,438 111,129 119,433 108,961 112,430 8 Ninety-one days to one year 125,620 124,691 125,924 125,287 124,918 130,868 125,539 124,617 9 One year to five years 132,792 131,235 131,501 131,501 132,160 131,745 132,792 130,088 10 Five years to ten years 55,461 55,462 55,907 56,561 56,750 54,682 55,461 56,750 11 More than ten years 70,896 70,897 70,897 70,897 71,212 70,893 70,896 71,212 12 Total federal agency obligations 130 130 130 130 130 130 130 130 13 Within fifteen days' 0 0 0 0 0 0 0 0 14 Sixteen days to ninety days 0 0 0 0 0 0 0 0 15 Ninety-one days to one year 0 0 0 0 0 0 0 0 16 One year to five years 30 130 130 130 130 30 130 130 17 Five years to ten years 0 0 0 0 0 100 0 0 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 • April 2001 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2000 2001 IItteemm 11999977 11999988 11999999 22000000 DDeecc.. DDeecc.. DDeecc.. DDeecc.. June July Aug. Sept. Oct. Nov. Dec. Jan. Seasonally adjusted AAAADDDDJJJJUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS2222 1111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss3333 46.87 45.19 41.74 38.69 39.96 40.26 39.94 39.86 39.54 39.44 38.69 38.95 2222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss4444 46.54 45.07 41.42 38.48 39.48 39.69 39.37 39.38 39.12 39.16 38.48 38.88 3333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 46.54 45.07 41.42 38.48 39.48 39.69 39.37 39.38 39.12 39.16 38.48 38.88 4444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 45.18 43.68 40.44 37.36 38.89 39.19 38.93 38.76 38.41 38.24 37.36 37.70 5555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee6666 479.37 513.19 592.03 584.10 575.06 576.75 577.43 579.01 580.55 580.69 584.10 590.93 Not seasonally adjusted 6666 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss7777 48.01 45.31 41.89 38.58 39.24 39.70 39.52 39.29 38.90 38.83 38.58 39.80 7777 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 47.69 45.19 41.57 38.37 38.76 39.13 38.94 38.82 38.48 38.55 38.37 39.72 8888 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 47.69 45.19 41.57 38.37 38.76 39.13 38.94 38.82 38.48 38.55 38.37 39.72 9999 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss8888 46.33 43.80 40.58 37.26 38.18 38.63 38.50 38.19 37.77 37.63 37.26 38.54 11110000 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee9999 484.98 518.27 600.63 590.20 574.55 577.19 576.60 576.79 578.34 582.36 590.20 591.41 NNNNOOOOTTTT AAAADDDDIIIIUUUUSSSSTTTTEEEEDDDD FFFFOOOORRRR CCCCHHHHAAAANNNNGGGGEEEESSSS IIIINNNN RRRREEEESSSSEEEERRRRVVVVEEEE RRRREEEEQQQQUUUUIIIIRRRREEEEMMMMEEEENNNNTTTTSSSS11110000 11111111 TTTToooottttaaaallll rrrreeeesssseeeerrrrvvvveeeessss'''''''' 47.92 45.21 41.66 38.54 39.22 39.67 39.49 39.26 38.85 38.79 38.54 39.80 11112222 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss 47.60 45.09 41.33 38.33 38.74 39.10 38.91 38.78 38.44 38.51 38.33 39.73 11113333 NNNNoooonnnnbbbboooorrrrrrrroooowwwweeeedddd rrrreeeesssseeeerrrrvvvveeeessss pppplllluuuussss eeeexxxxtttteeeennnnddddeeeedddd ccccrrrreeeeddddiiiitttt5555 47.60 45.09 41.33 38.33 38.74 39.10 38.91 38.78 38.44 38.51 38.33 39.73 11114444 RRRReeeeqqqquuuuiiiirrrreeeedddd rrrreeeesssseeeerrrrvvvveeeessss 46.24 43.70 40.35 37.22 38.15 38.60 38.47 38.16 37.73 37.59 37.22 38.55 11115555 MMMMoooonnnneeeettttaaaarrrryyyy bbbbaaaasssseeee11112222 491.79 525.06 607.94 597.12 581.44 583.99 583.34 583.48 585.07 589.12 597.12 598.27 11116666 EEEExxxxcccceeeessssssss rrrreeeesssseeeerrrrvvvveeeessss11113333 1.69 1.51 1.31 1.33 1.06 1.07 1.01 1.10 1.13 1.20 1.33 1.25 11117777 BBBBoooorrrrrrrroooowwwwiiiinnnnggggssss ffffrrrroooommmm tttthhhheeee FFFFeeeeddddeeeerrrraaaallll RRRReeeesssseeeerrrrvvvveeee .32 .12 .32 .21 .48 .57 .58 .48 .42 .28 .21 .07 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 Aff airs, 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 2001 1997 1998 1999 2000 IItteemm Dec. Dec. Dec. Dec. Oct. Nov. Dec. Jan. Seasonally adjusted Measures2 1 Ml 1,073.4 1,097.0 1,124.3 1,091.3 1,096.3 1,089.2 1,091.3 1,102.3 2 M2 4,029.9 4,382.6 4,648.2 4,945.7 4.888.2 4,905.9 4,945.7 4,996.5 3 M3 5,428.3 6,028.2 6,524.1 7,090.4r 6,990.5 7,016.0 7,090.4r 7,188.4 4 Debt 15,223.1 16,276.0 17,376.7 18,253.9 18,119.8 18,183.2 18,253.9 n.a. Ml components 5 Currency3 424.3 459.2 516.7 530.5 526.4 528.0 553300..55 553344..99 6 Travelers checks4 8.1 8.2 8.2 8.0 8.4 8.0 8.0 8.1 7 Demand deposits3 395.4 379.4 355.6 313.7 322.1 315.2 313.7 317.5 8 Other checkable deposits6 245.7 250.1 243.7 239.1 239.4 238.0 239.1 241.8 Nontransaction components 9 In M27 2,956.6 3,285.6 3,523.9 3,854.4 3,791.8 3,816.7 3,854.4 3,894.2 10 In M3 only8 1,398.3 1,645.7 1,875.9 2,144.7 2,102.3 2,110.1 2,144.7 2,191.9 Commercial banks 11 Savings deposits, including MMDAs 1,021.1 1,185.8 1,287.0 1,420.6 1,389.4 1,401.5 1,420.6 1,436.1 12 Small time deposits9 625.5 626.4 635.2 698.8 689.8 693.8 698.8 701.5 13 Large time deposits10' " 517.7 575.5 648.8 720.1 701.9 704.7 720.1 736.8 Thrift institutions 14 Savings deposits, including MMDAs 376.8 414.1 449.3 452.7 456.7 455.8 452.7 453.5 15 Small time deposits9 342.9 325.8 320.9 347.0 342.7 345.4 347.0 351.0 16 Large time deposits10 85.5 88.7 91.3 103.7 102.6 103.6 103.7 106.9 Money market mutual funds 17 Retail 590.2 733.5 831.6 935.3 913.3 920.3 993355..33 995522..00 18 Institution-only 389.9 530.0 622.0 767.7 744.2 752.2 767.7 801.2 Repurchase agreements and eurodollars 19 Repurchase agreements12 255.3 299.6 343.0 362.5 363.1 358.7 336622..55 335599..11 20 Eurodollars12 150.0 151.8 170.8 190.7r 190.5 191.0 190.7r 187.9 Debt components 21 Federal debt 3,800.6 3,751.2 3,660.2 3,400.6 3,446.0 3,419.7 3,400.6 n.a. 22 Nonfederal debt 11,422.5 12,524.7 13,716.5 14,853.2 14,673.9 14,763.5 14,853.2 n.a. Not seasonally adjusted Measures2 23 Ml 1,096.9 1,120.4 1,147.8 1,115.7 1,093.7 1,095.3 1,115.7 1,102.5 24 M2 4,051.3 4,404.9 4,672.2 4,974.4r 4,865.7 4,898.1 4,974.4r 5,005.9 25 M3 5,453.6 6,060.3 6,561.4 7,135.5r 6,948.5 7,011.6 7,135.5r 7,218.5 26 Debt 15,218.5 16,271.3 17,372.0 18,248.6 18.070.7 18,161.9 18,248.6 n.a. Ml components 27 Currency3 428.1 463.3 521.5 535.8 525.1 528.6 535.8 532.7 28 Travelers checks4 8.3 8.4 8.4 8.1 8.4 8.2 8.1 8.2 29 Demand deposits5 412.4 395.9 371.2 329.1 322.2 320.5 329.1 317.6 30 Other checkable deposits6 248.2 252.8 246.6 242.6 238.1 238.1 242.6 244.1 Nontransaction components 31 In M27 2,954.4 3,284.5 3,524.5 3,858.8 3,772.0 3,802.8 3,858.8 3,903.3 32 In M3 only8 1,402.3 1,655.4 1,889.2 2,161,0r 2,082.8 2,113.5 2,161.0r 2,212.7 Commercial banks 33 Savings deposits, including MMDAs 1,020.4 1,186.0 1,288.5 1,425.3 1,380.0 1,397.2 1,425.3 1,433.8 34 Small time deposits9 625.3 626.5 635.4 699.0 690.8r 695. lr 699.0 702.7 35 Large time deposits10, " 517.1 574.9 648.2 719.5 698.9r 705.8 719.5 730.5 Thrift institutions 36 Savings deposits, including MMDAs 376.5 414.2 449.8 454.2 453.6 454.4 454.2 452.8 37 Small time deposits9 342.8 325.8 321.0 347.1 343.2 346.1 347.1 351.7 38 Large time deposits10 85.4 88.6 91.2 103.6 102.1 103.8 103.6 105.9 Money market mutual funds 39 Retail 589.4 731.9 829.7 933.1 904.4 909.9 993333..11 962.3 40 Institution-only 397.0 541.9 636.9 785.6 734.7 755.9 785.6 828.1 Repurchase agreements and eurodollars 41 Repurchase agreements'" 250.5 295.4 339.5 359.4 358.0 357.9 335599..44 358.5 42 Eurodollars12 152.3 154.5 173.4 193.0 189.1 190.2 193.0 189.6 Debt components 43 Federal debt 3,805.8 3,754.9 3,663.1 3,403.7 3,395.5 3,401.3 33..440033..77 n.a. 44 Nonfederal debt 11,412.7 12,516.3 13,709.0 14,844.9 14,675.3 14,760.7 14,844.9 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A14 Domestic Nonfinancial Statistics • April 2001 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 deht is as follows: which are derived from the Federal Reserve Board's flow of funds accounts, are break- Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of adjusted (that is, discontinuities in the data have been smoothed into the series) and depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at all month-averaged (that is, the data have been derived by averaging adjacent month-end levels). commercial banks other than those owed to depository institutions, the U.S. government, and 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository foreign banks and official institutions, less cash items in the process of collection and Federal institutions. Reserve float: and (4) other checkable deposits (OCDs), consisting of negotiable order of 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, Travelers checks issued by depository institutions are included in demand deposits. credit union share draft accounts, and demand deposits at thrift institutions. Seasonally 5. Demand deposits at commercial banks and foreign-related institutions other than those adjusted Ml is computed by summing currency, travelers checks, demand deposits, and owed to depository institutions, the U.S. government, and foreign banks and official institu- OCDs, each seasonally adjusted separately. tions, less cash items in the process of collection and Federal Reserve float. M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time 6. Consists of NOW and ATS account balances at all depository institutions, credit union deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) share draft account balances, and demand deposits at thrift institutions. balances in retail money market mutual funds. Excludes individual retirement accounts 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally money fund balances. adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities and retail money fund balances, each seasonally adjusted separately, and adding this result to (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and seasonally adjusted Ml. term) of U.S. addressees. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) 9. Small time deposits—including retail RPs—are those issued in amounts of less than issued by all depository institutions, (2) balances in institutional money funds, (3) RP $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are liabilities (overnight and term) issued by all depository institutions, and (4) eurodollars subtracted from small time deposits. (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those at all banking offices in the United Kingdom and Canada. Excludes amounts held by booked at international banking facilities. depository institutions, the U.S. government, money market funds, and foreign banks and 11. Large time deposits at commercial banks less those held by money market funds, official institutions. Seasonally adjusted M3 is calculated by summing large time deposits, depository institutions, the U.S. government, and foreign banks and official institutions. institutional money fund balances, RP liabilities, and eurodollars, each seasonally adjusted 12. Includes both overnight and term. separately, and adding this result to seasonally adjusted M2. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial sectors—the federal sector (U.S. government, not including government-sponsored enter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Commercial Banking Institutions—Assets and Liabilities A15 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities' A. All commercial banks Billions of dollars Monthly averages Wednesday figures Account 2000 2000r 2001 2001 Jan.r July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 10 Jan. 17 Jan. 24 Jan. 31 Seasonally adjusted Assets 1 Bank credit 4,792.6 5,081.0 5,124.9 5,174.2 5,148.5 5,160.7 5,223.5 5,263.2 5,267.3 5,250.4 5,259.2 5,276.4 2 Securities in bank credit 1,268.6 1,317.4 1,321.7 1,333.1 1,310.3 1,302.8 1,335.2 1,356.3 1,364.9 1,354.0 1,351.1 1,354.2 3 U.S. government securities 812.7 820.7 814.7 809.7 794.7 784.7 786.5 787.4 789.5 785.4 783.3 788.6 4 Other securities 455.9 496.7 507.0 523.4 515.5 518.1 548.6 569.0 575.4 568.6 567.7 565.7 5 Loans and leases in bank credit2 . . . 3,523.9 3,763.6 3,803.2 3,841.1 3,838.2 3,857.9 3,888.4 3,906.8 3,902.4 3,896.5 3,908.2 3,922.1 6 Commercial and industrial 1,010.2 1,073.6 1,081.1 1,080.8 1,080.0 1,081.4 1,090.3 1,105.6 1,100.2 1,104.2 1,112.5 1,111.0 7 Real estate 1,491.3 1,615.1 1,626.5 1,638.1 1,635.8 1,647.2 1,653.8 1,652.6 1,652.3 1,648.1 1,652.1 1,658.6 8 Revolving home equity 104.3 119.2 120.4 122.1 125.4 127.0 128.5 129.5 129.2 129.3 129.6 130.1 9 Other 1,387.0 1.495.9 1,506.1 1,516.0 1,510.4 1,520.2 1,525.4 1,523.0 1,523.1 1,518.7 1,522.5 1,528.5 10 Consumer 496.7 520.1 529.1 533.1 533.1 536.6 538.0 540.6 537.7 540.9 541.7 541.8 11 Security3 143.2 151.4 157.9 178.4 176.6 178.1 186.5 184.2 187.1 178.5 179.8 187.5 12 Other loans and leases 382.5 403.4 408.5 410.6 412.7 414.7 419.8 423.9 425.1 424.8 422.1 423.3 13 Interbank loans 218.9 239.9 245.9 237.3 247.9 247.2 252.8 270.3 264.4 257.0 286.2 276.8 14 Cash assets4 293.1 271.9 271.7 269.3 267.7 255.3 267.1 274.6 273.9 285.1 264.9 276.5 15 Other assets5 375.6 396.4 400.3 402.7 418.0 407.5 407.4 422.1 425.1 419.8 425.1 421.9 16 Total assets6 5,620.9 5,927.9 5,980.7 6,021.1 6,020.1 6,0083 6,0873 6,165.9 6,166.7 6,148.0 6,170.8 6,187.1 Liabilities 17 Deposits 3,492.3 3.725.1 3,752.2 3,769.5 3,784.4 3,772.1 3,848.7 3,891.7 3,895.3 3,911.0 3,858.8 3,891.9 18 Transaction 645.7 611.4 616.6 608.9 612.5 597.8 597.1 607.0 584.0 612.5 611.1 631.1 19 Nontransaction 2,846.6 3,113.7 3,135.5 3,160.6 3,171.8 3,174.3 3,251.7 3,284.7 3,311.3 3,298.5 3,247.8 3,260.7 20 Large time 844.5 921.4 930.9 920.3 914.8 911.8 929.2 943.2 954.1 947.5 936.3 932.4 21 Other 2,002.1 2,192.3 2,204.6 2,240.3 2,257.1 2,262.5 2,322.5 2,341.5 2,357.2 2,351.0 2,311.5 2,328.4 22 Borrowings 1,138.2 1,222.3 1,229.3 1,222.5 1,213.6 1,209.9 1,241.4 1,270.7 1,258.2 1,236.4 1,291.5 1,299.9 23 From banks in the U.S 359.6 390.3 389.6 374.2 370.2 365.8 392.1 403.3 406.0 390.8 406.1 407.9 24 From others 778.6 832.0 839.7 848.3 843.4 844.1 849.3 867.3 852.1 845.5 885.5 892.0 25 Net due to related foreign offices 227.2 261.9 269.7 269.2 251.9 241.5 224.3 223.0 228.9 219.2 222.8 217.9 26 Other liabilities 291.0 298.6 318.2 340.3 349.8 350.0 348.4 367.7 380.0 377.1 357.7 362.5 27 Total liabilities 5,148.6 5,507.9 5,569.4 5,601.4 5,599.7 5,573.5 5,662.8 5,753.0 5,762.4 5,743.7 5,730.9 5,1122 28 Residual (assets less liabilities)7 472.3 420.0 411.4 419.7 420.4 434.9 424.5 412.9 404.2 404.3 440.0 414.9 Not seasonally adjusted Assets 29 Bank credit 4,816.8 5,049.4 5,096.1 5,160.8 5,162.0 5,191.4 5,257.0 5,287.0 5,292.3 5,281.2 5,270.8 5,296.8 30 Securities in bank credit 1,277.2 1,299.8 1,308.9 1,327.7 1,314.6 1,317.6 1,344.9 1,365.7 1,375.8 1,363.8 1,357.6 1,364.2 31 U.S. government securities 814.4 812.3 805.8 801.6 789.6 787.2 788.3 789.0 791.3 787.2 783.6 792.0 32 Other securities 462.8 487.6 503.2 526.1 525.0 530.4 556.6 576.7 584.5 576.5 574.0 572.2 33 Loans and leases in bank credit2 ... 3,539.5 3,749.6 3,787.1 3,833.0 3,847.4 3,873.8 3,912.1 3,921.3 3,916.5 3,917.4 3,913.2 3,932.6 34 Commercial and industrial 1,007.8 .1,068.8 1,070.8 1,076.7 1,080.8 1,085.5 1,092.9 1,103.0 1,096.3 1,101.3 1,107.1 1,109.3 35 Real estate 1,495.3 1,611.4 1,626.5 1,638.5 1,641.5 1,655.1 1,659.1 1,656.7 1,657.6 1,655.4 1,654.7 1,660.0 36 Revolving home equity 104.5 119.3 120.6 122.8 125.9 127.5 128.9 129.8 129.5 129.7 129.9 130.3 37 Other 1,390.8 1,492.1 1,506.0 1,515.7 1,515.6 1,527.7 1,530.1 1,526.9 1,528.1 1,525.6 1,524.8 1,529.7 38 Consumer 503.8 516.6 528.0 533.9 530.8 535.6 543.9 546.8 544.1 547.4 547.7 547.0 39 Credit cards and related plans. . n.a. 197.0 205.1 209.0 205.6 209.3 218.5 219.3 218.1 219.9 219.6 217.8 40 Other n.a. 319.6 322.9 324.9 325.2 326.3 325.4 327.5 326.0 327.5 328.1 329.2 41 Security3 147.3 148.5 152.8 171.6 180.4 180.4 190.7 188.6 191.1 184.3 182.4 193.1 42 Other loans and leases 385.3 404.3 409.0 412.3 413.8 417.1 425.6 426.3 427.5 429.1 421.2 423.4 43 Interbank loans 219.6 235.9 235.9 231.1 241.7 252.1 260.2 271.3 267.2 261.5 279.7 276.3 44 Cash assets4 307.1 262.5 259.4 264.9 268.7 263.3 286.1 288.3 274.3 321.6 269.4 276.8 45 Other assets5 374.2 395.7 398.5 401.1 410.8 404.5 407.2 420.6 419.8 417.4 417.9 427.4 46 Total assets6 5,658.8 5,882.5 5,927.7 5,9953 6,021.2 6,048.8 6,146.9 6,203.2 6,190.0 6,217.7 6,173.7 6,213.0 Liabilities 47 Deposits 3,506.0 3,700.5 3,719.9 3,753.4 3,777.5 3,801.5 3,889.8 3,903.8 3,915.5 3,945.1 3,835.0 3.885.1 48 Transaction 657.2 604.9 601.0 602.6 604.5 605.5 628.1 617.4 591.7 641.9 597.3 626.8 49 Nontransaction 2,848.8 3,095.6 3,118.9 3,150.8 3,173.0 3,196.1 3,261.7 3,286.4 3,323.8 3,303.2 3,237.7 3,258.3 50 Large time 855.6 904.7 914.0 909.4 912.1 922.6 945.5 956.2 968.4 959.4 949.0 945.3 51 Other 1,993.2 2,190.9 2,205.0 2,241.4 2,260.9 2,273.5 2,316.2 2,330.2 2,355.3 2,343.8 2,288.7 2,313.0 52 Borrowings 1,156.7 1,209.9 1,202.0 1,218.2 1,215.4 1,219.0 1,252.2 1,288.2 1,252.6 1,260.3 1,322.6 1,326.0 53 From banks in the U.S 363.5 387.4 385.2 373.8 369.3 369.3 397.8 406.3 402.4 396.0 412.7 412.3 54 From others 793.3 822.5 816.8 844.4 846.2 849.7 854.4 881.9 850.3 864.3 909.9 913.6 55 Net due to related foreign offices .... 230.8 253.4 267.0 264.1 253.0 246.6 230.7 225.5 225.1 216.3 239.8 221.7 56 Other liabilities 292.4 296.2 317.7 339.6 348.8 351.1 350.8 369.2 381.9 377.8 358.8 364.3 57 Total liabilities 5,185.9 5,460.0 5,506.7 5,5753 5,594.7 5,6183 5,723.4 5,786.6 5,775.1 5,799.6 5,1562 5,797.0 58 Residual (assets less liabilities)7 472.9 422.5 421.1 420.0 426.5 430.5 423.4 416.6 414.9 418.0 4)7.5 416.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A16 Domestic Financial Statistics • April 2001 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued B. Domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 2000 2000r 2001 2001 Jan.r July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 10 Jan. 17 Jan. 24 Jan. 31 Seasonally adjusted Assets 1 Bank credit 4,243.8 4,498.7 4,537.9 4,579.6 4,566.7 4,584.3 4,624.1 4,649.1 4,654.9 4,645.5 4,642.9 4,651.9 7 Securities in bank credit 1,065.4 1,107.3 1,110.4 1,123.0 1,116.5 1,117.2 1,132.2 1,149.9 1,153.1 1,150.3 1,147.1 1,150.0 U.S. government securities 731.6 741.4 734.9 732.0 724.5 718.1 718.6 720.8 721.4 720.3 716.5 723.0 4 Other securities 333.8 365.9 375.4 391.0 392.0 399.1 413.5 429.1 431.7 430.1 430.6 427.0 Loans and leases in bank credit2 3,178.4 3,391.4 3,427.5 3,456.7 3,450.3 3,467.1 3,492.0 3.499.3 3,501.8 3,495.1 3,495.7 3,501.9 6 Commercial and industrial 815.5 868.5 874.6 876.7 878.3 879.5 885.1 893.3 891.5 892.8 896.1 895.2 7 Real estate 1,474.0 1,596.5 1,607.9 1,619.2 1,617.6 1,628.4 1,635.0 1,634.0 1,633.8 1,629.5 1,633.4 1,639.9 8 Revolving home equity 104.3 119.2 120.4 122.1 125.4 127.0 128.5 129.5 129.2 129.3 129.6 130.1 9 Other 1,369.7 1,477.3 1,487.6 1,497.1 1,492.3 1,501.4 1,506.6 1,504.5 1,504.6 1,500.2 1,503.8 1,509.8 in Consumer 496.7 520.1 529.1 533.1 533.1 536.6 538.0 540.6 537.7 540.9 541.7 541.8 11 Security3 76.4 70.0 76.4 84.5 75.0 75.3 80.4 73.9 80.5 73.2 69.2 68.6 17 Other loans and leases 315.8 336.3 339.4 343.1 346.2 347.3 353.4 357.5 358.2 358.7 355.4 356.5 n Interbank loans 190.0 216.4 223.6 213.7 220.9 220.5 226.0 241.2 233.1 230.2 255.7 248.1 14 Cash assets4 241.2 225.9 226.3 223.5 224.3 215.5 225.8 230.2 228.1 240.7 221.1 232.4 15 Other assets5 337.5 353.5 356.6 358.7 376.5 367.6 371.6 385.1 388.5 383.8 388.6 383.2 16 Total assets6 4,953.7 5,233.7 5,282.8 5,313.5 5,326.8 5,325.9 5,384.3 5,441.7 5,441.0 5,436.3 5,444.0 5,451.4 Liabilities 17 Deposits 3,113.3 3,335.0 3,357.4 3.382.5 3,401.7 3,391.0 3,465.1 3,500.4 3,496.1 3,514.2 3,472.6 3,510.0 18 Transaction 634.9 600.1 605.8 599.1 602.0 587.2 586.7 596.7 573.4 602.4 600.5 621.3 19 Nontransaction 2,478.3 2,734.9 2,751.6 2,783.4 2,799.7 2,803.8 2,878.4 2,903.8 2,922.8 2,911.8 2,872.1 2,888.7 70 Large time 475.0 544.9 549.5 545.8 545.3 543.9 559.2 563.2 567.7 561.5 560.4 560.4 71 Other 2,003.3 2,190.0 2,202.2 2,237.7 2,254.4 2,259.8 2,319.2 2,340.6 2,355.1 2,350.2 2,311.7 2,328.3 77 Borrowings 960.2 1,019.3 1,028.9 1,005.5 992.0 984.9 998.7 1,025.4 1,011.7 1,003.0 1,049.1 1,041.0 From banks in the U.S 339.8 369.2 372.4 354.2 350.7 345.8 367.4 375.4 374.8 368.3 380.7 377.0 24 From others 620.4 650.1 656.5 651.3 641.3 639.2 631.3 649.9 636.9 634.7 668.4 664.0 75 Net due to related foreign offices .... 191.4 243.7 246.4 245.0 235.3 235.4 226.3 218.3 232.0 216.9 210.9 208.8 26 Other liabilities 219.1 223.9 242.8 260.4 269.3 275.3 275.7 290.0 300.1 300.0 282.8 282.1 27 Total liabilities 4,483.9 4,821.9 4,875.5 4,893.3 4,898.4 4,886.6 4,965.8 5,034.0 5,040.0 5,034.0 5,015.4 5,041.9 28 Residual (assets less liabilities)7 469.8 411.9 407.2 420.2 428.5 439.3 418.5 407.7 401.0 402.3 428.6 409.5 Not seasonally adjusted Assets 29 Bank credit 4,260.1 4,478.0 4,518.9 4,567.1 4,571.4 4,601.0 4,646.6 4,663.8 4,670.1 4,666.3 4,649.1 4,663.4 30 Securities in bank credit 1,070.0 1,096.8 1.103.4 1,117.5 1,113.4 1.121.3 1,137.8 1,154.2 1,158.1 1,154.9 1,150.1 1,154.6 31 U.S. government securities 732.8 734.0 727.7 726.1 719.8 719.3 719.2 721.8 722.1 721.1 717.1 726.1 32 Other securities 337.3 362.8 375.8 391.5 393.6 402.1 418.6 432.4 436.0 433.8 433.0 428.5 33 Loans and leases in bank credit2 3,190.1 3,381.2 3,415.5 3,449.5 3,458.1 3,479.6 3,508.8 3,509.6 3,512.0 3,511.4 3,499.0 3,508.8 34 Commercial and industrial 811.5 866.2 866.9 872.7 877.7 880.3 883.7 889.1 885.5 888.4 890.2 892.5 35 Real estate 1,477.9 1,592.9 1,608.2 1,619.9 1,623.0 1,636.3 1,640.3 1,637.9 1,638.9 1.636.5 1,635.8 1,641.1 36 Revolving home equity 104.5 119.3 120.6 122.8 125.9 127.5 128.9 129.8 129.5 129.7 129.9 130.3 37 Other 1,373.3 1,473.6 1,487.6 1,497.0 1,497.1 1.508.9 1,511.4 1,508.0 1,509.3 1,506.8 1,506.0 1,510.8 38 Consumer 503.8 516.6 528.0 533.9 530.8 535.6 543.9 546.8 544.1 547.4 547.7 547.0 39 Credit cards and related plans. . n.a. 197.0 205.1 209.0 205.6 209.3 218.5 219.3 218.1 219.9 219.6 217.8 40 Other n.a. 319.6 322.9 324.9 325.2 326.3 325.4 327.5 326.0 327.5 328.1 329.2 41 Security3 80.1 67.3 71.1 77.8 79.4 78.4 84.2 77.7 84.7 78.0 71.8 73.0 42 Other loans and leases 316.8 338.1 341.2 345.3 347.1 349.0 356.7 358.2 358.8 361.1 353.4 355.2 43 Interbank loans 190.7 212.5 213.7 207.4 214.7 225.4 233.3 242.2 235.9 234.8 249.2 247.6 44 Cash assets4 253.1 218.3 215.5 220.0 224.5 221.0 241.3 242.0 226.0 274.8 224.0 231.9 45 Other assets5 334.7 354.8 355.6 357.9 370.1 364.6 369.3 382.0 381.2 379.8 380.2 387.0 46 Total assets6 4,980.1 5,202.8 5,241.9 5,290.1 5,319.1 5,349.8 5,427.3 5,466.3 5,450.0 5,492.1 5,438.8 5,466.0 Liabilities 47 Deposits 3,120.1 3,319.2 3,337.1 3,372.7 3,399.2 3,417.2 3,497.3 3,504.4 3,508.6 3,541.5 3,439.6 3,494.4 48 Transaction 646.3 593.7 590.2 592.3 593.8 594.7 617.2 607.0 581.0 631.6 586.9 616.9 49 Nontransaction 2,473.8 2,725.5 2,746.9 2,780.5 2.805.4 2.822.5 2,880.1 2,897.4 2,927.6 2,909.9 2,852.7 2,877.4 50 Large time 480.6 536.8 544.1 541.3 546.8 551.2 566.1 569.4 574.4 568.3 566.2 566.6 51 Other 1,993.2 2,188.7 2.202.8 2,239.2 2.258.7 2.271.3 2,314.0 2,328.0 2,353.1 2,341.6 2,286.5 2,310.8 52 Borrowings 978.8 1,006.9 1,001.7 1.001.3 993.9 994.0 1,009.4 1,042.9 1,006.1 1,027.0 1,080.2 1,067.1 53 From banks in the U.S 343.7 366.4 368.0 353.9 349.8 349.3 373.1 378.4 371.1 373.5 387.3 381.5 54 From others 635.1 640.5 633.7 647.4 644.1 644.8 636.4 664.5 635.0 653.5 692.8 685.7 55 Net due to related foreign offices .... 192.7 236.1 243.8 240.6 236.3 239.0 227.7 218.7 226.1 212.8 224.9 212.2 56 Other liabilities 218.8 223.1 242.8 260.1 268.9 275.3 276.0 289.6 300.4 299.1 282.0 281.6 57 Total liabilities 4,510.4 4,785.3 4,825.4 4,874.7 4,898.2 4,925.5 5,010.4 5,055.6 5,041.3 5,080.3 5,026.7 5,055.4 58 Residual (assets less liabilities)7 469.7 417.5 416.5 415.4 420.9 424.2 416.9 410.7 408.7 411.7 412.1 410.7 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Commercial Banking Institutions—Assets and Liabilities 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 2000 2000r 2001 2001 Jan.r July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 10 Jan. 17 Jan. 24 Jan. 31 Seasonally adjusted Assets 1 Bank credit 2,395.4 2,522.4 2,540.0 2,562.6 2,539.0 2,537.8 2,556.4 2,564.1 2,573.4 2,561.3 2,556.4 2,563.1 ? Securities in bank credit 556.4 580.5 578.7 586.7 576.9 572.8 580.8 591.5 594.1 592.4 588.6 591.7 U.S. government securities 361.6 366.3 362.2 360.3 354.1 347.6 350.8 352.5 352.0 352.3 349.6 354.9 4 Trading account 20.5 24.4 23.8 23.3 21.2 20.5 29.1 33.3 36.4 29.7 29.8 36.4 5 Investment account 341.0 341.9 338.4 337.0 333.0 327.1 321.7 319.1 315.6 322.6 319.8 318.5 6 Other securities 194.8 214.2 216.5 226.4 222.7 225.2 230.0 239.0 242.1 240.1 239.0 236.9 7 Trading account 81.5 97.2 102.5 114.5 112.7 116.0 122.0 127.6 133.3 130.0 125.8 122.3 8 Investment account 113.3 117.0 113.9 112.0 110.1 109.3 108.0 111.4 108.8 110.1 113.2 114.6 i9n O St t a h t e e r and local government . 2 89 4 . . 0 4 9 2 0 6 . . 9 1 2 88 5 . . 1 9 8 2 6 5 . . 2 8 8 2 3 6 . . 9 1 2 82 6 . . 9 3 2 81 6 . . 3 7 2 84 7 . . 2 2 2 81 7 . . 5 3 2 8 7 3 . . 1 1 8 2 6 7 . . 0 2 2 87 7 . . 4 2 1i?1 . Lo C an o s m a m nd e rc le ia a l s e a s n d in i b n a d n u k s tr c i r a e l dit2 . . . 1, 5 8 5 3 9 9 . . 3 0 1, 5 9 8 4 6 1 . . 6 9 1, 5 9 8 6 9 1 . . 7 3 1, 5 9 9 7 0 5 . . 0 9 1, 5 9 8 6 9 2 . . 3 1 1, 5 9 8 6 7 4 . . 5 9 1, 5 9 9 7 2 5 . . 4 6 1, 5 9 9 7 7 2 . . 3 6 1, 5 9 9 7 6 9 . . 1 3 1. 5 9 9 6 6 8 . . 9 9 1, 6 9 0 6 0 7 . . 1 8 1, 5 9 9 7 8 1 . . 6 4 13 Bankers acceptances 1.0 1.0 .9 .9 .8 .9 .9 .8 .8 .9 .8 .8 1145 Re O al th e e s r t ate 5 75 5 9 8 . . 7 3 5 8 8 1 5 6. . 9 7 5 82 8 2 8 . . 7 8 5 8 8 2 9 3 . . 1 7 5 8 8 1 8 5. . 8 5 5 81 8 8 6 . . 5 7 5 8 9 1 1 7 . . 5 0 5 81 9 3 6 . . 4 5 5 8 9 14 5 . . 5 3 5 8 9 10 6 . . 0 0 5 8 9 1 9 2. . 3 3 5 8 9 1 7 6. . 9 8 16 Revolving home equity 66.9 78.0 78.9 77.8 79.8 81.0 81.9 82.2 82.0 82.1 82.3 82.5 17 Other 692.8 739.0 743.8 746.0 735.9 737.5 735.1 731.2 732.5 727.9 730.1 734.4 1189 C Se o c n u s r u it m y3 e r 22 7 1 0. . 2 5 2 6 3 3 0 . . 2 8 2 6 3 9 3 . . 3 0 23 7 4 7 . . 1 5 2 6 3 7 6 . . 7 2 2 6 3 8 7 . . 0 8 2 7 3 2 7 . . 6 0 2 6 3 6 6 . . 4 2 2 7 3 2 5 . . 9 3 2 6 3 5 6 . . 6 0 2 6 3 2 6 . . 0 2 2 6 3 1 7 . . 0 0 20 Federal funds sold to and repurchase agreements 21 Othe w r ith broker-dealers 4 20 9 . . 3 9 4 1 4 8 . . 6 6 5 1 0 8 . . 7 6 5 1 8 9 . . 2 3 4 1 9 8 . . 1 6 5 1 0 7 . . 0 9 5 1 6 6 . . 1 5 4 1 9 7 . . 0 4 5 1 5 6 . . 9 9 4 1 7 7 . . 7 9 4 1 4 7 . . 1 9 4 1 3 7 . . 4 5 22 State and local government 12.2 12.4 12.5 12.6 12.6 12.6 12.4 12.6 12.7 12.6 12.6 12.7 23 Agricultural 9.3 9.5 9.6 9.4 9.4 9.5 9.7 9.8 9.7 9.8 9.8 9.8 24 Federal funds sold to and repurchase agreements with others 11.9 12.9 14.1 16.2 16.9 19.0 20.9 25.7 2277..77 2266..44 23.6 24.5 25 All other loans 76.8 84.4 84.3 85.5 85.5 83.0 84.4 83.0 82.4 83.6 83.1 82.6 26 Lease-financing receivables 118.1 125.0 126.1 126.7 128.6 129.0 129.0 128.2 128.1 128.1 128.1 128.3 27 Interbank loans 131.5 142.6 141.0 131.5 137.0 140.8 140.4 153.6 147.1 143.5 168.5 159.0 28 Federal funds sold to and repurchase agreements with commercial banks 54.9 74.7 66.9 57.2 58.3 61.5 64.1 77.3 71.6 65.8 94.9 80.6 29 Other 76.5 67.9 74.1 74.3 78.7 79.3 76.3 76.4 75.6 77.7 73.6 78.4 30 Cash assets4 149.3 145.1 145.1 142.0 142.5 137.4 144.3 146.3 143.7 154.5 140.8 147.4 31 Other assets5 238.2 243.2 246.9 249.5 263.3 259.4 257.2 264.1 263.0 266.2 264.7 263.2 32 Total assets6 2,8793 3,018.1 3,037.5 3,049.9 3,046.4 3,039.9 3,061.8 3,090.8 3,090.4 3,088.2 3,092.9 3,095.4 Liabilities 33 Deposits 1,614.9 1.649.7 1,644.8 1,644.5 1,647.7 1,631.6 1,662.2 1,670.5 1,668.1 1,682.2 1,651.3 1,673.1 34 Transaction 317.8 303.7 305.7 301.9 304.1 294.0 294.9 299.6 286.5 305.6 298.1 313.6 35 Nontransaction 1,297.1 1,346.0 1,339.1 1,342.7 1,343.6 1,337.6 1,367.3 1,370.9 1,381.7 1,376.6 1,353.2 1,359.6 36 Large time 233.4 268.3 266.6 258.6 255.5 251.3 261.4 263.5 267.0 263.4 261.8 259.2 37 Other 1,063.7 1,077.7 1,072.4 1,084.0 1,088.1 1,086.3 1,105.9 1,107.4 1,114.7 1,113.2 1,091.5 1,100.3 38 Borrowings 634.8 679.4 689.9 672.0 665.0 662.0 670.6 682.6 668.4 665.4 700.6 697.6 39 From banks in the U.S 188.6 205.3 207.7 192.3 196.6 194.0 212.5 215.6 213.5 211.4 218.0 217.8 40 From others 446.2 474.1 482.3 479.7 468.3 468.0 458.2 467.1 454.9 454.1 482.6 479.8 41 Net due to related foreign offices 191.4 221.3 222.7 224.4 211.9 211.8 205.4 201.4 212.4 201.9 195.1 192.3 42 Other liabilities 160.0 178.0 194.8 209.6 216.5 221.1 221.6 236.0 246.7 245.7 228.1 228.5 43 Total liabilities 2,601.1 2,7283 2,752.2 2,750.5 2,741.0 2,726.5 2,759.9 2,790.6 2,795.5 2,795.2 2,775.1 2,791.6 44 Residual (assets less liabilities)7 278.2 289.8 285.3 299.4 305.4 313.4 301.9 300.3 294.8 293.0 317.8 303.8 Footnotes appear on p. A2 J. