Federal Reserve Bulletin, 2001-08

Volume 87 • Number 8 • August 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 501 MONETARY POLICY REPORT TO THE the Senate Committee on Banking, Housing, CONGRESS and Urban Affairs, June 13, 2001). The weakness in the economy that emerged late 532 Alan Greenspan, Chairman, Board of Goverlast year has become more persistent and wide- nors, discusses the condition of the U.S. banking spread. In response, the FOMC has lowered system and testifies that in recent years, we have the target federal funds rate six times this year, incorporated innovative ideas and accommofor a cumulative total reduction of 23A percent- dated significant change in banking and superage points. A number of factors account for this vision. He states further that building on bank unusually steep reduction in the federal funds practice, we are in the process of improving rate, including the magnitude and rapidity of both lending and supervisory policies that will the slowdown and the need to offset a stronger foster better risk management; and perhaps these dollar and lower equity prices. At midyear the policies could also reduce the pro-cyclical information available for the recent performance pattern of easing and tightening of bank lendof both the U.S. economy and some of our key ing and accordingly increase bank shareholder trading partners remains somewhat downbeat, values and economic stability (Testimony before on balance. Nonetheless, a number of factors are the Senate Committee on Banking, Housing, in place that should set the stage for stronger and Urban Affairs, June 20, 2001). growth later this year and in 2002. Moreover, the outlook for productivity growth over the longer run remains favorable. 535 ANNOUNCEMENTS Federal Open Market Committee directive and a 528 INDUSTRIAL PRODUCTION AND CAPACITY decrease in the discount rate. UTILIZATION FOR JUNE 2001 Interagency release of annual host state loan-to- Industrial production fell 0.7 percent in June, deposit ratios. to 142.5 percent of its 1992 average; second- Interagency letter to the Securities and Exchange quarter production was down 5.6 percent at Commission on broker-dealer exemptions. an annual rate. The rate of capacity utilization for total industry sank to 77 percent, more FOMC meeting schedule for 2002. than 5 percentage points below its 1967-2000 Enforcement actions. average. Availability of the Board's 87th Annual Report, 531 TESTIMONY OF FEDERAL RESERVE 2000 and the Annual Report: Budget Review, OFFICIALS 2001. Roger W. Ferguson, Jr., Vice Chairman, Board Changes in Board staff. of Governors of the Federal Reserve System, testifies on his nomination to serve a full 538 MINUTES OF THE FEDERAL OPEN MARKET term on the Board and discusses the Federal COMMITTEE HELD ON MAY 15, 2001 Reserve's objectives, including the importance of transparency, keeping in mind that the central At this meeting, the Committee voted to lower bank must balance the need to be open and its target for the federal funds rate by 50 basis accountable with the need to maintain an effec- points to 4 percent. In taking this action, the tive process of decisionmaking by the Federal Committee continued to believe that the risks Open Market Committee (Testimony before were weighted mainly toward conditions that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

might generate economic weakness in the fore- A63 GUIDE TO STATISTICAL RELEASES AND seeable future. SPECIAL TABLES 545 LEGAL DEVELOPMENTS A78 INDEX TO STATISTICAL TABLES Various bank holding company, bank service A80 BOARD OF GOVERNORS AND STAFF corporation, and bank merger orders; and pending cases. A82 FEDERAL OPEN MARKET COMMITTEE AND STAFF; ADVISORY COUNCILS 565 MEMBERSHIP OF THE BOARD OF GOVERNORS OF THE FEDERAL RESERVE A84 FEDERAL RESERVE BOARD PUBLICATIONS SYSTEM, 1913-2001 List of appointive and ex officio members. A86 MAPS OF THE FEDERAL RESERVE SYSTEM A1 FINANCIAL AND BUSINESS STATISTICS A88 FEDERAL RESERVE BANKS, BRANCHES, AND OFFICES These tables reflect data available as of June 27, 2001. A3 GUIDE TO TABULAR PRESENTATION A4 Domestic Financial Statistics 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 • Stephen R. Malphrus • J. Virgil Mattingly, Jr. • Vincent R. Reinhart • 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

Monetary Policy Report to the Congress Report submitted to the Congress on July 18, 2001, contained, and prospects for inflation have become pursuant to section 2B of the Federal Reserve Act less of a concern as rates of resource utilization have declined and energy prices have shown signs of turning down. MONETARY POLICY AND THE The information available at midyear for the recent ECONOMIC OUTLOOK performance of both the U.S. economy and some of our key trading partners remains somewhat down- When the Federal Reserve submitted its report on beat, on balance. Moreover, with inventories still monetary policy in mid-February, the Federal Open excessive in some sectors, orders for capital goods Market Committee (FOMC) had already reduced its very soft, and the effects of lower stock prices and the target for the federal funds rate twice to counter weaker job market weighing on consumers, the econemerging weakness in the economy. As the year has omy may expand only slowly, if at all, for a while unfolded, the weakness has become more persistent longer. Nonetheless, a number of factors are in place and widespread than had seemed likely last autumn. that should set the stage for stronger growth later this The shakeout in the high-technology sector has been year and in 2002. In particular, interest rates have especially severe, and with overall sales and profits declined since last fall; the lower rates have helped continuing to disappoint, businesses are curtailing businesses and households strengthen their financial purchases of other types of capital equipment as well. positions and should show through to aggregate The slump in demand for capital goods has also demand in coming quarters. The recently enacted tax worked against businesses' efforts to correct the cuts and the apparent cresting of energy prices should inventory imbalances that emerged in the second half also bolster aggregate demand fairly soon. In addiof last year and has contributed to sizable declines in tion, as firms at some point become more satisfied manufacturing output this year. At the same time, with their inventory holdings, the cessation of liquiforeign economies have slowed, limiting the demand dation will boost production and, in turn, provide a for U.S. exports. lift to employment and incomes; a subsequent shift to inventory accumulation in association with the pro- To foster financial conditions that will support jected strengthening in demand should provide addistrengthening economic growth, the FOMC has lowtional impetus to production. Moreover, with no ered its target for the federal funds rate four times apparent sign of abatement in the rapid pace of since February, bringing the cumulative decline this year to 23/4 percentage points. A number of factors technological innovation, the outlook for productivity growth over the longer run remains favorable. The spurred this unusually steep reduction in the federal efficiency gains made possible by these innovations funds rate. In particular, the slowdown in growth was should spur demand for the capital equipment that rapid and substantial and carried considerable risks embodies the new technologies once the overall ecothat the sluggish performance of the economy in the nomic situation starts to improve and should support first half of this year would persist. Among other consumption by leading to solid increases in real things, the abruptness of the slowing, by jarring incomes over time. consumer and business confidence, raised the possibility of becoming increasingly self-reinforcing were Even though an appreciable recovery in the growth households and businesses to postpone spending of economic activity by early next year seems the while reassessing their situations. In addition, other most likely outcome, there is as yet no hard evidence financial developments, including a higher foreign that this improvement is in train, and the situation exchange value of the dollar, lower equity prices, and remains very uncertain. In these circumstances, the tighter lending terms and standards at banks, were FOMC continues to believe that the risks are tending to restrain aggregate demand and thus were weighted toward conditions that may generate ecooffsetting some of the influence of the lower federal nomic weakness in the foreseeable future. At the funds rate. Finally, despite some worrisome readings same time, the FOMC recognizes the importance of early in the year, price increases remained fairly well sustaining the environment of low inflation and well- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

502 Federal Reserve Bulletin • August 2001 Selected interest rates Percent 1999 2000 2001 NOTE. The data are daily and extend through July 12, 2001. The dates on the horizontal axis are those of scheduled FOMC meetings and of any intermeeting policy actions. anchored inflation expectations that enabled the Fed- The timing and size of the cut in the target rate eral Reserve to react rapidly and forcefully to the seemed to ease somewhat the concerns of financial slowing in real GDP growth over the past several market participants about the longer-term outlook for quarters. When, as the FOMC expects, activity begins the economy. Equity prices generally rose in January, to firm, the Committee will continue to ensure that risk spreads on lower-rated corporate bonds narfinancial conditions remain consistent with holding rowed significantly, and the yield curve steepened. inflation in check, a key requirement for maximum However, incoming data over the month revealed that sustainable growth. the slowing in consumer and business spending late last year had been sizable. Furthermore, a sharp erosion in survey measures of consumer confidence, a Monetary Policy, Financial Markets, backup of inventories, and a steep decline in capacity and the Economy over the First Half of 2001 utilization posed the risk that spending could remain depressed for some time. In light of these develop- By the time of the FOMC meeting on December 19, ments, the FOMC at its scheduled meeting on Janu- 2000, it had become evident that economic growth ary 30 and 31 cut its target for the federal funds rate had downshifted considerably, but the extent of that another Vi percentage point, to 5]/2 percent, and stated slowing was only beginning to come into focus. At that it continued to judge the risks to be weighted that meeting, the FOMC concluded that the risks to mainly toward economic weakness. the economy in the foreseeable future had shifted to The information reviewed by the FOMC at its being weighted mainly toward conditions that may meeting on March 20 suggested that economic activgenerate economic weakness and that economic and ity continued to expand, but slowly. Although confinancial developments could warrant further close sumer spending seemed to be rising moderately and review of the stance of policy well before the next housing had remained relatively firm, stock prices scheduled meeting. Subsequent data indicated that had declined substantially in February and early holiday retail sales had come in below expectations March, and reduced equity wealth and lower conand that conditions in the manufacturing sector had sumer confidence had the potential to damp housedeteriorated. Corporate profit forecasts had also been hold spending going forward. Moreover, manufacturmarked down, and it seemed possible that the result- ing output had contracted further, as businesses continued to work down their excess inventories and ing decline in equity values, along with the expense cut back on capital equipment expenditures. In addiof higher energy costs, could damp future business tion, economic softness abroad raised the likelihood investment and household spending. In response, the of a weakening in U.S. exports. Core inflation had FOMC held a telephone conference on January 3, picked up a bit in January, but some of the increase 2001, and decided to reduce the target federal funds rate x/i percentage point, to 6 percent, and indicated reflected the pass-through of a rise in energy prices that was unlikely to continue, and the FOMC judged that the risks to the outlook remained weighted that the slowdown in the growth of aggregate demand toward economic weakness. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 503 would ease inflationary pressures on labor and other interest rates on longer-term Treasuries and on resources. Accordingly, the FOMC on March 20 low- higher-quality private securities declined, some risk ered its target for the federal funds rate another spreads widened, and stock prices fell as financial V2 percentage point, to 5 percent. The members also market participants trimmed their expectations for continued to see the risks to the outlook as remaining economic activity and profits. When the FOMC met weighted mainly toward economic weakness. Fur- on June 26 and 27, conditions in manufacturing thermore, the FOMC recognized that in a rapidly appeared to have worsened still more. It also seemed evolving economic situation, it would need to be alert likely that slower growth abroad would restrain to the possibility that a conference call would be demand for exports and that weakening labor markets desirable during the relatively long interval before would hold down growth in consumer spending. In the next scheduled meeting to discuss the possible light of these developments, but also taking into need for a further policy adjustment. account the cumulative 250 basis points of easing Capital markets continued to soften in late March already undertaken and the other forces likely to be and early April, in part because corporate profits and stimulating spending in the future, the FOMC loweconomic activity remained quite weak. Although ered its target for the federal funds rate LA percentequity prices and bond yields began to rise in mid- age point, to 33/ 4 percent, and continued to view the April as financial market investors became more con- risks to the outlook as weighted toward economic fident that a cumulative downward spiral in activity weakness. could be avoided, reports continued to suggest flag- The Board of Governors of the Federal Reserve ging economic performance and risks of extended System approved cuts in the discount rate in the first weakness ahead. In particular, spending by consum- half of the year that matched the FOMC's cuts in ers had leveled out and their confidence had fallen the target federal funds rate. As a result, the discount further. The FOMC discussed economic develop- rate declined from 6 percent to 3LA percent over the ments in conference calls on April 11 and April 18, period. deciding on the latter occasion to reduce its target for the federal funds rate another V2 percentage point, to 41/2 percent. The Committee again indicated that it Economic Projections for 2001 and 2002 judged the balance of risks to the outlook as weighted toward economic weakness. The members of the Board of Governors and the When the FOMC met on May 15, economic condi- Federal Reserve Bank presidents, all of whom particitions remained quite sluggish, especially in manufac- pate in the deliberations of the FOMC, expect ecoturing, where production and employment had nomic growth to remain slow in the near term, though declined further. Although members were concerned most anticipate that it will pick up later this year at that some indicators of core inflation had moved up least a little. The central tendency of the forecasts for in the early months of the year and that part of the the increase in real GDP over the four quarters of recent backup in longer-term interest rates may have 2001 spans a range of VA percent to 2 percent, and owed to increased inflation expectations, most saw the central tendency of the forecasts for real GDP underlying price increases as likely to remain damped growth in 2002 is 3 percent to 3V4 percent. The as continued subpar growth relieved pressures on civilian unemployment rate, which averaged 4V2 perresources. In light of the prospect of continued weak- cent in the second quarter of 2001, is expected to ness in the economy and the significant risks to the move up to the area of 43A percent to 5 percent by the economic expansion, the FOMC reduced its target end of this year. In 2002, with the economy projected for the federal funds rate an additional V2 percentage to expand at closer to its trend rate, the unemploypoint, to 4 percent. With the softening in aggregate ment rate is expected to hold steady or perhaps to demand still of unknown persistence and dimension, edge higher. With pressures in labor and product the FOMC continued to view the risks to the outlook markets abating and with energy prices no longer as weighted toward economic weakness. Still, the soaring, inflation is expected to be well contained FOMC recognized that it had eased policy substan- over the next year and a half. tially this year and that, in the absence of further Despite the projected increase in real GDP growth, sizable adverse shocks to the economy, at future the uncertainty about the near-term outlook remains meetings it might need to consider adopting a more considerable. This uncertainty arises not only from cautious approach to further policy actions. the difficulty of assessing when businesses will feel Subsequent news on economic activity and cor- that conditions are sufficiently favorable to warrant a porate profits failed to point to a rebound. In June, pickup in capital spending but also from the difficulty Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

504 Federal Reserve Bulletin • August 2001 Economic projections for 2001 and 2002 benefit from a strengthening of the U.S. economy, a Percent stabilization of the global high-tech sector, an easing of oil prices, and stimulative macroeconomic policies Board of Governors and Reserve Bank presidents in some countries. IInnddiiccaattoorr Central The chain-type price index for personal consump- Range tendency tion expenditures rose 2L A percent over the four quar- 2001 ters of 2000, and most FOMC participants expect inflation to remain around that rate through next year; CChhaannggee,, ffoouurrtthh qquuaarrtteerr ttoo ffoouurrtthh qquuaarrtteerr11 indeed, the central tendency of their forecasts for the N R N Ree oo aa mm ll ii GG nnaa DD ll PP GG 22 DDPP 33 ''AA 11-- -- 22 55 33 1111 ''//22 //44 -- -- 44 22 ''// 44 increase in this price measure is 2 percent to 2l/i per- PPCCEE pprriicceess 22--2233//44 22--22 ''//22 cent in 2001 and VA percent to 2Vi percent in 2002. AAvveerraaggee lleevveell,, One favorable factor in the inflation outlook is the ffoouurrtthh qquuaarrtteerr CCiivviilliiaann uunneemmppllooyymmeenntt behavior of energy prices. Those prices have declined 4433//44--55 4433//44--55 recently after having increased rapidly in the past 2002 couple of years, and prospects are good that they could stabilize or even fall further in coming quar- Change, fourth quarter ters. In addition to their direct effects, lower energy Nominal GDP 44--II//44--66 55--5511//22 Real GDP2 33--33//22 33--33 llAA prices should tend to limit increases in other prices by PCE prices 11 11//22--33 PP//44--2211//22 reducing input costs for a wide range of energy- Average level, intensive goods and services and by helping damp fourth quarter Civilian unemployment inflation expectations. More broadly, the competitive 4433//44--55//22 4433//44--55 ''AA conditions that have restricted businesses' ability to 1. Change from average for fourth quarter of previous year to average for raise prices in recent years are likely to persist. And fourth quarter of year indicated. although labor costs could come under upward pres- 2. Chain-weighted. sure as wages tend to catch up to previous increases in productivity, the slackening in resource utilization of gauging where businesses stand in the inventory this year is expected to contribute to reduced inflation cycle. Nonetheless, all the FOMC participants forepressures going forward. see a return to solid growth by 2002. By then, the inventory correction should have run its course, and the monetary policy actions taken this year, as well as the recently enacted tax reductions, should be provid- ECONOMIC AND FINANCIAL DEVELOPMENTS ing appreciable support to final demand. IN 2001 In part because of lower interest rates, many firms have been able to shore up their balance sheets. And Economic growth remained very slow in the first half although some lower-rated firms, especially in of 2001 after having downshifted in the second half telecommunications and other sectors with gloomy of 2000. Real gross domestic product rose at an near-term prospects, may continue to find it difficult annual rate of just VA percent in the first quarter, to obtain financing, businesses generally are fairly about the same as in the fourth quarter, and appears well positioned to step up their capital spending once to have posted at best a meager gain in the second the outlook for sales and profits improves. By all quarter. Businesses have been working to correct the accounts, technological innovation is still proceeding inventory imbalances that emerged in the second half rapidly, and these advances should eventually revive of last year, which has led to sizable declines in high-tech investment, especially with the price of manufacturing output, and capital spending has weakcomputing power continuing to drop sharply. ened appreciably. In contrast, household spending— In addition, consumer spending is expected to get a especially for motor vehicles and houses—has held boost from the tax cuts and from falling energy up well. Employment increased only modestly over prices, which should help offset the effects of the the first three months of the year and turned down in weaker job market and the decline over the past year the spring; the unemployment rate in June stood at in stock market wealth. Housing activity, which has 4!/2 percent, Vi percentage point higher than in the been buoyed in recent quarters by low mortgage fourth quarter of last year. interest rates, is likely to remain firm into 2002. The inflation news early this year was not very Significant concerns remain about the foreign eco- favorable, as energy prices continued to soar and as nomic outlook and the prospects for U.S. exports. measures of core inflation—which exclude food and Nevertheless, economic activity abroad is expected to energy—registered some pickup. More recently, Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 505 Change in real GDP Consumer Spending Percent, annual rate Real consumer spending grew at an annual rate of 3'/2 percent in the first quarter. Some of the increase reflected a rebound in purchases of light motor vehi- — 6 cles, which were boosted by a substantial expansion of incentives and rose to just a tad below the record pace of 2000 as a whole. In addition, outlays for non-auto goods posted a solid gain, and spending on services rose modestly despite a weather-related drop in outlays for energy services. In the second quarter, however, the rise in consumer spending seems to have lessened as sales of light motor vehicles dropped a bit, on average, and purchases of other goods apparently did not grow as fast in real terms as they 1995 1996 1997 1998 1999 2000 2001 had in the first quarter. NOTE. Here and in the subsequent charts, except as noted, change is measured to the final quarter of the indicated period from the final quarter of the The rise in real consumption so far this year has preceding period. been considerably smaller than the outsized gains in the second half of the 1990s and into 2000. But the however, energy prices have moved lower, and the increase in spending still outstripped the growth in monthly readings on core inflation have returned to real disposable personal income (DPI), which has more moderate rates. Moreover, apart from energy, been restrained this year by further big increases in prices at earlier stages of processing have been quiesconsumer energy prices and by the deterioration in cent this year. the job market; between the fourth quarter of 2000 and May, real DPI increased just about 2 percent at an annual rate, well below the average pace of the The Household Sector preceding few years. In addition, the net worth of households fell again in the first quarter, to a level Growth in household spending has slowed noticeably 8 percent below the high reached in the first quarter from the rapid pace of the past few years. Still, it was of 2000. On net, the ratio of household net worth to fairly well maintained in the first half of 2001 despite DPI has returned to about the level reached in 1997, the weaker tenor of income, wealth, and consumer significantly below the recent peak but still high by confidence, and the personal saving rate declined a historical standards. In addition, consumer sentiment bit further. A greater number of households encoun- indexes, which had risen to extraordinary levels in tered problems servicing debt, but widespread diffi- the late 1990s and remained there through last fall, culties or restrictions on the availability of credit did fell sharply around the turn of the year. However, not emerge. these indexes have not deteriorated further, on net, Change in PCE chain-type price index Change in real income and consumption Percent, annual rate Percent, annual rate • Total • Excluding food and energy D Disposable personal income • Personal consumption expenditures Qi — 6 QI — 4 1995 1996 1997 1998 1999 2000 2001 1995 1996 1997 1998 1999 2000 2001 NOTE. Data are for personal consumption expenditures (PCE). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

506 Federal Reserve Bulletin • August 2001 since the winter and are still at reasonably favorable have offset the effect of the decline in wealth on the levels when compared with the readings for the pre- saving rate. 1997 period. Rising household wealth almost certainly was a key factor behind the surge in consumer spending Residential Investment between the mid-1990s and last year, and thus helps to explain the sharp fall in the personal saving rate Housing activity remained buoyant in the first half over that period. The saving rate has continued to fall of this year as lower mortgage interest rates appear this year—from -0.7 percent in the fourth quarter of to have offset the restraint from smaller gains in 2000 to -1.1 percent in May—even though the boost employment and income and from lower levels of to spending growth from the earlier run-up in stock wealth. In the single-family sector, starts averaged an prices has likely run its course and the effects of annual rate of 1.28 million units over the first five lower wealth should be starting to feed through to months of the year—4 percent greater than the hefty spending. The apparent decline in the saving rate pace for 2000 as a whole. Sales of new and existing may simply reflect noisiness in the data or a slower homes strengthened noticeably around the turn of response of spending to wealth than average histori- the year and were near record levels in March; they cal experience might suggest. In addition, consumers fell back in April but reversed some of that drop in probably base their spending decisions on income May. Inventories of new homes for sale are excepprospects over a longer time span than just a few tionally low; builders' backlogs are sizable; and, quarters. Thus, to the extent that consumers do not according to the Michigan survey, consumers' assessexpect the current sluggishness in real income growth ments of homebuying conditions remain favorable, to persist, the tendency to maintain spending for a mainly because of perceptions that mortgage rates are time by dipping into savings or by borrowing may low. Likely because of the sustained strength of housing demand, home prices have continued to rise faster Wealth and saving than overall inflation, although the various measures that attempt to control for shifts in the regional composition of sales and in the characteristics of houses sold provide differing signals on the magnitude of the price increases. Notably, over the year ending in the first quarter, the constant-quality price index for new homes rose 4 percent, while the repeat-sales price index for existing homes was up nearly 9 percent. Despite the higher prices, the share of income required to finance a home purchase—one measure of affordability—has fallen in recent quarters as mort- Private housing starts Millions of units, annual rate Multifamily NOTE. The data extend through 2001:Q1. The wealth-to-income ratio is the NOTE. The data extend through 2001 :Q2; the data for that quarter are the ratio of household net worth to disposable personal income. averages for April and May. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 507 Mortgage rates Household debt service burden Percent — 8.5 Fixed rate — 8.0 f — \ — 7.5 - A/ 7.0 Adjustable rate // \ — 6.5 - 6.0 11i r*! i i i i i i i I i i I L I I I I I ! i I i i i i i I 1999 2000 2001 NOTE. The data, which are monthly and extend through June 2001, are NOTE. The data are quarterly and extend through 2001 :Q1. Debt burden is an contract rates on thirty-year mortgages from the Federal Home Loan Mortgage estimate of the ratio of debt payments to disposable income; debt payments Corporation. consist of the estimated required payments on outstanding mortgage and consumer debt. gage rates have dropped back after last year's bulge, and that share currently is about as low as it has been The household debt service burden—the ratio of at any time in the past decade. Rates on thirty-year minimum scheduled payments on mortgage and conconventional fixed-rate loans now stand around sumer debt to disposable personal income—rose to 7!/4 percent, and ARM rates are at their lowest levels more than 14 percent at the end of the first quarter, a in a couple of years. twenty-year high, and available data suggest a similar In the multifamily sector, housing starts averaged reading for the second quarter. In part because of the 343,000 units at an annual rate over the first five elevated debt burden, some measures of household months of the year, matching the robust pace that has loan performance have deteriorated a bit in recent been evident since 1997. Moreover, conditions in the quarters. The delinquency rate on home mortgage market for multifamily housing continue to be condu- loans has edged up but remains low, while the delincive to new construction. The vacancy rate for multi- quency rate on credit card loans has risen noticeably family rental units in the first quarter held near its and is in the middle part of its range over the past low year-earlier level, and rents and property values decade. Personal bankruptcies jumped to record levcontinued to rise rapidly. els in the spring, but some of the spurt was probably the result of a rush to file before Congress passed bankruptcy reform legislation. Household Finance Delinquency rates on household loans The growth of household debt is estimated to have slowed somewhat in the first half of this year to a still Percent fairly hefty IV2 percent annual rate—about a percentage point below its average pace over the previous two years. Households have increased both their home mortgage debt and their consumer credit (debt not secured by real estate) substantially this year, although in both cases the growth has moderated a bit recently. The relatively low mortgage interest rates have boosted mortgage borrowing both by stimulating home purchases and by making it attractive to refinance existing mortgages and extract some of the buildup in home equity. The rapid growth in consumer credit has been concentrated in credit card 1988 1990 1992 1994 1996 1998 2000 debt, perhaps reflecting households' efforts to sustain NOTE. The data are quarterly and extend through 2001 :Q1. Data on credit their consumption in the face of weaker income card delinquencies are from bank Call Reports; data on auto loan delinquencies are from the Big Three automakers; data on mortgage delinquencies are from growth. the Mortgage Bankers Association. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

508 Federal Reserve Bulletin • August 2001 Net percentage of large commercial banks tightening Fixed Investment standards for consumer loans Real spending on equipment and software (E&S) Percent began to soften in the second half of last year, and it posted small declines in both the fourth quarter of 2000 and the first quarter of 2001. Much of the weakness in the first quarter was in spending on high-tech equipment and software; such spending, which now accounts for about half of E&S outlays when measured in nominal terms, declined at an annual rate of about 12 percent in real terms—the first real quarterly drop since the 1990 recession. An especially sharp decrease in outlays for communications equipment reflected the excess capacity that had emerged as a result of the earlier surge in spending, 1996 1997 1998 1999 2000 2001 the subsequent re-evaluation of profitability, and the NOTE. The data extend through May 2001 and are based on the Federal accompanying financing difficulties faced by some Reserve's Senior Loan Officer Opinion Survey on Bank Lending Practices, firms. In addition, real spending on computers and which is generally conducted four times per year. Net percentage is percentage reporting a tightening less percentage reporting an easing. peripheral equipment, which rose more than 40 percent per year in the second half of the 1990s, showed Lenders have tightened up somewhat in response little growth, on net, between the third quarter of to the deterioration of household financial conditions. 2000 and the first quarter of 2001. The leveling in In the May Senior Loan Officer Opinion Survey on real computer spending reportedly reflects some Bank Lending Practices, about a fifth of the banks stretching out of businesses' replacement cycles for indicated that they had tightened the standards for personal computers as well as a reduced demand for approving applications for consumer loans over the servers. Outside the high-tech area, spending rose in preceding three months, and about a fourth said that the first quarter as purchases of motor vehicles they had tightened the terms on loans they are willing reversed some of the decline recorded over the secto make, substantial increases from the November ond half of 2000 and as outlays for industrial equipsurvey. Of those that had tightened, most cited actual ment picked up after having been flat in the fourth or anticipated increases in delinquency rates as a quarter. reason. Real E&S spending likely dropped further in the second quarter. In addition to the ongoing contraction The Business Sector in outlays on high-tech equipment, the incoming data for orders and shipments point to a decline in invest- The boom in capital spending that has helped fuel the ment in non-high-tech equipment, largely reflecting economic expansion came to a halt late last year. the weakness in the manufacturing sector this year. After having risen at double-digit rates over the preceding five years, real business fixed investment flattened out in the fourth quarter of 2000 and rose only Change in real business fixed investment a little in the first quarter of 2001. Demand for capital U iJ Percent, annual rate equipment has slackened appreciably, reflecting the sluggish economy, sharply lower corporate profits • Structures • Equipment and software and cash flow, earlier overinvestment in some sectors, and tight financing conditions facing some firms. — 20 Qi In addition, inventory investment fell substantially in the first quarter as businesses moved to address the overhangs that began to develop late last year. With investment spending weakening, businesses have cut back on new borrowing. Following the drop in longer-term interest rates in the last few months of 2000, credit demands have been concentrated in longer-term markets, though cautious investors have required high spreads from marginal borrowers. 1995 1996 1997 1998 1999 2000 2001 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 509 Outlays on nonresidential construction posted Firms outside the motor vehicles industry also another sizable advance in early 2001 after having moved aggressively to address inventory imbalances expanded nearly 13 percent in real terms in 2000, but in the first half of the year, and this showed through the incoming monthly construction data imply a sharp to manufacturing output, which, excluding motor retrenchment in the second quarter. The downturn in vehicles, fell at an annual rate of IV2 percent over this spending comes on the heels of an increase in period. These production adjustments—along with a vacancy rates for office and industrial space in many sharp reduction in the flow of imports—contributed cities. Moreover, while financing generally remains to a small decline in real non-auto stocks in the first available for projects with viable tenants, lenders are quarter, and book-value data for the manufacturing now showing greater caution. Not surprisingly, one and trade sector point to a further decrease, on net, in bright spot is the energy sector, where expenditures April and May. As of May, stocks generally seemed for drilling and mining have been on a steep uptrend in line with sales at retail trade establishments, but since early 1999 (mainly because of increased explo- there were still some notable overhangs in wholesale ration for natural gas) and the construction of facili- trade and especially in manufacturing, where ties for electric power generation remains very strong. inventory-shipments ratios for producers of computers and electronic products, primary and fabricated metals, and chemicals remained very high. Inventory Investment A sharp reduction in the pace of inventory investment Business Finance was a major damping influence on real GDP growth in the first quarter of 2001. The swing in real nonfarm The economic profits of U.S. corporations fell at a inventory investment from an accumulation of 19 percent annual rate in the first quarter after a $51 billion at an annual rate in the fourth quarter of similar decline in the fourth quarter of 2000. As a 2000 to a liquidation of $25 billion in the first quarter result, the ratio of profits to GDP declined 1 percentof 2001 subtracted 3 percentage points from the age point over the two quarters, to 8.5 percent; growth in real GDP in the first quarter. Nearly half of the ratio of the profits of nonfinancial corpthe negative contribution to GDP growth came from orations to sector output fell 2 percentage points over the motor vehicle sector, where a sizable cut in the interval, to 10 percent. Investment spending has assemblies (added to the reduction already in place in declined by more than profits, however, reducing the fourth quarter) brought the overall days' supply somewhat the still-elevated need of nonfinancial down to comfortable levels by the end of the first corporations for external funds to finance capital quarter. A rise in truck assemblies early in the second expenditures. Corporations have husbanded their quarter led to some backup of inventories in that increasingly scarce internal funds by cutting back on segment of the market, but truck stocks were back in cash-financed mergers and equity repurchases. While an acceptable range by June; automobile assemblies were up only a little in the second quarter, and stocks Before-tax profits of nonfinancial corporations remained lean. as a percent of sector GDP Percent Change in real nonfarm business inventories Billions of chained 1996 dollars, annual rate llllll, I 1 I I 1 I 11 II I I II 1 I I I 11 1 11 11 1 I • — 25 1977 1980 1983 1986 1989 1992 1995 1998 2001 Ql NOTE. Data extend through 2001:Q1. Profits are from domestic operations of nonfinancial corporations, with inventory valuation and capital consumption 1995 1996 1997 1998 1999 2000 2001 adjustments, divided by gross domestic product of nonfinancial corporate sector. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

510 Federal Reserve Bulletin • August 2001 Financing gap and net equity retirement Spread of low-tier CP rate over high-tier CP rate at nonfarm nonfinancial corporations Basis points Billions of dollars 125 — 250 Net equity retirement — 100 — 200 — 75 Financing gap — 50 -— 25 iJ 1997 1998 1999 2000 2001 NOTE. The data are daily and extend through July 12, 2001. The series shown NOTE. The data through 2000 are annual; the final observation is for 2001:Q1 is the difference between the rate on A2/P2 nonfinancial commercial paper and and is at an annual rate. The financing gap is the difference between capital the AA rate. expenditures and internally generated funds. Net equity retirement is the differonly by highly rated corporations, and default is ence between equity retired through share repurchases, domestic cash-financed mergers, or foreign takeovers of U.S. firms and equity issued in public or private extremely rare. The defaults, along with some downmarkets, including funds invested by venture capital partnerships. grades, led investors in commercial paper to pull equity retirements have therefore fallen, so has gross back and reevaluate the riskiness of issuers. For a equity issuance, though by less. Inflows of venture while, issuance by all but top-rated names became equity capital, in particular, have been reduced sub- very difficult and quality spreads widened signifistantially. Businesses have met their financing needs cantly, pushing some issuers into the shortest maturiby borrowing heavily in the bond market while pay- ties and inducing others to exit the market entirely. ing down both commercial and industrial (C&I) loans As a consequence, the amount of commercial paper at banks and commercial paper. In total, after having outstanding plummeted. In the second quarter, risk increased 9V2 percent last year, the debt of nonfinan- spreads returned to more typical levels and the runoff cial businesses rose at a 5 percent annual rate in the moderated. By the end of June, the amount of nonfirst quarter of this year and is estimated to have risen financial commercial paper outstanding was nearly at about the same pace in the second quarter. 30 percent below its level at the end of 2000, with The decline in C&I loans and commercial paper many firms still not having returned to the market. owes, in part, to less hospitable conditions in shorter- Even though banks' C&I loans were boosted in term funding markets. The commercial paper market January and February by borrowers substituting away was rattled in mid-January by the defaults of two Net percentage of domestic banks tightening standards large California utilities. Commercial paper is issued for commercial and industrial loans, by size of borrower Major components of net business financing Percent Billions of dollars O Commercial paper Sum of components H Bonds — 500 • Bank loans 1991 1993 1995 1997 1999 2001 1999 2000 2001 NOTE. The data are based on the Federal Reserve's Senior Loan Officer Opinion Survey on Bank Lending Practices, which is generally conducted four NOTE. Seasonally adjusted annual rate for nonfarm nonfinancial corporate times per year. The data extend through May 2001. Small firms are those with businesses. The data for 2001 :Q2 are estimated. annual sales of less than $50 million. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 511 from the commercial paper market, loans declined, Liabilities of failed businesses on net, over the first half of the year, in part because as a proportion of total liabilities borrowers paid down their bank loans with proceeds from bond issues. Many banks reported on the Federal Reserve's Bank Lending Practices surveys this Nonfinancial firms year that they had tightened standards and terms— including the premiums charged on riskier loans, the cost of credit lines, and loan covenants—on C&I loans. Loan officers cited a worsened economic outlook, industry-specific problems, and a reduced tolerance for risk as the reasons for having tightened. Despite these adjustments to banks' lending stance, credit appears to remain amply available for sound borrowers, and recent surveys of small businesses indicate that they have not found credit significantly more difficult to obtain. 1991 1993 1995 1997 1999 2001 Meanwhile, the issuance of corporate bonds this NOTE. Annual average. Value for June 2001 is a twelve-month trailing year has proceeded at about double the pace of the average. preceding two years. With the yields on high-grade SOURCE. Dun & Bradstreet. bonds back down to their levels in the first half of elevated spreads reflect the deterioration in business 1999 and with futures quotes suggesting interest rates credit quality that has occurred as the economy has will be rising next year, corporations apparently slowed. While declines in interest rates have held judged it to be a relatively opportune time to issue. aggregate interest expense at a relatively low percent- Although investors remain somewhat selective, they age of cash flow, many individual firms are feeling have been willing to absorb the large volume of the pinch of decreases in earnings. Over the twelve issuance as they have become more confident that the months ending in May, 11 percent of speculativeeconomy would recover and a prolonged disruption grade bonds, by dollar volume, have defaulted—the to earnings would be avoided. The heavy pace of highest percentage since 1991 and a substantial jump issuance has been supported, in part, by inflows into from 1998, when less than 2 percent defaulted. This bond mutual funds, which may have come at the deterioration reflects not only the unusually large expense of equity funds. defaults by the California utilities, but also stress in The flows are forthcoming at relatively high risk the telecommunications sector and elsewhere. Howspreads, however. Spreads of most grades of corpo- ever, some other measures of credit performance rate debt relative to rates on swaps have fallen a little have shown a more moderate worsening. The ratio this year, but spreads remain unusually high for lower of the liabilities of failed businesses to those of all investment-grade and speculative-grade credits. The nonfinancial businesses and the delinquency rate on C&I loans at banks have risen noticeably from their lows in 1998, but both remain well below levels Net interest payments of nonfinancial corporations relative to cash flow posted in the early 1990s. Commercial mortgage debt increased at about an Percent 83/ percent annual rate in the first half of this year, 4 and the issuance of commercial-mortgage-backed securities (CMBS) maintained its robust pace of the past several years. While spreads of the yields on investment- and speculative-grade CMBS over swap rates have changed little this year, significant fractions of banks reported on the Bank Lending Practices survey that they have tightened terms and standards on commercial real estate loans. Although the delinquency rates on CMBS and commercial real estate loans at banks edged up in the first quarter, they remained near record lows. Nevertheless, those commercial banks that reported taking a more cautious approach toward commercial real estate lending NOTE. The data are quarterly and extend through 2001 :Q1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

512 Federal Reserve Bulletin • August 2001 stated that they are doing so, in part, because of a less National saving as a percent of nominal GDP favorable economic outlook in general and a worsen- Percent ing of the outlook for commercial real estate. The Government Sector Excluding federal saving The fiscal 2001 surplus in the federal unified budget is likely to be smaller than the surplus in fiscal 2000 because of the slower growth in the economy and the recently enacted tax legislation. Nonetheless, the unified surplus will remain large, and the paydown of the federal debt is continuing at a rapid clip. As a Total consequence, the Treasury has taken a number of steps to preserve liquidity in a shrinking market. The 1985 1997 weaker economy is also reducing revenues at the state and local level, but these governments remain in NOTE. The data extend through 2001:Q1. National saving comprises the gross saving of households, businesses, and governments. reasonably good fiscal shape overall and are taking advantage of historically low interest rates to refund Federal receipts in the first eight months of the existing debt and to issue new debt. current fiscal year were just 4Vi percent higher than during the first eight months of fiscal 2000—a much Federal Government smaller gain than those posted, on average, over the preceding several years. Much of the slowing was in The fiscal 2001 surplus in the federal government's corporate receipts, which dropped below year-earlier unified budget is likely to come in below the fiscal levels, reflecting the recent deterioration in profits. In 2000 surplus of $236 billion. Over the first eight addition, individual income tax payments rose less months of the fiscal year—October to May—the uni- rapidly than over the preceding few years, mainly fied budget recorded a surplus of $137 billion, because of slower growth in withheld tax payments. $16 billion higher than during the comparable period This spring's nonwithheld payments of individual last year. But over the balance of the fiscal year, taxes, which are largely payments on the previous receipts will continue to be restrained by this year's year's liability, were relatively strong. Indeed, slow pace of economic growth and the associated although there was no appreciable "April surprise" decline in corporate profits. Receipts will also be this year—that is, these payments were about in line reduced significantly over the next few months by the with expectations—liabilities again appear to have payout of tax rebates and the shift of some corporate risen faster than the NIPA tax base in 2000. One payments into fiscal 2002, provisions included in the factor that has lifted liabilities relative to income in Economic Growth and Tax Relief Reconciliation Act recent years is that rising levels of income and a of 2001. changing distribution have shifted more taxpayers into higher tax brackets. Higher capital gains reali- Federal saving, which is basically the unified budzations also have helped raise liabilities relative to get surplus adjusted to conform to the accounting the NIPA tax base over this period. (Capital gains practices followed in the national income and product are not included in the NIPA income measure, which, accounts (NIPA), has risen dramatically since hitting by design, includes only income from current a low of -3VI percent of GDP in 1992 and stood at 33/ percent of GDP in the first quarter—a swing of production.) 4 more than 7 percentage points. Reflecting the high The faster growth in outlays that emerged in fiscal level of federal saving, national saving, which com- 2000 has extended into fiscal 2001. Smoothing prises saving by households, businesses, and govern- through some timing anomalies at the start of the ments, has been running at a higher rate since the late fiscal year, nominal spending during the first eight 1990s than it did over most of the preceding decade, months of fiscal 2001 was more than 4 percent higher even as the personal saving rate has plummeted. The than during the same period last year; excluding the deeper pool of national saving, along with large sizable drop in net interest outlays that has accompainflows of foreign capital, has provided resources for nied the paydown of the federal debt, the increase in the technology-driven boom in domestic investment spending so far this year was nearly 6 percent. Spendin recent years. ing in the past couple of years has been boosted by Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 513 sizable increases in discretionary appropriations as with a four-week maturity to provide it with greater well as by faster growth in outlays for the major flexibility and cost efficiency in managing its cash health programs. The especially rapid increase in balances, which, in part because new securities are Medicaid outlays reflects the higher cost and utiliza- now issued less frequently, have become more volation of medical care (including prescription drugs), tile. Finally, also in May, the Treasury announced it growing enrollments, and a rise in the share of would in the next few months seek public comment expenses picked up by the federal government. Out- on a plan to ease the "35 percent rule," which limits lays for Medicare have been lifted, in part, by the the bidding at auctions by those holding claims on higher reimbursements to providers that were enacted large amounts of an issue. With reopenings increaslast year. ingly being used to maintain liquidity in individual Real federal expenditures for consumption and issues, this rule was constraining many potential bidgross investment, the part of government spending ders. As discussed below, the reduced issuance of that is included in GDP, rose at a 5 percent annual Treasury securities has also led the Federal Reserve rate in the first quarter. Over the past couple of years, to modify its procedures for acquiring such securities real nondefense purchases have remained on the and to study possible future steps for its portfolio. moderate uptrend that has been evident since the In early 2000, as investors focused on the possibilmid-1990s, while real defense purchases have started ity that Treasury securities were going to become to rise slowly after having bottomed out in the late increasingly scarce, they became willing to pay a 1990s. premium for longer-dated securities, pushing down The Treasury has used the substantial federal bud- their yields. However, these premiums appear to get surpluses to pay down its debt further. At the end have largely unwound later in the year as market of June, the outstanding Treasury debt held by the participants made adjustments to the new environpublic had fallen nearly $600 billion, or 15 percent, ment. These adjustments include the substitution of from its peak in 1997. Relative to nominal GDP, alternative instruments for hedging and pricing, such publicly held debt has dropped from nearly 50 per- as interest rate swaps, prominent high-grade corcent in the mid-1990s to below 33 percent in the first porate bonds, and securities issued by governmentquarter, the lowest it has been since 1984. sponsored enterprises (GSEs). To benefit from adjust- Declines in outstanding federal debt and the associ- ments by market participants, in 1998, Fannie Mae ated reductions in the sizes and frequency of auctions and Freddie Mac initiated programs to issue securiof new issues have diminished the liquidity of the ties that share some characteristics with Treasury Treasury market over the past few years. Bid-asked securities, such as regular issuance calendars and spreads are somewhat wider, quote sizes are smaller, large issue sizes; in the first half of this year they and the difference between yields on seasoned versus issued $88 billion of coupon securities and $502 bilmost-recently issued securities has increased. In part, lion of bills under these programs. The GSEs have however, these developments may also reflect a more also this year begun buying back older securities to cautious attitude among securities dealers following boost the size of their new issues. Nevertheless, the the market turmoil in the fall of 1998. market for Treasury securities remains considerably The Treasury has taken a number of steps to limit more liquid than markets for GSE and other fixedthe deterioration in the liquidity of its securities. In income securities. recent years, it has concentrated its issuance into fewer securities, so that the auction sizes of the remaining securities are larger. Last year, in order to State and Local Governments enable issuance of a larger volume of new securities, the Treasury began buying back less-liquid older State and local governments saw an enormous securities, and it also made every second auction of improvement in their budget positions between the its 5- and 10-year notes and 30-year bond a reopening mid-1990s and last year as revenues soared and of the previously issued security. In February, the spending generally was held in check; accordingly, Treasury put limits on the noncompetitive bids that these governments were able both to lower taxes and foreign central banks and governmental monetary to make substantial allocations to reserve funds. More entities may make, so as to leave a larger and more recently, however, revenue growth has slowed in predictable pool of securities available for competi- many states, and reports of fiscal strains have tive bidding, helping to maintain the liquidity and increased. Nonetheless, the sector remains in relaefficiency of the market. In May, the Treasury tively good fiscal shape overall, and most governannounced that it would begin issuing Treasury bills ments facing revenue shortfalls have managed to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

514 Federal Reserve Bulletin • August 2001 adopt balanced budgets for fiscal 2002 with only U.S. current account minor adjustments to taxes and spending. 1 Billions of dollars, annual rate Real consumption and investment spending by state and local governments rose at nearly a 5 percent + annual rate in the first quarter and apparently posted a sizable increase in the second quarter as well. Much 0 of the strength this year has been in construction spending, which has rebounded sharply after a — 100 reported decline in 2000 that was hard to reconcile with the sector's ongoing infrastructure needs and the — 200 good financial condition of most governments. Hir- — 300 ing also remained fairly brisk during the first half of the year; on average, employment rose 30,000 per — 400 month, about the same as the average monthly increase over the preceding three years. 1995 1996 1997 1998 1999 2000 2001 Although interest rates on municipal debt have edged up this year, they remain low by historical standards. State and local governments have taken in April continued at about the same pace. Net investadvantage of the low interest rates to refund existing ment income payments were a bit less in the first debt and to raise new capital. Credit quality has quarter than the average for last year primarily remained quite high in the municipal sector even as because of a sizable decrease in earnings by U.S. tax receipts have softened, with credit upgrades out- affiliates of foreign firms. pacing downgrades in the first half of this year. Most As U.S. economic growth slowed in the second notable among the downgrades was that of Califor- half of last year and early this year, real imports of nia's general obligation bonds. Standard and Poor's goods and services, which had grown very rapidly in lowered California's debt two notches from AA to the first three quarters of 2000, expanded more slowly A+, citing the financial pressures from the electricity in the fourth quarter and then contracted 5 percent at crisis and the likely adverse effects of the crisis on an annual rate in the first quarter. The largest declines the state's economy. were in high-tech products (computers, semiconductors, and telecommunications equipment) and automotive products. In contrast, imports of petroleum The External Sector and petroleum products increased moderately. A temporary surge in the price of imported natural gas The deficits in U.S. external balances narrowed pushed the increase of the average price of non-oil sharply in the first quarter of this year, largely imports above an annual rate of 1 percent in the first because of a smaller deficit in trade in goods and quarter, slightly higher than the rate of increase services. Most of the financial flows into the United recorded in 2000. States continued to come from private foreign U.S. real exports were hit by slower growth abroad, sources. the strength of the dollar, and plunging global demand for high-tech products. Real exports of goods and services, which had grown strongly in the first Trade and Current Account three quarters of 2000, fell 6V2 percent at an annual rate in the fourth quarter of last year and declined After widening continuously during the past four another 1 percent in the first quarter of this year. The years, the deficits in U.S. external balances narrowed largest declines in both quarters were in high-tech in the first quarter of 2001. The current account capital goods and automotive products (primarily in deficit in the first quarter was $438 billion at an intra-firm trade with Canada). By market destination, annual rate, or 4.3 percent of GDP, compared with the largest increases in U.S. goods exports during the $465 billion in the fourth quarter of 2000. Most of the first three quarters of 2000 had been to Mexico and reduction of the current account deficit can be traced countries in Asia; the recent declines were mainly in to changes in U.S. trade in goods and services; exports to Asia and Latin America. In contrast, goods exports to Western Europe increased steadily the trade deficit narrowed from an annual rate of throughout the entire period. About 45 percent of $401 billion in the fourth quarter of 2000 to $380 bil- U.S. goods exports in the first quarter of 2001 were lion in the first quarter of this year. The trade deficit Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 515 Change in real imports and exports of goods and services U.S. international securities transactions Percent, annual rate Billions of dollars I [ Imports Private foreign purchases of U.S. securities • Exports — 20 • Net foreign purchases of U.S. bonds H Net foreign purchases of U.S. equities 15 mrnm 10 Ql I 1 1995 1996 1997 1998 1999 2000 2001 NOTE. Change for the half-year indicated is measured from the preceding half-year, and the change for 2001 :Q1 is from 2000:Q4. Imports and exports for each half-year are the average of the levels for component quarters. Private U.S. purchases of foreign securities capital equipment; 20 percent were industrial sup- • Net U.S. purchases of foreign bonds 125 H Net U.S. purchases of foreign equities plies; and 5 to 10 percent each were agricultural, 100 automotive, consumer, and other goods. After increasing through much of 2000, the spot 75 price of West Texas intermediate (WTI) crude oil 50 reached a peak above $37 per barrel in September, the highest level since the Gulf War. As world eco- 25 nomic growth slowed in the latter part of 2000, oil + price declines reversed much of the year's price gain. 0 In response, OPEC reduced its official production targets in January of this year and again in March. As 1999 2000 2001 a result, oil prices have remained relatively high in SOURCE. Department of Commerce, Survey of Current Business. 2001 despite weaker global economic growth and a substantial increase in U.S. oil inventories. Oil prices chases of U.S. bonds, as foreign purchases of both have also been elevated by the volatility of Iraqi oil corporate and agency bonds accelerated and private exports arising from tense relations between Iraq foreign sales of Treasuries paused. Foreign purchases and the United Nations. During the first six months of of U.S. equities are only slightly below their 2000 this year, the spot price of WTI has fluctuated, with pace despite the apparent decline in expected returns only brief exceptions, between $27 and $30 per to holding U.S. equities. barrel. The pace at which U.S. residents acquired foreign securities changed little between the second half of last year and the first quarter of this year. As Financial Account in previous years, most of the foreign securities acquired were equities. In the first quarter of 2001, as was the case in 2000 as Net financial inflows associated with direct investa whole, nearly all of the net financial flows into the ment slowed a good bit in the first quarter, as there United States came from private foreign sources. were significantly fewer large foreign takeovers of Foreign official inflows were less than $5 billion and U.S. firms and U.S. direct investment abroad were composed primarily of the reinvestment of remained robust. accumulated interest earnings. Reported foreign exchange intervention purchases of dollars were modest. The Labor Market Inflows arising from private foreign purchases of U.S. securities accelerated further in the first quarter Labor demand weakened in the first half of 2001, and are on a pace to exceed last year's record. All of especially in manufacturing, and the unemployment the pickup is attributable to larger net foreign pur- rate rose. Increases in hourly compensation have Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

516 Federal Reserve Bulletin • August 2001 continued to trend up in recent quarters, while mea- Measures of labor utilization sured labor productivity has been depressed by the Percent slower growth of output. Employment and Unemployment After having risen an average of 149,000 per month in 2000, private payroll employment increased an average of only 63,000 per month in the first quarter of 2001, and it declined an average of 117,000 per month in the second quarter. The unemployment rate moved up over the first half of the year and in June stood at 4Vi percent, Vi percentage point higher than in the fourth quarter of last year. 1970 1975 1980 1985 1990 1995 2000 Much of the weakness in employment in the first NOTE. The data extend through June 2001. The augmented unemployment half of the year was in the manufacturing sector, rate is the number of unemployed plus those who are not in the labor force and want a job, divided by the civilian labor force plus those who are not in the labor where job losses averaged 78,000 per month in the force and want a job. In January 1994, a redesigned survey was introduced; data first quarter and 116,000 per month in the second from that point on are not directly comparable with those of earlier periods. quarter. Since last July, manufacturing employment help-supply firms) also slowed markedly in the sechas fallen nearly 800,000. Factory job losses were ond quarter. Employment in retail trade remained on widespread in the first half of the year, with some of a moderate uptrend over the first half of the year, and the biggest cutbacks at industries struggling with employment in finance, insurance, and real estate sizable inventory overhangs, including metals and increased modestly after having been unchanged, on industrial and electronic equipment. The weakness net, last year. in manufacturing also cut into employment at helpsupply firms and at wholesale trade establishments. Apart from manufacturing and the closely related Labor Costs and Productivity help-supply and wholesale trade industries, employment growth held up fairly well in the first quarter Through the first quarter, compensation growth but began to slip noticeably in the second quarter. remained quite strong—indeed, trending higher by Some of the slowing in the second quarter reflected a some measures. These gains likely reflected the infludrop in construction employment after a strong first ence of earlier tight labor markets, higher consumer quarter that likely absorbed a portion of the hiring price inflation—largely due to soaring energy that normally takes place in the spring; on average, prices—and the greater real wage gains made posconstruction employment rose a fairly brisk 15,000 sible by faster structural productivity growth. The per month over the first half, about the same as upward pressures on labor costs could abate in comin 2000. Hiring in the services industry (other than ing quarters if pressures in labor markets ease and energy prices fall back. Net change in private nonfarm payroll employment Hourly compensation, as measured by the employment cost index (ECI) for private nonfarm businesses, moved up in the first quarter to a level about 4LA percent above its level of a year earlier; this compares with increases of about 4V2 percent over the preceding year and 3 percent over the year before that. The slight deceleration in the most recent twelve-month change in the ECI is accounted for by a slowdown in the growth of compensation for sales workers relative to the elevated rates that had prevailed in early 2000; these workers' pay includes a substantial commission component and thus is especially sensitive to cyclical developments. Compensation per hour in the nonfarm business sector—a mea- 1991 1993 1995 1997 1999 2001 sure that picks up some forms of compensation that Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 517 Measures of change in hourly compensation Change in output per hour, nonfarm businesses Percent Percent 6 — 6 Employment cost index Nonfarm compensation per hour 1993 1995 1997 1999 2001 NOTE. The data extend through 2001:Q1. The ECI is for private industry NOTE. Changes are Q4 to Q4 except the change for 2001:Q1, which is from excluding farm and household workers. Nonfarm compensation per hour is for 2000:Q1. the nonfarm business sector. Measured labor productivity in the nonfarm business sector has been bounced around in recent quarthe ECI omits but that sometimes has been revised ters by erratic swings in hours worked by selfsubstantially once the data go through the annual employed individuals, but on balance, it has barely revision process—shows a steady uptrend over the risen since the third quarter of last year after having past couple of years; it rose 6 percent over the year increased about 3 percent per year, on average, over ending in the first quarter after having risen AVi perthe preceding three years. This deceleration coincides cent over the preceding year. with a marked slowing in output growth and seems According to the ECI, wages and salaries rose at an broadly in line with the experience of past busiannual rate of about AVi percent in the first quarter. ness cycles; these readings remain consistent with a Excluding sales workers, wages rose 5 percent noticeable acceleration in structural productivity hav- (annual rate) in the first quarter and 4]A percent over ing occurred in the second half of the 1990s. Reflectthe year ending in March; this compares with an ing the movements in hourly compensation and in increase of 33A percent over the year ending in March actual productivity, unit labor costs in the nonfarm 2000. Separate data on average hourly earnings of business sector jumped in the first quarter and have production or nonsupervisory workers also show a risen 3 xh percent over the past year. discernible acceleration of wages: The twelve-month Looking ahead, prospects for favorable productivchange in this series was 4XA percent in June, XH perity performance will hinge on a continuation of the centage point above the reading for the preceding rapid technological advances of recent years and on twelve months. Benefit costs as measured in the ECI have risen Change in unit labor costs, nonfarm businesses faster than wages over the past year, with the increase over the twelve months ending in March totaling 5 percent. Much of the pressure on benefits is coming Qi from health insurance, where employer payments have accelerated steadily since bottoming out in the mid-1990s and are now going up about 8 percent per year. The surge in spending on prescription drugs accounts for some of the rise in health insurance costs, but demand for other types of medical care is increasing rapidly as well. Moreover, although there has been some revamping of drug coverage to counter the pressures of soaring demand, many employers have been reluctant to adjust other features of the health benefits package in view of the need to retain workers in a labor market that has been very tight in recent years. NOTE. Changes are Q4 to Q4 except the change for 2001 :Q1, which is from 2000:Q1. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

518 Federal Reserve Bulletin • August 2001 the willingness of businesses to expand and update sizable advance in the second quarter. Unlike the their capital stocks to take advantage of the new surges in energy prices in 1999 and 2000, the efficiency-enhancing capital that is becoming avail- increases in the first half of 2001 were not driven by able at declining cost in many cases. To be sure, the developments in crude oil markets. Indeed, natural current weakness in business investment will likely gas prices were the major factor boosting overall damp the growth of the capital stock relative to the energy prices early this year as tight inventories and pace of the past couple of years. But once the cyclical concerns about potential stock-outs pushed spot weakness in the economy dissipates, continued prices to extremely high levels; natural gas prices advances in technology should provide impetus to have since receded as additional supplies have come renewed capital spending and a return to solid on line and inventories have been rebuilt. In the increases in productivity. spring, gasoline prices soared in response to strong demand, refinery disruptions, and concerns about lean inventories; with refineries back on line, imports up, Prices and inventories restored, gasoline prices have since fallen noticeably below their mid-May peaks. Elec- Inflation moved higher in early 2001 but has mod- tricity prices also rose substantially in the first half of erated some in recent months. After having risen the year, reflecting higher natural gas prices as well 2LA percent in 2000, the chain price index for per- as the problems in California. Capacity problems sonal consumption expenditures (PCE) increased in California and the hydropower shortages in the about 3LA percent in the first quarter of 2001 as Northwest persist, though California's electricity conenergy prices soared and as core consumer prices— sumption has declined recently and wholesale prices which exclude food and energy—picked up. Energy have dropped. In contrast, capacity in the rest of the prices continued to rise rapidly in April and May but country has expanded appreciably over the past year eased in June and early July. In addition, core PCE and, on the whole, appears adequate to meet the price inflation has dropped back after the first-quarter normal seasonal rise in demand. spurt, and the twelve-month change in this series, Core PCE prices rose at a 2VI percent annual rate which is a useful indicator of the underlying inflation in the first quarter—a hefty increase by the standards trend, stood at 1 Vi percent in May, about the same as of recent years. But the data are volatile, and the the change over the preceding twelve months. The first-quarter increase, no doubt, exaggerates any core consumer price index (CPI) continued to move pickup. Based on monthly data for April and May, up at a faster pace than the core PCE measure over core PCE inflation appears to have slowed considerthe past year, rising 2Vi percent over the twelve ably in the second quarter; the slowing was concenmonths ending in May, also the same rate as over the trated in the goods categories and seems consistent preceding year. with reports that retailers have been cutting prices to PCE energy prices rose at an annual rate of about spur sales in an environment of soft demand. 11 percent in the first quarter and, given the big Core consumer price inflation—whether measured increases in April and May, apparently posted another by the PCE index or by the CPI—in recent quarters Change in consumer prices Change in consumer prices excluding food and energy Percent, annual rate Percent, annual rate f~| Chain-type price index for PCE I 1 Chain-type price index for PCE • CPI • CPI Ql 1993 1995 1997 1999 2001 1993 1995 1997 1999 2001 NOTE. The CPI is for all urban consumers (CPI-U). NOTE. The CPI is for all urban consumers (CPI-U). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 519 almost certainly has been boosted by the effects of rable year-earlier period. The price index for gross higher energy prices on the costs of producing other domestic purchases—which is defined as the prices goods and services. Additional pressure has come paid for consumption, investment, and government from the step-up in labor costs. That said, firms purchases—also accelerated in the first quarter—to appear to have absorbed much of these cost increases an increase of about 23/4 percent; the increase in this in lower profit margins. Meanwhile, non-oil import measure over the past year was 2 LA percent, about the prices have remained subdued, thus continuing to same as over the preceding year. Excluding food and restrain input costs for many domestic industries and energy, the latest four-quarter changes in both GDP to limit the ability of firms facing foreign competition and gross domestic purchases prices were roughly the to raise prices for fear of losing market share. In same as over the preceding year. addition, apart from energy, price pressures at earlier stages of processing have been minimal. Indeed, excluding food and energy, the producer price index U.S. Financial Markets (PPI) for intermediate materials has been flat over the past year, and the PPI for crude materials has fallen Longer-term interest rates and equity prices have 11 percent. Moreover, inflation expectations, on bal- shown remarkably small net changes this year, given ance, seem to have remained quiescent: According to the considerable shifts in economic prospects and the Michigan survey, the median expectation for major changes in monetary policy. To some extent, inflation over the upcoming year generally has been the expectations of the economic and policy develrunning about 3 percent this year, similar to the opments in 2001 had already become embedded in readings in 2000. financial asset prices as last year came to a close; In contrast to the step-up in consumer prices, prices from the end of August through year-end, the broadfor private investment goods in the NIPA were up est equity price indexes fell 15 percent and only a little in the first quarter after having risen investment-grade bond yields declined 40 to 70 basis about 2 percent last year. In large part, this pattern points. In addition, however, equity prices and longwas driven by movements in the price index for term interest rates were influenced importantly by computers, which fell at an annual rate of nearly growing optimism in financial markets over the sec- 30 percent in the first quarter as demand for high-tech ond quarter of 2001 that the economy and profits equipment plunged. This drop in computer prices would rebound strongly toward the end of 2001 and was considerably greater than the average decrease of in 2002. On net, equity prices fell 6 percent in the roughly 20 percent per year in the second half of the first half of this year as near-term corporate earnings 1990s and the unusually small 11 percent decrease in were revised down substantially. Rates on longer- 2000. Monthly PPI data suggest that computer prices term Treasury issues rose a little, but those on corpowere down again in the second quarter, though much rate bonds were about unchanged, with the narrowing less than in the first quarter. spread reflecting greater investor confidence in the All told, the GDP chain-type price index rose at an outlook. But risk spreads remained wide by historical annual rate of VA percent in the first quarter and has standards for businesses whose debt was rated as risen 2LA percent over the past four quarters, an marginally investment grade or below; many of these acceleration of Vi percentage point from the compa- firms had been especially hard hit by the slowdown and the near-term oversupply of high-tech equipment Alternative measures of price change and services, and defaults by these firms became Percent, QI to QI more frequent. Nevertheless, for most borrowers the environment for long-term financing was seen to be 1998 1999 2000 Pnce measure to to 10 quite favorable, and firms and households tended to 1999 2000 2001 tap long-term sources of credit in size to bolster their financial conditions and lock in more favorable costs. Gross domestic product 1.5 1.8 2.3 Gross domestic purchases 1.2 2.3 2.2 Personal consumption expenditures ... 1.5 2.5 2.2 Excluding food and energy 1.8 1.6 1.7 Interest Rates Fixed-weight Consumer price index 1.7 3.3 3.4 Excluding food and energy 2.2 2.2 2.7 In response to the abrupt deceleration in economic NOTE. A fixed-weight index uses quantity weights from a base year to growth and prospects for continued weakness in the aggregate prices from each distinct item category. A chain-type index is the geometric average of two fixed-weight indexes and allows the weights to change economy, the FOMC lowered the target federal funds each year. The consumer price indexes are for all urban consumers. Changes are rate 23A percentage points in six steps in the first half based on quarterly averages. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

520 Federal Reserve Bulletin • August 2001 Rates on selected Treasury securities Measures of long-term inflation expectations Percent I A Two-year — 6.5 Ten-year 1j ^VjyWfA /S — N^w/flr JHLAJWS AIWCS\ — 6.0 ~* r f^ M \I L I^LTT 5,5 rafc r * —JF*"yn JFL J Three-month MV ~ 5 0 — W- 4.0 — 3.5 • 1 I I I I I I I I I I I 1 I I I I I I I I I I I 1 I I I I I I I JFMAMJ JASONDJ F MAM J JASONDJ FMAMJ J JFMAMJ JASONDJ FMAMJ IASONDJ FMAMJ J 1999 2000 2001 1999 2000 2001 NOTE. The data are daily and extend through July 12, 2001. NOTE. The data for the Michigan survey, which are monthly and extend through June 2001, measure five-year to ten-year inflation expectations. The data for the FRB Philadelphia survey, which are quarterly and extend through 2001:Q2, measure ten-year inflation expectations. TIIS inflation compensation of this year, an unusually steep decline relative to is the rate of inflation at which the price of the ten-year Treasury inflationindexed security equals the value of a portfolio of zero-coupon securities that many past easing cycles. Through March, the policy replicates its payments; data for this measure are weekly averages and extend easings combined with declining equity prices and through July 13, 2001. accumulating evidence that the slowdown in economic growth was more pronounced than had been the second quarter. Despite this increase, there is little initially thought led to declines in yields on evidence that inflation is expected to go up from its intermediate- and longer-term Treasury securities. current level. At the end of last year, inflation com- Over the second quarter, despite the continued pensation had declined to levels suggesting investors decrease in short-term rates and further indications of expected inflation to fall, and the rise in inflation a weakening economy, yields on intermediate-term compensation in the second quarter largely reversed Treasury securities were about unchanged, while those declines. Moreover, survey measures of longerthose on longer-term securities rose appreciably. On term inflation expectations have changed little since net, yields on intermediate-term Treasury securities the middle of last year. fell about 3A percentage point in the first half of this Yields on longer-maturity corporate bonds were year, while those on longer-term Treasury securities about unchanged, on net, over the first half of this rose about LA percentage point. year. Yields on investment-grade bonds are near their The increase in longer-term Treasury yields in the lows for the past ten years, but those on speculativesecond quarter appears to have been the result of a grade bonds are elevated. Spreads of corporate bond number of factors. The main influence seems to have yields relative to swap rates narrowed a bit, although been increased investor confidence that the economy they still remain high. Amidst signs of deteriorating would soon pick up. That confidence likely arose in credit quality and a worsening outlook for corporate part from the aggressive easing of monetary policy earnings, risk spreads on speculative-grade bonds and also in part from the improving prospects for, and had risen by about 2 percentage points late last year, passage of, a sizable tax cut. The tax cut and the reaching levels not seen since 1991. Much of this growing support for certain spending initiatives widening was reversed early in the year, as investors implied stronger aggregate demand and less federal became more confident that corporate balance sheets saving than previously anticipated. The prospect that would not deteriorate substantially, but speculativethe federal debt might be paid down less rapidly may grade bond spreads widened again recently in also have reduced slightly the scarcity premiums response to negative news about second-quarter earninvestors were willing to pay for Treasury securities. ings and declines in share prices, leaving these Finally, a portion of the rise may have been the result spreads at the end of the second quarter only slightly of increased inflation expectations. Inflation compen- below where they began the year. Nonetheless, invessation as measured by the difference between nomi- tors, while somewhat selective, appear to remain nal Treasury rates and the rates on inflation-indexed receptive to new issues with speculative-grade Treasury securities rose about XA percentage point in ratings. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 521 Corporate bond yields remains in the elevated range it shifted to in late 1998. Judging from the widening since 1998 of the average spread between rates on riskier and less-risky loans, banks have become especially cautious about lending to marginal credits. Equity Markets After rising in January in response to the initial easing of monetary policy, stock prices declined in February and March in reaction to profit warnings and weak economic data, with the Wilshire 5000, the broadest major stock price index, ending the first quarter down 13 percent. Stock prices retraced some of those losses in the second quarter, rising 7 per- NOTE. The data are monthly averages and extend through June 2001. The AA rate is calculated from bonds in the Merrill Lynch AA index with seven to cent, as first-quarter earnings releases came in a little ten years remaining to maturity. The high-yield rate is the yield on the Merrill above sharply reduced expectations and as investors Lynch 175 high-yield index. became more confident that economic growth and Interest rates on commercial paper and C&I loans corporate profits would soon pick up. On net, the have fallen this year by about as much as the federal Wilshire 5000 ended the half down 6 percent, the funds rate, although some risk spreads widened. The DJIA declined 3 percent, and the tech-heavy Nasdaq average yield spread on second-tier commercial paper fell 13 percent. Earnings per share of the S&P 500 in over top-tier paper widened to about 100 basis points the first quarter decreased 10 percent from a year in late January, about four times its typical level, earlier. A disproportionate share of the decline in following defaults by a few prominent issuers. As the S&P earnings—more than half—was attributable to a year progressed, investors became less concerned plunge in the technology sector, where first-quarter about the remaining commercial paper borrowers, earnings were down nearly 50 percent from their and this spread has returned to a more normal level. peak in the third quarter of last year. According to preliminary data from the Federal The decline in stock prices has left the Wilshire Reserve's quarterly Survey of Terms of Business 5000 down by about 20 percent, and the Nasdaq Lending, the spread over the target federal funds rate down by about 60 percent, from their peaks in March of the average interest rate on commercial bank C&I 2000. Both of these indexes are near their levels at loans edged up between November and May and the end of 1998, having erased the sharp run-up in prices in 1999 and early 2000. But both indexes Spread of average business loan rate remain more than two and one-half times their levels over intended federal funds rate Major stock price indexes January 4, 1999 = 100 I 1 I I I I I I t I I I I I I I I I I I I I I I I I I I I I I NOTE. The data, which are based on the Federal Reserve's Survey of Terms JFMAMJ JASONDJFMAMJ IASONDJ FMAMJ J of Business Lending, are for loans made by domestic commercial banks. The 1999 2000 2001 survey is conducted in the middle month of each quarter; the final observation is for May 2001 and is preliminary. NOTE. The data are daily and extend through July 12, 2001. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

522 Federal Reserve Bulletin • August 2001 S&P 500 earnings-price ratio and the real interest rate generally investing the difference by purchasing other Treasury securities on the open market. The Federal Reserve also has increased its holdings of longerterm repurchase agreements (RPs), including RPs backed by agency securities and mortgage-backed securities, as a substitute for outright purchases of Treasury securities. In the first half of the year, longer-term RPs, typically with maturities of twentyeight days, averaged $13 billion. As reported in the previous Monetary Policy Report, the FOMC also initiated a study to evaluate assets to hold on its balance sheet as alternatives to Treasury securities. That study identified several options for further consideration. In the near term, the Federal Reserve is considering purchasing and holding Ginnie Mae mortgage-backed securities, which NOTE. The data are monthly and extend through June 2001. The earningsprice ratio is based on I/B/E/S consensus estimates of earnings over the coming are explicitly backed by the full faith and credit of the year. The real rate is estimated as the difference between the ten-year Treasury U.S. government, and engaging in repurchase operarate and the five-year to ten-year expected inflation rate from the FRB Philadelphia survey. tions against foreign sovereign debt. For possible at the end of 1994, when the bull market shifted into implementation later, the Federal Reserve is studying a higher gear. The ratio of expected one-year-ahead whether to auction longer-term discount window earnings to equity prices began to fall in 1995 when, credit, and it will over time take a closer look at a as productivity growth picked up, investors began to broader array of assets for repurchase and for holding build in expectations that increases in earnings would outright, transactions that would require additional remain rapid for some time. This measure of the legal authority. earnings-price ratio remains near the levels reached in 1999, suggesting that investors still anticipate robust long-term earnings growth, likely reflecting Debt and the Monetary Aggregates expectations for continued strong gains in productivity. The growth of domestic nonfinancial debt in the first Despite the substantial variation in share prices half of 2001 is estimated to have remained moderate, over the first half of this year, trading has been slowing slightly from the pace in 2000 as a reduction orderly, and financial institutions appear to have in the rate of increase in nonfederal debt more than encountered no difficulties that could pose broader offset the effects of smaller net repayments of federal systemic concerns. Market volatility and a less ebul- debt. In contrast, the monetary aggregates have lient outlook have led investors to buy a much smaller grown rapidly so far this year, in large part because share of stock on margin. At the end of May, margin the sharp decline in short-term market interest rates debt was 1.15 percent of total market capitalization, has reduced the opportunity cost of holding the equal to its level at the beginning of 1999 and well deposits and other assets included in the aggregates. below its high of 1.63 percent in March of last year. Debt and Depository Intermediation Federal Reserve Open Market Operations The debt of the domestic nonfinancial sectors is esti- As noted earlier, the Federal Reserve has responded mated to have expanded at a 43A percent annual rate to the diminished size of the auctions of Treasury over the first half of 2001, a touch below the 5lA persecurities by modifying its procedures for acquiring cent growth recorded in 2000. Changes in the growth such securities. To help maintain supply in private of nonfederal and federal debt this year have mostly hands adequate for liquid markets, since July of last offset each other. The growth of nonfederal debt year the System has limited its holdings of individual moderated from 8V2 percent in 2000 to a still-robust securities to specified percentages, ranging from IV4 percent pace in the first half of this year. House- 15 percent to 35 percent, of outstanding amounts. To holds' borrowing slowed some but was still substanstay within these limits, the System has at times not tial, buoyed by continued sizable home and durable rolled over all of its holdings of maturing securities, goods purchases. Similarly, business borrowing mod- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 523 Growth of domestic nonfinancial debt Percent of all U.S. commercial bank assets at well-capitalized banks Percent Percent — 100 — — 80 — — 60 — 40 1 1 f 1 1 I 1 1 1 1 i I 1 1991 1993 1995 1997 1999 2001 Nonfederal Note. The data are quarterly and extend through 2001:Q1. Capital status is determined using the regulatory standards for the leverage, tier 1, and total capital ratios. quarter, bank profits remained in the high range recorded for the past several years, and virtually all banks—98 percent by assets—were well capitalized. With banks' financial condition still quite sound, they Federal remain well positioned to meet future increases in the demand for credit. The Monetary Aggregates NOTE. Annual growth rates are computed from fourth-quarter averages. Growth in the first half of 2001 is the June average relative to the fourth-quarter average at an annual rate and is based on partially estimated data. Domestic The monetary aggregates have expanded rapidly so nonfinancial debt consists of the outstanding credit market debt of governments, households and nonprofit organizations, nonfinancial businesses, and farms. far this year, although growth rates have moderated somewhat recently. M2 rose 1014 percent at an annual erated even as bond issuance surged, as a good porrate in the first half of this year after having grown tion of the funds raised was used to pay down com- 61/4 percent in 2000. The interest rates on many of the mercial paper and bank loans. Tending to boost debt components of M2 do not adjust quickly or fully to growth was a slowing in the decline in federal debt to a 614 percent rate in the first half of this year from M2 growth rate 63/4 percent last year, largely because of a decline in tax receipts on corporate profits. Percent, annual rate The share of credit to nonfinancial sectors held at HI banks and other depository institutions edged down in the first half of the year. Bank credit, which accounts for about three-fourths of depository credit, increased at a 3'/2 percent annual rate in the first half of the this year, well off the 9Vi percent growth registered in 2000. Banks' loans to businesses and households decelerated even more, in part because borrowers preferred to lock in the lower rates available from longer-term sources of funds such as bond and mortgage markets and perhaps also in part because banks firmed up their lending stance in reaction to concerns about loan performance. Loan delin- NOTE. M2 consists of currency, travelers checks, demand deposits, other quency and charge-off rates have trended up in recent checkable deposits, savings deposits (including money market deposit accounts), quarters, and higher loan-loss provisions have small-denomination time deposits, and balances in retail money market funds. See footnote under the domestic nonfinancial debt chart for details on the comweighed on profits. Nevertheless, through the first putation of growth rates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

524 Federal Reserve Bulletin • August 2001 M3 growth rate Monetary authorities in most cases reacted to signs of slowdown by lowering official rates, but by less Percent, annual rate than in the United States. Partly in response to these actions, yield curves have steepened noticeably so far in 2001. Although long-term interest rates moved down during the first quarter, they more than reversed those declines in most cases as markets reacted to a combination of the anticipation of stronger real growth and the risk of increased inflationary pressure. Foreign equity markets—especially for high-tech stocks—were buffeted early this year by many of the same factors that affected U.S. share prices: negative earnings reports, weaker economic activity, buildups of inventories of high-tech goods, and uncertainties regarding the timing and extent of policy responses. In recent months, the major foreign equity indexes NOTE. M3 consists of M2 plus large-denomination time deposits, balances moved up along with U.S. stock prices, but they have in institutional money market funds, RP liabilities (overnight and term), and eurodollars (overnight and term). See footnote under the domestic nonfinancial edged off lately and in most cases are down, on debt chart for details on the computation of growth rates. balance, for the year so far. changes in market interest rates. As a consequence, Slower U.S. growth, monetary easing by the Fedthe steep declines in short-term market rates this year eral Reserve, fluctuations in U.S. stock prices, and the have left investments in M2 assets relatively more large U.S. external deficit have not undermined dollar attractive, contributing importantly to the accelera- strength. After the December 2000 FOMC meeting, tion in the aggregate. M2 has also probably been the dollar lost ground against the major currencies; buoyed by the volatility in the stock market this year, but shortly after the FOMC's surprise rate cut on and perhaps by lower expected returns on equity Foreign interest rates investments, leading investors to seek the safety and liquidity of M2 assets. Percent M3, the broadest monetary aggregate, rose at a Short-term (three-month) 13V4 percent annual rate through June, following 9VA percent growth in 2000. All of the increase in M3, apart from that accounted for by M2, resulted from a ballooning of institutional money market funds, which expanded by nearly a third. Yields on these funds lag market yields somewhat, and so the returns to the funds, like those on many M2 assets, became relatively attractive as interest rates on short- Japanese CD + term market instruments declined. I I l I I I i I International Developments Long-term (ten-year government bonds) Canada United Kingdom So far this year, average foreign growth has weak- — _ _ — 6 ened further and is well below its pace of a year ago. Activity abroad was restrained by the continued high level of oil prices, the global slump of the high- Germany — 4 technology sector, and spillover effects from the U.S. economic slowdown, but in some countries domestic Japan demand softened as well in reaction to local factors. High oil prices kept headline inflation rates somewhat elevated, but even though core rates of inflation l l l I i I have edged up in countries where economic slack has QI Q2 Q3 Q4 QI Q2 Q3 diminished, inflationary pressures appear to be well 2000 2001 under control. NOTE. The data are weekly and extend through July 11, 2001. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 525 January 3, the dollar reversed all of that decline as The dollar has gained about 9 percent against market participants evidently reassessed the pros- the yen, on balance, as the Japanese economy has pects for recovery in the United States versus that remained troubled by structural problems, stagnant in our major trading partners. The dollar as measured growth, and continuing deflation. Industrial producby a trade-weighted index against the currencies of tion has been falling, and real GDP declined slightly major industrial countries gained in value steadily in in the first quarter, with both private consumption and the first three months of 2001, reaching a fifteen-year investment contracting. Japanese exports also have high in late March. Continued flows of foreign funds sagged because of slower demand from many key into U.S. assets appeared to be contributing impor- trading partners. Early in the year, under increasing tantly to the dollar's increase. Market reaction to pressure to respond to signs that their economy was indications that the U.S. economy might be headed weakening further, the Bank of Japan (BOJ) slightly toward a more prolonged slowdown undercut the reduced the uncollateralized overnight call rate, its dollar's strength somewhat in early April, and the key policy interest rate. By March, the low level of dollar eased further after the unexpected April 18 rate equity prices, which had been declining since early cut by the FOMC. However, the dollar has more than 2000, was provoking renewed concerns about the made up that loss in recent months as signs of weak- solvency of Japanese banks. In mid-March, the BOJ ness abroad have emerged more clearly. On balance, announced that it was shifting from aiming at a the dollar is up about 7 percent against the major particular overnight rate to targeting balances that currencies so far this year; against a broader index private financial institutions hold at the Bank, effecthat includes currencies of other important trading tively returning the overnight rate to zero; the BOJ partners, the dollar has appreciated 5 percent. also announced that it would continue this easy monetary stance until inflation moves up to zero or above. After the yen had moved near the end of Nominal U.S. dollar exchange rates March to its weakest level relative to the dollar in more than four years, Japanese financial markets Week ending January 5, 2000 = 100 were buoyed by the surprise election in May of Exchange rate indexes Junichiro Koizumi to party leadership and thereby to prime minister. The yen firmed slightly for several weeks thereafter, but continued weak economic fun- Major currencies damentals and increased market focus on the daunting challenges facing the new government helped push the yen back down and beyond its previous low level. At the start of 2001, economic activity in the euro area had slowed noticeably from the more rapid rates seen early last year but still was fairly robust. Average GDP growth of near 2 percent was only slightly below estimated rates of potential growth, although Selected bilateral rates Japanese yen some key countries (notably Germany) were showing signs of faltering further. Although high prices for oil U.K.pound and food had raised headline inflation, the rate of change of core prices was below the 2 percent ceiling for overall inflation set by the European Central Bank (ECB). The euro also was showing some signs of strength, having moved well off the low it had reached in October. However, negative spillovers Canadian dollar from the global slowdown started to become more evident in weaker export performance in the first quarter, and leading indicators such as business confidence slumped. Nevertheless, the ECB held policy steady through April, as further weakening of the NOTE. The data are weekly and extend through July 11, 2001. Indexes (top euro against the dollar (following a trend seen since panel) are trade-weighted averages of the exchange value of the dollar against major currencies and against the currencies of a broad group of important U.S. the FOMC's rate cut in early January), growth of M3 trading partners. Bilateral rates (bottom panel) are in foreign currency units per in excess of the ECB's reference rate, and signs of an dollar. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

526 Federal Reserve Bulletin • August 2001 edging up of euro-area core inflation were seen as In Argentina, the weak economy and the governmilitating against an easing of policy. ment's large and growing debt burden stoked market In early May, the ECB surprised markets with a fears that the government would default on its debt 25 basis point reduction of its minimum bid rate and alter its one-for-one peg of the peso to the dollar. and parallel reductions of its marginal lending and In April, spreads on Argentina's internationally deposit rates. In explaining the step, the ECB noted traded bonds moved up sharply, and interest rates that monetary developments no longer posed a threat spiked. In June, the government completed a nearly to price stability and projected that moderation of $30 billion debt exchange with its major domestic GDP growth would damp upward price pressure. The and international creditors aimed at alleviating the euro has continued to fall since then and, on balance, government's cash flow squeeze, improving its debt has declined 9 percent against the dollar since the amortization profile, and giving it time to enact fiscal beginning of the year. Faced with a similar slowdown reforms and revive the economy. Argentine financial in the U.K. economy that was exacerbated by the conditions improved somewhat following agreement outbreak of foot-and-mouth disease, the Bank of on the debt swap. However, this improvement proved England also cut its official call rate three times (by a temporary, and an apparent intensification of market total of 75 basis points) during the first half of the concerns about the possibility of a debt default trigyear. The Labor Party's victory in parliamentary elec- gered a sharp fall in Argentine financial asset prices tions in early June seemed to raise market expecta- at mid-July. This financial turbulence in Argentina tions of an early U.K. euro referendum and put addi- negatively affected financial markets in several other tional downward pressure on sterling, but that was emerging market economies. The turmoil in Argenpartly offset by signs of stronger inflationary pres- tina took a particular toll on Brazil, where an energy sure. On balance, the pound has lost about 6 percent crisis added to other problems that have kept growth against the dollar this year, while it has strengthened against the euro. Emerging markets The exchange value of the Canadian dollar has swung over a wide range in 2001. In the first quarter, Week ending January 5,2000 = 100 the Canadian dollar fell about 5 percent against Daily exchange rates the U.S. dollar as the Canadian economy showed Brazil 130 signs of continuing a deceleration of growth that had started in late 2000. Exports—especially autos, auto equipment, and electronic equipment—suffered from — 120 weaker U.S. demand. Softer global prices for nonoil commodities also appeared to put downward pres- 110 sure on the Canadian currency. With inflation well within its target range, the Bank of Canada cut its Argentina 100 policy rate several times by a total of 125 basis points. So far this year, industries outside of manufacturing and primary resources appear to have been Percentage points much less affected by external shocks, and domestic Bond spreads demand has maintained a fairly healthy pace. Since — 12 the end of March, the Canadian dollar has regained much of the ground it had lost earlier and is down — 10 about 2 percent on balance since the beginning of the — 8 year. Global financial markets were rattled in February — 6 by serious problems in the Turkish banking sector. Turkish interest rates soared and, after market pres- — 4 sures led authorities to allow the Turkish lira to float, — 2 it experienced a sharp depreciation of more than 30 percent. An IMF program announced in mid-May Q1 Q2 Q3 Q4 Q1 Q2 Q3 that will bring $8 billion in support this year and 2000 2001 require a number of banking and other reforms helped NOTE. The data are weekly and extend through July 11,2001. Exchange rates steady the situation temporarily, but market sentiment (top panel) are in foreign currency units per dollar. Bond spreads (bottom panel) started to deteriorate again in early July. are the J.P. Morgan Emerging Market Bond Index "plus" (sovereign yield) spreads over U.S. Treasuries. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary Policy Report to the Congress 527 very slow since late last year. Intervention purchases example, fell from a 15 percent annual rate in late of the real by the Brazilian central bank and a 2000 to close to zero in mid-2001. The turnaround of 300 basis point increase in its main policy interest the high-tech component of industrial production in rate helped take some pressure off the currency, but those countries was even more abrupt—from more the real has declined about 24 percent so far this year. than a 30 percent rate of increase to a slight decline The weak performance of the Mexican economy at by midyear. In the Philippines and Indonesia, ecothe end of last year caused largely by a fall in exports nomic difficulties were compounded by serious politito the United States (notably including a sharp drop cal tensions. Currencies in many of these countries in exports of automotive products) and tight mone- moved down versus the dollar, and stock prices tary policy carried over into early 2001. With infla- declined. In Korea, the sharp slump in activity that tion declining, the Bank of Mexico loosened mone- began late last year continued into 2001, as weakness tary policy in May for the first time in three years. in the external sector spread to domestic consumption Problems with Mexican growth did not spill over to and investment. The Bank of Korea lowered its target financial markets, however. The peso has remained interest rate a total of 50 basis points over the first strong and is up about 3 percent so far this year, and half of the year in response to the weakening in stock prices have risen. activity. The Chinese economy, which is less depen- Average growth in emerging Asia slowed signifi- dent on technology exports than many other councantly in the first half; GDP grew more slowly or tries in the region, continued to expand at a brisk even declined in economies that were more exposed pace in the first half of this year, as somewhat softer to the effects of the global drop in demand for high- export demand was offset by increased government tech products. Average growth of industrial produc- spending. • tion in Malaysia, Singapore, and Hong Kong, for Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

528 Industrial Production and Capacity Utilization for June 2001 Released for publication July 17 production in June was more than Wi percent below its level in June 2000. Manufacturing output, which Industrial production fell 0.7 percent in June, to also posted its ninth consecutive monthly decline, 142.5 percent of its 1992 average; second-quarter contracted 0.8 percent in June, to more than 4 percent production was down 5.6 percent at an annual rate. below its year-earlier level. Mining output weakened After nine consecutive months of decline, industrial 0.4 percent, and utilities production increased 0.9 per- Industrial production Ratio scale, 1992 = 100 145 Total industrial production 125 - _ ^^ Excluding high-tech industries ~~ 105 85 1 1 1 1 1 1 1 1 Capacity utilization Percent of capacity Total industry 85 80 75 70 I I Ml 1 I I I I I I I ! _• I 1 I I I I I I I L 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 12-month percent change Percent of capacity 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

529 Industrial production and capacity utilization, June 2001 Industrial production, index, 1992= 100 Percent change CCCaaattteeegggooorrryyy 22000011 20011 JJuunnee 22000000 ttoo Mar/ Apr/ Mayr June? Mar/ Apr/ Mayr JuneP JJuunnee 22000011 Total 145.0 144.2 143.5 142.5 -.3 -.5 -.5 -.7 -3.6 Previous estimate 145.1 144.2 143.1 -.2 -.6 -.8 Major market groups Products, total2 134.5 133.6 133.1 132.4 -.1 -.7 -.4 -.5 -2.7 Consumer goods 122.4 121.7 121.7 121.5 .1 -.6 .0 -.2 -2.2 Business equipment 195.6 193.0 191.8 189.0 .1 -1.3 -.6 -1.4 -2.0 Construction supplies 140.5 139.6 138.7 137.6 .4 -.7 -.6 -.7 ^1.0 Materials 163.9 163.4 162.2 160.7 -.7 -.3 -.7 -.9 -5.1 Major industry groups Manufacturing 150.0 149.3 148.6 147.4 -.5 -.5 -.5 -.8 -4.2 Durable 191.3 189.9 189.4 187.0 .1 -.7 -.3 -1.2 -3.9 Nondurable 112.7 112.4 111.7 111.3 -1.2 -.2 -.7 -.3 -4.6 Mining 102.7 102.8 102.7 102.3 1.3 .1 -.1 -.4 1.9 Utilities 122.0 120.0 118.0 119.0 .2 -1.7 -1.7 .9 -2.2 Capacity utilization, percent 2000 2001 Average, Low, High, 1967-00 1982 1988-89 June Mar/ Apr/ May1" June? Total 82.1 71.1 85.4 82.7 78.7 78.1 77.6 77.0 3.6 Manufacturing 81.1 69.0 85.7 82.0 77.3 76.8 76.3 75.5 4.0 Advanced processing 80.6 71.0 84.2 79.9 77.9 77.2 76.9 76.2 2.1 Primary processing . 82.2 65.7 88.3 86.5 77.4 77.1 76.3 75.4 7.1 Mining 87.4 80.3 88.0 86.2 89.2 89.3 89.3 89.1 -1.4 Utilities 87.6 75.9 92.6 91.7 89.6 87.8 86.1 86.6 3.6 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. cent. The rate of capacity utilization for total industry The output of business equipment fell 1.4 percent sank to 77 percent, more than 5 percentage points in June. The production of transit equipment dropped below its 1967-2000 average. back in June; although output in this category rose, on average, in the second quarter, it remained more than 10 percent below its level in June 2000. Medium MARKET GROUPS and heavy truck production—the hardest-hit transit industry—was more than 40 percent below its June The output of consumer goods dipped 0.2 percent in 2000 level. The 1.2 percent decline in the production June, despite a gain in the production of consumer of information-processing equipment reflected, in energy goods. Production of automotive products, part, continued losses in the communications equipwhich jumped in May, fell back 1.3 percent in June; ment industry; the output of computer and office the level of production was nearly 7 percent below equipment was flat in June. The output of industrial that of June 2000. Elsewhere among consumer dura- and other equipment fell 1.8 percent, with widebles, the production of home audio and video equip- spread declines posted within the sector. ment, appliances, and household furniture weakened Broad-based weakness in the construction supplies noticeably. The output of nondurable consumer goods industries led to a reduction in the output of intermewas flat. The output of consumer energy products diate products. The production of business supplies increased 1.7 percent, with sizable gains in the pro- edged up slightly after six consecutive months of duction of automotive gasoline and in utility sales to decline. The output of materials fell back 0.9 percent residences. The production of nondurable consumer in June, and the losses were widespread. Within goods excluding energy contracted 0.3 percent, as the durable materials industries, noticeable cutbacks were production of foods and tobacco and clothing contin- made in the production of both automotive parts and ued to decrease. semiconductors. Among nondurable materials, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

530 Federal Reserve Bulletin • August 2001 output of chemicals and of textiles continued to fall. showed advances in output in the second quarter: The output of energy materials was flat, with small motor vehicles and parts, lumber and products, paper offsetting changes among the components. and products, and petroleum products. The output of motor vehicles and parts increased at an annual rate of 35 percent after having fallen at an average rate of INDUSTRY GROUPS 25 percent in each of the previous two quarters. The factory operating rate dropped 3A of a per- The weakness in manufacturing production in June centage point, to 75.5 percent in June. The utilization was widespread across industries. Overall manufac- rate for primary-processing industries declined to turing fell 0.8 percent, and both the manufacturing 75.4 percent, while the rate for advanced-processing aggregate excluding motor vehicles and parts and the industries declined to 76.2 percent. With the excepaggregate excluding high-technology industries fell tions of stone, clay, and glass products, petroleum by nearly the same amount. products, and miscellaneous manufactures, operating Overall manufacturing output fell at an annual rate rates for the major manufacturing industries remained of 5.9 percent in the second quarter, after having below their long-run averages. Capacity utilization dropped 7.9 percent in the first quarter. The weakness in high-technology industries (computers, communiin the second quarter was evident among both dura- cations equipment, and semiconductors and related bles and nondurables. The largest drops were in electronic components) dropped 2 percentage points electrical machinery (most notably semiconductors), in June, to 67.5 percent. The operating rate at utilities textile mill products, industrial machinery and equip- picked up slightly to 86.6 percent. The operating rate ment, fabricated metal products, printing and publish- for mining edged down to 89.1 percent. • ing, and chemical products. Only four industries Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

531 Testimony of Federal Reserve Officials Testimony of Roger W. Ferguson, Jr., Vice Chairman, instrument have been in the service of our objective Board of Governors of the Federal Reserve System, of promoting maximum sustainable growth. before the Committee on Banking, Housing, and Making monetary policy has been only part of the Urban Affairs, U.S. Senate, June 13, 2001 challenge. During my tenure at the Federal Reserve we have also worked diligently to communicate to Chairman Sarbanes, Senator Gramm, and members the public what we are doing with policy and why. of the Committee, I am pleased to appear before you Transparency in policymaking is a key part of the today as President Bush's nominee to serve on the democratic process, as well as being helpful in foster- Board of Governors of the Federal Reserve System. I ing efficient decisionmaking in the private sector. am honored that the President has nominated me to Becoming more transparent has been a goal of the serve a full term as a member of the Board. central bank in recent years, keeping in mind that we As a Governor, I am particularly mindful that the must balance the need to be open and accountable policy decisions of the Federal Reserve influence the with the need to maintain an effective process of economic well-being of all Americans. It has been decisionmaking by the Federal Open Market Commy privilege to serve our fellow citizens in this mittee. Transparency requires that we periodically capacity since 1997, giving this role my undivided review our procedures, as we did in 1999, to ensure attention, and I hope to be able to continue in that that they appropriately balance these considerations. I service. do not know what future changes, if any, might be During my tenure we have faced a rapidly chang- called for in how we communicate, but I am confiing environment in many of our areas of responsibil- dent that the Federal Reserve will continue to look ity, and I would like to review briefly some of those for ways to communicate clearly our policies and our developments and our responses to them. supporting rationales. The Congress has given the Federal Reserve three While macroeconomic conditions are of overriding monetary policy objectives: maximum employment, importance, the role of the Federal Reserve is broader stable prices, and moderate long-term interest rates. than monetary policy. Financial stability is an essen- We have viewed these objectives as congruent with tial precondition for maintaining a strong economy, a goal of maximum sustainable growth, which can and the Federal Reserve has important supervisory occur only in the context of long-run price stability. and regulatory responsibilities for our nation's Fostering financial conditions in which Americans banking system. The Federal Reserve, and other can realize the full productive potential of our econ- regulators, must continue to foster a competitive omy has presented a number of challenges in recent environment that will benefit the users of financial years. The most important developments have been a services, while also promoting safety and soundness. step-up in the advance of technology—both in terms I believe that we must achieve these goals with a of the production of new goods and the more effec- minimum of regulatory burden and without leaving tive harnessing of past innovations—and a rapid the impression that any institution is too big to fail. accumulation of physical capital. These develop- To minimize regulatory burden and achieve our other ments have made workers increasingly more produc- objectives, we should encourage what to my mind tive. But faster productivity growth fed back on the are the best regulators, namely market discipline and demand for goods and services in ways that com- management accountability. Of late, our challenge plicated the calibration of monetary policy. Faster has been to meet these goals as we implement the growth in productivity, and the reactions of busi- financial modernization law. In my opinion, the nesses and households to this acceleration of produc- Congress wisely removed several antiquated barriers tivity, have combined with other forces—particularly to a modern financial structure in the United States, those associated with the growing interconnectedness and now we need to design regulatory and superof the global economy—to require substantial adjust- visory policies that reflect the will of the Congress ments in the Federal Reserve's policy interest rate in and deal effectively with a changing financial serrecent years. But those adjustments in our policy vices industry. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

532 Federal Reserve Bulletin • August 2001 Technology and deregulation, forces for change Finally, our payment system affects every conthat I have just mentioned, have encouraged consoli- sumer and business. This system too has been, and dation in the financial sector. With central bank and will continue to be, changed greatly by emerging treasury officials from twelve other major industrial technologies. From the time of its very founding, the economies, I have reviewed the likely effect of the Federal Reserve has had the responsibility to foster global trend toward consolidation and its implication an efficient, safe, and accessible payment system. for central banks and regulators. Because financial During much of 1998 and 1999, our primary objecsystems will continue to consolidate, as the forces tive in this regard was to help banks and other parthat motivate that evolution are unabated, the regula- ticipants in the payment system maintain smooth tory community needs to monitor developments operations as the century date change passed. Domesclosely. But our study also found that existing poli- tically, we achieved this goal by working directly cies appear adequate to allow regulators to maintain with the banking sector. Internationally, I was privisafe and sound financial industries now and in the leged to work through multilateral groups to raise the intermediate term and for monetary policy to work awareness of the international regulatory community through many of the same mechanisms as in the past. of the nature of the Y2K challenge. Now, we can take More than the structure of the financial services a longer-term perspective and consider how we might industry has changed of late. That sector has found facilitate innovation in the payment system. uses for consumer information and created an array As an overseer and regulator, the Federal Reserve of financial products and services unimagined even needs to approach payment system innovations with a few years ago. These developments, in turn, raise an open mind and a willingness to adapt. In a some new concerns, and have re-ignited some exist- dynamic economy, markets need to play a key role ing ones, among consumers and legislators. The Con- in guiding the development of infrastructure. This gress grappled with one of these issues, privacy, in means that innovation and competition will be central the financial modernization law. Concerns about to the future development of the payment system—as abusive lending practices have also re-emerged of they are in other areas of the economy. Regulators late. In all areas, but particularly in areas as sensitive should strive to remove barriers to innovations when as these, regulators should faithfully administer con- we can do so without sacrificing important public sumer protection laws as written. Any necessary policies. We should take every opportunity to foster regulations should adequately inform consumers and competition and maintain the integrity of the payprotect them against abusive practices while also not ment system, but public policy should not be built on discouraging legitimate extensions of credit, espe- a single vision or prediction of the future. Ultimately, cially to those who might previously have been consumers and businesses as well as service providdenied access to such credit. Financial literacy will ers will determine the range of payment services that certainly play an important role in avoiding the best meet their needs. growth of abusive or deceptive financial practices Mr. Chairman and members of the Committee, and in allowing consumers to protect their interests. I during my years on the Board of Governors, I have believe that legislation, careful regulation, and educa- done my best to contribute positively to all aspects of tion are all components of the response to these the Federal Reserve's many responsibilities. I look emerging consumer concerns. I also hope, however, forward to the opportunity to continue to work with that businesses recognize that it is in their long-term you and serve the nation as a member of the Board of interest to maintain the confidence of consumers by Governors. Thank you for your attention and for avoiding deceptive and abusive practices and by considering my nomination. I would be pleased to respecting the privacy of their customers. respond to questions. Testimony of Alan Greenspan, Chairman, Board of today, I would like to raise just a few issues. I have Governors of the Federal Reserve System, before the attached an appendix in which the Federal Reserve Committee on Banking, Housing, and Urban Affairs, Board staff provides far more detail relevant to the US. Senate, June 20, 2001 purpose of these hearings.1 Mr. Chairman and members of the Committee, I am 1. The attachment to this statement is available, on request, from pleased to be here this morning to discuss the condi- Publications Services, Mail Stop 127, Board of Governors of the tion of the U.S. banking system. In my presentation Federal Reserve System, Washington, DC 20551. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Testimony of Federal Reserve Officials 533 There are, I believe, two salient points to be made (2) hoping for repayment of new loans before conabout the current state of the banking system. First, ditions turn adverse. Given the limited ability to many of the traditional quantitative and qualitative foresee turning points, the competitive pressures led, indicators suggest that bank asset quality is deterio- as has usually been the case, to a deterioration of rating and that supervisors therefore need to be more underlying loan quality as the peak in the economy sensitive to problems at individual banks, both cur- approached. Supervisors have had comparable probrently and in the months ahead. Some of the credits lems. In a rising economy buffeted by competitive that were made in earlier periods of optimism— banking markets, it is difficult to evaluate the embedespecially syndicated loans—are now under pressure ded risks in new loans or to be sure that adequate and scrutiny. The softening economy and/or special capital is being held. Even if correctly diagnosed, circumstances have especially affected borrowers in making that supervisory case to bank management the retail, manufacturing, health care, and telecom- can be difficult because, regrettably, incentives for munications industries. California utilities, as you loan officers and managers traditionally have know, have also been under particular pressure. All rewarded loan growth, market share, and the profits of these, and no doubt other problem areas that are that derive from booking interest income with, in not now foreseeable, require that both bank manage- retrospect, inadequate provisions for possible default. ment and supervisors remain particularly alert to Moreover, credit-risk specialists at banks historically developments. have had difficulty making their case about risk Second, we are fortunate that our banking system because of their inability to measure and quantify it. entered this period of weak economic performance in At the same time, with debt service current and a strong position. After rebuilding capital and liquid- market-risk premiums cyclically low, coupled with ity in the early 1990s, followed by several years of the same inability to quantify and measure risk, post-World War II record profits and very strong loan supervisory criticisms of standards traditionally have growth, our banks now have prudent capital and been difficult to justify. reserve positions. In addition, asset quality was quite When the economy begins to slow and the quality good by historical standards before the deterioration of some booked loans deteriorates, as in the current began. Moreover, in the last decade, as I will discuss cycle, loan standards belatedly tighten. New loan more fully in a moment, banks have improved their applications that earlier would have been judged risk management and control systems, which we creditworthy, especially since the applications are believe may have both strengthened the resultant now being based on a more cautious economic outasset quality and shortened banks' response time to look, are nonetheless rejected, when in retrospect it changing economic events. This potential for an will doubtless be those loans that would have been improved reaction to cyclical weakness, and better the most profitable to the bank. risk management, is being tested by the events of Such policies are demonstrably not in the best recent quarters and may well be tested further in interests of banks' shareholders or the economy. They coming quarters. lead to an unnecessary degree of cyclical volatility in We can generalize from these recent events to earnings and, as such, to a reduced long-term capitalunderstand a bit better some relevant patterns in ized value of the bank. More importantly, such polibanking, patterns that appear to be changing for the cies contribute to increased economic instability. The better. The recent weakening in loan quality bears last few years have had some of the traditional charsome characteristics typical of traditional relation- acteristics I have just described: the substantial easships of loans to the business cycle—the pro- ing of terms as the economy improved, the rapid cyclicality of bank lending practices. The rapid expansion of the loan book, the deterioration of loan increase in loans, though typical of a normal expan- quality as the economy slowed, and the cumulative sion of the economy, was unusual in that it was tightening of loan standards. But this interval has had associated with more than a decade of uninterrupted some interesting characteristics not observed in eareconomic growth. As our economy expanded, busi- lier expansions. First, in the mid-1990s, examiners ness and household financing needs increased, and began to focus on banks' risk-management systems projections of future outcomes turned increasingly and processes; at the same time, supervisors' observaoptimistic. In such a context, loan officers, whose tions about softening loan standards came both experience counsels that the vast majority of bad unusually early in the expansion and were taken more loans are made in the latter stages of a business seriously than had often been the case. The turmoil expansion, have had the choice of (1) restraining in financial markets in 1998, associated with both lending, and presumably losing market share, or the East Asian crisis and the Russian default, also Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

534 Federal Reserve Bulletin • August 2001 focused bankers' attention on loan quality during the efforts to reform the Basel Capital Accord. When continued expansion in this country. And there was a operational, near the middle of this decade, the further induced tightening of standards last year in revised accord, Basel II, promises to promote not response to early indications of deteriorating loan only better risk management over a wider group of quality, months before aggregate growth slowed. banks but also less intrusive supervision once the All of this might have been the result of idiosyn- risk-management system is validated. It also promcratic events from which generalizations should not ises less variability in loan policies over the cycle be made. Perhaps. But at the same time another, more because of both bank and supervisory focus on forprofound development of critical importance had mal techniques for managing risk. begun: the creation at the larger, more sophisticated In recent years, we have incorporated innovative banks of an operational loan process with a more or ideas and accommodated significant change in bankless formal procedure for recognizing, pricing, and ing and supervision. Institutions have more ways managing risk. In these emerging systems, loans are than ever to compete in providing financial services. classified by risk, internal profit centers are charged Financial innovation has improved the measurement for equity allocations by risk category, and risk and management of risk and holds substantial promadjustments are explicitly made. In short, the formal ise for much greater gains ahead. Building on bank measurement and quantification of risk has begun to practice, we are in the process of improving both occur and to be integrated into the loan-making pro- lending and supervisory policies that we trust will cess. This is a sea change—or at least the begin- foster better risk management; but these policies ning of one. Formal risk-management systems are could also reduce the pro-cyclical pattern of easing designed to reduce the potential for the unintended and tightening of bank lending and accordingly acceptance of risk and hence should reduce the pro- increase bank shareholder values and economic stacyclical behavior that has characterized banking his- bility. It is not an easy road, but it seems that we are tory. But, again, the process has just begun. well along it. • The federal banking agencies are trying to generalize and institutionalize this process in the current Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

535 Announcements FEDERAL OPEN MARKET COMMITTEE the Office of the Comptroller of the Currency issued DIRECTIVE AND DISCOUNT RATE ACTION on June 28, 2001, the host state loan-to-deposit ratios that the banking agencies will use to determine The Federal Open Market Committee at its meeting compliance with section 109 of the Riegle-Neal on June 27, 2001, decided to lower its target for the Interstate Banking and Branching Efficiency Act of federal funds rate by 25 basis points to 33A percent. 1994. These ratios update data released on March 23, In a related action, the Board of Governors approved 2000. a 25 basis point reduction in the discount rate to In general, section 109 prohibits a bank from estab- 3LA percent. The action by the FOMC brings the lishing or acquiring a branch or branches outside its decline in the target federal funds rate since the home state primarily for the purpose of deposit probeginning of the year to 275 basis points. duction. Section 109 also prohibits branches of banks The patterns evident in recent months—declining controlled by out-of-state bank holding companies profitability and business capital spending, weak from operating primarily for the purpose of deposit expansion of consumption, and slowing growth production. abroad—continue to weigh on the economy. The Section 109 provides a process to test compliance associated easing of pressures on labor and product with the statutory requirements. The first step in the markets is expected to keep inflation contained. process involves a loan-to-deposit ratio screen that Although continuing favorable trends bolster long- compares a bank's statewide loan-to-deposit ratio term prospects for productivity growth and the econ- with the host state loan-to-deposit ratio for banks in a omy, the Committee continues to believe that against particular state. the background of its long-run goals of price stability A second step is conducted if a bank's statewide and sustainable economic growth and of the informa- loan-to-deposit ratio is less than one-half of the pubtion currently available, the risks are weighted mainly lished ratio for that state or if data are not available at toward conditions that may generate economic weak- the bank to conduct the first step. The second step ness in the foreseeable future. requires the appropriate banking agency to determine In taking the discount rate action, the Federal whether the bank is reasonably helping to meet the Reserve Board approved requests submitted by the credit needs of the communities served by the bank's boards of directors of the Federal Reserve Banks of interstate branches. Boston, New York, Philadelphia, Atlanta, Chicago, A bank that fails both steps is in violation of Dallas, and San Francisco. section 109 and is subject to sanctions by the appro- Subsequently, the Federal Reserve Board approved priate banking agency. on June 28, 2001, actions by the boards of directors of the Federal Reserve Banks of Cleveland, Richmond, Minneapolis, and Kansas City, decreasing the discount rate at those banks from 3V2 percent to JOINT AGENCY LETTER TO SEC ON 3 !/4 percent, effective immediately. BROKER-DEALER EXEMPTIONS The Federal Reserve Board also approved action by the board of directors of the Federal Reserve Bank The Federal Reserve Board on July 2, 2001, joined of St. Louis, decreasing the discount rate at that bank the Office of the Comptroller of the Currency and the from 3'/ percent to 3LA percent, effective Friday, Federal Deposit Insurance Corporation in a letter to 2 June 29, 2001. the Securities and Exchange Commission (SEC) concerning the SEC's interim final rules to implement provisions of the Gramm-Leach-Bliley Act that pro- BANKING AGENCIES ISSUE HOST STATE vide specific exemptions from the broker and dealer LOAN-TO-DEPOSIT RATIOS definitions that permit banks to continue providing The Board of Governors of the Federal Reserve Sys- trust and fiduciary, as well as other specified traditem, the Federal Deposit Insurance Corporation, and tional banking, products and services. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

536 Federal Reserve Bulletin • August 2001 FOMC MEETING SCHEDULE FOR 2002 tion with the operations and activities of the Strategic Trading Group of the bank. The Federal Open Market Committee announced U.S. Trust Corporation and the United States Trust on July 16, 2001, its tentative meeting schedule for Company of New York are paying to the Board a 2002. It is as follows: January 29-30 (Tuesday- civil money penalty in the amount of $5 million and Wednesday), March 19 (Tuesday), May 7 (Tuesday), are making a $5 million monetary payment to the June 25-26 (Tuesday-Wednesday), August 13 state of New York. (Tuesday), September 24 (Tuesday), November 6 (Wednesday), and December 10 (Tuesday). PUBLICATION OF THE ANNUAL REPORT AND BUDGET REVIEW ENFORCEMENT ACTIONS The 87th Annual Report, 2000, of the Board of Governors of the Federal Reserve System, covering The Federal Reserve Board announced on June 21, operations for the calendar year 2000, is now avail- 2001, the issuance of an order of prohibition against able from Publications Services, Mail Stop 127, Nelly Kann de Gouverneur, a former employee and Board of Governors of the Federal Reserve System, institution-affiliated party of Banco Mercantil, C.A., Washington, DC 20551, or phone 202-452-3244 or S.A.C.A., New York Agency, New York. 3245. Also available from Publications Services is a Ms. Kann, without admitting to any allegations, separately printed companion document, Annual consented to the issuance of the order based on her Report: Budget Review, 2001, which describes the alleged violations of law and unsafe and unsound budgeted expenses of the Federal Reserve Banks practices in connection with the structuring of deposfor 2001, the 2001 phase of the Board's current its of cash and monetary instruments by private banktwo-year (2000-01) budget, and income and expenses ing customers of Mercantil resulting in violations of for 1999 and 2000. This year's report includes a the Currency and Foreign Transactions Report Act chapter on the modernization of the Banks' check- (31 U.S.C. §5311 et seq.) processing system. Both reports are also available on the Federal Reserve Board's web site: http:// The Federal Reserve Board announced on July 2, www.federalreserve.gov. 2001, the issuance of a cease and desist order against Harvey Plante, a former officer and institutionaffiliated party of the Bankers Trust Company, CHANGES IN BOARD STAFF New York, New York. The Federal Reserve Board announced on June 11, The Federal Reserve Board announced on July 12, 2001, the appointments of Donald Kohn as Adviser 2001, the issuance of an order to cease and desist to the Board for Monetary Policy in the Office of against the Bank of Rogers, Rogers, Arkansas. Board Members, Vincent Reinhart as Director of the Division of Monetary Affairs, and Brian Madigan The Federal Reserve Board and the New York as Deputy Director of the Division of Monetary State Banking Department announced on July 13, Affairs, all effective July 2, 2001. 2001, the joint issuance of a combined consent order Mr. Kohn will continue as Secretary of the Federal to cease and desist and an assessment of a civil Open Market Committee, with responsibility for money penalty and monetary payment against U.S. briefing the Committee and for its announcements, Trust Corporation, a bank holding company, and minutes, and transcripts. Mr. Kohn has been the its subsidiary, the United States Trust Company of Director of the Division of Monetary Affairs since New York, a state-chartered bank. 1987 but is relinquishing management of the division U.S. Trust Corporation and the United States Trust and will focus on issues related to monetary policy. Company of New York, without admitting to any Mr. Reinhart joined the Federal Reserve Bank of allegations, consented to the issuance of the order in New York in 1983 and moved to the Division of connection with alleged violations and deficiencies Monetary Affairs at the Board in 1988. He was relating to the lack of internal controls and proce- named an officer of the Board in 1994 and was dures and inadequate compliance with the Bank named deputy associate director in 1998. In 1999, Secrecy Act and relating to the failure to maintain Mr. Reinhart transferred to the Division of Internaaccurate and complete books and records in connec- tional Finance where, as deputy director, he had Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Announcements 537 responsibility for the sections for International Bank- Mr. Frierson will oversee all the functions in the ing, Financial Markets, International Financial Trans- office and directly supervise preparing the Board's actions, and Trade and Quantitative Studies. minutes, distributing information to and from the Mr. Madigan joined the Board's staff in 1979 as an Board, publishing the Federal Reserve Regulatory economist in the Division of Research and Statistics. Service and associated manuals, and providing gen- He was promoted to senior economist in 1984 and eral administrative support. He joined the Office of became chief of the banking section in 1985. In 1987, the Secretary in 1998 as an associate secretary after he was named an officer of the Board. In 1988, eleven years in the Legal Division, where he attained Mr. Madigan joined the Division of Monetary Affairs the position of assistant general counsel. and was promoted to associate director in 1993. Ms. Shanks will supervise managing the Board's The Federal Reserve Board announced on June 18, records, responding to requests under the Freedom of 2001, the following official staff promotion and Information Act, providing conference planning and appointment, effective August 6, 2001. other visitor services, overseeing the appointment of Federal Reserve Bank and Branch directors, and pro- • The promotion of Robert deVere Frierson to viding temporary executive secretarial services. She Deputy Secretary of the Board joined the Board in 1991 as a senior attorney in the • The appointment of Margaret McCloskey Shanks Legal Division. Ms. Shanks received her undergraduas Assistant Secretary of the Board, replacing ate degree from DePaul University and her J.D. Barbara R. Lowrey, Associate Secretary of the Board, degree from Loyola University. • upon her retirement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

538 Minutes of the Meeting of the Federal Open Market Committee Held on May 15, 2001 A meeting of the Federal Open Market Committee Mr. Whitesell, Assistant Director, Division was held in the offices of the Board of Governors of Monetary Affairs, Board of Governors of the Federal Reserve System in Washington, D.C., Mr. Skidmore, Special Assistant to the Board, on Tuesday, May 15, 2001, starting at 9:00 a.m. Office of Board Members, Board of Governors Present: Mr. Kumasaka, Assistant Economist, Division Mr. Greenspan, Chairman of Monetary Affairs, Board of Governors Mr. McDonough, Vice Chairman Mr. Ferguson Ms. Low, Open Market Secretariat Assistant, Mr. Gramlich Division of Monetary Affairs, Board Mr. Hoenig Mr. Kelley of Governors Mr. Meyer Ms. Minehan Mr. Connolly, First Vice President, Federal Reserve Mr. Moskow Bank of Boston Mr. Poole Messrs. Beebe, Eisenbeis, and Goodfriend, Messrs. Jordan, McTeer, Santomero, and Stern, Mses. Mester and Perelmuter, Alternate Members of the Federal Open Market Messrs. Rosenblum and Sniderman, Senior Committee Vice Presidents, Federal Reserve Banks of San Francisco, Atlanta, Richmond, Messrs. Broaddus, Guynn, and Parry, Presidents Philadelphia, New York, Dallas, and of the Federal Reserve Banks of Richmond, Cleveland respectively Atlanta, and San Francisco respectively Mr. Sullivan, Vice President, Federal Reserve Bank Mr. Kohn, Secretary and Economist of Chicago Mr. Gillum, Assistant Secretary Ms. Fox, Assistant Secretary Mr. Weber, Senior Research Officer, Federal Reserve Mr. Mattingly, General Counsel Bank of Minneapolis Ms. Johnson, Economist Mr. Stockton, Economist By unanimous vote, the minutes of the meeting Ms. Cumming, Messrs. Fuhrer, Hakkio, Howard, of the Federal Open Market Committee held on Lindsey, Rasche, Reinhart, Slifman, and Wilcox, March 20, 2001, were approved. Associate Economists The Manager of the System Open Market Account reported on recent developments in foreign exchange Mr. Kos, Manager, System Open Market Account markets. There were no open market operations in Mr. Ettin, Deputy Director, Division of Research and foreign currencies for the System's account in the Statistics, Board of Governors period since the previous meeting. The Manager also reported on developments in Mr. Simpson, Senior Adviser, Division of Research domestic financial markets and on System open marand Statistics, Board of Governors ket transactions in government securities and federal Messrs. Connors,1 Madigan, Oliner, and Struckmeyer, agency obligations during the period March 20, 2001, Associate Directors, Divisions of International through May 14, 2001. By unanimous vote, the Com- Finance, Monetary Affairs, Research and mittee ratified these transactions. Statistics, and Research and Statistics, By unanimous vote, the Committee approved the Board of Governors extension for one year beginning in December 2001 1. Attended portion of meeting relating to staff briefings. of the System's reciprocal currency ("swap") Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

539 arrangements with the Bank of Canada and the Bank manufacturing capacity fell even further below its of Mexico. The arrangement with the Bank of Canada long-run average. is in the amount of $2 billion equivalent and that Consumer spending had held up relatively well with the Bank of Mexico in the amount of $3 billion thus far this year despite the deceleration in personal equivalent. Both arrangements are associated with incomes, reduced household net worth, and deteriorathe Federal Reserve's participation in the North tion in consumer sentiment since last autumn. After American Framework Agreement. The early vote to a solid first-quarter gain, nominal retail sales rose renew the System's participation in the swap arrange- briskly in April, reflecting strong outlays at general ments maturing in December relates to the provision merchandise and apparel stores, building and matethat each party must provide six months prior notice rial outlets, and automotive dealers. Growth of spendof an intention to terminate its participation. ing on services slowed in the first quarter (latest The Committee then turned to a discussion of the data), partly because of a weather-related drop in economic and financial outlook and the implementa- consumption of energy services. tion of monetary policy over the intermeeting period Low mortgage rates continued to provide support ahead. A summary of the economic and financial to residential building activity. The first-quarter averinformation available at the time of the meeting and age for total housing starts was the strongest quarof the Committee's discussion is provided below, terly reading in a year despite a March decline in followed by the domestic policy directive that was starts that might have been exaggerated by unusual approved by the Committee and issued to the Federal weather patterns. In addition, sales of new and exist- Reserve Bank of New York. ing homes remained brisk through March. New home The information reviewed at this meeting sug- sales reached a new high in March, and sales of gested that the economic expansion remained very existing homes were only a little below their record sluggish. Household spending, especially for housing high in June 1999. and motor vehicles, had held up relatively well, but Against the background of a sluggish economy and business investment was quite weak and appeared to deteriorating earnings, business capital spending on be decreasing further. Persistent inventory overhangs equipment and software declined somewhat further in a number of sectors had led to additional substan- in the first quarter. Increased purchases of cars and tial cuts in manufacturing production. Reflecting in trucks were among the few areas of strength in busipart the downtrend in manufacturing output, labor ness equipment expenditures; elsewhere, outlays for demand had weakened considerably and unemploy- high-tech equipment decreased on a quarterly basis ment had risen. Price inflation had picked up a little for the first time since the 1990 recession, and spendbut, abstracting from energy, had remained relatively ing for equipment such as industrial machinery subdued. changed little. Moreover, recent data on orders for Private nonfarm payroll employment fell sharply nondefense capital goods suggested that some further in April after a small drop in March. Manufacturing, slippage in future spending for equipment was likely. construction, and the service sector recorded large By contrast, nonresidential construction continued to payroll declines in April, and gains elsewhere were expand briskly; expenditures for oil and gas explorasmall. The unemployment rate increased further, to tion surged in the first quarter, and nonresidential 4.5 percent in April, and initial claims for unemploy- building activity continued at a rapid pace, with ment insurance averaged over the four weeks ended sizable gains recorded for most major categories of April 28 were at their highest level since 1993. buildings. Industrial production declined appreciably further Business inventories on a book-value basis fell in April. Manufacturing output registered a seventh steeply further in March, with roughly half of the consecutive monthly drop, while a robust boost to decline reflecting a runoff of motor vehicle stocks mining activity associated with strong gains in crude at the wholesale and retail levels. Despite the sharp oil and gas production was offset by a decrease in liquidation of inventories in the manufacturing sector utilities output in a period of unusually warm in February and March, the aggregate inventoryweather. In manufacturing, the production of motor shipments ratio for that sector edged higher in March vehicles and parts was unchanged in April after hav- to a level well above that of a year ago. In the ing surged in February and March, but the output wholesale trade sector, aggregate stocks dropped of high-tech equipment continued to trend steeply somewhat on balance in the first quarter and the downward, and there was widespread weakness in sector's stock-sales ratio edged lower; nonetheless, the manufacture of other industrial products. Reflect- the sector's ratio in March also was above its level of ing the production cutbacks, the rate of utilization of a year earlier. Retail inventories ran off in February Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