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A18 Domestic Nonfinancial Statistics • April 2001 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 2000 2000r 2001 2001 Jan.r July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 10 Jan. 17 Jan. 24 Jan. 31 Not seasonally adjusted Assets 45 Bank credit 2,418.2 2,500.9 2,517.6 2,545.7 2,541.7 2,553.9 2,577.1 2,585.7 2,596.1 2,587.6 2,569.9 2,584.3 46 Securities in bank credit 562.7 571.0 572.2 582.7 576.4 578.6 586.4 597.2 600.0 597.9 592.9 599.1 47 U.S. government securities 364.3 359.1 355.6 355.2 352.0 350.6 351.9 355.3 353.9 354.6 351.9 360.8 48 Trading account 21.2 22.6 23.1 22.6 21.1 21.8 28.9 34.5 36.7 31.6 31.2 38.5 49 Investment account 343.1 336.4 332.5 332.7 330.9 328.8 323.0 320.8 317.1 323.0 320.7 322.3 50 Mortgage-backed securities . . 218.5 212.4 208.0 208.4 210.4 210.8 212.7 219.0 218.0 220.6 218.7 220.1 51 Other 124.6 124.0 124.5 124.3 120.5 118.1 110.3 101.8 99.1 102.4 102.0 102.2 52 One year or less 24.2 31.4 32.5 33.2 32.0 32.6 31.3 31.4 29.8 31.4 32.3 32.6 53 One to five years 59.4 55.2 54.1 53.7 51.6 49.9 44.9 38.4 37.2 38.8 38.0 37.8 54 More than five years . . . 41.0 37.5 37.9 37.4 37.0 35.6 34.1 32.0 32.1 32.1 31.7 31.8 55 Other securities 198.4 212.0 216.6 227.5 224.4 228.0 234.5 241.9 246.2 243.3 241.0 238.3 56 Trading account 81.5 97.2 102.5 114.5 112.7 116.0 122.0 127.6 133.3 130.0 125.8 122.3 57 Investment account 116.9 114.7 114.1 113.0 111.7 112.0 112.5 114.3 112.8 113.3 115.3 116.0 58 State and local government . . 24.6 25.6 25.6 25.7 26.1 26.6 26.9 27.5 27.6 27.3 27.5 27.4 59 Other 92.3 89.2 88.5 87.3 85.6 85.4 85.6 86.8 85.2 86.0 87.8 88.6 60 Loans and leases in bank credit2 . . 1,855.5 1,929.9 1,945.5 1,963.0 1,965.3 1,975.4 1,990.8 1,988.5 1,996.1 1,989.7 1,977.0 1,985.2 61 Commercial and industrial 556.3 584.2 584.0 587.6 589.1 589.8 591.5 594.4 591.5 593.8 595.7 597.4 62 Bankers acceptances 1.0 1.0 .9 .9 .8 .9 .9 .8 .8 .9 .8 .8 63 Other 555.2 583.3 583.1 586.8 588.2 588.9 590.6 593.6 590.6 592.9 594.9 596.6 64 Real estate 765.9 812.3 820.2 821.3 817.7 823.7 823.0 819.9 823.2 818.8 816.9 821.0 65 Revolving home equity 67.2 78.2 79.2 78.1 80.1 81.2 82.1 82.6 82.5 82.5 82.6 82.8 66 Other 426.3 451.6 456.9 459.3 453.2 456.4 454.8 453.3 456.7 452.8 450.4 453.6 67 Commercial 272.4 282.4 284.1 283.9 284.4 286.2 286.1 284.0 284.0 283.5 283.8 284.6 68 Consumer 228.1 228.3 231.2 233.1 234.2 236.2 239.7 241.6 241.1 241.6 241.5 241.8 69 Credit cards and related plans. . n.a. 73.2 74.3 75.4 76.5 78.0 82.3 83.3 83.5 83.4 82.9 82.1 70 Other n.a. 155.2 156.9 157.7 157.7 158.2 157.5 158.4 157.5 158.2 158.7 159.7 71 Security3 73.9 60.6 64.0 70.8 72.1 71.0 76.4 70.2 77.1 70.4 64.6 65.4 72 Federal funds sold to and repurchase agreements with broker-dealers .... 54.3 41.9 45.7 51.8 53.8 53.6 59.7 53.4 60.9 52.7 47.3 48.6 73 Other 19.7 18.7 18.3 19.0 18.4 17.5 16.7 16.8 16.2 17.7 17.3 16.8 74 State and local government .... 12.2 12.4 12.7 12.8 12.8 12.7 12.5 12.6 12.6 12.6 12.5 12.6 75 Agricultural 9.3 9.7 9.7 9.6 9.6 9.6 9.7 9.8 9.8 9.8 9.7 9.7 7b Federal funds sold to and repurchase agreements with others 11.9 12.9 14.1 16.2 16.9 19.0 20.9 25.7 27.7 26.4 23.6 24.5 77 All other loans 77.7 85.1 84.5 86.4 85.4 85.5 88.4 84.0 82.8 85.9 82.3 82.5 78 Lease-financing receivables .... 120.3 124.3 125.1 125.1 127.5 127.7 128.6 130.4 130.4 130.5 130.2 130.3 79 Interbank loans 132.0 142.7 135.1 127.9 131.1 139.2 141.2 154.7 145.4 146.9 167.8 161.0 80 Federal funds sold to and repurchase agreements with commercial banks 56.4 74.0 63.1 55.5 56.5 62.2 65.2 79.1 71.3 69.6 94.7 83.9 81 Other 75.6 68.7 72.0 72.5 74.6 77.0 76.0 75.6 74.1 77.3 73.1 77.2 82 Cash assets4 159.9 138.8 137.1 138.9 142.9 139.7 155.0 156.4 142.8 182.3 145.4 148.8 83 Other assets5 237.2 242.6 244.1 249.0 256.9 254.9 255.4 263.9 259.5 265.2 262.5 268.2 84 Total assets A912.5 2,989.9 2,998.3 3,025.7 3,037.3 3,052.0 3,092.1 3,123.7 3,107.1 3,145.0 3,108.6 3,125.1 Liabilities 85 Deposits 1,626.3 1,639.2 1,629.1 1,636.8 1,642.3 1,644.8 1,685.2 1,681.5 1,682.2 1,710.0 1,639.3 1,672.1 86 Transaction 327.5 299.9 294.6 297.2 298.3 297.7 314.0 308.3 290.2 328.0 292.9 313.9 87 Nontransaction 1,298.8 1,339.3 1,334.5 1,339.6 1,344.0 1,347.1 1,371.3 1,373.2 1,391.9 1,382.0 1,346.4 1,358.2 88 Large time 239.0 260.2 261.3 254.1 257.0 258.6 268.3 269.7 273.7 270.2 267.5 265.4 89 Other 1,059.8 1,079.1 1,073.2 1,085.4 1,087.0 1,088.5 1,103.0 1,103.5 1,118.2 1,111.8 1,078.8 1,092.8 90 Borrowings 655.0 664.5 659.6 661.9 663.9 669.0 677.2 702.7 671.9 690.3 730.4 724.4 91 From banks in the U.S 193.1 200.0 200.4 188.4 193.1 196.5 215.5 219.8 214.0 216.9 224.0 223.4 92 From nonbanks in the U.S 461.9 464.5 459.2 473.6 470.8 472.5 461.7 482.9 457.9 473.5 506.3 501.0 93 Net due to related foreign offices .. . 192.7 213.7 220.1 220.0 212.8 215.3 206.8 201.9 206.4 197.8 209.1 195.8 94 Other liabilities 160.0 178.0 194.8 209.6 216.5 221.1 221.6 236.0 246.7 245.7 228.1 228.5 95 Total liabilities 2,634.0 2,695.4 2,703.6 2,728.3 2,7355 2,7503 2,790.9 2,822.1 2,807.1 2,843.8 2,806.8 2,820.8 96 Residual (assets less liabilities)1 278.6 294.6 294.7 297.4 301.9 301.7 301.3 301.6 300.0 301.3 301.7 304.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Commercial Banking Institutions—Assets and Liabilities A19 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 2000 2000r 2001 2001 Jan.r July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 10 Jan. 17 Jan. 24 Jan. 31 Seasonally adjusted Assets 1 Bank credit 1,848.5 1,976.3 1,997.9 2,017.1 2,027.8 2,046.6 2,067.7 2,085.1 2,081.5 2,084.2 2,086.5 2,088.8 2 Securities in bank credit 509.1 526.8 531.7 536.3 539.6 544.3 551.4 558.4 559.0 557.9 558.5 558.3 3 US. government securities 370.0 375.1 372.7 371.7 370.3 370.5 367.8 368.3 369.3 368.0 366.9 368.1 4 Other securities 139.0 151.6 159.0 164.6 169.3 173.9 183.6 190.1 189.6 189.9 191.6 190.1 5 Loans and leases in bank credit2 1,339.4 1,449.5 1,466.2 1,480.8 1,488.2 1,502.2 1,516.3 1,526.6 1,522.5 1,526.3 1,527.9 1,530.5 6 Commercial and industrial 256.2 281.9 284.9 286.7 289.0 292.0 292.7 295.9 295.4 295.9 296.0 296.6 7 Real estate 714.3 779.5 785.2 795.4 801.8 809.9 818.0 820.6 819.3 819.5 821.1 823.0 8 Revolving home equity 37.4 41.3 41.5 44.3 45.5 45.9 46.5 47.3 47.2 47.2 47.3 47.6 9 Other 677.0 738.3 743.8 751.1 756.3 763.9 771.5 773.3 772.1 772.3 773.7 775.4 10 Consumer 275.2 289.3 296.1 299.0 296.9 298.8 300.9 304.4 302.4 305.0 305.5 304.7 11 Security3 6.2 6.7 7.1 7.1 7.3 7.4 7.8 7.6 7.7 7.6 7.2 7.6 12 Other loans and leases 87.5 92.0 92.9 92.6 93.1 94.2 96.9 98.2 97.7 98.3 98.2 98.6 13 Interbank loans 58.5 73.8 82.6 82.2 83.9 79.7 85.6 87.5 85.9 86.8 87.2 89.0 14 Cash assets4 91.9 80.8 81.2 81.5 81.8 78.1 81.5 84.0 84.4 86.2 80.3 85.0 15 Other assets5 99.4 110.4 109.7 109.3 113.3 108.1 114.4 121.0 125.5 117.7 123.9 120.0 16 Total assets6 2,074.4 2,215.7 2,2453 2,263.6 2,280.5 2,286.0 2322.5 2350.9 2350.7 2348.1 2,351.0 2356.1 Liabilities 17 Deposits 1,498.3 1,685.3 1,712.6 1,738.0 1,754.0 1,759-4 1,802.9 1,829.9 1,828.0 1,832.0 1,821.3 1,836.9 18 Transaction 317.2 296.4 300.0 297.2 297.8 293.3 291.8 297.1 286.9 296.8 302.5 307.8 19 Nontransaction 1,181.2 1,388.9 1,412.6 1,440.8 1,456.2 1,466.1 1,511.1 1,532.8 1,541.1 1,535.2 1,518.8 1,529.1 20 Large time 241.6 276.6 282.8 287.1 289.8 292.6 297.8 299.7 300.7 298.1 298.7 301.2 21 Other 939.6 1,112.3 1,129.7 1,153.6 1,166.4 1,173.5 1,213.2 1,233.1 1,240.4 1,237.1 1,220.2 1,228.0 22 Borrowings 325.5 340.0 339.0 333.5 327.1 322.9 328.0 342.7 343.3 337.5 348.5 343.4 23 From banks in the U.S 151.2 164.0 164.7 161.9 154.1 151.8 154.9 159.9 161.3 156.9 162.7 159.3 24 From others 174.3 176.0 174.2 171.6 173.0 171.1 173.1 182.9 182.0 180.6 185.8 184.2 25 Net due to related foreign offices .... 0.0 22.4 23.7 20.6 23.4 23.7 20.9 16.8 19.7 15.0 15.7 16.4 26 Other liabilities 59.1 45.9 48.1 50.8 52.8 54.2 54.1 54.0 53.5 54.3 54.7 53.5 27 Total liabilities 1,882.9 2,093.6 2,1233 2,142.8 2,157.4 2J60.2 2,205.9 2,243.5 2,244.5 2,238.8 2,2403 2,2503 28 Residual (assets less liabilities)7 191.6 122.1 122.0 120.8 123.1 125.8 116.6 107.4 106.2 109.3 110.8 105.8 Not seasonally adjusted Assets 29 Bank credit 1,842.0 1.977.1 2,001.3 2,021.4 2,029.7 2,047.0 2,069.5 2,078.1 2,074.0 2,078.8 2,079.2 2,079.1 30 Securities in bank credit 507.3 525.8 531.3 534.8 537.0 542.8 551.4 557.0 558.0 557.0 557.2 555.5 31 U.S. government securities 368.5 375.0 372.1 370.8 367.8 368.7 367.3 366.5 368.2 366.5 365.2 365.3 32 Other securities 138.8 150.9 159.2 164.0 169.2 174.1 184.1 190.5 189.8 190.5 192.0 190.2 33 Loans and leases in bank credit2 1,334.6 1,451.3 1,470.0 1,486.6 1,492.8 1,504.3 1,518.0 1,521.1 1,515.9 1,521.7 1,522.0 1,523.6 34 Commercial and industrial 255.3 282.0 282.9 285.0 288.6 290.5 292.2 294.7 294.1 294.6 294.5 295.2 35 Real estate 712.0 780.6 788.0 798.6 805.3 812.6 817.3 818.0 815.6 817.7 819.0 820.1 36 Revolving home equity 37.3 41.1 41.4 44.7 45.8 46.3 46.8 47.2 47.0 47.2 47.2 47.4 37 Other 674.7 739.5 746.6 753.8 759.4 766.3 770.5 770.8 768.6 770.5 771.7 772.6 38 Consumer 275.8 288.3 296.8 300.7 296.6 299.4 304.2 305.1 303.0 305.9 306.2 305.1 39 Credit cards and related plans. . n.a. 123.9 130.9 133.6 129.1 131.3 136.2 136.0 134.5 136.5 136.8 135.7 40 Other n.a. 164.4 165.9 167.1 167.5 168.1 168.0 169.1 168.5 169.3 169.5 169.5 41 Security3 6.2 6.7 7.1 7.1 7.3 7.4 7.8 7.6 7.7 7.6 7.2 7.6 42 Other loans and leases 85.5 93.6 95.2 95.2 94.9 94.4 96.6 95.7 95.6 95.9 95.1 95.6 43 Interbank loans 58.7 69.8 78.6 79.5 83.6 86.3 92.1 87.5 90.5 87.9 81.4 86.5 44 Cash assets4 93.3 79.4 78.4 81.1 81.6 81.3 86.3 85.6 83.2 92.5 78.6 83.1 45 Other assets5 97.5 112.3 111.5 108.9 113.2 109.6 113.9 118.2 121.7 114.6 117.7 118.9 46 Total assets6 2,067.6 2^12.9 2,243.6 2,264.4 2,281.8 2,297.8 2335.1 2342.6 2,342.8 2,347.0 2330.2 2340.9 Liabilities 47 Deposits 1,493.8 1,680.0 1,707.9 1,736.0 1,756.9 1,772.4 1,812.0 1,822.9 1,826.4 1,831.5 1,800.3 1,822.3 48 Transaction 318.8 293.8 295.6 295.0 295.5 297.0 303.2 298.7 290.8 303.6 294.0 303.1 49 Nontransaction 1,175.0 1,386.2 1,412.4 1,440.9 1,461.4 1,475.4 1,508.8 1,524.2 1,535.6 1.528.0 1,506.3 1,519.2 50 Large time 241.6 276.6 282.8 287.1 289.8 292.6 297.8 299.7 300.7 298.1 298.7 301.2 51 Other 933.4 1,109.6 1,129.5 1,153.8 1,171.6 1,182.8 1,211.0 1,224.5 1,234.9 1,229.9 1,207.7 1,218.0 52 Borrowings 323.8 342.4 342.1 339.3 330.0 325.1 332.2 340.1 334.3 336.6 349.8 342.8 53 From banks in the U.S 150.6 166.4 167.6 165.5 156.7 152.8 157.6 158.6 157.1 156.6 163.3 158.1 54 From others 173.2 176.0 174.5 173.8 173.3 172.3 174.7 181.6 177.2 18&0 186.5 184.7 55 Net due to related foreign offices .... 0.0 22.4 23.7 20.6 23.4 23.7 20.9 16.8 19.7 15.0 15.7 16.4 56 Other liabilities 58.8 45.1 48.0 50.5 52.4 54.2 54.4 53.6 53.8 53.4 54.0 53.1 57 Total liabilities 1,876.4 2,090.0 2,121.8 2,146.4 2,162.8 2,1753 2,219.5 2,233.5 2,234.2 2,236.6 2,219.9 2,234.6 58 Residual (assets less liabilities)7 191.2 122.9 121.8 118.1 119.0 122.5 115.6 109.1 108.7 110.5 110.3 106.3 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A20 Domestic NonfinancialS tatistics • April 2001 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued E. Foreign-related institutions Billions of dollars Monthly averages Wednesday figures Account 2000 2000r 2001 2001 Jan. July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 10 Jan. 17 Jan. 24 Jan. 31 Seasonally adjusted Assets 1 Bank credit 548.7r 582.3 587.0 594.5 581.7 576.3 599.4 614.0 612.4 604.9 616.4 624.5 2 Securities in bank credit 203.2r 210.1 211.3 210.1 193.8 185.6 203.0 206.5 211.8 203.6 203.9 204.2 3 U.S. government securities 81.1 79.3 79.7 77.7 70.2 66.6 67.9 66.6 68.1 65.1 66.8 65.6 4 Other securities 122.1r 130.8 131.5 132.5 123.5 119.0 135.1 139.8 143.7 138.5 137.2 138.6 5 Loans and leases in bank credit2 . . . 345.6 372.3 375.7 384.4 388.0 390.8 396.4 407.6 400.6 401.3 412.4 420.3 6 Commercial and industrial 194.7 205.1 206.5 204.1 , 201.7 201.9 205.1 212.3 208.7 211.4 216.5 215.8 7 Real estate 17.3r 18.7 18.6 18.9 18.2 18.8 18.8 18.6 18.5 18.6 18.7 18.7 8 Security3 66.8 81.4 81.5 93.9 101.6 102.8 106.0 110.3 106.6 105.3 110.6 119.0 9 Other loans and leases 66.8 67.1 69.1 67.5 66.5 67.4 66.4 66.4 66.8 66.1 66.7 66.8 10 Interbank loans 29.0 23.5 22.2 23.6 27.0 26.7 26.8 29.1 31.3 26.7 30.5 28.7 11 Cash assets4 51.8 45.9 45.4 45.8 43.4 39.8 41.3 44.4 45.8 44.4 43.8 44.1 12 Other assets5 38.0r 42.8 43.7 44.0 41.5 39.9 35.8 37.0 36.6 36.0 36.5 38.7 13 Total assets6 667.2r 694.2 698.0 707.6 6933 682.4 703.0 724.1 725.6 711.7 726.9 735.7 Liabilities 14 Deposits 379.0r 390.1 394.8 387.0 382.7 381.1 383.6 391.3 399.2 396.8 386.2 381.9 15 Transaction 10.7r 11.3 10.9 9.8 10.6 10.6 10.3 10.3 10.7 10.1 10.5 9.8 16 Nontransaction 368.3 378.8 383.9 377.2 372.1 370.5 373.3 381.0 388.5 386.7 375.7 372.0 17 Borrowings 177.9 203.0 200.3 217.0 221.6 225.0 242.7 245.3 246.5 233.4 242.4 258.8 18 From banks in the U.S 19.8r 21.1 17.2 20.0 19.5 20.0 24.7 27.9 31.2 22.5 25.3 30.9 19 From others 158.2r 181.9 183.1 197.0 202.1 204.9 218.0 217.4 215.2 210.9 217.1 228.0 20 Net due to related foreign offices 35.8r 18.2 23.3 24.2 16.6 6.0 -2.0 4.7 -3.1 2.3 12.0 9.2 21 Other liabilities 71.9r 74.7 75.4 79.9 80.6 74.7 72.7 77.7 79.9 77.1 74.9 80.4 22 Total liabilities 664.7r 686.0 693.8 708.0 701.4 686.8 697.1 718.9 722.4 709.7 7155 7303 23 Residual (assets less liabilities)7 2.5r 8.2 4.2 -.5 -8.1 -4.4 5.9 5.2 3.2 2.0 11.4 5.4 Not seasonally adjusted Assets 24 Bank credit 556.6r 571.4 577.2 593.7 590.5 590.4 610.4 623.2 622.2 614.9 621.7 633.4 25 Securities in bank credit 201.2' 203.0 205.5 210.2 201.2 196.3 207.1 211.5 217.7 208.9 207.5 209.6 26 U.S. government securities 81.6 78.2 78.1 75.6 69.8 68.0 69.1 67.2 69.2 66.1 66.5 65.9 27 Trading account 7.9 12.0 13.8 14.1 11.8 10.8 11.7 11.1 10.3 10.6 11.3 11.9 28 Investment account 73.8 66.2 64.3 61.4 58.1 57.1 57.4 56.1 58.9 55.5 55.2 53.9 29 Other securities 125.6r 124.8 127.4 134.7 131.4 128.3 138.0 144.3 148.5 142.7 141.0 143.7 30 Trading account 81. r 80.6 82.0 90.4 89.3 86.7 89.2 94.5 96.7 93.0 92.7 95.4 31 Investment account 44.5r 44.2 45.4 44.2 42.2 41.6 48.8 49.8 51.8 49.7 48.3 48.3 32 Loans and leases in bank credit2 . . . 349.4 368.4 371.7 383.5 389.3 394.2 403.3 411.7 404.5 406.0 414.2 423.8 33 Commercial and industrial 196.2 202.6 203.8 204.1 203.1 205.2 209.2 213.9 210.7 212.9 216.9 216.7 34 Real estate 17.5 18.4 18.4 18.7 18.5 18.8 18.7 18.8 18.7 18.8 18.9 18.9 35 Security3 67.2 81.2 81.7 93.7 101.0 102.0 106.5 110.9 106.4 106.3 110.6 120.0 36 Other loans and leases 68.5 66.2 67.8 67.0 66.7 68.1 68.9 68.2 68.7 68.0 67.7 68.2 37 Interbank loans 29.0 23.5 22.2 23.6 27.0 26.7 26.8 29.1 31.3 26.7 30.5 28.7 38 Cash assets4 54.0 44.3 43.9 44.9 44.2 42.3 44.8 46.4 48.3 46.8 45.5 44.9 39 Other assets5 39.5r 40.9 42.9 43.2 40.7 40.0 37.9 38.5 38.6 37.6 37.7 40.3 40 Total assets6 678.7r 679.6 68S.8 705.1 702.1 699.1 719.6 736.9 740.1 725.6 734.9 746.9 Liabilities 41 Deposits 385.9 381.3 382.9 380.6 378.2 384.3 392.5 399.4 406.9 403.7 395.4 390.8 42 Transaction 10.9 11.2 10.8 10.3 10.7 10.8 10.9 10.4 10.7 10.4 10.4 9.9 43 Nontransaction 375.0 370.1 372.0 370.3 367.5 373.6 381.6 389.0 396.2 393.3 384.9 380.9 44 Borrowings 177.9 203.0 200.3 217.0 221.6 225.0 242.7 245.3 246.5 233.4 242.4 258.8 45 From banks in the U.S 19.8r 21.1 17.2 20.0 19.5 20.0 24.7 27.9 31.2 22.5 25.3 30.9 46 From others 158.2r 181.9 183.1 197.0 202.1 204.9 218.0 217.4 215.2 210.9 217.1 228.0 47 Net due to related foreign offices .... 38. lr 17.3 23.2 23.5 16.7 7.6 3.0 6.8 -1.0 3.5 14.9 9.4 48 Other liabilities 73.6r 73.1 74.9 79.5 79.9 75.9 74.8 79.5 81.5 78.7 76.8 82.6 49 Total liabilities 675.5r 674.7 6813 700.6 696.5 692.8 713.0 731.0 733.8 7193 7295 741.6 50 Residual (assets less liabilities)7 3.2r 5.0 4.5 4.5 5.6 6.3 6.5 5.9 6.2 6.3 5.4 5.3 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 Liabilities'—Continued F. Memo items Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2000 2000r 2001 2001 Jan. July Aug. Sept. Oct. Nov. Dec. Jan. Jan. 10 Jan. 17 Jan. 24 Jan. 31 Not seasonally adjusted MEMO Large domestically chartered banks, , adjusted for mergers 51 Revaluation gains on off-balance-sheet items8 62.4 63.1 66.5 74.4 70.9 68.0 78.4 80.6 88.4 83.1 77.8 71.9 52 Revaluation losses on off-balancesheet items8 61.7 62.9 67.3 73.9 72.8 72.6 83.1 82.5 91.0 85.1 79.0 73.5 53 Mortage-backed securities9 253.3 242.5 238.0 238.2 239.7 239.8 241.8 247.2 246.4 248.7 246.7 248.2 54 Pass-through 175.7r 173.3 170.0 170.6 173.5 173.9 177.2 182.4 181.7 184.0 181.9 183.2 55 CMO, REMIC, and other 11.(I 69.2 68.0 67.6 66.2 66.0 64.6 64.8 64.7 64.7 64.8 65.1 56 Net unrealized gains (losses) on available-for-sale securities10 .... -13.2 -12.4 -6.0 -4.2 -8.4 -7.5 -5.3 -3.0 -3.4 -3.4 -3.1 -2.1 57 Off-shore credit to U.S. residents''. . . . 23.2 22.2 22.1 22.1 22.3 23.1 23.4 23.0 23.2 22.9 23.0 23.0 58 Securitized consumers loans12 n.a. 87.3 86.6 85.9 80.8 80.5 82.2 82.4 82.6 83.0 82.1 82.3 59 Credit cards and related plans n.a. 72.4 72.0 71.8 67.2 67.3 68.6 68.5 68.5 69.0 68.2 68.5 60 Other n.a. 15.0 14.6 14.1 13.6 13.2 13.6 13.9 14.1 14.0 13.9 13.8 61 Securitized business loans'2 n.a. 17.0 16.2 15.3 15.2 17.8 18.6 18.4 18.5 18.3 18.2 18.6 Small domestically chartered commercial banks, adjusted for mergers 62 Mortgage-backed securities9 199.8r 207.2 210.1 211.6 212.4 213.7 214.9 217.7 218.2 216.7 216.5 219.4 63 Securitized consumer loans'2 n.a. 221.4 221.8 222.4 224.6 225.5 230.9 231.1 231.9 229.9 230.3 231.7 64 Credit cards and related plans n.a. 212.5 213.0 214.0 215.2 215.9 221.6 222.0 222.8 220.7 221.3 222.8 65 Other n.a. 8.9 8.7 8.4 9.4 9.6 9.3 9.1 9.2 9.2 9.0 8.9 Foreign-related institutions 66 Revaluation gains on off-balancesheet items8 42.4r 41.3 42.9 48.4 47.3 44.7 45.6 51.0 51.8 51.1 50.7 52.2 67 Revaluation losses on off-balancesheet items8 41.2r 38.2 40.2 45.1 44.7 41.0 41.7 47.5 48.3 47.5 46.3 49.9 68 Securitized business loans12 n.a. 23.9 23.7 23.1 23.0 22.8 23.1 23.2 23.3 23.4 23.2 22.9 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 • April 2001 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 1996 1997 1998 1999 2000 July Aug. Sept. Oct. Nov. Dec. 1 All issuers 775,371 966,699 1,163,303 1,403,023 1,615,341 1,551,668 1,559,054 1,557,700 1,587,591 1,624,421 1,615,341 Financial companies' 2 Dealer-placed paper, total2 361,147 513,307 614,142 786,643 973,060 900,651 905,634 899,853 912,739 960,701 973,060 3 Directly placed paper, total3 229,662 252,536 322,030 337,240 298,848 309,076 303,307 315,039 328,049 312,438 298,848 4 Nonfinancial companies4 184,563 200,857 227.132 279,140 343,433 341,941 350,113 342,809 346,803 351,282 343,433 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 Date of change Av r e a r te a ge Av r e a r te a ge 1998—Jan. 1 8.50 8.35 1999—Jan. . 7.75 2000—Jan. . Sept. 30 8.25 1999 8.00 Feb. 7.75 Feb. Oct. 16 8.00 2000 9.23 Mar. 7.75 Mar. Nov. 18 7.75 Apr. 7.75 Apr. 1998—Jan. . 8.50 May 7.75 May 1999—July 1 8.00 Feb. 8.50 June 7.75 June Aug. 25 8.25 Mar. 8.50 July . 8.00 July . Nov. 17 8.50 Apr. 8.50 Aug. 8.06 Aug. May 8.50 Sept. 8.25 Sept. 2000—Feb. 3 8.75 June 8.50 Oct. . 8.25 Oct. . Mar. 22 9.00 July . 8.50 Nov. 8.37 Nov. May 17 9.50 Aug. 8.50 Dec. 8.50 Dec. Sept. 8.49 2001—Jan. 4 9.00 Oct. . 8.12 2001—Jan. . Feb. 1 8.50 Nov. 7.89 Dec 7.75 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 2001 week 2001, week ending ending IItteemm 11999988 11999999 22000000 Oct. Nov. Dec. Jan. Dec. 29 Jan. 5 Jan. 12 Jan. 19 Jan. 26 MONEY MARKET INSTRUMENTS 1 5.35 4.97 6.24 6.51 6.51 6.40 5.98 6.48 5.88 5.91 6.02 5.96 2 Discount window borrowing2,4 4.92 4.62 5.73 6.00 6.00 6.00 5.52 6.00 5.96 5.50 5.50 5.50 Commercial paper3'5'6 Nonfinancial 3 5.40 5.09 6.27 6.48 6.49 6.51 5.74 6.45 6.12 5.73 5.74 55..6600 4 5.38 5.14 6.29 6.48 6.52 6.42 5.59 6.36 5.94 5.56 5.60 5.47 5 3-month 5.34 5.18 6.31 6.51 6.50 6.34 5.49 6.28 5.85 5.45 5.47 5.35 Financial 6 5.42 5.11 6.28 6.48 6.49 6.52 5.75 6.45 6.12 5.76 5.78 5.59 7 5.40 5.16 6.30 6.47 6.54 6.42 5.62 6.33 5.98 5.59 5.60 5.50 8 3-month 5.37 5.22 6.33 6.52 6.52 6.33 5.51 6.21 5.84 5.46 5.51 5.42 Commercial paper (historical)3,5'7 9 1-month n.a. 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 n.a. 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 n.a. 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 P 1-month 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 n.a. 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 n.a. 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 55..3399 55..2244 66..2233 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 6-month 5.30 5.30 6.37 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Certificates of deposit, secondary market310 17 5.49 5.19 6.35 6.55 6.56 6.62 5.83 66..5555 66..1199 55..8855 55..8833 5.68 18 5.47 5.33 6.46 6.67 6.65 6.45 5.62 6.32 5.96 5.58 5.62 5.52 19 6-month 5.44 5.46 6.59 6.65 6.63 6.30 5.45 6.11 5.76 5.40 5.46 5.35 20 Eurodollar deposits, 3-month3'" 5.45 5.31 6.45 6.66 6.64 6.43 5.62 6.31 5.96 5.57 5.61 5.51 U.S. Treasury bills Secondary market '5 71 4.78 4.64 5.82 6.11 6.17 5.77 5.15 5.66 5.36 5.13 5.17 55..1111 4.83 4.75 5.90 6.04 6.06 5.68 4.95 5.50 5.10 4.94 4.99 4.92 23 1-year 4.80 4.81 5.78 5.72 5.84 5.33 4.63 5.11 4.71 4.60 4.67 4.64 Auction high3-5'12 74 44..8811 44..6666 55..6666 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 75 4.85 4.76 5.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 26 1-year 4.85 4.78 5.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. U.S. TREASURY NOTES AND BONDS Constant maturities13 77 5.05 5.08 6.11 6.01 6.09 5.60 4.81 5.34 4.89 4.79 4.85 4.83 78 5.13 5.43 6.26 5.91 5.88 5.35 4.76 5.12 4.78 4.72 4.80 4.79 79 5.14 5.49 6.22 5.85 5.79 5.26 4.77 5.06 4.77 4.73 4.81 4.81 30 5.15 5.55 6.16 5.78 5.70 5.17 4.86 4.98 4.80 4.81 4.85 4.94 31 5.28 5.79 6.20 5.84 5.78 5.28 5.13 5.16 5.04 5.07 5.14 5.23 37 5.26 5.65 6.03 5.74 5.72 5.24 5.16 5.10 5.01 5.08 5.19 5.29 33 20-year 5.72 6.20 6.23 6.04 5.98 5.64 5.65 5.58 5.54 5.61 5.65 5.75 34 30-year 5.58 5.87 5.94 5.80 5.78 5.49 5.54 5.44 5.42 5.50 5.54 5.64 Composite 35 More than 10 years (long-term) 55..6699 66..1144 66..4411 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. STATE AND LOCAL NOTES AND BONDS Moody's series'4 36 4.93 5.28 5.58 5.46 5.38 5.11 4.99 5.07 5.00 4.90 4.96 5.10 37 Baa 5.14 5.70 6.19 6.22 6.17 5.85 5.76 5.79 5.74 5.70 5.74 5.85 38 Bond Buyer series15 5.09 5.43 5.71 5.59 5.54 5.22 5.10 5.14 5.09 5.00 5.10 5.20 CORPORATE BONDS 39 Seasoned issues, all industries'6 6.87 7.45 7.98 7.95 7.90 7.65 7.55 7.59 7.52 7.55 7.55 7.60 Rating group 40 6.53 7.05 7.62 7.55 7.45 7.21 7.15 7.15 7.09 7.13 7.14 7.21 41 Aa 6.80 7.36 7.83 7.81 7.75 7.48 7.38 7.40 7.33 7.36 7.38 7.44 47 A 6.93 7.53 8.11 8.11 8.09 7.88 7.75 7.83 7.72 7.75 7.75 7.80 43 Baa 7.22 7.88 8.36 8.34 8.28 8.02 7.93 7.97 7.94 7.95 7.90 7.95 MEMO Dividend-price ratio17 44 Common stocks 1.49 1.25 1.15 1.15 1.16 1.19 1.16 1.18 1.16 1.19 1.17 1.15 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. Digitized for8 .F ARn AaSveEragRe 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 http://fraseenrd.esd tAlouguuisst f2e9,d .1o99r7g. / the price index. Federal Reserve Bank of St. Louis
A24 Domestic Nonfinancial Statistics • April 2001 1.36 STOCK MARKET Selected Statistics 2000 2001 IInnddiiccaattoorr 11999988 11999999 May June July Aug. Sept. Oct. Nov. Dec. Jan. Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 550.65 619.52 643.71 640.07 649.61 653.27 666.14 667.05 646.53 646.64 645.44 650.55 2 Industrial 684.35 775.29 809.40 814.75 819.54 825.28 837.23 829.99 797.00 800.88 792.66 796.74 3 Transportation 468.61 491.62 414.73 411.50 395.09 410.67 419.84 404.23 403.20 434.92 457.53 471.21 4 Utility 190.52 284.82 478.99 487.17 501.93 484.19 459.91 463.76 469.16 455.66 444.16 440.36 5 Finance 516.65 530.97 552.48 523.22 544.51 556.32 597.17 616.89 587.76 600.45 621.62 634.17 6 Standard & Poor's Corporation (1941—43 = 10)' 1,085.50 1,327.33 1,427.22 1,418.48 1,461.96 1,473.00 1,485.46 1,468.06 1,390.14 1,375.04 1,330.93 1,335.63 7 American Stock Exchange (Aug. 31, 1973 = 50)2 682.69 770.90 922.22 917.76 934.90 930.66 920.54 952.74 913.64 892.60 870.16 898.18 Volume of trading (thousands of shares) 8 New York Stock Exchange 666,534 799,554 1,026,867 893,896 971,137 941,694 875,087 1,026,597 1,167,025 1,015,606 1,183,149 1,299,986 9 American Stock Exchange 28,870 32,629 50,604 44,146 42,490 36,486 35,695 47,047 57,915 58,541 73,759 72,312 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers' 140,980° 228.530° 198,790° 240,660 247,200 244,970 247,560 250,780 233,376 219,110 198,790 197,110 Free credit balances at brokers4 11 Margin accounts5 40,250° 55,130c 100,680° 66,170 64,970 71,730 68,020 70,959 83,131 96,730 100.680 90.380 12 Cash accounts 62,450c 79,070° 84,400° 73,500 74,140 74,970 72,640 74,766 73,271 74,050 84,400 80,470 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 2001 11999988 11999999 22000000 Aug. Sept. Oct. Nov. Dec. Jan. U.S. budget' 1 Receipts, total 1,721,798 1,827,454 2,025,197 138,128 219,471 135,111 125,666 200.489 219,215 2 On-budget 1,305.999 1,382,986 1,544,614 101,429 176,692 101,121 89,216 161,737 171,001 3 Off-budget 415,799 444,468 480,583 36,699 42,779 33,990 36,450 38,752 48,214 4 Outlays, total 1,652,224 1,702,942 1,788,953 148,555 153,744 146,431 149,356 167.823 142,836 5 On-budget 1,335,948 1,382,262 1,458,188 115,539 114,748 115,840 116,737 132,747 144,448 6 Off-budget 316,604 320.778 330,765 33,016 38,901 30,592 32,619 35,075 -1,613 7 Surplus or deficit (-), total 69,246 124,414 236,244 -10,427 65,727 -11,321 -23,690 32,666 76,379 8 On-budget -29,949 724 86,426 -14,110 61,944 -14,719 -27,521 28,990 26,553 9 Off-budget 99,195 123,690 149,818 3,683 3,878 3,398 3.831 3,677 49,827 Source of financing (total) 10 Borrowing from the public -51,211 -88,674 -222,672 9,995 -32,334 -29,666 41,325 -36,689 -23,990 II Operating cash (decrease, or increase (—)) 4,743 -17,580 3,799 20,873 -39,479 42,653 -1,431 -9,632 -45,761 12 Other 2 -22,778 -18,160 -17,327 -20,441 6,086 -1,666 -16,204 13.655 -6,628 MEMO 13 Treasury operating balance (level, end of period) 38,878 56,458 52,659 13,180 52,659 10,006 11,437 21,069 66,830 14 Federal Reserve Banks 4,952 6,641 8,459 5,961 8,459 5,360 4,382 5,149 5,256 15 Tax and loan accounts 33,926 49,817 44,199 7,218 44,199 4,646 7,055 15,920 61,574 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 US. 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 when available. 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 • April 2001 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1999 2000 2000 2001 11999999 22000000 HI H2 HI H2 Nov. Dec. Jan. RECEIPTS 1 All sources 1,827,454 2,025,200 966,045 892,266 1,089,760 952,939 125,666 200,489 219,215 2 Individual income taxes, net 879,480 1,004,500 481.907 425.451 550,208 458,679 60,489 83,485 135,702 3 Withheld 693,940 780.397 351,068 372,012 388,526 395.572 62,855 78,133 84,319 4 Nonwithheld 308,185 358.049 240,278 68,302 281,103 77,732 2,320 6,468 52,713 5 Refunds 122,706 134.046 109,467 14,841 119,477 14,628 4,686 1,116 1,330 Corporation income taxes 6 Gross receipts 216,324 235,655 106,861 110,111 119,166 123,962 4,292 53,192 7,778 7 Refunds 31,645 28,367 17,092 13,996 13,781 15,776 2,245 1,886 2,066 8 Social insurance taxes and contributions, net . . . 611,833 652.900 324,831 292,551 353,514 310,122 51,383 53,559 64,214 9 Employment taxes and contributions2 580,880 620.447 306,235 280,059 333,584 297,665 48,536 52,932 62,259 10 Unemployment insurance 26,480 27,641 16,378 10,173 17,562 10,097 2,431 260 1,596 11 Other net receipts3 4,473 4,763 2,216 2,319 2,368 2,360 416 367 359 12 Excise taxes 70,414 68,900 31,015 34,262 33,532 35,501 6,030 5,865 5,307 13 Customs deposits 18,336 19.900 8,440 10,287 9,218 10,676 1,640 1,461 1,694 14 Estate and gift taxes 27,782 29,000 14,915 14,001 15,073 13,216 2,141 1,863 2,403 15 Miscellaneous receipts4 34,929 42,800 15,140 19,569 22,83! 