540 Federal Reserve Bulletin • August 2001 and March after a small January rise, and the sector's tions in reserve markets consistent with a decrease of inventory-sales ratio decreased somewhat on balance 50 basis points in the intended level of the federal to around the middle of its range for the past twelve funds rate, to about 5 percent. This action, in conjuncmonths. tion with a further easing of Vi percentage point on The U.S. trade deficit in goods and services nar- April 18, was intended to help promote a more satisrowed considerably in February, reflecting a further factory economic expansion going forward. Under rise in the value of exports and a sharp drop in the then-current conditions, the members agreed that the value of imports. The average deficit for the first two balance of risks remained weighted toward condimonths of the year was smaller than that for the tions that could generate economic weakness in the fourth quarter. Nonetheless, exports for the January- foreseeable future. February period were below the fourth-quarter aver- Federal funds traded at rates near the Committee's age, with notable declines occurring in automotive target levels over the intermeeting period. Other products, industrial supplies, and semiconductors. short-term interest rates generally fell somewhat less The slowdown in imports in January-February was than the reduction in the federal funds rate because broadly spread across trade categories, with the larg- the markets had anticipated the easing in policy, est decreases occurring in automotive products, high- though only in part. In contrast to the declines in tech goods, and oil. Recent information indicated that short-term rates, longer-term yields rose on balance economic activity in the foreign industrial countries as investors apparently became more confident of had decelerated since the fourth quarter. Expansion a pickup in output growth, supported in part by in the euro area, the United Kingdom, and Canada improved prospects for substantial federal tax reducappeared to have slowed significantly, while the Japa- tions. The more optimistic assessment of the econese economy seemed to have faltered after a brief nomic outlook and the unexpected intermeeting easrebound late last year. In addition, economic growth ing action apparently contributed to a narrowing of in the major developing countries had softened mark- risk premiums on lower-grade private debt obligaedly, with the slowdown in most of those countries tions and to a rise in equity prices. Better-thanreflecting weaker external demand. expected first-quarter earnings also boosted stock Overall inflation had been held down thus far this prices, and broad indexes of U.S. stock market prices year by a deceleration in energy prices, but by some moved substantially higher. measures core price inflation had picked up a bit. The In foreign exchange markets, the trade-weighted total consumer price index (CPI) increased moder- value of the dollar in terms of many of the major ately in February and March (latest data), and the foreign currencies changed little on balance over the increase in that index during the past twelve months intermeeting interval. A number of major foreign was smaller than that during the previous twelve- central banks cut their policy rates during the period, month period, reflecting reduced increases in energy but by less than the two easing steps in the United prices. By contrast, core CPI inflation picked up States. The dollar's appreciation against the euro was slightly in the February-March period and on a year- offset by its decline in terms of the yen and the over-year basis. However, inflation as measured by Canadian dollar. The dollar also was essentially the core personal consumption expenditure (PCE) unchanged in terms of an index of the currencies chain-type price index, though also running a little of other important trading partners. The value of the higher in February-March, recorded a small decline Mexican peso rose appreciably against the dollar as on a year-over-year basis. At the producer level, core monetary authorities maintained their tight policy finished goods inflation was subdued in March and stance and as spreads on Mexican debt narrowed. In April but moved up somewhat on a year-over-year contrast, concerns about potential spillovers from basis. With regard to labor costs, growth in the Argentina's worsening financial difficulties depressed employment cost index (ECI) for hourly compensa- the value of the Brazilian real relative to the dollar. tion picked up noticeably in the first quarter of this The broad monetary aggregates continued to grow year; however, the gain in compensation for the four rapidly in March and April. In addition to the effects quarters ended in March was a little below the large of lower market interest rates, extensive mortgage increase for the four-quarter period ended in March financing activity and a flight to safety from volatile 2000. By contrast, average hourly earnings of produc- equity markets likely added to M2's strong upward tion or nonsupervisory workers rose more briskly in trend. The expansion of M3 was bolstered by robust April and on a year-over-year basis. growth of institution-only money funds and by At its meeting on March 20, 2001, the Committee greater issuance of managed liabilities included in adopted a directive that called for maintaining condi- this aggregate to help finance faster growth of bank Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 541 credit and a shift in bank funding from foreign to U.S. ness and household demands for goods and services. sources. The debt of domestic nonfinancial sectors As business profits stabilized and final demand had grown at a moderate pace on balance through firmed, inventory liquidation would come to an end, April. adding to the upward momentum of economic activ- The staff forecast prepared for this meeting sug- ity. The members were uncertain as to the degree and gested that, after a period of slow growth associated timing of the strengthening in final demand, and in part with an inventory correction, the economic although a relatively prompt and strong rebound expansion would gradually regain strength over the could not be ruled out, many saw a variety of factors next two years and move back toward a rate near the that pointed to the possibility that the upturn could be staff's current estimate of the growth of the econo- weaker or more delayed than the central tendencies my's potential output. The period of subpar expan- of their expectations. With regard to the outlook for sion was expected to foster an easing of pressures on inflation, a number of members expressed concern resources and some moderation in core price infla- about a tendency for some measures of inflation to tion. Despite the substantial easing in the stance of edge higher this year, but many members expected monetary policy, the forecast anticipated that the that the easing of pressures in labor and product expansion of domestic final demand would be held markets that already had occurred, and that was likely back to an extent by some of the developments in to continue in the months ahead, would damp inflafinancial markets—in particular, the decline in house- tion going forward. hold net worth associated with the earlier downturn In their review of developments across the nation, in equity prices, the continuation of relatively strin- members referred to quite sluggish economic congent terms and conditions on some types of loans ditions in many parts of the country. Weakness by financial institutions, and the appreciation of the remained especially pronounced in manufacturing, dollar. Partly as a result of the decline in household but as reflected in the employment data for April and wealth, growth of consumer spending was expected in widespread anecdotal reports, softening had spread to remain relatively low for some time, and housing to other sectors of the economy as well. At the same demand would increase only a little from its recent time, pockets of strength could be found in a number level. However, business fixed investment, notably of industries, notably in energy and construction, and outlays for equipment and software, would resume overall business activity continued to display considrelatively good growth after a period of adjustment of erable vigor in a number of regions. Members noted capital stocks to more desirable levels; a projected that business confidence had deteriorated, but some recovery in the growth of foreign economies was also observed that the pessimism tended to be limited seen as providing increased support for U.S. exports; to the nearer term and was accompanied by favorable and fiscal policy was assumed to become more expectations regarding the outlook later in the year expansionary. and in 2002. In the Committee's discussion of current and pro- With regard to the outlook for key sectors of the spective economic developments, members com- economy, a number of members commented that mented that the slowdown in the expansion to a now consumer spending had held up reasonably well in quite sluggish pace was likely to be more prolonged recent months despite a variety of adverse developthan they had anticipated earlier and indeed, with the ments including the negative wealth effects of stock economy displaying some signs of fragility and market declines, widely publicized job cutbacks, inventories still appearing excessive in some sectors, heavy consumer debt loads, and previous overspendit was not entirely clear that the slowing in the ing by many consumers. A recent survey had indigrowth of the economy had bottomed out. Despite cated that consumer sentiment had firmed a little, but the crosscurrents and uncertainties that were the survey results had yet to be confirmed by addiinvolved, members saw an upturn in the economic tional surveys and the level of consumer confidence expansion by later in the year as the most likely was still well below earlier highs. As in the past, outlook. This view was premised in large measure consumer spending attitudes likely would depend on the lagged effects of the Committee's relatively importantly on trends in employment and income, aggressive easing actions this year, including any and further increases in unemployment in the period further easing that might be adopted at this meeting, just ahead along with the negative wealth effects of growing prospects of some fiscal policy stimulus earlier stock market price declines and the persislater in the year, and more generally the favorable tence of high energy costs were likely to constrain effects of still substantial productivity gains on profit the growth in consumer expenditures over coming opportunities and income growth and hence on busi- quarters. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

542 Federal Reserve Bulletin • August 2001 Household expenditures on home construction had significant drag on the economic expansion remained been maintained at a relatively robust level in recent a key uncertainty in the economic outlook. In the months, evidently reflecting the cushioning effects of view of many members, the adjustment process might very attractive mortgage interest rates. Housing activ- not be substantially completed until much later in the ity was described as a source of strength in many year and could take even longer for high-tech firms. regions. Housing prices had tended to edge higher This evaluation assumed continued sluggish growth across the nation, though there were signs that the in final demand during the period immediately ahead. price appreciation had eased in some parts of the Stronger growth, which could not be ruled out, would country, notably on the West Coast. While the pre- of course bring inventory-sales ratios to desired vailing negative influences on household spending levels more quickly. might spill over a bit more to housing activity during Members also expressed concern about the potenthe year ahead, there were few current developments tial implications for U.S. expansion from developin housing markets that might be read as signaling ments abroad. To some extent, economic difficulties any marked weakening in this sector of the economy. in foreign nations had occurred in concert with soft- A softening in business demand for capital equip- ening activity in the United States, and notable weakment had accounted for much of the slowdown in the ness in world high-tech markets along with the downgrowth of final demand in late 2000 and early 2001. ward adjustment in equity prices globally represented The latest available data on new orders pointed to a downside risk factor worldwide. The anticipated further, and possibly larger, declines in business recovery in this country would help to strengthen spending on equipment and software over the months many foreign economies and in turn improve prosahead. Members cited anecdotal and survey reports pects for U.S. exports. Members noted, however, that that indicated many business firms were canceling, in some nations persisting structural problems precutting back, or stretching out planned capital expen- sented threats to national economic prosperity and ditures. It was difficult to see any signs of a signifi- international trade. On balance, while the external cant near-term turnaround in business spending for risks to the U.S. economy clearly were to the downequipment and software, and the timing and strength side, at least over the nearer term, the prospective of a subsequent rebound would depend importantly rebound in U.S. economic activity and stimulative on the outlook for sales and profits. With regard to macroeconomic policies abroad were expected to profit expectations, the most recent data showed con- contribute to strengthening growth worldwide and tinued markdowns, but the pace of downward revi- to improving prospects for exports during the year sions was diminishing. It was too early to conclude ahead. that the outlook for profits might be approaching a The nation's fiscal outlook was seen as supportive degree of stability or be near the point of turning up, of aggregate demand. While the exact structure of tax and in any event it was clear that business sentiment cuts was still being negotiated, passage of new fiscal currently was quite gloomy. Looking to the future, measures seemed imminent and likely would help however, members anticipated that continuing gains bolster consumption spending beginning later in the in efficiency engendered by new technologies would year. Whatever its precise timing, the expansionary provide substantial profit opportunities and likely fiscal package would undoubtedly join at some point strengthen investment spending during the course of in coming quarters with the lagged effects of the the year ahead. In the meantime, nonresidential con- System's policy easing actions to foster strengthenstruction and energy-related investments were a ing economic expansion. source of some support to investment spending, but A number of members commented that the persistthey provided only a very partial offset to widespread ing updrift in some key measures of core inflation weakness in other business spending. had become increasingly worrisome. In this regard, Ongoing efforts to reduce excess inventories were they noted that some of the recent increases in bond continuing to curb output in manufacturing industries yields could represent a rise in long-term inflation and to restrain growth in overall economic activity. A expectations. Such a rise would not be entirely unexnumber of members commented that anecdotal and pected in the context of improving sentiment about other evidence suggested that considerable progress the strength of the expansion, the potentially adverse already had been made in scaling down unwanted implications for costs of the cyclical weakness in inventories, notably of motor vehicles, but substantial productivity, and the possibility that high energy further progress probably would be needed in high- prices and their passthrough effects might persist tech industries where sales were still falling. How longer than had been anticipated earlier. To a considlong inventory cutbacks would continue to exert a erable extent, however, any uptick in inflation expec- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Minutes of the Federal Open Market Committee 543 tations likely represented a reversal of anticipated outlook for significant strengthening remained tenudeclines in inflation earlier this year when economic ous in a climate of fragile business and consumer prospects had seemed weaker and survey data did not confidence. Members noted that the lagged effects confirm any increase in long-term inflation expecta- of the monetary policy easing implemented earlier tions. Moreover, not all measures of core inflation this year were still very hard to discern, though they had accelerated; in particular, core PCE price infla- should be felt increasingly over the year ahead. In tion had been quite stable on a twelve-month basis this regard the risks of rising inflation could not be for some time. dismissed, and while those risks appeared to be quite Looking ahead, most members did not foresee a limited for the nearer term, excessive monetary significant rise in inflation as a likely prospect. They stimulus had to be avoided to avert rising inflation cited the prevalence of highly competitive conditions expectations and added inflation pressures over time. in most markets, which continued to make it very Members who preferred or could support a 25 basis difficult for business firms to raise prices despite point easing action gave particular emphasis to the pressures to do so in a period of rising labor, energy, desirability at this point of taking and signaling a and other costs. Widespread evidence of some lessen- more cautious approach to policy, relative to the ing of pressures in most labor markets across the 50 basis point federal funds rate reductions the Comnation had not yet resulted in lower wage inflation, mittee had been implementing, given the lagged but the members expected that recent and anticipated effects of the substantial reduction in the federal ebbing of pressures on labor and other resources and funds rate to date, the accompanying buildup in associated slack in product markets in a period of liquidity, and the related risk that a further aggressive continuing subpar economic growth, along with pro- easing action would increase the odds of an overly jected declines in energy prices, would hold down accommodative policy stance and rising inflation inflation over the forecast horizon. Nonetheless, there pressures in the future. were some risks of rising inflation. An unexpectedly All the members accepted a proposal to include in strong rebound in economic growth could begin to the press statement to be released after this meeting a put added upward pressure on prices at a time when sentence indicating that the Committee continued to labor markets were still tight by historical standards regard the risks to the economic outlook as being and accelerating productivity no longer held down tilted toward weakness even after today's easing increases in unit labor costs. Given the lags in the action. Forecasts of growth in business earnings and effectiveness of monetary policy, such pressure spending continued to be revised down, and until that might materialize before the effects of counter- process ended, weakness in demand seemed to be the vailing actions by the Committee had a chance to main threat to satisfactory economic performance. take hold. At the same time the members anticipated that a In the Committee's discussion of policy for the neutral balance of risks statement could be approforthcoming intermeeting period, all but one of the priate before long, probably well before substantial members indicated that they could support a proposal evidence had emerged that economic growth had calling for further easing of reserve conditions consis- strengthened appreciably, once the Committee could tent with a 50 basis point reduction in the federal see that policy had eased enough to promote a future funds rate to a level of 4 percent. One member return to maximum sustainable economic growth. expressed a strong preference for a 25 basis point Indeed, it was not clear how much more the federal reduction and two others indicated that they could funds rate might have to be reduced after today in the have accepted that more limited easing move. absence of further significantly adverse shocks, and Despite their somewhat differing preferences, all the some members noted that the end of the easing members agreed that further easing was desirable in process might be near. Even so, with the economy light of what they viewed as the continuing weakness perhaps still in the midst of a process of weakening in the economy, the absence of evidence that growth growth in aggregate demand of unknown persistence had stabilized or was about to rebound, and still and dimension, the members generally agreed that, decidedly downside risks to the economic expansion. given prevailing uncertainties, it would be premature Some members noted that, although policy had been for the Committee to shift its balance of risks stateeased substantially, it might still be considered to be ment at this time. only marginally accommodative in relation to the At the conclusion of this discussion, the Commitforces that were damping aggregate demand. Accord- tee voted to authorize and direct the Federal Reserve ingly, the action contemplated for today was needed Bank of New York, until it was instructed otherto provide adequate stimulus to an economy whose wise, to execute transactions in the System Account Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

544 Federal Reserve Bulletin • August 2001 in accordance with the following domestic policy 25 basis points in the federal funds rate. While the directive: risks of weaker economic growth still tended to dominate those of rising inflation and called for some The Federal Open Market Committee seeks monetary further easing, the Committee had added significant and financial conditions that will foster price stability and liquidity to the economy this year through its cumupromote sustainable growth in output. To further its latively large easing actions. The lagged effects of long-run objectives, the Committee in the immediate those actions should be felt increasingly over time. future seeks conditions in reserve markets consistent with reducing the federal funds rate to an average of around Moreover, following the rapid and aggressive policy 4 percent. actions already taken, a more cautious policy move at this point would in his view appropriately limit the The vote encompassed approval of the sentence risks of producing an overly accommodative policy below for inclusion in the press statement to be stance and rising inflation over time. released shortly after the meeting: The Chairman called for a recess after this vote and convened a meeting of the Board of Governors to Against the background of its long-run goals of price consider one-half percentage point reductions in the stability and sustainable economic growth and of the infordiscount rate that had been proposed by a number of mation currently available, the Committee believes that the Federal Reserve Banks. After the recess, the Chairrisks continue to be weighted mainly toward conditions that may generate economic weakness in the foreseeable man informed the Committee that the pending reducfuture. tions had been approved. It was agreed that the next meeting of the Com- Votes for this action: Messrs. Greenspan, McDonough, mittee would be held on Tuesday-Wednesday, Ferguson, Gramlich, Kelley, Meyer, Ms. Minehan, June 26-27, 2001. Messrs. Moskow and Poole. Vote against this action: Mr. Hoenig. The meeting adjourned at 1:15 p.m. Mr. Hoenig dissented because he preferred a less Donald L. Kohn aggressive easing action involving a reduction of Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

545 Legal Developments ORDERS ISSUED UNDER BANK HOLDING COMPANY lion, representing approximately 6.3 percent of total depos- ACT its in insured depository institutions in the state ("state deposits").4 BB&T is the largest commercial banking Orders Issued Under Sections 3 and 4 of the Bank organization in West Virginia, controlling deposits of Holding Company Act $3.8 billion, representing 18.9 percent of state deposits. BB&T is the eighth largest commercial banking organiza- BB&T Corporation tion in Maryland, controlling deposits of $2.6 billion, rep- Winston-Salem, North Carolina resenting 4.4 percent of state deposits. F&M is the seventh largest commercial banking organi- Order Approving the Acquisition of a Bank Holding zation in Virginia, controlling total deposits of approxi- Company mately $3 billion, representing approximately 3.7 percent of state deposits. F&M is the eleventh largest commercial BB&T Corporation, Winston-Salem, North Carolina banking organization in West Virginia, controlling deposits ("BB&T"), a financial holding company within the mean- of $266 million, representing 1.3 percent of state deposits. ing of the Bank Holding Company Act ("BHC Act"), has F&M is the 25th largest commercial banking organization requested the Board's approval under section 3 of the BHC in Maryland, controlling deposits of $193 million, repre- Act (12 U.S.C. § 1842) to acquire F&M National Corpo- senting less than 1 percent of state deposits. ration, Winchester, Virginia ("F&M"),1 and its eleven On consummation of the proposal, and after taking the wholly owned subsidiary banks.2 BB&T also has requested proposed divestitures into account, BB&T would become the Board's approval under sections 4(c)(8) and 4(j) of the the fifth largest commercial banking organization in Vir- BHC Act (12 U.S.C. §§ 1843(c)(8) and (j)) to acquire ginia, controlling deposits of $8 billion, representing ap- F&M's nonbanking subsidiaries: proximately 9.8 percent of state deposits. BB&T would (1) F&M Trust Company, also in Winchester, Virginia, remain the largest commercial banking organization in and thereby engage in trust company activities pursuant West Virginia, controlling deposits of approximately to section 225.28(b)(5) of Regulation Y (12 C.F.R. $4 billion, representing approximately 20 percent of state § 225.28(b)(5)), and deposits. BB&T would remain the eighth largest commer- (2) Johnson Mortgage Company, LLC, Newport News, cial banking organization in Maryland, controlling deposits Virginia, and thereby engage in mortgage banking activ- of $2.8 billion, representing approximately 4.7 percent of ities pursuant to section 225.28(b)(1) of Regulation Y state deposits. (12 C.F.R. § 225(b)(1)). Notice of the proposal, alfording interested persons an Interstate Analysis opportunity to submit comments, has been published (66 Federal Register 23,255, and 28,163 (2001)). The time for Section 3(d) of the BHC Act allows the Board to approve filing comments has expired, and the Board has considered an application by a bank holding company to acquire the proposal and all comments received in light of the control of a bank located in a state other than the home factors set forth in sections 3 and 4 of the BHC Act. state of such bank holding company if certain conditions BB&T, with total consolidated assets of $59.3 billion, are met.5 For purposes of the BHC Act, the home state of operates depository institutions in Alabama, North Caro- BB&T is North Carolina, and F&M's subsidiary banks are lina, Georgia, South Carolina, Maryland, Tennessee, Ken- located in Virginia, West Virginia and Maryland.6 Based tucky, Virginia, West Virginia, and the District of Colum- on a review of the facts of record, including a review of the bia.3 BB&T is the sixth largest commercial banking relevant state statutes, the Board finds that all the condiorganization in Virginia, controlling deposits of $5.1 bil- 4. Deposit and ranking data are as of June 30, 2000, and reflect acquisitions as of April 12, 2001. 1. In addition, BB&T has requested the Board's approval to exer- 5. See 12 U.S.C. § 1842(d). A bank holding company's home state cise an option to acquire up to 9 percent of F&M's voting shares if is the state in which the total deposits of all banking subsidiaries of certain events occur. The option would expire on consummation of the such company were the largest on July 1, 1966, or the date on which proposal. the company became a bank holding company, whichever is later. 2. The subsidiary banks of F&M are listed in Appendix A. 12 U.S.C. § 1841(o)(4)(C). 3. Asset data are as of December 31, 2000. In this context, deposi- 6. For purposes of section 3(d) of the BHC Act, the Board considers tory institutions include commercial banks, savings banks, and sav- a bank to be located in the states in which the bank is chartered, ings associations. headquartered, or operates a branch. 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546 Federal Reserve Bulletin • August 2001 tions enumerated in section 3(d) of the BHC Act for an Consummation of the proposal without divestitures interstate acquisition are met in this case.7 In light of all the would be consistent with Board precedent and the DOJ facts of record, the Board is permitted to approve the Guidelines in the Annapolis, Charlottesville, Danville, Freproposal under section 3(d) of the BHC Act. dericksburg, Harrisonburg, Lynchburg, Newport News- Hampton, Norfolk-Portsmouth, Richmond, Roanoke, Competitive Considerations Staunton, Winchester, and Metropolitan Washington, D.C. banking markets. In each of these markets, the increase in Section 3 of the BHC Act prohibits the Board from approv- the HHI as a result of this proposal would be fewer than ing a proposal that would result in a monopoly or would be 200 points, in most cases fewer than 40 points, and numerin furtherance of an attempt to monopolize the business of ous competitors would remain.12 banking. Section 3 also prohibits the Board from approving In the Martinsburg, West Virginia, and Alleghany, Chara proposal that would substantially lessen competition in lotte, and Emporia, Virginia, banking markets, consummaany relevant banking market unless the anticompetitive tion of the proposal would exceed the DOJ Guidelines. In effects of the proposal in that banking market are clearly order to mitigate potentially adverse competitive effects of outweighed in the public interest by the probable effect of the proposal in these markets, BB&T has proposed divestithe proposal in meeting the convenience and needs of the tures in each market that would reduce the HHIs to levels community to be served.8 consistent with the DOJ Guidelines.13 BB&T and F&M compete directly in the following Martinsburg. BB&T is the largest depository institution seventeen banking markets: Annapolis, Maryland; Al- in the Martinsburg banking market, controlling deposits of leghany, Charlotte, Charlottesville, Danville, Emporia, Fre- $267.4 million, representing approximately 46.6 percent of dericksburg, Harrisonburg, Lynchburg, Newport News- market deposits. F&M is the third largest depository insti- Hampton, Norfolk-Portsmouth, Richmond, Roanoke, tution in the market, controlling deposits of $83.6 million, Staunton, and Winchester, all in Virginia; Martinsburg, representing approximately 14.6 percent of market depos- West Virginia; and Metropolitan Washington, D.C.9 The its. The HHI would increase 1357 points to 4215. Board has reviewed carefully the competitive effects of the BB&T has committed to divest four branches in the proposal in each of these banking markets in light of all the banking market that control $68.4 million in deposits. On facts of record, including the number of competitors that consummation of the proposal, and taking into account the would remain in the market, the share of total deposits in proposed divestitures, BB&T would remain the largest depository institutions in the market ("market deposits") depository institution in the Martinsburg banking market, controlled by the companies involved in the proposal,10 the controlling deposits of $282.5 million, representing apconcentration level of deposits in the market and the in- proximately 49.2 percent of market deposits, and the HHI crease in this level as measured by the Herfindahl- would increase 183 points to 3040. Seven other competi- Hirschman Index ("HHI") under the Department of Justice tors would remain in the banking market, including three Merger Guidelines ("DOJ Guidelines"), and other charac- competitors that each would control at least 10 percent of teristics of each markets.11 market deposits. In addition, the market is attractive for entry; since 1997, four firms have entered the market de novo. 7. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A). BB&T is well capitalized and well managed. On consummation of the proposal, BB&T would control less than 10 percent of the total amount of deposits of insured depository institutions in the United States and less than 30 percent of the total amount of deposits of acquisition generally will not be challenged (in the absence of other insured depository institutions in Virginia, West Virginia, and Mary- factors indicating anticompetitive effects) unless the post-merger HHI land. None of the relevant states has minimum age laws that are is at least 1800 and the merger increases the HHI by more than 200 applicable to this transaction. See Va. Code Ann. § 6.1-44.20 (Michie points. The Department of Justice has stated that the higher than 1999); W. Va. Code §§ lA-2-12a(c) and 31A-8A-5(b) (Michie 1996). normal HHI thresholds for screening bank mergers for anticompeti- 8. See 12 U.S.C. § 1842(c). tive effects implicitly recognize the competitive effects of limited- 9. The banking markets are defined in Appendix B. purpose lenders and other nondepository financial institutions. 10. Market share data for all banking markets are as of June 30, 12. The competitive analyses for these banking markets are pro- 2000. These data are based on calculations that include the deposits of vided in Appendix C. thrift institutions at 50 percent. The Board previously has indicated 13. BB&T has committed to execute sales agreements for the that thrift institutions have become, or have the potential to become, proposed divestitures discussed in this order with purchasers that are significant competitors of commercial banks. See, e.g., Midwest Fi- competitively suitable, and has committed to complete the divestitures nancial Group, 75 Federal Reserve Bulletin 386 (1989); National City within 180 days of consummation of the proposal. BB&T also has Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the committed that, if it is unsuccessful in completing the divestitures Board has regularly included thrift deposits in the calculation of within the 180-day period, it will transfer the unsold branches to an market share on a 50-percent weighted basis. See, e.g., First Hawai- independent trustee that is acceptable to the Board and will instruct ian, Inc., 77 Federal Reserve Bulletin 52 (1991). the trustee to sell the branches promptly to an alternative purchaser 11. Under the DOJ Guidelines, 49 Federal Register 26,823 acceptable to the Board. See BankAmerica Corporation, 78 Federal (June 29, 1984), a market is considered unconcentrated when the Reserve Bulletin 338 (1992); United New Mexico Financial Corporapost-merger HHI is less than 1000 points, moderately concentrated tion, 11 Federal Reserve Bulletin 484 (1991). BB&T also has commitwhen the post-merger HHI is between 1000 and 1800, and highly ted to submit to the Board, within 180 days after consummation of the concentrated when the post-merger HHI is more than 1800. The proposal, executed trust agreements acceptable to the Board stating Department of Justice has informed the Board that a bank merger or the terms of the proposed divestitures. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 547 Alleghany. BB&T is the third largest depository institu- banking market. The appropriate State agencies have been tion in the Alleghany banking market, controlling deposits provided an opportunity to comment and have not objected of $65 million, representing approximately 17.9 percent of to consummation of the proposal. market deposits. F&M is the largest depository institution Based on all the facts of record, including the commitin the market, controlling deposits of $129 million, repre- ments to divest branches in the Alleghany, Charlotte, Emsenting approximately 35.6 percent of market deposits. On poria, and Martinsburg banking markets, and the number consummation, the HHI would increase 1244 points to and size of the competitors that would remain in the 3628. markets, the Board concludes that consummation of the BB&T has committed to divest one branch in the bank- proposal is not likely to have a significantly adverse effect ing market that controls approximately $61.5 million in on competition or on the concentration of banking redeposits. On consummation of the proposal and taking into sources in these banking markets or in any relevant bankaccount the proposed divestiture, BB&T would become the ing markets. largest depository institution in the Alleghany banking market, controlling deposits of $132.5 million, represent- Other Considerations ing approximately 36.6 percent of market deposits. The HHI would increase by 36 points to 2421. Each of the five The BHC Act requires the Board, in acting on an applicafirms in the banking market would control at least tion, to consider the financial and managerial resources and 10 percent of market deposits. future prospects of the companies and banks involved, the Charlotte. BB&T is the second largest depository institu- convenience and needs of the communities to be served, tion in the Charlotte banking market, controlling deposits and certain supervisory factors. The Board has reviewed of $29.8 million, representing approximately 25.2 percent these factors in light of the record, including supervisory of market deposits. F&M is the third largest depository reports of examination assessing the financial and manageinstitution in the market, controlling deposits of rial resources of the organizations and financial informa- $18.5 million, representing approximately 15.7 percent of tion provided by BB&T. BB&T is well capitalized and market deposits. On consummation of the proposal, the would remain so after consummation of the proposal. HHI would increase 788 points to 4487. Based on all the facts of record, the Board concludes that BB&T has committed to divest F&M's only branch in the financial and managerial resources and the future prosthe banking market that controls approximately $18.5 mil- pects of BB&T, F&M, and their respective subsidiary lion. On consummation of the proposal and taking into banks are consistent with approval, as are the other superaccount the proposed divestiture, BB&T would remain the visory factors the Board must consider under the BHC Act. second largest depository institution in the Charlotte bank- In addition, considerations related to the convenience ing market, controlling deposits of $24.8 million, repre- and needs of the communities to be served, including the senting approximately 25.2 percent of market deposits, and records of performance of the institutions involved under the HHI would remain unchanged. the Community Reinvestment Act (12 U.S.C. § 2901 Emporia. BB&T is the second largest depository institution et seq.), are consistent with approval of the proposal.14 in the Emporia banking market, controlling deposits of BB&T also has filed notice under sections (4)(c)(8) and $62.9 million, representing 33.9 percent of market deposits. 4(j) of the BHC Act to acquire F&M's nonbanking subsid- F&M is the largest depository institution in the market, con- iaries and thereby engage in trust and mortgage banking trolling deposits of $63 million, representing 34 percent of activities. The Board has determined by regulation that market deposits. The HHI would increase 2307 points trust and mortgage banking activities are closely related to to 4892. banking for purposes of the BHC Act.15 Moreover, the BB&T has committed to divest two branches in the Federal Reserve System previously has approved applicabanking market that control approximately $52.4 million. tions by F&M to engage in the proposed activities. BB&T On consummation of the proposal and taking into account has committed to conduct these nonbanking activities in the proposed divestitures, BB&T would become the largest accordance with the limitations set forth in Regulation Y depository institution in the Emporia banking market, con- and the Board's order and interpretations. trolling deposits of $73.5 million, representing approxi- In order to approve this notice, the Board is required by mately 39.7 percent of market deposits. The HHI would section 4(j)(2)(A) of the BHC Act to determine that the increase 65 points to 2650. Five competitors in addition to acquisition of the nonbanking subsidiaries of F&M by BB&T would remain in the banking market, including four BB&T "can reasonably be expected to produce benefits to competitors that would each control 5 percent or more of the public . . . that outweigh possible adverse effects, such market deposits. as undue concentration of resources, decreased or unfair The Board has considered the views of the Department of Justice and the appropriate State banking agencies on the competitive effects of the proposal in each relevant banking market. The Department of Justice has advised the Board that, in light of the proposed divestitures, consum- 14. All the insured depository institutions of BB&T and F&M were rated satisfactory or better during their most recent examination of mation of the proposal would not be likely to have a CRA performance. significantly adverse effect on competition in any relevant 15. See 12 C.F.R. 225.28(b)(1) and (5). 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548 Federal Reserve Bulletin • August 2001 competition, conflicts of interests, or unsound banking connection with the proposal and with the conditions stated practices."16 or referred to in this order, including BB&T's divestiture As part of its evaluation of these factors, the Board has commitments. The Board's determination on the nonbankconsidered the financial and managerial resources of ing activities also is subject to all the terms and conditions BB&T and its subsidiaries, including the companies to be set forth in Regulation Y, including those in sections 225.7 acquired, and the effect of the proposed transaction on and 225.25(c)), and the Board's authority to require such those resources. For the reasons noted above, and based on modification or termination of the activities of a bank all the facts of record, the Board has concluded that finan- holding company or any of its subsidiaries as the Board cial and managerial considerations are consistent with ap- finds necessary to ensure compliance with, and to prevent proval of the notice. evasion of, the provisions of the BHC Act and the Board's The Board also has considered the competitive effects of regulations and orders thereunder. For purposes of these BB&T's proposed acquisition of the nonbanking subsidiar- transactions, the commitments and conditions referred to in ies of F&M in light of all the facts of record. BB&T and this order shall be deemed to be conditions imposed in F&M originate mortgages. There are numerous competi- writing by the Board in connection with its findings and tors for mortgage originations in the markets where BB&T decision and, as such, may be enforced in proceedings and F&M compete, and there are few barriers to entry. under applicable law. BB&T and F&M also provide trust services. The market The acquisition of the subsidiary banks of F&M shall for trust services is unconcentrated, and there are numerous not be consummated before the fifteenth calendar day after competitors for this service. As a result, the Board the effective date of this order, and the proposal may not be expects that consummation of the proposal would have a consummated later than three months after the effective de minimis effect on competition for these services. Based day of this order, unless such period is extended for good on all the facts of record, the Board concludes that it is cause by the Board or by the Federal Reserve Bank of unlikely that significantly adverse competitive effects Richmond, acting pursuant to delegated authority. would result from the nonbanking acquisitions proposed in By order of the Board of Governors, effective June 25, this transaction. 2001. The Board also expects that the proposed transaction would give BB&T an increased ability to serve the needs Voting for this action: Chairman Greenspan, Vice Chairman Ferguof its customers and provide expanded services to the son, and Governors Kelley, Meyer, and Gramlich. current customers of F&M. In addition, there are public benefits to be derived from permitting capital markets to ROBERT DEV. FRIERSON operate so that bank holding companies can make poten- Associate Secretary of the Board tially profitable investments in nonbanking companies and from permitting banking organizations to allocate their Appendix A resources in the manner they consider to be most efficient when such investments are consistent, as in this case, with Subsidiary Banks of F&M the relevant considerations under the BHC Act. The Board also concludes that the conduct of the proposed nonbanking activities within the framework of Reg- West Virginia ulation Y and Board precedent is not likely to result in adverse effects, such as an undue concentration of re- F&M Bank - West Virginia, Ranson sources, decreased or unfair competition, conflicts of interests, or unsound banking practices, that would outweigh the public benefits of the proposal, such as increased cus- Virginia tomer convenience and gains in efficiency. Accordingly, based on all the facts of record, the Board has determined that the balance of public interest factors that the Board F&M Bank - Atlantic, Gloucester must consider under section 4(j)(2)(A) of the BHC Act is F&M Bank - Central Virginia, Charlottesville favorable and consistent with approval of this proposal. F&M Bank - Highlands, Covington F&M Bank - Massanutten, Harrisonburg Conclusion F&M Bank - Northern Virginia, Fairfax F&M Bank - Peoples, Warrenton F&M Bank - Richmond, Richmond Based on the foregoing, and in light of all the facts of F&M Bank - Southern Virginia, Emporia record, the Board has determined that the application and F&M Bank - Winchester, Winchester notice should be, and hereby are, approved. Approval of the application and notice is specifically conditioned on compliance by BB&T with all the commitments made in Maryland 16. 12 U.S.C. § 1843(j)(2)(A). F&M Bank - Maryland, Bethesda Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 549 Appendix B Staunton, Virginia: the independent cities of Staunton and Waynesboro, and Augusta County, all in Virginia. Banking Markets in Which BB&T and F&M Compete Winchester, Virginia: the independent city of Winchester, Directly the counties of Clarke and Frederick, and the town of Strasburg in Shenandoah County, all in Virginia, and Alleghany, Virginia: Alleghany County and the indepen- Hampshire County, West Virginia. dent cities of Clifton Forge and Covington, all in Virginia. Annapolis, Maryland: the Annapolis Rand McNally Mar- Appendix C keting Area ("RMA"). Charlotte, Virginia: Charlotte County, Virginia. Banking Markets Consistent with DOJ Guidelines Charlottesville, Virginia: the Charlottesville RMA, the Without Divestitures non-RMA portion of Albemarle County, and the counties of Fluvanna, Greene, and Nelson, all in Virginia. Annapolis Danville, Virginia: the Danville RMA, the non-RMA portion of Pittsylvania County, Virginia (excluding the area BB&T is the ninth largest depository institution in around Hurt), and the independent city of Danville, Virginia. the Annapolis banking market, controlling deposits of Emporia, Virginia: Greenville County and the city of Em- $79.3 million, representing 4.8 percent of market deposits. poria, both in Virginia. F&M is the seventeenth largest depository institution in the Fredericksburg, Virginia: the independent city of Fred- market, controlling deposits of $8.3 million, representing ericksburg, the counties of Caroline, King George, Spotsyl- less than 1 percent of market deposits. On consummation vania, and Stafford (excluding the Washington, D.C.- of the proposal, BB&T would remain the ninth largest Maryland-Virginia RMA portion), and the towns of depository institution in the market, controlling deposits of Colonial Beach, Leedstown, Oak Grove, and Potomac approximately $87.6 million, representing approximately Beach in Westmoreland County, all in Virginia. 5.3 percent of market deposits. The HHI would increase Harrisonburg, Virginia: the independent city of Harrison- 5 points to 1036. burg and Rockingham County, both in Virginia. Lynchburg, Virginia: the Lynchburg RMA, the non-RMA Charlottesville portions of Henry County, and the independent city of Martinsville, all in Virginia. BB&T is the fifth largest depository institution in the Martinsburg, West Virginia: Berkeley County (excluding Charlottesville banking market, controlling deposits of the Hagerstown, Maryland-Pennsylvania-West Virginia $173.4 million, representing 8.9 percent of market depos- RMA portion). its. F&M is the sixth largest depository institution in the Metropolitan Washington, D.C.: the Washington, D.C.- market, controlling deposits of $125.1 million, represent- Maryland-Virginia RMA, the non-RMA portions of the ing 6.4 percent of market deposits. On consummation of counties of Calvert, Charles, and St. Mary's, all in Mary- the proposal, BB&T would become the fourth largest deland; the non-RMA portions of Fauquier and Loudoun pository institution in the market, controlling deposits of Counties, both in Virginia; the non-RMA portion of Jeffer- approximately $298.6 million, representing approximately son County, West Virginia; and the independent cities of 15.3 percent of market deposits. The HHI would increase Alexandria, Fairfax, Falls Church, and Manassas, all in 115 points to 1672. Virginia. Newport News-Hampton, Virginia: the Newport News- Danville Hampton RMA, the non-RMA portion of the counties of James City and Mathews, and the independent cities of BB&T is the ninth largest depository institution in the Hampton, Newport News, Poquoson, and Williamsburg, Danville banking market, controlling deposits of all in Virginia. $35.5 million, representing 2.7 percent of market deposits. Norfolk-Portsmouth, Virginia: the Norfolk-Portsmouth F&M is the seventh largest depository institution in the RMA, the independent cities of Chesapeake, Norfolk, market, controlling deposits of $45.2 million, representing Portsmouth, Suffolk, and Virginia Beach, all in Virginia, 3.5 percent of market deposits. On consummation of the and Currituck County, North Carolina. proposal, BB&T would become the seventh largest deposi- Richmond, Virginia: the Richmond RMA, the non-RMA tory institution in the market, controlling deposits of portions of Chesterfield, Dinwiddie, Goochland, Hanover, approximately $80.6 million, representing approximately Henrico, Powhatan, and Prince George Counties; the inde- 6.2 percent of market deposits. The HHI would increase pendent cities of Colonial Heights, Hopewell, Petersburg, 19 points to 1617. and Richmond; and the counties of Charles City, King and Queen, King William, and New Kent, all in Virginia. Fredericksburg Roanoke, Virginia: the Roanoke RMA, the non-RMA portions of Botetourt and Roanoke Counties; the independent BB&T is the largest depository institution in the Fredcities of Roanoke and Salem; and the town of Boones Mill ericksburg banking market, controlling deposits of in Franklin County, all in Virginia. $363.6 million, representing 21.9 percent of market depos- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

550 Federal Reserve Bulletin • August 2001 its. F&M is the thirteenth largest depository institution in depository institution in the market, controlling deposits of the market, controlling deposits of approximately 10 mil- approximately $288.8 million, representing approximately lion, representing less than 1 percent of market deposits. 8.6 percent of market deposits. The HHI would increase On consummation of the proposal, BB&T would remain 37 points to 1355. the largest depository institution in the market, controlling deposits of approximately $373.6 million, representing ap- Norfolk-Portsmouth proximately 22.5 percent of market deposits. The HHI would increase 26 points to 1421. BB&T is the largest depository institution in the Norfolk- Portsmouth banking market, controlling deposits of Harrisonburg $1.5 billion, representing 20.2 percent of market deposits. F&M is the twentieth largest depository institution in the BB&T is the sixteenth largest depository institution in the market, controlling deposits of $10.5 million, representing Harrisonburg banking market, controlling deposits of less than 1 percent of market deposits. On consummation $3.4 million, representing less than 1 percent of market of the proposal, BB&T would remain the largest deposideposits. F&M is the largest depository institution in the tory institution in the market, controlling deposits of market, controlling deposits of $226.1 million, represent- approximately $1.5 billion, representing approximately ing 18.2 percent of market deposits. On consummation of 20.4 percent of market deposits. The HHI would increase the proposal, BB&T would become the largest depository 6 points to 1174. institution in the market, controlling deposits of approximately $229.6 million, representing approximately Richmond 18.5 percent of market deposits. The HHI would increase 10 points to 1222. BB&T is the sixth largest depository institution in the Richmond banking market, controlling deposits of Lynchburg $906 million, representing 6.1 percent of market deposits. F&M is the tenth largest depository institution in the BB&T is the second largest depository institution in market, controlling deposits of $290.9 million, representthe Lynchburg banking market, controlling deposits of ing 2 percent of market deposits. On consummation of the $525 million, representing 24.4 percent of market deposits. proposal, BB&T would become the fifth largest depository F&M is the fourteenth largest depository institution in the institution in the market, controlling deposits of approximarket, controlling deposits of $8.1 million, representing mately $1.2 billion, representing approximately 8.1 percent less than 1 percent of market deposits. On consummation of market deposits. The HHI would increase 24 points to of the proposal, BB&T would remain the second largest 1283. depository institution in the market, controlling deposits of approximately $533 million, representing approximately Roanoke 24.7 percent of market deposits. The HHI would increase 18 points to 2170. BB&T is the eighth largest depository institution in the Roanoke banking market, controlling deposits of Metropolitan Washington, D.C. $140.3 million, representing 2.7 percent of market deposits. F&M is the seventeenth largest depository institution in BB&T is the seventh largest depository institution in the the market, controlling deposits of $14.2 million, represent- Metropolitan Washington, D.C. banking market, controling less than 1 percent of market deposits. On consummaling deposits of $2.7 billion, representing 4.6 percent of tion of the proposal, BB&T would remain the eighth largmarket deposits. F&M is the fourteenth largest depository est depository institution in the market, controlling deposits institution in the market, controlling deposits of $1.2 bilof approximately $154.4 million, representing approxilion, representing 2.1 percent of market deposits. On conmately 3 percent of market deposits. The HHI would summation of the proposal, BB&T would become the increase 2 points to 2874. fourth largest depository institution in the market, controlling deposits of $3.9 billion, representing 6.7 percent of market deposits. The HHI would increase 18 points to 847. Staunton Newport News-Hampton BB&T is the ninth largest depository institution in the Staunton banking market, controlling deposits of approxi- BB&T is the eighth largest depository institution in the mately $20 million, representing 2.2 percent of market Newport News-Hampton banking market, controlling de- deposits. F&M is the tenth largest depository institution in posits of $126.1 million, representing 3.8 percent of market the market, controlling deposits of $16 million, representdeposits. F&M is the seventh largest depository institution ing 1.8 percent of market deposits. On consummation of in the market, controlling deposits of $162.7 million, repre- the proposal, BB&T would become the eighth largest senting 4.9 percent of market deposits. On consummation depository institution in the market, controlling deposits of of the proposal, BB&T would become the fifth largest approximately $36 million, representing approximately Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 551 4 percent of market deposits. The HHI would increase Competitive Considerations 8 points to 1978. The Bank Merger Act prohibits the Board from approving Winchester an application if the proposal would result in a monopoly or would be in furtherance of any attempt to monopolize BB&T is the fourteenth largest depository institution in the the business of banking.3 The Bank Merger Act also pro- Winchester banking market, controlling deposits of hibits the Board from approving a proposal that would $8.8 million, representing less than 1 percent of market substantially lessen competition or tend to create a monopdeposits. F&M is the largest depository institution in the oly in any relevant market, unless the Board finds that the market, controlling deposits of $432 million, representing anticompetitive effects of the proposed transaction are 31.4 percent of market deposits. On consummation of the clearly outweighed in the public interest by the probable proposal, BB&T would become the largest depository in- effects of the transaction in meeting the convenience and stitution in the market, controlling deposits of approxi- needs of the community to be served.4 mately $441.2 million, representing approximately Central and Branch compete in the Muscatine banking 32.1 percent of market deposits. The HHI would increase market.5 The Board has carefully reviewed the competitive 40 points to 1525. effects of the proposal in this market in light of all the facts of record, including the characteristics of the market and the projected increase in the concentration of total deposits ORDERS ISSUED UNDER BANK MERGER ACT in insured depository institutions in this market ("market deposits")6 as measured by the Herfindahl-Hirschman In- Central State Bank dex ("HHI") under the Department of Justice Merger Muscatine, Iowa Guidelines ("DOJ Guidelines").7 Central is the largest depository institution in the market, Order Approving the Acquisition of a Thrift Branch controlling $292.6 million in deposits, representing 35 percent of market deposits. Commercial Federal is the Central State Bank ("Central"), a state member bank, has smallest depository institution in the market, controlling requested the Board's approval under section 18(c) of the $6.2 million, representing less than 1 percent of market Federal Deposit Insurance Act (12 U.S.C. § 1828(c)) (the deposits. On consummation of the proposal, Central would "Bank Merger Act") to purchase the assets and assume the remain the largest depository institution in the market, liabilities of the Muscatine branch ("Branch") of Commer- controlling deposits of $298.8 million, representing cial Federal Bank, A Federal Savings Bank, Omaha, Ne- 35.8 percent of market deposits. The HHI would increase braska ("Commercial Federal"). Central has also requested by 46 points to 2635. the Board's approval to operate Branch as a branch of Several factors indicate that the likely effect of consum- Central pursuant to section 9 of the Federal Reserve Act mation of this proposal on competition in the market would (12 U.S.C. § 321).' not be significantly adverse. Although there has been no Notice of the proposal, affording interested persons an de novo entry in recent years, the Muscatine banking opportunity to submit comments, has been given in accordance with the Bank Merger Act and the Board's Rules of Procedure (12 C.F.R. 262.3(b)). As required by the Bank 3. 12 U.S.C. § 1828(c)(5)(A). Merger Act, reports on the competitive effects of the 4. 12 U.S.C. § 1828(c)(5)(B). merger were requested from the United States Attorney 5. The Muscatine banking market is defined as Muscatine County, General and relevant banking agencies. The time for filing Iowa. comments has expired, and the Board has considered the 6. All market data are as of June 30, 2000. Market share data before consummation are based on calculations in which the deposits of thrift applications and all the facts of record in light of the institutions are included at 50 percent. The Board previously has factors set forth in the Bank Merger Act and Federal indicated that thrift institutions have become, or have the potential to Reserve Act. become, significant competitors of commercial banks. See WM Ban- Central is the 24th largest depository institution in Iowa, corp, 76 Federal Reserve Bulletin 743 (1984). Since Commercial Federal is a thrift, Branch's deposits are weighted at 50 percent controlling $292.6 million in deposits, representing less pre-merger and 100 percent post-merger. See Norwest Corporation, than 1 percent of total deposits in depository institutions in 78 Federal Reserve Bulletin 452 (1992); First Banks, Inc., 76 Federal the state.2 Branch controls $6.2 million in deposits and, on Reserve Bulletin 669, 670 n.9 (1990). consummation of this proposal, Central would control de- 7. Under the DOJ Guidelines, 49 Federal Register 26,823 (1984), a posits of $298.8 million. market in which the post-merger HHI is above 1800 is considered to be highly concentrated. The Department of Justice has informed the Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive effects) unless the post-merger HHI is at least 1800 and the merger or acquisition increases the HHI by at least 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers or acquisitions for anticompetitve effects 1. Branch is at 2400 Second Avenue, Muscatine, Iowa. implicitly recognize the competitive effects of limited-purpose lenders 2. State deposit data are as of June 30, 2000. and other nondepository financial institutions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

552 Federal Reserve Bulletin • August 2001 market has economic characteristics that suggest that it is and hereby are, approved. The Board's approval of this attractive for entry. The averages for Muscatine County proposal is conditioned on compliance by Central with the exceed the averages for all Iowa non-Metropolitan Statisti- commitments made in connection with these applications. cal Area counties in population per banking office, deposits For purposes of this action, the commitments and condiper banking office, increase in deposits, increase in popula- tions relied on in reaching this decision are conditions tion, per capita income, and increase in per capita income. imposed in writing by the Board and, as such, may be Muscatine County also ranks seventh among Iowa's enforced in proceedings under applicable law. 89 counties in the amount of total bank deposits. Of the six The transaction shall not be consummated before the remaining firms in the Muscatine banking market, three fifteenth calendar day after the effective date of this order firms, in addition to Central, would each control 10 percent or later than three months after the effective date of this or more of market deposits. order, unless such period is extended for good cause by the As required by the Bank Merger Act, the Board con- Board or the Federal Reserve Bank of Chicago, acting sulted with the Department of Justice and relevant banking pursuant to delegated authority. agencies. The Department of Justice has advised the Board By order of the Board of Governors, effective June 25, that consummation of the proposal would not likely have a 2001. significantly adverse effect on competition in any relevant market. No other agency has indicated that there are any Voting for this action: Chairman Greenspan, Vice Chairman Fergucompetitive issues raised by this proposal. son, and Governors Kelley, Meyer, and Gramlich. After carefully considering all the facts of record, including the factors set forth above and the relatively small ROBERT DEV. FRIERSON Associate Secretary of the Board change in concentration as measured by the HHI, the Board concludes that consummation of this proposal would not result in a significantly adverse effect on competition or ORDERS ISSUED UNDER INTERNATIONAL BANKING on the concentration of banking resources in the Muscatine ACT banking market, or any other relevant banking market. Banco de Bogota S.A. Financial, Managerial, and Other Considerations Santafe de Bogota, D.E., Colombia The Bank Merger Act also requires the Board to consider Order Approving Establishment of an Agency the financial and managerial resources and future prospects of the institutions involved in the proposal and the conve- Banco de Bogota S.A. ("Bank"), Santafe de Bogota, D.E., nience and needs of the communities to be served. The Colombia, a foreign bank within the meaning of the Inter- Board has reviewed carefully these factors in light of all national Banking Act ("IBA"), has applied under section the facts of record, including supervisory reports of exami- 7(d) of the IBA (12 U.S.C. § 3105(d)) to establish an nation assessing the financial and managerial resources of agency in Miami, Florida. The Foreign Bank Supervision the organizations. Based on these and all the facts of Enhancement Act of 1991, which amended the IBA, prorecord, the Board concludes that the financial, managerial, vides that a foreign bank must obtain the approval of the and other supervisory factors are consistent with approval. Board to establish an agency in the United States. In considering the convenience and needs factor, the Notice of the application, affording interested persons an Board has reviewed Central's record under the Community opportunity to comment, has been published in a newspa- Reinvestment Act ("CRA").8 The Board notes that Central per of general circulation in Miami, Florida (Miami Herreceived a "satisfactory" rating at its last CRA perforald, March 9, 1998). The time for filing comments has mance examination by the Federal Reserve Bank of Chiexpired, and the Board has considered the application and cago, as of October 16, 1998. Based on all the facts of all comments received. record, the Board concludes that the convenience and Bank, with total consolidated assets of approximately needs considerations are consistent with approval of the $3.7 billion, is the third largest bank in Colombia.1 Bank is proposal. the oldest commercial bank in Colombia, and operates Central has also applied under section 9 of the Federal through 274 branches in Colombia. Bank also owns bank Reserve Act to establish a branch at the location of Branch. subsidiaries in Panama and the Bahamas. In the United The Board has considered the factors it is required to States, Bank operates an agency in New York, New York, consider when reviewing an application for establishing and an Edge corporation in Miami, Florida. Grupo Aval branches pursuant to section 9 of the Federal Reserve Act Acciones y Valores, S.A. ("Aval"), a holding company and, for the reasons discussed in this order, finds those engaged in financial activities, owns a majority of Bank's factors to be consistent with approval. outstanding voting shares.2 Based on the foregoing and all the facts of record, the Board has determined that these applications should be, 1. Unless otherwise indicated all data are as of December 31, 2000. 2. Aval is controlled by Dr. Luis Carlos Sarmiento Angulo, who 8. 12 U.S.C. § 2901 etseq. directly and indirectly owns more than 90 percent of its shares. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 553 The proposed agency would be used to further develop to address money laundering or is participating in multi- Bank's trade-related business. Bank also intends to consol- lateral efforts to combat money laundering (12 U.S.C. idate and enhance the business lines that have been the § 3105(d)(6)(B)). primary focus of Bank's Miami Edge corporation: trade As noted above, Bank engages directly in the business of finance, private banking, foreign exchange, and portfolio banking outside the United States. Bank also has provided investment business.3 the Board with information necessary to assess the applica- In order to approve an application by a foreign bank to tion through submissions that address the relevant issues. establish an agency in the United States, the IBA and With respect to supervision by Bank's home country Regulation K require the Board to determine that the authorities, the Board has considered the following inforforeign bank applicant engages directly in the business of mation. Bank is supervised by the Colombian Superintenbanking outside of the United States, and has furnished to dency of Banking ("Superintendency").5 The Superintenthe Board the information it needs to assess the application dency is primarily responsible for the regulation and adequately. The Board also shall take into account whether supervision of Colombian financial institutions, including the foreign bank and any foreign bank parent is subject to their foreign offices, subsidiaries, and affiliates. The Supercomprehensive supervision or regulation on a consolidated intendency issues and promulgates supervisory regulations basis by its home country supervisor (12 U.S.C. concerning accounting requirements, asset quality, man- § 3105(d)(2); 12 C.F.R. 211.24).4 The Board may also take agement, operations, capital adequacy, loan classification into account additional standards as set forth in the IBA and loan loss provision standards. The Superintendency is and Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. responsible for monitoring, inspecting, and assessing the 211.24(c)(2)- (3)). management, operations, and asset quality of financial The IBA includes a limited exception to the general institutions. In addition, the Superintendency monitors requirement relating to comprehensive, consolidated super- compliance by financial institutions with applicable laws vision (12 U.S.C. § 3105(d)(6)). This exception provides and regulations and may order preventive measures and that, if the Board is unable to find that a foreign bank impose sanctions on financial institutions. seeking to establish a branch, agency, or commercial lend- In connection with its supervisory function, the Superining company is subject to comprehensive supervision or tendency conducts on-site examinations of financial instituregulation on a consolidated basis by the appropriate au- tions annually and may conduct special targeted examinathorities in its home country, the Board may nevertheless tions if circumstances merit such inspections. For off-site approve an application by such foreign bank if: monitoring purposes, the Superintendency requires exten- (i) The appropriate authorities in the home country of sive reporting from the institutions it supervises, including the foreign bank are actively working to establish monthly, quarterly, and semiannual consolidated financial arrangements for the consolidated supervision of data covering liquidity, capitalization, affiliate transactions, such bank; and asset quality, and earnings. Additionally, each foreign of- (ii) All other factors are consistent with approval (12 fice and affiliate is required to submit copies of documents U.S.C. § 3105(d)(6)(A)). In deciding whether to prepared to satisfy the requirements of local authorities. exercise its discretion to approve an application The Superintendency also has established guidelines for under authority of this exception, the Board shall the external audit of financial institutions and requires also consider whether the foreign bank has adopted external audits to be conducted annually. Reports of such and implements procedures to combat money laun- audits are submitted to the Superintendency. dering (12 U.S.C. § 3105(d)(6)(B)). The Superintendency is empowered to coordinate and The Board also may take into account whether the home share information with other domestic governmental agencountry of the foreign bank is developing a legal regime cies regarding the institutions it supervises. The Superintendency has stated that it will generally share information 3. Bank intends to close its Miami Edge corporation in connection with supervisors in jurisdictions where Colombian banks with the establishment of the proposed agency. 4. In assessing this standard, the Board considers, among other have operations. The Superintendency considers informafactors, the extent to which the home country supervisors: tion sharing to be important for the adequate supervision of (i) Ensure that the bank has adequate procedures for monitoring financial institutions and has entered into information sharand controlling its activities worldwide; ing agreements with several foreign jurisdictions. (ii) Obtain information on the condition of the bank and its The Colombian government has taken a number of steps subsidiaries and oflices through regular examination reports, audit reports, or otherwise; to combat money laundering. In the past decade, Colombia (iii) Obtain information on the dealings with and relationship has enacted legislation to prevent money laundering and between the bank and its affiliates, both foreign and domestic; has established a regulatory infrastructure to assist this (iv) Receive from the bank financial reports that are consolidated on a worldwide basis or comparable information that permits analysis of the bank's financial condition on a worldwide consolidated basis; (v) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. 5. Aval is supervised by the Superintendency of Securities because These are indicia of comprehensive, consolidated supervi- of its size and because its shares are registered on the Colombian stock sion. No single factor is essential, and other elements may exchanges. Both the Superintendency and the Superintendency of inform the Board's determination. Securities are part of the Finance Ministry and may share information. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

554 Federal Reserve Bulletin • August 2001 effort. Colombia has established a Financial Information With respect to access to information about Bank's and Analysis Unit in the Ministry of Finance, which is operations, the Board has reviewed the restrictions on responsible for gathering and centralizing information from disclosure in relevant jurisdictions in which Bank operates public and private entities in Colombia, as well as analyz- and has communicated with relevant government authoriing such information. The Prosecutor General's office has ties regarding access to information. Bank and its parent established a unit to investigate and prosecute money laun- have committed to make available to the Board such infordering cases and forfeiture actions. Colombia also partici- mation on the operations of Bank and any of its affiliates pates in international fora that address the issues of asset that the Board deems necessary to determine and enforce forfeiture and the prevention of money laundering.6 In compliance with the IBA, the Bank Holding Company Act addition, the Superintendency has issued circulars that of 1956, as amended, and other applicable federal law. To require financial institutions to establish systems for the the extent that the provision of such information to the prevention of money laundering. Board may be prohibited by law, Bank has committed to Bank has implemented policies and procedures to ensure cooperate with the Board to obtain any necessary consents compliance with Colombian law and regulations.7 Bank or waivers that might be required from third parties for has implemented a know your customer policy, which disclosure of such information. In addition, subject to requires customer identification at the time of contracting certain conditions, the Superintendency may share informafor any product or service (customer identification is up- tion on Bank's operations with other supervisors, including dated yearly). Bank also requires employees to identify and the Board. In light of these commitments and other facts of report unusual transactions and suspicious activities and record, and subject to the condition described below, the may close a customer's account if appropriate.8 Addition- Board concludes that Bank has provided adequate assurally, Bank has established recordkeeping procedures and ances of access to any necessary information that the provides ongoing training for employees on its policies and Board may request. procedures for the prevention of money laundering. On the basis of all the facts of record, and subject to the Based on all the facts of record, the Board has deter- commitments made by Bank and its parent, as well as the mined that Bank's home country authorities are actively terms and conditions set forth in this order, the Board has working to establish arrangements for the consolidated determined that Bank's application to establish an agency supervision of Bank, and that considerations relating to the should be, and hereby is, approved. Should any restrictions steps taken by Bank and its home country to combat on access to information on the operations or activities of money laundering are consistent with approval under this Bank and its affiliates subsequently interfere with the standard. Board's ability to obtain information to determine and The Board has also taken into account the additional enforce compliance by Bank or its affiliates with applicable standards set forth in the IBA (12 U.S.C. § 3105(d)(3)-(4); federal statutes, the Board may require or recommend 12 C.F.R. 211.24(c)(2)). The Superintendency has no ob- termination of any of Bank's direct or indirect activities in jection to the establishment of the proposed agency. the United States. Approval of this application also is Bank must comply with the minimum capital standards specifically conditioned on compliance by Bank with the of the Basel Capital Accord ("Accord"), as implemented commitments made in connection with this application and by Colombia. Bank's capital is in excess of the minimum with the conditions in this order.9 The commitments and levels that would be required by the Accord and is consid- conditions referred to above are conditions imposed in ered equivalent to the capital that would be required of a writing by the Board in connection with its decision and U.S. banking organization. Managerial and other financial may be enforced in proceedings under 12 U.S.C. § 1818 resources of Bank are also considered consistent with against Bank and its affiliates. approval, and Bank appears to have the experience and By order of the Board of Governors, effective June 11, capacity to support the proposed agency. Bank has estab- 2001. lished controls and procedures for the proposed agency to ensure compliance with U.S. law, as well as controls and Voting for this action: Chairman Greenspan, Vice Chairman Ferguprocedures for its worldwide operations generally. son, and Governors Meyer and Gramlich. Absent and not voting: Governor Kelley. ROBERT DEV. FRIERSON Associate Secretary of the Board 6. Colombia is a party to the 1988 U.N. Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances ("Convention"), and the United States has certified that Colombia has taken adequate measures to achieve full compliance with the goals and objectives of the Convention. Colombia also has signed the U.N. Convention against Transnational Organized Crime and is a member 9. The Board's authority to approve the establishment of the proof the Organization of American States Inter-American Drug Abuse posed agency parallels the continuing authority of the State of Florida Control Commission Experts Group to Control Money Laundering. to license offices of a foreign bank. The Board's approval of this 7. Bank's foreign bank subsidiaries have adopted the same policies application does not supplant the authority of the State of Florida, or and procedures for the prevention of money laundering. its agent, the Florida Department of Banking and Finance ("Depart- 8. Employees use computer programs to facilitate the analysis and ment"), to license the proposed office of Bank in accordance with any reporting of suspicious transactions. terms or conditions that the Department may impose. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 555 Banco Pastor S.A. into account additional standards as set forth in the IBA A Coruna, Spain and Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. 211.24(c)(2)-(3)). Order Approving Establishment of an Agency As noted above, Bank engages directly in the business of banking outside the United States. Bank also has provided Banco Pastor S.A. ("Bank"), A Coruna, Spain, a foreign the Board with information necessary to assess the applicabank within the meaning of the International Banking Act tion through submissions that address the relevant issues. ("IBA"), has applied under section 7(d) of the IBA With respect to supervision by home country authorities, (12 U.S.C. § 3105(d)) to establish an agency in Miami, the Board previously has determined, in connection with Florida. The Foreign Bank Supervision Enhancement Act applications involving other banks in Spain, that those of 1991, which amended the IBA, provides that a foreign banks were subject to home country supervision on a bank must obtain the approval of the Board to establish an consolidated basis.5 Bank is supervised by the Bank of agency in the United States. Spain on substantially the same terms and conditions as Notice of the application, affording interested persons an those other banks. Based on all the facts of record, it has opportunity to comment, has been published in a newspa- been determined that Bank is subject to comprehensive per of general circulation in Miami, Florida (Miami Her- supervision on a consolidated basis by its home country ald, January 24, 2001). The time for filing comments has supervisor. expired, and all comments have been considered. The additional standards set forth in section 7 of the IBA Bank, with total consolidated assets of approximately and Regulation K (see 12 U.S.C. § 3105(d)(3)-(4); $8.8 billion, is the ninth largest banking group in Spain.1 12 C.F.R. 211.24(c)(2)-(3)) have also been taken into ac- Bank is a commercial bank, which operates an extensive count. The Bank of Spain has no objection to the establishnetwork of branches in Spain and a branch in Paris, France. ment of the proposed agency. Bank also operates representative offices in several Euro- Spain's risk-based capital standards conform to the European and Latin American countries. Bank currently does pean Union capital standards, which are consistent with not have any operations in the United States. Bank's larg- those established by the Basel Capital Accord. Bank's est shareholder is the Pedro Barrie de la Maza Foundation capital is in excess of the minimum levels that would be ("Foundation"), which owns approximately 44 percent of required by the Basel Capital Accord and is considered its shares.2 equivalent to capital that would be required of a U.S. The proposed agency would offer a full range of banking banking organization. Managerial and other financial reproducts and services, including deposit, checking, lend- sources of Bank also are considered consistent with aping, credit card, and investment management services, to proval, and Bank appears to have the experience and Bank's existing and prospective customers in Latin Ameri- capacity to support the proposed agency. In addition, Bank ca.3 has established controls and procedures for the proposed In order to approve an application by a foreign bank to agency to ensure compliance with U.S. law, as well as establish an agency in the United States, the IBA and controls and procedures for its worldwide operations gener- Regulation K require the Board to determine that the ally. foreign bank applicant engages directly in the business of With respect to access to information about Bank's banking outside of the United States, and has furnished to operations, the restrictions on disclosure in relevant juristhe Board the information it needs to assess the application dictions in which Bank operates have been reviewed and adequately. The Board also shall take into account whether the foreign bank and any foreign bank parent is subject to comprehensive supervision or regulation on a consolidated (i) Ensure that the bank has adequate procedures for monitoring basis by its home country supervisor (12 U.S.C. and controlling its activities worldwide; § 3105(d)(2); 12 C.F.R. 211.24).4 The Board may also take (ii) Obtain information on the condition of the bank and its subsidiaries and offices through regular examination reports, audit reports, or otherwise; (iii) Obtain information on the dealings with and relationship 1. All data are as of December 31, 2000. between the bank and its affiliates, both foreign and domestic; 2. The Foundation is a nonprofit organization established by Pedro (iv) Receive from the bank financial reports that are consolidated Barrie de la Maza, who was the principal shareholder of Bank before on a worldwide basis or comparable information that permits he donated his shares to the Foundation. The Foundation, which is analysis of the bank's financial condition on a worldwide dedicated to promoting the social, cultural, and educational develop- consolidated basis; ment of Galicia, Spain, awards scholarships, carries out social welfare (v) Evaluate prudential standards, such as capital adequacy and projects, supports the arts, and promotes research in the scientific, risk asset exposure, on a worldwide basis. technical, historical, and artistic fields. Pedro Barrie de la Maza's These are indicia of comprehensive, consolidated supervision. No widow currently runs the Foundation and is chairman of Bank. Other single factor is essential, and other elements may inform the Board's than the Foundation, no person owns more than 10 percent of Bank's determination. shares. 5. See Caja de Ahorros de Valencia, Castellon y Alicante, 84 3. The proposed agency would not ofiFer deposit services to United Federal Reserve Bulletin 231 (1998); Banco Exterior de Espana S.A., States citizens, or residents, or to entities incorporated in the United 81 Federal Reserve Bulletin 616 (1995); Corporacion Bancaria de States. Espana, 81 Federal Reserve Bulletin 598 (1995); Banco Santander 4. In assessing this standard, the Board considers, among other S.A., 79 Federal Reserve Bulletin 622 (1993); Banco de Sabadell S.A., factors, the extent to which the home country supervisors: 79 Federal Reserve Bulletin 366 (1993). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

556 Federal Reserve Bulletin • August 2001 the relevant government authorities have been communi- Bank Austria Aktiengesellschaft cated with regarding access to information. Bank and the Vienna, Austria Foundation have committed to make available to the Board such information on the operations of Bank and any of its Order Approving Establishment of Branches affiliates that the Board deems necessary to determine and enforce compliance with the IBA, the Bank Holding Com- Bank Austria Aktiengesellschaft ("Bank"), Vienna, Auspany Act, and other applicable federal law. To the extent tria, a foreign bank within the meaning of the International that the provision of such information to the Board may be Banking Act ("IBA"), has applied under section 7(d) of prohibited by law or otherwise, Bank and the Foundation the IBA (12 U.S.C. § 3105(d)) to establish federal branches have committed to cooperate with the Board to obtain any in Greenwich, Connecticut, and New York, New York. The necessary consents or waivers that might be required from Foreign Bank Supervision Enhancement Act of 1991, third parties for disclosure of such information. In addition, which amended the IBA, provides that a foreign bank must subject to certain conditions, the Bank of Spain may share obtain the approval of the Board to establish branches in information on Bank's operations with other supervisors, the United States. including the Board. In light of these commitments and Notice of the application, affording interested persons an other facts of record, and subject to the condition described opportunity to comment, has been published in a newspabelow, it has been determined that Bank has provided per of general circulation in Greenwich, Connecticut adequate assurances of access to any necessary information {Greenwich Time, October 18, 2000), and New York, New that the Board may request. York (The Daily News, October 18, 2000). The time for On the basis of all the facts of record, and subject to the filing comments has expired, and the Board has considered commitments made by Bank, as well as the terms and all comments received. conditions set forth in this order, Bank's application to Bank, with total consolidated assets of approximately establish an agency is hereby approved.6 Should any re- €165 billion ($148.2 billion), is the largest banking group strictions on access to information on the operations or in Austria.1 Bank is a commercial and merchant bank and activities of Bank and its affiliates subsequently interfere engages in a number of banking, financial, and other activwith the Board's ability to obtain information to determine ities worldwide. Bank is owned by Bayerische Hypo- und and enforce compliance by Bank or its affiliates with Vereinsbank Aktiengesellschaft ("HVB"), the second largapplicable federal statutes, the Board may require or rec- est banking group in Germany.2 HVB provides a broad ommend termination of any of Bank's direct or indirect range of banking, financial, and related services to its activities in the United States. Approval of this application customers through an extensive network of branches in also is specifically conditioned on compliance by Bank and Germany and worldwide. the Foundation with the commitments made in connection Bank was established through an internal reorganization with this application and with the conditions in this order.7 undertaken in anticipation of a combination transaction The commitments and conditions referred to above are with HVB. As part of this reorganization, Sparkasse Stockconditions imposed in writing by the Board in connection erau Aktiengesellschaft, Vienna, Austria, a savings bank with this decision and may be enforced in proceedings subsidiary of the former Bank Austria Aktiengesllschaft under 12 U.S.C. § 1818 against Bank and its affiliates. ("old Bank Austria") succeeded to substantially all the By order, approved pursuant to authority delegated by assets and liabilities of old Bank Austria and changed its the Board, effective June 28, 2001. name to Bank Austria Aktiengesellschaft. Old Bank Austria operated branches in Greenwich, Connecticut, and New York, New York, and Bank has requested authority to ROBERT DEV. FRIERSON Associate Secretary of the Board retain and operate these offices.3 Pursuant to Regulation K, the Board allowed the reorganization to proceed before an application to establish the offices was filed and acted on by the Board.4 In order to approve an application by a foreign bank to establish branches in the United States, the IBA and Regulation K require the Board to determine that the foreign bank applicant engages directly in the business of banking 6. Approved by the Director of the Division of Banking Supervision 1. Data are as of December 31, 2000. and Regulation, with the concurrence of the General Counsel, pursu- 2. Munich Re AG, and Allianz AG, both of Munich, Germany, each ant to authority delegated by the Board. directly and indirectly owns more than 10 percent of the voting shares 7. The authority to approve the establishment of the proposed of HVB. agency parallels the continuing authority of the State of Florida to 3. Bank's original application also requested authority to retain license offices of a foreign bank. The approval of this application does Old Bank Austria's representative offices in Atlanta, Georgia, and not supplant the authority of the State of Florida, or its agent, the San Francisco, California. These offices have since been closed and, Florida Department of Banking and Finance ("Department") to li- therefore, are not addressed in this order. cense the proposed office of Bank in accordance with any terms or 4. See 12 C.F.R. 211.24(a)(3); Board Letter, dated November 1, conditions that the Department may impose. 2000, to John C. Murphy, Jr., Esq. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 557 outside of the United States, and has furnished to the Board The Board has also taken into account the additional the information it needs to assess the application ade- standards set forth in section 7 of the IBA and Regulaquately. The Board also shall take into account whether the tion K (see 12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. foreign bank and any foreign bank parent is subject to 211.24(c)(2)-(3)). The Ministry has no objection to the comprehensive supervision or regulation on a consolidated establishment of the proposed branches. basis by its home country supervisor (12 U.S.C. Austria's risk-based capital standards conform to the § 3105(d)(2); 12 C.F.R. 211.24).5 The Board may also take European Union capital standards, which are consistent into account additional standards as set forth in the IBA with those established by the Basel Capital Accord. Bank's and Regulation K (12 U.S.C. § 3105(d)(3)-(4); 12 C.F.R. capital is in excess of the minimum levels that would be 211.24(c)(2)-(3)). required by the Basel Capital Accord and is considered As noted above, Bank and HVB engage directly in the equivalent to capital that would be required of a U.S. business of banking outside the United States. Bank also banking organization. Managerial and other financial rehas provided the Board with information necessary to sources of Bank also are considered consistent with apassess the application through submissions that address the proval, and Bank appears to have the experience and capacity relevant issues. With respect to supervision by home coun- to support the proposed branches. In addition, Bank has try authorities, the Board previously has determined, in established controls and procedures for the branches to connection with applications involving other banks in Aus- ensure compliance with U.S. law, as well as controls and tria, that those banks were subject to home country supervi- procedures for its worldwide operations generally. sion on a consolidated basis.6 Bank is supervised by the With respect to access to information about Bank's Austrian Federal Ministry of Finance (the "Ministry") and operations, the Board has reviewed the restrictions on the Austrian National Bank on substantially the same terms disclosure in relevant jurisdictions in which Bank and and conditions as those other banks. Based on all the facts HVB operate and has communicated with relevant governof record, the Board has determined that Bank is subject to ment authorities regarding access to information. Bank and comprehensive supervision on a consolidated basis by its its parents have committed to make available to the Board home country supervisor. such information on the operations of Bank and any of its With respect to supervision of HVB, the Board previ- affiliates that the Board deems necessary to determine and ously has determined, in connection with applications in- enforce compliance with the IBA, the Bank Holding Comvolving other banks in Germany, that those banks were pany Act, and other applicable federal law. To the extent subject to home country supervision on a consolidated that the provision of such information to the Board may be basis.7 HVB is supervised by the German Federal Banking prohibited by law or otherwise, Bank and its parents have Supervisory Office ("FBSO") on substantially the same committed to cooperate with the Board to obtain any terms and conditions as those other banks. Based on all the necessary consents or waivers that might be required from facts of record, the Board has determined that HVB is third parties for disclosure of such information. In addition, subject to comprehensive supervision on a consolidated subject to certain conditions, the Ministry and FBSO may basis by its home country supervisor. share information on Bank's operations with other supervisors, including the Board. In light of these commitments and other facts of record, and subject to the condition 5. In assessing this standard, the Board considers, among other described below, the Board concludes that Bank has profactors, the extent to which the home country supervisors: vided adequate assurances of access to any necessary infor- (i) Ensure that the bank has adequate procedures for monitoring mation that the Board may request. and controlling its activities worldwide; (ii) Obtain information on the condition of the bank and its On the basis of all the facts of record, and subject to the subsidiaries and offices through regular examination reports, commitments made by Bank, as well as the terms and audit reports, or otherwise; conditions set forth in this order, the Board has determined (iii) Obtain information on the dealings with and relationship that Bank's application to establish the two branches between the bank and its affiliates, both foreign and domestic; should be, and hereby is, approved. Should any restrictions (iv) Receive from the bank financial reports that are consolidated on a worldwide basis or comparable information that permits on access to information on the operations or activities of analysis of the bank's financial condition on a worldwide Bank and its affiliates subsequently interfere with the consolidated basis; Board's ability to obtain information to determine and (v) Evaluate prudential standards, such as capital adequacy and enforce compliance by Bank or its affiliates with applicable risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No federal statutes, the Board may require or recommend single factor is essential, and other elements may inform the Board's termination of any of Bank's direct or indirect activities in determination. the United States. Approval of this application also is 6. See Bank Austria Aktiengesellschaft, 86 Federal Reserve Bulletin specifically conditioned on compliance by Bank and its 67 (2000); Erste Bank der Osterreichischen Sparkassen Aktiengesellparents with the commitments made in connection with schaft, 84 Federal Reserve Bulletin 1123 (1998); Creditanstalt- Bankverein, 82 Federal Reserve Bulletin 594 (1996). this application and with the conditions in this order.8 The 7. See Deutsche Hyp Deutsche Hypothekenbank Frankfurt-Hamburg AG, 86 Federal Reserve Bulletin 658 (2000); Deutsche Bank AG, 85 Federal Reserve Bulletin 509 (1999); Westdeutsche ImmobilienBank, 85 Federal Reserve Bulletin 346 (1999); Commerzbank AG, 85 Fed- 8. The Board's authority to approve the establishment of the proeral Reserve Bulletin 336 (1999). posed branches parallels the continuing authority of the Office of the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

558 Federal Reserve Bulletin • August 2001 commitments and conditions referred to above are condi- The proposed representative office is initially intended to tions imposed in writing by the Board in connection with act as a liaison with existing or potential customers of its decision and may be enforced in proceedings under Bank's European operations, to conduct research, and to 12 U.S.C. § 1818 against Bank and its affiliates. become familiar with the North American market. Bank By order of the Board of Governors, effective June 4, ultimately plans to use the representative office to assist the 2001. head office in making commercial mortgage loans. All decisions on credit extended by Bank would be made at the Voting for this action: Chairman Greenspan, Vice Chairman Fergu- head office. son, and Governors Kelley and Meyer. Absent and not voting: Gover- In acting on an application to establish a representative nor Gramlich. office, the IBA and Regulation K provide that the Board shall take into account whether the foreign bank engages ROBERT DEV. FRIERSON directly in the business of banking outside the United Associate Secretary of the Board States and has furnished to the Board the information it needs to assess the application adequately. The Board also RHEINHYP Rheinische Hypothekenbank AG shall take into account whether the foreign bank and any Frankfurt am Main, Germany foreign bank parent is subject to comprehensive supervision or regulation on a consolidated basis by its home Order Approving Establishment of a Representative country supervisor.3 The Board may take into account Office additional standards set forth in the IBA and Regulation K.4 RHEINHYP Rheinische Hypothekenbank AG ("Bank"), As noted above, Bank engages directly in the business of Frankfurt am Main, Germany, a foreign bank within the banking outside the United States through its banking meaning of the International Banking Act ("IBA"), has operations in Germany and elsewhere. Bank also has proapplied under section 10(a) of the IBA (12 U.S.C. vided the Board with the information necessary to assess § 3107(a)) to establish a representative office in New York, the application through submissions that address the rele- New York. The Foreign Bank Supervision Enhancement vant issues. Act of 1991, which amended the IBA, provides that a With respect to home country supervision of Bank, the foreign bank must obtain the approval of the Board to Board has considered the following information. The Gerestablish a representative office in the United States. man Federal Banking Supervisory Office ("FBSO") is the Notice of the application, affording interested persons an principal supervisory authority of Bank and Commerzopportunity to submit comments, has been published in a bank. The Board previously has determined, in connection newspaper of general circulation in New York (The New with applications involving other German banks, including York Times, November 20, 2000). The time for filing Commerzbank, that those banks were subject to comprecomments has expired, and all comments have been conhensive consolidated supervision by the FBSO.5 In this sidered. case, the Board has determined that Bank is supervised on Bank, with total consolidated assets of $79 billion,1 is the nineteenth largest bank in Germany. Commerzbank AG, Frankfurt am Main, Germany ("Commerzbank"), Chicago, Illinois; and Seattle, Washington; an agency in Los Angeles, owns approximately 98 percent of the voting stock of California; and a subsidiary bank also in Los Angeles. Bank. A chartered mortgage bank, Bank engages primarily 3. See 12 U.S.C. § 3107(a)(2); 12 C.F.R. 211.24(d)(2). In assessing in real estate and public sector financing activities in Ger- this standard, the Board considers, among other factors, the extent to which the home country supervisors: many. Bank operates twenty branches in Germany. It also (i) Ensure that the bank has adequate procedures for monitoring operates branches in England, Italy, and Portugal and rep- and controlling its activities worldwide; resentative offices in eight European countries. Commerz- (ii) Obtain information on the condition of the bank and its bank engages in a broad range of commercial and invest- subsidiaries and offices through regular examination reports, ment banking activities. In the United States, audit reports, or otherwise; (iii) Obtain information on the dealings with and relationship Commerzbank operates branches in New York, New York; between the bank and its affiliates, both foreign and domestic; Chicago, Illinois; and Los Angeles, California; an agency (iv) Receive from the bank financial reports that are consolidated in Atlanta, Georgia; and two nonbank subsidiaries that on a worldwide basis, or comparable information that permits engage in securities, derivatives, and commercial finance analysis of the bank's financial condition on a worldwide activities.2 consolidated basis; (v) Evaluate prudential standards, such as capital adequacy and risk asset exposure, on a worldwide basis. These are indicia of comprehensive, consolidated supervision. No Comptroller of the Currency ("OCC") to license federal offices of a single factor is essential and other elements may inform the Board's foreign bank. The Board's approval of this application does not determination. supplant the authority of the OCC to license the proposed offices of 4. See 12 U.S.C. § 3105(d)(3) and (4); 12 C.F.R. 211.24(c)(2). Bank in accordance with any terms or conditions that it may impose. 5. See Deutsche Hyp Deutsche Hypothekenbank Frankfurt-Hamburg AG, 86 Federal Reserve Bulletin 658 (2000); Deutsche Bank AG, 85 1. Data are as of December 31, 2000. Federal Reserve Bulletin 509 (1999); Westdeutsche ImmobilienBank, 2. Commerzbank also has a controlling interest in Korea Exchange 85 Federal Reserve Bulletin 346 (1999); Commerzbank AG, 85 Fed- Bank, Seoul, Korea, which has branches in New York, New York; eral Reserve Bulletin 336 (1999). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 559 substantially the same terms and conditions as those other condition described below, the Board has concluded that banks. Based on this finding and all the facts of record, the Bank has provided adequate assurances of access to any Board concludes that Bank is subject to comprehensive necessary information the Board may request. supervision on a consolidated basis by its home country On the basis of all the facts of record, and subject to the supervisor. commitments made by Bank, as well as the terms and The Board has taken into account the additional stan- conditions set forth in this order, the Board has determined dards set forth in the IBA and in Regulation K.6 The FBSO that Bank's application to establish a representative office has granted Bank approval to establish the proposed office. in New York should be, and hereby is, approved. If any With respect to the financial and managerial resources of restrictions on access to information on the operations or Bank, taking into consideration Bank's record of opera- activities of Bank or any of its affiliates subsequently tions in its home country, its overall financial resources, interfere with the Board's ability to determine and enforce and its standing with its home country supervisor, the compliance by Bank or its affiliates with applicable federal Board has determined that financial and managerial consid- statutes, the Board may require or recommend termination erations are consistent with approval. In addition, Bank of any of Bank's direct or indirect activities in the United appears to have the experience and capacity to support the States. Approval of this application also is specifically proposed office and has established controls and proce- conditioned on compliance by Bank and Commerzbank dures in the branch to ensure compliance with applicable with the commitments made in connection with this appli- U.S. law, as well as controls and procedures for its world- cation and with the conditions in this order.7 The commitments and conditions referred to above are conditions wide operations generally. imposed in writing by the Board in connection with its With respect to access to information, the Board has decision and may be enforced in proceedings against Bank, reviewed the restrictions on disclosure in relevant jurisdicits offices, and its affiliates under applicable law. tions in which Bank operates and has communicated with relevant government authorities about access to informa- By order of the Board of Governors, effective June 4, tion. Bank and Commerzbank have committed to make 2001. available to the Board such information on the operations of Bank and any affiliate of Bank that the Board deems Voting for this action: Chairman Greenspan, Vice Chairman Fergunecessary to determine and enforce compliance with the son, and Governors Kelley and Meyer. Absent and not voting: Gover- IBA, the Bank Holding Company Act, and other applicable nor Gramlich. federal law. To the extent that the provision of such infor- ROBERT DEV. FRIERSON mation may be prohibited or impeded by law or otherwise, Associate Secretary of the Board Bank has committed to cooperate with the Board to obtain any necessary consents or waivers that might be required from third parties in connection with disclosure of certain information. In addition, subject to certain conditions, the 7. The Board's authority to approve the establishment of the pro- FBSO may share information on Bank's operations with posed office parallels the continuing authority of the State of New other supervisors, including the Board. In light of these York to license offices of a foreign bank. The Board's approval of this commitments and other facts of record, and subject to the application does not supplant the authority of the State of New York or its agent, the New York State Banking Department ("Department"), to license the proposed office of Bank in accordance with any 6. See 12 U.S.C. § 3105(d)(3) and (4); 12 C.F.R. 211.24(c)(2). terms or conditions that the Department may impose. APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Section 3 Applicant(s) Bank(s) Effective Date Southern Development Bancorporation, Inc., Delta Bank and Trust, June 7, 2001 Arkadelphia, Arkansas Drew, Mississippi Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

560 Federal Reserve Bulletin • August 2001 Section 4 Applicant(s) Nonbanking Activity/Company Effective Date Northern Trust Corporation, Gateway Solutions, LLC, June 4, 2001 Chicago, Illinois Chicago, Illinois APPLICATIONS APPROVED UNDER BANK HOLDING COMPANY ACT By Federal Reserve Banks Recent applications have been approved by the Federal Reserve Banks as listed below. Copies are available upon request to the Reserve Banks. Section 3 Applicant s) Bank(s) Reserve Bank Effective Date Advantage Bancorp, First Choice Bank, Chicago June 8, 2001 Woodbury, Minnesota Geneva, Illinois Bank of De Soto, N.A., Employee D Bancorp, Inc., Dallas May 22, 2001 Stock Ownership Trust, De Soto, Texas De Soto, Texas Bank of De Soto, N.A., De Soto, Texas The Bank of Mulberry Employee Mansfield Bankstock, Inc., St. Louis May 23, 2001 Stock Ownership Trust, Mansfield, Arkansas Mulberry, Arkansas Bank of Mansfield, ACME Holding Company, Inc., Mansfield, Arkansas Mulberry, Arkansas Carolina Financial Corporation, Crescent Bank, Richmond June 1, 2001 Charleston, South Carolina Myrtle Beach, South Carolina CIB Marine Bancshares, Inc., Citrus Financial Services, Inc., Chicago June 5, 2001 Pewaukee, Wisconsin Vero Beach, Florida Citrus Bank, N.A., Vero Beach, Florida Commerce Financial Corporation Commerce Financial Corporation, Kansas City June 1, 2001 ESOP, Topeka, Kansas Topeka, Kansas Commerce Bank and Trust, Topeka, Kansas Crescent Financial Corporation, Crescent State Bank, Richmond June 18, 2001 Cary, North Carolina Cary, North Carolina First BanCorp, Southern Security Bank Corporation, New York May 29, 2001 San Juan, Puerto Rico Hollywood, Florida First Liberty Capital Corporation First Liberty Capital Corporation, Kansas City June 1, 2001 Employee Stock Ownership Plan, Hugo, Colorado Hugo, Colorado First Merchants Corporation, Franco Financial Inc., Chicago May 25, 2001 Muncie, Indiana Wabash, Indiana Frances Slocum Bank and Trust Company, Wabash, Indiana First National Bank Group, Inc. Alamo Corporation of Texas, Dallas June 19, 2001 Edinburg, Texas Alamo, Texas Alamo Bank of Texas, Alamo, Texas First Virginia Banks, Inc., James River Bankshares, Inc., Richmond May 24, 2001 Falls Church, Virginia Suffolk, Virginia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 561 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date GNB Bancshares, Inc., First Bank and Trust, Dallas May 9, 2001 Gainesville, Texas Ennis, Texas Guaranty National Bancshares, Inc., Wilmington, Delaware Greer Bancshares Incorporated, Greer State Bank, Richmond June 21, 2001 Greer, South Carolina Greer, South Carolina Hutisford Community Bancorp, Inc., Hustisford State Bank, Chicago June 5, 2001 Hutisford, Wisconsin Hustisford, Wisconsin Metro North Bancshares, Inc., The Bank of Elk River, Minneapolis June 14, 2001 Elk River, Minnesota Elk River, Minnesota Northrim BanCorp, Inc., Northrim Bank, San Francisco June 14, 2001 Anchorage, Alaska Anchorage, Alaska Old Florida Bankshares, Inc., Old Florida Bank, Atlanta June 8, 2001 Fort Myers, Florida Fort Myers, Florida Ottawa Bancshares, Inc., Admire Bancshares, Inc., Kansas City June 12, 2001 Salina, Kansas Emporia, Kansas Paragon Commercial Corporation, Paragon Commercial Bank, Richmond May 25, 2001 Raleigh, North Carolina Raleigh, North Carolina Promistar Financial Corporation, FNH Corporation, Philadelphia June 11, 2001 Johnstown, Pennsylvania Irwin, Pennsylvania Puget Sound Financial Services, Fife Commercial Bank, San Francisco June 4, 2001 Inc., Fife, Washington Fife, Washington Republic Bancshares of Texas, Inc., Republic National Bank, Dallas May 16, 2001 Houston, Texas Houston, Texas RBT Holdings, Inc., Dover, Delaware Sterling Bancshares, Inc., Lone Star Bancorporation, Inc., Dallas May 21, 2001 Houston, Texas Houston, Texas Sterling Bancorporation, Inc., Wilmington, Delaware Washington First Financial Group, Washington First International Bank, San Francisco June 8, 2001 Inc., Seattle, Washington Seattle, Washington Wewahitchka State Bank Employee Gulf Coast Community Bancshares, Atlanta June 5, 2001 Stock Ownership Plan, Inc., Wewahitchka, Florida Wewahitchka, Florida Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Banco Bradesco S.A., Bradesco Securities, Inc., New York June 13, 2001 Osasco, Brazil New York, New York Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

562 Federal Reserve Bulletin • August 2001 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Banco Espirito Santo, S.A., Clarity Incentive Systems, Inc., New York June 8, 2001 Lisbon, Portugal New York, New York E.S. Control Holding S.A., Luxembourg Espirito Santo Financial Group S.A., Luxembourg E.S. International Holding S.A., Luxembourg Espirito Financial (Portugal) Sociedade Gestora de Participacoes Sociais, S.A., Lisbon, Portugal Bespar Sociedade Gestora de Participacoes Sociais, S.A., Lisbon, Portugal Caisse Nationale de Credit Agricole, Paris, France Banco Espirito Santo, S.A., FiNet.com, Inc., New York June 8, 2001 Lisbon, Portugal New York, New York E.S. Control Holding, S.A., Luxembourg Espirito Santo Financial Group, S.A., Luxembourg E.S. International Holding S.A., Luxembourg Espirito Financial (Portugal) Sociedade Gestora de Participacoes Sociais, S.A., Lisbon, Portugal Bespar Sociedade Gestora de Participacoes Sociais, S.A., Lisbon, Portugal Caisse National de Credit Agricole, Paris, France Marshall & Ilsley Corporation, Derivion Corporation, Chicago May 21, 2001 Milwaukee, Wisconsin Atlanta, Georgia Northview Financial Corporation, Northview Mortgage L.L.C., Chicago June 21, 2001 Northfield, Illinois Northfield, Illinois Northview Bank & Trust, Northfield, Illinois Republic Bancorp Inc., NetBank, Inc., Chicago June 11, 2001 Owosso, Michigan Alpharetta, Georgia NetBank, Alpharetta, Georgia NetBank Partners, LLC, Alpharetta, Georgia Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 563 Sections 3 and 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date GB&T Bancshares, Inc., Community Trust Financial Services Atlanta May 24, 2001 Gainesville, Georgia Corporation, Hiram, Georgia Community Trust Bank, Hiram, Georgia Community Loan Company, Inc., Cartersville, Georgia Metroplex Appraisals, Inc., Hiram, Georgia Cash Transactions, LLC, Dallas, Georgia Hancock Holding Company, Lamar Capital Corporation, Atlanta June 15, 2001 Gulfport, Mississippi Purvis, Mississippi Lamar Bank, Purvis, Mississippi Larmar Data Solutions, Inc., Purvis, Mississippi APPLICATIONS APPROVED UNDER BANK MERGER ACT By the Secretary of the Board Recent applications have been approved by the Secretary of the Board as listed below. Copies are available upon request to the Freedom of Information Office, Office of the Secretary, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. Applicant(s) Bank(s) Effective Date Central Savings Bank, North Country Bank & Trust, June 29, 2001 Sault Sainte Marie, Michigan Traverse City, Michigan 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 Central Virginia Bank, Guaranty Bank, Richmond June 18, 2001 Powhatan, Virginia Charlottesville, Virginia Gold Bank, North American Savings, F.S.B., Kansas City May 25, 2001 Leawood, Kansas Grandview, Missouri Gold Bank, Provident Bank, F.S.B., Kansas City June 20, 2001 Leawood, Kansas St. Joseph, Missouri M&I Marshall & Ilsley Bank, Fifth Third Bank, Southwest F.S.B., Chicago June 8, 2001 Milwaukee, Wisconsin Scottsdale, Arizona Promistar Bank, The First National Bank of Herminie, Philadelphia June 11, 2001 Johnstown, Pennsylvania Herminie, Pennsylvania Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

564 Federal Reserve Bulletin • August 2001 PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the Individual Reference Services Group, Inc., v. Board of Gover- Federal Reserve Banks in which the Board of Governors is not nors, et al, No. 01-5175 (D.C. Cir., filed May 25, 2001); named a party. Trans Union LLC v. Federal Trade Commission, et al., No. 01-5202 (D.C. Cir., filed June 4, 2001). Appeals of district court order entered April 30, 2001, upholding an Artis v. Greenspan, No. 01-CV-0400(ESG) (D.D.C., complaint interagency rule regarding Privacy of Consumer Finance filed February 22, 2001. Employment discrimination action. Information. On June 21, 2001, the court consolidated these Dime Bancorp, Inc. v. Board of Governors, No. 00-4249 (2d cases with Reed Elsevier Inc. v. Board of Governors, Cir., filed December 11, 2000). Petition for review of a No. 00-1289 (D.C. Cir., filed June 30, 2000), and related Board order dated September 27, 2000, approving the appli- petitions for review filed against other federal agencies cations of North Fork Corporation, Inc., Melville, New challenging the same rules. On June 28, 2001, the court York, to acquire control of Dime Bancorp, Inc. and to denied the appellants' emergency motion for an injunction thereby acquire its wholly owned subsidiary, The Dime pending appeal. Savings Bank of New York, FSB, both of New York, New Bettersworth v. Board of Governors, No. 00-50262 (5th Cir., York. filed April 14, 2000). Appeal of district court's dismissal of Nelson v. Greenspan, No. 99-215(EGS) (D.D.C., amended Privacy Act claims. On April 12, 2001, the court denied the complaint filed December 8, 2000). Employment discrimi- petition for review. On June 12, 2001, the court denied the nation action. petitioner's request for rehearing. Albrecht v. Board of Governors, No. 00-CV-317 (CKK) Howe v. Bank for International Settlements, No. 00CV12485 (D.D.C., filed February 18, 2000). Action challenging the RCL (D. Mass., filed December 7, 2000). Action seeking method of funding of the retirement plan for certain Board damages in connection with gold market activities and the employees. On March 30, 2001, the district court granted in repurchase of privately-owned shares of the Bank for Interpart and denied in part the Board's motion to dismiss. national Settlements. Guerrero v. United States, No. CV-F-99-6771(OWW) (E.D. Barnes v. Reno, No. 1:00CV02900 (D.D.C., filed December 4, Cal., filed November 29, 1999). Prisoner suit. 2000). Civil rights action. On June 13, 2001, the district Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed court dismissed the action. August 3, 1999). Employment discrimination action. Sedgwick v. Board of Governors, No. 00-16525 (9th Cir., filed Fraternal Order of Police v. Board of Governors, August 7, 2000). Appeal of district court dismissal of action No. 1:98CV03116 (WBB)(D.D.C„ filed December 22, under Federal Tort Claims Act alleging violation of bank 1998). Declaratory judgment action challenging Board lasupervision requirements. On May 31, 2001, the court af- bor practices. On February 26, 1999, the Board filed a firmed the district court's dismissal. motion to dismiss the action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

565 Membership of the Board of Governors of the Federal Reserve System, 1913-2001 APPOINTIVE MEMBERS1 Federal Reserve Date of initial Other dates and information relating District oath of office to membership2 Charles S. Hamlin ....Boston AAuugg.. 1100,, 11991144 Reappointed in 1916 and 1926. Served until Feb. 3, 1936.3 Paul M. Warburg ....New York ...Aug. 10, 1914 Term expired Aug. 9, 1918. Frederic A. Delano ....Chicago ...Aug. 10, 1914 Resigned July 21, 1918. W.P.G. Harding ....Atlanta ...Aug. 10, 1914 Term expired Aug. 9, 1922. Adolph C. Miller ... .San Francisco ...Aug. 10, 1914 Reappointed in 1924. Reappointed in 1934 from the Richmond District. Served until Feb. 3, 1936.3 Albert Strauss ... .New York ...Oct. 26, 1918 Resigned Mar. 15, 1920. Henry A. Moehlenpah ....Chicago ...Nov. 10, 1919 Term expired Aug. 9, 1920. Edmund Piatt ... .New York ...June 8, 1920 Reappointed in 1928. Resigned Sept. 14, 1930. David C. Wills ....Cleveland ...Sept. 29, 1920 Term expired Mar. 4, 1921. John R. Mitchell ....Minneapolis ...May 12, 1921 Resigned May 12, 1923. Milo D. Campbell ....Chicago ...Mar. 14, 1923 Died Mar. 22, 1923. Daniel R. Crissinger ....Cleveland ...May 1, 1923 Resigned Sept. 15, 1927. George R. James ....St. Louis ...May 14, 1923 Reappointed in 1931. Served until Feb. 3, 1936.4 Edward H. Cunningham . ....Chicago ...May 14, 1923 Died Nov. 28, 1930. Roy A. Young ....Minneapolis ...Oct. 4, 1927 Resigned Aug. 31, 1930. Eugene Meyer ....New York ...Sept. 16, 1930 Resigned May 10, 1933. Wayland W. Magee ... .Kansas City ...May 18, 1931 Term expired Jan. 24, 1933. Eugene R. Black ....Atlanta ...May 19, 1933 Resigned Aug. 15, 1934. M.S. Szymczak ....Chicago ...June 14, 1933 Reappointed in 1936 and 1948. Resigned May 31, 1961. J.J. Thomas ....Kansas City ...June 14, 1933 Served until Feb. 10, 1936.3 Marriner S. Eccles ...San Francisco ...Nov. 15, 1934 Reappointed in 1936, 1940, and 1944. Resigned July 14, 1951. Joseph A. Broderick ...New York ...Feb. 3, 1936 Resigned Sept. 30, 1937. John K. McKee ...Cleveland ...Feb. 3, 1936 Served until Apr. 4, 1946.3 Ronald Ransom ...Atlanta ...Feb. 3, 1936 Reappointed in 1942. Died Dec. 2, 1947. Ralph W. Morrison ...Dallas ...Feb. 10, 1936 Resigned July 9, 1936. Chester C. Davis ...Richmond ...June 25, 1936 Reappointed in 1940. Resigned Apr. 15, 1941. Ernest G. Draper .. .New York ...Mar. 30, 1938 Served until Sept. 1, 1950.3 Rudolph M. Evans .. .Richmond ...Mar. 14, 1942 Served until Aug. 13, 1954.3 James K. Vardaman, Jr. ...St. Louis ...Apr. 4, 1946 Resigned Nov. 30, 1958. Lawrence Clayton ...Boston ...Feb. 14, 1947 Died Dec. 4, 1949. Thomas B. McCabe ...Philadelphia ...Apr. 15, 1948 Resigned Mar. 31, 1951. Edward L. Norton ...Atlanta ...Sept. 1, 1950 Resigned Jan. 31, 1952. Oliver S. Powell ...Minneapolis ...Sept. 1, 1950 Resigned June 30, 1952. Wm. McC. Martin, Jr. .... ...New York ...April 2, 1951 Reappointed in 1956. Term expired Jan. 31, 1970. A.L. Mills, Jr. ...San Francisco ...Feb. 18, 1952 Reappointed in 1958. Resigned Feb. 28, 1965. J.L. Robertson ...Kansas City ...Feb. 18, 1952 Reappointed in 1964. Resigned Apr. 30, 1973. C. Canby Balderston ...Philadelphia ...Aug. 12, 1954 Served through Feb. 28, 1966. Paul E. Miller ...Minneapolis ...Aug. 13, 1954 Died Oct. 21, 1954. Chas. N. Shepardson ...Dallas ...Mar. 17, 1955 Retired Apr. 30, 1967. G.H. King, Jr. ...Atlanta ...Mar. 25, 1959 Reappointed in 1960. Resigned Sept. 18, 1963. George W. Mitchell ...Chicago ...Aug. 31, 1961 Reappointed in 1962. Served until Feb. 13, 1976.3 J. Dewey Daane ...Richmond ...Nov. 29, 1963 Served until Mar. 8, 1974.3 Sherman J. Maisel ...San Francisco ...Apr. 30, 1965 Served through May 31, 1972. Andrew F. Brimmer ...Philadelphia ...Mar. 9, 1966 Resigned Aug. 31, 1974. William W. Sherrill ...Dallas ...May 1, 1967 Reappointed in 1968. Resigned Nov. 15, 1971. Arthur F. Burns ...New York ...Jan. 31, 1970 Term began Feb. 1, 1970. Resigned Mar. 31, 1978. John E. Sheehan ...St. Louis ...Jan. 4, 1972 Resigned June 1, 1975. Jeffrey M. Bucher .. .San Francisco ...June 5, 1972 Resigned Jan. 2, 1976. Robert C. Holland ...Kansas City ...June 11, 1973 Resigned May 15, 1976. Henry C. Wallich ...Boston ...Mar. 8, 1974 Resigned Dec. 15, 1986. Philip E. Coldwell ...Dallas ...Oct. 29, 1974 Served through Feb. 29, 1980. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

566 Federal Reserve Bulletin • August 2001 Federal Reserve Date of initial Other dates and information relating Name District oath of office to membership2 Philip C. Jackson, Jr. . Atlanta July 14, 1975 Resigned Nov. 17, 1978. J. Charles Partee Richmond Jan. 5, 1976 Served until Feb. 7, 1986.3 Stephen S. Gardner ... Philadelphia Feb. 13, 1976 Died Nov. 19, 1978. David M. Lilly Minneapolis June 1, 1976 Resigned Feb. 24, 1978. G. William Miller .... San Francisco Mar. 8, 1978 Resigned Aug. 6, 1979. Nancy H. Teeters Chicago Sept. 18, 1978 Served through June 27, 1984. Emmett J. Rice New York June 20, 1979 Resigned Dec. 31, 1986. Frederick H. Schultz . Atlanta July 27, 1979 Served through Feb. 11, 1982. Paul A. Volcker Philadelphia Aug. 6, 1979 Resigned August 11, 1987. Lyle E. Gramley Kansas City May 28, 1980 Resigned Sept. 1, 1985. Preston Martin San Francisco Mar. 31, 1982 Resigned April 30, 1986. Martha R. Seger Chicago July 2, 1984 Resigned March 11, 1991. Wayne D. Angell Kansas City Feb. 7, 1986 Served through Feb. 9, 1994. Manuel H. Johnson .. Richmond Feb. 7, 1986 Resigned August 3, 1990. H. Robert Heller San Francisco Aug. 19, 1986 Resigned July 31, 1989. Edward W. Kelley, Jr. Dallas May 26, 1987 Reappointed in 1990. Alan Greenspan New York Aug. 11, 1987 Reappointed in 1992. John P. LaWare Boston Aug. 15, 1988 Resigned April 30, 1995. Resigned Feb. 14, 1994. David W. Mullins, Jr. St. Louis May 21, 1990 Resigned Feb. 5, 1997. Lawrence B. Lindsey Richmond Nov. 26, 1991 Served through June 30, 1998. Susan M. Phillips Chicago Dec. 2, 1991 Term expired Jan. 31, 1996. Alan S. Blinder Philadelphia June 27, 1994 Resigned Feb. 17, 1997. Janet L. Yellen San Francisco Aug. 12, 1994 Laurence H. Meyer .. St. Louis June 24, 1996 Alice M. Rivlin Philadelphia June 25, 1996 Resigned July 16, 1999. Roger W. Ferguson, Jr. Boston Nov. 5, 1997 Reappointed in 2001. Edward M. Gramlich Richmond Nov. 5, 1997 Chairmen 4 Vice Chairmen4 Charles S. Hamlin Aug. 10, 1914-Aug. 9, 1916 Frederic A. Delano Aug. 10, 1914-Aug. 9, 1916 W.P.G. Harding Aug. 10, 1916-Aug. 9, 1922 Paul M. Warburg Aug. 10, 1916-Aug. 9, 1918 Daniel R. Crissinger May 1, 1923-Sept. 15, 1927 Albert Strauss Oct. 26, 1918-Mar. 15, 1920 Roy A. Young Oct. 4, 1927-Aug. 31, 1930 Edmund Piatt July 23, 1920-Sept. 14, 1930 Eugene Meyer Sept. 16, 1930-May 10, 1933 J.J. Thomas Aug. 21, 1934-Feb. 10, 1936 Eugene R. Black May 19, 1933-Aug. 15, 1934 Ronald Ransom Aug. 6, 1936-Dec. 2, 1947 Marriner S. Eccles Nov. 15, 1934-Jan. 31, 19485 C. Canby Balderston Mar. 11, 1955-Feb. 28, 1966 Thomas B. McCabe Apr. 15, 1948-Mar. 31, 1951 J.L. Robertson Mar. 1, 1966-Apr. 30, 1973 Wm. McC. Martin, Jr Apr. 2, 1951-Jan. 31, 1970 George W. Mitchell May 1, 1973-Feb. 13, 1976 Arthur F. Burns Feb. 1, 1970-Jan. 31, 1978 Stephen S. Gardner Feb. 13, 1976-Nov. 19, 1978 G. William Miller Mar. 8, 1978-Aug. 6, 1979 Frederick H. Schultz July 27, 1979-Feb. 11, 1982 Paul A. Volcker Aug. 6, 1979-Aug. 11, 1987 Preston Martin Mar. 31, 1982-Apr. 30, 1986 Alan Greenspan Aug. 11, 1987—6 Manuel H. Johnson Aug. 4, 1986-Aug. 3, 1990 David W. Mullins, Jr July 24, 1991-Feb. 14, 1994 Alan S. Blinder June 27, 1994-Jan. 31, 1996 Alice M. Rivlin June 25, 1996-July 16, 1999 Roger W. Ferguson, Jr Oct. 5, 1999- Ex-OFFICIO MEMBERS1 Secretaries of the Treasury Comptrollers of the Currency W.G. McAdoo Dec. 23, 1913-Dec. 15, 1918 John Skelton Williams Feb. 2, 1914-Mar. 2, 1921 Carter Glass Dec. 16, 1918-Feb. 1, 1920 Daniel R. Crissinger Mar. 17, 1921-Apr. 30, 1923 David F. Houston Feb. 2, 1920-Mar. 3, 1921 Henry M. Dawes May 1, 1923-Dec. 17, 1924 Andrew W. Mellon Mar. 4, 1921-Feb. 12, 1932 Joseph W. Mcintosh Dec. 20, 1924-Nov. 20, 1928 Ogden L. Mills Feb. 12, 1932-Mar. 4, 1933 J.W. Pole Nov. 21, 1928-Sept. 20, 1932 William H. Woodin Mar. 4, 1933-Dec. 31, 1933 J.F.T. O'Connor May 11, 1933-Feb. 1, 1936 Henry Morgenthau, Jr Jan. 1, 1934-Feb. 1, 1936 1. Under the provisions of the original Federal Reserve Act, the Federal members in office on the date of that act should continue to serve until Feb. 1, Reserve Board was composed of seven members, including five appointive 1936, or until their successors were appointed and had qualified; and that members, the Secretary of the Treasury, who was ex-officio chairman of the thereafter the terms of members should be fourteen years and that the Board, and the Comptroller of the Currency. The original term of office was ten designation of Chairman and Vice Chairman of the Board should be for a term of years, and the five original appointive members had terms of two, four, six, four years. eight, and ten years respectively. In 1922 the number of appointive members was 2. Date after words "Resigned" and "Retired" denotes final day of service. increased to six, and in 1933 the term of office was increased to twelve years. 3. Successor took office on this date. The Banking Act of 1935, approved Aug. 23, 1935, changed the name of the 4. Chairman and Vice Chairman were designated Governor and Vice Federal Reserve Board to the Board of Governors of the Federal Reserve System Governor before Aug. 23, 1935. and provided that the Board should be composed of seven appointive members; 5. Served as Chairman Pro Tempore from February 3, 1948, to April 15, that the Secretary of the Treasury and the Comptroller of the Currency should 1948. continue to serve as members until Feb. 1, 1936; that the appointive 6. Served as Chairman Pro Tempore from March 3, 1996, to June 20, 1996. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

1 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 US. 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 A3 2 Open-end investment companies—Net sales A9 Federal Reserve open market transactions and assets A32 Corporate profits and their distribution Federal Reserve Banks A32 Domestic finance companies—Assets and liabilities A33 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A3 5 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit A3 6 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A23 Interest rates—Money and capital markets A42 Nonfinancial business activity A24 Stock market—Selected statistics A42 Labor force, employment, and unemployment A43 Output, capacity, and capacity utilization A44 Industrial production—Indexes and gross value Federal Finance A46 Housing and construction A25 Federal fiscal and financing operations A47 Consumer and producer prices A26 U.S. budget receipts and outlays A48 Gross domestic product and income A27 Federal debt subject to statutory limitation A49 Personal income and saving Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

2 Federal Reserve Bulletin • August 2001 INTERNATIONAL STATISTICS Securities Holdings and Transactions A60 Foreign transactions in securities Summary Statistics A61 Marketable U.S. Treasury bonds and A50 U.S. international transactions notes—Foreign transactions A51 U.S. foreign trade A51 U.S. reserve assets Interest and Exchange Rates A51 Foreign official assets held at Federal Reserve A62 Foreign exchange rates Banks A52 Selected U.S. liabilities to foreign official A63 GUIDE TO STATISTICAL RELEASES AND institutions SPECIAL TABLES Reported by Banks in the United States A52 Liabilities to, and claims on, foreigners SPECIAL TABLES A53 Liabilities to foreigners A64 Assets and liabilities of commercial banks A55 Banks' own claims on foreigners March 31, 2001 A56 Banks' own and domestic customers' claims on A66 Terms of lending at commercial banks, May 2001 foreigners A72 Assets and liabilities of U.S. branches and A56 Banks' own claims on unaffiliated foreigners agencies of foreign banks, March 31, 2001 A57 Claims on foreign countries—Combined A76 Pro forma balance sheet and income statements domestic offices and foreign branches for priced service operations, March 31, 2001 Reported by Nonbanking Business A78 INDEX TO STATISTICAL TABLES Enterprises in the United States A58 Liabilities to unaffiliated foreigners A59 Claims on unaffiliated foreigners Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