16,556 1,935 2,949 4,183 OUTLAYS 16 All types 1,702,942 1,789,000 817,227 882,465 892,947 894,922 149,356 167,823 142,836 17 National defense 274,873 294.500 134,414 149,573 143,476 147,651 24,445 29,176 21,792 18 International affairs 15,243 17,200 6,879 8,530 7,250 11,902 1,326 4,828 1,289 19 General science, space, and technology 18,125 18.600 9,319 10,089 9,601 10,389 1,776 1,868 1,383 20 Energy 912 -1,100 797 -90 -893 -595 74 182 -378 21 Natural resources and environment 23,970 25,000 10,351 12,100 10,814 12,907 2,100 2,083 1.708 22 Agriculture 23,011 36,600 9,803 20,887 11,164 20,977 3,547 3,618 3,870 23 Commerce and housing credit 2,649 3,200 -1,629 7,353 -2,497 4,408 -709 555 -943 24 Transportation 42,531 46,900 17,082 23,199 21,054 25,841 4,221 4,035 3,323 25 Community and regional development 11,870 10,600 5,368 6,806 5,050 5,962 1,133 822 722 26 Education, training, employment, and social services 56,402 59.400 29,003 27,532 31,234 29,263 5,014 6,122 5,660 27 Health 141,079 154.500 69,320 74,490 75,871 81,413 13,111 12,975 14,087 28 Social security and Medicare 580,488 606,500 261,146 295,030 306,966 307,473 51,481 54,224 50,633 29 Income security 237,707 247.900 126,552 113,504 133,915 113,212 18,950 23,882 18,473 30 Veterans benefits and services 43,212 47.100 20,105 23,412 23,174 22,615 3,644 5,520 2,101 31 Administration of justice 25.924 28,000 13,149 13,459 13,981 14,635 2,741 2,495 2,602 32 General government 15,771 13,200 6,641 7,010 6,198 6,461 1,134 1,205 707 33 Net interest5 229,735 223,200 116,655 112,420 115,545 104,685 18,916 17,122 19,575 34 Undistributed offsetting receipts6 -40,445 -42.600 -17,724 -22,850 -19,346 -24,070 -3,547 -2,889 -3,767 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 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 1 Federal debt outstanding 5,643 5,681 5,668 5,685 5,805 5,802 5,714 5,702 5,690 2 Public debt securities 5,614 5,652 5,639 5,656 5.776 5,773 5,686 5,674 5,662 3 Held by public 3,787 3,795 3,685 3,667 3,716 3,688 3,496 3,438 3,413 4 Held by agencies 1,827 1,857 1,954 1,989 2,061 2,085 2,190 2,236 2,249 5 Agency securities 29 29 29 29 29 28 28 28 27 6 Held by public 29 28 28 28 28 28 28 28 27 7 Held by agencies 1 1 1 1 1 0 0 0 0 8 Debt subject to statutory limit 5,530 5,566 5,552 5,568 5,687 5,687 5,601 5,592 5,581 9 Public debt securities 5,530 5,566 5,552 5,568 5,687 5,686 5,601 5,591 5,580 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 2000 TTyyppee aanndd hhoollddeerr 11999977 11999988 11999999 22000000 Ql Q2 Q3 Q4 1 Total gross public debt 5,502.4 5,614.2 5,776.1 5,662.2 5,773.4 5,685.9 5,674.2 5,662.2 B\ tvpe 2 Interest-bearing 5,494.9 5,605.4 5,766.1 5,618.1 5,763.8 5,675.9 5,622.1 5,618.1 3 Marketable 3,456.8 3,355.5 3,281.0 2,966.9 3,261.2 3,070.7 2,992.8 2,966.9 4 Bills 715.4 691.0 737.1 646.9 753.3 629.9 616.2 646.9 5 Notes 2,106.1 1,960.7 1,784.5 1,557.3 1.732.6 1,679.1 1,611.3 1,557.3 6 Bonds 587.3 621.2 643.7 626.5 653.0 637.7 635.3 626.5 7 Inflation-indexed notes and bonds' 33.0 67.6 100.7 121.2 107.4 109.0 115.0 121.2 8 Nonmarketable" 2,038.1 2,249.9 2,485.1 2,651.2 2,502.6 2,605.2 2,629.3 2,651.2 9 State and local government series 124.1 165.3 165.7 151.0 161.9 160.4 153.3 151.0 10 Foreign issues3 36.2 34.3 31.3 27.2 28.8 27.7 25.4 27.2 11 Government 36.2 34.3 31.3 27.2 28.8 27.7 25.4 27.2 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 181.2 180.3 179.4 176.9 178.6 177.7 177.7 176.9 14 Government account series4 1.666.7 1,840.0 2,078.7 2,266.1 2,103.3 2,209.4 2,242.9 2,266.1 15 Non-interest-bearing 7.5 8.8 10.0 44.2 9.6 10.1 52.1 44.2 By holder5 16 U.S. Treasury and other federal agencies and trust funds 1,655.7 1,826.8 2,060.6 2,085.4 2,190.2 2,235.7 17 Federal Reserve Banks 451.9 471.7 477.7 501.7 505.0 511.4 18 Private investors 3.414.6 3,334.0 3,233.9 3,182.8 2,987.4 2,936.2 19 Depository institutions 300.3 237.3 246.3 235.1 219.7 n.a. 20 Mutual funds 321.5 343.2 348.6 338.9 318.6 n.a. 21 Insurance companies 176.6 144.5 125.3 n.a. 124.0 120.9 n.a. n.a. 22 State and local treasuries6 239.3 269.3 266.8 257.2 256.4 n.a. Individuals 23 Savings bonds 186.5 186.7 186.5 185.3 184.6 184.7 24 Pension funds 359.4 374.4 384.5 385.9 384.5 n.a. 25 Private 142.5 157.8 171.3 174.8 175.5 n.a. 26 State and Local 216.9 216.6 213.2 211.1 209.0 n.a. 27 Foreign and international7 1,241.6 1,278.7 1,268.8 1,273.9 1,248.9 1,225.2 28 Other miscellaneous investors6,8 589.5 498.8 407.1 382.5 253.8 n.a. 1. The US. 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 • April 2001 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 2000 2000, week ending 2001, week ending IItteemm Oct. Nov. Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 Jan. 31 OUTRIGHT TRANSACTIONS2 By type of security- 1 US. Treasury bills 26,999 33,213 33,972 44,451 28,399 30,087 29,272 46,063 31,026 31,192 25,294 28,501 Coupon securities, by maturity 2 Five years or less 139,243 116,403 142,810 200,827 140,926 136,050 97,687 138,635 233,089 167,473 184,622 169,233 3 More than five years 67,524 62,146 80,454 95,819 90,414 89.936 45,923 70,178 108,729 88,749 83,347 97,040 4 Inflation-indexed 1,987 1,033 1,441 1,420 1.563 1,527 907 2,034 5,306 2,310 2,387 1,411 Federal agency 5 Discount notes 51,052 52,139 54,545 56,732 48,781 52,063 58,338 63,200 53,350 66,652 61,610 67,509 Coupon securities, by maturity 6 One year or less 1,082 1,094 1,821 1,980 1,415 1,962 2,292 1,225 1,246 2,800 793 1,324 7 More than one year, but less than or equal to five years 12,597 9,936 10,987 17,403 11,269 9,880 6,012 10,168 21,825 13,689 13,104 13,901 8 More than five years 11,659 7,450 12,455 14,019 17,255 13,377 6,324 7,280 17,020 10,642 13,583 12,505 9 Mortgage-backed 80,367 80,031 77.576 90,154 123,014 68,876 30,729 54,267 144,559 114,402 104,151 60,919 By type of counterparty With interdealer broker 10 U.S. Treasury 102,544 92,335 117,395 152,034 114,749 123,851 77,852 117,676 178,968 139,148 135,431 137,738 11 Federal agency 10,680 8,654 11,965 13,370 13,645 13,157 7,330 11,240 18,578 11,889 12,816 12,066 12 Mortgage-backed 26,882 23,812 26,775 29,402 37,557 26,804 13,004 22,031 44,970 30,924 30,977 21,504 With other 13 U.S. Treasury 133,209 120,459 141,282 190,483 146,553 133,748 95,936 139,234 199,182 150,575 160,220 158,446 14 Federal agency 65,710 61,966 67,843 76.763 65,076 64,125 65,636 70,633 74,862 81,895 76,273 83,173 15 Mortgage-backed 53,485 56,219 50,801 60,752 85,457 42,072 17,725 32,236 99,589 83,479 73,174 39,415 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 17 Five years or less 2,497 3,309 3,629 5,012 4,666 3,474 1,641 2,637 4,007 3,831 4,256 3,666 18 More than five years 10,472 13,051 14,020 17.887 14,870 15,733 8,092 11,731 17,813 15,512 15,182 14,893 19 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 0 Federal agency 20 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 21 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 22 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 n.a. 0 23 More than five years 86 72 325 464 304 235 n.a. n.a. 118 55 20 58 24 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 0 OPTIONS TRANSACTIONS4 By type of underlying security 25 U.S. Treasury bills 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 26 Five years or less 1.217 1,548 1.380 1,361 1,940 1,317 1,265 407 1,628 1,553 754 902 27 More than five years 3,829 3,619 4,111 3,105 5,870 4,757 2,419 3,491 6,201 4,420 3,853 3,590 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 n.a. 0 0 0 0 0 0 0 0 20 0 32 More than five years 102 124 14 36 n.a. 12 0 0 n.a. n.a. 55 197 33 Mortgage-backed 1,189 1,272 1,228 1,242 945 1,674 1,077 1.092 2,105 692 1,206 1,029 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 2001, week ending IItteemm Oct. Nov. Dec. Dec. 6 Dec. 13 Dec. 20 Dec. 27 Jan. 3 Jan. 10 Jan. 17 Jan. 24 NET OUTRIGHT POSITIONS3 By type of security 1 U.S.' Treasury bills 4,172 6,870 15,431 25,627 24,064 7,224 7,857 12,648 11,859 6,987 12,609 Coupon securities, by maturity 2 Five years or less -30,472 -28,545 -18,515 -24,136 -21,555 -16,746 -15,218 -13,626 -10,388 -12,565 -13,972 3 More than five years -17,380 -11,005 -13,463 -11,230 -14,317 -13,971 -14,071 -13,363 -10,442 -10,434 -9,383 4 Inflation-indexed 3,125 3,015 1,713 1,560 1,872 1,867 1,709 1,400 4,458 3,628 3,733 Federal agency 5 Discount notes 33,428 29,599 31,098 34,622 30,133 28,910 32,335 29,166 29,422 33,806 31,531 Coupon securities, by maturity 6 One year or less 13,990 16,088 16,590 16,245 15,876 16,878 16,970 17,187 15,160 17,826 17,686 7 More than one year, but less than or equal to five years 5,672 7,057 7,293 6,499 10,167 7,357 6,048 5,520 6,757 6,822 6,942 8 More than five years 1,978 4,043 5,114 4,163 3,742 6,157 5,626 6,217 6,649 8,113 6,255 9 Mortgage-backed 14,541 12,132 14,596 12,297 13,939 13,899 14,803 20,050 17,785 16,521 13,052 NET FUTURES POSITIONS4 By type of deliverable security 10 U.S.'Treasury bills n.a. n.a. 0 n.a. n.a. 0 n.a. n.a. n.a. n.a. n.a. Coupon securities, by maturity 11 Five years or less 1,995 1,921 -252 -657 -423 20 -495 601 -859 -475 2,870 12 More than five years 1,365 -2,745 -3,090 -2,879 -3,901 -2,960 -3,438 -1,608 -4,660 -6,726 -8,017 13 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 14 Discount notes 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 15 One year or less 0 0 0 0 0 0 0 0 0 0 0 16 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 n.a. 17 More than five years -1,232 -1,364 -521 -1,004 -740 -317 -269 -215 -68 -56 -62 18 Mortgage-backed 0 0 0 0 0 0 0 0 0 0 0 NET OPTIONS POSITIONS By type of deliverable security 19 U.S.'Treasury bills 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 20 Five years or less 1,541 -1,768 -684 -1,229 -283 98 -1,594 -344 1,248 1,421 1,634 21 More than five years 771 -203 -93 -1,201 -467 110 378 1,043 1,021 1,294 1,100 22 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 23 Discount notes 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 24 One year or less 0 0 0 0 0 0 0 0 0 0 0 25 More than one year, but less than or equal to five years 41 -209 -528 -148 -597 -610 -629 -660 -586 -561 -448 26 More than five years 208 259 533 427 378 534 664 731 836 268 383 27 Mortgage-backed 3,895 2,892 2,031 1,575 2,767 2,494 2,691 -537 -207 360 2,357 Financing5 Reverse repurchase agreements 28 Overnight and continuing 289,809 310,115 337,035 348,676 328,712 335,487 332,586 344,636 350,308 345,504 338,748 29 Term 832,733 824,867 821,860 821,004 826,114 845,610 854,643 716,768 771,154 802,742 837,898 Securities borrowed 30 Overnight and continuing 289,467 271,420 263,010 257,697 261,575 263,144 266,023 267,982 279,724 273,126 267,133 31 Term 117,801 123,967 137,491 132,603 135,102 138,700 142,393 138,307 132,370 128,726 128,360 Securities received as pledge 32 Overnight and continuing 2,228 2,748 2,848 2,971 2,742 n.a. n.a. n.a. n.a. n.a. 3,042 33 Term n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Repurchase agreements 34 Overnight and continuing 729,081 724,736 769,296 786,976 776,360 766,948 745,335 776,455 784,701 802,850 784,444 35 Term 772,976 796,328 785,387 769,715 778,736 803,143 840,669 692,715 744,867 766,159 791,009 Securities loaned 36 Overnight and continuing 7,252 8,221 8,521 8,109 7,839 7,989 9,674 9,249 9,866 9,091 9,182 37 Term 5,314 4,465 4,284 4,459 4,478 4,143 4,141 4,179 4,168 4,171 4,103 Securities pledged 38 Overnight and continuing 60,045 56,285 56,936 53,519 55,368 57,569 59,095 59,920 58,480 54,970 51,671 39 Term 4,689 3,981 4,207 4,109 4,315 4,227 4,158 4,212 4,228 3,786 3,878 Collateralized loans 40 Total 27,796 26,695 25,778 30,783 24,367 26,876 20,426 28,184 26,103 25,033 26,837 1. Data for positions and financing are obtained from reports submitted to the Federal securities are included when the time to delivery is more than five business days. Forward Reserve Bank of New York by the U.S. government securities dealers on its published list of contracts for mortgage-backed agency securities are included when the time to delivery is primary dealers. Weekly figures are close-of-business Wednesday data. Positions for calendar more than thirty business days. days of the report week are assumed to be constant. Monthly averages are based on the 4. Futures positions reflect standardized agreements arranged on an exchange. All futures number of calendar days in the month. positions are included regardless of time to delivery. 2. Securities positions are reported at market value. 5. Overnight financing refers to agreements made on one business day that mature on the 3. Net outright positions include immediate and forward positions. Net immediate posi- next business day; continuing contracts are agreements that remain in effect for more than one tions include securities purchased or sold (other than mortgage-backed agency securities) that business day but have no specific maturity and can be terminated without advance notice by have been delivered or are scheduled to be delivered in five business days or less and either party; term agreements have a fixed maturity of more than one business day. Financing "when-issued" securities that settle on the issue date of offering. Net immediate positions for data are reported in terms of actual funds paid or received, including accrued interest. mortgage-backed agency securities include securities purchased or sold that have been NOTE, "n.a." indicates that data are not published because of insufficient activity. delivered or are scheduled to be delivered in thirty business days or less. Forward positions reflect agreements made in the over-the-counter market that specify delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A30 Domestic Nonfinancial Statistics • April 2001 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2000 AAggeennccyy 11999966 11999977 11999988 11999999 July Aug. Sept. Oct. Nov. 1 Federal and federally sponsored agencies 925,823 1,022,609 1,296,477 1,616,492 1,726,016 1,763,089 1,776,334 n.a. 2 Federal agencies 29.380 27,792 26,502 26,376 26,094 25,892 25,993 25,523 3 Defense Department1 6 6 6 6 6 6 6 6 4 Export-Import Bank"3 1.447 552 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 84 102 205 126 205 210 227 237 6 Government National Mortgage Association certificates of participation3 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 Postal Service6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 27.853 27,786 26,496 26,370 76.088 25,886 25.987 25,517 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 896,443 994,817 1,269,975 1,590,116 1,699.922 1,737,197 1,750,341 1,777,824 1,807,600 11 Federal Home Loan Banks 263,404 313,919 382,131 529,005 565.037 572,836 580,579 576,689 580,957 12 Federal Home Loan Mortgage Corporation 156.980 169.200 287,396 360,711 399,370 412,656 406,936 422,960 429,617 13 Federal National Mortgage Association 331.270 369,774 460,291 547,619 579,448 595,117 607,000 615,463 633,100 14 Farm Credit Banks8 60.053 63,517 63,488 68,883 69,757 70,139 71,055 71,345 71,667 15 Student Loan Marketing Association9 44.763 37,717 35,399 41,988 44,223 44,113 42,423 48.988 50,016 16 Financing Corporation10 8,170 8,170 8,170 8.170 8,170 8,170 8,170 8,170 ?,170 17 Farm Credit Financial Assistance Corporation" 1.261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation1" 29.996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt1, 58,172 49,090 44,129 42,152 38,143 38,040 42,837 41,280 n.a. Lending to federal and federally sponsored agencies 2 2 0 1 E Po x s p t o a r l t- S I e m r p v o ic r e t 6 Bank3 1.431 557 4 T T 4 T 4 T 4 T 4 T • 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. 2 2 3 4 T U e n n it n e e d s s S ee ta t V es a l R le a y i l A w u ay th o A r s it s y o ciation6 n.a. n.a. ii \1 t 1 i1 1 i ii Other lending14 25 Farmers Home Administration 18.325 13,530 9,500 6,665 5,760 5,660 5,540 5,540 2b Rural Electrification Administration 16.702 14,898 14,091 14,085 13,165 13,238 12,989 12,891 11 Other 21.714 20,110 20,538 21,402 19,218 19,142 24,308 22,849 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. U. 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 2001 TTyyppee ooff ii oo ss rr ss uu uu ee ss ee oo rr iissssuueerr,, 11999988 11999999 22000000 June July Aug. Sept. Oct. Nov. Dec. Jan. 1 All issues, new and refunding' 262,342 215,427 180,403 20,208 12,827 15,284 15,598 18,035 18,079 15,348 11,255 By type of issue 2 General obligation 87.015 73,308 64,475 8,581 4,256 5,194 6,888 5,871 5,044 5,060 6,256 3 Revenue 175,327 142,120 115,928 11,628 8,572 10,090 8,710 12,163 13,036 10,288 4,999 By type of issuer 4 State 23,506 16,376 19,944 2,907 783 1,011 2,022 3,005 1,942 1,640 1,738 5 Special district or statutory authority2 178,421 152,418 111,695 13,520 8,545 10,728 10,152 11,224 12,311 1,053 7,061 6 Municipality, county, or township 60,173 46,634 39,273 3.782 3,500 3,545 3,424 3,806 3,827 3,165 2,456 7 Issues for new capital 160,568 161,065 154,257 16,987 11,297 12,402 13,968 16,387 14,520 13,286 8,758 By use of proceeds 8 Education 36,904 36,563 38.665 4,465 3,185 3.630 3,210 3,492 3,446 2,919 2,786 9 Transportation 19,926 17,394 19,730 1,093 1,947 1,979 1,574 2,575 2.124 1,381 780 10 Utilities and conservation 21,037 15,098 11,917 1,141 353 1,409 1,408 1,272 1,973 1,307 678 11 Social welfare n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Industrial aid 8,594 9,099 7,122 1,150 632 281 387 730 500 615 63 13 Other purposes 42,450 47,896 47,309 5,776 2,543 3,564 5,243 6,558 3,787 4,264 3,013 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 oorr ii ssss iiss uu ss ee uu ,, ee oo rr ffffeerriinngg,, 11999988 11999999 22000000 May June July Aug. Sept. Oct. Nov.1" Dec. 1 All issues' 1,128,491 1,072,866 944,414 62,939 100,615 65,511 82,752 94,492 62,466 95,595 63,594 2 Bonds" 1,001,736 941,298 809,497 58,233 92,742 57,476 69,875 88,102 53,345 84,094 58,713 By type of offering 3 Sold in the United States 923.771 818,683 684,662 45,986 75,271 40,753 56,133 73,516 47,415 76,383 57.189 4 Sold abroad 77,965 122,615 124,835 12,247 17,471 16,723 13,742 14,586 5,930 7,712 1,525 MEMO 5 Private placements, domestic n.a. n.a. n.a. 2,694 3,391 1,038 241 376 127 5,534 3,709 By industry group 6 Nonfinancial 307,935 293,963 244,092 20,832 29,412 15,885 17,947 24,483 12,547 25,784 18,219 7 Financial 693,801 647,335 565,404 37,401 63,331 41,592 51,928 63,619 40,799 58,310 40,495 8 Stocks3 205,605 217,868 134,917 4,706 7,873 8,035 12,877 6,390 9,121 11,501 2,665 By type of offering 9 Public 126,755 131,568 134,917 4,706 7,873 8,035 12,877 6,390 9,121 11,501 2,665 10 Private placement4 78,850 86,300 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 74,113 110,284 118,369 4,522 6,521 7,773 8.645 6,205 8,278 10,794 2,146 12 Financial 52,642 21,284 16,548 184 1.352 262 4,232 185 843 707 519 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data include 144(a) olferings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data cover only public offerings. exclude secondary olferings, 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 • April 2001 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2000 2001 IItteemm 11999999 22000000rr June July Aug. Sept. Oct. Nov. Dec.r Jan. 1 Sales of own shares" 1,791,894 2,279,315 181,866 166,815 179,890 159,809 169,071 143,412 170,255 208,194 2 Redemptions of own shares 1,621,987 2,057,277 161,462 151,717 159,027 147,644 153,067 138,791 160,918 173,833 3 Net sales1 169,906 222,038 20,404 15,098 20.864 12,166 16,004 4,621 9,337 34,361 4 Assets4 5,233,191 5,123,747 5,458,914 5,392,308 5,745,264 5,550,176 5,442,937 4,993,008 5,123,747 5,278,863 5 Cash5 219,189 277,386 259,241 258,472 261.967 280,192 302,682 300,133 277,386 280,477 6 Other 5,014,002 4,846,361 5,199,673 5,133,836 5,483,298 5,269,984 5,140,255 4,692.875 4,846,361 4,998,386 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 1999 2000 AAccccoouunntt 11999988 11999999 22000000 Qi Q2 Q3 Q4 Qi Q2 Q3 Q4 1 Profits with inventory valuation and capital consumption adjustment 815.0 856.0 n.a. 852.0 836.8 842.0 893.2 936.3 963.6 970.3 n.a. 2 Profits before taxes 758.2 823.0 n.a. 797.6 804.5 819.0 870.7 920.7 942.5 945.1 n.a. 3 Profits-tax liabilitv 244.6 255.9 n.a. 247.8 250.8 254.2 270.8 286.3 292.0 290.6 n.a. 4 Profits after taxes 513.6 567.1 n.a. 549.9 553.7 564.8 599.9 634.4 650.4 654.4 n.a. 5 Dividends 351.5 370.7 397.0 361.1 367.2 373.9 380.6 387.3 393.0 400.1 407.6 6 Undistributed profits 162.1 196.4 n.a. 188.7 186.5 190.9 219.3 247.1 257.4 254.4 n.a. 7 Inventory valuation 17.0 -9.1 n.a. 11.4 -8.9 -19.7 -19.2 -25.0 -13.6 -4.5 n.a. 8 Capital consumption adjustment 39.9 42.1 33.6 42.9 41.2 42.7 41.6 40.6 34.7 29.7 29.5 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities' Billions of dollars, end of period; not seasonally adjusted 1999 2000 AAccccoouunntt 11999988 11999999 22000000 Q2 Q3 Q4 QI Q2 Q3 Q4 ASSETS I Accounts receivable, gross" 711.7 811.5 915.3 756.5 776.3 811.5 848.7 884.4 900. r 915.3 2 Consumer 261.8 279.8 296.1 269.2 271.0 279.8 285.4 294.1 301.9' 296.1 3 Business 347.5 405.2 471.1 373.7 383.0 405.2 434.6 454.1 455.7 471.1 4 Real estate 102.3 126.5 148.1 113.5 122.3 126.5 128.8 136.2 142.4 148.1 5 LESS; Reserves for unearned income 56.3 53.5 59.9 53.4 54.0 53.5 54.0 57.1 58.8 59.9 6 Reserves for losses 13.8 13.5 14.7 13.4 13.6 13.5 14.0 14.4 14.2 14.7 7 Accounts receivable, net 641.6 744.6 840.6 689.7 708.6 744.6 780.7 813.0 827.r 840.6 8 All other 337.9 406.3 463.0 373.2 368.5 406.3 412.7 418.3 441.4 463.0 9 Total assets 979.5 1,150.9 1,303.7 1,062.9 1,077.2 1,150.9 1,193.4 1,231.3 1,268.4 1,303.7 LIABILITIES AND CAPITAL 10 Bank loans 26.3 35.1 35.6 25.1 27.0 35.1 28.5 32.5 35.4 35.6 11 Commercial paper 231.5 227.9 235.2 231.0 205.3 227.9 230.2 221.3 215.6 235.2 Debt 12 Owed to parent 61.8 123.8 145.8 65.4 84.5 123.8 145.1 137.1 144.3 145.8 13 Not elsewhere classified 339.7 397.0 464.1 383.1 396.2 397.0 412.0 445.4 465.5 464.1 14 All other liabilities 203.2 222.7 280.4 226.1 216.0 222.7 247.6 259.3 269.2 280.4 15 Capital, surplus, and undivided profits 117.0 144.5 142.6 132.2 148.2 144.5 130.1 135.6 138.3 142.6 16 Total liabilities and capital 979.5 1,150.9 1,303.6 1,062.9 1,077.2 1,150.9 1,193.4 1,231.3 1,268.4 1,303.6 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 Receivables' Billions of dollars, amounts outstanding 2000 TTyyppee ooff ccrreeddiitt 11999988 11999999 22000000 July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted 1 Total 875.8 993.9 1,145.0 1,089.1 1,094.1 1,112.1 l,134.9r l,136.2r 1,145.0 2 Consumer 352.8 385.3 439.3 405.9 411.1 419.7 437.3 439.8r 439.3 3 Real estate 131.4 154.7 174.7 167.5 169.0 170.9 174.4r 176.6r 174.7 4 Business . 391.6 453.9 531.0 515.8 514.1 521.6 523.2r 519.7' 531.0 Not seasonally adjusted 5 Total 884.0 1,003.2 1,155.7 1,082.2 1,087.9 1,106.8 l,132.9r l,137.9r 1,155.7 6 Consumer 356.1 388.8 443.4 408.3 412.3 421.0 437.9 441,4r 443.4 7 Motor vehicles loans 103.1 114.7 122.5 129.4 130.7 130.1 131.8 127.8 122.5 8 Motor vehicle leases 93.3 98.3 102.9 104.4 105.4 104.6 104.3 104.0 102.9 9 Revolving" 32.3 33.8 38.3 33.6 33.6 35.4 37.1 38.0r 38.3 10 Other1 33.1 33.1 32.4 31.5 32.3 31.7 31.9 32.0 32.4 Securitized assets4 1 1 Motor vehicle loans 54.8 71.1 97.1 74.5 76.2 78.8 84.3 91.5 97.1 12 Motor vehicle leases 12.7 9.7 6.6 7.6 7.4 7.2 7.0 6.8 6.6 13 Revolving 8.7 10.5 27.5 10.9 10.7 17.2 25.8 25.8 27.5 14 Other 18.1 17.7 16.0 16.4 16.2 16.0 15.7 15.5 16.0 15 Real estate 131.4 154.7 174.7 167.5 169.0 170.9 174.4r 176.6r 174.7 16 One- to four-family 75.7 88.3 105.2 100.5 101.7 100.9 104.6 107.0 105.2 17 Other 26.6 38.3 42.9 39.7 40.2 41.5 42. r 42.7r 42.9 Securitized real estate assets4 18 One- to four-family 29.0 28.0 24.7 27.1 26.8 26.5 25.7 25.0 24.7 19 Other .1 1 1.9 .2 .2 1.9 1.9 1.9 1.9 20 Business 396.5 459.6 537.7 506.4 506.7 514.9 520.6r 519.9r 537.7 21 Motor vehicles 79.6 87.8 95.2 89.4 89.6 94.1 95.9 93.3 95.2 22 Retail loans 28.1 33.2 31.0 34.1 34.3 34.8 34.7 32.3 31.0 23 Wholesale loans5 32.8 34.7 39.6 32.9 32.6 35.5 37.5 37.3 39.6 24 Leases 18.7 19.9 24.6 22.3 22.7 23.7 23.7 23.8 24.6 25 Equipment 198.0 221.9 267.3 248.6 250.0 256.7 259.4r 259.3r 267.3 26 Loans 50.4 52.2 56.2 54.8 54.3 55.8 56.1 54.7 56.2 27 Leases 147.6 169.7 211.1 193.9 195.8 200.9 203.3r 204.6' 211.1 28 Other business receivables6 69.9 95.5 108.6 109.4 108.3 104.9 103.7 103.2 108.6 Securitized assets4 29 Motor vehicles 29.2 31.5 37.8 29.8 29.6 31.9 34.2 37.0 37.8 30 Retail loans 2.6 2.9 3.2 2.8 2.7 2.4 2.3 3.1 3.2 31 Wholesale loans 24.7 26.4 32.5 24.6 24.5 27.1 29.5 31.5 32.5 32 Leases 1.9 2.1 2.2 2.4 2.4 2.4 2.4 2.4 2.2 33 Equipment 13.0 14.6 23.1 22.5 22.4 21.4 21.7 21.3 23.1 34 Loans 6.6 7.9 15.5 16.0 15.9 15.1 14.9 14.6 15.5 35 Leases 6.4 6.7 7.6 6.5 6.5 6.4 6.7 6.7 7.6 36 Other business receivables6 6.8 8.4 5.6 6.8 6.8 5.8 5.8 5.8 5.6 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 • April 2001 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2000 2001 IItteemm 11999999 22000000 July Aug. Sept. Oct. Nov. Dec. Jan. Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 195.2 210.7 234.5 235.8 237.0 241.9 240.2 247.2 250.0 238.7 2 Amount of loan (thousands of dollars) 151.1 161.7 177.0 178.3 179.7 182.5 180.4 184.2 187.3 181.6 3 Loan-to-price ratio (percent) 80.0 78.7 77.4 77.7 77.7 77.1 77.2 76.2 76.5 78.2 4 Maturity (years) 28.4 28.8 29.2 29.3 29.3 29.2 29.2 29.2 29.1 29.4 5 Fees and charges (percent of loan amount)" .89 .77 .70 .66 .68 .70 .69 .69 .73 .71 Yield (percent per year) 6 Contract rate1 6.95 6.94 7.41 7.41 7.44 7.41 7.43 7.36 7.29 7.09 7 Effective rate1'3 7.08 7.06 7.52 7.51 7.54 7.52 7.53 7.47 7.40 7.20 8 Contract rate (HUD series)4 7.00 7.45 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. SECONDARY MARKETS Yield (percent per year) 9 FHA mortgages (Section 203)5 7.04 7.74 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 GNMA securities6 6.43 7.03 7.57 7.59 7.44 7.43 7.30 7.22 6.83 6.57 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 414,515 523,941 610,122 561,045 568,187 574,087 586,756 598,951 610,122 623,950 12 FHA/VA insured 33.770 55,318 61.539 60,397 60,150 59,961 60,329 60,694 61,539 62,970 13 Conventional 380,745 468,623 548,583 500,648 508,037 514,126 526,427 538,257 548,583 560,980 14 Mortgage transactions purchased (during period) 188,448 195,210 154,231 15,128 13,352 11,501 18,444 17,322 17,193 20,598 Mortgage commitments (during period) 15 Issued7 193,795 187,948 163,689 16,660 14.253 16,143 17,435 15,287 20,120 27,325 16 To sell8 1.880 5.900 11,786 436 236 693 268 676 1,436 766 FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 1 / Total 255,010 324,443 385,693 354,020 357,002 361,624 365,198 372,819 385,693 391,679 18 M1AA A insured 785 1,836 3,332 2,858 2,903 3,517 3,530 3,321 3,332 3,307 19 Conventional 254,225 322,607 382,361 351,162 354,099 358,107 361,668 369,498 382,361 388,372 Mortgage transactions (during period) 20 267,402 239,793 174.043 10,912 16,056 21,748 16,195 19,402 24,313 15,658 21 Sales 250,565 233,031 166.901 10,539 15,558 21,189 15,614 18,823 22,277 15,364 22 Mortgage commitments contracted (during period)9 281,899 228,432 169,231 10,803 17,468 19,481 17,915 20,012 21,780 18,685 1. Weighted averages based on sample surveys of mortgages originated by major institu- 6. Average net yields to investors on fully modified pass-through securities backed by tional lender groups for purchase of newly built homes; compiled by the Federal Housing mortgages and guaranteed by the Government National Mortgage Association (GNMA), Finance Board in cooperation with the Federal Deposit Insurance Corporation. assuming prepayment in twelve years on pools of thirty-year mortgages insured by the 2. Includes all fees, commissions, discounts, and "points" paid (by the borrower or the Federal Housing Administration or guaranteed by the Department of Veterans Affairs. seller) to obtain a loan. 7. Does not include standby commitments issued, but includes standby commitments 3. Average effective interest rate on loans closed for purchase of newly built homes, converted. assuming prepayment at the end of ten years. 8. Includes participation loans as well as whole loans. 4. Average contract rate on new commitments for conventional first mortgages; from U.S. 9. Includes conventional and government-underwritten loans. The Federal Home Loan Department of Housing and Urban Development (HUD). Based on transactions on the first Mortgage Corporation's mortgage commitments and mortgage transactions include activity day of the subsequent month. under mortgage securities swap programs, whereas the corresponding data for FNMA 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured exclude swap activity. by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Real Estate A3 5 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 1999 2000 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999966 11999977 11999988 Q3 Q4 Qi Q2 Q3P 1 All holders 4,868,298r 5,204,119r 5,737,161r 6,236,316r 6,385,916r 6,481,515r 6,651,208r 6,803,226 By type of property ? One to four-family residences 3,718,683r 3,973,692r 4,362,699r 4,698,263r 44,,779933,,996666rr 44,,885533,,775599rr 44,,997777,,887799rr 5,104,650 3 Multifamily residences 288,837r 302,29 lr 332,12 Ir 360,939r 374,596r 382,386r 392,595r 399,882 4 Nonfarm, nonresidential 773,643 837,837r 945,836r 1,075,719r 1,114,392r 1,141,622r 1,174,687r 1,191,463 5 87,134 90,299 96,506 101,395 102,962 103,748 106,047r 107,232 By type of holder 6 Major financial institutions 1,981.886 2,083,981r 2,194,813 2,321,356 2,394,923 2,456,786 2,548,570r 2,603,713 7 Commercial banks" 1,145,389 1,245,315 1,337,217 1,418,819 1,495,502 1,546,816 1,614,307 1,648,734 8 One to four-family 677,603 745,510 797,492 827,291 879,552 904,581 948,496 968,069 i 1 i 9n ? 1 Sav M N F i a o n u r n g m lt f s i a f r i a n m m s , t i i l n t y u o t n io re n s s i ' dential 3 6 4 2 9 2 5 8 7 4 , , , . 