3 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 Agriculture 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 Nonfinancial Statistics • August 2001 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 2000 2001 2001 MMoonneettaarryy oorr ccrreeddiitt aaggggrreeggaattee Q2 Q3 Q4r Qir Jan.r Feb/ Mar.r Apr.r May Reserves of depositor institutions2 1 Total -10.9 -8.3 -8.7 -2.1 10.0 1.2 -18.8 16.6 3.2 2 Required -7.7 -8.6 -10.4 -3.5 12.7 -4.5 -18.0 20.8 11.5 3 Nonborrowed -12.5 -9.9 -6.4 .5 14.3 1.9 -19.0 16.9 -1.8 4 Monetary base3 -3.6 2.5 2.8 6.4 11.2 3.5 2.6 7.1 6.3 Concepts of money and debt4 5 Ml -- 11..99rr -3.7r -3.3 5.1 12.6 .9 13.8 5.3 -.6 6 M2 6.4 5.6r 6.3 10.7 12.2 10.9 14.4 10.4 5.1 7 M3 9.0 8.8 7.0 12.2 15.8 9.9 9.5 17.6 13.3 8 Debt 6.1 4.6r 4.5 4.8 3.3 5.0 6.0 3.4 n.a. Nontransaction components 9 In M25 9.0 8.5 9.1 12.3 12.1 13.7 14.6 11.8 6.7 10 In M3 only6 15.2r 16.3r 8.8 15.9 24.1 7.5 -1.5 34.4 32.0 Time and savings deposits Commercial banks 11 Savings, including MMDAs 8.0r 11.8 12.0 17.4 13.8 24.7 19.7 20.4 18.0 12 Smalltime7 13.3r 10.5 5.6 2.5 5.3 -4.8 -7.0 -9.3 -9.2 13 Large time8'9 17.1 11.5 4.1 -1.3 22.8 -57.4 -46.8 35.6 8.8 Thrift institutions 14 Savings, including MMDAs 1.4r 3.1r .4 6.4 .3 26.5 23.6 10.2 32.3 15 Small time7 3.7r 10.8 9.5 6.4 11.1 2.7 -3.4 1.0 6.9 16 Large time8 .6 23.2r 14.0 11.9 32.6 6.8 2.3 20.2 19.9 Money market mutual funds 17 Retail 13.4 3.9r 11.6 16.9 20.5 8.7 24.6 18.1 -11.8 18 Institution-only 17.8r 29.0r 18.6 49.8 51.2 86.6 40.7 42.4 67.2 Repurchase agreements and eurodollars 19 Repurchase agreements10 11.0 8.2 -3.6 -13.7 -14.0 -33.7 -24.3 71.5 3.3 20 Eurodollars10 15.0 .6 10.3 3.1 -14.0 4.9 14.7 -61.8 8.3 Debt components4 21 Federal -7.5 -7.3 -8.0 -5.4 -7.1 -2.9 1.2 -10.9 n.a. 22 Nonfederal 9.6r 7.6r 7.5 7.2 5.7 6.8 7.1 6.6 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: (I) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, commercial banks other than those owed to depository institutions, the U.S. government, and which are derived from the Federal Reserve Board's flow of funds accounts, are breakforeign banks and official institutions, less cash items in the process of collection and Federal adjusted (that is, discontinuities in the data have been smoothed into the series) and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of month-averaged (that is, the data have been derived by averaging adjacent month-end levels). withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail credit union share draft accounts, and demand deposits at thrift institutions. Seasonally money fund balances, each seasonally adjusted separately. adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities OCDs, each seasonally adjusted separately. (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time term) of U.S. addressees, each seasonally adjusted separately. deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail 7. Small time deposits—including retail RPs—are those issued in amounts of less than money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions balances at depository institutions and money market funds. Seasonally adjusted M2 is are subtracted from small time deposits. calculated by summing savings deposits, small-denomination time deposits, and retail money 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those fund balances, each seasonally adjusted separately, and adding this result to seasonally booked at international banking facilities. adjusted M1. 9. Large time deposits at commercial banks less those held by money market funds, M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) depository institutions, the U.S. government, and foreign banks and official institutions. balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 10. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures Factor 2001 2001 Mar. Apr. May Apr. 18 Apr. 25 May 2 May 9 May 16 May 23 May 30 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 577,856 580,694 585,031 581,623 579,189 586,387 580,001 584,842 582,062 590,572 U.S. government securities" 2 Bought outright—System account3 522,787 523,962 526,810 522,374 525,432 527,036 524,714 527,258 552266,,009999 552299,,116688 3 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 10 10 10 10 10 1100 1100 1100 1100 1100 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 19,105 20,009 21,907 22,220 17,183 22,443 17,433 20,053 20,915 26,534 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 27 29 129 4 29 10 8 525 33 2222 9 Seasonal credit 19 35 80 40 36 41 69 88 83 86 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 1? Float 406 251 -91 613 -402 -401 257 -153 130 -507 13 Other Federal Reserve assets 35,502 36,398 36,187 36,362 36,900 37,247 37,511 37,061 34,823 35,259 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 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 16 Treasury currency outstanding 32,191 32,349r 32,488 32,347r 32,382r 32,417 32,447 32,475 32,504 32,533 ABSORBING RESERVE FUNDS 17 Currency in circulation 585,180 588,086r 591,535 588,863r 588,00 r 588,369 589,718 590,329 590,981 594,970 18 Reverse repurchase agreements—triparty 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 496 500 514 503 512 516 518 517 511 510 Deposits, other than reserve balances, with Federal Reserve Banks 70 Treasury 5,390 5,903 5,149 5,491 6,894 6,733 5,053 5,169 4,993 5,148 71 Foreign 85 92 100 79 119 86 75 104 76 148 77 Service-related balances and adjustments 6,859 6,940 6,946 6,785 7,03 lr 7,241 6,877 6,843 7,087 6,879 73 Other 260 352 350 342 347 357 365 395 342 294 74 Other Federal Reserve liabilities and capital 18,232 17,806 17,971 17,953 17,971 17,983 18,034 17,946 17,944 17,960 25 Reserve balances with Federal Reserve Banks . . . 6,789 6,609 8,198 7,200r 3,941 10,765 5,053 9,261 5,877 10,441 End-of-month figures Wednesday figures Mar. Apr. May Apr. 18 Apr. 25 May 2 May 9 May 16 May 23 May 30 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 581,870 587,708 591,914 590,736 580,474 593,177 580,286 594,063 584,945 608,194 U.S. government securities2 2 Bought outright—System account3 523,862 525,911 527,562 525,195 527,300 526,643 526,442 528,380 525,608 529,372 3 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 Federal agency obligations 4 Bought outright 10 10 10 10 10 1100 1100 1100 1100 1100 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 21,995 25,007 30,310 29,264 16,507 29,257 15,007 31,747 23,705 42,380 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 8 44 67 11 32 1100 1122 2244 11 11 9 Seasonal credit 14 36 86 37 34 54 83 86 8844 8899 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 P Float 180 -370 -998 -274 -596 4 977 -683 478 846 13 Other Federal Reserve assets 35,801 37,069 34,878 36,494 37,188 37,200 37,754 34,500 35,058 35,495 14 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 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 16 Treasury currency outstanding 32,271 32,417r 32,562 32,347r 32,382r 32,417 32,447 32,475 32,504 32,533 ABSORBING RESERVE FUNDS 17 Currency in circulation 585,853 588,191r 595,911 589,793r 588,83 r 590,197 591,330 591,648 593,311 596,594 18 Reverse repurchase agreements—triparty 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 478 516 510 512 516 518 518 511 510 510 Deposits, other than reserve balances, with Federal Reserve Banks ?0 5,657 7,894 4,396 6,753 7,483 5,714 4,427 5,309 4,788 4,301 71 70 102 85 107 121 115 89 76 84 72 77 Service-related balances and adjustments 6,757 7,241 7,045 6,785 7,03 f 7,241 6,877 6,843 7,087 6,879 Other 248 403 321 335 330 369 355 355 328 295 74 Other Federal Reserve liabilities and capital 17,441 18,232 17,845 17,677 17,660 17,792 17,685 17,654 17,685 17,738 25 Reserve balances with Federal Reserve Banks5 . .. 10,882 10,792 11,609 14,368r 4,130 16,895 4,697 17,389 6,901 27,583 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 • August 2001 1.12 RESERVES AND BORROWINGS Depository Institutions1 Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1998 1999 2000 2000 2001 Dec. Dec. Dec. Nov. Dec. Jan. Feb. Mar. Apr/ May 1 Reserve balances with Reserve Banks2 9,026 5,262 7,159 7,156 7,159 7,190 6,615 6,737 6,863 7,612 2 Total vault cash3 44,294 60,619 45,229r 44,636r 45,229r 47,683r 48,517r 44,104r 43,656 43,263 3 Applied vault cash4 36,183 36,392 31,381 31,629 31,381 32,601 32,734 30,978 31,728 31,773 4 Surplus vault cash5 8,111 24,227 13,848r 13,007r 13,848r 15,083r 15,783r 13,127r 11,929 11,490 5 Total reserves6 45,209 41,654 38,540 38,786 38,540 39,791 39,349 37,715 38,591 39,385 6 Required reserves 43,695 40,357 37,216 37,584 37,216 38,538 37,917 36,329 37,314 38,363 7 Excess reserve balances at Reserve Banks7 1,514 1.297 1,325 1,201 1,325 1,253 1,432 1,385 1,277 1,022 8 Total borrowing at Reserve Banks 117 320 210 283 210 73 51 58 51 213 9 Adjustment 101 179 99 124 99 39 30 38 15 134 10 Seasonal 15 67 111 159 111 34 21 20 35 79 11 Special Liquidity Facility8 0 74 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 2001 Feb. 7 Feb. 21 Mar. 7 Mar. 21 Apr. 4 Apr. 18r May 2 May 16 May 30 June 13 1 Reserve balances with Reserve Banks2 6,410 6,608 6,836 6,296 7,287 6,326 7,350r 7,159 8,163 6,768 2 Total vault cash3 52,714r 48,624r 44,107r 43,875r 44,424r 43,409 43,690r 42,645 43,900 42,155 3 Applied vault cash4 34,631 32,380 31,547 30,304 31,523 31,199 32,413 31,033 32,530 30,271 4 Surplus vault cash5 18,083r 16,245r 12,561r 13,571r 12,902r 12,210 1 l,277r 11,612 11,370 11,884 5 Total reserves6 41,041 38,988 38,382 36,600 38,809 37,525 39,763r 38,191 40,693 37,039 6 Required reserves 39,844 37,361 37,103 35,419 37,062 36,329 38,549 37,303 39,581 35,776 7 Excess reserve balances at Reserve Banks7 1,196 1,627 1,279 1,180 1,747 1,196 1,214r 888 1,112 1,262 8 Total borrowing at Reserve Banks 34 38 95 38 60 42 59 346 97 295 9 Adjustment 9 18 76 17 42 4 20 267 13 195 10 Seasonal 25 20 19 21 18 38 39 79 85 101 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 credit' Seasonal credit2 Extended credit3 FFeeddeerraall RReesseerrvvee BBaannkk On On On 7/6/01 Effective date Previous rate 7/6/01 Effective date Previous rate 7/6/01 Effective date Previous rate Boston 3.25 6/27/01 3.50 3.80 6/28/01 3.95 4.30 6/28/01 4.45 New York 6/27/01 Philadelphia 6/27/01 Cleveland 6/28/01 Richmond 6/28/01 Atlanta 6/27/01 Chicago 6/27/01 St. Louis 6/29/01 Minneapolis 6/28/01 Kansas City 6/28/01 Dallas 6/27/01 San Francisco .... 3.25 6/27/01 3.50 3.80 6/28/01 3.95 4.30 6/28/01 4.45 Range of rates for adjustment credit in recent years4 Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Bank Effective date level)—All of Effectix level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1977 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^ 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 17 4.75 4.75 July 3 7-7.25 7.25 17 8.5 8.5 10 7.25 7.25 1995—Feb. 1 4.75-5.25 5.25 Aug. 21 7.75 7.75 1984—Apr. 9 8.5-9 9 9 5.25 5.25 Sept. 22 8 8 13 9 9 Oct. 16 8-8.5 8.5 Nov. 21 8.5-9 8.5 1996—Jan. 31 5.00-5.25 5.00 20 8.5 8.5 26 8.5 8.5 Feb. 5 5.00 5.00 Nov. 1 8.5-9.5 9.5 Dec. 24 8 8 3 9.5 9.5 1998—Oct. 15 4.75-5.00 4.75 1985—May 20 7.5-8 7.5 16 4.75 4.75 1979—July 20 10 10 24 7.5 7.5 Nov. 17 4.50-4.75 4.50 Aug. 17 10-10.5 10.5 19 4.50 4.50 20 10.5 10.5 1986—Mar. 7 7-7.5 7 Sept. 19 10.5-11 11 10 7 7 1999—Aug. 24 4.50-4.75 4.75 21 11 11 Apr. 21 6.5-7 6.5 26 4.75 4.75 Oct. 8 11-12 12 23. 6.5 6.5 Nov. 16 4.75-5.00 4.75 10 12 12 July 11 6 6 18 5.00 5.00 Aug. 21 5.5-6 5.5 1980—Feb. 15 12-13 13 22 5.5 5.5 2000—Feb. 2 5.00-5.25 5.25 19 13 13 4 5.25 5.25 May 29 12-13 13 1987—Sept. 4 5.5-6 6 Mar. 21 5.25-5.50 5.50 30 12 12 11 6 6 23 5.50 5.50 June 13 11-12 11 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 6.5 Feb. 1 5.00 5.00 Mar. 20 4.50-5.00 4.50 11998811—— MMaayy 55 13-14 14 1991—Feb. 1 6-6.5 6 21 4.50 4.50 88 14 14 4 6 6 Apr. 18 4.00-4.50 4.00 Nov. 2 13-14 13 Apr. 30 5.5-6 5.5 20 4.00 4.00 6 13 13 May 2 5.5 5.5 May 15 3.50-4.00 3.50 Dec. 4 12 12 Sept. 13 5-5.5 5 17 3.50 3.50 17 5 5 June 27 3.25-3.50 3.25 1982—July 20 11.5-12 11.5 Nov. 6 4.5-5 4.5 June 29 3.25 3.25 23 11.5 11.5 7 4.5 4.5 Aug. 2 11-11.5 11 Dec. 20 3.5^1.5 3.5 IInn eeffffeecctt JJuullyy 66,, 22000011 3.25 3.25 3 11 11 24 3.5 3.5 16 10.5 10.5 27 10-10.5 10 1992—July 2 3-3.5 3 30 10 10 7 3 3 1. Available on a short-term basis to help depository institutions meet temporary needs for of the Federal Reserve Bank, this time period may be shortened. Beyond this initial period, a funds that cannot be met through reasonable alternative sources. The highest rate established flexible rate somewhat above rates charged on market sources of funds is charged. The rate for loans to depository institutions may be charged on adjustment credit loans of unusual size ordinarily is reestablished on the first business day of each two-week reserve maintenance that result from a major operating problem at the borrower's facility. period, but it is never less than the discount rate applicable to adjustment credit plus 50 basis 2. Available to help relatively small depository institutions meet regular seasonal needs for points. funds that arise from a clear pattern of intrayearly movements in their deposits and loans and 4. For earlier data, see the following publications of the Board of Governors: Banking and that cannot be met through special industry lenders. The discount rate on seasonal credit takes Monetary Statistics, 1914-1941, and 1941-1970\ and the Annual Statistical Digest, 1970into account rates charged by market sources of funds and ordinarily is reestablished on the 1979. first business day of each two-week reserve maintenance period; however, it is never less than In 1980 and 1981, the Federal Reserve applied a surcharge to short-term adjustment-credit the discount rate applicable to adjustment credit. borrowings by institutions with deposits of $500 million or more that had borrowed in 3. May be made available to depository institutions when similar assistance is not successive weeks or in more than four weeks in a calendar quarter. A 3 percent surcharge was reasonably available from other sources, including special industry lenders. Such credit may in effect from Mar. 17, 1980, through May 7, 1980. A surcharge of 2 percent was reimposed be provided when exceptional circumstances (including sustained deposit drains, impaired on Nov. 17, 1980; the surcharge was subsequently raised to 3 percent on Dec. 5, 1980, and to access to money market funds, or sudden deterioration in loan repayment performance) or 4 percent on May 5, 1981. The surcharge was reduced to 3 percent effective Sept. 22, 1981, practices involve only a particular institution, or to meet the needs of institutions experiencing and to 2 percent effective Oct. 12, 1981. As of Oct. 1, 1981, the formula for applying the difficulties adjusting to changing market conditions over a longer period (particularly at times surcharge was changed from a calendar quarter to a moving thirteen-week period. The of deposit disintermediation). The discount rate applicable to adjustment credit ordinarily is surcharge was eliminated on Nov. 17, 1981. charged on extended-credit loans outstanding less than thirty days; however, at the discretion Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A8 Domestic Nonfinancial Statistics • August 2001 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt Percentage of Effective date deposits Net transaction accounts" 1 $0 million-$42.8 million3 33333 1111122222/////2222288888/////0000000000 2 More than $42.8 million4 1111100000 1111122222/////2222288888/////0000000000 00000 1111122222/////2222277777/////9999900000 00000 1111122222/////2222277777/////9999900000 1. Required reserves must be held in the form of deposits with Federal Reserve Banks succeeding calendar year by 80 percent of the percentage increase in the total reservable or vault cash. Nonmember institutions may maintain reserve balances with a Federal liabilities of all depository institutions, measured on an annual basis as of June 30. No Reserve Bank indirectly, on a pass-through basis, with certain approved institutions. For corresponding adjustment is made in the event of a decrease. The exemption applies only to previous reserve requirements, see earlier editions of the Annual Report or the Federal accounts that would be subject to a 3 percent reserve requirement. Effective with the reserve Reserve Bulletin. Under the Monetary Control Act of 1980, depository institutions maintenance period beginning December 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 2001 TTyyppee ooff ttrraannssaaccttiioonn 11999988 11999999 22000000 aanndd mmaattuurriittyy Oct. Nov. Dec. Jan. Feb. Mar. Apr. U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 3,550 0 8,676 779 2,507 509 520 2,683 557799 330088 2 Gross sales 0 0 0 0 0 0 0 0 0 0 3 Exchanges 450,835 464,218 477,904 38,142 45,182 39,428 40,769 42,767 46,712 38,317 4 For new bills 450,835 464,218 477,904 38,142 45,182 39,428 40,769 42,767 46,712 38,317 5 Redemptions 2,000 0 24,522 2,656 1,021 1,145 228 638 211 3,537 Others within one year 6 Gross purchases 6,297 11,895 8,809 0 580 1,420 0 1,605 67 3,027 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 46,062 50,590 62,025 8,663 7,957 0 10,296r 5,609r 0 12,204 9 Exchanges -49,434 -53,315 -54,656 -6,608 -7,012 0 -6,667 -6,799 0 -7,000 10 Redemptions 2,676 1,429 3,779 787 780 0 2,422 1,529 0 4,368 One to five years 11 Gross purchases 12,901 19,731 14,482 734 1,332 1,045 925 2,983 1,883 4,480 12 Gross sales 0 0 0 0 0 0 0 0 0 0 13 Maturity shifts -37,777 -44,032 -52,068 -8,663 -5,997 0 — I0,296r —2,784r 0 -12,204 14 Exchanges 37,154 42,604 46,177 6,608 5,737 0 6,667 4,945 0 7,000 Five to ten years 15 Gross purchases 2,294 4,303 5,871 0 510 771 1,283 0 00 11,,339900 16 Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,908 -5,841 -6,801 0 -699 0 0 - l,855r 0 0 18 Exchanges 7,439 7,583 6,585 0 1,275 0 0 971 0 0 More than ten years 19 Gross purchases 4,884 9,428 5,833 982 0 0 296 495 11,,000000 991133 20 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -2,377 -717 -3,155 0 -1,261 0 0 —971r 0 0 22 Exchanges 4,842 3,139 1,894 0 0 0 0 883 0 0 All maturities 23 Gross purchases 29,926 45,357 43,670 2,495 4,929 3,745 3,024 7,766 33,,552299 1100,,111188 24 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 4,676 1,429 28,301 3,443 1,802 1,145 2,650 2,166 211 7,905 Matched transactions 26 Gross purchases 4,430,457 4,413,430 4,399,257 344,920 351,391 345,680 356,250 320,060 339966,,002299 338811,,666677 27 Gross sales 4,434,358 4,431,685 4,381,188 346,428 351,232 348,917 352,336 322,056 395,151 381,895 Repurchase agreements 28 Gross purchases 512,671 281,599 0 0 00 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 -2,457 3,286 -637 4,289 3,604 4,196 1,984 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 00 00 00 00 32 Gross sales 25 0 0 0 0 0 0 0 0 0 33 Redemptions 322 157 51 0 0 0 0 120 0 0 Repurchase agreements 34 Gross purchases 284,316 360,069 00 00 00 00 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 0 -120 0 0 Reverse repurchase agreements 37 Gross purchases 0 0 00 00 00 00 00 00 00 00 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 0 304,989 890,236 64,428 87,125 95,470 104,930 67,655 8866,,447722 8855,,116666 40 Gross sales 0 164,349 987,501 62,308 79,295 79,365 129,385 62,910 88,142 82,154 41 Net change in triparty obligations 0 140,640 -97,265 2,120 7,830 16,105 -24,455 4,745 -1,670 3,012 42 Total net change in System Open Market Account... 27,538 135,780 -63,877 -337 11,116 15,468 -20,166 8,229 2,526 4,996 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 2. Transactions exclude changes in compensation for the effects of inflation on the principal Account; all other figures increase such holdings. of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic NonfinancialS tatistics • August 2001 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month Account 2001 2001 May 2 May 9 May 16 May 23 May 30 Mar. 31 Apr. 30 May 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 2,200 2,200 2,200 3 1,117 1,110 1,103 1,096 1,070 1,179 1,129 1,075 Loans 4 To depository institutions 63 95 110 85 90 22 80 154 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Triparty Obligations 7 Repurchase agreements—triparty2 29,257 15,007 31,747 23,705 42,380 21,995 25,007 30,310 Federal agency obligations3 8 Bought outright 10 10 10 10 10 10 10 10 y Held under repurchase agreements 0 0 0 0 0 0 0 0 10 Total U.S. Treasury securities3 526,643 526,442 528,380 525,608 529,372 523,862 525,911 527,562 u Bought outright4 526,643 526,442 528,380 525,608 529,372 523,862 525,911 527,562 12 Bills 181,516 178,908 178,708 175,026 178,786 184,244 180,787 177,911 13 Notes 247,967 249,369 251,534 252,354 252,357 243,661 247,965 251,415 14 Bonds 97,160 98,165 98,139 98,228 98,230 95,957 97,159 98,236 15 Held under repurchase agreements 0 0 0 0 0 0 0 0 16 Total loans and securities 555,973 541,554 560,247 549,408 571,853 545,889 551,008 558,035 17 Items in process of collection 9,512 8,911 7,869 7,633 10,612 6,292 2,569 7,670 18 Bank premises 1,498 1,499 1,499 1,499 1,499 1,487 1,497 1,504 Other assets 19 Denominated in foreign currencies5 14,768 14,774 14,780 14,787 14,793 14,554 14,766 14,759 20 All other6 20,734 21,281 18.132 18,587 19,020 19,748 20,602 18,441 21 Total assets 616,847 602,375 616,875 606,256 632,094 602,394 604,818 614,730 LIABILITIES 22 Federal Reserve notes 559,415 560,512 560,786 562,413 565,642 555,239 557,418 564,934 23 Reverse repurchase agreements—triparty" 0 0 0 0 0 0 0 0 24 Total deposits 30,208 16,110 30,340 18,605 38,664 23,803 26,571 24,040 25 Depository institutions 24,010 11,240 24,600 13,406 33,995 17,828 18,172 19,238 26 U.S. Treasury—General account 5,714 4,427 5,309 4,788 4,301 5,657 7,894 4,396 27 Foreign—Official accounts 115 89 76 84 72 70 102 85 28 Other 369 355 355 328 295 248 403 321 ?9 Deferred credit items 9,432 8,067 8,095 7,553 10,050 5,911 2,596 7,910 30 Other liabilities and accrued dividends7 3,510 3,461 3.418 3,398 3,390 3,858 3,520 3,467 31 Total liabilities 602,565 588,151 602,639 591,969 617,746 588,811 590,105 600,351 CAPITAL ACCOUNTS 32 Capital paid in 7,043 7,045 7,027 7,060 7,069 7,029 7,043 7,070 33 Surplus 6,445 6,479 6,508 6,542 6,566 6,217 6,371 6,557 34 Other capital accounts 794 701 701 685 712 336 1,299 751 35 Total liabilities and capital accounts 616,847 602,375 616,875 606,256 632,094 602,394 604,818 614,730 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) 739,661 739,143 738.483 737,903 737,129 741,342 739,839 736,954 38 LESS: Held by Federal Reserve Banks 180,246 178,631 177,696 175,490 171,487 186,103 182,421 172,020 39 Federal Reserve notes, net 559,415 560,512 560,786 562,413 565,642 555,239 557,418 564,934 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 2,200 2,200 2,200 4? Other eligible assets 0 5,808 0 0 0 0 0 0 43 U.S. Treasury and agency securities 546,169 541,459 547,541 549,167 552,396 541,993 544,172 551,689 44 Total collateral 559,415 560,512 560,786 562,413 565,642 555,239 557,418 564,934 t. 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 month1 TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 2001 2001 May 2 May 9 May 16 May 23 May 30 Mar. 31 Apr. 30 May 31 1 Total loans 63 95 109 85 91 22 80 154 2 Within fifteen days2 15 27 50 81 86 22 72 132 3 Sixteen days to ninety days 48 69 59 4 5 0 8 21 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities3 526,643 526,442 528,380 525,608 529,372 523,861 525,912 527,562 6 Within fifteen days" 21,550 21,156 19,176 19,531 18,608 9,959 18,127 4,645 7 Sixteen days to ninety days 116,637 116,387 112,824 111,343 116,467 126,988 113,525 115,568 8 Ninety-one days to one year 122,016 121,476 123,384 120,829 120,387 122,234 127,821 135,422 9 One year to five years 135,551 135,551 140,735 141,640 141,641 136,157 135,551 139,658 10 Five years to ten years 56,338 56,340 57,502 57,505 57,507 54,923 56,337 57,508 11 More than ten years 74,552 75,531 74,759 74,760 74,762 73,600 74,551 74,762 12 Total federal agency obligations 10 10 10 10 10 10 10 10 13 Within fifteen days2 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 10 10 10 10 10 10 10 10 17 Five years to ten years 0 0 0 0 0 0 0 0 18 More than ten years 0 0 0 0 0 0 0 0 1. Denotes last calendar day of the month, but data reflect last Wednesday of the month. 3. Includes compensation that adjusts for the effects of inflation on the principal of 2. Holdings under repurchase agreements are classified as maturing within fifteen days in inflation-indexed securities, accordance with maximum maturity of the agreements. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A12 Domestic Nonfinancial Statistics • August 2001 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2000 2001 1997 1998 1999 2000 IItteemm Dec. Dec. Dec. Dec. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 46.85 45.18 41.78 38.51 39.02 39.02 38.51 38.83 38.87 38.26 38.79 38.89 2 Nonborrowed reserves4 46.52 45.07 41.46 38.30 38.60 38.74 38.30 38.75 38.82 38.20 38.74 38.68 3 Nonborrowed reserves plus extended credit5 46.52 45.07 41.46 38.30 38.60 38.74 38.30 38.75 38.82 38.20 38.74 38.68 4 Required reserves 45.16 43.67 40.48 37.18 37.87 37.82 37.18 37.57 37.43 36.87 37.51 37.87 5 Monetary base6 479.47 513.49 593.09 583.96r 579.70 581.40 583.96r 589.39r 591.12r 592.42r 595.92r 599.03 Not seasonally adjusted 6 Total reserves7 48.01 45.31 41.89 38.60 38.84 38.85 38.60 39.78 39.38 37.76 38.66 39.47 7 Nonborrowed reserves 47.69 45.19 41.57 38.39 38.42 38.56 38.39 39.70 39.33 37.71 38.61 39.25 8 Nonborrowed reserves plus extended credit5 47.69 45.19 41.57 38.39 38.42 38.56 38.39 39.70 39.33 37.71 38.61 39.25 9 Required reserves8 46.33 43.80 40.59 37.27 37.69 37.65 37.27 38.52 37.95 36.38 37.38 38.44 10 Monetary base9 484.98 518.27 600.72 590.20 578.29 582.36 590.20 591.50 589.04 591.36 594.92r 598.54 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 47.92 45.21 41.65 38.54 38.78 38.79 38.54 39.79 39.35 37.72 38.59r 39.39 12 Nonborrowed reserves 47.60 45.09 41.33 38.33 38.36 38.50 38.33 39.72 39.30 37.66 38.54 39.17 13 Nonborrowed reserves plus extended credit5 47.60 45.09 41.33 38.33 38.36 38.50 38.33 39.72 39.30 37.66 38.54 39.17 14 Required reserves 46.24 43.70 40.36 37.22 37.63 37.58 37.22 38.54 37.92 36.33 37.31r 38.36 15 Monetary base12 491.79 525.06 608.02 597.12 585.01 589.12 597.12 598.38 595.59 598.20 601.84r 605.45 16 Excess reserves13 1.69 1.51 1.30 1.33 1.15 1.20 1.33 1.25 1.43 1.39 1.28 1.02 17 Borrowings from the Federal Reserve .32 .12 .32 .21 .42 .28 .21 .07 .05 .06 .05 .21 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly 8. To adjust required reserves for discontinuities that are due to regulatory changes in statistical release. Historical data starting in 1959 and estimates of the effect on required reserve requirements, a multiplicative procedure is used to estimate what required reserves reserves of changes in reserve requirements are available from the Money and Reserves would have been in past periods had current reserve requirements been in effect. Break- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve adjusted required reserves include required reserves against transactions deposits and nonper- System, Washington, DC 20551. sonal time and savings deposits (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus changes in reserve requirements. (See also table 1.10.) (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all adjusted required reserves (line 4) plus excess reserves (line 16). those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, difference between current vault cash and the amount applied to satisfy current reserve break-adjusted total reserves (line 1) less total borrowings of depository institutions from the requirements. Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no 5. Extended credit consists of borrowing at the discount window under the terms and adjustments to eliminate the effects of discontinuities associated with regulatory changes in conditions established for the extended credit program to help depository institutions deal reserve requirements. with sustained liquidity pressures. Because there is not the same need to repay such 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve borrowing promptly as with traditional short-term adjustment credit, the money market effect requirements. of extended credit is similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total 6. The seasonally adjusted, break-adjusted monetary base consists of (I) 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 2001 1997 1998 1999r 2000r IItteemm Dec. Dec. Dec. Dec. Feb.r Mar.r Apr/ May Seasonally adjusted Measures2 1 Ml 1,073.4 1,097.0 1,124.8 1,088.2 1,100.4 1,113.1 1,118.0 1,117.4 2 M2 4,031,9r 4,385.9r 4,653.3 4,945.2 5,040.6 5,101.1 5,145.1 5,167.0 3 M3 5,430.8r 6,030.8r 6,530.6 7,100.4 7,252.7 7,310.2 7,417.7 7,500.2 4 Debt 15,223.2r 16,246. lr 17,315.1 18,222.1 18,347.9 18,440.4 18,492.4 n.a. Ml components 5 Currency3 424.3 459.2 516.7 529.9 537.7 539.8 542.6 546.1 6 Travelers checks4 8.1 8.2 8.2 8.0 8.0 7.9 7.8 8.0 7 Demand deposits5 395.4 379.4 356.1 311.3 313.4 316.5 313.0 312.3 8 Other checkable deposits6 245.7 250.1 243.7 239.0 241.4 248.9 254.8 251.1 Nontransaction components 9 In M27 2,958.5r 3,288.9r 3,528.5 3,857.0 3,940.2 3,988.0 4,027.1 4,049.6 10 In M3 only8 l,399.0r l,645.0r 1,877.3 2,155.1 2,212.0 2,209.2 2,272.6 2,333.2 Commercial banks 11 Savings deposits, including MMDAs 1,021.1 1,185.8 1,287.0 1,421.7 1,467.6 1,491.7 1,517.0 1,539.7 12 Small time deposits9 625.5 626.4 635.2 699.7 700.0 695.9 690.5 685.2 13 Large time deposits10, " 517.4r 575.2r 648.3 726.5 704.9 677.4 697.5 702.6 Thrift institutions 14 Savings deposits, including MMDAs 376.8 414.1 449.3 451.9 462.0 471.1 475.1 487.9 15 Small time deposits9 342.9 325.8 320.9 346.6 350.6 349.6 349.9 351.9 16 Large time deposits10 85.5 88.7 91.3 103.2 106.6 106.8 108.6 110.4 Money market mutual funds 17 Retail 592. lr 773366..88rr 836.2 937.2 960.1 979.8 994.6 984.8 18 Institution-only 391.8r 531.8r 623.5 768.3 858.9 888.0 919.4 970.9 Repurchase agreements and eurodollars 19 Repurchase agreements'2 254.3 297.5 340.8 360.2 346.0 339.0 359.2 360.2 20 Eurodollars12 150.0 151.8 173.3 197.1 195.6 198.0 187.8 189.1 Debt components 21 Federal debt 3,800.6 3,751.2 3,660.3 3,400.5 3,372.1 3,375.4 3,344.7 n.a. 22 Nonfederal debt 1 l,422.6r 12,494.9r 13,654.9 14,821.6 14,975.9 15,065.0 15,147.7 n.a. Not seasonally adjusted Measures" 23 Ml 1,096.9 1,120.4 1,148.3 1,112.4 1,087.8 1,107.8 1,123.2 1,111.4 24 M2 4,053.2r 4,408.2r 4,677.3 4,973.8 5,039.4 5,135.6 5,209.1 5,143.0 25 M3 5,456.2r 6,062.9r 6,568.1 7,145.5 7,287.5 7,372.4 7,480.4 7,475.8 26 Debt 15,218.9r 16,241.4r 17,310.5 18,214.7 18,343.3 18,439.4 18,464.5 n.a. MI components 27 Currency3 428.1 463.3 521.5 535.2 536.2 539.8 543.0 546.1 28 Travelers checks4 8.3 8.4 8.4 8.1 8.2 8.0 7.9 8.0 29 Demand deposits5 412.4 395.9 371.7 326.6 304.3 311.4 313.0 307.2 30 Other checkable deposits6 248.2 252.8 246.6 242.5 239.2 248.6 259.3 250.1 Nontransaction components 31 In M27 2,956.3r 3,287.8r 3,529.1 3,861.4 3,951.6 4,027.8 4,085.9 4,031.5 32 In M3 only8 l,403.0r 1,654.8' 1,890.7 2,171.6 2,248.1 2,236.8 2,271.3 2,332.8 Commercial banks 33 Savings deposits, including MMDAs 1,020.4 1,186.0 1,288.5 1,426.4 1,459.3 1,498.5 1,542.1 1,535.3 34 Small time deposits9 625.3 626.5 635.4 699.9 702.3 697.7 691.1 682.9 35 Large time deposits10, 11 516.8r 574.5r 647.7 725.8 705.3 682.8 702.4 708.4 Thrift institutions 36 Savings deposits, including MMDAs 376.5 414.2 449.8 453.4 459.4 473.2 482.9 486.5 37 Small time deposits9 342.8 325.8 321.0 346.8 351.7 350.5 350.2 350.7 38 Large time deposits10 85.4 88.6 91.2 103.1 106.7 107.6 109.4 111.3 Money market mutual funds 39 Retail 591.3r 735.2r 834.3 935.0 978.8 1,007.9 1,019.6 976.0 40 Institution-only 398.9r 543.7r 638.4 786.2 888.9 905.6 915.3 957.1 Repurchase agreements and eurodollars 41 Repurchase agreements'2 249.5 293.4 337.4 357.1 350.5 341.7 355.9 365.1 42 Eurodollars12 152.3 154.5 176.0 199.5 196.7 199.0 188.4 190.9 Debt components 43 Federal debt 3,805.8 3,754.9 3,663.2 3,403.5 3,368.7 3,392.5 3,341.0 n.a. 44 Nonfederal debt ll,413.1r 12,486.5r 13,647.3 14,811.2 14,974.6 15,046.8 15,123.4 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic Nonfinancial Statistics • August 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 debt is as follows: which are derived from the Federal Reserve Board's flow of funds accounts, are break- Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of adjusted (that is, discontinuities in the data have been smoothed into the series) and depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at all month-averaged (that is, the data have been derived by averaging adjacent month-end levels). commercial banks other than those owed to depository institutions, the U.S. government, and 3. Currency outside the U.S. Treasury, Federal Reserve Banks, and vaults of depository foreign banks and official institutions, less cash items in the process of collection and Federal institutions. Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of 4. Outstanding amount of U.S. dollar-denominated travelers checks of nonbank issuers. withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, Travelers checks issued by depository institutions are included in demand deposits. credit union share draft accounts, and demand deposits at thrift institutions. Seasonally 5. Demand deposits at commercial banks and foreign-related institutions other than those adjusted Ml is computed by summing currency, travelers checks, demand deposits, and owed to depository institutions, the U.S. government, and foreign banks and official institu- OCDs, each seasonally adjusted separately. tions, less cash items in the process of collection and Federal Reserve float. M2: Ml plus (1) savings deposits (including MMDAs), (2) small-denomination time 6. Consists of NOW and ATS account balances at all depository institutions, credit union deposits (time deposits—including retail RPs—in amounts of less than $100,000), and (3) share draft account balances, and demand deposits at thrift institutions. balances in retail money market mutual funds. Excludes individual retirement accounts 7. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail (IRAs) and Keogh balances at depository institutions and money market funds. Seasonally money fund balances. adjusted M2 is calculated by summing savings deposits, small-denomination time deposits, 8. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities and retail money fund balances, each seasonally adjusted separately, and adding this result to (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and seasonally adjusted Ml. term) of U.S. addressees. M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more) 9. Small time deposits—including retail RPs—are those issued in amounts of less than issued by all depository institutions, (2) balances in institutional money funds, (3) RP $100,000. All IRAs and Keogh accounts at commercial banks and thrift institutions are liabilities (overnight and term) issued by all depository institutions, and (4) eurodollars subtracted from small time deposits. (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and 10. Large time deposits are those issued in amounts of $100,000 or more, excluding those at all banking offices in the United Kingdom and Canada. Excludes amounts held by booked at international banking facilities. depository institutions, the U.S. government, money market funds, and foreign banks and 11. Large time deposits at commercial banks less those held by money market funds, official institutions. Seasonally adjusted M3 is calculated by summing large time deposits, depository institutions, the U.S. government, and foreign banks and official institutions. institutional money fund balances, RP liabilities, and eurodollars, each seasonally adjusted 12. Includes both overnight and term. separately, and adding this result to seasonally adjusted M2. Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial sectors—the federal sector (U.S. government, not including government-sponsored enter- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A15 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1 A. All commercial banks Billions of dollars Monthly averages Wednesday figures Account 2000 2000r 2001 2001 May Nov. Dec. Jan.r Feb.r Mar.r Apr/ May May 9 May 16 May 23 May 30 Seasonally adjusted Assets 1 Bank credit 5,005.8 5,166.5 5,216.3 5,265.0 5,275.9 5,287.2 5309.1 5,318.0 5,320.4 5,314.5 5,308.9 55,,332299..77 ? Securities in bank credit l,311.1r 1,311.4 1,335.4 1,356.4 1,350.8 1,345.3 1,360.8 1,369.2 1,367.0 1,369.2 1,367.8 1,372.8 U.S. government securities 819.0 785.9 788.7 786.2 777.5 758.5 766.6 769.3 764.6 766.8 769.0 775.9 4 Other securities 492.1r 525.4 546.7 570.2 573.3 586.8 594.2 599.9 602.4 602.4 598.8 596.9 5 Loans and leases in bank credit2 . .. 3,694.7r 3,855.2 3,880.9 3,908.6 3,925.1 3,941.9 3,948.3 3,948.8 3,953.4 3,945.3 3,941.1 3,956.9 6 Commercial and industrial 1,059.0 1,084.6 1,090.3 1,103.9 1,110.1 1,109.6 1,106.2 1,103.2 1,106.6 1,101.8 1,103.9 1,101.0 7 Real estate 1,577.0 1,649.8 1,655.5 1,657.8 1,668.5 1,676-5 1,683.0 1,693.5 1,697.6 1,692.6 1,688.1 1,696.5 8 Revolving home equity 114.2 128.1 131.2 133.6 135.3 137.2 138.0 139.3 139.1 139.3 139.7 139.1 9 Other 1,462.7 1,521.7 1,524.3 1,524.2 1,533.2 1,539.3 1,545.1 1,554.3 1,558.5 1,553.3 1,548.4 1,557.4 in Consumer 511.r 537.2 542.3 547.0 546.5 544.9 549.3 553.0 549.0 553.5 556.1 554.3 11 Security3 148.7 165.0 168.7 169.9 168.2 173.5 174.1 163.0 165.6 160.0 157.0 168.8 i? Other loans and leases 398.9 418.6 424.2 429.9 431.8 437.5 435.7 436.1 434.6 437.4 436.0 436.2 n Interbank loans 227.8 245.9 252.2 270.4 267.2 276.1 293.2 287.1 290.8 293.7 283.5 282.2 14 Cash assets4 273.7 256.1 267.2 273.3 265.5 268.4 270.6 263.7 260.2 262.6 256.0 275.2 15 Other assets5 378.9 402.7 397.1 412.2 414.2 430.4 429.8 423.8 430.5 413.4 424.5 425.4 16 Total assets6 5,826-3 6,008.5 6,068.9 6,156.2 6,157.7 6,1973 6,237.5 6,227.4 6,236.8 6,218.9 6,207.6 6,247.7 Liabilities 17 Deposits 3,630.8r 3,781.1 3,847.6 3,892.0 3,890.6 3,925.0 3.987.5 4,000.9 3,959.6 44..000011..66 4,006.8 44,,003388..33 18 Transaction 629.8 601.2 601.9 608.2 607.7 606.9 610.3 613.0 586.1 605.8 624.6 645.5 19 Nontransaction 3,001.(f 3,179.8 3,245.7 3,283.8 3,282.9 3,318.2 3,377.2 3,388.0 3,373.5 3,395.9 3,382.1 3,392.8 ?n Large time 877.6 917.4 934.7 941.7 936.9 934.9 947.8 962.2 937.8 963.1 973.8 979.9 71 Other 2,123.5r 2,262.5 2,311.0 2,342.1 2,346.0 2,383.2 2,429.4 2,425.8 2,435.7 2,432.7 2,408.3 2,412.9 ??. Borrowings 1,204.6 1,202.9 1,242.4 1,264.2 1,259.3 1,243J 1,278.2 1,247.6 1,264.0 1,239.4 1,238.8 1,246.0 23 From banks in the U.S 382.0 368.7 396.7 397.3 396.2 395.4 404.8 385.1 384.6 390.7 385.9 380.0 74 From others 822.6 834.2 845.7 867.0 863.1 848.1 873.4 862.5 879.4 848.7 852.9 866.0 75 Net due to related foreign offices 254.8 244.3 225.8 221.2 219.4 233.2 189.7 207.1 220.3 209.8 197.2 203.5 26 Other liabilities 313.5 347.2 345.4 364.8 343.2 355.1 348.8 339.0 350.3 335.7 332.8 336.5 27 Total liabilities 5,403.7r 5,575.4 5,661-3 5,7423 5,71X4 5,756.8 5,804.2 5,794.7 5,794.1 5,786.6 5,775.6 53243 28 Residual (assets less liabilities)7 422.5r 433.1 407.6 413.9 445.4 440.5 433.3 432.7 442.7 432.3 432.0 423.4 Not seasonally adjusted Assets 79 Bank credit 4,998.0 5,185.7 5,252.7 5,279.9 5,270.9 5,274.5 5,301.5 5,307.2 5,312.4 5,305.1 5,290.6 55,,331188..66 Securities in bank credit 1,311.0r 1,315.4 1,341.0 1,361.6 1,352.5 1,349.4 1,362.4 1,368.4 1,367.1 1,368.1 1,365.5 1,372.0 31 U.S. government securities 820.3 787.0 788.5 788.4 779.2 764.4 771.5 770.2 765.6 768.1 769.3 776.3 37. Other securities 490.6r 528.4 552.5 573.2 573.3 585.0 590.9 598.2 601.5 600.0 596.3 595.7 33 Loans and leases in bank credit2 . . . 3,687.1r 3,870.3 3,911.7 3,918.2 3,918.4 3,925.1 3,939.1 3,938.8 3,945.3 3,937.0 3,925.1 3,946.6 34 Commercial and industrial 1,061.5 1,085.7 1,092.5 1,101.1 1,109.5 1,111.1 1,110.9 1,105.5 1,111.6 1,104.4 1,104.0 1,101.2 35 Real estate 1,577.2 1,655.3 1,660.1 1,656.9 1,661.9 1,669.1 1,678.7 1,693.9 1,698.1 1,694.1 1,688.4 1,696.4 36 Revolving home equity 114.2 128.8 131.3 132.8 134.1 135.5 137.0 139.3 139.1 139.4 139.8 139.1 37 Other 1,463.0 1,526.5 1,528.8 1,524.1 1,527.8 1,533.5 1,541.7 1,554.6 1,559.0 1,554.7 1,548.7 1,557.3 38 Consumer 5l0.ff 537.6 548.2 551.4 547.1 541.1 546.1 550.8 546.8 551.6 553.9 551.7 39 Credit cards and related plans. . n.a. 209.3 218.2 218.3 213.4 209.1 214.2 218.8 215.1 219.0 221.8 220.0 40 Other n.a. 328.2 329.9 333.0 333.8 331.9 331.9 332.0 331.7 332.6 332.1 331.7 41 Security3 143.3 171.0 180.8 177.7 171.0 169.6 169.8 157.0 158.7 154.3 149.8 163.5 4? Other loans and leases 395.0 420.7 430.2 431.1 428.8 434.2 433.6 431.7 430.1 432.6 428.8 433.7 43 Interbank loans 226.7 252.6 260.9 272.4 269.0 283.5 299.3 280.3 285.9 286.9 270.2 277.3 44 Cash assets4 271.8 263.1 286.5 289.4 266.5 258.5 266.4 261.7 249.4 257.1 241.2 297.1 45 Other assets5 379.0 402.4 403.3 414.0 413.3 429.7 429.6 424.0 433.7 415.5 420.6 424.5 46 Total assets6 5,815.5 6,041.0 6,139.5 6,191.3 6,154.8 6,1813 6^31.9 6,208.1 6,216.1 6,1993 6,157.2 6,252.6 Liabilities 47 3,619. lr 3,803.1 3,894.2 3,906.8 3,907.5 3,935.4 4,006.7 3,988.9 3,952.2 3,988.5 3,969.6 4,040.5 48 Transaction 619.9 607.4 631.1 620.0 599.5 600.9 616.5 603.2 569.3 595.0 596.6 656.4 49 Nontransaction 2,999.2r 3,195.6 3,263.0 3,286.9 3,308.0 3,334.5 3,390.2 3,385.7 3,382.8 3,393.5 3,373.0 3,384.0 50 Large time 876.5 924.8 948.6 954.8 948.5 938.1 949.1 960.9 939.3 960.4 971.6 977.2 51 Other 2,122.7r 2,270.9 2,314.4 2,332.1 2,359.5 2,396.4 2,441.1 2,424.8 2,443.6 2,433.1 2,401.4 2,406.8 5? Borrowings 1,211.2 1,211.3 1,245.3 1,281.5 1,262.9 1,241.9 1,278.9 1,252.7 1,276.3 1,246.3 1,234.6 1,249.3 53 From banks in the U.S 385.7 369.5 398.6 403.5 400.6 399.0 408.0 388.2 389.8 394.3 386.2 382.6 54 From others 825.5 841.8 846.7 878.0 862.3 842.9 870.9 864.4 886.5 852.0 848.4 866.7 55 Net due to related foreign offices .... 254.6 246.6 230.6 225.4 225.5 232.2 182.7 206.3 218.9 207.9 196.8 203.7 56 Other liabilities 314.3 349.1 347.9 367.2 347.2 353.8 343.9 339.7 349.9 335.6 334.2 338.5 57 Total liabilities 5^992" 5,610.1 5,718.0 5,780.9 5,743.0 5,7633 5,812.2 5,787.7 5,797.2 5,7783 5,735.2 5,832.0 58 Residual (assets less liabilities)7 416.3r 430.9 421.5 410.4 411.8 418.0 419.7 420.5 418.9 421.0 422.0 420.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • August 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 2000 2001 2001 May Nov. Dec. Jan.r Feb.r Mar.r Apr.' May May 9 May 16 May 23 May 30 Seasonally adjusted Assets 1 Bank credit 4,421.0 44..557788..44rr 4,616.9 4,651.5 4,668.4 4,666.4 4,692.6 4,715.1 4,708.5 4,719.6 4,711.0 4,721.6 7 Securities in bank credit l,098.7r 1,115.8 1,130.3 1,148.1 1,151.9 1,139.7 1,146.2 1,158.9 1,153.2 1,162.1 1,157.8 1,163.4 3 U.S. government securities 738.6 717.9 719.5 719.8 713.2 690.6 691.6 699.5 692.9 698.1 699.1 707.5 4 Other securities 360. r 398.0 410.8 428.3 438.7 449.1 454.6 459.4 460.2 464.0 458.7 455.9 Loans and leases in bank credit2 3,322.3r 3,462.6r 3,486.6r 3,503.4 3,516.5 3,526.7 3,546.3 3,556.2 3,555.4 3,557.5 3,553.2 3,558.2 6 Commercial and industrial 853.7 878.5r 881.3r 889.4 892.7 889.0 885.4 884.3 884.6 884.6 885.0 883.0 7 Real estate 1,559.2 1,631.3r l,637.0r 1,639.4 1,650.2 1,658.3 1,665.1 1,675.5 1,679.3 1,674.7 1,670.1 1,678.5 8 Revolving home equity 114.2 128.T 131.2r 133.6 135.3 137.2 138.0 139.3 139.1 139.3 139.7 139.1 9 Other 1,445.0 1,503.lr l,505.7r 1,505.7 1,514.9 1,521.1 1,527.2 1,536.2 1,540.2 1,535.3 1,530.4 1,539.4 10 Consumer 511.r 537.2r 542.3r 547.0 546.5 544.9 549.3 553.0 549.0 553.5 556.1 554.3 11 Security3 67.2 64.6r 68.6r 64.8 62.9 66.9 78.8 75.2 77.4 74.3 73.6 73.4 1? Other loans and leases 331.1 350.9r 357.5r 362.8 364.2 367.5 367.8 368.3 365.1 370.5 368.3 368.9 n Interbank loans 197.3 219.0r 225. r 241.2 238.8 245.5 263.8 255.2 262.6 256.8 253.0 248.4 14 Cash assets4 230.5 217.5 227.3 231.8 223.7 227.7 231.3 226.2 220.9 224.7 219.4 238.7 15 Other assets5 338.4 362.7 360.9 375.1 377.7 392.1 388.9 384.9 392.5 373.7 383.8 387.4 16 Total assets6 5,127.7 5,315.4 5,366.8 5,435.3 5,444.0 5,467.1 5,511.7 5,516.7 5,519.8 5,509.9 5,502.3 5,531.7 Liabilities 17 Deposits 3,247.5 3,401.5 3,467.6 3,505.4 3,510.0 3,546.4 3,594.9 3,594.2 3,576.8 3,592.3 3,589.1 3,615.0 18 Transaction 618.7 590.4 591.3 598.0 597.4 597.4 599.8 602.5 575.3 594.5 614.6 635.4 19 Nontransaction 2,628.8 2,811.1 2,876.3 2,907.4 2,912.7 2,948.9 2,995.1 2,991.7 3,001.5 2,997.8 2,974.5 2,979.6 70 Large time 507.3 547.2 563.9 567.5 568.8 567.9 568.0 568.2 568.1 567.3 568.4 568.9 71 Other 2,121.5 2,263.9 2,312.5 2,339.9 2,343.9 2,381.0 2,427.1 2,423.5 2,433.4 2,430.5 2,406.1 2,410.7 77 Borrowings 1,001.6 979.9 1,002.8 1,020.7 1,020.8 1,010.2 1,042.1 1,031.3 1,043.5 1,023.7 1,029.0 1,025.9 From banks in the U.S 364.0 350.1 374.5 372.1 373.7 371.2 381.2 365.6 363.9 368.5 367.5 362.8 74 From others 637.6 629.8 628.3 648.6 647.1 639.0 660.9 665.6 679.6 655.2 661.4 663.1 25 Net due to related foreign offices .... 234.2 237.1 227.6 217.7 214.6 211.5 185.5 211.9 202.7 216.6 211.9 220.3 26 Other liabilities 229.3 271.8 272.8 285.2 266.1 272.5 260.9 252.8 263.9 249.2 246.8 250.1 27 Total liabilities 4,712.5 4,890.2 4,970.8 5,029.1 5,011.5 5,040.6 5,083.5 5,090.1 5,086.9 5,081.9 5,076.7 5,111.4 28 Residual (assets less liabilities)7 415.2 425.2 396.0r 406.2 432.4 426.5 428.3 426.6 432.9 428.1 425.6 420.3 Not seasonally adjusted Assets 29 Bank credit 4,417.4 4,594.9r 4,642.5 4,658.3 4,660.2 4,658.5 4,687.9 4,709.1 4,705.2 4,714.2 4,699.4 4,714.9 30 Securities in bank credit l,098.6r 1,119.8 1,135.9 1,153.3 1,153.7 1,143.8 1,147.8 1,158.1 1,153.2 1,161.0 1,155.6 1,162.7 31 U.S. government securities 739.9 718.9 719.3 722.0 715.0 696.5 696.5 700.4 693.9 699.4 699.4 707.9 32 Other securities 358.6r 400.9 416.6 431.3 438.8 447.3 451.3 457.7 459.3 461.6 456.2 454.8 33 Loans and leases in bank credit2 3,318.8r 3,475.0 3,506.6 3,505.0 3,506.5 3,514.7 3,540.0 3,550.9 3,551.9 3,553.1 3,543.8 3,552.3 34 Commercial and industrial 859.0 879.0r 881.21" 884.9 889.9 889.4 891.9 889.6 892.6 890.0 888.8 886.4 35 Real estate l,559.4r l,636.8r l,641.6r 1,638.4 1,643.6 1,650.9 1,660.8 1,675.9 1,679.8 1,676.1 1,670.5 1,678.4 36 Revolving home equity 114.2 128.8r 131.3r 132.8 134.1 135.5 137.0 139.3 139.1 139.4 139.8 139.1 37 Other 1,445.3 l,508.0r l,510.3r 1,505.6 1,509.5 1,515.4 1,523.8 1,536.6 1,540.7 1,536.7 1,530.7 1,539.2 38 Consumer 510.0r 537.6r 548.2r 551.4 547.1 541.1 546.1 550.8 546.8 551.6 553.9 551.7 39 Credit cards and related plans. . n.a. 209.3r 218.2r 218.3 213.4 209.1 214.2 218.8 215.1 219.0 221.8 220.0 40 Other n.a. 328.2r 329.9r 333.0 333.8 331.9 331.9 332.0 331.7 332.6 332.1 331.7 41 Security3 62.6 69. r 74.6r 67.4 64.7 68.9 75.8 70.0 71.3 69.1 67.8 68.9 42 Other loans and leases 327.8 352.6r 361.2r 362.9 361.1 364.3 365.5 364.7 361.4 366.4 362.7 367.0 43 Interbank loans 196.2 225.8 233.9 243.2 240.6 252.8 269.9 248.4 257.7 250.0 239.6 243.4 44 Cash assets4 229.6 222.5 243.8 245.3 224.6 219.2 228.7 225.1 211.2 219.9 205.9 261.0 45 Other assets5 339.1 362.4 365.4 375.7 375.9 390.7 389.6 385.7 395.7 376.2 380.8 387.4 46 Total assets6 5,122.8 5rJ43.2r 5,422.1 5,458.4 5,436.7 5,456.7 5,511.4 5,503.6 5,504.9 5,495.4 5,460.8 5,542.3 Liabilities 47 Deposits 3,234.6 3,420.8 3,503.5 3,510.3 3,518.8 3,552.2 3,611.3 3,581.0 3,566.2 3,579.0 3,551.5 3,616.9 48 Transaction 609.2 596.4 619.8 609.6 589.4 591.7 606.6 593.1 559.1 584.2 587.0 646.3 49 Nontransaction 2,625.4 2,824.4 2,883.7 2,900.7 2,929.4 2,960.5 3,004.7 2,987.9 3,007.1 2,994.8 2,964.4 2,970.5 50 Large time 504.7 552.1 567.7 570.8 572.1 566.4 565.9 565.3 565.8 563.9 565.3 565.9 51 Other 2,120.7 2,272.3 2,315.9 2,329.9 2,357.3 2,394.1 2,438.8 2,422.6 2,441.3 2,430.9 2,399.1 2,404.6 52 Borrowings 1,008.1 988.3 1,005.7 1,038.0 1,024.4 1,008.6 1,042.8 1,036.3 1,055.8 1,030.6 1,024.7 1,029.3 53 From banks in the U.S 367.7 350.9 376.4 378.3 378.1 374.9 384.5 368.7 369.1 372.1 367.9 365.5 54 From others 640.5 637.4 629.3 659.7 646.3 633.7 658.4 667.6 686.7 658.4 656.9 663.8 55 Net due to related foreign offices .... 237.2 239.0 227.7 218.6 217.4 210.3 183.1 214.3 202.6 218.0 215.9 225.0 56 Other liabilities 231.7 273.5 273.2 286.2 268.7 271.2 258.1 254.9 264.1 250.6 250.2 254.2 57 Total liabilities 4,711.6 4,921.6 5,010.0 5,053.2 5,029.3 5,042.3 5,095.3 5,086.5 5,088.7 5,078.2 5,042.3 5,125.3 58 Residual (assets less liabilities)7 411.2 421.5 412.1 405.3 407.4 414.4 416.1 417.0 416.2 417.1 418.6 417.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities 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 May Nov. Dec. Jan.r Feb.r Mar.r Apr.r May May 9 May 16 May 23 May 30 Seasonally adjusted Assets 1 Bank credit 2,502.5r 2,536.7 2,554.3 2,571.4 2,581.6 £588.7 2,610.4 2,622.8 2,623.9 2,627.6 2,615.4 22,,662233..99 2 Securities in bank credit 582.4r 573.8 580.9 592.3 595.4 591.2 597.6 607.6 604.8 610.9 605.7 609.7 3 U.S. government securities 365.1r 348.7 352.2 353.4 349.5 338.9 341.8 349.8 344.9 349.4 348.6 355.8 4 Trading account 22.1 21.6 28.8 34.2 37.5 35.4 33.7 35.3 31.0 35.5 36.1 39.6 5 Investment account 343.0r 327.1 323.4 319.2 312.0 303.4 308.1 314.5 313.9 313.9 312.5 316.2 6 Other securities 217.4 225.0 228.7 238.9 245.9 252.3 255.8 257.8 259.9 261.5 257.1 253.9 7 Trading account 101.9 114.5 119.0 126.0 129.3 132.5 135.9 137.0 139.4 140.1 135.8 133.7 8 Investment account 115.5 110.6 109.8 112.9 116.6 119.9 119.9 120.8 120.5 121.4 121.2 120.2 9 State and local government . 25.5 26.3 26.3 27.1 27.6 28.1 28.4 28.1 28.0 28.3 28.3 28.1 10 Other 90.0 84.3 83.5 85.8 89.0 91.8 91.5 92.7 92.5 93.1 93.0 92.1 11 Loans and leases in bank credit2 .. . 1,920.(7 1,962.9 1,973.4 1,979.1 1,986.2 1,997.5 2,012.8 2,015.2 2,019.1 2,016.7 2,009.7 2,014.2 12 Commercial and industrial 584.2r 588.5 590.7 594.1 595.4 591.0 588.1 587.0 587.9 587.4 587.7 585.4 13 Bankers acceptances 1.1 1.0 1.0 .8 .8 .8 .8 .8 .8 .8 .8 ..88 14 Other 583. r 587.6 589.6 593.2 594.6 590.2 587.3 586.2 587.1 586.6 586.8 558844..66 15 Real estate 802.7r 820.0 819.0 819.5 825.8 834.1 840.7 846.4 851.8 846.0 840.5 847.5 16 Revolving home equity 74.3 82.0 84.3 86.1 87.3 89.1 89.7 90.1 90.1 90.1 90.4 89.6 17 Other 728.4r 738.1 734.7 733.4 738.5 744.9 751.0 756.3 761.7 755.9 750.1 757.9 18 Consumer 229.1 239.6 241.5 243.0 245.0 246.4 248.0 250.5 248.6 250.8 251.8 251.4 19 Security3 61.1 58.0 61.4 57.7 55.3 58.8 70.2 66.4 68.8 65.5 64.9 64.7 20 Federal funds sold to and repurchase agreements with broker-dealers 39.7 41.7 46.3 41.7 39.4 4433..66 5533..88 4499..33 5511..77 4499..00 4477..66 4477..11 21 Other 21.3 16.3 15.2 16.0 15.9 15.2 16.4 17.1 17.1 16.4 17.3 17.6 22 State and local government 12.5 12.8 12.6 12.8 13.0 13.2 13.1 13.1 13.2 13.1 13.1 13.0 23 Agricultural 9.6r 9.8 10.0 10.1 10.3 10.4 10.4 10.7 10.8 10.8 10.7 10.7 24 Federal funds sold to and repurchase agreements with others 13.3 19.0 21.0 25.8 26.1 26.0 22.9 23.5 22.7 2233..55 2233..22 2244..11 25 All other loans 86.6r 86.5 87.8 86.7 85.5 86.4 87.4 85.1 82.9 87.2 85.3 85.0 26 Lease-financing receivables 121.1 128.7 129.4 129.5 129.8 131.2 132.0 132.5 132.5 132.6 132.5 132.6 27 Interbank loans 133.1 138.7 137.7 153.9 141.1 137.4 145.3 131.5 142.1 132.4 127.4 122.7 28 Federal funds sold to and repurchase agreements with commercial banks 67.5r 62.1 63.8 79.0 70.4 70.4 8811..88 7711..00 80.1 7722..11 6655..99 6655..22 29 Other 65.7 76.5 73.9 74.9 70.7 67.0 63.5 60.4 62.0 60.3 61.5 57.5 30 Cash assets4 150.1 139.0 144.1 146.3 137.6 142.0 144.7 139.1 136.1 136.4 133.5 149.3 31 Other assets5 221.1' 254.1 248.6 260.2 262.6 271.5 264.9 262.2 267.9 252.8 263.7 263.5 32 Total assets6 2,978.4r 3,032.7 3,048.1 3,094.4 3,085.2 3,102.0 3,127.7 3,118.0 3,1325 3,111.6 3,1023 3,122.1 Liabilities 33 Deposits l,654.8r 1,643.0 1,672.9 1,680.7 1,674.1 1,700.6 1,725.0 1,716.1 1,708.0 1,715.5 1,711.2 1,727.2 34 Transaction 317.8r 296.4 297.2 300.4 298.3 301.5 301.2 301.2 286.3 296.1 305.4 321.4 35 Nontransaction 1,337. lr 1,346.5 1,375.7 1,380.3 1,375.8 1,399.1 1,423.8 1,414.9 1,421.6 1,419.4 1,405.8 1,405.8 36 Large time 251.3r 254.5 265.3 267.2 262.7 265.0 264.9 267.2 264.9 266.0 268.7 269.4 37 Other l,085.8r 1,092.0 1,110.4 1,113.1 1,113.2 1,134.0 1,158.8 1,147.7 1,156.8 1,153.4 1,137.1 1,136.4 38 Borrowings 655.6r 652.7 666.3 676.8 679.5 676.9 705.5 691.1 704.3 686.7 687.3 683.3 39 From banks in the U.S 201.4 196.0 214.0 213.9 215.6 219.6 229.8 212.4 212.5 216.1 212.0 209.0 40 From others 454.2 456.7 452.3 462.9 463.9 457.3 475.6 478.7 491.9 470.7 475.3 474.4 41 Net due to related foreign offices 228.2 213.4 206.7 200.9 197.9 196.1 172.7 195.2 185.7 197.7 196.7 203.8 42 Other liabilities 170.^ 217.9 218.7 231.8 212.2 216.4 204.4 195.8 207.6 192.2 189.3 192.7 43 Total liabilities 2,709.4r 2,726.9 2,764.6 2,7903 2,763.8 2,789.9 2,807.6 2,798.2 2,805.6 2,792.2 2,7845 2^07.1 44 Residual (assets less liabilities)7 269.(7 305.8 283.5 304.2 321.4 312.1 320.0 319.8 326.9 319.4 317.8 315.0 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics • August 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 May Nov. Dec. Jan.r Feb.r Mar.r Apr/ May May 9 May 16 May 23 May 30 Not seasonally adjusted Assets 45 Bank credit 2,496.7r 2,552.4 2,575.5 2,582.5 2,584.4 2,585.2 2,606.0 2,616.3 2,619.2 2,620.9 2,603.2 2,618.2 46 Securities in bank credit 580.5r 579.5 587.3 598.1 599.2 593.1 596.5 605.3 602.8 608.1 602.0 607.9 47 U.S. government securities 364.6r 351.6 352.8 356.2 353.2 342.5 344.0 349.1 343.8 349.1 347.4 355.2 48 Trading account 22.1 21.8 28.9 34.5 37.9 35.8 34.0 35.2 30.9 35.4 36.0 39.5 49 Investment account 342.5r 329.8 323.9 321.7 315.3 306.7 310.0 313.9 312.8 313.7 311.5 315.7 50 Mortgage-backed securities .. 220.0 211.4 213.4 219.7 215.6 214.0 221.4 227.9 231.1 226.4 223.0 229.3 51 Other 122.5r 118.3 110.6 102.0 99.7 92.6 88.7 86.0 81.7 87.2 88.4 86.3 52 One year or less 31.7 32.7 31.4 31.5 33.6 33.3 31.7 28.6 27.9 28.3 29.8 27.8 One to five years 53.6 50.0 45.0 38.5 37.1 34.1 31.2 30.9 27.5 32.7 32.2 32.1 54 More than five years . . . 37.2 35.7 34.1 32.1 29.0 25.2 25.8 26.4 26.3 26.3 26.4 26.5 55 Other securities 215.9 228.0 234.5 241.9 246.0 250.5 252.5 256.2 259.0 259.0 254.6 252.7 56 Trading account 101.2 116.0 122.0 127.6 129.3 131.5 134.2 136.1 138.9 138.8 134.5 133.1 57 Investment account 114.7 112.0 112.5 114.3 116.6 119.0 118.4 120.0 120.1 120.2 120.1 119.6 58 State and local government . . 25.3 26.6 26.9 27.5 27.6 27.9 28.0 28.0 27.9 28.0 28.0 28.0 59 Other 89.3 85.4 85.6 86.8 89.0 91.1 90.3 92.1 92.2 92.3 92.1 91.6 60 Loans and leases in bank credit2 . . l,916.2r 1,972.8 1,988.2 1,984.4 1,985.3 1,992.2 2,009.5 2,011.0 2,016.4 2,012.8 2,001.2 2,010.3 61 Commercial and industrial 587.4r 589.7 589.7 590.6 594.3 591.7 592.4 589.8 592.8 590.0 589.0 586.6 62 Bankers acceptances 1.1 1.0 1.0 .8 .8 .8 .8 .8 .8 .8 .8 .8 63 Other 586.3r 588.7 588.7 589.7 593.5 590.9 591.6 589.0 592.0 589.3 588.2 585.8 64 Real estate 802. lr 825.2 823.5 820.1 822.5 828.3 836.7 846.0 851.9 846.6 839.4 846.8 65 Revolving home equity 74.2 82.4 84.2 85.2 86.3 87.7 88.7 90.0 90.0 90.0 90.3 89.7 66 Other 443.4r 453.3 448.7 445.7 445.5 449.6 456.4 462.6 468.9 463.3 456.0 462.6 67 Commercial 284.5r 289.5 290.7 289.1 290.8 291.0 291.6 293.4 293.0 293.2 293.1 294.5 68 Consumer 229.5 238.1 243.7 246.6 247.2 246.1 248.7 250.9 249.3 251.3 252.1 251.7 69 Credit cards and related plans.. n.a. 78.1 82.4 83.4 83.1 82.6 84.6 86.9 85.4 86.8 88.0 87.7 70 Other n.a. 160.0 161.3 163.2 164.1 163.5 164.0 164.0 163.9 164.5 164.0 163.9 71 Security3 56.7 62.1 67.2 60.3 57.1 60.5 67.1 61.6 62.9 60.6 59.6 60.5 72 Federal funds sold to and repurchase agreements with broker-dealers .... 36.9 44.6 50.6 43.6 40.7 44.9 51.4 45.7 47.3 45.4 43.8 44.0 73 Other 19.8 17.5 16.6 16.7 16.4 15.6 15.7 15.9 15.6 15.2 15.9 16.5 74 State and local government .... 12.5 12.8 12.6 12.8 13.0 13.2 13.1 13.1 13.2 13.1 13.1 13.0 75 Agricultural 9.5 9.8 10.0 10.2 10.1 10.2 10.3 10.7 10.7 10.7 10.7 10.6 76 Federal funds sold to and repurchase agreements with others 13.3 19.0 21.0 25.8 26.1 26.0 22.9 23.5 22.7 23.5 23.2 24.1 77 All other loans 84.8 87.8 90.7 86.6 83.8 84.4 86.3 83.6 81.0 85.2 82.4 85.2 78 Lease-financing receivables .... 120.5 128.4 129.7 131.6 131.2 131.7 132.0 131.9 132.0 131.9 131.8 131.8 79 Interbank loans 135.8r 139.5 141.6 155.3 140.0 138.5 147.4 133.8 141.1 135.1 127.4 129.2 80 Federal funds sold to and repurchase agreements with commercial banks 68.9 62.6 65.6 79.7 69.9 71.0 83.0 72.3 79.6 73.6 65.9 68.6 81 Other 66.9 77.0 75.9 75.7 70.2 67.5 64.4 61.5 61.5 61.6 61.5 60.5 82 Cash assets4 150.1r 140.2 155.5 157.2 139.5 137.1 145.0 139.3 130.2 134.7 124.7 165.3 83 Other assets5 228.4 253.7 253.0 260.8 260.8 270.2 265.6 263.0 271.1 255.3 260.7 263.5 84 Total assets6 2,975.8r 3,049.9 3,088.9 3,118^ 3,087.0 3,0933 3,126.6 3,114.7 3,123.9 3,108.4 3,078.4 3,138.8 Liabilities 85 Deposits l,646.8r 1,650.1 1,690.7 1,686.9 1,681.9 1,699.0 1,734.1 1,709.3 1,698.8 1,709.0 1,688.6 1,733.5 86 Transaction 312.7r 298.8 315.0 309.3 295.2 297.8 308.5 297.0 276.2 292.6 289.3 330.6 87 Nontransaction 1,334. lr 1,351.4 1,375.6 1,377.6 1,386.7 1,401.2 1,425.6 1,412.4 1,422.6 1,416.5 1,399.3 1,402.9 88 Large time 248.7r 259.4 269.1 270.5 266.0 263.5 262.8 264.4 262.6 262.6 265.6 266.4 89 Other l,085.3r 1,092.0 1,106.5 1,107.1 1,120.8 1,137.7 1,162.8 1,148.0 1,160.0 1,153.8 1,133.7 1,136.5 90 Borrowings 662.1 661.1 669.2 694.1 683.1 675.3 706.2 696.1 716.6 693.6 683.1 686.7 91 From banks in the U.S 205.lr 196.8 215.9 220.2 220.0 223.2 233.1 215.5 217.6 219.6 212.3 211.6 92 From nonbanks in the U.S 457. lr 464.3 453.3 473.9 463.1 452.0 473.1 480.7 499.0 473.9 470.7 475.1 93 Net due to related foreign offices .. . 231.2 215.4 206.8 201.8 200.8 194.9 170.3 197.6 185.6 199.1 200.7 208.5 94 Other liabilities 173.2 219.7 219.0 232.8 214.8 215.1 201.6 198.0 207.8 193.6 192.8 196.8 95 Total liabilities 2,713.4r 2,7463 2,785.7 2,815.7 2,780.6 2,7843 2,812.2 2301.1 2,808.8 2,7953 2,765.2 2,825.4 96 Residual (assets less liabilities)7 262.5 303.6 303.2 303.1 306.4 309.1 314.4 313.6 315.1 313.1 313.2 313.4 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 Mayr Nov. Dec. Jan.r Feb.1" Mar.r Apr.r May May 9 May 16 May 23 May 30 Seasonally adjusted Assets 1 Bank credit 1,918.5 2,041.7 2,062.6 2,080.1 2,086.8 2,077.6 2,082.1 2,092.3 2,084.6 2,092.0 2,095.6 2,097.7 2 Securities in bank credit 516.3 542.1 549.4 555.8 556.5 548.5 548.6 551.3 548.3 551.2 552.1 553.7 3 U.S. government securities 373.5 369.1 367.4 366.4 363.7 351.7 349.8 349.7 348.0 348.7 350.5 351.7 4 Other securities 142.7 172.9 182.1 189.4 192.8 196.8 198.8 201.6 200.3 202.6 201.6 202.0 5 Loans and leases in bank credit2 1,402.2 1,499.6 1,513.2 1,524.3 1,530.3 1,529.1 1,533.5 1,541.0 1,536.3 1,540.8 1,543.5 1,544.0 6 Commercial and industrial 269.5 290.0 290.7 295.3 297.3 298.0 297.3 297.3 296.8 297.2 297.3 297.6 7 Real estate 756.5 811.2 818.0 819.9 824.4 824.2 824.4 829.1 827.5 828.6 829.6 831.0 8 Revolving home equity 39.9 46.1 47.0 47.6 48.0 48.0 48.3 49.2 48.9 49.2 49.3 49.5 9 Other 716.6 765.1 771.0 772.3 776.4 776.2 776.1 779.9 778.5 779.4 780.3 781.5 10 Consumer 282.0 297.6 300.7 304.0 301.5 298.5 301.2 302.5 300.4 302.7 304.3 303.0 11 Security-1 6.1 6.6 7.1 7.2 7.6 8.1 8.6 8.7 8.6 8.8 8.7 8.8 12 Other loans and leases 88.1 94.2 96.7 97.9 99.5 100.3 102.0 103.4 103.1 103.5 103.5 103.6 13 Interbank loans 64.2 80.4 87.4 87.3 97.6 108.0 118.5 123.7 120.5 124.4 125.6 125.6 14 Cash assets4 80.4 78.5 83.1 85.5 86.1 85.6 86.6 87.1 84.7 88.2 85.9 89.4 15 Other assets5 110.7 108.6 112.4 114.9 115.1 120.6 123.9 122.7 124.6 120.9 120.1 124.0 16 Total assets6 2,149J 2,282.7 2318.7 2,340.8 2,358.8 2365.1 2,384.1 2398.6 23873 2,398.4 2,400.0 2,409.6 Liabilities 17 Deposits 1,592.7 1,758.5 1,794.8 1,824.7 1,835.9 1,845.8 1,869.9 1,878.1 1,868.8 1,876.8 1,877.9 1,887.8 18 Transaction 301.0 294.0 294.1 297.6 299.1 295.9 298.6 301.3 289.0 298.4 309.3 314.0 19 Nontransaction 1,291.7 1,464.6 1,500.7 1,527.1 1,536.8 1,549.9 1,571.4 1,576.8 1,579.9 1,578.4 1,568.7 1,573.8 20 Large time 256.0 292.7 298.6 300.3 306.1 302.9 303.0 300.9 303.2 301.2 299.7 299.5 21 Other 1,035.8 1,171.9 1,202.1 1,226.8 1,230.7 1,247.0 1,268.3 1,275.8 1,276.7 1,277.1 1,269.0 1,274.3 22 Borrowings 346.0 327.2 336.5 343.9 341.2 333.3 336.7 340.2 339.2 337.0 341.7 342.6 23 From banks in the U.S 162.6 154.1 160.5 158.1 158.1 151.6 151.4 153.3 151.4 152.5 155.5 153.9 24 From others 183.4 173.1 176.0 185.7 183.2 181.7 185.3 186.9 187.7 184.5 186.2 188.7 25 Net due to related foreign offices .... 6.0 23.7 20.9 16.8 16.7 15.4 12.8 16.6 17.0 18.9 15.2 16.5 26 Other liabilities 58.4 53.9 54.1 53.4 53.9 56.1 56.4 57.0 56.3 57.0 57.4 57.4 27 Total liabilities 2,003.1 2,1633 2,2063 2,238.8 2,247.7 2,250.6 2,275.8 2,291.9 2,2813 2,289.7 2,292.2 23043 28 Residual (assets less liabilities)7 146.2 119.4 112.5 102.0 111.1 114.5 108.2 106.8 106.1 108.7 107.8 105.3 Not seasonally adjusted Assets 29 Bank credit 1,920.7 2,042.5 2,067.1 2,075.8 2,075.8 2,073.3 2,081.8 2,092.8 2,086.0 2,093.2 2,096.2 2,096.7 30 Securities in bank credit 518.1 540.3 548.6 555.2 554.6 550.7 551.3 552.9 550.5 552.9 553.6 554.7 31 U.S. government securities 375.4 367.4 366.5 365.8 361.8 354.0 352.5 351.3 350.2 350.3 352.0 352.7 32 Other securities 142.7 172.9 182.1 189.4 192.8 196.8 198.8 201.6 200.3 202.6 201.6 202.0 33 Loans and leases in bank credit2 1,402.6 1,502.2 1,518.5 1,520.6 1,521.2 1,522.5 1,530.5 1,539.9 1,535.5 1,540.3 1,542.6 1,542.0 34 Commercial and industrial 271.6 289.3 291.4 294.4 295.6 297.7 299.4 299.9 299.8 300.0 299.8 299.7 35 Real estate 757.3 811.6 818.0 818.3 821.1 822.6 824.1 829.9 827.9 829.6 831.1 831.6 36 Revolving home equity 40.0 46.4 47.1 47.6 47.8 47.8 48.3 49.3 49.1 49.4 49.4 49.5 37 Other 717.3 765.2 770.9 770.7 773.3 774.7 775.8 780.5 778.8 780.2 781.7 782.1 38 Consumer 280.6 299.5 304.5 304.8 300.0 295.0 297.5 299.8 297.5 300.3 301.9 300.0 39 Credit cards and related plans. . n.a. 131.3 135.8 134.9 130.3 126.5 129.6 131.9 129.8 132.2 133.8 132.2 40 Other n.a. 168.2 168.7 169.9 169.7 168.5 167.9 167.9 167.8 168.0 168.1 167.8 41 Security3 5.9 7.0 7.3 7.1 7.6 8.4 8.7 8.4 8.4 8.5 8.2 8.4 42 Other loans and leases 87.2 94.8 97.2 96.0 96.9 98.9 100.9 102.0 101.8 102.0 101.6 102.2 43 Interbank loans 60.4 86.2 92.3 87.8 100.6 114.3 122.5 114.7 116.5 114.8 112.2 114.2 44 Cash assets4 79.6 82.4 88.3 88.1 85.1 82.0 83.7 85.9 81.0 85.3 81.2 95.8 45 Other assets5 110.7 108.6 112.4 114.9 115.1 120.6 123.9 122.7 124.6 120.9 120.1 124.0 46 Total assets6 2,146.9 2,293.2 2333.2 2339.7 2349.7 2363.4 2,384.8 2388.8 2381.0 2,387.0 2,3823 2,4033 Liabilities 47 Deposits 1,587.8 1,770.6 1,812.8 1,823.4 1,836.9 1,853.2 1,877.2 1,871.6 1,867.4 1,870.0 1,862.9 1,883.4 48 Transaction 296.5 297.6 304.8 300.3 294.2 293.9 298.0 296.2 282.9 291.7 297.7 315.7 49 Nontransaction 1,291.4 1,473.0 1,508.0 1,523.2 1,542.6 1,559.3 1,579.1 1,575.5 1,584.5 1,578.3 1,565.1 1,567.6 50 Large time 256.0 292.7 298.6 300.3 306.1 302.9 303.0 300.9 303.2 301.2 299.7 299.5 51 Other 1,035.4 1,180.3 1,209.4 1,222.9 1,236.5 1,256.4 1,276.1 1,274.5 1,281.3 1,277.1 1,265.4 1,268.1 52 Borrowings 346.0 327.2 336.5 343.9 341.2 333.3 336.7 340.2 339.2 337.0 341.7 342.6 53 From banks in the U.S 162.6 154.1 160.5 158.1 158.1 151.6 151.4 153.3 151.4 152.5 155.5 153.9 54 From others 183.4 173.1 176.0 185.7 183.2 181.7 185.3 186.9 187.7 184.5 186.2 188.7 55 Net due to related foreign offices .... 6.0 23.7 20.9 16.8 16.7 15.4 12.8 16.6 17.0 18.9 15.2 16.5 56 Other liabilities 58.4 53.9 54.1 53.4 53.9 56.1 56.4 57.0 56.3 57.0 57.4 57.4 57 Total liabilities 1,998.2 2,1753 2,2243 2,237.5 2,248.6 2,258.1 2,283.1 2,285.4 2,279.8 2,282.9 2,277.1 2,299.9 58 Residual (assets less liabilities)7 148.7 117.9 108.9 102.2 101.0 105.3 101.8 103.4 101.1 104.1 105.4 103.6 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 Domestic NonfinancialS tatistics • August 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 2000 2001 2001 May Nov. Dec/ Jan.r Feb.r Mar.r Apr. May May 9 May 16 May 23 May 30 Seasonally adjusted Assets 1 Bank credit 584.8 588.1 599.4 613.5 607.4 620.8 616.5r 602.9 611.9 594.9 597.9 608.1 2 Securities in bank credit 212.4 195.5 205.0 208.3 198.8 205.6 214.6r 210.3 213.8 207.1 209.9 209.4 U.S. government securities 80.4 68.1 69.2 66.4 64.3 67.9 75.0 69.8 71.7 68.7 69.9 68.4 4 Other securities 132.0 127.5 135.9 141.9 134.6 137.7 139.6r 140.5 142.2 138.4 140.0 140.9 5 Loans and leases in bank credit2 . . . 372.4 392.6 394.4 405.2 408.6 415.2 40lff 392.6 398.1 387.8 387.9 398.7 6 Commercial and industrial 205.3 206.1 209.0 214.5 217.4 220.6 220.8r 218.9 222.0 217.3 218.9 218.0 7 Real estate 17.7 18.5 18.5 18.5 18.3 18.2 \lff 18.0 18.3 18.0 18.0 18.0 8 Security3 81.5 100.3 100.1 105.1 105.3 106.6 95.3r 87.8 88.3 85.7 83.4 95.3 9 Other loans and leases 67.9 67.7 66.7 67.2 67.6 69.9 67.9 67.8 69.5 66.8 67.6 67.3 10 Interbank loans 30.4 26.8 27.0 29.2 28.4 30.7 29.5r 31.9 28.2 36.9 30.6 33.9 11 Cash assets4 43.1 38.5 39.9 41.5 41.8 40.7 39.3 37.5 39.3 37.9 36.5 36.5 12 Other assets5 40.5 40.0 36.1 37.1 36.5 38.3 40.9 38.9 38.0 39.6 40.7 37.9 13 Total assets6 6985 693.1 702.1 720.9 730.2 725.8r 710.7 717.0 709.0 7053 716.0 Liabilities 14 Deposits 383.3r 379.6r 380.0 386.6 380.5 378.6 392.6r 406.8 382.8 409.4 417.6 423.3 15 Transaction 11.1 10.8 10.6 10.2 10.3 9.4 10.5 10.5 10.8 11.3 10.0 10.1 16 Nontransaction 372.2r 368.8r 369.4 376.4 370.2 369.2 382. r 396.3 371.9 398.1 407.7 413.2 17 Borrowings 203.1 223.0 239.6 243.5 238.5 233.3 236.0 216.4 220.5 215.7 209.9 220.1 18 From banks in the U.S 18.1 18.6 22.2 25.2 22.5 24.2 23.5 19.5 20.7 22.2 18.4 17.2 19 From others 185.0 204.4 217.4 218.3 216.0 209.1 212.5 196.8 199.8 193.5 191.5 202.9 20 Net due to related foreign offices 20.6 7.3 -1.8 3.5 4.8 21.8 4.2 -4.7 17.6 -6.8 -14.7 -16.9 21 Other liabilities 84.2 75.4 72.6 79.6 77.1 82.5 &7ff 86.3 86.4 86.5 86.1 86.4 22 Total liabilities 691.2r 685.2r 690.5 7m 700.9 716.2 720.7r 704.7 7073 704.7 698.9 712.9 23 Residual (assets less liabilities)7 7.4r Iff 11.6 7.7 12.9 13.9 5.1 6.1 9.7 4.3 6.4 3.1 Not seasonally adjusted Assets 24 Bank credit 580.6 590.8 610.1 621.6 610.7 616.0 613.7r 598.2 607.2 591.0 591.2 603.7 25 Securities in bank credit 212.4 195.5 205.0 208.3 198.8 205.6 214.6r 210.3 213.8 207.1 209.9 209.4 26 U.S. government securities 80.4 68.1 69.2 66.4 64.3 67.9 75.0 69.8 71.7 68.7 69.9 68.4 21 Trading account 12.4 10.9 11.8 11.4 10.4 9.5 14.2 13.4 13.9 13.3 13.5 13.2 28 Investment account 68.0 57.2 57.3 55.1 53.8 58.4 60.8 56.4 57.8 55.4 56.4 55.2 29 Other securities 132.0 127.5 135.9 141.9 134.6 137.7 139.6r 140.5 142.2 138.4 140.0 140.9 30 Trading account 87.7 88.0 90.7 96.3 90.8 94.5 96.5r 98.2 98.8 95.7 98.3 99.5 31 Investment account 44.2 39.4 45.1 45.6 43.8 43.2 43.1 42.3 43.3 42.7 41.7 41.4 32 Loans and leases in bank credit2 . . . 368.2 395.3 405.1 413.3 411.9 410.4 399. lr 387.9 393.4 383.9 381.3 394.3 33 Commercial and industrial 202.6 206.7 211.4 216.2 219.6 221.7 219.0 215.8 218.9 214.4 215.2 214.9 34 Real estate 17.7 18.5 18.5 18.5 18.3 18.2 17^ 18.0 18.3 18.0 18.0 18.0 35 Security3 80.7 101.8 106.2 110.4 106.3 100.6 94.0 87.0 87.4 85.2 82.0 94.6 36 Other loans and leases 67.2 68.2 69.0 68.3 67.7 69.9 68.2 67.0 68.7 66.2 66.1 66.8 37 Interbank loans 30.4 26.8 27.0 29.2 28.4 30.7 29.5r 31.9 28.2 36.9 30.6 33.9 38 Cash assets4 42.1 40.6 42.7 44.1 41.9 39.3 37.7 36.6 38.2 37.1 35.2 36.1 39 Other assets5 39.9 40.0 37.9 38.3 37.4 39.0 40.0 38.3 38.0 39.3 39.8 37.1 40 Total assets6 692.7 697.9 717.4 732.8 718.1 724.6 720.5r 704.6 711.2 703.9 696.4 7103 Liabilities 41 Deposits 384.5r 382.3r 390.7 396.5 388.7 383.1 395.4 407.9 385.9 409.5 418.1 423.6 42 Transaction 10.7 11.0 11.3 10.4 10.1 9.2 10.0 10.1 10.2 10.7 9.5 10.1 43 Nontransaction 373.8r 371.3r 379.4 386.1 378.7 374.0 385.5r 397.8 375.7 398.8 408.6 413.5 44 Borrowings 203.1 223.0 239.6 243.5 238.5 233.3 236.0 216.4 220.5 215.7 209.9 220.1 45 From banks in the U.S 18.1 18.6 22.2 25.2 22.5 24.2 23.5 19.5 20.7 22.2 18.4 17.2 46 From others 185.0 204.4 217.4 218.3 216.0 209.1 212.5 196.8 199.8 193.5 191.5 202.9 47 Net due to related foreign offices .... 17.4 7.6 2.9 6.8 8.0 21.9 -.4 -7.9 16.3 -10.1 -19.1 -21.3 48 Other liabilities 82.7 75.6 74.7 81.0 78.5 82.6 85.8r 84.8 85.8 84.9 84.0 84.3 49 Total liabilities 687.6r 688.4r 708.0 727.8 713.7 720.9 716.9" 701.1 708.5 700.0 692.9 706.7 50 Residual (assets less liabilities)7 5.r 9.4r 9.4 5.1 4.4 3.6 3.6 3.4 2.7 3.9 3.5 3.5 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banking Institutions—Assets and Liabilities A21 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities1—Continued F. Memo items Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2000 2000 2001 2001 May Nov. Dec.r Jan.r Feb.r Mar.r Apr. May May 9 May 16 May 23 May 30 Not seasonally adjusted MEMO Large domestically chartered banks, adjusted for mergers 1 Revaluation gains on off-balance-sheet items8 72.4 68.0 77.8 79.5 77.6 80.6 79.6 81.7 84.1 85.0 80.5 78.1 2 Revaluation losses on off-balancesheet items8 72.9 72.6 83.1 82.5 81.0 79.8 74.9 74.7 74.9 74.6 74.8 74.9 3 Mortgage-backed securities9 253.7 240.6 242.6 248.0 244.5 244.8 252.2 258.9 262.3 257.4 253.9 260.0 4 Pass-through 178.6 174.3 177.5 182.6 178.9 180.9 189.8r 195.2 196.6 194.0 191.8 196.9 5 CMO, REMIC, and other 75.1 66.4 65.0 65.3 65.6 63.9 62.4r 63.7 65.7 63.4 62.1 63.1 6 Net unrealized gains (losses) on available-for-sale securities10 .... -10.3 -1.2 1.4 -2.5 -.6 -.3 -.3 -1.7 -1.0 -1.7 -1.9 -2.4 7 Off-shore credit to U.S. residents".... 23.5 23.1 23.4 23.0 22.7 22.6 21.7 21.0 21.1 20.9 21.2 20.6 8 Securitized consumer loans12 n.a. 80.5 82.2 82.4 80.8 80.2 78.8r 77.0 78.0 77.0 75.8 76.8 9 Credit cards and related plans n.a. 67.3 68.6 68.5 67.3 67.3 66.4r 65.0 65.9 65.0 64.0 65.0 10 Other n.a. 13.2 13.6 13.9 13.4 12.9 12.4 12.0 12.1 12.0 11.8 11.8 11 Securitized business loans12 n.a. 17.8 18.6 18.4 18.6 18.7 18.8 19.8 19.8 19.8 19.8 19.9 Small domestically chartered commercial banks, adjusted for mergers 12 Mortgage-backed securities9 205.7 213.0 214.5 218.2 222.7 229.1 237.7r 242.3 240.9 241.2 243.5 243.7 13 Securitized consumer loans12 n.a. 225.6 231.1 231.5 235.6 238.6 241.2r 242.2 242.6 240.5 241.7 243.7 14 Credit cards and related plans n.a. 216.1 221.9 222.4 226.8 229.9 232.6 233.8 234.1 232.1 233.2 235.3 15 Other n.a. 9.5 9.2 9.1 8.9 8.7 8.6r 8.4 8.5 8.5 8.4 8.4 Foreign-related institutions 16 Revaluation gains on off-balancesheet items8 50.4 44.6 45.7 51.8 49.4 52.5 54.1 56.2 56.0 54.3 57.7 56.9 17 Revaluation losses on off-balancesheet items8 47.0 40.8 41.7 48.9 47.1 49.5 50.6r 51.6 51.1 50.4 52.8 51.9 18 Securitized business loans12 n.a. 22.8 23.1 23.2 22.4 21.5 19.8 18.0 18.4 18.1 17.7 17.5 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 made 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 NonfinancialS tatistics • August 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 2001 IItteemm 1996 1997 1998 1999 2000 Nov. Dec. Jan. Feb. Mar. Apr. 1 All issuers 775,371 966,699 1,163,303 1,403,023 1,615,341 1,624,421 1,615,341 1,566,104 1,544,572 1,511,354 1,519,528 Financial companies' 2 Dealer-placed paper, total" 361,147 513,307 614,142 786,643 973,060 960,701 973,060 976,735 977,791 978,225 995,072 3 Directly placed paper, total3 229,662 252,536 322,030 337,240 298,848 312,438 298,848 270,922 263,554 249,420 247,333 4 Nonfinancial companies4 184,563 200,857 227,132 279,140 343,433 351,282 343,433 318,447 303,227 283,711 277,123 1. Institutions engaged primarily in commercial, savings, and mortgage banking; sales, 3. As reported by financial companies that place their paper directly with investors. personal, and mortgage financing; factoring, finance leasing, and other business lending; 4. Includes public utilities and firms engaged primarily in such activities as communicainsurance underwriting; and other investment activities. tions, construction, manufacturing, mining, wholesale and retail trade, transportation, and 2. Includes all financial-company paper sold by dealers in the open market. services. B. Bankers Dollar Acceptances1 Millions of dollars, not seasonally adjusted, year ending September2 Item 1997 1998 1999 2000 1 Total amount of reporting banks' acceptances in existence 25,774 14,363 10,094 9,881 2 Amount of other banks' eligible acceptances held by reporting banks 736 523 461 462 3 Amount of own eligible acceptances held by reporting banks (included in item 1) 6,862 4,884 4,261 3,789 4 Amount of eligible acceptances representing goods stored in, or shipped between, foreign countries (included in item 1) 10,467 5,413 3,498 3,689 1. Includes eligible, dollar-denominated bankers acceptances legally payable in the United 2. Data on bankers dollar acceptances are gathered from approximately 40 institutions; States. Eligible acceptances are those that are eligible for discount by Federal Reserve Banks; includes U.S. chartered commerical banks (domestic and foreign offices), U.S. branches and that is, those acceptances that meet the criteria of Paragraph 7 of Section 13 of the Federal agencies of foreign banks, and Edge and agreement corporations. The reporting group is Reserve Act (12 U.S.C. §372). revised every year. 1.33 PRIME RATE CHARGED BY BANKS Short-Term Business Loans1 Percent per year Average Average Average Date of change Rate Period rate Period rate Period rate 1998—Jan. 1 8.50 1998 8.35 1999—Jan 7.75 2000—Jan 8.50 Sept. 30 8.25 1999 8.00 Feb 7.75 Feb 8.73 Oct. 16 8.00 2000 9.23 Mar. 7.75 Mar 8.83 Nov. 18 7.75 Apr 7.75 Apr. 9.00 1998—Jan 8.50 May 7.75 May 9.24 1999—July 1 8.00 Feb 8.50 June 7.75 June 9.50 Aug. 25 8.25 Mar 8.50 July 8.00 July 9.50 Nov. 17 8.50 Apr 8.50 Aug 8.06 Aug 9.50 May 8.50 Sept 8.25 Sept 9.50 2000—Feb. 3 8.75 June 8.50 Oct 8.25 Oct 9.50 Mar. 22 9.00 July 8.50 Nov 8.37 Nov. 9.50 MMaayy 1177 9.50 Aug 8.50 Dec 8.50 Dec 9.50 Sept 8.49 2001—Jan. 4 9.00 Oct 8.12 2001—Jan 9.05 Feb. 1 8.50 Nov 7.89 Feb 8.50 Mar. 21 8.00 Dec 7.75 Mar. 8.32 Apr. 19 7.50 Apr 7.80 May 16 7.00 May 7.24 June 28 6.75 June 6.98 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 2001 2001, week ending IItteemm 11999988 11999999 22000000 Feb. Mar. Apr. May Apr. 27 May 4 May 11 May 18 May 25 MONEY MARKET INSTRUMENTS 1 Federal funds1,2,3 5.35 4.97 6.24 5.49 5.31 4.80 4.21 4.42 4.53 4.43 4.37 3.98 2 Discount window borrowing2-4 4.92 4.62 5.73 5.00 4.81 4.28 3.73 4.00 4.00 4.00 3.86 3.50 Commercial paper1,5,6 Nonfinancial 3 1-month 5.40 5.09 6.27 5.39 5.02 4.71 4.06 4.36 4.35 4.06 3.98 3.98 4 2-month 5.38 5.14 6.29 5.25 4.87 4.54 3.98 4.25 4.19 3.98 3.94 3.92 5 3-month 5.34 5.18 6.31 5.14 4.78 4.44 3.93 4.19 4.14 3.93 3.90 3.87 Financial 6 1-month 5.42 5.11 6.28 5.41 5.06 4.74 4.08 4.41 4.31 4.09 4.02 4.00 7 2-month 5.40 5.16 6.30 5.29 4.93 4.57 4.00 4.28 4.23 3.99 3.96 3.94 8 3-month 5.37 5.22 6.33 5.19 4.81 4.47 3.96 4.21 4.15 3.96 3.93 3.92 Commercial paper (historical)3'5'1 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 12 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. 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 3-month 5.39 5.24 6.23 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 market3,10 17 1-month 5.49 5.19 6.35 5.47 5.09 4.77 4.11 4.42 4.33 4.12 4.06 4.04 18 3-month 5.47 5.33 6.46 5.26 4.89 4.53 4.02 4.26 4.20 4.01 4.00 3.98 19 6-month 5.44 5.46 6.59 5.12 4.74 4.41 4.01 4.20 4.17 4.00 3.99 3.98 20 Eurodollar deposits, 3-month3,11 5.45 5.31 6.45 5.26 4.89 4.55 4.01 4.26 4.19 3.99 3.99 3.97 U.S. Treasury bills Secondary market3,5 21 3-month 4.78 4.64 5.82 4.88 4.42 3.87 3.62 3.72 3.78 3.65 3.54 3.58 22 6-month 4.83 4.75 5.90 4.71 4.28 3.85 3.62 3.71 3.77 3.60 3.59 3.61 23 1-year 4.80 4.81 5.78 4.51 4.11 3.80 3.60 3.65 3.72 3.58 3.58 3.59 Auction high3,5,12 24 3-month 4.81 4.66 5.66 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 25 6-month 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 27 1-year 5.05 5.08 6.11 4.68 4.30 3.98 3.78 3.82 3.90 3.76 3.76 3.78 28 2-year 5.13 5.43 6.26 4.66 4.34 4.23 4.26 4.19 4.23 4.16 4.30 4.33 29 3-year 5.14 5.49 6.22 4.71 4.43 4.42 4.51 4.43 4.49 4.38 4.55 4.58 30 5-year 5.15 5.55 6.16 4.89 4.64 4.76 4.93 4.83 4.91 4.78 4.96 5.01 31 7-year 5.28 5.79 6.20 5.10 4.88 5.03 5.24 5.11 5.14 5.12 5.30 5.33 32 10-year 5.26 5.65 6.03 5.10 4.89 5.14 5.39 5.25 5.28 5.29 5.46 5.46 33 20-year 5.72 6.20 6.23 5.62 5.49 5.78 5.92 5.88 5.83 5.85 5.98 5.98 34 30-year 5.58 5.87 5.94 5.45 5.34 5.65 5.78 5.76 5.71 5.74 5.83 5.81 Composite 35 More than 10 years (long-term) 5.69 6.14 6.41 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 Aaa 4.93 5.28 5.58 5.09 5.00 5.14 5.15 5.16 5.15 5.12 5.17 5.15 37 Baa 5.14 5.70 6.19 5.86 5.80 5.96 5.94 6.01 5.96 5.92 5.98 5.92 38 Bond Buyer series15 5.09 5.43 5.71 5.18 5.13 5.27 5.29 5.34 5.32 5.25 5.31 5.30 CORPORATE BONDS 39 Seasoned issues, all industries16 6.87 7.45 7.98 7.50 7.41 7.63 7.69 7.68 7.61 7.65 7.73 7.71 Rating group 40 Aaa 6.53 7.05 7.62 7.10 6.98 7.20 7.29 7.26 7.21 7.25 7.34 7.32 41 Aa 6.80 7.36 7.83 7.32 7.22 7.43 7.50 7.49 7.42 7.46 7.54 7.52 42 A 6.93 7.53 8.11 7.69 7.61 7.82 7.88 7.88 7.81 7.85 7.93 7.90 43 Baa 7.22 7.88 8.36 7.87 7.84 8.07 8.07 8.09 8.00 8.03 8.11 8.10 MEMO Dividend-price ratio17 44 Common stocks 1.49 1.25 1.15 1.22 1.33 1.32 1.23 1.27 1.23 1.24 1.22 1.22 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 the Board's Commercial Paper web in compiling this index. The twenty-bond index has a rating roughly equivalent to Moodys' pages (http://www.federalreserve.gov/releases/cp) for more information. A1 rating. Based on Thursday figures. 7. An average of offering rates on commercial paper for firms whose bond rating is AA or 16. Daily figures from Moody's Investors Service. Based on yields to maturity on selected the equivalent. Series ended August 29, 1997. long-term bonds. 8. An average of offering rates on paper directly placed by finance companies. Series 17. Standard & Poor's corporate series. Common stock ratio is based on the 500 stocks in ended August 29, 1997. the price index. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A24 Domestic Nonfinancial Statistics • August 2001 1.36 STOCK MARKET Selected Statistics 2000 2001 IInnddiiccaattoorr 11999988 11999999 22000000 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 550.65 619.52 643.71 667.05 646.53 646.64 645.44 650.55 648.05 603.44 607.06 644.44 2 Industrial 684.35 775.29 809.40 829.99 797.00 800.88 792.66 796.74 799.38 744.21 747.48 798.94 3 Transportation 468.61 491.62 414.73 404.23 403.20 434.92 457.53 471.21 482.26 452.36 455.22 477.21 4 Utility 190.52 284.82 478.99 463.76 469.16 455.66 444.16 440.36 424.53 395.34 400.49 414.69 5 Finance 516.65 530.97 552.48 616.89 587.76 600.45 621.62 634.17 626.41 583.38 587.88 618.74 6 Standard & Poor's Corporation (1941-43 = 10)1 1,085.50 1,327.33 1,427.22 1,468.06 1,390.14 1,375.04 1,330.93 1,335.63 1,305.75 1,185.85 1,189.84 1,270.37 7 American Stock Exchange (Aug. 31, 1973 = 50)2 682.69 770.90 922.22 952.74 913.64 892.60 870.16 898.18 923.99 891.22 891.18 940.73 Volume of trading (thousands of shares) 8 New York Stock Exchange 666,534 799,554 1,026,867 1,026,597 1,167,025 1,015,606 1,183,149 1,299,986 1,117,977 1,251,569 1,247,382 1,091,366 9 American Stock Exchange 28,870 32,629 51,437 47,047 57,915 58,541 73,759 72,312 70,648 81,666 77,612 66,103 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers3 140,980 228,530 198,790 250,780 233,380 219,110 198,790 197,110 186,810 165,350 166,940 174,180 Free credit balances at brokers4 11 Margin accounts5 40,250 55,130 100,680 70,960 82,990 96,730 100,680 90,380 99,390 106,300 97,470 91,990 12 Cash accounts 62,450 79,070 84,400 74,766 73,410 74,050 84,400 81,380 78,660 77,520 77,460 76,260 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 Dec. Jan. Feb. Mar. Apr. May U.S. budget 1 Receipts, total 1,721,798 1,827,302 2,025,218 200,489 219,215 110,481 130,07 lr 331,796 125,194 2 On-budget 1,305,999 1,382,986 1,544,634 161,737 171,001 70,555 84,120r 278,611 84,363 3 Off-budget 415,799 444,468 480,584 38,752 48,214 39,926 45,951 53,185 40,831 4 Outlays, total 1,652,619 1,702,875 1,788,826 167,823 142,836 158,649 180,733r 141,999 153,112 5 On-budget 1,336,015 1,382,097 1,458,061 132,747 144,448 123,573 145,182r 109,938 118,121 6 Off-budget 316,604 320,778 330,765 35,075 -1,613 35,076 35,550 32,062 34,992 7 Surplus or deficit (—), total 69,179 124,579 236,392 32,666 76,379 -48,168 -50,662 189,796 -27,919 8 On-budget -30,016 889 86,573 28,990 26,553 -53,018 -61,062 168,673 -33,758 9 Off-budget 99,195 123,690 149,819 3,677 49,827 4,850 10,401 21,123 5,839 Source of financing (total) 10 Borrowing from the public -51,211 -88,674 -222,672 -36,689 -23,990 15,100 32,557 -135,572 -20,608 11 Operating cash (decrease, or increase [-]) 4,743 -17,580 3,799 -9,632 -45,761 45,717 -7,171 -36,846 58,856 12 Other 2 -22,711 -18,325 -17,519 13,655 -6,628 -12,649 25,276 -17,378 -10,329 MEMO 13 Treasury operating balance (level, end of period) 38,878 56,458 52,659 21,069 66,830 21,113 28,284 65,130 6,274 14 Federal Reserve Banks 4,952 6,641 8,459 5,149 5,256 4,956 5,657 7,894 4,396 15 Tax and loan accounts 33,926 49,817 44,199 15,920 61,574 16,158 22,627 57,236 1,878 1. Since 1990, off-budget items have been the social security trust funds (Federal Old-Age, net gain or loss for U.S. currency valuation adjustment; net gain or loss for IMF loan- Survivors, and Disability Insurance) and the U.S. Postal Service. valuation adjustment; and profit on sale of gold. 2. Includes special drawing rights (SDRs); reserve position on the U.S. quota in the SOURCE. Monthly totals; U.S. Department of the Treasury, Monthly Treasury Statement of International Monetary Fund (IMF); loans to the IMF; other cash and monetary assets; Receipts and Outlays of the U.S. Government; fiscal year totals: U.S. Office of Management accrued interest payable to the public; allocations of SDRs; deposit funds; miscellaneous and Budget, Budget of the U.S. Government 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 Nonfinancial Statistics • August 2001 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS' Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1999 2000 2001 11999999 22000000 HI H2 HI H2 Mar. Apr. May RECEIPTS 1 All sources 1,827,302 2,025,218 966,045 892,266 1,089,763 952,942 130,071 331,796 125,194 2 Individual income taxes, net 879,480 1,004,462 481,907 425,451 550,208 458,679 33,591 220,015 46,718 3 Withheld 693,940 780,397 351,068 372,012 388,526 395,572 67,068 64,489 63,237 4 Nonwithheld 308,185 358,049 240,278 68,302 281,103 77,732 7,662 187,032 13,753 5 Refunds 122,706 134,046 109,467 14,841 119,477 14,628 4411,,115533 3311,,551188 3300,,228822 Corporation income taxes 6 Gross receipts 216,324 235,655 106,861 110,111 119,166 123,962 26,986 26,693 6,453 7 Refunds 31,645 28,367 17,092 13,996 13,781 15,776 4,849 2,948 1,349 8 Social insurance taxes and contributions, net . . . 611,833 652,852 324,831 292,551 353,514 310,122 60,135 73,887 61,437 y Employment taxes and contributions2 580,880 620,451 306,235 280,059 333,584 297,665 59,499 68,773 52,210 10 Unemployment insurance 26,480 27,640 16,378 10,173 17,562 10,097 209 4,760 8,786 ii Other net receipts3 4,473 4,761 2,216 2,319 2,368 2,360 427 354 441 12 Excise taxes 70,414 68,865 31,015 34,262 33,532 35,501 7,064 5,690 4,390 13 Customs deposits 18,336 19,914 8,440 10,287 9,218 10,676 1,653 1,477 1,501 14 Estate and gift taxes 27,782 29,010 14,915 14,001 15,073 13,216 2,215 4,471 2,485 15 Miscellaneous receipts4 34,929 42,826 15,140 19,569 22,831 16,556 3,276 2,510 3,559 OUTLAYS 16 All types 1,702,875 1,788,826 817,227 882,465 892,947 894,905 180,733 141,999 153,508 17 National defense 274,873 294,494 134,414 149,573 143,476 147,651 31,144 22,253 26,028 18 International affairs 15,243 17,216 6,879 8,530 7,250 11,902 1,980 1,272 -1,490 19 General science, space, and technology 18,125 18,637 9,319 10,089 9,601 10,389 1,811 1,547 1,892 20 Energy 912 -1,060 797 -90 -893 -595 187 -390 -25 21 Natural resources and environment 23,970 25,031 10,351 12,100 10,814 12,907 1,822 1,741 2,136 22 Agriculture 23,011 36,641 9,803 20,887 11,164 20,977 2,083 1,272 711 23 Commerce and housing credit 2,649 3,211 -1,629 7,353 -2,497 4,408 1,025 -260 -907 24 Transportation 42,531 46,854 17,082 23,199 21,054 25,841 3,899 3,593 4,850 2b Community and regional development 11,870 10,629 5,368 6,806 5,050 5,962 616 855 928 26 Education, training, employment, and social services 56,402 59,201 29,003 27,532 31,234 29,263 6,874 4,798 5,907 27 Health 141,079 154,534 69,320 74,490 75,871 81,413 14,763 14,844 14,954 28 Social security and Medicare 580,488 606,549 261,146 295,030 306,966 307,473 57,468 50,826 55,876 29 Income security 237,707 247,895 126,552 113,504 133,915 113,212 31,652 19,913 22,005 30 Veterans benefits and services 43,212 47,083 20,105 23,412 23,174 22,615 6,333 2,164 2,865 31 Administration of justice 25,924 27,820 13,149 13,459 13,981 14,635 2,559 2,562 22,,445500 32 General government 15,771 13,454 6,641 7,010 6,198 6,461 1,100 1,162 884499 33 Net interest5 229,735 223,218 116,655 112,420 115,545 104,685 18,568 17,816 18,363 34 Undistributed offsetting receipts6 -40,445 -42,581 -17,724 -22,850 -19,346 -24,070 -3,150 -3,970 -3,882 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 2002\ 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 All 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1999 2000 2001 IItteemm Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 1 Federal debt outstanding 5,681 5,668 5,685 5,805 5,802 5,714 5,702 5,690 5,801 2 Public debt securities 5,652 5,639 5,656 5,776 5,773 5,686 5,674 5,662 5,774 3 Held by public 3,795 3,685 3,667 3,716 3,688 3,496 3,439 3,414 3,434 4 Held by agencies 1,857 1,954 1,989 2,061 2,085 2,190 2,236 2.249 2,339 5 Agency securities 29 29 29 29 28 28 28 27 27 6 Held by public 28 28 28 28 28 28 28 27 27 7 Held by agencies 1 1 1 1 0 0 0 0 0 8 Debt subject to statutory limit 5,566 5,552 5,568 5,687 5,687 5,601 5,592 5,581 5,693 9 Public debt securities 5,566 5,552 5,568 5,687 5,686 5,601 5,591 5,580 5,692 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 Monthly Treasury Statement. bia stadium bonds. 1.41 GROSS PUBLIC DEBT OF U.S. TREASURY Types and Ownership Billions of dollars, end of period 2000 2001 TTyyppee aanndd hhoollddeerr 11999977 11999988 11999999 22000000 Q2 Q3 Q4 Ql 1 Total gross public debt 5,502.4 5,614.2 5,776.1 5,662.2 5,685.9 5,674.2 5,662.2 5,773.7 B\ type 2 Interest-bearing 5,494.9 5,605.4 5,766.1 5,618.1 5,675.9 5,622.1 5,618.1 5,752.0 3 Marketable 3,456.8 3,355.5 3,281.0 2,966.9 3,070.7 2,992.8 2,966.9 2,981.9 4 Bills 715.4 691.0 737.1 646.9 629.9 616.2 646.9 712.0 5 Notes 2,106.1 1,960.7 1,784.5 1,557.3 1,679.1 1,611.3 1,557.3 1,499.0 6 Bonds 587.3 621.2 643.7 626.5 637.7 635.3 626.5 627.9 7 Inflation-indexed notes and bonds' 33.0 67.6 100.7 121.2 109.0 115.0 121.2 128.0 8 Nonmarketable2 2,038.1 2,249.9 2,485.1 2,651.2 2,605.2 2,629.3 2,651.2 2,770.0 9 State and local government series 124.1 165.3 165.7 151.0 160.4 153.3 151.0 152.9 10 Foreign issues3 36.2 34.3 31.3 27.2 27.7 25.4 27.2 24.7 11 Government 36.2 34.3 31.3 27.2 27.7 25.4 27.2 24.7 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 181.2 180.3 179.4 176.9 177.7 177.7 176.9 177.4 14 Government account series4 1,666.7 1,840.0 2,078.7 2,266.1 2,209.4 2,242.9 2,266.1 2,360.3 15 Non-interest-bearing 7.5 8.8 10.0 44.2 10.1 52.1 44.2 46.5 By holder 5 16 U.S. Treasury and other federal agencies and trust funds 1,657.1 1,828.1 2,064.2 2,270.2 2,193.6 2,226.5 2,270.2 2,357.0 17 Federal Reserve Banks6 430.7 452.1 478.0 511.7 504.9 511.4 511.7 523.9 18 Private investors 3,414.6 3,334.0 3,233.9 2,880.4 2,987.4 2,936.2 2,880.4 2,892.9 19 Depository institutions 300.3 237.3 246.5 197.8 219.4 218.3 197.8 188.1 20 Mutual funds 321.5 343.2 348.6 339.0 322.8 324.3 339.0 348.2 21 Insurance companies 176.6 144.5 125.3 116.6 122.0 119.3 116.6 112.8 22 State and local treasuries7 239.3 269.3 266.8 246.2 256.4 241.9 246.2 234.1 Individuals 23 Savings bonds 186.5 186.6 186.4 184.8 184.6 184.3 184.8 184.8 24 Pension funds 360.5 375.3 378.9r 387.7r 384.1 383.1 387.7r 384.9 25 Private 143.5 157.6 167.7 181.6 173.6 179.2 181.6 181.3 26 State and Local 216.9 217.7 211.2r 206.1 210.5 203.9 206.1 203.6 27 Foreign and international8 1,241.6 1,278.7 1,268.7 1,201.4 1,248.8 1,225.2 1,201.4 1,196.2 28 Other miscellaneous investors7'9 589.5 499.0 410.8 218.3 250.4 237.9 218.3 n.a. 1. The U-S- Treasury first issued inflation-indexed securities during the first quarter of 1997. 8. 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- 9. 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. SOURCES. Data by type of security, U.S. Treasury Department, 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, Federal Reserve Board of Governors, Flow holdings; data for other groups are Treasury estimates. of Funds Accounts of the United States and U.S. Treasury Department, Treasury Bulletin, 6. U.S. Treasury securities bought outright by Federal Reserve Banks, see Bulletin unless otherwise noted. table 1.18. 7. In March 1996, in a redefinition of series, fully defeased debt backed by nonmarketable federal securities was removed from "Other miscellaneous investors" and added to "State and local treasuries." The data shown here have been revised accordingly. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A28 Domestic Nonfinancial Statistics • August 2001 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions1 Millions of dollars, daily averages 2001 2001, week ending IItteemm Feb. Mar. Apr. Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 May 16 May 23 May 30 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 30,923 32,043 32,414 36,299 31,998 44,646 27,625 20,894 17,560 20,596 20,583 34,425 Coupon securities, by maturity 2 Five years or less 177,374 170,530r 180,666r 175,696r 159,027r 190,179 196,537 182,562 196,987 201,426 163,520 170,148 3 More than five years 97,333r 87,263r 82,663r 84,918r 85,881r 78,227 82,033 82,012 94,801 94,370 80,939 74,755 4 Inflation-indexed 1,673 1,575 1,847r 1,794 1,676 1,770 1,995 2,044 1,629 2,650 11,,446699 1,633 Federal agency 5 Discount notes 66,280 62,429 61,242r 57,355 56,842r 61,195 66,497 63,766 59,305 52,421 52,497 56,532 Coupon securities, by maturity 6 One year or less l,406r 998 1,188 965 647 1,517 1,502 1,352 1,730 1,588 1,194 1,903 7 More than one year, but less than or equal to five years 19,340 16,460 18,577 12,047 17,969 18,396 23,674 17,867 15,792 18,626 17,249 14,387 8 More than five years 9,935 13,912 7,125r 8,079r 6,381r 5,274 8,070 8,307 6,490 8,903 13,506 7,244 9 Mortgage-backed 108,394 105,381 107,684 83,096 144,118 126,096 88,470 79,022 120,064 122,504 87,584 72,304 By type of counterparty With interdealer broker 10 U.S. Treasury 164,014 151,017 152,513 153,316 142,672 160,861 156,341 150,604 159,235 165,885 140,001 144,299 11 Federal agency 14,732 15,012 12,924 11,034 11,672 11,608 15,939 13,632 12,476 12,561 12,696 10,856 12 Mortgage-backed 32,659 34,045 34,441 28,157 43,120 39,724 29,240 27,882 3399,,229999 31,380 3311,,551111 26,367 With other 13 U.S. Treasury 143,288 140,393 145,077 145,390 135,910 153,961 151,850 136,908 151,742 153,157 126,510 136,662 14 Federal agency 82,229 78,786 75,208 67,411 70,167 74,774 83,805 77,660 70,842 68,977 71,750 69,211 15 Mortgage-backed 75,735 71,337 73,244 54,940 100,998 86,373 59,231 51,140 80,765 91,124 56,073 45,937 FUTURES TRANSACTIONS3 By type of deliverable security 16 U.S. Treasury bills 0 n.a. 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 4,230 4,208 3,482 3,488 3,919 3,766 3,007 3,161 4,387 5,762 4,177 7,214 18 More than five years 17,291 16,989 17,079r 16,395 18,265 16,849 17,124 16,015 16,450 16,392 19,139 22,237 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 00 0 0 0 00 22 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 0 23 More than five years 66 55 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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 971 1,167 1,022 1,739 502 1,908 598 696 1,366 1,140 728 1,285 27 More than five years 4,166 4,188 4,119 4,805 4,563 4,848 3,615 2,561 3,060 4,111 3,133 4,336 28 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 00 Federal agency 29 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 30 One year or less 0 0 0 0 0 0 0 0 0 0 0 0 31 More than one year, but less than or equal to five years 29 85 72 85 n.a. 63 n.a. 70 130 0 131 119 32 More than five years 119 133 118 75 172 29 n.a. 190 196 131 n.a. 40 33 Mortgage-backed 1,444 1,863 1,024 802 1,251 1,753 404 932 2,435 1,520 1,192 863 1. Transactions are market purchases and sales of securities as reported to the Federal Forward transactions are agreements made in the over-the-counter market that specify Reserve Bank of New York by the U.S. government securities dealers on its published list of delayed delivery. Forward contracts for U.S. Treasury securities and federal agency debt primary dealers. Monthly averages are based on the number of trading days in the month. securities are included when the time to delivery is more than five business days. Forward Transactions are assumed to be evenly distributed among the trading days of the report week. contracts for mortgage-backed agency securities are included when the time to delivery is Immediate, forward, and futures transactions are reported at principal value, which does not more than thirty business days. include accrued interest; options transactions are reported at the face value of the underlying 3. Futures transactions are standardized agreements arranged on an exchange. All futures securities. transactions are included regardless of time to delivery. Dealers report cumulative transactions for each week ending Wednesday. 4. Options transactions are purchases or sales of put and call options, whether arranged on 2. Outright transactions include immediate and forward transactions. Immediate delivery an organized exchange or in the over-the-counter market, and include options on futures refers to purchases or sales of securities (other than mortgage-backed federal agency securi- contracts on U.S. Treasury and federal agency securities. ties) for which delivery is scheduled in five business days or less and "when-issued" NOTE, "n.a." indicates that data are not published because of insufficient activity. securities that settle on the issue date of offering. Transactions for immediate delivery of mortgagebacked agency securities include purchases and sales for which delivery is scheduled in thirty business days or less. Stripped securities are reported at market value by maturity of coupon or corpus. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Finance A29 1.43 U.S. GOVERNMENT SECURITIES DEALERS Positions and Financing1 Millions of dollars 2001 2001, week ending Feb. Mar. Apr. Apr. 4 Apr. 11 Apr. 18 Apr. 25 May 2 May 9 May 16 May 23 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S. Treasury bills 9,779 20,272 30,544 44,155 40,934 57,291 6,395 1,469 387 -1,152 -3,039 Coupon securities, by maturity 2 Five years or less -17,917 -14,721 -17,951 -14,819 -16,003 -18,297 -16,403 -24,868 -10,566 -17,324 -20,578 3 More than five years -3,985 -6,315 -7,938 -6,752 -7,782 -7,227 -8,356 -9,514 -12,556 -13,569 -12,359 4 Inflation-indexed 3,907 4,146 4,196 4,188 4,377 4,508 3,827 4,026 3,420 3,907 5,444 Federal agency 5 Discount notes 32,994 36,096 49,374 42,037 49,299 54,292 50,340 47,111 47,215 51,112 51,121 Coupon securities, by maturity 6 One year or less 18,229 16,162 15,777 16,519 16,307 15,823 14,955 15,529 14,666 12,933 13,294 7 More than one year, but less than or equal to five years 6,215 5,802 7,171 4,274 4,776 7,117 9,425 9,759 7,730 7,246 11,572 8 More than five years 5,480 8,578 8,699 9,240 9,926 8,534 7,669 8,222 7,161 5,873 6,562 9 Mortgage-backed 10,110 9,611 12,181 13,082 9,749 9,762 14,961 14,358 13,940 15,511 16,402 NET FUTURES POSITIONS4 By type of deliverable security 10 U.S. Treasury bills n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. Coupon securities, by maturity 11 Five years or less 2,344 -1,421 -1,673 -1,353 -1,646 -424 -3,011 -1,842 -1,949 1,174 1,881 12 More than five years -11,744 -10,207 -5,836 -8,406 -6,516 -6,782 -4,296 -3,659 -6,652 -6,233 -5,458 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 n.a. 0 0 0 0 0 0 0 0 0 0 17 More than five years -300 -341 -335 -385 -380 -364 -293 -253 -266 -372 -270 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 604 295 -356 -612 -1,472 -719 490 735 1,724 1,356 276 21 More than five years -815 730 658 1,131 377 1,163 -50 956 1,429 2,000 3,246 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 -578 355 302 519 216 236 252 411 565 459 328 26 More than five years 558 593 103 20 82 24 74 350 607 135 299 27 Mortgage-backed 2,002 2,485 1,368 2,220 823 1,121 2,061 823 -41 1,135 1,543 Financing5 Reverse repurchase agreements 28 Overnight and continuing 350,827 376,076 366,382 369,121 360,179 361,327 370,012 374,868 377,131 396.864 376,925 29 Term 845,692 881,202 925,786 841,773 902,139 919,879 977,571 961,871 1,018,020 865,077 946,881 Securities borrowed 30 Overnight and continuing 278,815 278,034 280,746 270,908 268,931 279,432 290,534 293,294 294,510 308,057 298,110 31 Term 120,113 123,908 125,608 123,493 128,356 124,767 124,015 126,859 128,300 115,417 118,057 Securities received as pledge 32 Overnight and continuing 3,002 3,391 3,161 2,963 3,127 3,299 3,104 3,251 3,694 3,450 3.148 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 803,148 836,852 869,117 861,690 864,697 867,654 890,133 853,874 870,984 874,702 862,049 35 Term 801,371 842,163 852,132 775,748 833,753 860,415 879,972 888,398 934,216 802,259 869.971 Securities loaned 36 Overnight and continuing 9,648 9,463 9,626 9,386 10,065 9,561 9,591 9,346 9,681 10,371 9,665 37 Term 4,194 4,429 4,411 n.a. n.a. 4,469 4,431 4,303 4,883 4,552 4,451 Securities pledged 38 Overnight and continuing 51,166 50,758 53,318 49,627 53,160 52,868 53,962 56,220 58,123 57,947 57,773 39 Term 5,029 5,938 6,529 6,174 6,500 6,362 6,766 6,753 6,685 7,753 7,809 Collateralized loans 40 Total 21,373 23,731 24,336 27,366 22,520 24,447 25,177 23,123 23,209 24,038 20,984 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 • August 2001 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2000 2001 AAggeennccyy 11999977 11999988 11999999 22000000 Nov. Dec. Jan. Feb. Mar. 1 Federal and federally sponsored agencies 1,022,609 1,296,477 1,616,492 1,851,632 1,833,155 1,851,632 n.a. 1,917,503 1,919,761 2 Federal agencies 27,792 26,502 26,376 25,666 25,555 25,666 25,426 25,141 25,063 3 Defense Department1 6 6 6 6 6 6 6 6 6 4 Export-Import Bank2,3 552 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 102 205 126 255 239 255 275 291 307 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 7 Postal Service6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 8 Tennessee Valley Authority 27,786 26,496 26,370 25,660 25,549 25,660 25,420 25,135 25,057 9 United States Railway Association6 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 10 Federally sponsored agencies7 994,817 1,269,975 1,590,116 1,825,966 1,807,600 1,825,966 1,873,199 1,892,362 1,894,698 11 Federal Home Loan Banks 313,919 382,131 529,005 594,404 580,957 594,404 604,904 598,586 602,824 12 Federal Home Loan Mortgage Corporation 169,200 287,396 360,711 426,899 429,617 426,899 446,997 455,623 461,338 13 Federal National Mortgage Association 369,774 460,291 547,619 642,700 633,100 642,700 654,200 668,200 666,600 14 Farm Credit Banks8 63,517 63,488 68,883 74,181 71,667 74,181 73,925 73,647 74,174 15 Student Loan Marketing Association9 37,717 35,399 41,988 45,375 50,016 45,375 50,669 53,886 47,322 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation" 1,261 1,261 1.261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 49,090 44,129 42,152 40,575 40,170 40,575 39,348 38,924 39341 Lending to federal and federally sponsored agencies 2 2 1 0 E Po x s p t o a r l t- S Im er p v o ic r e t 6 Bank3 n.a. 5 52 T A T f T T * T T * T T 22 Student Loan Marketing Association n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 2 2 3 4 T U e n n it n e e d s s S e t e a t V es a l R le a y i l A w u ay th o A ri s t s y o ciation6 n n. . a a . . tI i I 1I 1 I t1 i I 1I 1I Other lending14 25 Farmers Home Administration 13,530 9,500 6,665 5,275 5,320 5,275 5,155 5,155 5,155 26 Rural Electrification Administration 14,898 14,091 14,085 13,126 13,023 13,126 13,197 13,281 13,371 27 Other 20,110 20,538 21,402 22,174 21,827 22,174 20,996 20,488 20,815 1. Consists of mortgages assumed by the Defense Department between 1957 and 1963 10. The Financing Corporation, established in August 1987 to recapitalize the Federal under family housing and homeowners assistance programs. Savings and Loan Insurance Corporation, undertook its first borrowing in October 1987. 