4 3 4 8 5 3 5 8 1 5 2 3 4 6 4 2 3 2 1 9 3 6 , , , , 8 1 6 9 2 4 7 8 6 8 0 6 r 4 6 5 5 4 2 6 4 3 9 , , , , 5 1 9 0 7 1 5 3 4 6 7 5 4 6 9 6 7 3 6 3 6 1 , , , , 2 9 3 3 4 6 4 2 6 4 6 0 5 6 1 6 6 3 6 7 8 1 , , , , 5 5 6 8 9 2 3 3 1 0 4 9 5 6 3 8 7 3 7 0 2 2 . , . , 1 7 4 6 3 4 3 7 1 5 1 3 5 7 5 0 7 3 6 1 5 3 , , , , 3 9 7 7 8 1 9 1 2 3 2 7 5 7 6 7 2 3 9 6 1 3 , , , , 8 9 4 9 0 4 8 1 1 5 8 9 13 One- to four-family 513,712 520,782r 533,918 560,622 549,072 560,046 578,641 595,472 1145 M No u n lt f i a f r a m m , i l n y o nresidential 6 5 1 2 , , 5 7 7 2 0 3 5 51 9 . , 1 5 5 4 0 0 5 52 6 , , 8 8 0 2 1 1 5 5 7 7 . , 2 9 8 8 2 3 5 5 9 9 , , 1 9 3 4 8 8 5 62 7 , , 4 7 4 5 7 9 5 63 9 , , 6 1 9 4 1 2 6 65 0 , , 4 0 4 4 1 4 16 Farm 331 354 417 459 475 493 518 531 17 Life insurance companies 208,162 206,840 213,640 226,190 230.787 229,225 232,270r 233,491 18 One- to four-family 6,977 7,187 6,590 7,432 5,934 5,874 5,949r 5,999 19 Multifamily 30,750 30,402 31,522 31,998 32,818 32,602 33,037r 33,206 70 Nonfarm, nonresidential 160,315 158,779 164,004 174.571 179,048 177,870 180,243r 181,167 21 Farm 10,120 10,472 11,524 12,189 12,987 12,879 13,041r 13,119 22 Federal and related agencies 295,192 286,194 293,613 322,572 322,352 323,145 332.868r 336,871 73 Government National Mortgage Association 2 8 7 8 7 7 7 6 24 One to four-family 2 8 7 8 7 7 7 6 75 Multifamily 0 0 0 0 0 0 0 0 76 Farmers Home Administration4 41,596 41,195 40,851 73,705 73,871 72,899 72,896 73,009 77 One- to four-family 17,303 17.253 16.895 16,583 16,506 16,456 16,435 16,444 78 Multifamily 11,685 11,720 11,739 11,745 11,741 11,732 11,729 11,734 79 Nonfarm, nonresidential 6.841 7,370 7,705 41,068 41,355 40,509 40,554 40,665 30 Farm 5,768 4,852 4,513 4,308 4,268 4,202 4,179 4,167 31 Federal Housing and Veterans' Administrations 6,244 3,811 3,674 3,889 3,712 3,794 3,845 3,395 37 One to four-family 3,524 1.767 1,849 2,013 1,851 1,847 1,832 1,327 33 Multifamily 2,719 2,044 1,825 1,876 1,861 1,947 2,013 2,068 .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 2,431 724 361 163 152 98 72 82 40 One- to four-family 365 117r 58r 26r 25r 16r 12r 13 41 Multifamily 413 140r 70r 31r 29r 19r 14r 16 47 Nonfarm. nonresidential 1,653 467r 233r I05r 98r 63r 46r 53 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 168,813 161.308 157,675 153,172 151,500 150,312 153.507r 153,114 45 One- to four-family 155,008 149,831 147,594 142,982 141,195 139,986 142,478r 141,786 46 Multifamily 13.805 11,477 10,081 10,190 10,305 10,326 11,029 11,328 47 Federal Land Banks 29,602 30.657 32,983 34,217 34,187 34,142 34,830' 35,549 48 One- to four-family 1,742 1,804 1,941 2,013 2,012 2,009 2,049r 2,092 49 Farm 0 0 0 0 0 0 0 0 50 Federal Home Loan Mortgage Corporation 46,504 48,454 57,085 55,695 56,676 57,009 56,972 57,046 51 One- to four-family 41,758 42.629 49,106 44,010 44,321 43,384 42,892 42,138 52 Multifamily 4,746 5,825 7,979 11,685 12,355 13,625 14,080 14,908 53 Mortgage pools or trusts5 2,040,847r 2,239,350' 2,589,800r 2,891,187r 2,954,784r 2,982,316r 3,034,134r 3,112,824 54 Government National Mortgage Association 506,246 536,879 537.446 569.038 582,263 589,192r 590,830r 602,794 55 One- to four-family 494,064 523,225 522,498 552,670 565,189 571,506r 572,783r 584,318 56 Multifamily 12,182 13,654 14,948 16,368 17,074 17,686 18,047 18,476 57 Federal Home Loan Mortgage Corporation 554,260 579,385 646,459 738.581 749,081 757,106 768,641 790,891 58 One to four-family 551,513 576,846 643,465 735,088 744.619 752,607 763.890 786,007 59 Multifamily 2,747 2,539 2,994 3,493 4,462 4,499 4,751 4.884 60 Federal National Mortgage Association 650,779 709,582 834.517 938,484 960,883 975,815 995,815 1,020,828 61 One- to four-family 633,209 687.981 804,204 903,531 924,941 938,898 957,584 981,206 62 Multifamily 17,570 21,601 30,313 34,953 35.942 36,917 38,231 39,622 63 Farmers Home Administration4 3 2 1 0 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 01 0 0 0 0 0 67 Farm 3 2 0 0 0 0 0 68 Private mortgage conduits 329.559 413,502 571,378r 645,083r 662,557r 660,203' 678,848r 698,311 69 One- to four-family6 258,800 316,400 412,700 455,276 462,600 455,623r 464,593r 477,899 70 Multifamily 16,369 21,591 34,329r 40,935r 42,628 43,268r 44.290r 44,513 71 Nonfarm, nonresidential 54,390 75,511 124,348r 148.872r I57,330r 161,3 3 2r 169,965r 175,899 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 550,372r 594,594r 658,935r 701,202r 713,857r 719,268r 735.6361" 749,818 74 One- to four-family 363,104r 382,315r 423,416r 447,171r 454,126r 456.285r 469,801r 487,534 75 Multifamily 68,830r 72,088r 75,374r 76,242r 78,420r 79,326r 80,219r 81,808 76 Nonfarm, nonresidential 100,269 121,4I2r 140,17 r 156,874r I60,093r 162,289r I63,806r 158,437 77 Farm 18,169 18,779 19,974 20,915r 21,217 21,368 21,811r 22,039 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 • April 2001 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2000 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999988 11999999 22000000 July Aug. Sept. Oct. Nov. Dec. Seasonally adjusted 1 Total 1,301,023 1,393,657 1,533,800 1,470,768 1,484,081 1,492,934 1,509,568 1,522,000 1,533,800 2 Revolving 560,504 595,610 663,000 638,406 645,121 649,297 656,666 662,800 663,000 3 Nonrevolving2 740,519 798,047 870,800 832,363 838,961 843,637 852,902 862,200 870,800 Not seasonally adjusted 4 Total 1331,742 1,426,151 1,568,800 1,463,292 1,486,048 1,495,627 1,513,688 1,529,800 1,568,800 By major holder 5 Commercial banks 508,932 499,758 543,700 506,254 520,431 521,767 521,515 527,200 543,700 6 Finance companies 168,491 181,573 193,200 194,438 196,555 197,276 200,815 197,800 193,200 7 Credit unions 155,406 167,921 185,300 178,034 180,679 181,597 183,010 184,200 185,300 8 Savings institutions 51,611 61,527 64,000 61,493 62,037 62,580 62,815 63,100 64,000 9 Nonfinancial business 74,877 80,311 82,700 71,956 73,030 72,091 70,842 73,800 82,700 10 Pools of securitized assets3 372,425 435,061 500,000 45,117 453,316 460,316 474,691 483,800 500,000 By major type of credit 11 Revolving 586,528 623,245 692,800 630,633 641,298 645,820 654,678 664,300 692,800 12 Commercial banks 210,346 189,352 218,100 194,496 204,016 202,362 201,874 206,100 218,100 13 Finance companies 32,309 33,814 38,252 33,565 33,558 35,405 37,148 37,957 38,252 14 Credit unions 19,930 20,641 22,191 20,476 20,796 20,783 20,804 21,276 22,191 15 Savings institutions 12,450 15,838 16,862 15,745 16,036 16,327 16,505 16,684 16,862 16 Nonfinancial business 39,166 42,783 42,504 36,078 36,669 35,817 34,484 36,430 42,504 17 Pools of securitized assets3 272,327 320,817 354,683 330,273 330,223 335,126 343,313 345,817 354,683 18 Nonrevolving 745,214 802,906 867,383 832,659 844,750 849,807 859,418 865,467 867,383 19 Commercial banks 298,586 310,406 319,302 311,758 316,415 319,405 319,882 321,053 319,302 20 Finance companies 136,182 147,759 154,905 160,873 162,997 161,871 163,697 159,801 154,905 21 Credit unions 135,476 147,280 162,781 157,558 159,883 160,814 162,359 162,960 162,781 22 Savings institutions 39,161 45,689 46,424 45,748 46,001 46,253 46,310 46,367 46,424 23 Nonfinancial business 35,711 37,528 40,269 35,878 36,361 36,274 36,311 37,352 40,269 24 Pools of securitized assets3 100,098 114,244 143,703 120,844 123,093 125,190 130,858 137,934 143,703 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 11999988 11999999 22000000 June July Aug. Sept. Oct. Nov. Dec. INTEREST RATES Commercial banks2 1 48-month new car 8.72 8.44 9.34 n.a. n.a. 9.62 n.a. n.a. 9.63 n.a. 2 24-month personal 13.74 13.39 13.90 n.a. n.a. 13.85 n.a. n.a. 14.12 n.a. Credit card plan 3 All accounts 15.71 15.21 15.71 n.a. n.a. 15.98 n.a. n.a. 15.99 n.a. 4 Accounts assessed interest 15.59 14.81 14.91 n.a. n.a. 15.35 n.a. n.a. 15.23 n.a. Auto finance companies 5 New car 6.30 6.66 6.61 6.40 6.55 7.46 7.16 4.74 5.41r 7.45 6 Used car 12.64 12.60 13.55 13.58 13.64 13.70 13.91 13.87 13.53 13.45 OTHER TERMS3 Maturity (months) 7 New car 52.1 52.7 54.9 55.6 55.6 55.7 55.9 57.6 57.3 55.2 8 Used car 53.5 55.9 57.0 57.3 57.2 57.2 57.0 57.0 56.8 NC Loan-to-value ratio 9 New car 92 92 92 92 92 92 91 93 93 91 10 Used car 99 99 99 99 100 100 100 100 100 NC Amount financed (dollars) 11 New car 19,083 19,880 20,923 20,349 20,406 20,664 21,010 22,069 22,443 21,867 12 Used car 12,691 13,642 14,058 14,245 14,269 14,166 13,950 13,978 14,325 NC 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 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 11999999 Q2 Q3 Q4 Ql Q2 Q3 Q4 Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors .. . 711.lr 731.3r 804.6r l,044.6r l,121.5r 939.8r l,178.0r l,089.5r 924.0r 971.5r 779.9 835.7 By sector and instrument Federal government 144.4 145.0 23.1 -52.6 -71.2 -98.5 -68.9' -34.0' -215.5 -414.0 -219.5 -334.5 Treasury securities 142.9 146.6 23.2 -54.6 -71.0 -99.1 -68.9' -34.0' -213.5 -415.8 -217.1 -333.3 4 Budget agency securities and mortgages 1.5 -1.6 -.1 2.0 -.2 .6 .0 .0 -2.1 1.8 -2.4 -1.2 5 Nonfederal 566.7r 586.3 781.5r l,097.2r 1,192.7' 1,038.3' 1,247.0' 1,123.5' 1,139.6' 1,385.4' 999.4 1,170.2 By instrument Commercial paper 18.1 -.9 13.7 24.4 37.4 -2.6 49.8 44.0 29.8' 110.4' 56.1 -4.0 7 Municipal securities and loans -48.2 2.6 71.4 96.8 68.2 56.8 71.3 52.5 8.9 34.0 29.8 68.6 8 Corporate bonds 91.1 116.3 150.5 218.7 229.9 287.6 202.8 155.2 186.2 153.8 184.4 175.6 9 Bank loans n.e.c 103.7 70.5 106.5 108.2 82.7 24.0 112.3 108.6 131.9 163.1 31.8 84.2 in Other loans and advances 67.2 33.5 69.1 74.3 71.2 2.3 79.2 55.4 153.3' 124.4' -2.5 141.1 ii Mortgages 195.8r 275.7 317.7r 5012' 608.9' 608.9' 655.4' 598.3' 484.9' 662.6' 577.0 570.5 i? 181.0' 242. lr 252.3 386.8' 432.0' 440.2' 479.4 397.1' 344.1' 489.4' 429.6 414.1 n Multifamily residential 6.1r 9.0r 8.2r 20.8' 40.2 33.0' 41.3' 50.9' 29.5' 44.7' 31.3 36.6 14 Commercial 7.r 22.0r 54.lr 93.4' 131.2' 126.7' 127.6' 147.9' 104.4' 119.7' 110.7 116.8 H 1.6 2.6 3.2 6.2 5.5 9.0 7.0 2.5 6.9 8.9 5.3 3.0 16 Consumer credit 138.9 88.8 52.5 67.6 94.4 61.4 76.2 109.5 144.6' 137.2' 122.9 134.2 By borrowing sector 17 363.5r 357.8r 337.lr 479.1' 538.2' 512.9' 580.6' 498.0' 523.0' 663388..99'' 555522..22 557766..00 18 Nonfinancial business 254.7r 235.3r 388.2r 537.8r 602.1' 481.8' 613.9' 591.9' 612.8' 725.7' 423.5 533.9 19 Coiporate 227.5r 149. r 266.5r 418.1' 481.6' 372.8' 473.8' 453.6' 481.3' 592.4' 309.1 404.5 7.0 Nonfarm noncorporate 24.3 81.4 115.6r 112.0' 115.3' 107.2' 131.6' 132.7' 116.5' 125.1' 109.3 117.6 71 Farm 2.9 4.8 6.2 7.7 5.2 1.7 8.5 5.6 15.0' 8.3 5.1 11.7 22 State and local government -51.5 -6.8 56.1 80.3 52.3 43.6 52.5 33.6 3.8 20.8 23.6 60.3 7.3 Foreign net borrowing in United States 78.5 88.4 71.8 43.3 25.3 -24.5 77.3 17.6 118.0' -7.6' 89.2 47.8 74 Commercial paper 13.5 11.3 3.7 7.8 16.3 -27.5 41.1 33.6 57.8' 12.0' 7.0 50.1 75 Bonds 57.1 67.0 61.4 34.8 14.2 .2 44.0 -2.7 45.7 -27.4' 71.7 -15.3 76 Bank loans n.e.c 8.5 9.1 8.5 6.7 .5 5.6 -6.6 2.3 15.4 5.7 11.9 12.2 27 Other loans and advances -.5 1.0 -1.8 -6.0 -5.7 -2.8 -1.1 -15.5 -.9 2.0 -1.5 .8 28 Total domestic plus foreign 789.6r 819.7r 876.3r l,087.9r l,146.8r 915.3r l,255.4r l,107.1r l,042.0r 963.9r 869.0 883.5 Financial sectors 29 Total net borrowing by financial sectors 454.0r 545.7r 653.8r 1,073.9 1,087.9 995.3 1,064.2 l,063.2r 617.7r 817.5r 733.2 1,079.0 By instrument 30 Federal government-related 204.2r 231.4r 212.9r 470.9 592.0 576.6 651.6 550.1' 248.6' 370.9' 503.5 607.9 31 Government-sponsored enterprise securities 105.9 90.4 98.4 278.3 318.2 304.7 407.1 367.9 104.9 248.9 278.1 300.5 32 Mortgage pool securities 98.3r 141,0r 114.6r 192.6 273.8 271.9 244.5 182.2' 143.7' 122.1' 225.4 307.4 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 249.8 314.4 440.9 603.0 495.9 418.8 412.6 513.0 369.2 446.6 229.7 471.1 35 Open market paper 42.7 92.2 166.7 161.0 176.2 57.3 89.9 479.0 130.9 77.4 65.2 237.5 36 Corporate bonds 195.9 173.8 210.5 296.9 221.8 254.8 179.5 -21.0 166.5 230.7 195.9 220.9 37 Bank loans n.e.c 2.5 12.6 13.2 30.1 -14.3 11.0 -5.9 -55.6 .3 5.4 -.7 -12.7 38 Other loans and advances 3.4 27.9 35.6 90.2 107.1 107.9 139.8 107.5 64.4 123.1 -36.7 19.1 39 Mortgages 5.3 7.9 14.9 24.8 5.1 -12.3 9.4 3.2 7.0 10.0 6.0 6.4 By borrowing sector 40 Commercial banking 22.5 13.0 46.1 72.9 67.2 61.5 107.0 54.1 72.4 113.2 23.5 31.1 41 Savings institutions 2.6 25.5 19.7 52.2 48.0 59.2 51.9 5.8 40.6 59.1 -23.4 32.5 47 Credit unions -.1 .1 .1 .6 2.2 1.4 2.8 3.3 -2.9 .9 1.1 1.0 43 Life insurance companies -.1 1.1 .2 .7 .7 3.0 1.1 -4.4 -.7 -1.1 -.3 -.7 44 Government-sponsored enterprises 105.9 90.4 98.4 278.3 318.2 304.7 407.1 367.9 104.9 248.9 278.1 300.5 45 Federally related mortgage pools 98.3r 141.0r 114.6r 192.6 273.8 271.9 244.5 182.2' 143.7' 122.1' 225.4 307.4 46 Issuers of asset-backed securities (ABSs) 142.4 150.8 202.2 321.4 234.0 301.5 220.5 124.2 166.0 154.8 155.6 298.8 47 Finance companies 50.2 45.9 48.7 43.0 62.4 90.5 -17.2 99.2 52.3 103.9 96.9 46.8 48 Mortgage companies -2.2 4.1 -4.6 1.6 .2 5.1 -6.1 6.2 -3.0 2.7 -.3 1.0 49 Real estate investment trusts (REITs) 4.5 11.9 39.6 62.7 6.3 -19.7 7.9 11.3 11.5 9.8 -2.4 10.4 50 Brokers and dealers -5.0 -2.0 8.1 7.2 -17.2 -18.3' 17.8' -37.3 44.4 -.7 25.4 -6.7 51 Funding corporations 34.9 64.1 80.7 40.7 92.2 -65.3' 27.0' 250.6 -11.4 4.0 -46.4 56.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A38 Domestic Financial Statistics • April 2001 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 11999999 Q2 Q3 Q4 Ql Q2 Q3 Q4 All sectors 52 Total net borrowing, all sectors l,243.7r l,365.4r l,530.1r 2,161.8r 2,234.6r l,910.7r 2,319.6r 2,170.3r l,659.8r l,781.4r 1,602.2 1,962.6 53 Open market paper 74.3 102.6 184.1 193.1 229.9 27.2 180.7 556.6 218.4r 199.8r 128.4 283.6 54 U.S. government securities 348.61 376.41" 236.01 418.3 520.7r 478.1 582.7' 516.T 33.0r -43.0r 284.0 273.4 55 Municipal securities -48.2 2.6 71.4 96.8 68.2 56.8 71.3 52.5 8.9 34.0 29.8 68.6 56 Corporate and foreign bonds 344.1 357.0 422.4 550.4 465.9 542.6 426.3 131.5 398.4 357.2r 452.0 381.2 57 Bank loans n.e.c 114.7 92.1 128.2 145.0 68.9 40.6 99.8 55.2 147.7 174.2 43.0 83.6 58 Other loans and advances 70.1 62.5 102.8 158.5 172.6 107.5 217.9 147.3 216.9r 249.5r -40.7 161.0 59 Mortgages 201.r 283.5r 332.6r 532.0r 614.0r 596.6r 664.8r 601.5r 491.9r 612.6' 583.0 576.9 60 Consumer credit 138.9 88.8 52.5 67.6 94.4 61.4 76.2 109.5 144.6r 137.2r 122.9 134.2 Funds raised through mutual funds and corporate equities 61 Total net issues X31.5 231.9 181.2 100.0 156.5 173.1r 124.5r 172.9r 410.7r 168.9r 208.1 -105.7 62 Corporate equities -16.0 -5.7 -83.9 -174.6 -31.8 -39.3r -3.0r .R 104.6r — 68.7r -51.7 -282.0 63 Nonfinancial corporations -58.3 -69.5 -114.4 -267.0 -143.5 -338.4 -128.4 -55.0 62.8r -248.8 -75.6 -350.8 64 Foreign shares purchased by U.S. residents 50.4 82.8 57.6 101.2 114.4 284.4 121.7 71.3 63.3 180. R 50.0 71.5 65 Financial corporations -8.1 -19.0 -27.1 -8.9 -2.8r 14.7r 3.7r - 16.2r -21.4r -.R -26.1 -2.8 66 Mutual fund shares 147.4 237.6 265.1 274.6 188.3 212.4 127.5 172.8 306.1 237.6 259.8 176.3 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 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 11999999 Q2 Q3 Q4 QI Q2 Q3 Q4 NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets l,243.7r l,365.4r l,530.1r 2,161.8r 2,234.6r l,910.7r 2,319.6r 2,170.3r l,659.8r 1,781.4 1,602.2 1,962.6 7 Domestic nonfederal nonfinancial sectors — 61.0r 79.5r — 13.7r 132.31" 264.5r 360.2r 234.2r -8.8r -156.0r 151.0 -178.1 -212.4 Household 34.5r 127.8r 1.0r -16.2' 200.5r 279.4r 242.8r 9.1' -251.3r 84.3 -186.6 -219.4 4 Nonfinancial corporate business -8.8 -10.2 -12.7 14.0 19.lr -1.4 33.0r -22.3r 90.4 22.6 3.7 -29.4 Nonfarm noncorporate business 4.7 -4.3 -2.1 .1 1.5 1.2 .8 1.4 2.6 2.8 3.8 4.3 6 State and local governments —91.4 -33.7 .1 134.5 43.4 81.0 -42.4 2.4 2.3 41.4 1.0 32.1 7 Federal government -.5r -1.2' 5.1 13.5 5.8 6.7 11.2 -! 1,7r 6.5r 7.7 4.5 15.0 8 Rest of the world 273.9 414.4 311.3 254.2 210.6 61.6 385.3 138.7 325.9r 207.1 195.0 390.9 9 Financial sectors l,031.2r 878.7r l,227.5r l,761.7r l,753.7r 1,482.1' l,688.9r 2,052.2r 1,483.4' 1,415.6 1,580.8 1,769.1 10 Monetary authority 12.7 12.3 38.3 21.1 25.7 59.8 20.6 -42.2 103.4 -3.9 27.3 7.9 11 Commercial banking 265.9 187.5 324.3 305.2 308.2 166.6 449.4 548.7 377.1 484.6 369.3 206.1 1? U.S.-chartered banks 186.5 119.6 274.9 312.0 317.6 259.4 421.9 457.7 409.2 505.6 332.8 113.9 N Foreign banking offices in United States 75.4 63.3 40.2 -11.9 -20.1 -102.5 33.2 42.0 4.8 -29.9 30.9 90.4 14 Bank holding companies -.3 3.9 5.4 -.9 6.2 .4 -12.4 42.6 -42.2 3.5 -6.7 -3.3 15 Banks in U.S.-affiliated areas 4.2 .7 3.7 6.0 4.4 9.2 6.6 6.3 5.4 5.4 12.3 5.1 16 Savings institutions -7.6 19.9 -4.7 36.3 68.7 85.3 58.1 20.2 50.2 73.0 56.5 43.0 17 Credit unions 16.2 25.5 16.8 19.0 27.5 32.7 27.5 18.8 35.6 36.6 28.5 25.4 18 Bank personal trusts and estates -8.3 -7.7 -25.0 -12.8 27.8 27.8 27.8 27.8 18.9r 13.8 17.6 . 18.1 19 Life insurance companies 100.0 69.6 104.8 76.9 53.5 68.2 36.8 30.7 57.2 52.0 85.9 79.7 7.0 Other insurance companies 21.5 22.5 25.2 20.4 -4.2 26.7 -14.4 -9.4 -14.0 -18.1 6.0 6.3 71 Private pension funds 19.9r -4.r 47.6r 56.4r 45.0r 68.7r 5.9r 49.8r 46.8r 24.7 68.9 21.4 7? State and local government retirement funds 33.6 37.3 63.8 71.5 49.9 25.1 40.0 58.2 55.3 20.7 -32.1 8.5 93 Money market mutual funds 86.5 88.8 87.5 244.0 182.0 -67.0 224.8 354.5 208.8 -156.2 244.9 299.4 ?4 Mutual funds 52.5 48.9 80.9 124.8 47.2 117.2 -13.0 -12.7 -77.8 63.7 46.3 72.2 ?5 Closed-end funds 10.5 4.7 -2.9 4.5 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 26 Government-sponsored enterprises 86.7 84.2 94.3 261.7 235.5r 251.7r 275.9' 225.3r 139.2r 222.5 158.9 264.5 27 Federally related mortgage pools 98.3r 141.0r 114.6r 192.6 273.8 271.9 244.5 182.2r 143.7r 122.1 225.4 307.4 78 Asset-backed securities issuers (ABSs) 120.6 120.5 163.8 281.7 215.8 284.8 212.0 94.4 145.3 120.3 120.4 269.9 7.9 Finance companies 49.9 18.4 21.9 51.9 94.9 88.1 91.7 114.4 132.9 138.9 81.4 43.4 30 Mortgage companies -3.4 8.2 -9.1 3.2 .3 10.2 -12.1 12.3 -6.0 5.5 -.5 2.0 31 Real estate investment trusts (REITs) 1.4 4.4 20.2 -5.1 -2.6 -2.2 -2.7 -7.0 -16.3 -2.5 -3.6 -5.4 3? Brokers and dealers 90.1 -15.7 14.9 6.8 -34.7' - 135.9r -6.1' -30.5r 122.5r 38.1 176.8 -52.9 33 Funding corporations -15.7 12.6r 50.4r 1.6r 136.3r 99.4r 19.7r 413.6r -42.6r 176.8 -100.2 149.2 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets l,243.7r l,365.4r l,530.1r 2,161.8r 2,234.6r l,910.7r 2,319.6r 2,170.3r l,659.8r 1,781.4 1,602.2 1,962.6 Other financial sources 35 Official foreign exchange 8.8 -6.3 .7 66..66 -8.7 -5.4 -8.5 --77..00 11..55 -8.8 .7 88..77 36 Special drawing rights certificates 2.2 -.5 -.5 .0 -3.0 .0 -4.0 -4.0 .0 -8.0 -4.0 -4.0 37 Treasury currency .7 ,5r ,5r .6' 1.0' 2.r 2.0r .0 2.2r 3.2 4.2 .0 38 Foreign deposits 35.3 85.9 108.9 2.0 86.5 110.1 69.4 52.7 258.5 8.5 -89.2 -80.0 39 Net interbank transactions 10.0 -51.6 -19.7 -32.3 17.6 93.4 -30.8 -40.7 -71.1 177.7 -61.3 -84.6 40 Checkable deposits and currency -12.8 15.7 41.2 47.4 151.4 37.5 139.3 365.2 -219.1 -65.0 49.2 -49.4 41 Small time and savings deposits 96.6 97.2 97.1 152.4 44.7 106.6 119.1 28.0 104.3 130.3 238.5 298.8 4? Large time deposits 65.6 114.0 122.5 92.1 130.6 42.4 102.7 359.4 149.2 108.4 141.5 64.9 43 Money market fund shares 141.2 145.4 155.9 287.2 249.1 115.3 174.3 485.5 241.0 48.2 241.9 402.8 44 Security repurchase agreements 110.5 41.4 120.9 91.3 169.7r -80.7r 191.4r 310.5r 284. r 130.4 238.2 -200.6 45 Corporate equities -16.0 -5.7 -83.9 -174.6 -31.8 -39.3r -3.0r ,R 104.6R -68.7 -51.7 -282.0 46 Mutual fund shares 147.4 237.6 265.1 274.6 188.3 212.4 127.5 172.8 306.1 237.6 259.8 176.3 47 Trade payables 127.5r 113.5r 132.lr 29.0r 197.3r 224.4r 243.6r 199.5r 228.2r 124.8 132.6 100.5 48 Security credit 26.7 52.4 111.0 103.3 104.3r 128.2r 29.1' 321.3r 523.4r -99.8 104.1 14.4 49 Life insurance reserves 45.8 44.5 59.3 48.0 50.8 42.1 48.1 57.6 49.8 59.7 51.7 55.6 50 Pension fund reserves 158.7r 148.T 201.2' 202.5r 187.7r 199.0r 191.6' 177.3r 217.6r 220.4 196.2 129.3 51 Taxes payable 6.2 16.2 15.7 12.0 15.7r 47.3 A' 16.8r 22.5r 31.6 -6.0 19.3 52 Investment in bank personal trusts 6.4 -5.3 -49.9 -42.5 -7.1 -7.1 -7.2 -6.9 -5.9r -10.6 -6.6 -5.5 53 Noncorporate proprietors' equity 34.6 -3.4 -46.0 -41.4 — 8.0r 23.8r -56.5r 10.2r -13.4' -2.4 39.9 -18.2 54 Miscellaneous 505.4r 532. lr 487.5R 841.6r 749. lr 1,436. lr 534.8r 584.9r 701.5r 1,105.4 1,189.7 1,063.7 55 Total financial sources 2,744.3r 2,937.2r 3,249.7r 4,061.4r 4,519.7r 4,598.8r 4,183.4r 5,253.8r 4,544.7r 3,904.2 4,271.5 3,572.7 Liabilities not identified as assets ( —) 56 Treasury currency -.3 -A' -,2r -.1' — ,7r .6' .2' -2.2 - 1.8r --..77 ..99 --11..66 57 Foreign deposits 25.1 59.6 107.4 -6.4 66.5 96.8 21.3' 92.5 209.4r -65.7 -111.7 -132.1 58 Net interbank liabilities -3.1 -3.3 -19.9 3.4 3.5 -4.8 -7.0 -23.7 24.4 -4.3 -18.3 68.5 59 Security repurchase agreements 25.7 2.4r 63.2r 61.3r 30. r — A' 133.2r -225.9r 561.2r 27.6 119.3 -249.6 60 Taxes payable 21.1 23.1 28.0 13.9 3.2r 25.0 3.0r -6.4r 1.1' 7.4 -15.4 -9.9 61 Miscellaneous — 166.0r -82.8r — 84.7r -56.4r —317.5r — 101.4r —489.7r -157.6r -340.6r -267.1 -38.6 21.7 Floats not included in assets ( —) 62 Federal government checkable deposits -6.0 .5 -2.7 2.6 -7.4 -27.0 8.6 -9.2 28.7 -2.6 -2.0 13.7 63 Other checkable deposits -3.8 -4.0 -3.9 -3.1 -.8 -.9 -.3 .0 .6 1.5 1.9 2.7 64 Trade credit 14.1R —21.9' -28.5r -40. r 54.0r -64.6r 73.lr 161.7r -2.9r -38.3 -41.4 32.2 65 Total identified to sectors as assets 2,837.6r 2,964.2r 3,190.9r 4,086.3r 4,688.9r 4,675.5r 4,434.9r 5,424.6r 4,058.0r 4,246.5 4,376.7 3,827.0 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F. 1 and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A40 DomesticN onfinancial Statistics • April 2001 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr Q2 Q3 Q4 Ql Q2 Q3 Q4 Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 14,443.7r 15,246.8r 16,291.4r 17,447.5r 16,786.7r 17,109.0r 17,447.5r 17,677.2r 17,857.4r 18,064.0 18,344.3 By sector and instrument 2 Federal government 3,781.8 3,804.9 3.752.2 3,681.0 3,651.7 3,633.4r 3,681.0 3,653.5 3,464.0 3,410.2 3,385.2 3 Treasury securities 3,755.1 3.778.3 3.723.7 3,652.8 3,623.4 3,605.r 3.652.8 3,625.8 3,435.7 3,382.6 3,357.8 4 Budget agency securities and mortgages 26.6 26.5 28.5 28.3 28.3 28.3 28.3 27.8 28.2 27.6 27.3 5 Nonfederal 10,662.0r 11,441.9' 12.539. lr 13,766.5' 13,135.0r 13,475.6r 13,766.5' 14.023.7' 14,393.5' 14,653.9 14,959.2 By instrument 6 Commercial paper 156.4 168.6 193.0 230.3 232.4 239.3 230.3 260.8 296.8 307.0 278.4 7 Municipal securities and loans 1,296.0 1,367.5 1,464.3 1,532.5 1,510.0 1,518.6 1,532.5 1,539.2 1,551.6 1,550.3 1,567.8 8 Corporate bonds 1.460.4 1,610.9 1.829.6 2.059.5 1,970.0 2,020.7 2,059.5 2.106.0 2.144.5 2,190.6 2,234.5 9 Bank loans n.e.c 934.1 1,040.5 1,148.8 1,231.5 1,178.5 1,202.9 1,231.5 1,259.1 1,307.2 1,311.6 1,334.2 10 Other loans and advances 770.4 839.5 913.8 985.3 956.0 969.8 985.3 1,030.2' 1,059.0' 1,063.6 1,100.4 11 Mortgages 4.833. lr 5,150.8' 5,658.0r 6,301.3r 5,947.8r 6,154.2r 6,301.3' 6,412.4' 6,580.4' 6,735.2 6,875.0 12 Home 3,719.0r 3,971.3r 4,358.lr 4,790. r 4,563.8r 4,693.3r 4,790.1' 4,865.9' 4.990.6' 5.108.6 5,209.4 13 Multifamily residential 278.4r 286.6r 307,4r 347.8r 324.8' 335. r 347.8' 355.2' 366.4r 374.2 383.3 14 Commercial 748.6r 802.6r 896.0' 1.061.4' 959.6r 1,024.4r 1,061.4' 1,087.5' 1.117.4' 1,145.1 1,174.3 15 Farm 87.1 90.3 96.5 102.0 99.6 101.4 102.0 103.7 106.0 107.3 108.0 16 Consumer credit 1.211.6 1,264.1 1.331.7 1,426.2 1,340.4 1,370.1 1,426.2 1,416.0 1,454.0 1,495.6 1,568.8 By borrowing sector 17 Household 5,222.5r 5,559.9' 6,039.0r 6,577.5' 6,260.7r 6,424.7r 6,577.5' 6,647.5' 6.816.7' 6.985.8 7,169.1 18 Nonfinancial business 4,376. lr 4,762.5r 5,300.3r 5,936.8r 5,636.0r 5,808.5r 5,936.8' 6,118.9' 6.311.0' 6.405.0 6.510.8 19 Corporate 3,095.3' 3,359.9r 3,778.0r 4,294.0r 4,062.0' 4.199.7' 4,294.0' 4,445.5 4,601.2' 4,667.0 4,740.8 20 Nonfarm noncorporate 1,130.9 l,246.5r l,358.4r 1.473.8r l,408.0r 1.440.2' 1,473.8' 1.503.2' 1.534.5' 1.561.1 1,590.9 21 Farm 149.9 156.1 163.8 169.0 166.1 168.6 169.0 170.2' 175.4' 176.9 179.1 22 State and local government 1,063.4 1.119.5 1,199.8 1,252.1 1,238.2 1,242.4 1,252.1 1.257.3 1,265.7 1,263.1 1,279.3 23 Foreign credit market debt held in United States 542.2 608.0 651.4 676.9 652.7 672.9 676.9 704.6 699.3r 727.8 738.8 24 Commercial paper 67.5 65.1 72.9 89.2 70.1 81.8 89.2 101.6 101.2 109.8 120.9 25 366.3 427.7 462.5 476.7 466.4 477.4 476.7 488.1 481.3' 499.2 495.4 26 Bank loans n.e.c 43.7 52.1 58.9 59.4 60.5 58.8 59.4 63.3 64.7 67.7 70.7 27 Other loans and advances 64.7 63.0 57.2 51.7 55.8 55.0 51.7 51.7 52.1 51.2 51.8 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 14,985.9r 15,854.7r 16,942.8r 18,124.4r 17,439.4r 17,781.9r 18,124.4r 18,381.8r 18,556.7r 18,791.9 19,083.1 Financial sectors 29 Total credit market debt owed by financial sectors 4,824.5r 5,445.2 6,519.1 7,607.0 7,073.3 7,346.8 7,607.0 7,744.3r 7,964.4r 8,160.1 8,430.8 By instrument 30 Federal government-related 2,608.2r 2,821.1 3,292.0 3,884.0 3,580.7 3,745.9 3,884.0 3,940.1' 4,035.5 4,164.2 4,316.7 31 Government-sponsored enterprise securities 896.9 995.3 1.273.6 1,591.7 1,398.0 1.499.8 1,591.7 1.618.0 1,680.2 1,749.7 1,824.8 32 Mortgage pool securities 1,711,3r 1,825.8 2,018.4 2.292.2r 2,182.7 2,246.1 2,292.2' 2.322.1' 2,355.3' 2,414.5 2,491.9 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 2,216.3 2,624.1 3,227.1 3.723.0 3,492.6 3,601.0 3,723.0 3,804.2 3,928.9 3,995.9 4,114.1 35 Open market paper 579.1 745.7 906.7 1.082.9 940.9 963.4 1.082.9 1,115.7 1,135.2 1,151.6 1,210.7 36 Corporate bonds 1,378.4 1,555.9 1,852.8 2.074.6 2,042.8 2,091.1 2,074.6 2,114.2 2,183.2 2,239.3 2,290.1 37 Bank loans n.e.c 64.0 77.2 107.2 92.9 106.8 105.2 92.9 91.4 92.7 92.5 91.0 38 Other loans and advances 162.9 198.5 288.7 395.8 328.6 365.4 395.8 404.4 436.9 430.2 438.3 39 Mortgages 31.9 46.8 71.6 76.7 73.6 75.9 76.7 78.5 81.0 82.5 84.1 By borrowing sector 40 Commercial banks 113.6 140.6 188.6 230.0 202.7 224.2 230.0 242.2 265.4 265.2 266 8 41 Bank holding companies 150.0 168.6 193.5 219.3 205.5 211.8 219.3 221.4 229.3 236.9 242.5 42 Savings institutions 140.5 160.3 212.4 260.4 241.6 255.4 260.4 266.9 280.7 276.0 287.7 43 Credit unions .4 .6 1.1 3.4 1.8 2.5 3.4 2.6 2.9 3.1 3.4 44 Life insurance companies 1.6 1.8 2.5 3.2 4.0 4.3 3.2 3.0 2.7 2.7 2.5 45 Government-sponsored enterprises 896.9 995.3 1,273.6 1.591.7 1,398.0 1,499.8 1,591.7 1,618.0 1,680.2 1,749.7 1,824.8 46 Federally related mortgage pools 1,711.3r 1,825.8 2,018.4 2.292.2r 2,182.7 2,246.1 2,292.2' 2,322.1' 2,355.3' 2,414.5 2,491.9 47 Issuers of asset-backed securities (ABSs) 863.3 1,076.6 1,398.0 1,632.0 1,539.9 1.599.1 1,632.0 1,665.8 1,706.4 1,753.6 1,837.8 48 Brokers and dealers 27.3 35.3 42.5 25.3 30.2r 34.6 25.3 36.4 36.2 42.6 40.9 49 Finance companies 529.8 554.5 597.5 659.9 639.2 628.5 659.9 670.7 699.2 716.5 734.8 50 Mortgage companies 20.6 16.0 17.7 17.8 17.8 16.3 17.8 17.1 17.8 17.7 17.9 51 Real estate investment trusts (REITs) 56.5 96.1 158.8 165.1 160.3 162.2 165.1 167.9 170.4 169.8 172.4 52 Funding corporations 312.7 373.7 414.4 506.6 449.7r 462.0 506.6 510.1 517.9 511.9 507.4 All sectors 53 Total credit market debt, domestic and foreign ... 19,810.4r 21,300.0r 23,461.9r 25,731.4r 24,512.7r 25,128.7r 25,731.4r 26,126.1r 26,521.1r 26,952.0 27,513.9 54 Open market paper 803.0 979.4 1,172.6 1,402.4 1,243.3 1,284.5 1,402.4 1,478.1 1.533.3 1,568.3 1,610.0 55 U.S. government securities 6,389.9r 6,626.0 7,044.3 7.565.0 7,232.4 7,379.2' 7,565.0 7,593.6' 7,499.4' 7,574.4 7,701.8 56 Municipal securities 1,296.0 1,367.5 1,464.3 1.532.5 1,510.0 1,518.6 1,532.5 1,539.2 1.551.6 1,550.3 1,567.8 57 Corporate and foreign bonds 3,205.1 3,594.5 4.144.9 4,610.8 4.479.2 4,589.1 4,610.8 4,708.3 4,808.9' 4,929.0 5,019.9 58 Bank loans n.e.c 1,041.7 1,169.8 1.314.9 1.383.8 1,345.7 1,366.9 1,383.8 1,413.7 1,464.6 1,471.7 1,495.9 59 Other loans and advances 998.0 1,101.0 1.259.6 1.432.7 1,340.3 1,390.1 1,432.7 1,486.3' 1,548.0' 1,545.0 1,590.5 60 Mortgages 4,865. lr 5,197.7r 5.729.6r 6,378.0r 6,021.4r 6.230.1' 6,378.0' 6,490.8' 6,661.3' 6,817.7 6,959.1 61 Consumer credit 1,211.6 1,264.1 1,331.7 1.426.2 1,340.4 1,370.1 1,426.2 1,416.0 1,454.0 1.495.6 1,568.8 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1999 2000 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999966 11999977 11999988 11999999 Q2 Q3 Q4 QL Q2 Q3 Q4 CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 19,810.4r 21,300.0r 23,461.9r 25,731.4r 24,512.7r 25,128.7r 25,731.4r 26,126. lr 26,521.1r 26,952.0 27,513.9 ? Domestic nonfederal nonfinancial sectors 3,032.R 2,974.7R 3,078.7' 3,413.3' 3,233.9' 3,291.4' 3,413.3' 3,343.6' 3,355.1' 3,317.0 3,326.4 Household 2,119. lr 2,076.4R 2,031.9' 2,302.5' 2.133.6' 2,191.8' 2,302.5' 2.233.7' 2,224.0' 2,182.1 2,171.2 4 Nonfinancial corporate business 270.2 257.5 271.5 290.6' 268.5 280.5' 290.6' 288.9' 296.5' 301.5 312.4 Nonfarm noncorporate business 38.0 35.9 35.9 37.5 36.9 37.1 37.5 38.1 38.8 39.8 40.8 6 State and local governments 604.8 605.0 739.4 782.8 794.8 781.9 782.8 782.9 795.8 793.7 802.0 7 Federal government 200.2 205.4R 219.1 258.0 225.0 260.7 258.0 259.6 261.6' 262.7 266.4 8 Rest of the world 1,926.6 2,257.3 2,539.8 2,678.0 2,621.3 2,718.1 2,678.0 2.763.6' 2.812.8' 2,862.0 2,957.7 9 14,651.5R 15,862.5R 17,624.3' 19,382.0' 18,432.5' 18,858.5' 19,382.0' 19,759.3' 20,091.6' 20,510.3 20,963.3 10 Monetary authority 393.1 431.4 452.5 478.1 485.1 489.3 478.1 501.9 505.1 511.5 511.8 11 Commercial banking 3,707.7 4,031.9 4,335.7 4,643.9 4,383.4 4,488.3 4.643.9 4,725.0 4,847.4 4,931.0 5,003.1 P U.S.