2. Includes participation certificates reclassified as debt beginning Oct. 1, 1976. 11. The Farm Credit Financial Assistance Corporation, established in January 1988 to 3. On-budget since Sept. 30, 1976. provide assistance to the Farm Credit System, undertook its first borrowing in July 1988. 4. Consists of debentures issued in payment of Federal Housing Administration insurance 12. The Resolution Funding Corporation, established by the Financial Institutions Reform, claims. Once issued, these securities may be sold privately on the securities market. Recovery, and Enforcement Act of 1989, undertook its first borrowing in October 1989. 5. Certificates of participation issued before fiscal year 1969 by the Government National 13. The FFB, which began operations in 1974, is authorized to purchase or sell obligations Mortgage Association acting as trustee for the Farmers Home Administration; the Department issued, sold, or guaranteed by other federal agencies. Because FFB incurs debt solely for the of Health, Education, and Welfare; the Department of Housing and Urban Development; the purpose of lending to other agencies, its debt is not included in the main portion of the table to Small Business Administration; and the Veterans Administration. avoid double counting. 6. Off-budget. 14. Includes FFB purchases of agency assets and guaranteed loans; the latter are loans 7. Includes outstanding noncontingent liabilities: notes, bonds, and debentures. Includes guaranteed by numerous agencies, with the amounts guaranteed by any one agency generally Federal Agricultural Mortgage Corporation; therefore, details do not sum to total. Some data being small. The Farmers Home Administration entry consists exclusively of agency assets, are estimated. whereas the Rural Electrification Administration entry consists of both agency assets and 8. Excludes borrowing by the Farm Credit Financial Assistance Corporation, which is guaranteed loans. shown on line 17. 9. Before late 1982, the association obtained financing through the Federal Financing Bank (FFB). Borrowing excludes that obtained from the FFB, which is shown on line 22. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Markets and Corporate Finance A31 1.45 NEW SECURITY ISSUES Tax-Exempt State and Local Governments Millions of dollars 2000 2001 TTyyppee ooff iissssuuee oorr iissssuueerr,, oorr uussee 11999988 11999999 22000000 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 1 All issues, new and refunding1 262,342 215,427 180,403 18,035 18,079 15,348 11,255 19,829 24,495 16,985 26,248 By type of issue 2 General obligation 87,015 73,308 64,475 5,871 5,044 5,060 6,256 9,389 7,668 6,890 8,385 3 Revenue 175,327 142,120 115,928 12,163 13,036 10,288 4,999 10,441 16,827 10,094 17,863 By type of issuer 4 State 23,506 16,376 19,944 3,005 1,942 1,640 1,738 3,268 1,893 1,900 3,123 5 Special district or statutory authority2 178,421 152,418 111,695 11,224 12,311 1,053 7,061 11,011 17,280 113,344 17,281 6 Municipality, county, or township 60,173 46,634 39,273 3,806 3,827 3,165 2,456 5,550 5,323 3,740 5,845 7 Issues for new capital 160,568 161,065 154,257 16,387 14,520 13,286 8,758 13,384 15,387 12,264 20,002 By use of proceeds 8 Education 36,904 36,563 38,665 3,492 3,446 2,919 2,786 3,102 5,343 3,731 5,714 9 Transportation 19,926 17,394 19,730 2,575 2,124 1,381 780 2,411 1,219 1,381 2,522 10 Utilities and conservation 21,037 15,098 11,917 1,272 1,973 1,307 678 1,335 1,677 1,447 2,969 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 7,122 730 500 615 63 281 396 436 422 13 Other purposes 42,450 47,896 47,309 6,558 3,787 4,264 3,013 4,742 4,368 3,010 4,736 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 2001 TTyyppee ooff iissssuuee,, ooffffeerriinngg,, oorr iissssuueerr 11999988 11999999 22000000 Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. 1 All issues' 1,128,491 1,072,866 942,198 94,492 62,466 95,595 61,378 125,894 96,206 139,267r 92,762 2 Bonds2 1,001,736 941,298 807,281 88,102 53,345 84,094 58,713 118,372 88,806 127,956 86,274 By type of offering 3 Sold in the United States 923.771 818,683 684,484 73,516 47,415 76,383 57,189 115,583 86,146 118,779 81,156 4 Sold abroad 77,965 122,615 122,798 14,586 5,930 7,712 1,525 2,789 2,660 9,177 5,117 MEMO 5 Private placements, domestic n.a. n.a. n.a. 376 127 5,534 3,709 26 1,897 652 0 By industry group 6 Nonfinancial 307,711 293,963 242,452 24,483 12,547 25,784 18,219 44,443 34,604 44,385 33,549 7 Financial 694,025 647,335 564,829 63,619 40,799 58,310 40,495 73,928 54,201 83,571 52,725 8 Stocks1 182,055 223,968 283,717 18,790 21,521 23,901 15,065 7,522 7,400 n,3ir 6,488 By type of offering 9 Public 126,755 131,568 134,917 6,390 9,121 11,501 2,665 7,522 7,400 11,31 r 6,488 10 Private placement4 55,300 92,400 148,800 12,400 12,400 12,400 12,400 n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 74,113 110,284 118,369 6,205 8,278 10,794 2,146 4,356 4,463 7,718 4,823 12 Financial 52,642 21,284 16,548 185 843 707 519 3,166 2,937 3,593r 1,665 1. Figures represent gross proceeds of issues maturing in more than one year; they are the 2. Monthly data include 144(a) offerings. principal amount or number of units calculated by multiplying by the offering price. Figures 3. Monthly data cover only public offerings. exclude secondary offerings, employee stock plans, investment companies other than closed- 4. Data are not available. end, intracorporate transactions, and Yankee bonds. Stock data include ownership securities SOURCE. Securities Data Company and the Board of Governors of the Federal Reserve issued by limited partnerships. System. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A32 Domestic Nonfinancial Statistics • August 2001 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2000 2001 IItteemm 11999999 22000000 Oct. Nov. Dec. Jan. Feb. Mar. Apr.r May 1 Sales of own shares2 1,791,894 2,279,315 169,071 143,412 170,255 206,765 148,362 162,548 152,327 159,517 2 Redemptions of own shares 1,621,987 2,057,277 153,067 138,791 160,918 171,819 141,663 175,633 130,454 134,634 3 Net sales3 169,906 222,038 16,004 4,621 9,337 34,946 6,699 -13,085 21,873 24,883 4 Assets4 5,233,191 5,123,747 5,442,937 4,993,008 5,123,747 5,280,222 4,879,229 4,594,182 4,910,568 4,956,556 5 Cash5 219,189 277,386 302,682 300,133 277,386 280,472 274,077 241,518 247,169 236,053 6 Other 5,014,002 4,846,361 5,140,255 4,692,875 4,846,361 4,999,750 4,605,152 4,352,664 4,663,399 4,720,503 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 2001 AAccccoouunntt 11999988 11999999 22000000 Q2 Q3 Q4 Ql Q2 Q3 Q4 Qlr 1 Profits with inventory valuation and capital consumption adjustment 815.0 856.0 946.2 836.8 842.0 893.2 936.3 963.6 970.3 914.7 869.0 2 Profits before taxes 758.2 823.0 925.6 804.5 819.0 870.7 920.7 942.5 945.1 894.1 841.8 3 Profits-tax liability 244.6 255.9 284.2 250.8 254.2 270.8 286.3 292.0 290.6 267.7 254.4 4 Profits after taxes 513.6 567.1 641.4 553.7 564.8 599.9 634.4 650.4 654.4 626.4 587.4 5 Dividends 351.5 370.7 397.0 367.2 373.9 380.6 387.3 393.0 400.1 407.6 414.7 6 Undistributed profits 162.1 196.4 244.4 186.5 190.9 219.3 247.1 257.4 254.4 218.8 172.8 7 Inventory valuation 17.0 -9.1 -12.9 -8.9 -19.7 -19.2 -25.0 -13.6 -4.5 -8.5 -3.5 8 Capital consumption adjustment 39.9 42.1 33.5 41.2 42.7 41.6 40.6 34.7 29.7 29.1 30.7 SOURCE. U.S. Department of Commerce, Survey of Current Business. 1.51 DOMESTIC FINANCE COMPANIES Assets and Liabilities1 Billions of dollars, end of period; not seasonally adjusted 1999 2000 2001 AAccccoouunntt 11999988 11999999 22000000 Q3 Q4 Ql Q2 Q3 Q4 Ql ASSETS 1 Accounts receivable, gross2 711.7 811.5 915.6 776.3 811.5 848.7 884.4 900.1 915.6 916.6 7 Consumer 261.8 279.8 296.1 271.0 279.8 285.4 294.1 301.9 296.1 292.9 3 Business 347.5 405.2 471.1 383.0 405.2 434.6 454.1 455.7 471.1 472.1 4 Real estate 102.3 126.5 148.3 122.3 126.5 128.8 136.2 142.4 148.3 151.6 5 LESS; Reserves for unearned income 56.3 53.5 60.0 54.0 53.5 54.0 57.1 58.8 60.0 60.3 6 Reserves for losses 13.8 13.5 15.1 13.6 13.5 14.0 14.4 14.2 15.1 15.6 7 Accounts receivable, net 641.6 744.6 840.5 708.6 744.6 780.7 813.0 827.1 840.5 840.7 8 All other 337.9 406.3 461.8 368.5 406.3 412.7 418.3 441.4 461.8 474.8 9 Total assets 979.5 1,150.9 1,302.4 1,077.2 1,150.9 1,193.4 1,231.3 1,268.4 1,302.4 1,315.5 LIABILITIES AND CAPITAL 10 Bank loans 26.3 35.1 35.6 27.0 35.1 28.5 32.5 35.4 35.6 41.2 11 Commercial paper 231.5 227.9 235.2 205.3 227.9 230.2 221.3 215.6 235.2 178.3 Debt 12 Owed to parent 61.8 123.8 146.5 84.5 123.8 145.1 137.1 144.3 146.5 138.5 13 Not elsewhere classified 339.7 397.0 463.8 396.2 397.0 412.0 445.4 465.5 463.8 501.9 14 All other liabilities 203.2 222.7 279.7 216.0 222.7 247.6 259.3 269.2 279.7 299.7 15 Capital, surplus, and undivided profits 117.0 144.5 141.6 148.2 144.5 130.1 135.6 138.3 141.6 151.0 16 Total liabilities and capital 979.5 1,150.9 1,302.4 1,077.2 1,150.9 1,193.4 1,231.3 1,268.4 1,302.4 1,310.6 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 Receivables1 Billions of dollars, amounts outstanding 2000 2001 TTyyppee ooff ccrreeddiitt 11999988 11999999 22000000 Nov. Dec. Jan. Feb. Mar.r Apr. Seasonally adjusted 1 Total 875.8 993.9 1,145.2 1,136.2 1,145.2 1,156.7 1,159.7 1,158.6 1,171.5 2 Consumer 352.8 385.3 439.3 439.8 439.3 443.8 447.1 449.8 456.3 3 Real estate 131.4 154.7 174.9 176.6 174.9 177.7 179.0 177.7 182.5 4 Business 391.6 453.9 531.0 519.7 531.0 535.2 533.6 531.1 532.6 Not seasonally adjusted 5 Total 884.0 1,003.2 1,156.0 1,137.9 1,156.0 1,156.7 1,159.7 1,163.1 1,173.7 6 Consumer 356.1 388.8 443.4 441.4 443.4 443.9 445.1 445.7 451.0 7 Motor vehicles loans 103.1 114.7 122.5 127.8 122.5 117.5 118.5 118.9 127.0 8 Motor vehicle leases 93.3 98.3 102.9 104.0 102.9 103.3 102.4 101.3 101.9 9 Revolving2 32.3 33.8 38.3 38.0 38.3 37.1 36.9 35.6 36.0 10 Other3 33.1 33.1 32.4 32.0 32.4 32.4 32.0 31.3 28.2 Securitized assets4 11 Motor vehicle loans 54.8 71.1 97.1 91.5 97.1 103.9 105.2 108.1 106.1 12 Motor vehicle leases 12.7 9.7 6.6 6.8 6.6 6.3 6.9 6.6 7.0 13 Revolving 8.7 10.5 27.5 25.8 27.5 27.6 27.6 27.6 28.8 14 Other 18.1 17.7 16.0 15.5 16.0 15.8 15.5 16.2 16.0 15 Real estate 131.4 154.7 174.9 176.6 174.9 177.7 179.0 177.7 182.5 16 One- to four-family 75.7 88.3 105.4 107.0 105.4 108.2 109.5 108.1 112.3 17 Other 26.6 38.3 42.9 42.7 42.9 43.2 43.4 43.8 43.8 Securitized real estate assets4 18 One- to four-family 29.0 28.0 24.7 25.0 24.7 24.4 24.2 23.9 23.8 19 Other .1 .2 1.9 1.9 1.9 1.9 1.9 1.9 2.6 20 Business 396.5 459.6 537.7 519.9 537.7 535.1 535.6 539.7 540.2 21 Motor vehicles 79.6 87.8 95.2 93.3 95.2 93.6 93.6 91.9 91.0 22 Retail loans 28.1 33.2 31.0 32.3 31.0 30.8 30.7 30.5 29.9 23 Wholesale loans5 32.8 34.7 39.6 37.3 39.6 38.2 37.6 35.8 35.3 24 Leases 18.7 19.9 24.6 23.8 24.6 24.6 25.3 25.6 25.8 25 Equipment 198.0 221.9 267.3 259.3 267.3 265.6 262.5 264.6 267.5 26 Loans 50.4 52.2 56.2 54.7 56.2 56.3 55.6 57.1 57.1 27 Leases 147.6 169.7 211.1 204.6 211.1 209.3 206.9 207.5 210.4 28 Other business receivables6 69.9 95.5 108.6 103.2 108.6 110.4 114.5 115.2 113.5 Securitized assets4 29 Motor vehicles 29.2 31.5 37.8 37.0 37.8 37.3 37.2 40.0 40.3 30 Retail loans 2.6 2.9 3.2 3.1 3.2 3.1 2.9 2.8 3.1 31 Wholesale loans 24.7 26.4 32.5 31.5 32.5 32.1 31.7 34.5 34.6 32 Leases 1.9 2.1 2.2 2.4 2.2 2.2 2.6 2.6 2.6 33 Equipment 13.0 14.6 23.1 21.3 23.1 22.5 22.2 22.5 22.2 34 Loans 6.6 7.9 15.5 14.6 15.5 14.7 14.5 14.6 14.4 35 Leases 6.4 6.7 7.6 6.7 7.6 7.8 7.8 7.9 7.8 36 Other business receivables6 6.8 8.4 5.6 5.8 5.6 5.6 5.6 5.6 5.7 NOTE. This table has been revised to incorporate several changes resulting from the before deductions for unearned income and losses. Components may not sum to totals benchmarking of finance company receivables to the June 1996 Survey of Finance Compa- because of rounding. nies. In that benchmark survey, and in the monthly surveys that have followed, more detailed 2. Excludes revolving credit reported as held by depository institutions that are subsidiarbreakdowns have been obtained for some components. In addition, previously unavailable ies of finance companies. data on securitized real estate loans are now included in this table. The new information has 3. Includes personal cash loans, mobile home loans, and loans to purchase other types of resulted in some reclassification of receivables among the three major categories (consumer, consumer goods, such as appliances, apparel, boats, and recreation vehicles. real estate, and business) and in discontinuities in some component series between May and 4. Outstanding balances of pools upon which securities have been issued; these balances June 1996. are no longer carried on the balance sheets of the loan originator. Includes finance company subsidiaries of bank holding companies but not of retailers and 5. Credit arising from transactions between manufacturers and dealers, that is, floor plan banks. Data in this table also appear in the Board's G.20 (422) monthly statistical release. For financing. ordering address, see inside front cover. 6. Includes loans on commercial accounts receivable, factored commercial accounts, and 1. Owned receivables are those carried on the balance sheet of the institution. Managed receivable dealer capital; small loans used primarily for business or farm purposes; and receivables are outstanding balances of pools upon which securities have been issued; these wholesale and lease paper for mobile homes, campers, and travel trailers. balances are no longer carried on the balance sheets of the loan originator. Data are shown Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A34 Domestic Nonfinancial Statistics • August 2001 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2000 2001 IItteemm 11999988 11999999 22000000 Nov. Dec. Jan. Feb. Mar. Apr. May Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 195.2 210.7 234.5 247.2 250.0 238.7 245.0 244.5 240.8 241.4 2 Amount of loan (thousands of dollars) 151.1 161.7 177.0 184.2 187.3 181.6 185.4 182.9 181.5 181.4 3 Loan-to-price ratio (percent) 80.0 78.7 77.4 76.2 76.5 78.2 77.9 77.2 77.6 77.6 4 Maturity (years) 28.4 28.8 29.2 29.2 29.1 29.4 29.0 28.8 28.5 28.6 5 Fees and charges (percent of loan amount)2 .89 .77 .70 .69 .73 .71 .70 .66 .71 .69 Yield (percent per year) 6 Contract rate1 6.95 6.94 7.41 7.36 7.29 7.09 6.99 6.94 6.96 7.02 7 Effective rate1'3 7.08 7.06 7.52 7.47 7.40 7.20 7.10 7.04 7.07 7.12 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 7.22 6.83 6.57 6.61 6.41 6.53 6.61 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 1 1T otal 414,515 523,941 610,122 598,951 610,122 623,950 632,850 n.a. n.a. n.a. 12 FHA/VA insured 33,770 55,318 61,539 60,694 61,539 62,970 63,337 n.a. n.a. n.a. 13 Conventional 380,745 468,623 548,583 538,257 548,583 560,980 569,513 n.a. n.a. n.a. 14 Mortgage transactions purchased (during period) 188,448 195,210 154,231 17,322 17,193 20,598 17,230 20,899 24,015 16,825 Mortgage commitments (during period) 15 Issued7 193,795 187,948 163,689 15,287 20,120 27,325 25,471 n.a. n.a. n.a. 16 To sell8 1,880 5,900 11,786 676 1,436 766 835 n.a. n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period f 17 Total 255,010 324,443 385,693 372,819 385,693 391,679 407,086 421,655 430,960 437,582 18 FHA/VA insured 785 1,836 3,332 3,321 3,332 3,307 3,319 3,329 2,878 2,785 19 Conventional 254,225 322,607 382,361 369,498 382,361 388,372 403,767 418,326 428,082 434,797 Mortgage transactions (during period) 20 Purchases 267,402 239,793 174,043 19,402 24,313 15,658 16,536 24,648 n.a. n.a. 21 Sales 250,565 233,031 166,901 18,823 22,277 15,364 15,549 23,367 31,219 33,670 22 Mortgage commitments contracted (during period)9 281,899 228,432 169,231 20,012 21,780 18,685 17,664 26,682 32,758 39,897 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 the Federal 5. Average gross yield on thirty-year, minimum-downpayment first mortgages insured National Mortgage Association exclude swap activity. by the Federal Housing Administration (FHA) for immediate delivery in the private secondary market. Based on transactions on first day of subsequent month. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Real Estate A35 1.54 MORTGAGE DEBT OUTSTANDING1 Millions of dollars, end of period 2000 2001 TTyyppee ooff hhoollddeerr aanndd pprrooppeerrttyy 11999966rr 11999977rr 11999988rr Ql Q2 Q3 Q4 Ql 1 All holders 5,198,237 5,698,389 6,326,415 6,426,515 6,592,329 6,744,667 6,889,962 7,016,475 By type of property 2 One- to four-family residences 3,968,218 4,348,553 4,773,876 4,832,886 4,962,031 5,087,538 5,193,000 5,284,886 3 Multifamily residences 302,642 330,718 372,619 387,188 390,753 399,232 409,216 418,762 4 Nonfarm, nonresidential 837,077 922,612 1,076,958 1,102,565 1,133,107 1,149,940 1,178,909 1,202,752 5 90,300 96,506 102,962 103,875 106,437 107,957 108,836 110,075 By type of holder 6 Major financial institutions 2,084,000 2,195.869 2,396,265 2,458,194 2,550,201 2,606,592 2,621,076 2,667,125 7 Commercial banks2 1,245,334 1,338,273 1,496,844 1,548,224 1,615,794 1,650,294 1,661,600 1,688,869 8 One- to four-family 745,777 798,009 880,208 905,270 949,223 968,831 966,609 978,227 9 Multifamily 50,705 54,174 67,666 72,509 75,795 77,031 77,821 79,890 10 Nonfarm, nonresidential 421,865 457,054 517,130 537,772 557,059 570,513 583,153 596,518 11 Farm 26,987 29,035 31,839 32,673 33,717 33,919 34,016 34,234 12 Savings institutions^ 631,826 643,957 668,634 680,745 701,992 721,563 723,534 741,114 13 One- to four-family 520,782 533,895 549,046 560,018 578,612 595,518 595,053 608,289 14 Multifamily 59,540 56,847 59,168 57,790 59,174 60,077 61,094 62,666 1.5 Nonfarm, nonresidential 51,150 52,798 59,945 62,444 63,688 65,437 66,852 69,589 16 Farm 354 417 475 493 518 531 535 569 17 Life insurance companies 206,840 213,640 230,787 229,225 232,415 234,735 235,942 237,142 18 One- to four-family 7,187 6,590 5,934 5,567 5,237 4,907 4,904 4,800 19 Multifamily 30,402 31,522 32,818 32,634 33,121 33,478 33,681 33,867 20 Nonfarm, nonresidential 158,779 164,004 179,048 178,043 180,701 182,646 183,757 184,774 21 Farm 10,472 11,524 12,987 12,981 13,356 13,704 13,600 13,701 22 Federal and related agencies 286,194 293,602 322,132 322,917 332,642 336,682 343,962 346,276 23 Government National Mortgage Association 8 7 7 7 7 6 6 6 24 One- to four-family 8 7 7 7 7 6 6 6 25 Multifamily 0 0 0 0 0 0 0 0 26 Farmers Home Administration4 41,195 40,851 73,871 72,899 72,896 73,009 73,323 73,361 27 One- to four-family 17,253 16,895 16,506 16,456 16,435 16.444 16,372 16,297 28 Multifamily 11,720 11,739 11,741 11,732 11,729 11,734 11,733 11,725 29 Nonfarm, nonresidential 7,370 7,705 41,355 40,509 40,554 40,665 41,070 41,247 30 Farm 4,852 4,513 4,268 4,202 4,179 4,167 4,148 4,093 31 Federal Housing and Veterans' Administrations 3,811 3,674 3,712 3,794 3,845 3,395 3,507 2,873 32 One- to four-family 1,767 1,849 1,851 1,847 1,832 1,327 1,308 1,276 33 Multifamily 2,044 1,825 1,861 1,947 2,013 2,068 2,199 1,597 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 724 361 152 98 72 82 45 50 40 One- to four-family 117 58 25 16 12 13 7 8 41 Multifamily 140 70 29 19 14 16 9 10 42 Nonfarm, nonresidential 467 233 98 63 46 53 29 32 43 Farm 0 0 0 0 0 0 0 0 44 Federal National Mortgage Association 161,308 157,675 151,500 150,312 153,507 152,815 155,363 156,294 45 One- to four-family 149,831 147,594 141,195 139,986 142,478 141,786 144,150 145,014 46 Multifamily 11,477 10,081 10,305 10,326 11,029 11,029 11,213 11,280 47 Federal Land Banks 30,657 32,983 34,187 34,142 34,830 35,549 36,326 37,072 48 One- to four-family 1,804 1,941 2,012 2,009 2,049 2,092 2,137 2,181 49 Farm 0 0 0 0 0 0 0 0 50 Federal Home Loan Mortgage Corporation 48,454 57,085 56,676 57,009 56,972 57,046 59,240 60,110 51 One- to four-family 42,629 49,106 44,321 43,384 42,892 42,138 42,871 42,771 52 Multifamily 5,825 7,979 12,355 13,625 14,080 14,908 16,369 17,339 53 Mortgage pools or trusts5 2,232,848 2,581,969 2,947,760 2,983,365 3,034,691 3,115,138 3.231,195 3,305,311 54 Government National Mortgage Association 536,879 537,446 582,263 589,192 590,708 602,628 611,629 601,540 55 One- to four-family 523,225 522,498 565,189 571,506 572,661 584,152 592,700 581,760 56 Multifamily 13,654 14,948 17,074 17,686 18,047 18,476 18,929 19,780 57 Federal Home Loan Mortgage Corporation 579,385 646,459 749,081 757,106 768,641 790,891 822,310 833,616 58 One- to four-family 576,846 643,465 744,619 752,607 763,890 786,007 816,602 827,769 59 Multifamily 2,539 2,994 4,462 4,499 4,751 4,884 5,708 5,847 60 Federal National Mortgage Association 709,582 834,517 960,883 975,815 995,815 1,020,828 1,057,750 1,099,049 61 One- to four-family 687,981 804,204 924,941 932,178 957,584 981,206 1,016,398 1,055,412 62 Multifamily 21,601 30,313 35,942 43,637 38,231 39,622 41,352 43,637 63 Farmers Home Administration4 2 1 0 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 0 0 0 0 0 0 67 Farm 2 1 0 0 0 0 0 0 68 Private mortgage conduits 407,000 563,546 655,533 661,252 679,527 700,792r 739,506 771,106 69 One- to four-family6 310,659 405,153 455,021 455,623 464,593 477,899 499,834 523,300 70 Multifamily 20,907 33,754 42,226 43,069 44,290 45,991 49,322 50,639 71 Nonfarm, nonresidential 75,434 124,639 158,287 162,560 170,644 176,901 190,350 197,167 72 Farm 0 0 0 0 0 0 0 0 73 Individuals and others7 595,195 626,949 660,258 662,039 674,794 686,254 693,729 697,763 74 One- to four-family 382,315 416,335 441,205 442,006 454,314 470,762 478,118 481,485 75 Multifamily 72,088 74,462 76,740 77,466 78,179 79,587 79,566 80,268 76 Nonfarm, nonresidential 122,013 116,178 121,095 121,174 120,415 113,725 113,697 113,424 77 Farm 18,779 19,974 21,217 21,393 21,886 22,179 22,348 22,586 1. Multifamily debt refers to loans on structures of five or more units. 6. Includes securitized home equity loans. 2. Includes loans held by nondeposit trust companies but not loans held by bank trust 7. Other holders include mortgage companies, real estate investment trusts, state and local departments. credit agencies, state and local retirement funds, noninsured pension funds, credit unions, and 3. Includes savings banks and savings and loan associations. finance companies. 4. FmHA-guaranteed securities sold to the Federal Financing Bank were reallocated from SOURCE. Based on data from various institutional and government sources. Separation of FmHA mortgage pools to FmHA mortgage holdings in 1986:Q4 because of accounting nonfarm mortgage debt by type of property, if not reported directly, and interpolations and changes by the Farmers Home Administration. extrapolations, when required for some quarters, are estimated in part by the Federal Reserve. 5. Outstanding principal balances of mortgage-backed securities insured or guaranteed by Line 69 from Inside Mortgage Securities and other sources. the agency indicated. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A36 Domestic NonfinancialS tatistics • August 2001 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2000 2001 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999988 22000000rr Nov. Dec.' Jan.' Feb.' Mar.' Apr. Seasonally adjusted 1 Total 1,301,023 1,393,657 1,531,469 l,525,073r 1,531,469 1,548,486 1,562,937 1,570,368 1,584,329 2 Revolving 560,504 595,610 663,830 660,992r 663,830 669,780 681,384 688,166 697,360 3 Nonrevolving2 740,519 798,047 867,639 864,08 lr 867,639 878,706 881,553 882,203 886,970 Not seasonally adjusted 4 Total 1,331,742 1,426,151 1,566,457 l,532,836r 1,566,457 1,560,357 1,558,086 1,557,971 1,570,179 By major holder 5 Commercial banks 508,932 499,758 541,470 529,91 lr 541,470 539,796 535,137 534,545 540,781 6 Finance companies 168,491 181,573 193,189 197,759 193,189 187,029 187,493 185,874 191,161 V Credit unions 155,406 167,921 184,434 183,772 184,434 184,120 183,548 182,918 184,248 8 Savings institutions 51,611 61,527 64,557 63,879r 64,557 64,667 64,777 64,887 64,950 9 Nonfinancial business 74,877 80,311 82,662 73,786 82,662 77,685 73,020 71,757 71,510 10 Pools of securitized assets3 372,425 435,061 500,145 483,729 500,145 507,060 514,111 517,990 517,529 By major type of credit4 11 Revolving 586,528 623,245 693,645 664,463' 693,645 681,812 682,143 681,139 690,146 12 Commercial banks 210,346 189,352 218,063 206,121 218,063 211,006 208,192 208,924 215,185 13 Finance companies 32,309 33,814 38,251 37,956 38,251 37,098 36,938 35,626 36,044 14 Credit unions 19,930 20,641 22,226 21,656 22,226 21,714 21,415 20,902 21,103 15 Savings institutions 12,450 15,838 16,560 16,482' 16,560 16,701 16,842 16,983 16,975 16 Nonfinancial business 39,166 42,783 42,430 36,430 42,430 38,934 35,290 34,150 33,815 17 Pools of securitized assets3 272,327 320,817 356,114 345,817 356,114 356,359 363,466 364,554 367,024 18 Nonrevolving 745,214 802,906 872,812 868,373' 872,812 878,545 875,943 876,832 880,033 19 Commercial banks 298,586 310,406 323,407 323,789' 323,407 328,790 326,945 325,621 325,597 20 Finance companies 136,182 147,759 154,938 159,803 154,938 149,931 150,555 150,249 155,117 21 Credit unions 135,476 147,280 162,208 162,116 162,208 162,406 162,133 162,016 163,145 22 Savings institutions 39,161 45,689 47,997 47,397' 47,997 47,966 47,935 47,904 47,975 23 Nonfinancial business 35,711 37,528 40,232 37,356 40,232 38,750 37,729 37,607 37,694 24 Pools of securitized assets3 100,098 114,244 144,031 137,912 144,031 150,701 150,645 153,436 150,506 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 2001 IItteemm 11999988 11999999 22000000 Oct. Nov. Dec. Jan. Feb. Mar. Apr. INTEREST RATES Commercial banks2 1 48-month new car 8.72 8.44 9.34 n.a. 9.63 n.a. n.a. 9.17 n.a. n.a. 2 24-month personal 13.74 13.39 13.90 n.a. 14.12 n.a. n.a. 13.71 n.a. n.a. Credit card plan 3 All accounts 15.71 15.21 15.71 n.a. 15.99 n.a. n.a. 15.66 n.a. n.a. 4 Accounts assessed interest 15.59 14.81 14.91 n.a. 15.23 n.a. n.a. 14.61 n.a. n.a. Auto finance companies 5 New car 6.30 6.66 6.61 4.74 5.41 7.45 7.29 7.19 6.80 6.80 6 Used car 12.64 12.60 13.55 13.87 13.66 13.58 13.11 13.34 13.19 12.82 OTHER TERMS3 Maturity (months) 7 New car 52.1 52.7 54.9 57.6 57.3 55.2 54.3 55.5 55.6 56.3 8 Used car 53.5 55.9 57.0 57.0 56.8 56.6 57.8 58.0 58.0 57.9 Loan-to-value ratio 9 New car 92 92 92 93 93 91 90 91 91 91 10 Used car 99 99 99 100 100 100 98 99 100 100 Amount financed (dollars) 11 New car 19,083 19,880 20,923 22,069 22,443 21,867 21,315 21,993 22,131 21,914 12 Used car 12,691 13,642 14,058 13,978 14,325 14,591 14,155 14,095 14,214 14,347 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 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors 1 Total net borrowing by domestic nonfinancial sectors ... 711.1 731.3 804.6 1,011.4 1,088.8 1,150.9 1,051.9 917.1 952.3 752.2 829.1 965.5 By sector and instrument 7 Federal government 144.4 145.0 23.1 -52.6 -71.2 -68.9 -34.0 -215.5 -414.0 -219.5 -334.5 -10.8 3 Treasury securities 142.9 146.6 23.2 -54.6 -71.0 -68.9 -34.0 -213.5 -415.8 -217.1 -333.3 -8.6 4 Budget agency securities and mortgages 1.5 -1.6 -.1 2.0 -.2 .0 .0 -2.1 1.8 -2.4 -1.2 -2.2 5 Nonfederal 566.7 586.3 781.5 1,064.0 1,160.0 1,219.8 1,085.9 1,132.6 1,366.2 971.8 1,163.5 976.3 By instrument 6 Commercial paper 18.1 -.9 13.7 24.4 37.4 49.8 44.0 29.8 110.4 56.1 -4.0 -207.2 7 Municipal securities and loans -48.2 2.6 71.4 96.8 68.2 71.3 52.5 8.9 34.0 29.8 68.6 94.3 8 Corporate bonds 91.1 116.3 150.5 218.7 229.9 202.8 155.2 186.2 153.8 184.4 175.6 400.0 9 Bank loans n.e.c 103.7 70.5 106.5 108.2 82.7 112.3 108.6 131.9 163.1 31.7 86.5 -11.3 in Other loans and advances 67.2 33.5 69.1 74.3 60.6 74.0 39.7 155.6 126.6 -10.1 145.1 -8.9 11 Mortgages 195.8 275.7 317.7 474.0 586.9 633.4 576.3 475.0 640.4 557.4 568.1 553.8 1? 181.0 242.1 252.3 379.7 426.1 473.6 391.3 336.5 482.4 428.4 413.5 406.3 n Multifamily residential 6.1 9.0 8.2 19.9 39.6 40.6 51.0 28.8 43.9 29.5 40.3 40.8 14 Commercial 7.1 22.0 54.1 68.2 115.6 112.2 131.6 102.3 104.3 93.2 110.6 101.5 IS 1.6 2.6 3.2 6.2 5.5 7.0 2.5 7.3 9.7 6.2 3.7 5.1 16 Consumer credit 138.9 88.8 52.5 67.6 94.4 76.2 109.5 145.3 137.9 122.5 123.7 155.6 By borrowing sector 17 363.5 357.8 337.1 472.1 532.4 574.8 492.2 516.2 632.7 555500..55 556655..22 555599..99 18 Nonfinancial business 254.7 235.3 388.2 511.7 575.3 592.6 560.1 612.7 712.7 397.6 537.9 326.5 IP Coiporate 227.5 149.1 266.5 392.0 454.7 452.5 421.9 480.8 578.5 282.3 407.5 231.8 20 Nonfarm noncorporate 24.3 81.4 115.6 112.0 115.3 131.6 132.7 116.5 125.1 109.3 116.5 85.7 71 Farm 2.9 4.8 6.2 7.7 5.2 8.5 5.6 15.4 9.1 6.0 13.9 9.1 22 State and local government -51.5 -6.8 56.1 80.3 52.3 52.5 33.6 3.8 20.8 23.6 60.4 89.9 23 Foreign net borrowing in United States 78.5 88.4 71.8 43.3 25.3 77.3 17.6 118.0 -7.6 89.3 66.3 -27.0 24 Commercial paper 13.5 11.3 3.7 7.8 16.3 41.1 33.6 57.8 12.0 7.0 50.1 -25.4 ?5 Bonds 57.1 67.0 61.4 34.8 14.2 44.0 -2.7 45.7 -27.4 71.8 9.2 -1.4 ?6 Bank loans n.e.c 8.5 9.1 8.5 6.7 .5 -6.6 2.3 15.4 5.7 11.9 12.2 10.3 27 Other loans and advances -.5 1.0 -1.8 -6.0 -5.7 -1.1 -15.5 -.9 2.0 -1.5 -5.2 -10.5 28 Total domestic plus foreign 789.6 819.7 876.3 1,054.7 1,114.1 1,228.2 1,069.5 1,035.1 944.6 841.5 895.4 938.4 Financial sectors 29 Total net borrowing by financial sectors 454.0 545.7 653.8 1,073.9 1,077.2 1,059.1 1,047.6 586.4 819.3 725.5 1,075.9 893.6 By instrument 30 Federal government-related 204.2 231.4 212.9 470.9 592.0 651.6 550.1 248.6 370.4 503.4 612.1 461.1 31 Government-sponsored enterprise securities 105.9 90.4 98.4 278.3 318.2 407.1 367.9 104.9 248.9 278.1 304.8 264.1 32 Mortgage pool securities 98.3 141.0 114.6 192.6 273.8 244.5 182.2 143.7 121.6 225.3 307.3 197.0 33 Loans from U.S. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 249.8 314.4 440.9 603.0 485.3 407.5 497.4 337.8 448.9 222.1 463.8 432.5 35 Open market paper 42.7 92.2 166.7 161.0 176.2 89.9 479.0 130.9 77.4 65.2 237.5 -119.5 36 Corporate bonds 195.9 173.8 210.5 296.9 211.1 174.4 -36.6 135.1 233.0 188.3 211.6 456.8 37 Bank loans n.e.c 2.5 12.6 13.2 30.1 -14.3 -5.9 -55.6 .3 5.4 -.7 -6.2 23.6 38 Other loans and advances 3.4 27.9 35.6 90.2 107.1 139.8 107.5 64.4 123.1 -36.7 19.1 79.2 39 Mortgages 5.3 7.9 14.9 24.8 5.1 9.4 3.2 7.0 10.0 6.0 1.8 -7.5 By borrowing sector 40 Commercial banking 22.5 13.0 46.1 72.9 67.2 107.0 54.1 72.4 113.2 2233..55 3300..88 113388..44 41 Savings institutions 2.6 25.5 19.7 52.2 48.0 51.9 5.8 40.6 59.1 -23.4 32.7 40.8 4? Credit unions -.1 .1 .1 .6 2.2 2.8 3.3 -2.9 .9 1.1 1.0 -.2 43 Life insurance companies -.1 1.1 .2 .7 .7 1.1 -4.4 -.7 -1.1 -.3 -.7 -2.4 44 Government-sponsored enterprises 105.9 90.4 98.4 278.3 318.2 407.1 367.9 104.9 248.9 278.1 304.8 264.1 45 Federally related mortgage pools 98.3 141.0 114.6 192.6 273.8 244.5 182.2 143.7 121.6 225.3 307.3 197.0 46 Issuers of asset-backed securities (ABSs) 142.4 150.8 202.2 321.4 223.4 215.4 108.6 134.6 157.1 148.0 311.3 277.0 47 Finance companies 50.2 45.9 48.7 43.0 62.4 -17.2 99.2 52.3 103.9 96.9 45.6 -43.8 48 Mortgage companies -2.2 4.1 -4.6 1.6 .2 -6.1 6.2 -3.0 2.7 -.3 1.0 .7 49 Real estate investment trusts (REITs) 4.5 11.9 39.6 62.7 6.3 7.9 11.3 11.5 9.8 -2.4 -8.1 -6.1 50 Brokers and dealers -5.0 -2.0 8.1 7.2 -17.2 17.8 -37.3 44.4 -.7 25.4 -6.6 -23.9 51 Funding corporations 34.9 64.1 80.7 40.7 92.2 27.0 250.6 -11.4 4.0 -46.4 56.8 51.8 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A38 Domestic Nonfinancial Statistics • August 2001 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS'—Continued Billions of dollars; quarterly data at seasonally adjusted annual rates 1999 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 11999999 Q3 Q4 Q1 Q2 Q3 Q4 Q1 All sectors 55552222 TTTToooottttaaaallll nnnneeeetttt bbbboooorrrrrrrroooowwwwiiiinnnngggg,,,, aaaallllllll sssseeeeccccttttoooorrrrssss 1,243.7 1,365.4 1,530.1 2,128.6 2,191.3 2,287.4 2,117.1 1,621.5 1,763.9 1,567.0 1,971.3 1,832.1 55553333 OOOOppppeeeennnn mmmmaaaarrrrkkkkeeeetttt ppppaaaappppeeeerrrr 74.3 102.6 184.1 193.1 229.9 180.7 556.6 218.4 199.8 128.4 283.6 -352.1 55554444 UUUU....SSSS.... ggggoooovvvveeeerrrrnnnnmmmmeeeennnntttt sssseeeeccccuuuurrrriiiittttiiiieeeessss 348.6 376.4 236.0 418.3 520.7 582.7 516.1 33.0 -43.5 283.8 277.6 450.3 55555555 MMMMuuuunnnniiiicccciiiippppaaaallll sssseeeeccccuuuurrrriiiittttiiiieeeessss -48.2 2.6 71.4 96.8 68.2 71.3 52.5 8.9 34.0 29.8 68.6 94.3 55556666 CCCCoooorrrrppppoooorrrraaaatttteeee aaaannnndddd ffffoooorrrreeeeiiiiggggnnnn bbbboooonnnnddddssss 344.1 357.0 422.4 550.4 455.2 421.2 115.9 367.0 359.5 444.6 396.4 855.4 55557777 BBBBaaaannnnkkkk llllooooaaaannnnssss nnnn....eeee....cccc 114.7 92.1 128.2 145.0 68.9 99.8 55.2 147.7 174.2 42.9 92.5 22.6 55558888 OOOOtttthhhheeeerrrr llllooooaaaannnnssss aaaannnndddd aaaaddddvvvvaaaannnncccceeeessss 70.1 62.5 102.8 158.5 162.0 212.8 131.7 219.2 251.7 -48.3 159.0 59.7 55559999 MMMMoooorrrrttttggggaaaaggggeeeessss 201.1 283.5 332.6 498.8 592.0 642.7 579.5 482.0 650.4 563.4 569.9 546.3 66660000 CCCCoooonnnnssssuuuummmmeeeerrrr ccccrrrreeeeddddiiiitttt 138.9 88.8 52.5 67.6 94.4 76.2 109.5 145.3 137.9 122.5 123.7 155.6 Funds raised through mutual funds and corporate equities 66661111 TTTToooottttaaaallll nnnneeeetttt iiiissssssssuuuueeeessss 131.7 231.7 181.2 101.6 161.6 129.6 178.1 366.3 142.4 170.9 -170.9 127.4 66662222 CCCCoooorrrrppppoooorrrraaaatttteeee eeeeqqqquuuuiiiittttiiiieeeessss -15.7 -5.9 -83.9 -173.0 -26.7 2.2 5.2 60.2 -95.2 -88.9 -342.0 22.7 66663333 NNNNoooonnnnffffiiiinnnnaaaannnncccciiiiaaaallll ccccoooorrrrppppoooorrrraaaattttiiiioooonnnnssss -58.3 -69.5 -114.4 -267.0 -143.5 -128.4 -55.0 61.2 -245.2 -87.7 -394.8 -33.9 66664444 FFFFoooorrrreeeeiiiiggggnnnn sssshhhhaaaarrrreeeessss ppppuuuurrrrcccchhhhaaaasssseeeedddd bbbbyyyy UUUU....SSSS.... rrrreeeessssiiiiddddeeeennnnttttssss 50.4 82.8 57.6 101.2 114.4 121.7 71.3 63.3 180.1 61.1 90.5 79.8 66665555 FFFFiiiinnnnaaaannnncccciiiiaaaallll ccccoooorrrrppppoooorrrraaaattttiiiioooonnnnssss -7.8 -19.2 -27.1 -7.3 2.4 8.8 -11.1 -64.2 -30.2 -62.3 -37.8 -23.2 66666666 MMMMuuuuttttuuuuaaaallll ffffuuuunnnndddd sssshhhhaaaarrrreeeessss 147.4 237.6 265.1 274.6 188.3 127.5 172.8 306.1 237.6 259.8 171.1 104.7 1. Data in this table also appear in the Board's Z. 1 (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 9 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 1999 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999955 11999966 11999977 11999988 11999999 Q3 Q4 Ql Q2 Q3 Q4 Ql NET LENDING IN CREDIT MARKETS2 1 Total net lending in credit markets 1,243.7 1,365.4 1,530.1 2,128.6 2,191.3 2,287.4 2,117.1 1,621.5 1,763.9 1,567.0 1,971.3 1,832.1 ? Domestic nonfederal nonfinancial sectors -65.7 81.0 -17.3 106.3 231.5 202.7 -41.2 -148.2 120.8 -236.9 -212.5 -261.2 Household 29.7 129.3 -2.6 -12.2 189.4 238.4 2.7 -224.5 61.8 -218.5 -233.3 -279.3 4 Nonfinancial corporate business -8.8 -10.2 -12.7 -16.0 -2.8 5.8 -47.6 71.5 14.9 -3.2 -35.5 10.3 Nonfarm noncorporate business 4.7 -4.3 -2.1 .1 1.5 .8 1.4 2.6 2.8 3.8 4.3 4.4 6 State and local governments -91.4 -33.7 .1 134.5 43.4 -42.4 2.4 2.3 41.4 -19.0 52.1 3.4 7 Federal government -.5 -7.2 5.1 13.5 5.8 11.2 -11.7 6.5 7.7 4.5 10.2 6.1 8 273.9 414.4 311.3 254.2 210.6 385.3 138.7 325.9 207.1 205.6 381.1 112.4 9 1,036.0 877.1 1,231.0 1,754.5 1,743.4 1,688.2 2,031.3 1,437.2 1,428.4 1,593.8 1,792.4 1,974.7 10 Monetary authority 12.7 12.3 38.3 21.1 25.7 20.6 -42.2 103.4 -3.9 27.3 7.9 55.0 11 Commercial banking 265.9 187.5 324.3 305.2 308.2 449.4 548.7 377.1 484.6 369.3 203.8 108.4 1? U.S.-chartered banks 186.5 119.6 274.9 312.0 317.6 421.9 457.7 409.2 505.6 332.8 111.6 63.9 n Foreign banking offices in United States 75.4 63.3 40.2 -11.9 -20.1 33.2 42.0 4.8 -29.9 30.9 90.4 40.7 14 Bank holding companies -.3 3.9 5.4 -.9 6.2 -12.4 42.6 -42.2 3.5 -6.7 -3.2 7.3 IS; Banks in U.S.-affiliated areas 4.2 .7 3.7 6.0 4.4 6.6 6.3 5.4 5.4 12.3 5.1 -3.6 16 -7.6 19.9 -4.7 36.1 68.6 58.1 20.2 56.3 71.2 58.2 40.1 50.5 17 16.2 25.5 16.8 19.0 27.5 27.5 18.8 35.6 36.6 28.5 25.0 39.0 18 Bank personal trusts and estates -8.3 -7.7 -25.0 -12.8 27.8 27.8 27.8 18.9 13.8 17.6 18.1 10.7 19 Life insurance companies 100.0 69.6 104.8 76.9 53.5 36.8 30.7 51.3 50.9 81.5 73.1 71.9 ?0 Other insurance companies 21.5 22.5 25.2 20.4 -4.2 -14.4 -9.4 -14.0 -18.1 6.0 -4.0 16.3 ?1 Private pension funds 19.9 -4.1 47.6 56.4 45.0 5.9 49.8 46.8 24.7 68.9 28.7 35.7 77 State and local government retirement funds 38.3 35.8 67.1 72.1 46.9 40.0 46.2 63.3 31.5 11..11 8800..66 58.8 n Money market mutual funds 86.5 88.8 87.5 244.0 182.0 224.8 354.5 208.8 -156.2 224444..99 229977..99 357.7 74 Mutual funds 52.5 48.9 80.9 124.8 47.2 -13.0 -12.7 -77.8 63.7 46.3 74.4 56.4 75 Closed-end funds 10.5 4.7 -2.6 5.5 6.9 6.9 6.9 -8.8 -8.8 -8.8 -8.8 -8.8 ?6 Government-sponsored enterprises 86.7 84.2 94.3 261.7 235.5 275.9 225.3 138.2 222.3 158.9 302.8 289.9 77 Federally related mortgage pools 98.3 141.0 114.6 192.6 273.8 244.5 182.2 143.7 121.6 225.3 307.3 197.0 78 Asset-backed securities issuers (ABSs) 120.6 120.5 163.8 281.7 205.2 206.9 78.8 114.0 122.6 112.8 282.4 257.0 79 Finance companies 49.9 18.4 21.9 51.9 94.9 91.7 114.4 132.9 138.9 81.4 44.3 -16.7 30 Mortgage companies -3.4 8.2 -9.1 3.2 .3 -12.1 12.3 -6.0 5.5 -.5 2.0 1.4 31 Real estate investment trusts (REITs) 1.4 4.4 20.2 -5.1 -2.6 -2.7 -7.0 -16.3 -2.5 -3.6 -2.8 4.0 37 90.1 -15.7 14.9 6.8 -34.7 -6.7 -30.5 96.6 58.6 181.4 -61.0 284.1 33 Funding corporations -15.7 12.6 50.4 -6.9 135.9 20.3 416.5 -26.6 171.6 -102.9 80.5 106.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Net flows through credit markets 1,243.7 1,365.4 1,530.1 2,128.6 2,191.3 2,287.4 2,117.1 1,621.5 1,763.9 1,567.0 1,971.3 1,832.1 Other financial sources 35 Official foreign exchange 8.8 -6.3 .7 66..66 --88..77 --88..55 --77..00 11..55 -8.8 ..77 44..99 --1100..55 36 Special drawing rights certificates 2.2 -.5 -.5 .0 -3.0 -4.0 -4.0 .0 -8.0 -4.0 -4.0 .0 37 Treasury currency .7 .5 .5 .6 1.0 2.0 .0 2.2 3.2 4.2 .0 -1.1 38 Foreign deposits 35.3 85.9 108.9 2.0 86.5 69.4 52.7 258.5 8.5 -16.0 192.7 40.0 39 Net interbank transactions 10.0 -51.6 -19.7 -32.3 17.6 -30.8 -40.7 -64.7 150.3 -148.6 -17.2 -168.8 40 Checkable deposits and currency -12.8 15.7 41.2 47.4 151.4 139.3 365.2 -219.1 -65.0 49.2 -50.2 83.8 41 Small time and savings deposits 96.6 97.2 97.1 152.4 44.7 119.1 28.0 104.3 130.3 238.5 290.8 287.6 47 Large time deposits 65.6 114.0 122.5 92.1 130.6 102.7 359.4 149.2 108.4 141.5 75.3 125.7 43 141.2 145.4 155.9 287.2 249.1 174.3 485.5 241.0 48.2 241.9 402.2 623.0 44 Security repurchase agreements 110.5 41.4 120.9 91.3 169.7 191.4 310.5 257.4 156.8 238.6 -209.3 -44.4 45 Corporate equities -15.7 -5.9 -83.9 -173.0 -26.7 2.2 5.2 60.2 -95.2 -88.9 -342.0 22.7 46 Mutual fund shares 147.4 237.6 265.1 274.6 188.3 127.5 172.8 306.1 237.6 259.8 171.1 104.7 47 Trade payables 127.5 113.5 132.1 96.0 207.3 257.9 219.1 211.8 122.6 135.1 87.1 8888..88 48 26.7 52.4 111.0 103.3 104.3 29.7 321.3 489.9 -86.2 102.2 57.9 --111188..88 49 Life insurance reserves 45.8 44.5 59.3 48.0 50.8 48.1 57.6 54.9 45.6 35.9 65.4 40.5 50 158.8 148.3 201.4 202.1 184.5 191.7 164.0 212.7 262.7 197.4 188.7 273.0 51 Taxes payable 6.2 16.2 15.7 12.0 16.1 .4 18.3 22.7 29.9 -10.7 27.1 24.5 57 Investment in bank personal trusts 6.4 -5.3 -49.9 -42.5 -7.1 -7.2 -6.9 -5.9 -10.6 -6.6 -5.5 -14.1 53 Noncorporate proprietors' equity 36.5 -11.9 -50.2 -50.0 -10.8 -59.6 7.0 -20.7 -3.6 31.6 -2.6 -5.4 54 Miscellaneous 505.4 532.1 487.5 936.5 654.6 499.0 518.4 962.3 1,194.5 1,210.2 673.5 590.5 55 Total financial sources 2,746.6 2,928.8 3,245.7 4,182.8 4,391.3 4,131.7 5,143.8 4,645.7 3,985.3 4,178.9 3,577.4 3,773.5 Liabilities not identified as assets (—) 56 Treasury currency -.3 -.4 -.2 -.1 -.7 .2 --22..22 -1.8 --..77 ..99 --33..33 --22..55 57 Foreign deposits 25.1 59.6 107.4 -13.0 71.3 26.4 114.4 211.5 -77.1 -75.0 160.0 17.3 58 Net interbank liabilities -3.1 -3.3 -19.9 3.4 3.5 -7.0 -23.7 24.4 -4.3 -18.3 68.6 16.4 59 Security repurchase agreements 25.7 2.4 63.2 60.4 29.9 131.1 -225.4 560.7 56.8 104.9 -286.4 -87.3 60 Taxes payable 21.1 23.1 28.0 13.9 3.6 3.0 -4.9 7.9 5.7 -20.1 32.3 17.4 61 Miscellaneous -208.4 -137.2 -148.6 -207.7 -436.0 -540.7 -319.1 -437.9 -323.0 -49.2 -189.1 160.3 Floats not included in assets (-) 62 Federal government checkable deposits -6.0 .5 -2.7 2.6 -7.4 8.6 -9.2 28.7 -2.6 -2.0 1111..99 --1100..77 63 Other checkable deposits -3.8 -4.0 -3.9 -3.1 -.8 -.3 .0 .6 1.5 1.9 2.7 3.3 64 Trade credit 14.1 -21.9 -28.5 -44.6 57.5 79.3 185.5 -19.9 -47.8 -41.0 41.6 -1.9 65 Total identified to sectors as assets 2,882.3 3,010.1 3,250.9 4,371.1 4,670.4 4,431.1 5,428.4 4,271.7 4,377.0 4,276.9 3,739.1 3,661.2 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables 2. Excludes corporate equities and mutual fund shares. F.l and F.5. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A40 Domestic Nonfinancial Statistics • August 2001 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1999 2000 2001 11999999 Q3 Q4 Qi Q2 Q3 Q4 QI Nonfinancial sectors 1 Total credit market debt owed by domestic nonfinancial sectors 14,443.7 15,246.8 16,258.2 17381.6 17,052.5 17381.6 17,609.4 17,784.7 17,984.2 18,263.4 18306.5 By sector and instrument 2 Federal government 3,781.8 3,804.9 3,752.2 3,681.0 3,633.4 3,681.0 3,653.5 3,464.0 3,410.2 3,385.2 3,408.8 3 Treasury securities 3,755.1 3,778.3 3,723.7 3,652.8 3,605.1 3,652.8 3,625.8 3,435.7 3,382.6 3,357.8 3,382.1 4 Budget agency securities and mortgages 26.6 26.5 28.5 28.3 28.3 28.3 27.8 28.2 27.6 27.3 26.8 5 Nonfederal 10,662.0 11,441.9 12,505.9 13,700.6 13,419.1 13,700.6 13,955.9 14,320.7 14,574.0 14,878.2 15,097.6 By instrument 6 Commercial paper 156.4 168.6 193.0 230.3 239.3 230.3 260.8 296.8 307.0 278.4 253.2 / Municipal securities and loans 1,296.0 1,367.5 1,464.3 1,532.5 1,518.6 1,532.5 1,539.2 1,551.6 1,550.3 1,567.8 1,596.6 8 Corporate bonds 1,460.4 1,610.9 1,829.6 2,059.5 2,020.7 2,059.5 2,106.0 2,144.5 2,190.6 2,234.5 2,334.5 9 Bank loans n.e.c 934.1 1,040.5 1,148.8 1,231.5 1,202.9 1,231.5 1,259.1 1,307.2 1,311.6 1,334.8 1,326.2 10 Other loans and advances 770.4 839.5 913.8 974.6 963.1 974.6 1,020.1 1,049.5 1,052.2 1,090.0 1,094.6 11 Mortgages 4,833.1 5,150.8 5,624.8 6,246.1 6,104.5 6,246.1 6,354.7 6,517.1 6,667.1 6,806.3 6,934.7 12 Home 3,719.0 3,971.3 4,351.0 4,777.1 4,681.8 4,777.1 4,851.1 4,974.1 5,091.8 5,192.4 5,283.9 13 Multifamily residential 278.4 286.6 306.5 346.4 333.6 346.4 353.6 364.6 371.9 382.0 392.2 14 Commercial 748.6 802.6 870.8 1,020.5 987.6 1,020.5 1,046.1 1,072.2 1,095.5 1,123.1 1,148.5 15 Farm 87.1 90.3 96.5 102.0 101.4 102.0 103.9 106.3 107.8 108.8 110.0 16 Consumer credit 1,211.6 1,264.1 1,331.7 1,426.2 1,370.1 1,426.2 1,416.0 1,454.0 1,495.3 1,566.5 1,558.0 By borrowing sector 17 Household 5,222.5 5,559.9 6,032.0 6,564.6 6,413.2 6,564.6 6,632.7 6,800.2 6,968.6 7,149.9 7,227.6 18 Nonfinancial business 4,376.1 4,762.5 5,274.2 5,883.9 5,763.5 5,883.9 6,065.9 6,254.8 6,342.3 6,449.1 6,563.5 19 Corporate 3,095.3 3,359.9 3,751.9 4,241.0 4,154.7 4,241.0 4,392.5 4,544.7 4,603.7 4,678.3 4,771.4 20 Nonfarm noncorporate 1,130.9 1,246.5 1,358.4 1,473.8 1,440.2 1,473.8 1,503.2 1,534.5 1,561.1 1,590.6 1,612.3 21 Farm 149.9 156.1 163.8 169.0 168.6 169.0 170.3 175.7 177.5 180.2 179.8 22 State and local government 1,063.4 1,119.5 1,199.8 1,252.1 1,242.4 1,252.1 1,257.3 1,265.7 1,263.1 1,279.3 1,306.5 23 Foreign credit market debt held in United States 542.2 608.0 651.4 676.9 672.9 676.9 704.6 699.3 727.8 743.4 736.6 24 Commercial paper 67.5 65.1 72.9 89.2 81.8 89.2 101.6 101.2 109.8 120.9 112.8 25 Bonds 366.3 427.7 462.5 476.7 477.4 476.7 488.1 481.3 499.2 501.5 501.2 26 Bank loans n.e.c 43.7 52.1 58.9 59.4 58.8 59.4 63.3 64.7 67.7 70.7 73.3 27 Other loans and advances 64.7 63.0 57.2 51.7 55.0 51.7 51.7 52.1 51.2 50.3 49.4 28 Total credit market debt owed by nonfinancial sectors, domestic and foreign 14,985.9 15,854.7 16,909.6 18,058.6 17,725.4 18,058.6 18314.0 18,484.0 18,712.0 19,006.8 19,243.1 Financial sectors 29 Total credit market debt owed by financial sectors 4,824.5 5,445.2 6,519.1 7,596.3 7340.1 7,596.3 7,725.8 7,946.3 8,140.2 8,410.0 8,616.4 By instrument 30 Federal government-related 2,608.2 2,821.1 3,292.0 3,884.0 3,745.9 3,884.0 3,940.1 4,035.3 4,164.0 4,317.6 4,426.1 31 Government-sponsored enterprise securities 896.9 995.3 1,273.6 1,591.7 1,499.8 1,591.7 1,618.0 1,680.2 1,749.7 1,825.9 1,891.9 32 Mortgage pool securities 1,711.3 1,825.8 2,018.4 2,292.2 2,246.1 2,292.2 2,322.1 2,355.2 2,414.3 2,491.7 2,534.2 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 3,712.4 3,594.2 3,712.4 3,785.7 3,911.0 3,976.1 4,092.5 4,190.2 35 Open market paper 579.1 745.7 906.7 1,082.9 963.4 1,082.9 1,115.7 1,135.2 1,151.6 1,210.7 1,180.8 36 Corporate bonds 1,378.4 1,555.9 1,852.8 2,064.0 2,084.3 2,064.0 2,095.7 2,165.2 2,219.4 2,267.9 2,380.6 37 Bank loans n.e.c 64.0 77.2 107.2 92.9 105.2 92.9 91.4 92.7 92.5 92.6 96.8 38 Other loans and advances 162.9 198.5 288.7 395.8 365.4 395.8 404.4 436.9 430.2 438.3 450.9 39 Mortgages 31.9 46.8 71.6 76.7 75.9 76.7 78.5 81.0 82.5 82.9 81.1 By borrowing sector 40 Commercial banks 113.6 140.6 188.6 230.0 224.2 230.0 242.2 265.4 265.2 266.7 273.9 41 Bank holding companies 150.0 168.6 193.5 219.3 211.8 219.3 221.4 229.3 236.9 242.5 266.0 42 Savings institutions 140.5 160.3 212.4 260.4 255.4 260.4 266.9 280.7 276.0 287.7 294.8 43 Credit unions .4 .6 1.1 3.4 2.5 3.4 2.6 2.9 3.1 3.4 3.3 44 Life insurance companies 1.6 1.8 2.5 3.2 4.3 3.2 3.0 2.7 2.7 2.5 1.9 45 Government-sponsored enterprises 896.9 995.3 1,273.6 1,591.7 1,499.8 1,591.7 1,618.0 1,680.2 1,749.7 1,825.9 1,891.9 46 Federally related mortgage pools 1,711.3 1,825.8 2,018.4 2,292.2 2,246.1 2,292.2 2,322.1 2,355.2 2,414.3 2,491.7 2,534.2 47 Issuers of asset-backed securities (ABSs) 863.3 1,076.6 1,398.0 1,621.4 1,592.4 1,621.4 1,647.3 1,688.5 1,733.8 1,821.1 1,882.4 48 Brokers and dealers 27.3 35.3 42.5 25.3 34.6 25.3 36.4 36.2 42.6 40.9 35.0 49 Finance companies 529.8 554.5 597.5 659.9 628.5 659.9 670.7 699.2 716.5 734.6 721.4 50 Mortgage companies 20.6 16.0 17.7 17.8 16.3 17.8 17.1 17.8 17.7 17.9 18.1 51 Real estate investment trusts (REITs) 56.5 96.1 158.8 165.1 162.2 165.1 167.9 170.4 169.8 167.8 166.2 52 Funding corporations 312.7 373.7 414.4 506.6 462.0 506.6 510.1 517.9 511.9 507.3 527.2 All sectors 53 Total credit market debt, domestic and foreign ... 19,810.4 21300.0 23,428.7 25,654.9 25,065.5 25,654.9 26,039.8 26,430.3 26,852.2 27,416.8 27,859.5 54 Open market paper 803.0 979.4 1,172.6 1,402.4 1,284.5 1,402.4 1,478.1 1,533.3 1,568.3 1,610.0 1,546.8 55 U.S. government securities 6,389.9 6,626.0 7,044.3 7,565.0 7,379.2 7,565.0 7,593.6 7,499.3 7,574.2 7,702.7 7,834.9 56 Municipal securities 1,296.0 1,367.5 1,464.3 1,532.5 1,518.6 1,532.5 1,539.2 1,551.6 1,550.3 1,567.8 1,596.6 5/ Corporate and foreign bonds 3,205.1 3,594.5 4,144.9 4,600.1 4,582.4 4,600.1 4,689.8 4,791.0 4,909.2 5,003.9 5,216.2 58 Bank loans n.e.c 1,041.7 1,169.8 1,314.9 1,383.8 1,366.9 1,383.8 1,413.7 1,464.6 1,471.7 1,498.1 1,496.3 59 Other loans and advances 998.0 1,101.0 1,259.6 1,422.1 1,383.4 1,422.1 1,476.2 1,538.5 1,533.6 1,578.6 1,594.9 60 Mortgages 4,865.1 5,197.7 5,696.4 6,322.8 6,180.4 6,322.8 6,433.2 6,598.1 6,749.5 6,889.2 7,015.7 61 Consumer credit 1,211.6 1,264.1 1,331.7 1,426.2 1,370.1 1,426.2 1,416.0 1,454.0 1,495.3 1,566.5 1,558.0 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables L.2 through L.