-chartered banks 3,175.8 3,450.7 3.761.2 4,078.9 3,847.6 3,944.3 4,078.9 4,171.3 4,295.4 4,368.2 4,419.3 N Foreign banking otfices in United States 475.8 516.1 504.2 484.1 465.7 475.3 484.1 482.0 478.1 487.5 508.1 14 Bank holding companies 22.0 27.4 26.5 32.7 25.1 22.0 32.7 22.1 23.0 21.3 20.5 15 Banks in U.S.-affiliated areas 34.1 37.8 43.8 48.3 45.0 46.7 48.3 49.6 51.0 54.0 55.3 16 Savings institutions 933.2 928.5 964.8 1,033.4 1,011.4 1,030.8 1,033.4 1,044.5 1,061.7 1,080.9 1,089.1 17 Credit unions 288.5 305.3 324.2 351.7 341.0 348.5 351.7 359.0 370.8 378.6 383.2 18 Bank personal trusts and estates 232.0 207.0 194.1 222.0 208.0 215.0 222.0 226.7' 230.2' 234.6 239.1 19 Life insurance companies 1,657.0 1,751.1 1,828.0 1,886.0 1,869.6 1,880.4 1,886.0 1.901.5 1.913.4 1,936.5 1,954.7 70 Other insurance companies 491.2 515.3 535.7 531.6 537.5 533.9 531.6 528.0 523.5 525.0 526.6 71 Private pension funds 627.0R 674.6R 731.0' 775.9' 762.0' 763.5' 775.9' 787.6' 793.8' 811.0 816.4 77 State and local government retirement funds 568.2 632.0 703.6 753.4 728.9 738.9 753.4 767.2 772.4 764.4 766.5 Money market mutual funds 634.3 721.9 965.9 1,147.8 1,001.8 1,049.7 1,147.8 1,217.1 1,159.4 1,212.5 1,297.1 74 Mutual funds 820.2 901.1 1,025.9 1,073.1 1,083.7 1,083.0 1,073.1 1,053.7 1.073.9 1,088.1 1,099.2 75 Closed-end funds 101.1 98.3 102.8 105.9 104.3 105.1 105.9 106.7 107.4 108.2 109.0 76 Government-sponsored enterprises 807.9 902.2 1,163.9 1,399.5 1,268.5' 1,339.1' 1,399.5 1,426.6' 1,483.8' 1,532.8 1,602.9 77 Federally related mortgage pools 1,711.3R 1,825.8 2,018.4 2,292.2' 2.182.7 2,246.1 2,292.2' 2,322.1' 2,355.3' 2,414.5 2,491.9 78 Asset-backed securities issuers (ABSs) 773.9 937.7 1,219.4 1,435.3 1,352.7 1,409.8 1,435.3 1,463.9 1,495.8 1.534.3 1.611.2 79 Finance companies 544.5 566.4 618.4 713.3 660.9 678.2 713.3 747.0 780.6 795.5 812.4 30 Mortgage companies 41.2 32.1 35.3 35.6 35.6 32.5 35.6 34.1 35.5 35.4 35.9 31 Real estate investment trusts (REITs) 30.4 50.6 45.5 42.9 45.3 44.7 42.9 38.8 38.2 37.3 36.0 37 Brokers and dealers 167.7 182.6 189.4 154.7' 158.8' 166.8' 154.7' 201.1 189.3 243.5 225.8 33 Funding corporations 121,0R 166.7R 169.8' 305.8' 211.1' 214.9' 305.8' 306.7' 354.2' 334.6 351.6 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 19,810.4r 21,300.0r 23,461.9r 25,731.4r 24,512.7r 25,128.7r 25,731.4r 26,126.1r 26,521.1' 26,952.0 27,513.9 Other liabilities 35 Official foreign exchange 53.7 48.9 60.1 50.1 50.9 52.1 50.1 49.4 46.5 44.9 46.1 36 Special drawing rights certificates 9.7 9.2 9.2 6.2 8.2 7.2 6.2 6.2 4.2 3.2 2.2 37 Treasury currency 18.9R 19.3' 19.9' 20.9' 20.4' 20.9' 20.9' 21.4' 22.1' 23.2 23.2 38 Foreign deposits 521.7 619.7 639.0 725.8 694.9 712.3 725.8 790.4 792.6' 770.3 750.3 39 Net interbank liabilities 240.8 219.4 189.0 204.5 207.1 199.6 204.5 168.1 215.9 200.3 198.5 40 Checkable deposits and currency 1,244.8 1,286.1 1,333.4 1,484.8 1,353.1 1,353.8 1,484.8 1,392.9 1.409.7 1,385.7 1,413.7 41 Small time and savings deposits 2,377.0 2,474.1 2,626.5 2,671.2 2,644.6 2,665.9 2.671.2 2,728.0 2,738.8 2,790.9 2,864.2 4? Large time deposits 590.9 713.4 805.5 936.1 809.0 837.5 936.1 966.5 987.4 1,025.9 1,052.1 43 Money market fund shares 886.7 1,042.5 1,329.7 1.578.8 1,393.5 1,444.9 1,578.8 1,666.0 1,627.1 1,697.8 1,812.3 44 Security repurchase agreements 701.5 822.4 913.7 1,083.4' 957.1' 999.4' 1,083.4' 1,155.8 1,185.1 1,238.6 1,196.5 45 2,342.4 2,989.4 3,610.5 4,553.4 4,049.1 3,931.5 4,553.4 4,863.3 4,759.6 4.815.0 4,432.8 46 Security credit 358.1 469.1 572.3 676.6' 586.5' 593.1' 676.6' 803.7 780.5 805.8 812.1 47 Life insurance reserves 610.6 665.0 718.3 783.9 749.8 756.2 783.9 799.9 809.4 822.3 823.5 48 Pension fund reserves 6,582.4R 7,725.5R 8,760.0' 9,747.7' 9,294.3' 8,959.6' 9,747.7' 9,952.3' 9,869.2' 10,021.9 9.847.5 49 Trade payables L,809.3R 1,941,4R 1,970.3 2,167.6' 2,030.8' 2,097.9' 2,167.6' 2.198.3' 2,229.9' 2,269.9 2,314.1 50 Taxes payable 123.8 139.5 151.5 167.2' 162.4 167.5 167.2' 180.5' 180.0' 184.1 184.1 51 Investment in bank personal trusts 871.3 942.5 1,001.0 1,130.4 1,061.0 1,019.0 1,130.4 1,163.0' 1,124.1' 1,122.3 1,039.0 52 Miscellaneous 6,349. LR 6,670.6R 7,237.9' 7,787.5' 7,431.5' 7,448.5' 7,787.5' 7,915.4' 8,164.1' 8,609.7 8,777.6 53 Total liabilities 45,502.9r 50,097.8r 55,409.7r 61,507.5r 58,017.0r 58,395.6r 61,507.5r 62,947.3r 63,467.3r 64,783.9 65,103.6 Financial assets not included in liabilities ( + ) 54 Gold and special drawing rights 21.4 21.1 21.6 21.4 20.8 21.3 21.4 21.4 21.5 21.4 21.6 55 Corporate equities 10,255.8 13,201.3 15,427.8 19,576.3 17,060.4 16,214.9 19,576.3 20,232.0 19.258.1' 19,066.7 17,168.8 56 Household equity in noncorporate business 3,889.2 4,164.4 4,414.7 4,704.5 4,548.9' 4,623.1 4,704.5 4,732.2 4,779.2' 4.835.0 4,915.7 Liabilities not identified as assets ( — ) 57 Treasury currency -6.R -6.3' -6.4' -7.1' -6.6' -6.6' -7.1' -7.6' -7.9' -7.6 -8.0 58 Foreign deposits 437.0 538.3 548.2 615.0 584.7 591.5 615.0 667.4' 650.9' 623.0 590.0 59 Net interbank transactions -10.6 -32.2 -27.0 -25.5 -10.6 -13.2 -25.5 -13.9 -11.6 -17.6 -4.1 60 Security repurchase agreements 109.8' 172.9' 234.3' 264.4' 291.6' 325.0' 264.4' 411.3' 416.5' 445.3 379.0 61 Taxes payable 76.9 92.6 102.0 95.3' 112.2 96.5' 95.3' 89.1' 103.0' 93.7 96.2 62 Miscellaneous -1,517.9' -1,889.8' -2,434.3' -2,884.0' -2,673.2' -2,988.0' -2,884.0' -3,029.7' -3,035.6' -2,805.8 -3,126.0 Floats not included in assets ( — ) 63 Federal government checkable deposits -1.6 -8.1 -3.9 -9.9 -12.4 -10.2 -9.9 -6.5 -5.2 --77..88 --22..33 64 Other checkable deposits 30.1 26.2 23.1 22.3 22.1 14.5 22.3 18.7 22.5 15.5 24.0 65 Trade credit 171.8R 133.5' 94.5 145.9' 19.2' 36.2' 145.9' 94.7' 62.3' 51.5 133.3 66 Total identified to sectors as assets 60,380.0r 68,457.3r 76,743.2r 87,593.4r 81,320.0r 81,209.2r 87,593.4r 89,709.3r 89,331.2r 90,316.8 89,127.7 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. L.L and L.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A42 Domestic Nonfinancial Statistics • April 2001 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 2000 2001 MMeeaassuurree 11999988 11999999 22000000 May June July Aug. Sept. Oct. Nov. Dec. Jan.? 1 Industrial production' 134.0 139.6 147.5 147.2 147.9 147.6 148.6 149.0 148.7r 148.2r 147.4 147.0 Market groupings 2 Products, total 127.2 131.2 136.2r 135.5 136.0 135.8 136.6 136.7 136.3 136.4 135.9 135.0 3 Final, total 129.3 133.3 138.8 137.5 138.3 138.1 139.2 139.3 138.8 139.0r 138.5 137.7 4 Consumer goods 118.4 120.8 123.0r 123.5 124.2 122.9 123.8 123.8 122.7 122.7r 122.4 121.0 5 Equipment 147.1 153.8 166.0 163.1 164.3 166.3 167.9 168.3 169.1 169.8r 169.0 169.4 6 Intermediate 121.0 125.1 128.8r 129.4 129.0 128.7 128.8 128.6 128.7r 128.4 127.8 127.0 7 Materials 145.7 154.5 167.9r 168.4 169.4 169.0 170.5 171.3 171.r 169.6r 168.4 168.7 Industry groupings 8 Manufacturing 138.2 144.8 153.6 153.1 153.8 153.7 154.6 155.1 154.9r 154.0r 152.4 152.3 9 Capacity utilization, manufacturing (percent)2. . 81.3 80.5 81.3 81.9 82.0 81.6 81.7 81.7 81.2 80.4 79.2 78.9 10 Construction contracts3 122.6r 135.lr 140.6 137.0' 145.0r 138.0r 137.0r 141.0r 146.0" 138.0r 138.0 145.0 11 Nonagricultural employment, total4 123.5r 126.3r 128.9 129.1 129.1 129.1 129.0 129.2 129.3 129.3 129.3 129.6 12 Goods-producing, total 103.0r 103.3r 104.0 104.1 104.2 104.4 103.9 103.9 104.0 103.9 103.6 103.9 1 1 3 4 M M a a n n u u f f a a c c t t u u r r i i n n g g , , t p o r t o a d l uction workers 19090..00 r r 9 9 7 8 . . 6 4 r r 9 9 7 7 . . 0 6 9 9 7 7 . . 3 9 9 9 7 7 . . 3 9 9 9 7 8 . . 6 4 9 9 7 7 . . 0 5 9 9 6 7 . . 7 2 9 9 6 7. . 1 7 9 97 6 . . 0 6 9 9 6 6 . . 3 6 9 96 6 . . 1 0 15 Service-producing 130.0 133.7r 136.8 137.0 137.1 137.0 137.0 137.3 137.3 137.4 137.6 137.8 16 Personal income, total 186.5 196.6 209.0 207.9 208.9 209.5 210.1 212.5 212.1 212.6 213.5 n.a. 17 Wages and salary disbursements 184.6 196.9 210.1 208.4 209.8 211.0 211.3 212.7 214.0 214.8 215.2 n.a. 18 Manufacturing 152.3 157.4 164.2 162.9 164.3 165.8 164.9 165.1 166.6 166.9 165.6 n.a. 19 Disposable personal income5 182.7 191.9 202.0 201.3 202.1 202.5 202.9 205.2 204.4 204.7 205.5 n.a. 20 Retail sales5 178.4 194.7 210.0 208.5 209.3 211.1 211.0 212.7 212.5 211.3r 211.5 213.1 Prices'' 21 Consumer (1982-84= 100) 163.0 166.6 172.2 171.5 172.4 172.8 172.8 173.7 174.0 174.1 174.0 175.1 22 Producer finished goods (1982=100) 130.7 133.0 138.0 137.3 138.6 138.6 138.2 139.4r 140.0 139.9 139.7 141.2 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 December 2000. The recent annual revision is described in an article in the 4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series March 2001 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 2001 CCaatteeggoorryy 11999988RR 11999999RR 22000000 June July Aug. Sept. Oct. Nov. Dec. Jan. HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 137.673 139,368 140,863 140,757 140,546 140,724 140,847 141,000 141,136 141,489 141,955 Employment ~> 128,085 130.207 131,903 131,870 131,603 131,622 131,954 132,223 132,302 132.562 132,819 3 Agriculture 3,378 3,281 3,305 3,313 3,295 3,317 3,356 3,241 3,176 3,274 3,179 Unemployment 4 6,210 5,880 5,655 5.574 5,648 5,785 5,537 5,536 5,658 5,653 5,956 5 Rate (percent of civilian labor force) 4.5 4.2 4.0 4.0 4.0 4.1 3.9 3.9 4.0 4.0 4.2 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 125,865 128,786 131,417 131,647 131,607 131,528 131,723 131,789 131,842r 131,861 132,129 7 Manufacturing 18,805 18,543 18,437 18.493 18,548 18,432 18.380 18,378 18,360R 18,304 18,239 8 Mining 590 535 538 539 538 537 539 542 541 540 545 9 Contract construction 6,020 6,404 6,687 6,668 6,670 6,675 6,720 6,745 6,734R 6,716 6,861 10 Transportation and public utilities 6.611 6,826 6,993 6,985 7,010 6,941 7,037 7,046 7,060 7,086 7,083 11 29,095 29,712 30,191 30,171 30,246 30,253 30,249 30,280 30,331R 30,341 30,363 1? Finance 7,389 7.569 7,618 7,588 7,586 7,608 7,622 7.638 7,647R 7,660 7,689 13 Service 37,533 39,027 40,384 40,401 40,403 40,572 40,685 40,696 40,764 40,800 40,881 14 Government 19,823 20,170 20,570 20.802 20,606 20,510 20,491 20,464 20.405r 20,414 20,468 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 2000 2000 2000 SSeerriieess Ql Q2 Q3 Q4r Ql Q2 Q3 Q4r Ql Q2 Q3 Q4r Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 144.4 147.1 148.4 148.1 176.1 178.1 180.1 182.1 82.0 82.6 82.4 81.3 2 Manufacturing 150.1 153.0 154.4 153.8 184.6 186.9 189.2 191.5 81.3 81.9 81.7 80.3 3 Primary processing3 173.5 178.6 180.3 178.7 203.0 206.9 211.2 216.0 85.4 86.4 85.4 82.7 4 Advanced processing4 137.3 139.0 140.3 140.0 172.7 174.1 175.2 176.2 79.5 79.8 80.1 79.5 Durable goods 186.7 192.9 196.7 196.4 228.5 233.3 238.3 243.6 81.7 82.7 82.5 80.6 6 Lumber and products 122.4 120.3 117.0 113.0 147.0 147.5 147.9 148.4 83.3 81.6 79.1 76.1 7 Primary metals 136.1 137.0 133.4 126.6 153.0 153.3 153.4 153.5 88.9 89.4 87.0 82.5 8 Iron and steel 135.0 136.1 130.5 121.2 152.8 153.1 153.4 153.6 88.4 88.9 85.1 78.9 9 Nonferrous 137.4 138.2 137.0 133.0 153.2 153.4 153.4 153.4 89.7 90.1 89.3 86.7 10 Industrial machinery and equipment 242.2 249.4 257.3 261.3 296.3 304.5 311.1 317.3 81.7 81.9 82.7 82.3 1 1 Electrical machinery 476.7 535.1 581.1 607.9 552.1 591.7 639.1 694.1 86.3 90.4 90.9 87.6 1? Motor vehicles and parts 171.8 175.9 170.8 159.6 207.0 208.2 209.2 210.1 83.0 84.5 81.7 75.9 13 Aerospace and miscellaneous transportation equipment 93.7 92.9 93.5 94.7 130.7 130.7 130.4 130.2 71.7 71.1 71.7 72.8 14 Nondurable goods 116.3 116.7 116.2 115.3 143.8 144.1 144.4 144.6 80.9 80.9 80.5 79.7 15 Textile mill products 104.0 103.3 99.8 94.4 124.4 123.9 123.3 122.8 83.6 83.4 80.9 76.9 16 Paper and products 117.6 117.9 114.0 114.9 136.9 137.2 137.5 137.9 85.8 85.9 82.9 83.3 17 Chemicals and products 124.8 125.8 125.4 124.5 161.9 163.0 164.1 164.8 77.1 77.2 76.4 75.6 18 Plastics materials 141.6 140.9 137.6 134.1 151.5 151.6 151.9 152.3 93.5 93.0 90.5 88.1 19 Petroleum products 116.0 118.3 117.3 115.8 123.2 123.2 123.2 123.1 94.1 96.0 95.3 94.0 70 Mining 99.4 100.0 100.6 100.1 116.7 116.5 116.3 115.8 85.2 85.8 86.6 86.4 ?1 Utilities 117.4 120.7 121.0 125.5 131.2 132.3 133.4 134.5 89.5 91.2 90.7 93.3 22 Electric 120.5 124.3 123.9 128.0 129.5 130.9 132.3 133.8 93.1 94.9 93.7 95.6 1973 1975 Previous cycle5 Latest cycle6 2001 2000 2001 High Low High Low High Low Jan. Aug. Sept. Oct.' Nov.r Dec.r Jan.p Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 81.9 82.6 82.4 82.0 81.4 80.7 80.2 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 81.2 81.7 81.7 81.2 80.4 79.2 78.9 3 Primarv processing3 91.2 68.2 88.1 66.2 88.9 77.7 85.1 85.4 85.2 84.5 82.8 81.0 80.5 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.4 80.2 80.2 79.9 79.7 78.8 78.6 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 81.6 82.6 82.7 81.7 80.8 79.4 78.7 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 83.7 78.1 78.9 77.5 75.9 75.1 74.2 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 89.2 86.3 87.3 84.1 82.9 80.5 79.9 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 88.3 84.5 86.0 80.6 79.3 76.8 76.3 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 90.4 88.5 89.0 88.2 87.1 84.8 84.2 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 81.4 82.9 83.1 83.0 82.4 81.7 81.1 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 85.1 90.8 90.2 88.5 87.4 86.9 86.3 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 83.6 83.1 83.8 79.7 76.2 72.0 67.1 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 71.8 71.7 70.7 71.9 73.3 73.2 73.6 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 80.8 80.5 80.3 80.4 79.9 78.8 78.9 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 83.2 80.6 79.9 78.6 75.5 76.6 76.1 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 85.8 82.3 82.6 85.0 83.2 81.6 81.8 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 77.2 76.7 76.3 76.4 75.7 74.6 74.5 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 95.3 89.1 89.8 90.5 87.7 86.0 83.9 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 92.3 95.5 95.4 94.6 94.9 92.6 92.4 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 84.5 86.9 86.4 86.3 86.2 86.6 88.5 71 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 90.0 91.5 91.0 89.5 92.1 98.3 92.2 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 93.6 95.3 93.9 93.1 95.1 98.6 95.0 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 December 2000. The recent annual revision is described in an article in the 4. Advanced processing includes foods, tobacco, apparel, furniture and fixtures, printing March 2001 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 Resen'e 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 • April 2001 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 2000 2001 2000 GGrroouupp por- avg. tion Jan. Feb. Mar. Apr. May June July Aug. Sept.r Oct.r Nov.r Dec. Jan.p Index (1992 = 100) MAJOR MARKETS 1 Total index 100.0 147.5 143.6 144.3 145.2 146.3 147.2 147.9 147.6 148.6 149.0 148.7 148.2 147.4 147.0 2 Products 60.5 136.2 133.3 134.2 134.4 135.3 135.5 136.0 135.8 136.6 136.7 136.3 136.4 135.9 135.0 3 Final products 46.3 138.8 135.1 135.9 136.0 137.2 137.5 138.3 138.1 139.2 139.3 138.8 139.0 138.5 137.7 4 Consumer goods, total 29.1 123.0 122.1 122.8 122.2 123.2 123.5 124.2 122.9 123.8 123.8 122.7 122.7 122.4 121.0 5 Durable consumer goods 6.1 160.7 162.9 162.6 162.1 164.7 163.8 164.4 158.7 160.0 162.8 157.3 154.4 152.0 147.7 6 Automotive products 2.6 153.0 156.9 154.8 155.3 157.6 157.9 157.8 149.4 153.8 156.7 148.0 143.6 138.7 132.1 7 Autos and trucks 1.7 166.9 171.4 169.0 170.3 173.7 175.7 174.8 160.5 169.8 172.7 159.1 153.0 144.1 132.9 8 Autos, consumer .9 114.0 116.5 116.3 115.1 118.5 119.7 118.1 113.6 120.3 120.5 107.8 103.0 94.3 99.0 9 Trucks, consumer .7 221.6 228.2 223.7 227.3 230.7 233.7 233.2 209.8 221.8 227.1 212.0 204.3 194.7 169.8 10 Auto parts and allied goods .... .9 131.4 134.3 132.5 131.9 132.7 130.6 131.6 131.6 129.1 132.1 130.2 128.2 129.1 128.9 11 Other 3.5 167.1 167.6 169.1 167.7 170.6 168.5 169.8 166.7 165.2 167.7 165.4 164.0 164.0 162.0 12 Appliances, televisions, and air conditioners 1.0 332.5 328.3 336.1 332.3 341.1 334.6 348.2 322.3 325.0 340.5 332.5 334.8 338.3 327.5 13 Carpeting and furniture .8 129.6 129.2 129.7 128.3 131.8 130.8 130.1 131.5 128.6 131.9 129.8 125.4 126.4 125.5 14 Miscellaneous home goods 1.6 120.4 122.7 122.7 122.1 122.7 121.6 120.5 121.3 119.7 118.1 117.5 117.1 115.6 115.4 15 Nondurable consumer goods 23.0 114.2 112.7 113.5 112.9 113.6 114.1 114.8 114.5 115.2 114.7 114.5 115.0 115.1 114.3 16 Foods and tobacco 10.3 110.7 110.3 110.6 110.8 110.9 110.3 110.8 111.0 111.4 110.5 110.4 110.6 109.5 109.5 17 Clothing 2.4 84.9 86.3 87.5 87.2 87.5 86.8 85.1 85.6 84.2 83.1 82.7 83.2 82.0 82.5 18 Chemical products 4.5 136.9 132.9 133.5 134.9 136.5 138.5 139.3 137.4 139.4 138.4 139.0 138.4 137.7 138.1 19 Paper products 2.9 111.1 109.1 109.6 108.3 108.2 109.0 111.6 112.4 112.4 112.4 113.8 112.5 111.8 112.5 20 Energy 2.9 116.7 113.1 116.2 110.7 113.6 116.0 117.0 114.9 117.1 118.4 115.5 119.7 126.0 119.0 21 Fuels .8 112.9 108.4 111.0 114.9 112.1 113.1 113.4 112.6 113.1 115.8 113.0 115.5 111.5 111.6 22 Residential utilities 2.1 118.6 115.1 118.5 107.4 113.8 117.1 118.5 115.6 119.0 119.1 116.2 121.6 134.8 123.0 23 Equipment 17.2 166.0 158.7 159.8 161.3 162.8 163.1 164.3 166.3 167.9 168.3 169.1 169.8 169.0 169.4 24 Business equipment 13.2 194.2 185.2 187.0 188.9 191.1 191.6 192.8 195.0 197.8 199.5 200.0 200.4 199.3 198.9 25 Information processing and related 5.4 312.3 284.8 289.2 293.5 298.8 302.5 307.0 313.9 322.1 327.2 332.3 336.7 336.8 340.7 26 Computer and office equipment 1.1 1,157.6 979.1 1,019.5 1,044.0 1,062.0 1,087.8 1,130.8 1,182.8 1,229.0 1,264.1 1,286.4 1,305.0 1,318.3 1,335.6 27 Industrial 4.0 144.5 140.4 142.1 142.2 142.9 143.4 143.8 144.4 147.7 146.5 146.9 146.9 145.5 146.1 28 Transit 2.5 127.7 130.9 130.6 131.5 131.3 129.0 130.1 127.6 126.8 127.7 121.6 121.8 117.4 113.6 29 Autos and trucks 1.2 145.6 153.8 154.2 154.0 156.5 153.9 152.9 141.5 142.8 144.2 131.4 130.4 122.0 113.8 30 Other 1.3 145.7 138.6 138.5 142.9 146.7 145.8 142.8 148.1 144.8 149.3 154.2 148.8 153.4 149.0 31 Defense and space equipment 3.3 76.2 77.1 75.9 76.0 75.5 75.5 76.3 77.9 76.1 73.7 75.3 77.0 77.2 78.4 32 Oil and gas well drilling .6 131.8 121.1 124.6 126.7 126.7 130.3 130.8 136.2 137.1 132.8 136.5 138.9 139.1 149.4 33 Manufactured homes .2 116.5 138.5 133.8 131.7 127.2 122.9 121.9 116.8 115.5 109.3 98.8 90.9 88.0 89.5 34 Intermediate products, total 14.2 128.8 127.8 128.9 129.5 129.3 129.4 129.0 128.7 128.8 128.6 128.7 128.4 127.8 127.0 35 Construction supplies 5.3 143.0 142.6 143.4 144.6 144.4 143.1 143.4 143.8 142.7 143.1 142.3 140.9 139.5 138.8 36 Business supplies 8.9 120.4 119.0 120.3 120.6 120.4 121.3 120.5 119.8 120.6 120.0 120.7 121.0 120.8 120.0 37 Materials 39.5 167.9 162.0 162.4 164.7 166.1 168.4 169.4 169.0 170.5 171.3 171.1 169.6 168.4 168.7 38 Durable goods materials 20.8 227.7 213.4 215.4 220.0 222.7 227.6 230.3 230.5 233.8 235.7 235.0 233.1 230.6 231.2 39 Durable consumer parts 4.0 165.1 164.3 163.2 164.9 162.2 169.9 165.7 158.3 168.3 169.0 168.5 161.9 155.4 149.0 40 Equipment parts 7.6 479.2 404.2 416.6 434.2 451.9 466.8 486.2 499.9 505.7 512.1 515.9 522.4 530.2 542.1 41 Other 9.2 134.5 135.3 134.8 135.9 135.7 135.9 135.9 135.3 134.7 135.5 133.7 131.9 128.8 129.2 42 Basic metal materials 3.1 128.5 130.7 128.8 131.1 131.9 130.8 130.7 128.5 127.5 129.2 125.9 124.4 121.0 120.3 43 Nondurable goods materials 8.9 113.8 116.2 115.3 115.6 115.2 115.7 115.2 113.9 112.8 112.7 113.4 110.6 108.8 108.8 44 Textile materials 1.1 97.8 100.4 101.9 102.2 101.1 100.9 101.7 97.9 99.3 95.9 94.0 89.3 88.9 88.6 45 Paper materials 1.8 115.8 118.2 116.7 118.1 118.7 117.5 118.1 114.9 112.8 113.8 117.2 113.5 109.2 111.1 46 Chemical materials 3.9 117.1 119.7 118.6 118.6 118.1 119.8 118.4 117.0 116.8 116.3 115.9 113.8 111.4 110.9 47 Other 2.1 112.8 114.6 113.0 113.5 112.6 112.4 112.3 113.7 110.2 112.0 114.0 111.1 112.4 111.8 48 Energy materials 9.7 103.4 102.6 102.1 102.5 103.5 103.3 103.1 102.9 104.2 104.3 103.9 104.5 105.8 106.0 49 Primary energy 6.3 98.0 97.2 96.2 97.7 98.8 98.3 98.4 98.7 98.9 98.5 97.8 98.2 99.2 100.4 50 Converted fuel materials 3.3 114.6 113.9 114.6 112.3 113.0 113.7 112.4 110.8 115.1 116.6 117.2 118.7 120.7 117.7 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 147.2 143.0 143.8 144.8 145.7 146.7 147.5 147.5 148.4 148.7 148.8 148.4 147.9 147.7 52 Total excluding motor vehicles and parts 95.1 146.3 142.2 143.0 143.9 144.9 145.8 146.5 146.9 147.4 147.7 147.8 147.7 147.3 147.4 53 Total excluding computer and office equipment 98.2 140.5 137.2 137.8 138.6 139.6 140.4 141.0 140.5 141.4 141.6 141.2 140.7 140.0 139.5 54 Consumer goods excluding autos and trucks . 27.4 120.6 119.5 120.3 119.6 120.5 120.7 121.5 120.9 121.3 121.2 120.7 121.0 121.1 120.2 55 Consumer goods excluding energy 26.2 123.8 123.2 123.5 123.6 124.4 124.4 125.0 123.9 124.5 124.4 123.6 122.9 121.6 121.1 56 Business equipment excluding autos and trucks 12.0 200.1 188.9 190.8 193.1 195.2 196.1 197.6 201.5 204.5 206.3 208.5 209.1 209.0 209.6 57 Business equipment excluding computer and office equipment 12.1 158.4 153.6 154.4 155.7 157.4 157.3 157.6 158.6 160.3 161.2 161.2 161.3 160.0 159.3 58 Materials excluding energy 29.8 188.5 180.8 181.5 184.6 186.0 189.3 190.7 190.3 191.8 193.0 192.8 190.4 188.1 188.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued Monthly data seasonally adjusted 1992 SIC pro- 2000 Group code por- avg. tion Apr. May July Aug. Sept.' Nov.r Index (1992 = 100) MAJOR INDUSTRIES 59 Total index 100.0 147.5 143.6 144.3 145.2 146.3 147.2 147.9 147.6 148.6 149.0 148.7 148.2 147.4 147.0 60 Manufacturing 85.4 153.6 149.2 149.9 151.3 152.2 153.1 153.8 153.7 154.6 155.1 154.9 154.0 152.4 152.3 61 Primary processing 26.5 178.0 171.9 173.0 175.5 177.1 178.7 180.1 179.4 180.3 181.2 181.1 178.8 176.2 176.3 62 Advanced processing 58.9 139.3 136.8 137.1 137.9 138.5 139.1 139.4 139.5 140.5 140.8 140.5 140.4 139.2 139.0 63 Durable goods 45.0 193.4 185.1 186.3 188.9 191.0 193.0 194.6 194.7 196.9 198.4 197.6 196.7 194.9 194.4 64 Lumber and products " '24 2.0 118.2 122.9 122.3 121.9 121.6 120.5 118.7 118.6 115.5 116.8 114.8 112.7 111.5 110.3 65 Furniture and fixtures 25 1.4 142.9 138.9 140.7 139.3 140.7 143.0 141.9 142.6 143.8 146.6 147.2 145.1 144.6 143.9 66 Stone, clay, and glass products 32 2.1 134.5 132.8 133.6 134.4 132.9 134.2 134.6 136.3 136.1 136.5 137.3 134.3 130.2 130.4 67 Primary metals 33 3.1 133.5 136.3 134.7 137.1 137.8 136.7 136.4 133.9 132.4 133.9 129.0 127.2 123.6 122.7 68 Iron and steel 331,2 1.7 131.0 134.8 133.5 136.9 136.8 135.9 135.5 129.9 129.7 131.9 123.7 121.9 118.1 117.3 69 Raw steel 331PT .1 120.9 126.4 121.7 125.8 127.3 127.1 128.2 126.4 123.9 117.7 115.6 106.3 104.6 107.7 70 Nonferrous 333-6,9 1.4 136.4 138.3 136.4 137.6 139.1 137.9 137.6 138.8 135.7 136.5 135.3 133.6 130.0 129.2 71 Fabricated metal products .. 34 5.0 135.5 134.9 135.8 135.6 135.9 136.2 135.7 136.1 136.3 136.0 136.0 134.5 131.8 132.0 72 Industrial machinery and equipment 35 8.0 252.6 238.7 242.1 245.8 247.2 249.9 250.9 253.9 257.9 260.0 261.5 261.3 261.0 260.7 73 Computer and office equipment 357 1.8 1,343.6 1,149.5 1,195.9 1,224.7 1,245.1 1,272.3 1,316.2 1,370.4 1,421.6 1,464.2 1,487.4 1,502.8 1,508.3 1,524.4 74 Electrical machinery 36 7.3 550.8 460.2 474.8 495.2 516.5 533.8 555.0 571.2 580.0 592.2 597.4 606.4 620.0 630.2 75 Transportation equipment. . . 37 9.5 130.9 132.0 130.7 131.9 132.1 133.6 133.5 128.0 132.4 132.4 129.2 126.8 122.6 118.1 76 Motor vehicles and parts . 371 4.9 170.5 172.7 170.3 172.5 174.1 177.6 176.1 163.1 173.9 175.5 167.2 160.1 151.4 141.5 77 Autos and light trucks . 371PT 2.6 153.0 157.1 155.1 156.0 159.2 161.1 160.1 147.8 156.4 158.8 145.8 140.1 131.5 123.2 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 93.8 93.8 93.5 93.7 92.7 92.3 93.6 94.9 93.5 92.1 93.6 95.4 95.2 95.7 79 Instruments 38 5.4 122.2 120.6 119.7 120.2 121.5 121.3 122.2 122.6 123.3 123.7 123.5 124.6 123.3 124.6 80 Miscellaneous 39 1.3 130.8 131.6 130.9 130.6 130.9 130.7 130.5 132.1 130.8 130.9 131.1 130.2 129.7 131.0 81 Nondurable goods 40.4 116.9 116.0 116.3 116.6 116.7 116.7 116.7 116.3 116.3 116.0 116.3 115.5 114.0 114.2 82 Foods "20 9.4 114.6 113.3 114.1 114.9 114.7 114.2 114.9 115.0 115.1 114.6 114.8 115.0 113.3 113.3 83 Tobacco products 21 1.6 95.3 99.8 97.4 94.3 95.6 95.3 93.8 95.8 96.6 94.5 93.7 93.1 94.2 95.2 84 Textile mil] products 22 1.8 100.1 103.6 103.8 104.4 104.4 102.6 103.1 101.4 99.4 98.4 96.7 92.7 93.9 93.1 85 Apparel products 23 2.2 91.6 93.4 94.3 94.1 94.6 93.0 91.2 92.0 90.7 89.5 89.2 89.1 87.5 87.9 86 Paper and products 26 3.6 116.1 117.5 117.4 117.8 118.4 116.5 118.8 114.9 113.3 113.7 117.1 114.8 112.6 113.0 87 Printing and publishing .... 27 6.7 110.0 108.9 108.9 109.7 109.1 109.9 109.1 110.0 110.4 110.9 111.6 111.2 110.1 110.4 88 Chemicals and products .... 28 9.9 128.3 124.8 124.9 124.9 125.2 126.3 125.9 124.8 125.9 125.4 125.8 124.8 123.0 123.0 89 Petroleum products 29 1.4 117.0 113.7 115.5 118.9 117.2 118.9 118.8 117.0 117.6 117.4 116.5 116.8 114.0 113.7 90 Rubber and plastic products . 30 3.5 142.2 143.2 143.2 143.0 143.5 142.6 143.5 144.4 142.1 141.9 141.3 138.9 136.3 137.9 91 Leather and products 31 .3 69.7 72.1 71.4 70.6 70.0 70.5 69.3 70.0 68.8 69.8 68.6 68.5 67.0 67.4 92 Mining 6.9 99.9 98.6 99.1 100.4 99.9 99.6 100.4 100.5 101.0 100.4 100.1 99.9 100.2 102.3 93 Metal 'lO .5 96.8 101.3 99.1 99.7 98.8 95.7 97.5 92.9 95.8 99.3 96.3 93.6 93.0 92.9 94 Coal 12 1.0 108.9 106.8 102.6 110.1 112.6 112.2 113.6 110.3 109.3 107.0 110.2 108.6 106.1 110.7 95 Oil and gas extraction 13 4.8 95.0 93.5 94.0 94.6 94.0 94.3 94.8 95.7 96.3 95.7 95.1 95.4 96.2 98.2 96 Stone and earth minerals 14 .6 126.1 124.9 131.7 133.4 130.4 123.9 127.7 124.4 125.0 123.7 124.6 120.5 118.4 119.5 97 Utilities 7.7 121.0 117.8 119.5 114.7 118.7 121.6 121.7 119.1 122.1 121.7 120.0 123.8 132.6 124.7 98 Electric 491.3PT 6.2 124.0 120.8 121.0 119.7 122.8 125.2 124.8 121.1 126.1 124.7 124.2 127.3 132.4 128.0 99 Gas 492,3PT 1.6 111.2 106.8 113.1 98.3 104.4 108.7 110.5 111.0 108.4 110.5 105.8 111.5 129.6 112.8 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 152.6 147.9 148.7 150.1 151.0 151.7 152.6 153.2 153.5 153.9 154.3 153.8 152.6 153.1 101 Manufacturing excluding computer and office equipment 83.6 145.4 141.9 142.3 143.6 144.4 145.2 145.8 145.4 146.2 146.5 146.2 145.4 143.7 143.6 102 Computers, communications equipment, and semiconductors 5.9 1,197.8 955.1 999.4 1,048.5 1,097.8 1,140.2 1,193.1 1,248.0 1,281.6 1,310.3 1,334.8 1,361.0 1,393.6 1,424.7 103 Manufacturing excluding computers and semiconductors 81.1 128.2 127.1 127.1 127.8 128.0 128.4 128.4 127.7 128.2 128.4 128.0 127.0 125.2 124.8 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 125.0 124.3 124.3 124.9 125.1 125.4 125.3 124.5 124.9 125.0 124.6 123.5 121.6 121.2 Gross value (billions of 1992 dollars, annual rates) Major Markets 105 Products, total 2,001.9 2,860.5 2,828.5 2,846.9 2,853.1 2,868.9 2,872.7 2,883.5 2,865.7 2,882.9 2,889.1 2,867.4 2,866.0 2,847.3 2,813.1 106 Final 1,552.1 2,203.1 2,170.2 2,183.5 2,186.3 2,202.8 2,205.6 2,218.6 2,202.8 2,220.5 2,228.1 2,205.4 2,207.0 2,190.8 2,161.5 107 Consumer goods 1,049.6 1,339.6 1,334.8 1,342.3 1,338.5 1,347.2 1,349.8 1,357.8 1,338.7 1,348.7 1,353.7 1,334.7 1,334.8 1,325.5 1,300.9 108 Equipment 502.5 865.7 840.3 846.2 854.0 862.2 862.2 867.3 872.8 880.8 883.3 880.9 882.6 875.5 872.6 109 Intermediate 449.9 657.0 657.2 662.3 665.6 665.0 666.0 663.9 661.8 661.5 660.2 661.0 658.0 655.5 650.5 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 December 2000. The recent annual revision is described in an article in the Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. March 2001 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 • April 2001 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 2000 IItteemm 11999988 11999999 22000000 Mar. Apr. May June July Aug. Sept. Oct.1 Nov.1" Dec. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,612 1,664 1,570 1,597 1,559 1,511 1,528 1,511 1,486 1.518 1,546 1,598 1,507 2 One-family 1,188 1,247 1,181 1.238 1,164 1,150 1,127 1,117 1,140 1,157 1,191 1,183 1,158 3 Two-family or more 425 417 389 359r 395r 36 r 401r 394r 346r 361r 355 415 349 4 Started 1,617 1,667 1,594 1,630 1,652 1,591 1,571 1,527 1,519 1,537 1,529 1,564 1.568 5 One-family 1,271 1,335 1,263 1,327 1.310 1,258 1,227 1,201 1,229 1,226 1,232 1,233 1,304 6 Two-family or more 346 332 330 303r 342r 333r 344r 326r 290r 31 lr 297 331 264 7 Under construction at end of period1 971 993 978 1,031 1,029 1,023 1,024 1,020 1,016 1,009 1,011 1,006 1,008 8 One-family 659 679 658 706 703 697 696 691 692 689 691 685 687 9 Two-family or more 312 314 320 325r 326r 326r 328r 329r 324r 320r 320 321 321 10 Completed 1.474 1,636 1,606 1,728 1,660 1,705 1,545 1,531 1,612 1,575' 1,546 1,589 1,551 11 One-family 1,160 1,307 1,282 1,375 1,354 1,377 1,222 1,216 1,266 l,273r 1.212 1,293 1,260 12 Two-family or more 315 329 324 353 306 328 323 315 346 302 334 296 291 13 Mobile homes shipped 374 348 250 287 271 265 262 251 249 231 213 196 176 Merchant builder activity in one-family units 14 Number sold 886 907 906 947 865 875 827 914 860 924r 940 900 1,034 15 Number for sale at end of period' 300 326 312 321 305 308 312 311 313 309r 312 316 308 Price of units sold (thousands of dollars 16 Median 152.5 160.0 168.5 165.7 163.1 165.0 159.9 168.6 165.0 171.5r 176.0 174.0 158.6 17 Average 181.9 195.8 206.4 205.3 207.5 200.1 197.7 202.4 200.4 208.4r 215.0 212.1 208.1 EXISTING UNITS (one-family) 18 Number sold 4,959 5,198 5,057 5,170r 4,910r 5,190r 5,220r 4,800r 5,240r 5,210r 5,100 5,330 4,980 Price of units sold (thousands of dollars 19 Median 128.4 133.3 139.0 134.7 136.1 137.6 140.2 143.3 143.2 141.6 138.6 139.5 139.7 20 Average 159.1 168.3 176.2 171.5 173.3 176.0 178.9 177.7 183.0 178.6 176.9 176.5 178.5 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 710,104 765,719 809,218 829,517 816,156 811,816 798,860 793,036 801,748 813,477 805,433 807,005 811,456 22 Private 550,983 592,037 624,689 637,743 629,491 629,820 624,383 619,046 616,918 625,317 620,086 623,818 625,472 23 Residential 314,058 348,584 358,918 372.1 18 368.948 367,653 363,756 355,196 350,783 351,682 348,898 347,332 346,751 24 Nonresidential 236,925 243,454 265,771 265,625 260,543 262,167 260,627 263,850 266,135 273,635 271,188 276,486 278,721 25 Industrial buildings 40,464 35,016 40,553 39,030 38,670 39,814 39,951 42,081 41,552 40,872 42,651 45,897 43,638 26 Commercial buildings 95,753 103,759 115,080 116.030 115,042 113,381 112,834 112,114 115,279 118,445 117,094 116,659 120,685 27 Other buildings 39,607 41,279 45,778 45,808 44,136 45,540 44,559 45,689 46,779 46,689 46,790 47,134 47,312 28 Public utilities and other 61,101 63,400 64,359 64,757 62,695 63,432 63,283 63,966 62,525 67,629 64,653 66,796 67.086 29 Public 159,121 173,682 184,529 191.774 186,665 181,995 174,477 173,990 184,830 188,160 185,347 183,187 185,983 30 Military 2,538 2,122 2,249 2,249 2,180 2,246 2,157 2,100 2,331 2,418 1,844 2,590 2,082 31 Highway 48,339 54,447 52,558 59,007 55,923 51,966 48,148 49,262 52,694 53,183 48,081 47,207 48,715 32 Conservation and development 5,421 6,002 6,009 6,494 5,840 5,363 5.832 4,875 5,629 6,158 6,793 5,681 6,245 33 Other 102,823 111,110 123,712 124,024 122,722 122,420 118,340 117,753 124,176 126,401 128,629 127,709 128,941 1. Not at annual rates. SOURCE. Bureau of the Census estimates for all series except (1) mobile homes, which are 2. Not seasonally adjusted. private, domestic shipments as reported by the Manufactured Housing Institute and season- 3. Recent data on value of new construction may not be strictly comparable with data for ally adjusted by the Census Bureau, and (2) sales and prices of existing units, which are previous periods because of changes by the Bureau of the Census in its estimating techniques. published by the National Association of Realtors. All back and current figures are available For a description of these changes, see Construction Reports (C-30-76-5), issued by the from the originating agency. Permit authorizations are those reported to the Census Bureau Census Bureau in July 1976. from 19,000 jurisdictions beginning in 1994. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Selected Measures A47 2.15 CONSUMER AND PRODUCER PRICES Percentage changes based on seasonally adjusted data except as noted Change from 12 Change from 3 months earlier Change from 1 month earlier months earlier (annual rate) IIInnndddeeexxx llleeevvveeelll,,, IIIttteeemmm 2000 2000 2001 JJJaaannn... 22000000 22000011 222000000111111 JJaann.. JJaann.. Mar.r June1 Sept.1" Dec.r Sept. Oct. Nov. Dec. Jan. CONSUMER PRICES2 (1982-84=100) 1 All items 2.7 3.7 5.6 2.4 3.3 2.3 .5 .2 .2 .2 .6 175.1 7 Food 1.5 2.9 2.4 1.9 4.1 2.1 .2 .1 -.R .5 .3 170.9 3 Energy items 14.7 17.8 43.4 5.6 7.9 3.8 4.r ,5r ,2r ,3r 3.9 132.5 4 All items less food and energy 2.0 2.6 2.9 2.2 2.9 2.0 .3 .R .3 .1 .3 183.5 Commodities -.1 .8 1.1 -.6 1.7 .0 ,4R ,2r -.r .1 144.8 6 Services 3.0 3.4 3.9 3.4 3.2 3.2 .1 .2 .3 ,2r .4 205.7 PRODUCER PRICES (1982=100) 7 Finished goods 2.5 4.8 7.9 2.3 2.0 2.9 ,7r .4 .1 ,2r 1.1 141.2 K Consumer foods -.4 2.5 2.7 3.3 -1.2 2.4 .2 ,7r .3' -.4 .8 138.4 9 Consumer energy 17.5 21.6 53.1 6.5 6.4 13.8 3.4r 1.6r ,8r ,8r 3.8 101.9 10 Other consumer goods 1.1 2.4 .8 1.3 2.4 .3 ,3r -.R ,0r ,2R .8 156.5 11 Capital equipment .4 1.3 .9 1.5 1.7 .3 ,2r -.r .0 .R .3 140.2 Intermediate materials 12 Excluding foods and feeds 4.6 4.4 9.5 3.1 3.1 1.2 .7 .2 -,lr .2 .8 113322..44 13 Excluding energy 2.4 1.5 4.2 2.7 .3 -.6 .0 .0 -.1 .0 .2 137.1 Crude materials 14 Foods -4.6 9.1 15.0 -7.3 -8.2 36.0 3.8r 3.r 1.3 3.4r 2.2 105.3 15 Energy 50.8 110.2 84.9 163.6 20.0 64.0 11.7R 2.8' -4.1 14.8 25.0 193.4 16 Other 16.3 -7.4 9.9 -11.9 -8.8 -10.2 ,8r -.6 -2.3 ,3r .5 138.7 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 • April 2001 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 1999 2000 AAccccoouunntt 11999988 11999999 22000000 Q4 Qi Q2 Q3 Q4 GROSS DOMESTIC PRODUCT 1 Total 8,790.2 9,299.2 9,965.7 9,559.7 9,752.7 9,945.7 10,039.4 10,125.0 Bv source 2 Personal consumption expenditures 5,850.9 6.268.7 6,758.6 6,446.2 6,621.7 6,706.3 6,810.8 6,895.6 3 Durable goods 693.9 761.3 820.4 787.6 826.3 814.3 824.7 816.2 4 Nondurable goods 1.707.6 1.845.5 2,009.5 1,910.2 1,963.9 1,997.6 2,031.5 2.045.1 3 Services 3,449.3 3.661.9 3,928.7 3,748.5 3,831.6 3,894.4 3.954.6 4,034.2 6 Gross private domestic investment 1,549.9 1,650.1 1,834.1 1,723.7 1,755.7 1,852.6 1.869.3 1,858.9 7 Fixed investment 1,472.9 1.606.8 1,776.8 1.651.0 1,725.8 1,780.5 1,803.0 1.797.8 8 Nonresidential 1.107.5 1.203.1 1.360.8 1,242.2 1,308.5 1,359.2 1,390.6 1,384.8 9 Structures 283.2 285.6 323.8 290.4 308.9 315.1 330.1 341.3 10 Producers" durable equipment 824.3 917.4 1,036.9 951.8 999.6 1,044.1 1.060.5 1,043.5 II Residential structures 365.4 403.8 416.0 408.8 417.3 421.3 412.4 413.0 12 Change in business inventories 77.0 43.3 57.4 72.7 29.9 72.0 66.4 61.1 13 Nonfarm 76.4 43.6 58.8 71.8 32.4 72.2 67.5 63.0 14 Net exports of goods and services -151.5 -254.0 -370.4 -299.1 -335.2 -355.4 -389.5 -401.6 15 966.0 990.2 1,099.0 1,031.0 1,051.9 1,092.9 1,130.8 1,120.3 16 Imports 1,117.5 1.244.2 1,469.4 1,330.1 1,387.1 1,448.3 1,520.3 1,521.9 17 Government consumption expenditures and gross investment 1,540.9 1.634.4 1,743.4 1,688.8 1,710.4 1.742.2 1.748.8 1,772.2 18 Federal 540.6 568.6 595.4 591.6 580.1 604.5 594.2 603.0 19 State and local 1,000.3 1,065.8 1,148.0 1,097.3 1,1.30.4 1,137.7 1,154.6 1,169.2 Bx major txpe of product 20 Final sales, total 8.713.2 9.255.9 9,908.4 9,486.9 9.722.8 9,873.7 9,973.1 10,063.9 21 3,239.3 3,467.0 3,738.0 3,566.0 3,680.3 3,734.1 3,776.5 3,761.1 22 Durable 1,532.3 1,651.1 1,805.2 1,701.8 1,773.7 1,809.6 1,830.6 1,806.7 23 Nondurable 1,707.1 1.815.8 1,932.8 1,864.1 1,906.6 1,924.5 1,945.9 1,954.3 24 Services 4,673.0 4.934.6 5,255.5 5.050.3 5,135.2 5,231.4 5.281.6 5,373.7 25 Structures 800.9 854.3 914.9 870.7 907.4 908.2 915.0 929.1 26 Change in business inventories 77.0 43.3 57.4 72.7 29.9 72.0 66.4 61.1 27 Durable goods 45.8 27.2 39.7 47.5 20.7 48.3 39.2 50.5 28 Nondurable goods 31.2 16.1 17.7 25.2 9.2 23.7 27.2 10.6 MEMO 29 Total GDP in chained 1996 dollars 8,515.7 8,875.8 9,320.4 9,084.1 9,191.8 9,318.9 9,369.5 9,401.5 NATIONAL INCOME 30 Total 7,038.1 7,469.7 n.a. 7,680.7 7,833.5 7,983.2 8,088.5 n.a. 31 Compensation of employees 4,984.2 5.299.8 5,638.6 5,421.1 5,512.2 5,603.5 5,679.6 5,759.1 32 Wages and salaries 4,192.8 4.475.1 4,769.7 4,583.5 4,660.4 4,740.1 4,804.9 4,873.5 33 Government and government enterprises 692.7 724.4 761.0 734.5 749.9 760.2 765.4 768.7 34 Other 3,500.1 3.750.7 4,008.7 3,849.0 3,910.5 3,980.0 4,039.5 4,104.8 35 Supplement to wages and salaries 791.4 824.6 868.9 837.7 851.8 863.3 874.7 885.6 36 Employer contributions for social insurance 305.9 323.6 344.8 330.3 337.8 342.9 347.1 351.6 37 Other labor income 485.5 501.0 524.0 507.4 514.0 520.5 527.6 534.1 38 Proprietors' income' 620.7 663.5 710.5 689.6 693.9 709.5 724.8 713.8 39 Business and professional1 595.2 638.2 687.9 657.9 674.8 688.1 693.1 695.8 40 Farm' 25.4 25.3 22.6 31.7 19.1 21.5 31.7 18.0 41 Rental income of persons" 135.4 143.4 140.4 146.2 145.6 140.8 138.1 136.9 42 Corporate profits' 815.0 856.0 n.a. 893.2 936.3 963.6 970.3 n.a. 43 Profits before tax3 758.2 823.0 n.a. 870.7 920.7 942.5 945.1 n.a. 44 Inventory valuation adjustment 17.0 -9.1 n.a. -19.2 -25.0 -13.6 -4.5 n.a. 45 Capital consumption adjustment 39.9 42.1 33.6 41.6 40.6 34.7 29.7 29.2 46 Net interest 482.7 507.1 n.a. 530.6 545.4 565.9 575.7 n.a. 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 11999988 11999999 22000000 Q4 QI Q2 Q3 Q4 PERSONAL INCOME AND SAVING 1 Total personal income 7,391.0 7,789.6 8,281.0 7,972.3 8,105.8 8,242.1 8,349.0 8,427.1 2 Wage and salary disbursements 4,190.7 4,470.0 4,769.1 4,578.3 4,660.4 4,740.1 4.804.9 4,870.9 3 Commodity producing industries 1,038.6 1,089.2 1,153.1 1,111.2 1,130.9 1,147.1 1,161.4 1.172.9 4 Manufacturing 756.6 782.4 815.9 795.1 802.8 813.1 821.4 826.3 Distributive industries 949.1 1,020.3 1,107.1 1,049.4 1,070.9 1,095.7 1,118.1 1.143.6 6 Service industries 1,510.3 1,636.0 1,748.1 1,683.2 1,708.6 1,737.2 1,760.1 1,786.5 7 Government and government enterprises 692.7 724.4 760.8 734.5 749.9 760.2 765.4 767.9 8 Other labor income 485.5 501.0 524.0 507.4 514.0 520.5 527.6 533.9 9 Proprietors' income1 620.7 663.5 710.5 689.6 693.9 709.5 724.8 713.8 10 Business and professional' 595.2 638.2 688.0 657.9 674.8 688.1 693.1 695.8 11 Farm' 25.4 25.3 22.6 31.7 19.1 21.5 31.7 17.9 12 Rental income of persons" 135.4 143.4 140.1 146.2 145.6 140.8 138.1 136.0 N Dividends 351.1 370.3 396.6 380.2 386.9 392.6 399.7 407.2 14 Personal interest income 940.8 963.7 1,033.7 989.0 1.011.6 1,031.3 1.042.9 1,049.2 15 Transfer payments 983.0 1,016.2 1,067.7 1,027.4 1,046.9 1,066.1 1,074.2 1.083.6 16 Old-age survivors, disability, and health insurance benefits 578.0 588.0 622.4 592.8 607.9 624.3 627.2 630.4 17 LESS: Personal contributions for social insurance 316.2 338.5 360.7 345.9 353.4 358.8 363.1 367.5 18 EQUALS: Personal income 7,391.0 7,789.6 8,281.0 7,972.3 8,105.8 8,242.1 8,349.0 8,427.1 19 LESS: Personal tax and nontax payments 1,070.9 1,152.0 1,291.8 1,197.3 1,239.3 1,277.2 1,308.1 1,342.4 20 EQUALS: Disposable personal income 6,320.0 6,637.7 6,989.3 6,775.0 6,866.5 6,964.9 7,040.9 7,084.7 21 LESS: Personal outlays 6,054.7 6,490.1 6,998.4 6,674.1 6,855.6 6,944.3 7,054.7 7.138.9 22 EQUALS: Personal saving 265.4 147.6 -9.1 101.0 11.0 20.6 -13.8 -54.3 MEMO Per capita (chained 1996 dollars) ->3 Gross domestic product 31,474.2 32,511.9r 33,836.6 33,153.5 33.485.6 33.874.7 33,984.3 33,987.9 24 Personal consumption expenditures 20,988.5 21,900.4r 22,855.5 22,266.4 22,635.5 22,757.7 22,959.1 23,059.6 25 Disposable personal income 22,672.0 23,191.0 23,638.0 23,404.0 23,472.0 23,639.0 23,732.0 23,711.0 26 Saving rate (percent) 4.2 2.2 -.1 1.5 •2 .3 -.2 -.8 GROSS SAVING 27 Gross saving 1,654.4 1,717.6 n.a. 1,746.3 1,777.0 1,844.5 1,854.7 n.a. 28 Gross private saving 1,375.7 1,343.5 n.a. 1,331.4 1,279.2 1,328.8 1,319.2 n.a. 79 Personal saving 265.4 147.6 -9.1 101.0 11.0 20.6 -13.8 -54.3 30 Undistributed corporate profits' 218.9 229.4 n.a. 241.7 262.7 278.5 279.6 n.a. 31 Corporate inventory valuation adjustment 17.0 -9.1 n.a. -19.2 -25.0 -13.6 -4.5 n.a. Capital consumption allowances 3? Corporate 624.3 676.9 739.3 694.8 711.5 731.1 775500..00 776644..88 33 Noncorporate 265.1 284.5 301.0 288.7 294.1 298.7 303.3 307.8 34 Gross government saving 278.7 374.1 n.a. 414.9 497.7 515.7 535.5 n.a. 35 Federal 137.4 217.3 n.a. 238.4 333.0 339.9 354.1 n.a. 36 Consumption of fixed capital 88.4 92.8 99.8 95.0 97.2 98.9 100.8 102.3 37 Current surplus or deficit (-), national accounts 49.0 124.4 n.a. 143.3 235.8 240.9 253.3 n.a. 38 State and local 141.3 156.8 n.a. 176.6 164.7 175.8 181.4 n.a. 39 Consumption of fixed capital 99.5 106.8 116.8 109.9 112.7 115.6 118.2 120.6 40 Current surplus or deficit ( —), national accounts 41.7 50.0 n.a. 66.6 52.0 60.1 63.2 n.a. 41 Gross investment 1,629.6 1,645.6 n.a. 1,678.5 1,699.3 1,771.9 1,752.8 n.a. 47 Gross private domestic investment 1,549.9 1,650.1 1,832.9 1,723.7 1,755.7 1,852.6 1,869.3 1,854.0 43 Gross government investment 278.8 308.7 336.4 324.4 334.2 331.9 333.6 345.9 44 Net foreign investment -199.1 -313.2 n.a. -369.6 -390.7 -412.5 -450.1 n.a. 45 Statistical discrepancy -24.8 -71.9 n.a. -67.8 -77.7 -72.5 -101.8 n.a. 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 • April 2001 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 Q3 Q4 Ql Q2 Q3 1 Balance on current account -140,540 -217,138 -331,479 -89,649 -96,223 -101,505 -104,971 -113,773 ? Balance on goods and services -105,932 -166,898 -264.971 -72.718 -76,280 -85,117 -88,598 -96,503 3 Exports 936,937 932,977 956,242 241,969 249,653 255,977 265,969 274,657 4 Imports -1,042,869 -1,099,875 -1,221,213 -314,687 -325,933 -341,094 -354,567 -371,160 5 Income, net 6,186 -6,211 -18,483 -5,535 -5,683 -4,364 -4,103 -4,518 6 Investment, net 11,050 -1,036 -13,102 -4,193 -4,319 -2,987 -2,706 -3,172 7 Direct 71,935 67,728 62,704 15,701 16,275 17,068 19,015 21,558 8 Portfolio -60,885 -68,764 -75,806 -19,894 -20,594 -20,055 -21,721 -24,730 9 Compensation of employees -4,864 -5,175 -5,381 -1.342 -1,364 -1,377 -1,397 -1,346 10 Unilateral current transfers, net -40,794 -44,029 -48,025 -11,396 -14,260 -12,024 -12,270 -12,752 11 Change in U.S. government assets other than official reserve assets, net (increase, —) 68 -422 2,751 -686 3,711 -131 -574 110 12 Change in U.S. official reserve assets (increase, -) -1,010 -6,783 8,747 1,951 1,569 -554 2,020 -346 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -350 -147 10 -184 -178 -180 -180 -182 15 Reserve position in International Monetary Fund -3,575 -5,119 5,484 2,268 1,800 -237 2,328 1,300 16 Foreign currencies 2,915 -1,517 3,253 -133 -53 -137 -128 -1,464 17 Change in U.S. private assets abroad (increase, —) -487,998 -328,231 -441,685 -124,174 -120,162 -178,273 -93,870 -76,968 18 Bank reported claims -141,118 -35,572 -69,862 -11.259 -45,304 -55,511 18,320 -11,383 19 Nonbank-reported claims -122,888 -10,612 -92,328 -27,943 -24,428 -52,563 -36,507 931 20 U.S. purchases of foreign securities, net -118,976 -135,995 -128,594 -41,420 -17,150 -27,236 -38,196 -30,428 21 U.S. direct investments abroad, net -105,016 -146,052 -150,901 -43,552 -33,280 -42,963 -37,487 -36,088 7.7 Change in foreign official assets in United States (increase, +) 18,876 -20,127 42,864 12,191 27,495 22,015 6,346 11,625 23 U.S. Treasury securities -6,690 -9,921 12,177 12,963 5,122 16,198 -4,000 -9,001 24 Other U.S. government obligations 4,529 6,332 20,350 1,835 6,730 8,107 10,334 14,272 25 Other U.S. government liabilities2 -1,041 -3,550 -3,255 -760 89 -644 -781 -620 26 Other U.S. liabilities reported by U.S. banks2 22,286 -9,501 12,692 -2,032 14,427 -2,577 -111 6,339 27 Other foreign official assets3 -208 -3,487 900 185 1,127 931 904 635 28 Change in foreign private assets in United States (increase, +) 738,086 502,362 710,700 182,019 157,072 214,520 238,803 188,544 29 U.S. bank-reported liabilities4 149,026 39,769 67,403 24,585 19,618 -8,824 46,943 13,981 30 U.S. nonbank-reported liabilities 113,921 -7.001 34,298 -8,085 792 58.061 24,038 2,633 31 Foreign private purchases of U.S. Treasury securities, net 146,433 48,581 -20,464 9,639 -17,191 -9,248 -20,597 -12,642 32 U.S. currency flows 24,782 16,622 22,407 4,697 12,213 -6,847 989 757 33 Foreign purchases of other U.S. securities, net 197,892 218,075 331,523 95,620 92,250 132,416 87,107 118,882 34 Foreign direct investments in United States, net 106,032 186,316 275,533 55,563 49,390 48,962 100,323 64,933 35 Capital account transactions, net5 350 637 -3,500 171 -3,993 166 170 165 36 Discrepancy -127,832 69,702 11,602 18,177 30,531 43,762 -47,924 -9,357 37 Due to seasonal adjustment -9,739 5.738 5,724 -2,515 -9,691 38 Before seasonal adjustment -127,832 69,702 11,602 27,916 24,793 38,038 -45,409 334 MEMO Changes in official assets 39 U.S. official reserve assets (increase, -) -1,010 -6,783 8,747 1,951 1,569 -554 2,020 -346 40 Foreign official assets in United States, excluding line 25 (increase, +) 19,917 -16,577 46,119 12,951 27,406 22,659 7,127 12,245 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) 12,124 -11,531 1,331 -783 -1,673 6,109 1,913 3,450 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38-41. and dealers. 2. Associated primarily with military sales contracts and other transactions arranged with 5. Consists of capital transfers (such as those of accompanying migrants entering or or through foreign official agencies. leaving the country and debt forgiveness) and the acquisition and disposal of nonproduced 3. Consists of investments in U.S. corporate stocks and in debt securities of private nonfinancial assets. corporations and state and local governments. SOURCE. U.S. Department of Commerce, Bureau of Economic Analysis, Survey of Current 4. Reporting banks included all types of depository institutions as well as some brokers Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Summary Statistics A51 3.11 U.S. FOREIGN TRADE' Millions of dollars; monthly data seasonally adjusted 2000 IItteemm 11999988 11999999 22000000 Juner Julyr Aug.r Sept.1" Oct.r Nov. Dec.P 1 Goods and services, balance -166,898 -264,971 -369,689 -29,893 -31,891 -30,126 -33,808 -33,620 -33,127 -32,994 7 Merchandise -246,854 -345,559 -449,468 -36,929 -38,591 -36,751 -39,396 -39,955 -39,125 -39,176 3 Services 79,956 80,588 49,779 7,036 6,700 6,625 5,588 6,335 5,998 6,182 4 Goods and services, exports 932,977 956,242 1,068,397 91,265 89,632 92,845 92,631 91,105 90,557 89,820 5 Merchandise 670,324 684,358 773,304 66,445 65,073 67,950 67,813 66,323 65,848 64,925 6 Services 262,653 271,884 295,093 24,820 24,559 24,895 24,818 24,782 24,709 24,895 7 Goods and services, imports 1,099,875 1,221,213 1,438,086 -121,158 -121,523 -122,971 -126,439 -124,725 -123,684 -122,814 8 Merchandise 917,178 1,029,917 1,222,772 -103,374 -103,664 -104,701 -107,209 -106,278 -104,973 -104,101 9 Services 182,697 191,296 215,314 -17,784 -17,859 -18,270 -19,230 -18,447 -18,711 -18,713 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 2001 AAsssseett 11999977 11999988 11999999 July Aug. Sept. Oct. Nov. Dec. Jan. Feb.? 1 Total 69,954 81,761c 71,516 66,516 65,333 66,256 65,257 65,523 67,647 67,542 66,486 2 Gold stock1 11,047c 11,046c 11,048c 11,046 11,046 11,046 11,046 11,046 11,046 11,046 11,046 3 Special drawing rights2'3 10,027 10,603 10,336 10,257 10,371 10,316 10,169 10,369 10,539 10,497 10,641 4 Reserve position in International Monetary Fund2 18,071 24,111 17,950 15,083 13,798 13,685 13,528 13,491 14,824 15,079 14,107 5 Foreign currencies4 30,809 36,001 32,182 30,130 30,118 31,209 30,514 30,617 31,238 30,920 30,692 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 BANKS' Millions of dollars, end of period 2000 2001 AAsssseett 11999977 11999988 11999999 July Aug. Sept. Oct. Nov. Dec. Jan. Feb.p 1 Deposits 457 167 71 76 78 139 115 104 215 199 195 Held in custody 2 U.S. Treasury securities" 620,885 607,574 632,482 624,177 628,001 611,641 595,591 591,071 594,094 594,694 603,906 3 Earmarked gold3 10,763 10,343 9,933 9,688 9,674 9,620 9,565 9,505 9,451 9,397 9,343 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 • April 2001 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2000 IItteemm 11999988 11999999 June July Aug. Sept. Oct.' Nov. Dec.p 1 Total1 759,928 806318 836,024r 846,745r 849,175r 848,546r 850,116 849,049 844,688 By type 2 Liabilities reported by banks in the United States' 125,883 138,847 136,072 139,627 136,989 143,010 146,452 147,631 144,550 3 U.S. Treasury bills and certificates3 134,177 156.177 157,190 160,093 159,781 155,498 155,101 155,061 151,872 U.S. Treasury bonds and notes 4 Marketable 432,127 422,266 433,829r 433,190r 433,639r 427,013r 419,863 414,896 415,964 5 Nonmarketable4 6,074 6,111 5,740 5,180 5,213 5,247 5,280 5,313 5,348 6 U.S. securities other than U.S. Treasury securities5 61,667 82,917 103,193 108,655 113,553r 117,778r 123,420 126,148 126,954 By area 7 Europe1 256,026 244,805 253,416 257,712 255,635 257,498 264,131 262,099 253,492 8 Canada 10,552 12,503 13,542 13,728 12,692r 12,821r 12,632 11,744 12,394 9 Latin America and Caribbean 79,503 73,518 71,25 lr 73,350r 76,353r 77,548r 77,526 78,742 76,812 10 Asia 400,631 463,703 485,343 487,417 490,110 486,890 481,344 481,094 488,080 11 Africa 10,059 7,523 7,850 8,656 8,707 8,466 8,323 8,012 8,115 12 Other countries 3,157 4,266 4,622 5,882 5,678 5,323 6,160 7,358 5,795 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 Dec. Mar. June Sept. 1 Banks' liabilities 103,383 117,524 101,125 88,537 85,649 85,842 78,872 2 Banks' claims 66,018 83,038 78,162 67,365 63,492 67,862 60,355 .3 Deposits 22.467 28,661 45,985 34,426 32,967 31,224 25,847 4 Other claims 43,551 54,377 32,177 32,939 30,525 36,638 34,508 5 Claims of banks' domestic customers2 10,978 8,191 20,718 20,826 21,753 18,802 19,123 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 11999988 11999999 22000000 June July Aug. Sept. Oct. Nov. Dec.p BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1347,837 1,408,740 1,523,372 1,451,491 1,480,318 1,444,482 1,453,627 l,511,130r 1,525,177 1,523,372 7 Banks' own liabilities 884,939 971,536 1,048,773 1,012,619 1,050,467 1,013,420 1,027,122 l,074,532r 1,073,534 1,048,773 3 Demand deposits 29,558 42,884 33,546 30,719 34,914 30,101 31,964 29,500 31,701 33,546 4 Time deposits2 151,761 163,620 191,781 182,963 186,483 184,820 184,822 185,459 192,420 191,781 Other3 140,752 155,853 172,953 168,148 172,466 173,971 174,458 194,628 187,066 172,953 6 Own foreign offices4 562,868 609,179 650,493 630,789 656,604 624,528 635,878 664,945r 662,347 650,493 7 Banks' custodial liabilities5 462,898 437,204 474,599 438,872 429,851 431,062 426,505 436,598r 451,643 474,599 8 U.S. Treasury bills and certificates6 183,494 185,676 177,742 180,822 182,699 180,925 174,604 173,984 173,896 177,742 9 Other negotiable and readily transferable instruments7 141,699 132,617 144,858 124,670 120,624 119,212 120,296 129,753r 132,453 144,858 10 Other 137,705 118,911 151,999 133,380 126,528 130,925 131,605 132,861r 145,294 151,999 11 Nonmonetary international and regional organizations8 . . 11,883 15,276 12,281 21,366 16,689 14,630 15,658 17,104 17,074 12,281 12 Banks' own liabilities 10,850 14,357 11,878 20,924 16,294 14,377 15,404 16,751 16,676 11,878 13 Demand deposits 172 98 41 34 30 26 19 48 30 41 14 Time deposits2 5,793 10,349 6,264 12,545 10,305 9,062 7,627 5,925 6,542 6,264 15 Other3 4,885 3,910 5,573 8,345 5,959 5,289 7,758 10,778 10,104 5,573 16 Banks' custodial liabilities5 1,033 919 403 442 395 253 254 353 398 403 17 U.S. Treasury bills and certificates6 636 680 252 432 371 217 223 215 249 252 18 Other negotiable and readily transferable instruments7 397 233 149 10 21 26 26 138 147 149 19 Other 0 6 2 0 3 10 5 0 2 2 20 Official institutions9 260,060 295,024 297,660 293,262 299,720 296,770 298,508 301,553r 302,692 297,660 71 Banks' own liabilities 80,256 97,615 97,052 88,392 92,739 90,985 95,049 102,654r 102,110 97,052 77 Demand deposits 3,003 3,341 3,950 2,887 4,063 4,573 5,213 4,361 4,702 3,950 73 Time deposits2 29,506 28,942 35,638 33,696 34,641 32,009 36,679 34,035r 35,335 35,638 24 Other3 47,747 65,332 57,464 51,809 54,035 54,403 53,157 64,258r 62,073 57,464 75 Banks' custodial liabilities5 179,804 197,409 200,608 204,870 206,981 205,785 203,459 198,899 200,582 200,608 26 U.S. Treasury bills and certificates6 134,177 156,177 153,010 157,190 160,093 159,781 155,498 155,101 155,061 153,010 27 Other negotiable and readily transferable instruments7 44,953 41,182 47,360 47,611 46,363 45,644 47,660 43,753 44,828 47,360 28 Other 674 50 238 69 525 360 301 45 693 238 79 Banks10 885,336 900,379 981,552 926,262 955,206 921,181 927,099 963,606r 973,539 981,552 30 Banks' own liabilities 676,057 728,492 789,052 755,644 792,072 754,093 762,392 797,354r 794,924 789,052 31 Unaffiliated foreign banks 113,189 119,313 138,559 124,855 135,468 129,565 126,514 132,409r 132,577 138,559 37 Demand deposits 14,071 17,583 15,532 14,543 17,508 11,959 12,918 12,160 12,834 15,532 33 Time deposits2 45,904 48,140 67,498 58,095 60,703 62,841 59,958 64,301r 68,828 67,498 34 Other3 53,214 53,590 55,529 52,217 57,257 54,765 53,638 55,948r 50,915 55,529 35 Own foreign offices4 562,868 609,179 650,493 630,789 656,604 624,528 635,878 664,945r 662,347 650,493 36 Banks' custodial liabilities5 209,279 171,887 192,500 170,618 163,134 167,088 164,707 166,252r 178,615 192,500 37 U.S. Treasury bills and certificates6 35,359 16,796 15,919 13,081 12,657 12,251 10,667 9,972 10,285 15,919 38 Other negotiable and readily transferable instruments7 45,332 45,695 35,104 34,657 34,018 33,893 32,679 34,26 LR 34,643 35,104 39 Other 128,588 109,396 141,477 122,880 116,459 120,944 121,361 122,019r 133,687 141,477 40 Other foreigners 190,558 198,061 231,879 210,601 208,743 211,901 212,362 228,867 231,872 231,879 41 Banks' own liabilities 117,776 131,072 150,791 147,659 149,362 153,965 154,277 157,773 159,824 150,791 47 Demand deposits 12,312 21,862 14,023 13,255 13,313 13,543 13,814 12,931 14,135 14,023 43 Time deposits2 70,558 76,189 82,381 78,627 80,834 80,908 80,558 81,198 81,715 82,381 44 Other3 34,906 33,021 54,387 55,777 55,215 59,514 59,905 63,644 63,974 54,387 45 Banks' custodial liabilities5 72,782 66,989 81,088 62,942 59,381 57,936 58,085 71,094 72,048 81,088 46 U.S. Treasury bills and certificates6 13,322 12,023 8,561 10,119 9,579 8,676 8,216 8,696 8,301 8,561 47 Other negotiable and readily transferable instruments7 51,017 45,507 62,245 42,392 40,261 39,649 39,931 51,601 52,835 62,245 48 Other 8,443 9,459 10,282 10,431 9,541 9,611 9,938 10,797 10,912 10,282 MEMO 49 Negotiable time certificates of deposit in custody for foreigners 27,026 30,345 34,088 26,571 26,186 25,911 25,991 27,164 25,854 34,088 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 • April 2001 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 11999988 11999999 22000000 June July Aug. Sept. Oct. Nov. Dec.p AREA 50 Total, all foreigners 1,347,837 1,408,740 1,523,372 1,451,491 1,480,318 1,444,482 1,453,627 l,511,130r 1,525,177 1,523,372 51 Foreign countries 1,335,954 1,393,464 1,511,091 1,430,125 1,463,669 1,429,852 1,437,969 l,494,026r 1,508,103 1,511,091 52 Europe 427,375 441,810 449,144 442,979 476,570 451,531 459,595 480,968r 469,232 449,144 53 Austria 3,178 2,789 2,724 2,709 3,239 2,783 2,541 2,037 2,671 2,724 54 Belgium and Luxembourg 42,818 44,692 33,401 31,219 33,282 31,281 29,828 29,648r 32,389 33,401 55 Denmark 1,437 2,196 3,001 3,444 3,521 3,689 3,429 3.001 3,531 3,001 56 Finland 1,862 1,658 1,412 1,395 1,751 1,618 1,512 1.418 1,874 1,412 57 France 44,616 49,790 37,840 42,095 42,379 42,723 39,693 41.736r 43,534 37,840 58 Germany 21,357 24,753 35,535 28,938 26,484 25,893 26,212 28,633r 27,084 35.535 59 Greece 2,066 3,748 2,013 2,772 2,917 3,455 3,331 3,445r 3,344 2,013 60 Italy 7,103 6,775 5,079 6.739 5,700 5,566 5,959 5,594 5,521 5,079 61 Netherlands 10,793 8,143 7,485 8,783 12,313 13,087 10,311 14,450 13,283 7,485 62 Norway 710 1.327 2,305 2,150 2,337 1.636 3,501 4,102r 5,159 2,305 63 Portugal 3,236 2,228 2,404 2,376 2,169 2.144 2,244 2,262r 2,379 2,404 64 Russia 2,439 5,475 19,020 11,879 14,960 14,252 15,970 17,260r 20,022 19,020 65 Spain 15.781 10,426 7,801 9,935 8,829 8,791 8,421 9,270 6,900 7,801 66 Sweden 3,027 4,652 6,498 5,430 5,100 5,992 6,209 6,247 7,36"' 6,498 67 Switzerland 50.654 63,485 74,732 57,361 76,255 77,578 88,276 97,15 lr 86,154 74,732 68 Turkey 4,286 7.842 7,548 8.472 8,341 7,999 8,173 8,492 4,525 7,548 69 United Kingdom 181,554 172,687 169,476 184,205 194,017 170,705 171,867 170,396r 169,534 169,476 70 Yugoslavia'1 233 286 276 276 277 277 275 270 279 276 71 Other Europe and other former U.S.S.R.'2 30,225 28,858 30,594 32,801 32,699 32.062 31,843 35,556r 33,687 30,594 72 Canada 30.212 34,214 31,059 37,375 37,231 33,722 33,869 34,367 31,252 31,059 73 Latin America and Caribbean 554,866 578,695 702,272 641,860 643.748 633,150 637,599 658,210r 684,379 702,272 74 Argentina 19,014 18,633 19,492 16,559 19,092 17,552 18,560 18,746 17,886 19,492 75 Bahamas 118,085 135,811 189,454 184,295 170,530 176,104 171.452 180,951 179.570 189,454 76 Bermuda 6,846 7,874 9,695 8,025 7,074 8,157 8,100 8,730 8,404 9,695 77 Brazil 15,815 12,865 10,952 10,908 11.950 12,351 11,537 10,204 11,663 10,952 78 British West Indies 302.486 312,278 374,106 323,407 339,700 321.573 331,097 340,926 368,175 374,106 79 Chile 5,015 7,008 5,895 6,194 5,440 5.296 5,346 5,105 5,327 5.895 80 Colombia 4,624 5,669 4,554 4.361 4,627 4,735 4,658 4,945 4.560 4,554 81 Cuba 62 75 88 85 122 91 88 92r 86 88 82 Ecuador 1,572 1,956 2.118 2,276 2,219 2.082 2.074 2,084 2,059 2,118 83 Guatemala 1,336 1,626 1,637 1,658 1,730 1,659 1,671 11,,666677 1,678 1,637 84 Jamaica 577 520 815 687 725 915 830 668800 722 815 85 Mexico 37,157 30,717 33,155 33.943 33,379 33,291 33,878 36,054 33,856 33,155 86 Netherlands Antilles 5,010 4,047 5,496 7,925 7.164 6,373 5,159 4,614 5,318 5,496 87 Panama 3,864 4.415 4,292 3.824 3.353 3,561 3,661 3,788 3,980 4,29'* 88 Peru 840 1.142 1,435 1,133 1,097 1,065 1,091 1,153 1,194 1.435 89 Uruguay 2,486 2,386 3,006 2,689 2,179 2,541 2,567 2,512 2,944 3,006 90 Venezuela 19,894 20,192 24,779 22,258 21.462 23,909 23,997 24,284r 25,963 24.779 91 Other 10,183 11,481 11,303 11,633 11,905 11,895 11,833 1 l,675r 10,994 11,303 92 Asia 307,960 319,489 306,412 289,816 285,018 291,017 286,551 229999,,114477rr 301.595 306,412 China 93 Mainland 13.441 12.325 16,538 10,000 9,385 11,769 11,830 13,719 15,835 16,538 94 Taiwan 12,708 13,603 17,690 13,584 13,156 14,675 15,140 18,^89 17,630 17.690 95 Hong Kong 20,900 27,701 26,768 23,638 25,675 26,749 26,583 25,784 25,924 26,768 96 India 5,250 7,367 4,532 5,613 5,712 5,547 5,838 5,548 5,173 4,532 97 Indonesia 8,282 6,567 8,524 7,341 7,342 7,318 7,310 7,589 8.375 8,524 98 Israel 7,749 7.488 8,055 6,124 5,794 5,951 7,132 6.668 6,538 8,055 99 Japan 168,563 159,075 150,434 153,649 147,549 146,382 142,782 150,196 149,679 150,434 100 Korea (South) 12,524 12,988 7,967 10.349 8,618 8,819 9,043 6,684 6,689 7,967 101 Philippines 3,324 3,268 2,430 2.003 1,649 1,679 1,822 1,676 2,334 2.430 102 Thailand 7,359 6,050 3,129 3,529 3,900 3,504 3,330 3,178 3.477 3,129 103 Middle Eastern oil-exporting countries13 15,609 21,314 23,760 18,578 22,195 21,968 21.851 23,852 23,732 23,760 104 Other 32,251 41,743 36,585 35,408 34,043 36.656 33,890 35,964r 36,209 36,585 105 Africa 8.905 9,468 10.836 8,729 9.739 9,607 9,821 9,663r 9,515 10,836 106 Egypt 1,339 2,022 2,622 1,966 1,780 1,615 1.544 1.546 1,655 2,622 107 Morocco 97 179 139 149 118 109 112 121 100 139 108 South Africa 1,522 1,495 1.011 601 792 708 842 767 853 1,011 109 Zaire 5 14 4 6 5 7 5 4 4 4 110 Oil-exporting countries14 3,088 2,914 4,052 3,405 4,258 4,470 4.499 4,405 4,027 4,052 111 Other 2,854 2,844 3,008 2,602 2,786 2,698 2,819 2,820r 2,876 3,008 112 Other 6,636 9.788 11,368 9,366 11,363 10,825 10,534 11,671 12,130 11,368 113 Australia 5,495 8,377 10,090 8.563 10,346 9,825 9,507 10,562 10,961 10,090 114 Other 1,141 1,411 1.278 803 1,017 1,000 1,027 1,109 1,169 1,278 115 Nonmonetary international and regional organizations . . 11,883 15,276 12.281 21,366 16,689 14,630 15,658 17,104 17,074 12,281 116 International15 10.221 12,876 11,008 20,106 15,295 13,118 14.387 16,126 16,068 11,008 117 Latin American regional16 594 1,150 740 768 786 1,146 888 589 523 740 118 Other regional17 1,068 1,250 533 492 608 366 383 389 483 533 11. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 15. Principally the International Bank for Reconstruction and Development. Excludes 12. Includes the Bank for International Settlements. Since December 1992, has "holdings of dollars" of the International Monetary Fund. included all parts of the former U.S.S.R. (except Russia), and Bosnia, Croatia, and Slovenia. 16. Principally the Inter-American Development Bank. 13. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 17. Asian, African, Middle Eastern, and European regional organizations, except the Bank Emirates (Trucial States). for International Settlements, which is included in "Other Europe." 14. Comprises Algeria, Gabon, Libya, and Nigeria. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Nonbank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. Dollars Millions of dollars, end of period 2000 AArreeaa oorr ccoouunnttrryy 11999988 11999999 22000000 June July Aug. Sept. Oct. Nov. Dec.p 1 Total, all foreigners 734,995 793,139 894,579 827,178 829,845 796,497 840,425 862,67lr 864,863 894,579 2 Foreign countries 731,378 788,576 889,893 822,455 825,959 792,720 835,560 857,448r 861,023 889,893 3 Europe 233,321 311,686 383,872 353,006 357,980 327,409 359,865 365,685r 371,891 383,872 4 Austria 1,043 2,643 2,941 2,119 2,617 1,956 2,584 2,809 2,681 2,941 5 Belgium and Luxembourg 7,187 10,193 5,516 6,392 6,302 5,819 6,344 6,020 5,036 5,516 6 Denmark 2,383 1,669 3,312 3,442 3,349 3,278 3,403 3.093 3,462 3,312 7 Finland 1,070 2,020 7,402 2,601 2,897 2,701 3,561 4,927 6,517 7,402 8 France 15,251 29,142 40,323 28,635 25,845 23,229 27,062 34,217r 34,567 40,323 9 Germany 15,923 29,205 36,973 33,583 30,452 31,804 33,229 33,017 32,161 36,973 in Greece 575 806 658 836 754 557 516 628r 876 658 11 Italy 7,284 8,496 7,629 7,688 6,447 7,358 6,215 6,482 6,738 7,629 V Netherlands 5,697 11,810 17,294 15,669 13,159 14,999 15,507 16,165 15,975 17,294 n Norway 827 1,000 5,012 1,932 2,401 1,448 4,474 4,655 6,159 5,012 14 Portugal 669 1,571 1,382 1,424 1.454 1,273 1.480 1,574 1,249 1,382 15 Russia 789 713 517 744 718 666 643 647 663 517 16 Spain 5,735 3,796 2,848 3,844 4,767 3,566 3,208 3,360 2,593 2,848 17 Sweden 4,223 3,264 9,301 8,692 8,404 8,761 8,501 8,504 8,815 9,301 18 Switzerland 46,874 79,158 82,383 86,284 94,550 87,172 100,345 103,818r 107,986 82,383 19 Turkey 1,982 2,617 3,175 3,188 2,735 2,855 2,821 2,831 3,260 3,175 ?0 United Kingdom 106,349 115,971 148,875 137,697 143,459 123,360 132,503 122,829 125,223 148,875 71 Yugoslavia2 53 50 50 49 49 49 49 49 49 50 22 Other Europe and other former U.S.S.R.3 9,407 7,562 8,281 8,187 7,621 6,558 7,420 10,060r 7,881 8,281 23 Canada 47,037 37,206 40,068 42,606 40,420 37,934 37,610 38,639 39,283 40,068 ?4 Latin America and Caribbean 342,654 355,168 378,821 334,463 334,855 338,764 347,550 357,575r 358,393 378,821 Argentina 9,552 10.894 11,546 10,729 10.660 10,597 10,840 11,166 11,468 11,546 Bahamas 96,455 99,066 96,999 83,524 76,477 78,896 83,126 83.523 79,167 96,999 77 Bermuda 5,011 8,007 9,343 6,285 6,906 4,684 6,265 8,426 8,324 9,343 78 Brazil 16,184 16,987 20,567 17,902 18,199 18,555 19,061 20,202 19,840 20,567 79 British West Indies 153,749 167,189 189,100 164,969 172,232 175,936 178,744 184,812 188,994 189,100 30 Chile 8,250 6,607 5,816 6,213 6,070 5,985 5,954 5,756r 5,772 5,816 31 Colombia 6,507 4,524 4,370 3,797 3.909 3,953 3,850 3,846 3,938 4,370 37. Cuba 0 0 0 0 0 3 0 0 0 0 33 Ecuador 1,400 760 635 613 610 607 623 639 629 635 34 Guatemala 1,127 1,135 1,246 1,235 1,215 1,277 1,226 1,245 1,247 1,246 35 Jamaica 239 295 355 291 299 305 337 379 355 355 36 Mexico 21,212 17,899 17,431 17,066 16,426 16,840 16,849 16,723' 16,946 17,431 37 Netherlands Antilles 6,779 5,982 5.801 6,502 6,652 5,804 5,770 6,158 6,554 5,801 38 Panama 3,584 3,387 2,935 3,063 2,981 2,882 2,781 2,668 2,839 2,935 39 Peru 3,275 2,529 2,808 2,458 2,488 2,487 2,697 2,653 2,713 2,808 4n Uruguay 1,126 801 675 620 649 777 728 663 677 675 41 Venezuela 3,089 3,494 3,520 3,471 3,357 3,410 3,390 3,321 3,451 3,520 42 Other 5,115 5,612 5,674 5,725 5,725 5,766 5,309 5,395 5,479 5,674 43 Asia 98,607 75,143 78,770 82,398 83,127 79,022 81.655 87,682r 83,363 78,770 China 44 Mainland 1,261 2.110 1,608 1,688 1,822 1.601 1,519 1,912 1,644 1,608 45 Taiwan 1,041 1,390 2,247 1,335 922 790 2,475 3,691 2,483 2,247 46 Hong Kong 9,080 5,903 6,715 4,261 5,777 5,403 6,014 6,540 6,454 6,715 47 India 1,440 1.738 2,178 1,905 2,013 2,037 2,006 1,787 1,736 2,178 48 Indonesia 1,942 1,776 1,917 1,856 1,940 1,880 1,982 2,009 1,961 1,917 49 Israel 1,166 1,875 2,729 1,610 1,982 2,281 1,116 1,551 1,911 2,729 50 Japan 46,713 28,641 35,112 33,256 31,209 32,494 35,234 35.773 36,468 35,112 51 Korea (South) 8,289 9,426 7,784 15,855 18,915 16,924 14,457 18,589 16,189 7,784 52 Philippines 1,465 1,410 1,784 1,868 1,802 1,483 1,495 1,473 1,758 1,784 53 Thailand 1,807 1,515 1,381 1,255 1,051 1,059 1,071 1,046 1,221 1,381 54 Middle Eastern oil-exporting countries4 16,130 14,267 10,091 12,128 10,367 10,006 9,961 9,867r 8,487 10,091 55 Other 8,273 5,092 5,224 5,381 5,327 3,064 4,325 3,444 3,051 5,224 56 Africa 3,122 2,268 2,151 2,482 2,505 2,215 2,597 2,29 r 1,977 2,151 57 Egypt 257 258 201 230 217 186 176 201 184 201 58 Morocco 372 352 204 259 272 247 254 252 235 204 59 South Africa 643 622 366 760 411 358 372 322 341 366 6n Zaire 0 24 0 0 0 0 0 0 0 0 61 Oil-exporting countries5 936 276 471 430 751 616 913 656 342 471 62 Other 914 736 909 803 854 808 882 860r 875 909 63 Other 6,637 7,105 6,211 7,500 7,072 7,376 6,283 5,576 6,116 6,211 64 Australia 6,173 6,824 5,962 7,240 6,891 7,036 6,036 5,238 5,938 5,962 65 Other 464 281 249 260 181 340 247 338 178 249 66 Nonmonetary international and regional organizations6. .. 3,617 4,563 4,686 4,723 3,886 3,777 4,865 5,223 3,840 4,686 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 • April 2001 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 11999999 22000000 June July Aug. Sept. Oct. Nov. Dec.P 1 Total 875,891 944,937 1,085,295 l,011,076r 1,009,702 1,085,295 2 Banks' claims 734,995 793,139 894,579 827,178 829,845 796,497 840,425 862,671 864,863 894,579 3 Foreign public borrowers 23,542 35,090 38,327 41,224 48.478 41,459 40,436 49,693 49.373 38,327 4 Own foreign offices2 484,535 529,682 612.778 557.717 557,557 544,142 576,452 586,918 593,256 612,778 5 Unaffiliated foreign banks 106,206 97,186 99.648 88,954 85,738 78,561 87,276 83.035 82,988 99,648 6 Deposits 27,230 34,538 23,886 22,371 21,856 21,822 23,765 23,598 23,758 23,886 7 Other 78,976 62,648 75,762 66.583 63.882 56,739 63,511 59,437 59,230 75,762 8 All other foreigners 120,712 131,181 143,826 139,283 138,072 132.335 136,261 143,025 139,246 143,826 9 Claims of banks' domestic customers3 140.896 151.798 190.716 183,898r 169,277 190,716 10 Deposits 79,363 88,006 99,846 105,846r 87,108 99,846 11 Negotiable and readily transferable instruments4 47,914 51,161 78.147 62.975 70,334 78.147 12 Outstanding collections and other claims 13,619 12.631 12,723 15,077 11,835 12,723 MEMO 13 Customer liability on acceptances 4,520 4.553 4,258 5,055r 4,701 4,258 14 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States5 39,978 31.125 53,153 44,139 46,337 55,293 57,784 53,848 55,899 53,153 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 tiled with bank regulatory 5. Includes demand and time deposits and negotiab'^ 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 States' Payable in U.S. Dollars Millions of dollars, end of period 1999 2000 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa"" 11999966 11999977 11999988 Dec. Mar. June Sept. 1 Total 258,106 276,550 250,418 267,082 262,173 273,139 263,500 BY borrower 2 Maturity of one year or less 211.859 205,781 186.526 187,894 181,050 185.927 174,809 3 Foreign public borrowers 15,411 12.081 13,671 22,811 23,436 24,850 23,647 4 All other foreigners 196,448 193.700 172,855 165.083 157,614 161.077 151,162 5 Maturity of more than one year 46.247 70,769 63,892 79.188 81.123 87,212 88,691 6 Foreign public borrowers 6,790 8,499 9.839 12,013 12.852 15,905 16.236 7 All other foreigners 39,457 62,270 54,053 67,175 68,271 71,307 72.455 By area Maturity of one year or less 8 Europe 55,690 58,294 68.679 80,842 79.638 75,561 69,486 9 Canada 8,339 9,917 10,968 7,859 8,408 7,344 8,225 10 Latin America and Caribbean 103.254 97,207 81,766 69,498 62.923 66,140 65.918 11 Asia 38.078 33.964 18,007 21.802 23.002 29.091 23,874 12 Africa 1.316 2.211 1,835 1.122 957 1,520 1,594 13 All other3 5,182 4.188 5,271 6,771 6,122 6,271 5,712 Maturity of more than one year 14 Europe 6,965 13,240 14.923 22,951 23,951 25,404 27,550 15 Canada 2,645 2,525 3,140 3,192 3.127 3.323 3,261 16 Latin America and Caribbean 24.943 42,049 33.442 39.051 39,714 42,427 41,166 17 Asia 9.392 10,235 10,018 11,257 11,612 12,549 13,131 18 Africa 1.361 1,236 1,232 1,065 965 924 895 19 All other3 941 1,484 1,137 1,672 1,754 2,585 2,688 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. Banks' Billions of dollars, end of period 1998 1999 2000 Area or country 11999966 11999977 Sept. Dec. Mar. June Sept. Dec. Mar. June Sept. 1 Total 645.8 721.8 1071.9 1051.6 981.9 930.4 930.4 934.5 949.4 989.6 952.9r 2 G-10 countries and Switzerland 228.3 242.8 240.0 217.7 208.9 224.0 208.2 232.3 278.5 320.0 286.9 3 Belgium and Luxembourg 11.7 11.0 11.7 10.7 15.6 16.2 15.7 14.3 14.2 13.8 13.0 4 France 16.6 15.4 20.3 18.4 21.6 20.7 20.0 29.0 27.1 32.6 29.1 5 Germany 29.8 28.6 31.4 30.9 34.7 32.1 37.4 38.7 37.3 31.5 37.8 6 Italy 16.0 15.5 18.5 11.5 17.8 16.4 15.0 18.1 20.0 20.8 18.8 7 Netherlands 4.0 6.2 8.4 7.8 10.7 13.3 11.7 12.3 17.1 16.1 17.6 8 Sweden 2.6 3.3 2.1 2.3 4.0 2.6 3.6 3.0 3.9 3.5 4.3 9 Switzerland 5.3 7.2 7.6 8.5 7.8 8.3 8.8 10.3 10.1 13.8 10.9 10 United Kingdom 104.7 113.4 100.1 85.4 56.2 74.7 52.3 68.2 107.8 144.3 118.7 11 Canada 14.0 13.7 15.9 16.8 15.9 17.1 17.9 16.3 17.5 18.3 18.7 12 Japan 23.7 28.6 23.9 25.4 24.6 22.6 25.7 22.1 23.5 25.4 18.1 1.3 Other industrialized countries 66.1 65.5 78.5 69.0 80.1 79.7 71.7 68.4 62.8 75.2 73.8r 14 Austria 1.1 1.5 2.1 1.4 2.8 2.8 3.0 3.5 2.6 2.8 3.5 15 Denmark 1.5 2.4 3.0 2.2 3.4 2.9 2.1 2.6 1.5 1.2 1.8 16 Finland .8 1.3 1.6 1.4 1.5 .9 .9 .9 .8 1.2 2.8 17 Greece 6.7 5.1 5.8 5.9 6.5 5.9 6.6 6.0 5.7 6.8 6.4 18 Norway 8.0 3.6 3.2 3.2 3.1 3.0 3.8 3.3 3.0 4.6 8.5 19 Portugal .9 .9 1.1 1.4 1.4 1.2 1.2 1.0 1.0 2.0 1.5 20 Spain 13.3 12.6 19.5 13.7 15.7 16.6 15.1 12.1 11.3 12.2 10.5 21 Turkey 2.7 4.5 5.2 4.8 5.2 4.9 4.7 4.8 5.1 5.6 5.6 22 Other Western Europe 4.9 8.3 10.4 10.4 10.2 10.3 9.2 6.8 8.3 8.0 8.4 23 South Africa 2.0 2.2 5.4 4.4 4.8 4.7 4.0 3.8 4.8 4.5 4.2r 24 Australia 24.0 23.1 21.4 20.3 25.4 26.6 21.1 23.5 18.6 26.3 20.5 25 OPEC2 19.8 26.0 26.0 27.1 26.2 26.2 30.1 31.4 28.9 32.3 31.8 26 Ecuador 1.1 1.3 1.2 1.3 1.2 1.1 .9 .8 .7 .7 .6 27 Venezuela 2.4 2.5 3.1 3.2 3.5 3.2 3.0 2.8 3.0 2.9 2.9 28 Indonesia 5.2 6.7 4.7 4.7 4.5 5.0 4.4 4.2 3.9 4.1 4.4 29 Middle East countries 10.7 14.4 16.1 17.0 16.7 16.5 21.4 23.1 21.1 24.0 22.7 30 African countries .4 1.2 .8 1.0 .4 .5 .5 .5 .2 .7 1.2 31 Non-OPEC developing countries 130.3 139.2 140.4 143.4 146.4 148.6 144.6 149.4 154.8 158.3 149.6r Latin America 32 Argentina 14.3 18.4 22.9 23.1 24.4 22.8 22.8 23.2 22.4 21.6 21.4 33 Brazil 20.7 28.6 24.0 24.7 24.2 25.2 23.5 27.7 28.1 28.3 28.5 34 Chile 7.0 8.7 8.5 8.3 8.6 8.2 7.7 7.4 8.2 8.1 7.4 35 Colombia 4.1 3.4 3.4 3.2 3.3 3.1 2.7 2.5 2.5 2.4 2.4 36 Mexico 16.2 17.4 18.7 18.9 19.7 18.5 19.4 18.7 18.3 20.5 17.5 37 Peru 1.6 2.0 2.2 2.2 2.2 2.1 1.8 1.7 1.9 2.1 2.1 38 Other 3.3 4.1 4.6 5.4 5.3 5.5 5.5 5.9 6.5 6.7 6.3 Asia China 39 Mainland 2.5 3.2 2.8 3.0 5.0 5.3 3.3 3.6 4.6 3.8 3.4 40 Taiwan 10.3 9.5 12.5 13.3 11.8 12.6 12.3 12.0 12.6 12.6 12.8 41 India 4.3 4.9 5.3 5.5 5.5 6.7 7.0 7.7 7.9 8.2 5.8 42 Israel .5 .7 .9 1.1 1.1 2.0 1.0 1.8 3.3 1.5 1.1 43 Korea (South) 21.5 15.6 13.1 13.7 13.7 15.3 16.0 15.2 17.4 21.2 21.0 44 Malaysia 6.0 5.1 5.0 5.6 5.9 6.0 6.1 6.1 6.5 6.8 6.9r 45 Philippines 5.8 5.7 4.7 5.1 5.4 5.7 5.8 6.2 5.3 5.3 4.7 46 Thailand 5.7 5.4 5.3 4.7 4.5 4.2 4.0 4.1 4.3 4.0 3.9 47 Other Asia 4.1 4.3 3.1 2.9 3.0 2.8 2.9 2.9 2.6 2.5 2.3 Africa 48 Egypt .7 .9 1.7 1.3 1.4 1.4 1.3 1.4 1.4 1.3 1.1 49 Morocco .7 .6 .5 .5 .5 .5 .5 .4 .3 .3 .4 50 Zaire .1 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .9 .8 1.1 1.0 .9 1.0 1.0 1.0 .9 .9 ,8r 52 Eastern Europe 6.9 9.1 6.3 5.5 6.8 5.7 5.4 5.2 6.3 9.4 9.0r 53 Russia4 3.7 5.1 2.8 2.2 2.0 2.1 2.0 1.6 1.7 1.5 1.4 54 Other 3.2 4.0 3.5 3.3 4.8 3.7 3.4 3.6 4.7 7.9 7.6 55 Offshore banking centers 135.1 140.2 121.0 93.9 83.0 66.0 79.1 59.9 42.0 52.4 50.6 56 Bahamas 20.5 24.2 30.7 35.4 22.0 10.4 18.2 13.7 2.4 .5 .6 57 Bermuda 4.5 9.8 10.4 4.6 3.9 5.7 8.2 8.0 7.3 6.3 6.3 58 Cayman Islands and other British West Indies 37.2 43.4 27.8 12.8 13.9 7.2 6.3 1.3 .0 5.1 5.9 59 Netherlands Antilles 26.1 14.6 6.0 2.6 2.7 1.3 9.1 1.7 2.5 2.6 1.9 60 Panama5 2.0 3.1 4.0 3.9 3.9 3.9 3.9 3.9 3.4 3.3 2.5 61 Lebanon .1 .1 .2 .1 .1 .1 .2 .1 .1 .1 .1 62 Hong Kong, China 27.9 32.2 30.6 23.3 22.8 22.0 22.4 21.0 22.2 20.7 20.6r 63 Singapore 16.7 12.7 11.1 11.1 13.5 15.2 10.6 10.1 4.1 13.6 12.7 64 Other6 .1 .1 .2 2 .2 .1 .2 .1 .1 .1 .1 65 Miscellaneous and unallocated7 59.6 99.1 459.9 495.1 430.4 380.2 391.2 387.9 376.1 342.1 351.1 1. The banking offices covered by these data include U.S. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Sov iet 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 • April 2001 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 June Sept. Dec. Mar. June Sept. 1 Total 61,782 57,382 46,570 49,337 52,979 53,044 53,489 70,534 76,944 2 Payable in dollars 39,542 41,543 36,668 36,032 36,296 37,605 35,614 47,864 51,751 3 Payable in foreign currencies 22,240 15,839 9,902 13,305 16,683 15,415 17,875 22,670 25,193 By type 4 Financial liabilities 33,049 26,877 19,255 25,058 27,422 27,980 29,180 44,068 49,895 5 Payable in dollars 11,913 12,630 10,371 13,205 12,231 13,883 12,858 22.803 26,159 6 Payable in foreign currencies 21,136 14,247 8,884 11,853 15,191 14,097 16,322 21,265 23,736 7 Commercial liabilities 28,733 30,505 27,315 24.279 25,557 25,064 24,309 26,466 27,049 8 Trade payables 12,720 10,904 10,978 10,935 12,651 12,857 12,401 13,764 14,218 9 Advance receipts and other liabilities 16,013 19,601 16,337 13,344 12,906 12,207 11,908 12,702 12,831 10 Payable in dollars 27,629 28,913 26,297 22,827 24,065 23,722 22,756 25,061 25,592 11 Payable in foreign currencies 1,104 1,592 1,018 1,452 1,492 1,318 1,553 1,405 1,457 By area ar country Financial liabilities 12 Europe 23,179 18,027 12,589 19,578 21,695 23,241 24,050 30,332 36,175 13 Belgium and Luxembourg 632 186 79 70 50 31 4 163 169 14 France 1,091 1,425 1,097 1,287 1,675 1,659 1,849 1,702 1,299 15 Germany 1.834 1,958 2,063 1,959 1,712 1,974 1,880 1,671 2,132 lb Netherlands 556 494 1,406 2,104 2,066 1,996 1,970 2,035 2,040 17 Switzerland 699 561 155 143 133 147 97 137 178 18 United Kingdom 17,161 11.667 5,980 13,097 15,096 16,521 16,579 21,463 28,601 19 Canada 1,401 2,374 693 320 344 284 313 714 249 20 Latin America and Caribbean 1,668 1,386 1,495 1,369 1,180 892 846 2,874 3,447 21 Bahamas 236 141 7 1 1 1 1 78 105 22 Bermuda 50 229 101 52 26 5 1 1,016 1,182 23 Brazil 78 143 152 131 122 126 128 146 132 24 British West Indies 1,030 604 957 944 786 492 489 463 501 25 Mexico 17 26 59 19 28 25 22 26 35 26 Venezuela 1 1 2 1 0 0 0 0 0 27 6,423 4,387 3,785 3,217 3,622 3,437 3,275 9,453 9,320 28 Japan 5,869 4,102 3,612 3,035 3,384 3,142 2,985 6,024 4,782 29 Middle Eastern oil-exporting countries' 25 27 0 2 3 4r 4 5 7 30 Africa 38 60 28 29 31 28 28 33 48 31 Oil-exporting countries" 0 0 0 0 0 0 0 0 0 32 All other3 340 643 665 545 550 98 668 662 656 Commercial liabilities 33 Europe 9,767 10,228 10,030 8,718 9,265 9,262 8,646 9,293 9,470 34 Belgium and Luxembourg 479 666 278 189 128 140 78 178 155 35 France 680 764 920 656 620 672 539 711 727 36 Germany 1,002 1,274 1,392 1,143 1,201 1,131 914 948 1,023 37 Netherlands 766 439 429 432 535 507 648 562 424 38 Switzerland 624 375 499 497 593 626 536 565 647 39 United Kingdom 4,303 4,086 3,697 2,959 3,175 3,071 2,661 2,982 3,034 40 Canada 1.090 1,175 1,390 1,670 1,753 1,775 2,024 2,053 1,897 41 Latin America and Caribbean 2,574 2,176 1,618 1,674 1,957 2,310 2,286 2,607 2,523 42 Bahamas 63 16 14 19 24 22 9 10 15 43 Bermuda 297 203 198 180 178 152 287 300 377 44 Brazil 196 220 152 112 120 145 115 119 166 45 British West Indies 14 12 10 5 39 48 23 22 19 46 Mexico 665 565 347 490 704 887 805 1,073 1,080 47 Venezuela 328 261 202 149 182 305 193 239 124 48 Asia 13.422 14,966 12,342 10,039 10,428 9,886 9,681 10,965 11,221 49 Japan 4.614 4.500 3,827 2.753 2,689 2,609 2,274 2,200 2,069 50 Middle Eastern oil-exporting countries' 2.168 3,111 2,852 2,209 2,618 2,551 2,308 3,489 3,720 51 Africa 1,040 874 794 832 959 950 943 950 1,285 52 Oil-exporting countries" 532 408 393 392 584 499 536 575 693 53 Other3 840 1,086 1,141 1,346 1,195 881 729 598 653 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 June Sept. Dec. Mar. June Sept. 1 Total 65,897 68,128 77,462 63,884 67,566 76,669 84,266 80,725 94,806 2 Payable in dollars 59,156 62,173 72,171 57,006 60,456 69,170 74,331 72,294 82,877 3 Payable in foreign currencies 6,741 5,955 5,291 6,878 7,110 7,472 9,935 8,431 11,929 By type 4 Financial claims 37.523 36,959 46,260 31,957 33,877 40,231 47,798 44,303 58,303 5 Deposits 21,624 22,909 30,199 13,350 15,192 18,566 23,316 17.462 30,928 6 Payable in dollars 20,852 21,060 28,549 11,636 13,240 16,373 21,442 15,361 27.974 7 Payable in foreign currencies 772 1,849 1,650 1,714 1,952 2,193 1.874 2,101 2,954 8 Other financial claims 15,899 14,050 16,061 18,607 18,685 21,665 24,482 26,841 27,375 9 Payable in dollars 12,374 11,806 14,049 14,800 15,718 18,593 19,659 22,384 20,541 10 Payable in foreign currencies 3,525 2,244 2,012 3,807 2,967 3,072 4.823 4,457 6,834 11 Commercial claims 28,374 31,169 31,202 31,927 33,689 36,438 36,468 36,422 36,503 12 Trade receivables 25,751 27,536 27,202 27,791 29,397 32,629 31,443 31,277 31,533 13 Advance payments and other claims 2,623 3,633 4,000 4,136 4,292 3,809 5,025 5,145 4,970 14 Payable in dollars 25,930 29,307 29,573 30,570 31,498 34,204 33,230 34,549 34,362 15 Payable in foreign currencies 2,444 1,862 1,629 1,357 2,191 2,207 3,238 1,873 2,141 By area or country Financial claims 16 Europe 11,085 14,999 12,294 13,978 13,878 13,023 16,789 18,254 23,706 17 Belgium and Luxembourg 185 406 661 457 574 529 540 317 304 18 France 694 1,015 864 1,368 1,212 967 1,835 1,292 1,477 19 Germany 276 427 304 367 549 504 669 576 696 20 Netherlands 493 677 875 997 1,067 1,229 1,981 1,984 2,486 21 Switzerland 474 434 414 504 559 643 612 624 626 22 United Kingdom 7,922 10,337 7,766 8,631 8,157 7,561 9,044 11,668 16,191 23 Canada 3,442 3,313 2,503 2,828 3,172 2,553 3,175 5,799 7,517 24 Latin America and Caribbean 20,032 15,543 27,714 11,486 12,749 18,206 21,945 14,874 21,691 25 Bahamas 1,553 2,308 403 467 755 1,593 1,299 655 1,358 26 Bermuda 140 108 39 39 524 11 11 34 22 77 Brazil 1,468 1,313 835 1,102 1,265 1,476 1,646 1,666 1,568 28 British West Indies 15,536 10,462 24,388 7,393 7,263 12,099 15,814 7,751 15,722 29 Mexico 457 537 1,245 1,702 1,791 1,798 1,979 2,048 2,280 30 Venezuela 31 36 55 71 47 48 65 78 101 31 Asia 2,221 2,133 3,027 2,801 3,205 5,457 4,430 3,923 4,002 32 Japan 1,035 823 1,194 949 1,250 3,262 2,021 1,410 1,726 33 Middle Eastern oil-exporting countries' 22 11 9 5 5 23r 29 42 85 34 Africa 174 319 159 228 251 286 232 320 284 35 Oil-exporting countries2 14 15 16 5 12 15 15 39 3 36 All other3 569 652 563 636 622 706 1.227 1,133 1,103 Commercial claims 37 Europe 10,443 12,120 13,246 12,961 14,367 16,389 16,118 15,928 16,481 38 Belgium and Luxembourg 226 328 238 286 289 316 271 425 393 39 France 1,644 1,796 2,171 2,094 2,375 2,236 2,520 2,692 2,924 40 Germany 1,337 1,614 1,822 1,660 1,944 1,960 2,034 1.906 2,143 41 Netherlands 562 597 467 389 617 1,429 1.337 1,242 1,310 42 Switzerland 642 554 483 385 714 610 611 563 682 43 United Kingdom 2,946 3,660 4,769 4,615 4,789 5,827 5,354 4,929 5,198 44 Canada 2,165 2,660 2,617 2,855 2,638 2,757 3,088 3,250 2,945 45 Latin America and Caribbean 5,276 5,750 6,296 6,278 5,879 5,959 5,899 5,792 5,798 46 Bahamas 35 27 24 21 29 20 15 48 75 47 Bermuda 275 244 536 583 549 390 404 381 387 48 Brazil 1,303 1,162 1,024 887 763 905 849 894 982 49 British West Indies 190 109 104 127 157 181 95 51 55 50 Mexico 1,128 1,392 1,545 1,478 1,613 1,678 1,529 1,565 1,615 51 Venezuela 357 576 401 384 365 439 435 466 379 5? Asia 8,376 8,713 7,192 7,690 8,579 9,165 9,101 9,173 8,991 53 Japan 2,003 1,976 1,681 1,511 1,823 2,074 2,082 1,882 2,071 54 Middle Eastern oil-exporting countries' 971 1,107 1,135 1,465 1,479 1,625 1,533 1,241 1,197 55 Africa 746 680 711 738 682 631 716 766 895 56 Oil-exporting countries" 166 119 165 202 221 171 82 160 392 57 Other3 1,368 1,246 1,140 1,405 1,544 1,537 1,546 1,513 1,393 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 • April 2001 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2000 2000 Transaction, and area or country 1999 2000 J D a e n c . . - June July Aug. Sept. Oct. Nov. Dec.p U.S. corporate securities STOCKS 1 Foreign purchases 2,340,659 3,605,196 3,605,196 300,356 271,572 286,819 297,677 339,995 284,909 286,161 2 Foreign sales 2,233,137 3,430,306 3,430,306 282,563 255,999 262,546 289,118 323,659 275,855 275,034 3 Net purchases, or sales (—) 107,522 174,890 174,890 17,793 15,573 24,273 8,559 16,336 9,054 11,127 4 Foreign countries 107,578 174,903 174,903 17,823 15,563 24,249 8,603 16,338 9,068 11,145 5 Europe 98,060 164,656 164,656 14,853 13,349 15,678 10,014 14,040 7,485 10,779 b France 3,813 5,727 5,727 -653 1,292 575 -565 1,757 408 40 1 Germany 13,410 31,752 31,752 2,544 371 2,670 643 1,383 988 777 8 Netherlands 8,083 4,915 4,915 584 554 594 792 -135 323 11,,669911 9 Switzerland 5.650 11,960 11,960 67 1,702 1,114 780 488 -598 --668844 10 United Kingdom 42,902 58,736 58,736 7,026 6,460 7,098 5,163 6,283 3,210 7,773 11 Canada -335 5,956 5,956 -46 -166 1,267 -924 194 1,477 1,468 12 Latin America and Caribbean 5,187 -17,812 -17,812 1,898 1,363 4,907 -3,406 -4,400 -2,979 -2,759 13 Middle East1 -1,066 9,189 9,189 4 98 908 52 754 340 277 14 Other Asia 4,445 12,494 12,494 870 815 1,789 2,707 5,840 3,310 1,451 15 Japan 5,723 2,070 2,070 439 492 568 2,467 2,640 662 1,615 16 Africa 372 415 415 54 -124 2 -56 -27 80 -45 IV Other countries 915 5 5 190 228 -302 216 -63 -645 -26 18 Nonmonetary international and regional organizations -56 -11 -11 -30 10 24 -42 -2 -14 -18 BONDS2 19 Foreign purchases 854,692 1,206,662 1,206,662 107,320r 87,580 107.808 106,384 103,028 114,686 117,904 20 Foreign sales 602,100 871,418 871,418 75,117 67,010 69,514 76,225 71,686 77,596 90,143 21 Net purchases, or sales (—) 252,592 335,244 335,244 32,203r 20,570 38,294 30,159 31,342 37,090 27,761 22 Foreign countries 252,994 335,348 335,348 32,254r 20,482 38,215 30,161 31,356 37,224 27,759 23 Europe 140,674 179,706 179.706 19,378 7,789 21,618 17,058 16,965 16,522 16,560 24 France 1,870 2,216 2,216 159 85 334 -819 347 272 138 25 Germany 7,723 4,067 4.067 897 154 1,185 44 433 537 -78 26 Netherlands 2,446 1,130 1,130 -169 -575 850 -818 848 183 275 27 Switzerland 4,553 3,833 3,833 324 1,003 757 333 350 483 -89 28 United Kingdom 106,344 140,152 140,152 16,218 4,003 15,909 15,950 12,503 12,952 12,825 29 Canada 6,043 13,287 13,287 1,092 943 1,965 811 897 1,179 414 30 Latin America and Caribbean 58,783 59,443 59,443 4,390 4,743 3,829 6,338 5,018 6,600 4,126 31 Middle East1 1,979 2.076 2,076 138r 264 54 -702 -54 437 1,077 32 Other Asia 42,817 78,280 78,280 7,059 6,601 10,562 6,777 8,215 11,839 5,535 33 Japan 17,541 38,842 38,842 3,945 3,320 5,664 3,573 3,690 7,435 2,932 34 Africa 1,411 938 938 72 10 37 49 58 25 76 35 Other countries 1,287 1,618 1,618 125 132 150 -170 257 622 -29 36 Nonmonetary international and regional organizations -402 -70 -70 -51 88 110 -2 -14 -134 2 Foreign securities 37 Stocks, net purchases, or sales ( —) 15,640 -9,253 -9,253 -3,291r -14,970 672 10,270 3,002 5,563 -3,195 38 Foreign purchases 1,177,303 1,802,870 1,802,870 152,855r 136,467 142,850 148,930 153,024 141,600 135,417 39 Foreign sales 1,161,663 1,812,123 1,812,123 156,146r 151,437 142,178 138,660 150,022 136,037 138,612 40 Bonds, net purchases, or sales ( —) -5,676 -3,872 -3,872 5,751 -6,488 -2,812 267 -3,439 8,434 -1,175 41 Foreign purchases 798.267 959,415 959,415 82,953 68,425 74,803 92,182 98,523 94,938 83,721 42 Foreign sales 803,943 963,287 963,287 77,202 74,913 77,615 91,915 101,962 86,504 84,896 43 Net purchases, or sales (-), of stocks and bonds .... 9,964 -13,125 -13,125 2,460r -21,458 -2,140 10,537 -437 13,997 -4,370 44 Foreign countries 9,679 -13,262 -13,262 2,610r -21,217 -1,986 10,361 -604 13,758 -3,951 45 Europe 59,247 -23.632 -23,632 -2,091r -23,431 -5,786 6,352 -3,901 7,373 -4,452 46 Canada -999 -3.857 -3,857 971r 255 910 -1,126 11,,881166 574 -1,357 47 Latin America and Caribbean -4,726 -15.108 -15,108 2,055r -979 -892 604 999999 -521 -205 48 Asia -42,961 26.039 26,039 l,624r 2,977 3,159 3,880 -47 5,742 1,872 49 Japan -43,637 21,912 21,912 3,165 4,119 1,478 2,082 -1,255 2,067 1,824 50 Africa 710 947 947 -37 532 -50 49 13 -28 -4 51 Other countries -1,592 2.349 2,349 88 -571 673 602 516 618 195 52 Nonmonetary international and regional organizations 285 151 151 -150 -241 -154 180 167 239 -419 1. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, 2. Includes state and local government securities and securities of U.S. government Saudi Arabia, and United Arab Emirates (Trucial States). agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Securities Holdings and Transactions A61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions1 Millions of dollars; net purchases, or sales (—) during period 2000 2000 AArreeaa oorr ccoouunnttrryy 11999999 22000000 J D a e n c .- . June July Aug. Sept. Oct. Nov. Dec.p 1 Total estimated -9,953 -53,791 -53,791 -17,932 -6,061 -114 -8,516 -3,038 -14,106 -9,789 2 Foreign countries -10,518 -53,330 -53,330 -17,597 -5,746 -117 -8,741 -3,223 -13,959 -9,904 3 Europe -38,228 -50,705 -50,705 -9,935 -6,351 3,707 -1,284 -3,708 -10,991 -6,850 4 Belgium and Luxembourg -81 73 73 252 -138 138 -127 320 53 -96 5 Germany 2,285 -7,304 -7,304 609 -2,199 -36 -1,738 1,424 -2,185 -1,065 6 Netherlands 2,122 2,140 2,140 -389 -584 91 836 183 264 -1,622 7 Sweden 1,699 1,082 1,082 -47 114 56 214 -118 -104 328 8 Switzerland -1,761 -10,326 -10,326 -1,928 -1,398 -338 -959 -57 -301 64 9 United Kingdom -20,232 -33,669 -33,669 -9,243 -4,372 3,054 -1,865 -3,793 -6,035 -4,199 in Other Europe and former U.S.S.R -22,260 -2,701 -2,701 811 2,226 742 2,355 -1,667 -2,683 -260 11 Canada 7,348 -308 -308 226 -872 222 1,417 160 -1,173 -1,492 12 Latin America and Caribbean -7,523 -4,914 -4,914 -3,839 1,415 245 -4,979 3,963 -507 -245 13 Venezuela 362 1,288 1,288 16 89 45 314 152 251 300 14 Other Latin America and Caribbean 1,661 -11,581 -11,581 -4,748 1,261 61 -4,936 3,030 -1,262 -1,746 15 Netherlands Antilles -9,546 5,379 5,379 893 65 139 -357 781 504 1,201 16 Asia 29,359 1,639 1,639 -3,988 -488 -4,918 -3,319 -4,688 -1,289 -458 17 Japan 20,102 10,580 10,580 -2,660 672 367 1,717 1,608 4,445 -3,855 18 Africa -3,021 -414 -414 -130 4 9 -139 -6 -16 -44 19 Other 1,547 1,372 1,372 69 546 618 -437 1,056 17 -815 20 Nonmonetary international and regional organizations 565 -461 -461 -335 -315 3 225 185 -147 115 21 International 190 -483 -483 -286 -333 15 391 39 -146 24 22 Latin American regional 666 76 76 -9 -1 -10 1 28 -1 6 MEMO 23 Foreign countries -10,518 -53,330 -53,330 -17,597 -5,746 -117 -8,741 -3.223 -13,959 -9,904 24 Official institutions -9,861 -6,302 -6,302 -1,412 -639 449 -6,626 -7,150 -4,967 1,068 25 Other foreign -657 -47,028 -47,028 -16,185 -5,107 -566 -2,115 3,927 -8,992 -10,972 Oil-exporting countries 26 Middle East2 2,207 3,483 3,483 859 267 217 -1,030 -724 -888 48 27 Africa3 0 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 • April 2001 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 2001 Sept. Oct. Nov. Dec. Jan. Feb. Exchange Rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 62.91 64.54 58.15 55.21 52.80 52.18 54.66 55.52 53.38 2 Austria/schilling 12.379 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 3 Belgium/franc 36.31 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 4 Brazil/real 1.1605 1.8207 1.8301 1.8397 1.8813 1.9483 1.9632 1.9561 2.0060 5 Canada/dollar 1.4836 1.4858 1.4855 1.4864 1.5125 1.5426 1.5219 1.5032 1.5216 6 China, P.R./yuan 8.3008 8.2783 8.2784 8.2785 8.2785 8.2774 8.2771 8.2776 8.2771 7 Denmark/krone 6.7030 6.9900 8.0953 8.5849 8.7276 8.6992 8.3059 7.9629 8.1103 8 European Monetary Union/euro3 n.a. 1.0653 0.9232 0.8695 0.8525 0.8552 0.8983 0.9376 0.9205 9 Finland/markka 5.3473 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 France/franc 5.8995 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 11 Germany/deutsche mark 1.7597 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 12 Greece/drachma 295.70 306.30 365.92 389.67 398.29 397.94 379.58 n.a. n.a. 13 Hong Kong/dollar 7.7467 7.7594 7.7924 7.7985 7.7977 7.7991 7.7991 7.7998 7.7999 14 India/rupee 41.36 43.13 45.00 45.97 46.43 46.82 46.78 46.61 46.56 15 Ireland/pound" 142.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 Italy/lira 1.736.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 17 Japan/yen 130.99 113.73 107.80 106.84 108.44 109.01 112.21 116.67 116.23 18 Malaysia/ringgit 3.9254 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 3.8000 19 Mexico/peso 9.152 9.553 9.459 9.362 9.537 9.508 9.467 9.769 9.711 20 Netherlands/guilder 1.9837 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 New Zealand/dollar2 53.61 52.94 45.68 41.71 40.01 39.90 42.97 44.42 43.45 22 Norway/krone 7.5521 7.8071 8.8131 9.2331 9.3794 9.3524 9.0616 8.7817 8.9180 23 Portugal/escudo 180.25 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 24 Singapore/dollar 1.6722 1.6951 1.7250 1.7406 1.7525 1.7478 1.7361 1.7380 1.7435 25 South Africa/rand 5.5417 6.1191 6.9468 7.1805 7.4902 7.6889 7.6439 7.7786 7.8214 26 South Korea/won 1,400.40 1.189.84 1,130.90 1,117.57 1,131.10 1,156.54 1,216.94 1.272.63 1.252.85 27 Spain/peseta 149.41 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 28 Sri Lanka/rupee 65.006 70.868 76.964 78.731 79.291 80.381 82.030 85.833 87.136 29 Sweden/krona 7.9522 8.2740 9.1735 9.6853 9.9930 10.0965 9.6604 9.4910 9.7518 30 Switzerland/franc 1.4506 1.5045 1.6904 1.7586 1.7745 1.7779 1.6855 1.6305 1.6686 31 Taiwan/dollar 33.547 32.322 31.260 31.198 31.846 32.433 33.123 32.673' 32.330 32 Thailand/baht 41.262 37.887 40.210 41.992 43.334 43.791 43.246 43.149 42.665 33 United Kingdom/pound" 165.73 161.72 151.56 143.36 145.06 142.58 146.29 147.75 145.25 34 Venezuela/bolivar 548.39 606.82 680.52 690.39 692.86 695.77 698.85 700.02 703.36 Indexes4 NOMINAL 35 Broad (January 1997=100)' 116.48 116.87 119.93 121.53 123.27 124.21 123.28 123.14' 123.77 36 Major currencies (March 1973= 100)6 95.79 94.07 98.34 100.65 102.24 103.08 101.26 100.24 101.44 37 Other important trading partners (January 1997= 100)7 126.03 129.94 130.26 130.37 131.99 132.87 133.61 135.01' 134.52 REAL 38 Broad (March 1973= 100)5 99.20r 98.52r 102.18' 103.82' 105.23 105.73 104.84' 105.26' 105.83 39 Major currencies (March 1973= 100)6 97.23r 96.66r 102.85' 105.56' 107.30' 108.12' 106.17' 105.93' 107.32 40 Other important trading partners (March 1973 = 100)7 108.1 R 107.23r 107.68' 108.02' 109.08' 109.20' 109.62' 110.93' 110.46 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 4. Starting with the February 2001 Bulletin, revised index values resulting from the annual table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, revision of data that underlie the calculated trade weights are reported. For more information see inside front cover. on the indexes of foreign exchange value of the dollar, see Federal Reserve Bulletin, vol. 84 2. U.S. cents per currency unit. (October 1998), pp. 811-818. 3. The euro is reported in place of the individual euro area currencies. By convention, the 5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies rate is reported in U.S. dollars per euro. The bilateral currency rates can be derived from the of a broad group of U.S. trading partners. The weight for each currency is computed as an euro rate by using the fixed conversion rates (in currencies per euro) as shown below: average of U.S. bilateral import shares from and export shares to the issuing country and of a measure of the importance to U.S. exporters of that country's trade in third country markets. 6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of Euro equals broad index currencies that circulate widely outside the country of issue. The weight for each 13.7603 Austrian schillings 1936.27 Italian lire currency is its broad index weight scaled so that the weights of the subset of currencies in the 40.3399 Belgian francs 40.3399 Luxembourg francs index sum to one. 5.94573 Finnish markkas 2.20371 Netherlands guilders 7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 6.55957 French francs 200.482 Portuguese escudos broad index currencies that do not circulate widely outside the country of issue. The weight 1.95583 German marks 166.386 Spanish pesetas for each currency is its broad index weight scaled so that the weights of the subset of .787564 Irish pounds 340.750 Greek drachmas currencies in the index sum to one. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A63 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases December 2000 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks December 31, 1999 May 2000 A64 March 31, 2000 August 2000 A64 June 30, 2000 November 2000 A64 September 30, 2000 February 2001 A64 Terms of lending at commercial banks February 2000 May 2000 A66 May 2000 August 2000 A66 August 2000 November 2000 A66 November 2000 February 2001 A66 Assets and liabilities of U.S. branches and agencies of foreign banks December 31, 1999 May 2000 A72 March 31, 2000 August 2000 A72 June 30, 2000 November 2000 A72 September 30, 2000 February 2001 A72 Pro forma balance sheet and income statements for priced service operations March 31, 2000 August 2000 A76 June 30, 2000 November 2000 A76 September 30, 2000 February 2001 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 • April 2001 Index to Statistical Tables References are to pages A3-A62, although the prefix "A" is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Federal finance Assets and liabilities (See also Foreigners) Debt subject to statutory limitation, and types and ownership Commercial banks, 15-21 of gross debt, 27 Domestic finance companies, 32, 33 Receipts and outlays, 25, 26 Federal Reserve Banks, 10 Treasury financing of surplus, or deficit, 25 Foreign-related institutions, 20 Treasury operating balance, 25 Automobiles Federal Financing Bank, 30 Consumer credit, 36 Federal funds, 23, 25 Production, 44, 45 Federal Home Loan Banks, 30 Federal Home Loan Mortgage Corporation, 30, 34, 35 Federal Housing Administration, 30, 34, 35 BANKERS acceptances, 5, 10, 22, 23 Federal Land Banks, 35 Bankers balances, 15-21. (See also Foreigners) Federal National Mortgage Association, 30, 34, 35 Bonds (See also U.S. government securities) Federal Reserve Banks New issues, 31 Condition statement, 10 Rates, 23 Discount rates (See Interest rates) Business activity, nonfinancial, 42 U.S. government securities, 5, 10, 11, 27 Business loans (See Commercial and industrial loans) Federal Reserve credit, 5, 6, 10, 12 Federal Reserve notes, 10 CAPACITY utilization, 43 Federally sponsored credit agencies, 30 Capital accounts Finance companies Commercial banks, 15-21 Assets and liabilities, 32 Federal Reserve Banks, 10 Business credit, 33 Certificates of deposit, 23 Loans, 36 Commercial and industrial loans Paper, 22, 23 Commercial banks, 15-21 Float, 5 Weekly reporting banks, 17, 18 Flow of funds, 37-41 Commercial banks Foreign currency operations, 10 Assets and liabilities, 15-21 Foreign deposits in U.S. banks, 5 Commercial and industrial loans, 15-21 Foreign exchange rates, 62 Consumer loans held, by type and terms, 36 Foreign-related institutions, 20 Real estate mortgages held, by holder and property, 35 Foreign trade, 51 Time and savings deposits, 4 Foreigners Commercial paper, 22, 23, 32 Claims on, 52, 55-7, 59 Condition statements (See Assets and liabilities) Liabilities to, 51-4, 58, 60, 61 Construction, 42, 46 Consumer credit, 36 GOLD Consumer prices, 42 Certificate account, 10 Consumption expenditures, 48, 49 Stock, 5, 51 Corporations Government National Mortgage Association, 30, 34, 35 Profits and their distribution, 32 Gross domestic product, 48, 49 Security issues, 31, 61 Cost of living (See Consumer prices) Credit unions, 36 HOUSING, new and existing units, 46 Currency in circulation, 5, 13 Customer credit, stock market, 24 INCOME, personal and national, 42, 48, 49 Industrial production, 42, 44 DEBT (See specific types of debt or securities) Insurance companies, 27, 35 Demand deposits, 15-21 Interest rates Depository institutions Bonds, 23 Reserve requirements, 8 Consumer credit, 36 Reserves and related items, 4-6, 12 Federal Reserve Banks, 7 Deposits (See also specific types) Money and capital markets, 23 Commercial banks, 4, 15-21 Mortgages, 34 Federal Reserve Banks, 5, 10 Prime rate, 22 Discount rates at Reserve Banks and at foreign central banks and International capital transactions of United States, 50-61 foreign countries (See Interest rates) International organizations, 52, 53, 55, 58, 59 Discounts and advances by Reserve Banks (See Loans) Inventories, 48 Dividends, corporate, 32 Investment companies, issues and assets, 32 Investments (See also specific types) EMPLOYMENT, 42 Commercial banks, 4, 15-21 Euro, 62 Federal Reserve Banks, 10, 11 Financial institutions, 35 FARM mortgage loans, 35 Federal agency obligations, 5, 9-11, 28, 29 LABOR force, 42 Federal credit agencies, 30 Life insurance companies (See Insurance companies) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A65 Loans (See also specific types) Savings deposits (See Time and savings deposits) Commercial banks, 15-21 Savings institutions, 35, 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 Thrift institutions, 4. (See also Credit unions and Savings NATIONAL defense outlays, 26 institutions) National income, 48 Time and savings deposits, 4, 13, 15-21 Trade, foreign, 51 OPEN market transactions, 9 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 PERSONAL income, 49 Treasury operating balance, 25 Prices Consumer and producer, 42, 47 UNEMPLOYMENT, 42 Stock market, 24 U.S. government balances Prime rate, 22 Commercial bank holdings, 15-21 Producer prices, 42, 47 Treasury deposits at Reserve Banks, 5, 10, 25 Production, 42, 44 U.S. government securities Profits, corporate, 32 Bank holdings, 15-21, 27 Dealer transactions, positions, and financing, 29 REAL estate loans Federal Reserve Banks holdings, 5, 10, 11, 27 Banks, 15-21, 35 Foreign and international holdings and transactions, 10, 27, 61 Terms, yields, and activity, 34 Open market transactions, 9 Type and holder and property mortgaged, 35 Outstanding, by type and holder, 27, 28 Reserve requirements, 8 Rates, 23 Reserves U.S. international transactions, 50-62 Commercial banks, 15-21 Utilities, production, 45 Depository institutions, 4-6, 12 Federal Reserve Banks, 10 VETERANS Administration, 34, 35 U.S. reserve assets, 51 Residential mortgage loans, 34, 35 WEEKLY reporting banks, 17, 18 Retail credit and retail sales, 36, 42 Wholesale (producer) prices, 42, 47 SAVING YIELDS (See Interest rates) Flow of funds, 37-41 National income accounts, 48 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
66 Federal Reserve Bulletin • April 2001 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 MICHELLE A. SMITH, Assistant to the Board DAVID H. HOWARD, Deputy Director DONALD J. WINN, Assistant to the Board VINCENT R. REINHART, Deputy Director WINTHROP P. HAMBLEY, Deputy Congressional Liaison THOMAS A. CONNORS, Associate Director JOHN LOPEZ, Special Assistant to the Board DALE W. HENDERSON, Associate Director BOB STAHLY MOORE, Special Assistant to the Board RICHARD T. FREEMAN, Assistant Director ROSANNA PIANALTO-CAMERON, Special Assistant to the Board WILLIAM L. HELKIE, Assistant Director DAVID W. SKIDMORE, Special Assistant to the Board STEVEN B. KAMIN, Assistant Director DIANE E. WERNEKE, Special Assistant to the Board RALPH W. TRYON, Assistant Director LEGAL DIVISION DIVISION OF RESEARCH AND STATISTICS J. VIRGIL MATTINGLY, JR., General Counsel DAVID J. STOCKTON, Director SCOTT G. ALVAREZ, Associate General Counsel EDWARD C. ETTIN, Deputy Director RICHARD M. ASHTON, Associate General Counsel DAVID WILCOX, Deputy Director KATHLEEN M. O'DAY, Associate General Counsel WILLIAM R. JONES, Associate Director ANN E. MISBACK, Assistant General Counsel MYRON L. KWAST, Associate Director SANDRA L. RICHARDSON, Assistant General Counsel STEPHEN D. OLINER, Associate Director STEPHEN L. SICILIANO, Assistant General Counsel PATRICK M. PARKINSON, Associate Director KATHERINE H. WHEATLEY, Assistant General Counsel 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 DIVISION OF BANKING ALICE PATRICIA WHITE, Assistant Director SUPERVISION AND REGULATION GLENN B. CANNER, Senior Adviser RICHARD SPILLENKOTHEN, Director DAVID S. JONES, Senior Adviser STEPHEN C. SCHEMERING, Deputy Director THOMAS D. SIMPSON, Senior Adviser HERBERT A. BIERN, Senior Associate Director ROGER T. COLE, Senior Associate Director DIVISION OF MONETARY AFFAIRS WILLIAM A. RYBACK, Senior Associate Director DONALD L. KOHN, Director GERALD A. EDWARDS, JR., Associate Director DAVID E. LINDSEY, Deputy Director STEPHEN M. HOFFMAN, JR., Associate Director BRIAN F. MADIGAN, Associate Director JAMES V. HOUPT, Associate Director RICHARD D. PORTER, Deputy Associate Director JACK P. JENNINGS, Associate Director WILLIAM C. WHITESELL, Assistant Director MICHAEL G. MARTINSON, Associate Director MOLLY S. WASSOM, Associate Director NORMAND R.V. BERNARD, Special Assistant to the Board HOWARD A. AMER, Deputy Associate Director DIVISION OF CONSUMER NORAH M. BARGER, Deputy Associate Director BETSY CROSS, Deputy Associate Director AND COMMUNITY AFFAIRS RICHARD A. SMALL, Deputy Associate Director DOLORES S. SMITH, Director DEBORAH P. BAILEY, Assistant Director GLENN E. LONEY, Deputy Director BARBARA J. BOUCHARD, Assistant Director SANDRA F. BRAUNSTEIN, Assistant Director ANGELA DESMOND, Assistant Director MAUREEN P. ENGLISH, Assistant Director JAMES A. EMBERSIT, Assistant Director ADRIENNE D. HURT, Assistant Director CHARLES H. HOLM, Assistant Director IRENE SHAWN MCNULTY, Assistant Director HEIDI WILLMANN RICHARDS, Assistant Director WILLIAM G. SPANIEL, Assistant Director DAVID M. WRIGHT, Assistant Director SIDNEY M. SUSS AN, Adviser WILLIAM C. SCHNEIDER, JR., Project Director, National Information Center 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 LOUISE L. ROSEMAN, Director STEPHEN R. MALPHRUS, Staff Director PAUL W. BETTGE, Associate Director KENNETH D. BUCKLEY, Assistant Director MANAGEMENT DIVISION TILLENA G. CLARK, Assistant Director STEPHEN J. CLARK, Associate Director, Finance Function JOSEPH H. HAYES, JR., Assistant Director DARRELL R. PAULEY, Associate Director, Human Resources JEFFREY C. MARQUARDT, Assistant Director Function EDGAR A. MARTINDALE, Assistant Director CHRISTINE M. FIELDS, Assistant Director, Human Resources MARSHA REIDHILL, Assistant Director Function JEFF J. STEHM, Assistant Director SHEILA CLARK, EEO Programs Director DIVISION OF SUPPORT SERVICES OFFICE OF THE INSPECTOR GENERAL BARRY R. SNYDER, Inspector General ROBERT E. FRAZIER, Director GEORGE M. LOPEZ, Assistant Director DONALD L. ROBINSON, Deputy Inspector General DAVID L. WILLIAMS, Assistant Director DIVISION OF INFORMATION TECHNOLOGY RICHARD C. STEVENS, Director MARIANNE M. EMERSON, Deputy Director MAUREEN T. HANNAN, Associate Director RAYMOND H. MASSEY, Associate Director GEARY L. CUNNINGHAM, Assistant Director WAYNE A. EDMONDSON, Assistant Director Po KYUNG KIM, Assistant Director SUSAN F. MARYCZ, 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 • April 2001 Federal Open Market Committee and Advisory Councils FEDERAL OPEN MARKET COMMITTEE MEMBERS ALAN GREENSPAN, Chairman WILLIAM J. MCDONOUGH, Vice Chairman ROGER W. FERGUSON, JR. EDWARD W. KELLEY, JR. MICHAEL H. MOSKOW EDWARD M. GRAMLICH LAURENCE H. MEYER WILLIAM POOLE THOMAS M. HOENIG CATHY E. MINEHAN ALTERNATE MEMBERS JERRY L. JORDAN ANTHONY M. SANTOMERO JAMIE B. STEWART, JR. ROBERT D. MCTEER, JR. GARY H. STERN STAFF DONALD L. KOHN, Secretary and Economist JEFFREY C. FUHRER, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary CRAIG S. HAKKIO, Associate Economist LYNN S. FOX, Assistant Secretary DAVID H. HOWARD, Associate Economist GARY P. GILLUM, Assistant Secretary WILLIAM C. HUNTER, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel DAVID E. LINDSEY, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel ROBERT H. RASCHE, Associate Economist KAREN H. JOHNSON, Economist VINCENT R. REINHART, Associate Economist DAVID J. STOCKTON, Economist LAWRENCE SLIFMAN, Associate Economist CHRISTINE M. CUMMING, Associate Economist PETER R. FISHER, Manager, System Open Market Account FEDERAL ADVISORY COUNCIL DOUGLAS A. WARNER, III, President LAWRENCE K. FISH, Vice President LAWRENCE K. FISH, First District ALAN G. MCNALLY, 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 CAMDEN R. FINE, Tenth District L. M. BAKER, JR., Fifth District RICHARD W. EVANS, JR., Eleventh District L. PHILLIP HUMANN, Sixth District LINNET F. DEILY, 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 LAUREN ANDERSON, New Orleans, Louisiana, Chairman DOROTHY BROADMAN, San Francisco, California, Vice Chairman ANTHONY S. ABBATE, Saddlebrook, New Jersey ANNE S. LI, Trenton, New Jersey TERESA A. BRYCE, St. Louis, Missouri J. PATRICK LIDDY, Cincinnati, Ohio MALCOLM BUSH, Chicago, Illinois OSCAR MARQUIS, Park Ridge, Illinois MANUEL CASANOVA, JR., Brownsville, Texas JEREMY NOWAK, Philadelphia, Pennsylvania CONSTANCE K. CHAMBERLIN, Richmond, Virginia NANCY PIERCE, Kansas City, Missouri ROBERT M. CHEADLE, Oklahoma City, Oklahoma MARTA RAMOS, San Juan, Puerto Rico MARY ELLEN DOMEIER, New Ulm, Minnesota RONALD A. REITER, San Francisco, California LESTER W. FIRSTENBERGER, Evansville, Indiana ELIZABETH RENUART, Boston, Massachusetts JOHN C. GAMBOA, San Francisco, California RUSSELL W. SCHRADER, San Francisco, California EARL JAROLIMEK, Fargo, North Dakota FRANK TORRES, JR., Washington, District of Columbia WILLIE M. JONES, Boston, Massachusetts GARY S. WASHINGTON, Chicago, Illinois M. DEAN KEYES, St. Louis, Missouri ROBERT L. WYNN II, Madison, Wisconsin THRIFT INSTITUTIONS ADVISORY COUNCIL THOMAS S. JOHNSON, New York, New York, President MARK H. WRIGHT, San Antonio, Texas, Vice President TOM R. DORETY, Tampa, Florida JAMES F. MCKENNA, Brookfield, Wisconsin RONALD S. ELIASON, Provo, Utah CHARLES C. PEARSON, JR., Harrisburg, Pennsylvania D. R. GRIMES, Alpharetta, Georgia HERBERT M. SANDLER, Oakland, California CORNELIUS D. MAHONEY, Westfield, Massachusetts EVERETT STILES, Franklin, North Carolina KAREN L. MCCORMICK, Port Angeles, Washington CLARENCE ZUGELTER, Kansas City, Missouri Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
70 Federal Reserve Bulletin • April 2001 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 States, its possessions, Canada, and Mexico. Elsewhere, The Federal Open Market Committee $35.00 per year or $.80 each. Federal Reserve Bank Board of Directors Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL A Consumer's Guide to Mortgage Lock-Ins RESERVE SYSTEM. A Consumer's Guide to Mortgage Settlement Costs ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Refinancings Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Home Mortgages: Understanding the Process and Your Right Vol. II (Irregular Transactions). 1969. 116 pp. Each volume to Fair Lending $5.00. How to File a Consumer Complaint about a Bank GUIDE TO THE FLOW OF FUNDS ACCOUNTS. January 2000. Making Sense of Savings 1,186 pp. $20.00 each. Welcome to the Federal Reserve FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated When Your Home is on the Line: What You Should Know monthly. (Requests must be prepaid.) About Home Equity Lines of Credit Consumer and Community Affairs Handbook. $75.00 per year. Keys to Vehicle Leasing (also available in Spanish) Monetary Policy and Reserve Requirements Handbook. $75.00 Looking for the Best Mortgage (also available in Spanish) per year. Securities Credit Transactions Handbook. $75.00 per year. The Payment System Handbook. $75.00 per year. Federal Reserve Regulatory Service. Four vols. (Contains all four Handbooks plus substantial additional material.) $200.00 per year. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A71 STAFF STUDIES: Only Summaries Printed in the 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by BULLETIN James T. Fergus and John L. Goodman, Jr. July 1993. 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 165-174 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 • April 2001 Maps of the Federal Reserve System LEGEND Both pages Facing page • Federal Reserve Bank city • Federal Reserve Branch city • Board of Governors of the Federal — Branch boundary Reserve System, Washington, D.C. NOTE The Federal Reserve officially identifies Districts by num- of Puerto Rico and the U.S. Virgin Islands; the San Franber and Reserve Bank city (shown on both pages) and by cisco Bank serves American Samoa, Guam, and the Comletter (shown on the facing page). monwealth of the Northern Mariana Islands. The Board of In the 12th District, the Seattle Branch serves Alaska, Governors revised the branch boundaries of the System and the San Francisco Bank serves Hawaii. most recently in February 1996. The System serves commonwealths and territories as follows: the New York Bank serves the Commonwealth Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
A73 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimore MD NY VTF X vr \ II /^ PA ™ WV * Bullalo •Charlotte MA / NY ci KY M RI BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H • Nashxille KKYY Birmingham • JJ LLoouuiissvviillllee MO JJ~~ TTNN LA Jacksonville AARR ^^ • Memphis New Oilcans H Little / Rock ( MS Mi.nni ATLANTA CHICAGO ST Louis 9-1 lNiDf e-: • Helena Ml H 1» 99HI MINNEAPOLIS 10-J 12-L WMMhmphHMHB \[ \SKA — —i Oklahoma C'ii\ l\*land OK ISHHB KANSAS CITY NV 1 11-K HAWAII DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
74 Federal Reserve Bulletin • April 2001 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 Charisse R. Lillie Anthony M. Santomero Glenn A. Schaeffer 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 Charles E. Bunch 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 James F. Goodmon Dan M. Bechter1 ATLANTA 30303 John F. Wieland Jack Guynn Paula Lovell Patrick K. Barron James M. McKee Birmingham 35283 Catherine Sloss Crenshaw Andre T. Anderson Jacksonville 32231 Julie K. Hilton Robert J. Slack Miami 33152 Mark T. Sodders James T. Curry III Nashville 37203 Whitney Johns Martin Melvyn K. Purcell1 New Orleans 70161 Ben Tom Roberts 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 Charles W. Mueller William Poole Walter L. Metcalfe, Jr. W. LeGrande Rives Little Rock 72203 Vick M. Crawley Robert A. Hopkins Louisville 40232 Roger Reynolds Thomas A. Boone Memphis 38101 Gregory M. Duckett Martha Perine Beard MINNEAPOLIS 55480 James J. Howard Gary H. Stern Ronald N. Zwieg James M. Lyon Helena 59601 Thomas O. Markle Samuel H. Gane KANSAS CITY 64198 Terrence P. Dunn Thomas M. Hoenig Jo Marie Dancik 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 H. B. Zachry, Jr. Robert D. McTeer, Jr. Patricia M. Patterson 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 Nelson C. Rising Robert T. Parry George M. Scalise John F. Moore Los Angeles 90051 William D. Jones Mark L. Mullinix2 Portland 97208 Nancy Wilgenbusch Raymond H. Laurence1 Salt Lake City 84125 H. Roger Boyer 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
A75 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, G, M, P, Z, AA, BB, and of Governors of the Federal Reserve System, Washing- DD, and 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
76 Federal Reserve Bulletin • April 2001 Federal Reserve Statistical Releases Available on the Commerce Department's Economic Bulletin Board The Board of Governors of the Federal Reserve Sys- For further information regarding a subscription to tem makes some of its statistical releases available to the economic bulletin board, please call (202) 482the public through the U.S. Department of Com- 1986. The releases transmitted to the economic bullemerce's economic bulletin board. Computer access tin board, on a regular basis, are the following: to the releases can be obtained by subscription. Reference Number Statistical release Frequency of release H.3 Aggregate Reserves Weekly/Thursday H.4.1 Factors Affecting Reserve Balances Weekly/Thursday H.6 Money Stock Weekly/Thursday H.8 Assets and Liabilities of Insured Domestically Chartered Weekly/Monday and Foreign Related Banking Institutions H.10 Foreign Exchange Rates Weekly/Monday H.15 Selected Interest Rates Weekly/Monday G.5 Foreign Exchange Rates Monthly/end of month G.17 Industrial Production and Capacity Utilization Monthly/midmonth G.19 Consumer Installment Credit Monthly/fifth business day Z. 1 Flow of Funds Quarterly Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis
Cite this document
Federal Reserve (2001, March 31). Federal Reserve Bulletin, 2001-04. Bulletin, Federal Reserve. https://whenthefedspeaks.com/doc/bulletin_200104
@misc{wtfs_bulletin_200104,
author = {Federal Reserve},
title = {Federal Reserve Bulletin, 2001-04},
year = {2001},
month = {Mar},
howpublished = {Bulletin, Federal Reserve},
url = {https://whenthefedspeaks.com/doc/bulletin_200104},
note = {Retrieved via When the Fed Speaks corpus}
}