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A41 1.60 SUMMARY OF FINANCIAL ASSETS AND LIABILITIES1 Billions of dollars except as noted, end of period 1999 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999966 11999977 11999988 11999999 Q3 Q4 Ql Q2 Q3 Q4 Ql CREDIT MARKET DEBT OUTSTANDING2 1 Total credit market assets 19,810.4 21,300.0 23,428.7 25,654.9 25,065.5 25,654.9 26,039.8 26,430.3 26,852.2 27,416.8 27,859.5 ? Domestic nonfederal nonfinancial sectors 3,035.0 2,974.0 3,052.0 3,353.6 3,239.7 3,353.6 3,285.6 3,289.4 3,236.4 3,246.4 3,146.6 2,122.0 2,075.7 2,035.1 2,294.6 2,185.6 2,294.6 2,232.4 2,217.2 2,167.2 2,152.9 2,075.2 4 Nonfinancial corporate business 270.2 257.5 241.5 238.7 235.1 238.7 232.1 237.6 240.7 250.6 226.9 5 Nonfarm noncorporate business 38.0 35.9 35.9 37.5 37.1 37.5 38.1 38.8 39.8 40.8 41.9 A State and local governments 604.8 605.0 739.4 782.8 781.9 782.8 782.9 795.8 788.7 802.0 802.5 7 200.2 205.4 219.1 258.0 260.7 258.0 259.6 261.6 262.7 265.2 268.3 8 1,926.6 2,257.3 2,539.8 2,678.0 2,718.1 2,678.0 2,763.6 2,812.8 2,864.7 2,957.9 2,990.0 9 14,648.6 15,863.2 17,617.7 19,365.3 18,846.9 19,365.3 19,731.0 20,066.5 20,488.4 20,947.3 21,454.6 10 393.1 431.4 452.5 478.1 489.3 478.1 501.9 505.1 511.5 511.8 523.9 11 3,707.7 4,031.9 4,335.7 4,643.9 4,488.3 4,643.9 4,725.0 4,847.4 4,931.0 5,002.6 5,016.7 P 3,175.8 3,450.7 3,761.2 4,078.9 3,944.3 4,078.9 4,171.3 4,295.4 4,368.2 4,418.7 4,425.1 N Foreign banking offices in United States 475.8 516.1 504.2 484.1 475.3 484.1 482.0 478.1 487.5 508.1 514.9 14 Bank holding companies 22.0 27.4 26.5 32.7 22.0 32.7 22.1 23.0 21.3 20.5 22.3 15 Banks in U.S.-affiliated areas 34.1 37.8 43.8 48.3 46.7 48.3 49.6 51.0 54.0 55.3 54.4 16 Savings institutions 933.2 928.5 964.6 1,033.2 1,030.5 1,033.2 1,045.8 1,062.5 1,082.2 1,089.7 1,101.0 17 288.5 305.3 324.2 351.7 348.5 351.7 359.0 370.8 378.6 383.1 391.3 18 Bank personal trusts and estates 232.0 207.0 194.1 222.0 215.0 222.0 226.7 230.2 234.6 239.1 241.8 19 Life insurance companies 1,657.0 1,751.1 1,828.0 1,886.0 1,880.4 1,886.0 1,900.1 1,911.6 1,933.7 1,950.2 1,969.2 70 Other insurance companies 491.2 515.3 535.7 531.6 533.9 531.6 528.0 523.5 525.0 524.0 528.1 71 627.0 674.6 731.0 775.9 763.5 775.9 787.6 793.8 811.0 818.2 827.1 77 State and local government retirement funds 565.4 632.5 704.6 751.4 739.9 751.4 767.2 775.1 775.4 795.5 810.2 73 Money market mutual funds 634.3 721.9 965.9 1,147.8 1,049.7 1,147.8 1,217.1 1,159.4 1,212.5 1,296.7 1,403.8 74 820.2 901.1 1,025.9 1,073.1 1,083.0 1,073.1 1,053.7 1,073.9 1,088.1 1,099.7 1,113.5 101.1 98.5 104.0 110.9 109.2 110.9 108.7 106.5 104.4 102.2 100.0 76 Government-sponsored enterprises 807.9 902.2 1,163.9 1,399.5 1,339.1 1,399.5 1,426.4 1,483.5 1,532.5 1,612.1 1,677.3 77 Federally related mortgage pools 1,711.3 1,825.8 2,018.4 2,292.2 2,246.1 2,292.2 2,322.1 2,355.2 2,414.3 2,491.7 2,534.2 78 Asset-backed securities issuers (ABSs) 773.9 937.7 1,219.4 1,424.6 1,403.1 1,424.6 1,445.4 1,477.9 1,514.5 1,594.5 1,650.9 79 Finance companies 544.5 566.4 618.4 713.3 678.2 713.3 747.0 780.6 795.5 812.6 809.3 30 Mortgage companies 41.2 32.1 35.3 35.6 32.5 35.6 34.1 35.5 35.4 35.9 36.2 31 Real estate investment trusts (REITs) 30.4 50.6 45.5 42.9 44.7 42.9 38.8 38.2 37.3 36.6 37.6 37 167.7 182.6 189.4 154.7 166.8 154.7 194.6 187.9 243.3 223.6 312.3 33 Funding corporations 121.0 166.7 161.3 296.8 205.3 296.8 301.8 348.0 327.7 327.5 370.1 RELATION OF LIABILITIES TO FINANCIAL ASSETS 34 Total credit market debt 19,810.4 21,300.0 23,428.7 25,654.9 25,065.5 25,654.9 26,039.8 26,430.3 26,852.2 27,416.8 27,859.5 Other liabilities 35 Official foreign exchange 53.7 48.9 60.1 50.1 52.1 50.1 49.4 46.5 44.9 4455..33 4422..22 36 Special drawing rights certificates 9.7 9.2 9.2 6.2 7.2 6.2 6.2 4.2 3.2 2.2 2.2 37 18.9 19.3 19.9 20.9 20.9 20.9 21.4 22.1 23.2 23.2 22.9 38 521.7 619.7 639.0 725.8 712.3 725.8 790.4 792.6 788.6 836.7 846.7 39 Net interbank liabilities 240.8 219.4 189.0 204.5 199.6 204.5 169.7 210.6 173.2 188.2 121.8 40 Checkable deposits and currency 1,244.8 1,286.1 1,333.4 1,484.8 1,353.8 1,484.8 1,392.9 1,409.7 1,385.7 1,413.5 1,384.1 41 Small time and savings deposits 2,377.0 2,474.1 2,626.5 2,671.2 2,665.9 2,671.2 2,728.0 2,738.8 2,790.9 2,862.2 2,965.4 47 Large time deposits 590.9 713.4 805.5 936.1 837.5 936.1 966.5 987.4 1,025.9 1,054.7 1,078.3 43 Money market fund shares 886.7 1,042.5 1,329.7 1,578.8 1,444.9 1,578.8 1,666.0 1,627.1 1,697.8 1,812.1 1,994.7 44 Security repurchase agreements 701.5 822.4 913.7 1,083.4 999.4 1,083.4 1,149.2 1,185.0 1,238.7 1,194.3 1.197.5 45 2,342.4 2,989.4 3,610.5 4,553.4 3,931.5 4,553.4 4,863.3 4,759.6 4,815.0 4,456.3 4.030.6 46 358.1 469.1 572.3 676.6 593.1 676.6 795.4 775.5 800.4 817.6 784.5 4477 610.6 665.0 718.3 783.9 756.2 783.9 801.0 806.5 815.5 819.4 817.0 4488 6,325.1 7,323.4 8,193.7 9,041.7 8,363.7 9,041.7 9,237.9 9,166.7 9,308.4 9,054.1 8,590.3 49 1,809.3 1,941.4 2,037.4 2,244.6 2,169.9 2,244.6 2,271.1 2,302.3 2,342.9 2,383.8 2,379.5 50 123.8 139.5 151.5 167.6 167.5 167.6 181.0 180.0 182.9 184.8 198.6 51 Investment in bank personal trusts 871.3 942.5 1,001.0 1,130.4 1,019.0 1,130.4 1,163.0 1,124.1 1,122.3 1,039.0 949.2 52 Miscellaneous 6,349.1 6,670.6 7,332.7 7,788.5 7,465.5 7,788.5 7,981.8 8,254.0 8,701.5 8,905.8 8,963.0 53 Total liabilities 45,245.6 49,695.6 54,972.1 60,803.4 57,825.5 60,803.4 62,274.0 62,823.2 64,113.0 64,510.0 64,228.1 Financial assets not included in liabilities (+) 54 Gold and special drawing rights 21.4 21.1 21.6 21.4 21.3 21.4 21.4 21.5 2211..44 2211..66 2211..44 55 Corporate equities 10,255.8 13,201.3 15,492.5 19,494.5 16,106.8 19,494.5 20,147.2 19,179.6 18,990.4 17,026.1 14,878.4 56 Household equity in noncoiporate business 3,889.2 4,162.6 4,428.4 4,736.4 4,647.8 4,736.4 4,763.1 4,809.4 4,865.0 4,944.9 5.056.0 Liabilities not identified as assets (-) 57 Treasury currency -6.1 -6.3 -6.4 -7.1 -6.6 -7.1 -7.6 -7.9 -7.6 -8.5 --99..11 58 Foreign deposits 437.0 538.3 541.6 613.3 584.3 613.3 666.1 646.9 628.1 668.1 682.1 59 Net interbank transactions -10.6 -32.2 -27.0 -25.5 -13.2 -25.5 -13.9 -11.6 -17.6 -4.1 1.3 60 Security repurchase agreements 109.8 172.9 233.4 263.3 323.7 263.3 410.1 422.6 447.7 372.2 370.8 61 76.9 92.6 102.0 95.6 96.5 95.6 89.6 103.0 92.5 96.9 87.2 62 Miscellaneous -1,448.9 -1,785.7 -2,468.4 -3,079.3 -3,143.7 -3,079.3 -3,250.3 -3,319.2 -3,099.3 -3,282.3 -3,530.1 Floats not included in assets (-) 63 Federal government checkable deposits -1.6 -8.1 -3.9 -9.9 -10.2 -9.9 -6.5 -5.2 -7.8 -3.0 --2222..33 64 Other checkable deposits 30.1 26.2 23.1 22.3 14.5 22.3 18.7 22.5 15.5 24.0 21.1 65 Trade credit 171.8 133.5 90.0 148.9 29.3 148.9 89.2 54.3 43.4 128.1 76.3 66 Total identified to sectors as assets 60,053.7 67,949.4 76,430.1 87,034.2 80,726.8 87,034.2 89,210.1 88,928.3 89,894.8 88,511.2 86,506.7 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 • August 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 Sept. Oct. Nov. Dec. Jan. Feb.r Mar.r Apr. Mayp 1 Industrial production' 134.0 139.6 147.5 149.0 148.7 148.2 147.3 146.0 145.4 145.1 144.2 143.1 Market groups 2 Products, total 127.2 131.2 136.2 136.7 136.3 136.3 136.0 135.0 134.6 134.7 133.7 132.7 3 Final, total 129.3 133.3 138.8 139.3 138.8 138.8 139.0 137.8 137.7 138.0 136.9 135.9 4 Consumer goods 118.4 120.8 123.0 123.8 122.7 122.4 123.1 121.8 122.3 122.5 121.7 120.8 5 Equipment 147.1 153.8 166.1 168.3 169.1 169.9 168.9 168.0 166.2 167.1 165.1 164.1 6 Intermediate 121.0 125.1 128.7 128.6 128.7 128.5 126.8 126.7 125.5 124.6 124.1 123.3 7 Materials 145.7 154.5 167.8 171.3 171.1 169.9 167.8 165.9 165.0 163.9 163.2 161.8 Industry groups 8 Manufacturing 138.2 144.8 153.6 155.1 154.9 154.1 152.6 151.3 150.7 150.1 149.1 148.1 9 Capacity utilization, manufacturing (percent)". . 81.3 80.5 81.3 81.7 81.2 80.5 79.3 78.4 77.9 77.4 76.7 76.0 10 Construction contracts3 122.6 135.lr 142.lr 143.0 151.0 143.0 140.0r 152.0 148.0 138.0 142.0 139.0 11 Nonagricultural employment, total4 123.5 126.3 128.9 129. 5r 129.6r 129.7r 129.8r 129.91 130.1 130.1 129.9 129.9 12 Goods-producing, total 103.0 103.3 104.0 104.1' 104.2r 104.2r 104.1r 103.9 103.9 103.8 103.0 102.6 13 Manufacturing, total 99.0 97.6 97.0 97.0r 96.9r 96.8r 96.6r 96. r 95.8 95.4 94.8 94.1 14 Manufacturing, production workers 100.0 98.4 97.6 97.0r 96.9r 96.6r 96.2r 95.7r 95.1 94.6 93.9 93.1 15 Service-producing 130.0 133.7 136.8 137.6r 137.7r 137.9r 138.0r 138.2r 138.4 138.5 138.5 138.6 16 Personal income, total 186.5 196.6 209.0 212.5 212.1 212.5 213.5 214.8 215.9 216.9 217.4 217.8 17 Wages and salary disbursements 184.6 196.9 210.1 212.7 214.0 214.6 215.2 216.8 218.3 219.4 220.1 220.5 18 Manufacturing 152.3 157.4 164.2 165.1 166.6 166.9 165.5 165.8 166.2 166.4 165.8 164.9 19 Disposable personal income5 182.7 191.9 202.0 205.2 204.4 204.6 205.5 206.6r 207.6 208.6 209.1 209.5 20 Retail sales5 178.4 194.7 210.0 212.7 212.5 211.3 211.6 214.4 213.9 213.2 214.9 n.a. Prices6 21 Consumer (1982-84=100) 163.0 166.6 172.2 173.7 174.0 174.1 174.0 175.1 175.8 176.2 176.9 177.7 22 Producer finished goods (1982=100) 130.7 133.0 138.0 139.4 140.1 140.0 139.7 141.2 141.5 141.0 141.7 142.5 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 Reserx'e 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 2000r 2001 CCaatteeggoorryy 11999988 11999999 22000000 Oct. Nov. Dec. Jan.r Feb/ Mar/ Apr/ May HOUSEHOLD SURVEY DATA1 1 Civilian labor force2 137,673 139,368 140,863 141,000 141,136 141,489 141,955 141,751 141,868 141,757 141,272 Employment 7 128,085 130,207 131,903 132,223 132,302 132,562 132,819 132,680 132,618 132,162 131,910 3 Agriculture 3,378 3,281 3,305 3,241 3,176 3,274 3,179 3,135 3,161 3,192 3,193 Unemployment 4 66,,221100 55,,888800 55,,665555 5,536 5.658 5,653 5,956 5,936 6,088 6,402 6,169 5 Rate (percent of civilian labor force) 4.5 4.2 4.0 3.9 4.0 4.0 4.2 4.2 4.3 4.5 4.4 ESTABLISHMENT SURVEY DATA 6 Nonagricultural payroll employment4 125,865 128,786 131,417 132,145 132,279 132,367 132,428 132,595 132,654 132,472 132,453 7 Manufacturing 18,805 18,543 18,437 18,404 18,382 18,349 18,257 18,192 18,116 18,003 17,879 8 Mining 590 535 538 551 548 548 550 555 557 560 564 9 Contract construction 6,020 6,404 6,687 6,758 6,781 6,791 6,826 6,880 6,929 6,851 6,882 10 Transportation and public utilities 6,611 6,826 6,993 7,076 7,093 7,108 7,106 7,123 7,127 7,119 7,131 II Trade 29.095 29,712 30,191 30,439 30,465 30,474 30,482 30,536 30,523 30,572 30,553 12 Finance 7,389 7,569 7,618 7,569 7,575 7,582 7,594 7,609 7,618 7,626 7,648 13 Service 37,533 39,027 40,384 40,767 40,845 40,901 40,984 41,020 41.073 40,995 41,037 14 Government 19,823 20,170 20,570 20,581 20,590 20,614 20,629 20,680 20,711 20,746 20,759 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 2001 2000 2001 2000 2001 SSeerriieess Q2 Q3 Q4 Qlr Q2 Q3 Q4 Ql Q2 Q3 Q4 Q!r Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 147.1 148.4 148.1 145.5 178.1 180.1 182.1 183.7 82.6 82.4 81.3 79.2 2 Manufacturing 153.0 154.4 153.8 150.7 186.9 189.2 191.5 193.5 81.9 81.7 80.3 77.9 3 Primary processing3 178.6 180.3 178.7 172.6 206.9 211.2 216.0 220.0 86.4 85.4 82.7 78.4 4 Advanced processing4 139.0 140.3 140.2 138.5 174.1 175.2 176.2 177.2 79.8 80.1 79.5 78.2 5 Durable goods 192.9 196.7 196.5 191.6 233.3 238.3 243.6 248.1 82.7 82.5 80.7 77.2 6 Lumber and products 120.3 117.0 113.2 109.6 147.5 147.9 148.4 148.7 81.6 79.1 76.3 73.7 7 Primary metals 137.0 133.4 127.5 121.0 153.3 153.4 153.5 153.5 89.4 87.0 83.1 78.8 8 Iron and steel 136.1 130.5 121.5 114.9 153.1 153.4 153.6 153.6 88.9 85.1 79.1 74.8 9 Nonferrous 138.2 137.0 134.7 128.3 153.4 153.4 153.4 153.5 90.1 89.3 87.8 83.6 10 Industrial machinery and equipment 249.4 257.3 261.9 256.3 304.5 311.1 317.3 322.5 81.9 82.7 82.5 79.5 11 Electrical machinery 535.1 581.1 604.0 593.7 591.7 639.1 694.1 741.7 90.4 90.9 87.1 80.1 12 Motor vehicles and parts 175.9 170.8 159.7 147.5 208.2 209.2 210.1 210.9 84.5 81.7 76.0 69.9 13 Aerospace and miscellaneous transportation equipment 92.9 93.5 94.8 94.0 130.7 130.4 130.2 130.0 71.1 71.7 72.8 72.3 14 Nondurable goods 116.7 116.2 115.3 113.6 144.1 144.4 144.6 144.7 80.9 80.5 79.7 78.5 15 Textile mill products 103.3 99.8 94.7 92.8 123.9 123.3 122.8 122.0 83.4 80.9 77.1 76.1 16 Paper and products 117.9 114.0 114.9 110.8 137.2 137.5 137.9 138.3 85.9 82.9 83.3 80.1 17 Chemicals and products 125.8 125.4 124.5 121.9 163.0 164.1 164.8 165.0 77.2 76.4 75.5 73.9 18 Plastics materials 140.9 137.6 131.0 130.9 151.6 151.9 152.3 152.7 93.0 90.5 86.0 85.7 19 Petroleum products 118.3 117.3 116.0 115.5 123.2 123.2 123.1 123.1 96.0 95.3 94.3 93.8 20 Mining 100.0 100.6 100.3 101.8 116.5 116.3 115.8 115.3 85.8 86.6 86.6 88.2 ?1 Utilities 120.7 121.0 123.7 122.9 132.3 133.4 134.5 135.7 91.2 90.7 92.0 90.6 22 Electric 124.3 123.9 127.5 125.4 130.9 132.3 133.8 135.3 94.9 93.7 95.3 92.7 1973 1975 Previous cycle5 Latest cycle6 2000 2001 High Low High Low High Low May Dec. Jan. Feb.r Mar.r Apr. Mayp Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 82.7 80.6 79.7 79.2 78.8 78.2 77.4 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 81.9 79.3 78.4 77.9 77.4 76.7 76.0 3 Primary processing3 91.2 68.2 88.1 66.2 88.9 77.7 86.4 80.9 79.2 78.6 77.5 77.0 76.3 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.9 79.0 78.6 78.1 77.9 77.1 76.5 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 82.7 79.5 77.9 77.0 76.8 75.8 75.2 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 81.7 75.0 72.9 73.3 74.8 74.3 75.2 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 89.2 82.2 80.7 79.0 76.7 78.0 76.1 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 88.8 77.2 75.5 75.2 73.8 76.2 74.3 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 89.9 88.2 86.9 83.6 80.2 80.1 78.4 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 82.0 82.1 80.5 79.1 78.9 77.1 75.8 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 90.2 85.5 82.9 80.0 77.3 74.8 73.0 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 85.3 72.1 65.8 69.9 74.1 73.5 75.2 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 70.6 73.3 72.5 71.9 72.5 72.3 72.2 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 80.9 78.9 78.8 78.8 77.9 77.7 76.9 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 82.8 77.1 76.0 76.0 76.2 75.7 75.4 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 84.9 81.7 81.0 81.6 77.8 81.9 80.4 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 77.5 74.5 73.8 74.3 73.4 72.1 71.2 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 93.9 79.8 83.9 88.2 85.0 83.3 81.8 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 96.5 93.2 93.5 94.6 93.4 94.6 93.3 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 85.4 86.1 87.5 87.9 89.3 89.3 89.0 71 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 91.9 95.7 91.7 89.8 90.3 89.1 87.3 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 95.7 97.7 94.0 91.6 92.4 92.0 89.2 1. Data in this table appear in the Board's G.17 (419) monthly statistical release. The data 3. Primary processing includes textiles; lumber; paper; industrial chemicals; synthetic are also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The materials; fertilizer materials; petroleum products; rubber and plastics; stone, clay, and glass; latest historical revision of the industrial production index and the capacity utilization rates primary metals; and fabricated metals. was released in 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 Reserve Bulletin, vol. 83 (February tures. 1997), pp. 67-92, and the references cited therein. For details about the construction of 5. Monthly highs, 1978-80; monthly lows, 1982. individual industrial production series, see "Industrial Production: 1989 Developments and 6. Monthly highs, 1988-89; monthly lows, 1990-91. Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. 2. Capacity utilization is calculated as the ratio of the Federal Reserve's seasonally adjusted index of industrial production to the corresponding index of capacity. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A44 Domestic Nonfinancial Statistics • August 2001 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 2000 2001 GGrroouupp pro- 2000 por- avg. tion May June July Aug. Sept. Oct. Nov. Dec. Jan. Feb/ Mar/ Apr. Mayp Index (1992= 100) MAJOR MARKETS 1 Total index 100.0 147.5 147.2 147.9 147.6 148.6 149.0 148.7 148.2 147.3 146.0 145.4 145.1 144.2 143.1 2 Products 60.5 136.2 135.5 136.0 135.8 136.6 136.7 136.3 136.3 136.0 135.0 134.6 134.7 133.7 132.7 3 Final products 46.3 138.8 137.5 138.3 138.1 139.2 139.3 138.8 138.8 139.0 137.8 137.7 138.0 136.9 135.9 4 Consumer goods, total 29.1 123.0 123.5 124.2 122.9 123.8 123.8 122.7 122.4 123.1 121.8 122.3 122.5 121.7 120.8 5 Durable consumer goods 6.1 160.8 163.8 164.4 158.7 160.0 162.8 157.3 154.3 153.4 148.9 150.8 153.7 152.9 154.6 6 Automotive products 2.6 153.2 157.9 157.8 149.4 153.8 156.7 148.0 143.6 140.7 133.8 138.2 145.2 144.5 148.7 7 Autos and trucks 1.7 166.9 175.7 174.8 160.5 169.8 172.7 159.1 153.0 144.1 136.2 143.5 154.9 154.9 162.4 8 Autos, consumer .9 114.0 119.7 118.1 113.6 120.3 120.5 107.8 103.0 94.3 99.4 100.3 104.0 102.7 105.2 9 Trucks, consumer .7 221.6 233.7 233.2 209.8 221.8 227.1 212.0 204.3 194.7 175.5 188.6 207.1 208.2 220.3 10 Auto parts and allied goods .... .9 131.7 130.6 131.6 131.6 129.1 132.1 130.2 128.2 133.8 128.4 128.7 129.4 127.9 127.4 11 Other 3.5 167.1 168.5 169.8 166.7 165.2 167.7 165.4 163.7 164.7 162.7 162.2 161.0 160.1 159.2 12 Appliances, televisions, and air conditioners 1.0 332.6 334.6 348.2 322.3 325.0 340.5 332.5 332.7 341.7 332.0 322.5 319.2 321.0 320.5 13 Carpeting and furniture .8 129.7 130.8 130.1 131.5 128.6 131.9 129.8 125.4 127.4 123.9 128.2 127.1 124.7 122.1 14 Miscellaneous home goods 1.6 120.4 121.6 120.5 121.3 119.7 118.1 117.5 117.1 115.5 116.5 115.4 115.0 114.3 114.6 15 Nondurable consumer goods 23.0 114.2 114.1 114.8 114.5 115.2 114.7 114.5 114.6 115.7 114.9 115.3 114.9 114.1 112.7 16 Foods and tobacco 10.3 110.7 110.3 110.8 111.0 111.4 110.5 110.4 110.7 110.1 110.3 110.7 110.0 109.4 108.6 17 Clothing 2.4 85.0 86.8 85.1 85.6 84.2 83.1 82.7 83.2 82.4 82.6 82.8 82.4 81.3 80.6 18 Chemical products 4.5 137.0 138.5 139.3 137.4 139.4 138.4 139.0 138.5 139.0 139.1 141.5 141.5 139.2 136.6 19 Paper products 2.9 111.1 109.0 111.6 112.4 112.4 112.4 113.8 112.5 112.2 113.7 111.1 110.4 111.5 109.9 20 Energy 2.9 116.3 116.0 117.0 114.9 117.1 118.4 115.5 117.3 126.1 119.0 119.2 119.6 118.8 116.8 21 Fuels .8 113.0 113.1 113.4 112.6 113.1 115.8 113.0 115.5 112.3 112.0 114.7 113.7 116.1 114.2 22 Residential utilities 2.1 117.9 117.1 118.5 115.6 119.0 119.1 116.2 117.6 134.5 122.8 121.3 122.6 119.7 117.6 23 Equipment 17.2 166.1 163.1 164.3 166.3 167.9 168.3 169.1 169.9 168.9 168.0 166.2 167.1 165.1 164.1 24 Business equipment 13.2 194.2 191.6 192.8 195.0 197.8 199.5 200.0 200.6 199.2 197.4 195.3 195.9 193.1 191.7 25 Information processing and related 5.4 312.2 302.5 307.0 313.9 322.1 327.2 332.3 336.7 335.9 337.4 330.6 328.2 326.5 323.1 26 Computer and office equipment 1.1 1,157.6 1,087.8 1,130.8 1,182.8 1,229.0 1,264.1 1,286.4 1,305.0 1,318.3 1,310.6 1,307.0 1,304.3 1,299.1 1,291.3 27 Industrial 4.0 144.6 143.4 143.8 144.4 147.7 146.5 146.9 147.4 145.8 145.7 141.4 142.0 138.9 136.6 28 Transit 2.5 127.7 129.0 130.1 127.6 126.8 127.7 121.6 121.8 117.4 111.7 114.4 117.8 116.6 117.8 29 Autos and trucks 1.2 145.6 153.9 152.9 141.5 142.8 144.2 131.4 130.4 122.0 115.6 120.9 129.0 126.6 130.0 30 Other 1.3 145.7 145.8 142.8 148.1 144.8 149.3 154.2 148.6 153.5 149.3 153.9 153.6 148.4 148.2 31 Defense and space equipment 3.3 76.2 75.5 76.3 77.9 76.1 73.7 75.3 77.0 77.5 78.5 76.7 78.0 78.1 78.0 32 Oil and gas well drilling .6 131.8 130.3 130.8 136.2 137.1 132.8 136.5 138.9 139.1 146.7 147.9 150.7 151.2 152.6 33 Manufactured homes .2 116.2 122.9 121.9 116.8 115.5 109.3 98.8 90.9 83.5 73.5 81.9 83.2 81.0 82.0 34 Intermediate products, total 14.2 128.7 129.4 129.0 128.7 128.8 128.6 128.7 128.5 126.8 126.7 125.5 124.6 124.1 123.3 35 Construction supplies 5.3 143.2 143.1 143.4 143.8 142.7 143.1 142.3 141.6 140.6 140.7 139.9 140.7 139.2 138.8 36 Business supplies 8.9 120.1 121.3 120.5 119.8 120.6 120.0 120.7 120.7 118.5 118.4 117.0 115.1 115.1 114.1 37 Materials 39.5 167.8 168.4 169.4 169.0 170.5 171.3 171.1 169.9 167.8 165.9 165.0 163.9 163.2 161.8 38 Durable goods materials 20.8 227.6 227.6 230.3 230.5 233.8 235.7 235.0 232.9 230.3 226.6 225.2 223.7 221.8 220.1 39 Durable consumer parts 4.0 165.3 169.9 165.7 158.3 168.3 169.0 168.5 161.8 157.6 146.1 149.9 152.1 151.6 151.6 40 Equipment parts 7.6 478.3 466.8 486.2 499.9 505.7 512.1 515.9 521.4 522.3 517.5 514.9 509.5 501.0 497.3 41 Other 9.2 134.6 135.9 135.9 135.3 134.7 135.5 133.7 131.8 129.6 130.1 127.2 125.8 125.3 123.9 42 Basic metal materials 3.1 128.7 130.8 130.7 128.5 127.5 129.2 125.9 124.4 123.6 121.2 118.3 114.8 116.2 113.2 43 Nondurable goods materials 8.9 113.8 115.7 115.2 113.9 112.8 112.7 113.4 110.7 108.6 107.5 107.2 104.6 105.8 104.6 44 Textile materials 1.1 97.9 100.9 101.7 97.9 99.3 95.9 94.0 89.5 90.3 91.0 87.7 87.5 87.6 86.2 45 Paper materials 1.8 115.8 117.5 118.1 114.9 112.8 113.8 117.2 113.4 109.4 110.3 112.4 106.0 111.0 109.7 46 Chemical materials 3.9 117.0 119.8 118.4 117.0 116.8 116.3 115.9 113.7 109.8 108.5 108.2 105.9 104.9 103.8 47 Other 2.1 113.0 112.4 112.3 113.7 110.2 112.0 114.0 111.9 113.9 111.0 110.2 109.0 112.8 111.5 48 Energy materials 9.7 103.4 103.3 103.1 102.9 104.2 104.3 103.9 105.4 104.5 104.4 103.9 105.0 104.3 103.4 49 Primary energy 6.3 98.1 98.3 98.4 98.7 98.9 98.5 97.8 99.3 98.6 100.3 99.3 100.3 100.2 99.5 50 Converted fuel materials 3.3 114.3 113.7 112.4 110.8 115.1 116.6 117.2 118.7 117.3 111.8 113.1 114.0 111.8 110.2 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 147.2 146.7 147.5 147.5 148.4 148.7 148.8 148.4 147.8 146.6 145.9 145.2 144.4 143.0 52 Total excluding motor vehicles and parts 95.1 146.3 145.8 146.5 146.9 147.4 147.7 147.8 147.7 147.2 146.5 145.4 144.6 143.7 142.4 53 Total excluding computer and office equipment 98.2 140.4 140.4 141.0 140.5 141.4 141.6 141.2 140.8 139.9 138.6 138.1 137.8 137.0 135.9 54 Consumer goods excluding autos and trucks . 27.4 120.6 120.7 121.5 120.9 121.3 121.2 120.7 120.6 121.9 120.8 121.1 120.7 119.9 118.5 55 Consumer goods excluding energy 26.2 123.9 124.4 125.0 123.9 124.5 124.4 123.6 122.9 122.5 122.0 122.6 122.7 122.0 121.2 56 Business equipment excluding autos and trucks 12.0 200.1 196.1 197.6 201.5 204.5 206.3 208.5 209.4 208.9 207.7 204.6 204.2 201.4 199.2 57 Business equipment excluding computer and office equipment 12.1 158.4 157.3 157.6 158.6 160.3 161.2 161.2 161.5 159.9 158.4 156.5 157.1 154.7 153.5 58 Materials excluding energy 29.8 188.5 189.3 190.7 190.3 191.8 193.0 192.8 190.4 187.8 185.1 184.1 182.1 181.4 179.9 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A45 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1—Continued Monthly data seasonally adjusted 1992 Group S co IC de Z p p o ro r- - 2 a 0 v 0 g 0 . tion May June July Aug. Sept. Oct. Nov. Feb.r Mar.r Apr. Mayp Index (1992=100) MAJOR INDUSTRIES 59 Total index 100.0 147.5 147.2 147.9 147.6 148.6 149.0 148.7 148.2 147.3 146.0 145.4 145.1 144.2 143.1 60 Manufacturing 85.4 153.6 153.1 153.8 153.7 154.6 155.1 154.9 154.1 152.6 151.3 150.7 150.1 149.1 148.1 61 Primary processing 26.5 178.0 178.7 180.1 179.4 180.3 181.2 181.1 178.8 176.1 173.5 173.1 171.3 170.9 169.7 62 Advanced processing 58.9 139.3 139.1 139.4 139.5 140.5 140.8 140.5 140.5 139.6 139.0 138.4 138.3 137.1 136.1 63 Durable goods 45.0 193.4 193.0 194.6 194.7 196.9 198.4 197.6 196.7 195.1 192.3 191.1 191.4 189.7 188.8 64 Lumber and products "24 2.0 118.3 120.5 118.7 118.6 115.5 116.8 114.8 113.2 111.5 108.3 109.1 111.3 110.6 112.1 65 Furniture and fixtures 25 1.4 142.9 143.0 141.9 142.6 143.8 146.6 147.2 145.0 145.3 144.1 143.8 143.3 141.1 139.2 66 Stone, clay, and glass products 32 2.1 134.7 134.2 134.6 136.3 136.1 136.5 137.3 134.6 132.4 135.2 134.3 134.0 132.5 132.9 67 Primary metals 33 3.1 133.7 136.7 136.4 133.9 132.4 133.9 129.0 127.3 126.3 124.0 121.3 117.8 119.7 116.8 68 Iron and steel 331,2 1.7 131.1 135.9 135.5 129.9 129.7 131.9 123.7 122.0 118.7 116.0 115.5 113.3 116.9 113.8 69 Raw steel 331PT .1 120.9 127.1 128.2 126.4 123.9 117.7 115.6 106.3 104.6 108.3 109.1 109.2 101.3 100.3 70 Nonfeirous 333-6,9 1.4 136.8 137.9 137.6 138.8 135.7 136.5 135.3 133.6 135.2 133.4 128.2 123.2 123.1 120.5 71 Fabricated metal products . . 34 5.0 135.6 136.2 135.7 136.1 136.3 136.0 136.0 134.7 132.9 133.5 130.3 129.8 129.0 128.6 72 Industrial machinery and equipment 35 8.0 252.8 249.9 250.9 253.9 257.9 260.0 261.5 261.9 262.3 258.4 255.0 255.6 250.6 247.5 73 Computer and office equipment 357 1.8 1,343.6 1,272.3 1,316.2 1,370.4 1,421.6 1,464.2 1,487.4 1,502.8 1,508.3 1,497.4 1,484.2 1,477.5 1,471.6 1,462.8 74 Electrical machinery 36 7.3 549.7 533.8 555.0 571.2 580.0 592.2 597.4 604.4 610.2 604.3 593.7 583.2 572.2 564.9 75 Transportation equipment... 37 9.5 131.0 133.6 133.5 128.0 132.4 132.4 129.2 126.8 122.8 116.0 119.8 124.5 123.9 125.6 76 Motor vehicles and parts . 371 4.9 170.5 177.6 176.1 163.1 173.9 175.5 167.2 160.1 151.8 138.6 147.4 156.5 155.4 159.1 77 Autos and light trucks . 371PT 2.6 153.0 161.1 160.1 147.8 156.4 158.8 145.8 140.1 131.5 125.9 131.9 141.8 141.6 148.1 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 93.8 92.3 93.6 94.9 93.5 92.1 93.6 95.4 95.3 94.3 93.5 94.3 94.0 93.9 79 Instruments 38 5.4 122.2 121.3 122.2 122.6 123.3 123.7 123.5 124.6 123.1 125.0 123.3 122.8 123.6 122.9 80 Miscellaneous 39 1.3 130.8 130.7 130.5 132.1 130.8 130.9 131.1 130.2 129.4 130.4 127.6 127.5 127.5 125.8 81 Nondurable goods 40.4 116.9 116.7 116.7 116.3 116.3 116.0 116.3 115.5 114.1 114.0 114.0 112.6 112.3 111.2 82 Foods "20 9.4 114.7 114.2 114.9 115.0 115.1 114.6 114.8 115.0 114.2 114.1 115.0 114.6 113.9 113.4 83 Tobacco products 21 1.6 95.3 95.3 93.8 95.8 96.6 94.5 93.7 93.1 94.2 95.2 93.7 91.7 92.0 89.8 84 Textile mill products 22 1.8 100.1 102.6 103.1 101.4 99.4 98.4 96.7 92.8 94.5 93.0 92.7 92.7 91.8 91.1 85 Apparel products 23 2.2 91.7 93.0 91.2 92.0 90.7 89.5 89.2 89.2 88.2 88.9 88.7 88.4 88.2 87.4 86 Paper and products 26 3.6 116.1 116.5 118.8 114.9 113.3 113.7 117.1 114.7 112.7 111.8 112.8 107.7 113.4 111.5 87 Printing and publishing .... 27 6.7 109.9 109.9 109.1 110.0 110.4 110.9 111.6 111.2 109.2 109.6 107.7 106.0 106.0 104.8 88 Chemicals and products .... 28 9.9 128.3 126.3 125.9 124.8 125.9 125.4 125.8 124.8 122.9 121.8 122.6 121.2 119.0 117.4 89 Petroleum products 29 1.4 117.1 118.9 118.8 117.0 117.6 117.4 116.5 116.9 114.7 115.1 116.5 115.0 116.6 115.1 90 Rubber and plastic products . 30 3.5 142.3 142.6 143.5 144.4 142.1 141.9 141.3 139.1 137.3 138.5 137.3 136.5 134.5 134.7 91 Leather and products 31 .3 69.8 70.5 69.3 70.0 68.8 69.8 68.6 68.9 66.9 67.1 69.3 67.8 65.6 65.9 92 Mining 6.9 100.0 99.6 100.4 100.5 101.0 100.4 100.1 101.1 99.6 101.0 101.4 102.9 102.7 102.3 93 Metal 10 .5 97.4 95.7 97.5 92.9 95.8 99.3 96.3 93.7 99.5 94.6 91.7 89.8 90.7 87.4 94 Coal 12 1.0 108.9 112.2 113.6 110.3 109.3 107.0 110.2 108.6 106.1 115.2 110.7 116.6 116.8 116.5 95 Oil and gas extraction 13 4.8 95.0 94.3 94.8 95.7 96.3 95.7 95.1 96.6 95.2 96.1 96.7 97.6 97.4 97.1 96 Stone and earth minerals 14 .6 126.4 123.9 127.7 124.4 125.0 123.7 124.6 123.2 119.3 121.7 126.4 130.5 129.9 129.3 97 Utilities 7.7 120.4 121.6 121.7 119.1 122.1 121.7 120.0 121.9 129.1 124.0 121.8 123.0 121.7 119.6 98 Electric 491.3PT 6.2 123.9 125.2 124.8 121.1 126.1 124.7 124.2 127.3 131.2 126.7 123.9 125.5 125.3 122.0 99 Gas 492,3PT 1.6 109.3 108.7 110.5 111.0 108.4 110.5 105.8 104.5 120.2 113.7 112.9 113.2 109.0 109.9 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 152.6 151.7 152.6 153.2 153.5 153.9 154.3 153.8 152.7 152.2 151.1 149.8 148.9 147.5 101 Manufacturing excluding computer and office equipment 83.6 145.4 145.2 145.8 145.4 146.2 146.5 146.2 145.4 143.9 142.7 142.2 141.6 140.7 139.7 102 Computers, communications equipment, and semiconductors 5.9 1,195.2 1,140.2 1,193.1 1,248.0 1,281.6 1,310.3 1,334.8 1,358.1 1,368.9 1,351.7 1,334.1 1,316.4 1,292.3 1,277.4 103 Manufacturing excluding computers and semiconductors 81.1 128.3 128.4 128.4 127.7 128.2 128.4 128.0 127.1 125.6 124.7 124.3 123.8 123.2 122.3 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 125.1 125.4 125.3 124.5 124.9 125.0 124.6 123.6 122.1 121.1 120.8 120.4 119.8 119.0 Gross value (billions of 1992 dollars, annual rates) MAJOR MARKETS 105 Products, total 2,001.9 2,860.5 2,872.7 2,883.5 2,865.7 2,882.9 2,889.1 2,867.4 2,863.2 2,850.2 2,818.1 2,819.8 2,830.0 2,812.7 2,802.8 106 Final 1,552.1 2,203.4 2,205.6 2,218.6 2,202.8 2,220.5 2,228.1 2,205.4 2,203.7 2,198.2 2.167.1 2,174.5 2,188.3 2,173.3 2,166.2 107 Consumer goods 1,049.6 1,340.0 1,349.8 1,357.8 1,338.7 1,348.7 1,353.7 1,334.7 1,331.2 1,332.8 1.312.2 1,322.8 1,329.1 1,324.9 1,320.9 108 Equipment 502.5 865.7 862.2 867.3 872.8 880.8 883.3 880.9 883.3 874.9 864.8 859.8 868.0 855.6 852.4 109 Intermediate 449.9 656.7 666.0 663.9 661.8 661.5 660.2 661.0 658.6 651.2 649.9 644.5 641.2 638.8 636.0 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 • August 2001 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 2000 2001 IItteemm 11999988 11999999 22000000 July Aug. Sept. Oct. Nov. Dec. Jan. Feb.r Mar.r Apr. Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,612 1.664 1,592 1,534 1,544 1,549 1,562 1,614 1,553 1,724 1,663 1,627 1,587 2 One-family 1,188 1.247 1,198 1,149 1,169 1,173 1,212 1,203 1,187 1,283 1,228 1,209 1,218 3 Two-family or more 425 417 394 385 375 376 350 411 366 441 435 418 369 4 Started 1,617 1.641 1,569 1,477 1,531 1,508 1,527 1,559 1,532 1,666 1,623 1,592 1,629 One-family 1,271 1.302 1,231 1,148 1,228 1,196 1,218 1,209 1,236 1,336 1,288 1,208 1,293 6 Two-family or more 346 339 338 329 303 312 309 350 296 330 335 384 336 7 Under construction at end of period' 971 953 934 980 975 971 971 969 965 985 989 1,002 998 8 One-family 659 648 623 658 659 658 659 655 652 669 675 676 679 9 Two-family or more 312 305 310 322 316 313 312 314 313 316 314 326 319 10 Completed 1,474 1.605 1,574 1,489 1,583 1,526 1,509 1,548 1,527 1,424 1,531 1,478 1,549 11 One-family 1,160 1,270 1,242 1,181 1,235 1,181 1,172 1,236 1,228 1,090 1,201 1,207 1,219 12 Two-family or more 315 335 332 308 348 345 337 312 299 334 330 271 330 13 Mobile homes shipped 374 348 250 251 249 231 213 196 176 164 177 179 183 Merchant builder activity in one-family units 14 Number sold 886 880r 877r 881 839 902 922 882 1,001 938 959 964 921 15 Number for sale at end of period' 300 315 301 304 304 301 301 304 297 295 295 286 287 Price of units sold (thousands of dollars)' 16 Median 152.5 161,0r 169.0 169.0 166.6 171.5 176.3 174.7 162.0 171.3 169.1 166.7 171.0 17 Average 181.9 195.8 207.2r 202.2 200.2 208.3 215.1 210.7 208.1 209.0 211.0 209.4 201.5 EXISTING UNITS (one-family) 18 Number sold 4,970 5,205 5,113 4,820 5,240 5,160 5,070 5,300 4,940 5,200 5,190 5,430 5,220 Price of units sold (thousands of dollars)2 19 Median 128.4 133.3 139.0 143.3 143.2 141.6 138.6 139.5 139.7 137.1 138.6 143.4 143.1 20 Average 159.1 168.3 176.2 177.7 183.0 178.6 176.9 176.5 178.5 175.8 174.6 179.5 179.9 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total put in place 703,533r 763,914r 817,130r 792,253r 803,968r 815,410r 820,805r 826,746r 838,731r 867,056r 876,171 876,111 879,231 22 Private 550,754r 595,667r 641,269r 627,733r 630,656r 638,850' 644,836' 651,066' 660,849' 673,715' 681,826 681,176 674,043 23 Residential 314,514r 349,560r 375,268r 364,I40r 364,039r 364,372' 370,256' 374,281' 379,593' 386,088' 398,863 395,080 395,145 24 Nonresidential 236,240r 246,107r 266,00 lr 263,593r 266,617' 274,478' 274,580' 276,785' 281,256' 287,627' 282,963 286,096 278,898 25 Industrial buildings 40,547r 32,794r 31,984r 33,986r 32,623' 31,384' 32,125' 33,265' 31,398' 35,878' 33,386 34,823 33,316 26 Commercial buildings 95,760r 104,53 lr 116,988r 116,193r 119,139' 121,349' 121,760' 120,587' 125,234' 125,402' 124,568 128,792 123,707 27 Other buildings 39,609r 40,906' 44,505r 44,945r 45,544' 45,020' 45,645' 45,628' 45,707' 46,567' 46,264 47,117 45,593 28 Public utilities and other 60,324r 67,876' 72,523r 68,469r 69,311' 76,725' 75,050' 77,305' 78,917' 79,780' 78,745 75,364 76,282 29 Public 152,779r 168,247r 175,86 lr 164,520r 173,311' 176,559' 175,969' 175,680' 177,883' 193,340' 194,345 194,935 205,188 30 Military 2,539r 2,142r 2,334r 2,196r 2,386' 2,509' 1,883' 2,629' 2,107' 2,270' 2,342 2,131 2,534 31 Highway 45,25 lr 52,024r 52,85 lr 49,628r 52,777' 53,923' 48,764' 48,858' 50,189' 58,458' 58,794 60,289 61,117 32 Conservation and development 5,415r 5,995r 6,043r 4,818r 5,568' 6,425' 6,815' 5,789' 6,339' 7,364' 7,826 7,557 6,564 33 Other 99,575' 108,086r 114,634r 107,878r 112,580' 113,702' 118,507' 118,404' 119,248' 125,248' 125,383 124,958 134,973 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 2001 2001 MMMaaayyy 22000000 22000011 222000000111111 MMaayy MMaayy June Sept. Dec. Mar. Jan. Feb. Mar. Apr. May CONSUMER PRICES2 (1982-84=100) 1 All items 3.2 3.6 2.4 3.3 2.3 4.0 .6 .3 .1 .3 .4 177.7 2 Food 2.2 3.1 1.9 4.1 2.1 4.1 .3 .5 .2 .1 .3 172.5 3 Energy items 14.6 15.8 5.6 7.9 3.8 6.0 3.9 -.2 -2.1 1.8 3.1 140.1 4 All items less food and energy 2.4 2.5 2.2 2.9 2.0 3.5 .3 .3 .2 .2 .1 185.5 5 Commodities .7 .1 -.6 1.7 .0 1.4 .1 .3 -.1 .0 -.4 145.7 6 Services 3.2 3.6 3.4 3.2 3.2 4.2 .4 .3 .3 .3 .3 208.4 PRODUCER PRICES (1982=100) 7 Finished goods 3.7 3.8 2.3 2.0 2.9 4.9 1.1 .1 -.1 .3 .1 142.5 8 Consumer foods 2.8 2.6 3.3 -1.2 2.7 10.2 ,9r ,5r 1.1 .6 — .4 141.8 9 Consumer energy 17.3 14.5 6.5 6.4 12.0 12.6 4.4r 1.2r -2.6 .1 .2 104.1 10 Other consumer goods 1.8 2.1 1.3 2.4 1.0 2.1 .6 -,3r .3 .2 .4 156.9 11 Capital equipment .7 .8 1.5 1.7 .3 .0 .2' -,2r .0 .3 -.1 139.7 Intermediate materials 12 Excluding foods and feeds 5.1 2.2 3.1 3.1 1.2 1.8 .8 — .2' -.2 --..33 .2 113322..11 13 Excluding energy 3.2 .6 2.7 .3 -.3 1.5 .1 .1 .1 -.1 .1 137.5 Crude materials 14 Foods 5.3 5.1 -7.3 -8.2 36.5 14.8 1.6r -i.r 3.0 -.5 -1.1 110.3 38.1 31.3 163.6 20.0 102.6 -44.1 31.7r - 31,0r -4.9 3.0 -3.7 139.8 16 Other 13.2 -12.0 -11.9 -8.8 -9.2 -13.4 .0' —2.3r -1.3 -2.6 -.2 130.9 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 • August 2001 2.16 GROSS DOMESTIC PRODUCT AND INCOME Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 2000 2001 AAccccoouunntt 11999988 11999999 22000000 Ql Q2 Q3 Q4 Qir GROSS DOMESTIC PRODUCT 1 Total 8,790.2 9,299.2 9,963.1 9,752.7 9,945.7 10,039.4 10,114.4 10,226.8 By source 2 Personal consumption expenditures 5,850.9 6,268.7 6,757.3 6,621.7 6,706.3 6,810.8 6,890.2 7,002.3 3 Durable goods 693.9 761.3 820.3 826.3 814.3 824.7 815.8 839.2 4 Nondurable goods 1,707.6 1,845.5 2,010.0 1,963.9 1,997.6 2,031.5 2,046.9 2,071.8 5 Services 3,449.3 3,661.9 3,927.0 3,831.6 3,894.4 3,954.6 4,027.5 4,091.3 6 Gross private domestic investment 1,549.9 1,650.1 1,832.7 1,755.7 1,852.6 1,869.3 1,853.3 1,788.8 7 Fixed investment 1,472.9 1,606.8 1,778.2 1,725.8 1,780.5 1,803.0 1,803.5 1,814.8 8 Nonresidential 1,107.5 1,203.1 1,362.2 1,308.5 1,359.2 1,390.6 1,390.4 1,392.4 9 Structures 283.2 285.6 324.2 308.9 315.1 330.1 342.8 361.0 10 Producers' durable equipment 824.3 917.4 1,038.0 999.6 1,044.1 1,060.5 1,047.6 1,031.4 11 Residential structures 365.4 403.8 416.0 417.3 421.3 412.4 413.1 422.4 12 Change in business inventories 77.0 43.3 54.5 29.9 72.0 66.4 49.8 -26.1 13 Nonfarm 76.4 43.6 55.8 32.4 72.2 67.5 51.0 -25.3 14 Net exports of goods and services -151.5 -254.0 -370.7 -335.2 -355.4 -389.5 -402.7 -375.6 15 Exports 966.0 990.2 1,097.3 1,051.9 1,092.9 1,130.8 1,113.7 1,110.0 16 Imports 1,117.5 1,244.2 1,468.0 1,387.1 1,448.3 1,520.3 1,516.4 1,485.6 17 Government consumption expenditures and gross investment 1,540.9 1,634.4 1,743.7 1,710.4 1,742.2 1,748.8 1,773.6 1,811.3 18 Federal 540.6 568.6 595.2 580.1 604.5 594.2 602.0 617.1 19 State and local 1,000.3 1,065.8 1,148.6 1,130.4 1,137.7 1,154.6 1,171.6 1,194.2 By major type of product 20 Final sales, total 8,713.2 9,255.9 9,908.5 9,722.8 9,873.7 9,973.1 10,064.6 10,252.9 21 Goods 3,239.3 3,467.0 3,739.0 3,680.3 3,734.1 3,776.5 3,764.9 3,824.8 22 Durable 1,532.3 1,651.1 1,806.7 1,773.7 1,809.6 1,830.6 1,812.7 1,835.8 23 Nondurable 1,707.1 1,815.8 1,932.3 1,906.6 1,924.5 1,945.9 1,952.2 1,988.9 24 Services 4,673.0 4,934.6 5,254.1 5,135.2 5,231.4 5,281.6 5,368.0 5,460.7 25 Structures 800.9 854.3 915.6 907.4 908.2 915.0 931.7 967.4 26 Change in business inventories 77.0 43.3 54.5 29.9 72.0 66.4 49.8 -26.1 27 Durable goods 45.8 27.2 37.2 20.7 48.3 39.2 40.7 -33.0 28 Nondurable goods 31.2 16.1 17.3 9.2 23.7 27.2 9.0 6.9 MEMO 29 Total GDP in chained 1996 dollars 8,515.7 8,875.8 9,318.5 9,191.8 9,318.9 9,369.5 9,393.7 9,422.8 NATIONAL INCOME 30 Total 7,038.1 7,469.7 8,002.0 7,833.5 7,983.2 8,088.5 8,102.8 8,165.0 31 Compensation of employees 4,984.2 5,299.8 5,638.2 5,512.2 5,603.5 5,679.6 5,757.5 5,853.9 32 Wages and salaries 4,192.8 4,475.1 4,769.4 4,660.4 4,740.1 4,804.9 4,872.0 4,953.6 33 Government and government enterprises 692.7 724.4 760.9 749.9 760.2 765.4 768.2 782.5 34 Other 3,500.1 3,750.7 4,008.5 3,910.5 3,980.0 4,039.5 4,103.9 4,171.1 35 Supplement to wages and salaries 791.4 824.6 868.8 851.8 863.3 874.7 885.5 900.3 36 Employer contributions for social insurance 305.9 323.6 344.8 337.8 342.9 347.1 351.5 359.3 37 Other labor income 485.5 501.0 524.0 514.0 520.5 527.6 534.0 541.1 38 Proprietors' income' 620.7 663.5 710.4 693.9 709.5 724.8 713.2 726.0 39 Business and professional1 595.2 638.2 687.8 674.8 688.1 693.1 695.2 705.0 40 Farm1 25.4 25.3 22.6 19.1 21.5 31.7 18.0 21.0 41 Rental income of persons2 135.4 143.4 140.0 145.6 140.8 138.1 135.4 137.9 42 Corporate profits' 815.0 856.0 946.2 936.3 963.6 970.3 914.7 869.0 43 Profits before tax3 758.2 823.0 925.6 920.7 942.5 945.1 894.1 841.8 44 Inventory valuation adjustment 17.0 -9.1 -12.9 -25.0 -13.6 -4.5 -8.5 -3.5 45 Capital consumption adjustment 39.9 42.1 33.5 40.6 34.7 29.7 29.1 30.7 46 Net interest 482.7 507.1 567.2 545.4 565.9 575.7 582.0 578.1 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 2000 2001 AAccccoouunntt 11999988 11999999 22000000 Ql Q2 Q3 Q4 Qlr PERSONAL INCOME AND SAVING 1 Total personal income 7,391.0 7,789.6 8,281.7 8,105.8 8,242.1 8,349.0 8,429.7 8,554.2 ? Wage and salary disbursements 4,190.7 4,470.0 4,769.4 4,660.4 4,740.1 4,804.9 4,872.0 4,953.6 Commodity-producing industries 1,038.6 1,089.2 1,153.2 1,130.9 1,147.1 1,161.4 1,173.3 1,184.4 4 Manufacturing 756.6 782.4 815.9 802.8 813.1 821.4 826.4 825.6 Distributive industries 949.1 1,020.3 1,107.3 1,070.9 1,095.7 1,118.1 1,144.4 1,167.1 6 1,510.3 1,636.0 1,748.0 1,708.6 1,737.2 1,760.1 1,786.2 1,819.5 7 Government and government enterprises 692.7 724.4 760.9 749.9 760.2 765.4 768.2 782.5 485.5 501.0 524.0 514.0 520.5 527.6 534.0 541.1 9 Proprietors' income1 620.7 663.5 710.4 693.9 709.5 724.8 713.2 726.0 in Business and professional' 595.2 638.2 687.8 674.8 688.1 693.1 695.2 705.0 II 25.4 25.3 22.6 19.1 21.5 31.7 18.0 21.0 P Rental income of persons2 135.4 143.4 140.0 145.6 140.8 138.1 135.4 137.9 N Dividends 351.1 370.3 396.6 386.9 392.6 399.7 407.2 414.2 14 Personal interest income 940.8 963.7 1,034.3 1,011.6 1,031.3 1,042.9 1,051.5 1,043.0 IS Transfer payments 983.0 1,016.2 1,067.8 1,046.9 1,066.1 1,074.2 1,084.0 1,115.5 16 Old-age survivors, disability, and health insurance benefits 578.0 588.0 622.4 607.9 624.3 627.2 630.4 653.3 17 LESS: Personal contributions for social insurance 316.2 338.5 360.7 353.4 358.8 363.1 367.6 377.3 18 EQUALS: Personal income 7,391.0 7,789.6 8,281.7 8,105.8 8,242.1 8,349.0 8,429.7 8,554.2 19 LESS: Personal tax and nontax payments 1,070.9 1,152.0 1,291.9 1,239.3 1,277.2 1,308.1 1,342.7 1,372.2 2n EQUALS: Disposable personal income 6,320.0 6,637.7 6,989.8 6,866.5 6,964.9 7,040.9 7,087.0 7,182.0 21 LESS: Personal outlays 6,054.7 6,490.1 6,998.3 6,855.6 6,944.3 7,054.7 7,138.6 7,254.4 22 EQUALS: Personal saving 265.4 147.6 -8.5 11.0 20.6 -13.8 -51.6 -72.4 MEMO Per capita (chained 1996 dollars) 73 Gross domestic product 31,474.2 32,511.9 33,836.1 33,485.6 33,874.7 3333,,998844..33 3333,,998855..99 3344,,001177..22 74 Personal consumption expenditures 20,988.5 21,900.4 22,855.1 22,635.5 22,757.7 22,959.1 23,058.3 23,200.6 25 Disposable personal income 22,672.0 23,191.0 23,640.0 23,472.0 23,639.0 23,732.0 23,718.0 23,795.0 26 Saving rate (percent) 4.2 2.2 -.1 .2 .3 -.2 -.7 -1.0 GROSS SAVING 27 Gross saving 1,654.4 1,717.6 1,825.1 1,777.0 1,844.5 1,854.7 1,824.2 1,766.5 28 Gross private saving 1,375.7 1,343.5 1,297.1 1,279.2 1,328.8 1,319.2 1,261.2 1,219.4 79 Personal saving 265.4 147.6 -8.5 11.0 20.6 -13.8 -51.6 -72.4 30 Undistributed corporate profits' 218.9 229.4 265.0 262.7 278.5 279.6 239.4 200.0 31 Corporate inventory valuation adjustment 17.0 -9.1 -12.9 -25.0 -13.6 -4.5 -8.5 -3.5 Capital consumption allowances 37 Corporate 624.3 676.9 739.4 711.5 731.1 775500..00 776655..22 777788..44 33 Noncorporate 265.1 284.5 301.1 294.1 298.7 303.3 308.2 313.4 34 Gross government saving 278.7 374.1 528.0 497.7 515.7 535.5 563.0 547.1 35 137.4 217.3 351.6 333.0 339.9 354.1 379.3 381.7 36 Consumption of fixed capital 88.4 92.8 99.8 97.2 98.9 100.8 102.3 103.6 37 Current surplus or deficit (-), national accounts 49.0 124.4 251.8 235.8 240.9 253.3 277.0 278.1 38 State and local 141.3 156.8 176.4 164.7 175.8 181.4 183.7 165.4 39 Consumption of fixed capital 99.5 106.8 116.8 112.7 115.6 118.2 120.6 123.2 40 Current surplus or deficit (-), national accounts 41.7 50.0 59.6 52.0 60.1 63.2 63.1 42.2 41 Gross investment 1,629.6 1,645.6 1,741.3 1,699.3 1,771.9 1,752.8 1,741.3 1,714.8 47 Gross private domestic investment 1,549.9 1,650.1 1,832.7 1,755.7 1,852.6 1,869.3 1,853.3 1,788.8 43 Gross government investment 278.8 308.7 336.6 334.2 331.9 333.6 346.5 350.3 44 Net foreign investment -199.1 -313.2 -427.9 -390.7 -412.5 -450.1 -458.5 -424.2 45 Statistical discrepancy -24.8 -71.9 -83.7 -77.7 -72.5 -101.8 -82.9 -51.6 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 • August 2001 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted1 2000r 2001 IItteemm ccrreeddiittss oorr ddeebbiittss 11999988rr 11999999rr 22000000rr Ql Q2 Q3 Q4 Qlp 1 Balance on current account -217,457 -324,364 -444,667 -104,903 -108,134 -115,305 -116,324 -109,562 ?. Balance on goods and services -166,828 -261,838 -375,739 -87,322 -90,784 -97,340 -100,293 -95,015 3 Exports 932,694 957,353 1,065,702 257,256 265,822 272,497 270,131 269,297 4 Imports -1,099,522 -1,219,191 -1,441,441 -344,578 -356,606 -369,837 -370,424 -364,312 5 Income, net -6,202 -13,613 -14,792 -5,657 -4,889 -4,885 642 -3,090 6 Investment, net -1,211 -8,511 -9,621 -4,380 -3,589 -3,620 1,971 -1,730 7 Direct 66,253 67,044 81,231 16,365 18,117 21,049 25,703 23,263 8 Portfolio -67,464 -75,555 -90,852 -20,745 -21,706 -24,669 -23,732 -24,993 9 Compensation of employees -4,991 -5,102 -5,171 -1,277 -1,300 -1,265 -1,329 -1,360 10 Unilateral current transfers, net -44,427 -48,913 -54,136 -11,924 -12,461 -13,080 -16,673 -11,457 11 Change in U.S. government assets other than official reserve assets, net (increase, —) -422 2,751 -944 -127 -572 114 -359 68 12 Change in U.S. official reserve assets (increase, -) -6,783 8,747 -290 -554 2,020 -346 -1,410 190 13 Gold 0 0 0 0 0 0 0 0 14 Special drawing rights (SDRs) -147 10 -722 -180 -180 -182 -180 -189 15 Reserve position in International Monetary Fund -5,119 5,484 2,308 -237 2,328 1,300 -1,083 574 16 Foreign currencies -1,517 3,253 -1,876 -137 -128 -1,464 -147 -195 17 Change in U.S. private assets abroad (increase, —) -352,427 -448,565 -579,718 -197,424 -95,021 -107,495 -179,779 -157,195 18 Bank-reported claims2 -35,572 -76,263 -138,500 -56,234 7,455 -18,147 -71,574 -90,027 19 Nonbank-reported claims -38,204 -85,700 -163,846 -75,256 -29,491 -14,585 -44,514 -5,618 20 U.S. purchases of foreign securities, net -136,135 -131,217 -124,935 -27,546 -39,639 -33,129 -24,621 -28,535 21 U.S. direct investments abroad, net -142,516 -155,385 -152,437 -38,388 -33,346 -41,634 -39,070 -33,015 22 Change in foreign official assets in United States (increase, +) -19,948 43,551 37,619 22,498 6,447 12,247 -3,573 4,091 23 U.S. Treasury securities -9,921 12,177 -10,233 16,204 -4,000 -9,001 -13,436 -1,027 24 Other U.S. government obligations 6,332 20,350 40,909 8,107 10,334 14,272 8,196 3,574 25 Other U.S. government liabilities" -3,371 -2,855 -1,987 -474 -1,000 -220 -293 -1,244 26 Other U.S. liabilities reported by U.S. banks2 -9,501 12,964 5,803 -2,270 209 6,884 980 1,785 27 Other foreign official assets3 -3,487 915 3,127 931 904 312 980 1,003 28 Change in foreign private assets in United States (increase, +) 524,412 770,193 986,599 234,284 243,560 209,861 298,894 233,412 29 U.S. bank-reported liabilities4 39,769 54,232 87,953 -7,425 53,923 -1,910 43,365 -476 30 U.S. nonbank-reported liabilities 23,140 69,075 177,010 85,188 24,400 19,078 48,344 42,269 31 Foreign private purchases of U.S. Treasury securities, net 48,581 -20,490 -52,792 -9,348 -20,546 -12,503 -10,395 538 3? U.S. currency flows 16,622 22,407 1,129 -6,847 989 757 6,230 2,311 33 Foreign purchases of other U.S. securities, net 218,091 343,963 485,644 136,208 94,400 128,393 126,643 147,132 34 Foreign direct investments in United States, net 178,209 301,006 287,655 36,508 90,394 76,046 84,707 41,638 35 Capital account transactions, net3 678 -3,491 705 173 173 175 184 174 36 Discrepancy 71,947 -48,822 696 46,053 -48,473 749 2,367 28,822 37 Due to seasonal adjustment 8,501 -2,380 -9,977 3,856 8,945 38 Before seasonal adjustment 71,947 -48,822 696 37,552 -46,093 10,726 -1,489 19,877 MEMO Changes in official assets 39 U.S. official reserve assets (increase, -) -6,783 8,747 -290 -554 2,020 -346 -1,410 119900 40 Foreign official assets in United States, excluding line 25 (increase, +) -16,577 46,406 39,606 22,972 7,447 12,467 -3,280 5,335 41 Change in Organization of Petroleum Exporting Countries official assets in United States (part of line 22) -11,531 1,621 11,582 6,143 1,639 3,636 164 --117700 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38^tl. 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 TRADE1 Millions of dollars; monthly data seasonally adjusted 2000r 2001 IItteemm 11999988 11999999 22000000 Oct. Nov. Dec. Jan.r Feb.r Mar. Apr.P 1 Goods and services, balance -166,686 -261,838 -375,739 -34,025 -32,978 -33,291 -33,332 -28,610 -33,076 -32.174 2 Merchandise -246,855 -345,434 -452,207 -40,205 -38,955 -39,361 -39,127 -34,614 -38,781 -37,833 3 Services 80,169 83,596 76,468 6,180 5,977 6,070 5,795 6,004 5,705 5,659 4 Goods and services, exports 933,053 957,353 1,065,702 90,412 90,478 89,241 90,104 90,475 88,716 86,917 5 Merchandise 670,324 684,553 772,210 65,807 65,856 64,574 65,309 65,748 63,884 62,123 6 Services 262,729 272,800 293,492 24,605 24,622 24,667 24,795 24,727 24,832 24,794 7 Goods and services, imports -1,099,739 -1,219,191 -1,441,441 -124,437 -123,456 -122,532 -123,436 -119,085 -121,792 -119,091 8 Merchandise -917,179 -1,029,987 -1,224,417 -106,012 -104,811 -103,935 -104,436 -100,362 -102,665 -99,956 9 Services -182,560 -189,204 -217,024 -18,425 -18,645 -18,597 -19,000 -18,723 -19,127 -19,135 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 Nov. Dec. Jan. Feb. Mar. Apr. May Junep 1 Total 69,954 81,761 71,516 65,523 67,647 67,542 66,486 64,222 64,731 65,254r 64,847 2 Gold stock1 11,047 11,046 11,048 11,046 11,046 11,046 11,046 11,046 11,046 11,044r 11,044 3 Special drawing rights2,3 10,027 10,603 10,336 10,369 10,539 10,497 10,641 10,379 10,420 10,481 10,409 4 Reserve position in International Monetary Fund2 18,071 24,111 17,950 13,491 14,824 15,079 14,107 13,777 13,816 14,283 14,619 5 Foreign currencies4 30,809 36,001 32,182 30,617 31,238 30,920 30,692 29,020 29,449 29,446 28,775 1. Gold held "under earmark" at Federal Reserve Banks for foreign and international SDR holdings and reserve positions in the IMF also have been valued on this basis since July accounts is not included in the gold stock of the United States; see table 3.13, line 3. Gold 1974. stock is valued at $42.22 per fine troy ounce. 3. Includes allocations of SDRs by the International Monetary Fund on Jan. 1 of the year 2. Special drawing rights (SDRs) are valued according to a technique adopted by the indicated, as follows: 1970—$867 million; 1971—$717 million; 1972—$710 million; 1979— International Monetary Fund (IMF) in July 1974. Values are based on a weighted average of $1,139 million; 1980—$1,152 million; 1981—$1,093 million; plus net transactions in SDRs. exchange rates for the currencies of member countries. From July 1974 through December 4. Valued at current market exchange rates. 1980, sixteen currencies were used; since January 1981, five currencies have been used. U.S. 3.13 FOREIGN OFFICIAL ASSETS HELD AT FEDERAL RESERVE BANKS1 Millions of dollars, end of period 2000 2001 AAsssseett 11999977 11999988 11999999 Nov. Dec. Jan. Feb. Mar. Apr. May Junep 1 Deposits 457 167 71 104 215 199 196 70 101 86 102 Held in custody 2 U.S. Treasury securities2 620,885 607,574 632,482 591,071 594,094 594,694 603,906 609,440 585,710 583,655 586,607 3 Earmarked gold3 10,763 10,343 9,933 9,505 9,451 9,397 9,343 9,289 9,235 9,154 9,100 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 • August 2001 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2000r 2001 IItteemm 11999988 11999999 Oct. Nov. Dec. Jan.r Feb.r Mar. Apr.p 1 Total1 759,928 806,318 850,116 849,049 845,926 866,885 864,593 865,466 855,708 By type 2 Liabilities reported by banks in the United States 125,883 138,847 146,452 147,631 144,650 155,295 155,163 154,641 158,997 3 U.S. Treasury bills and certificates3 134,177 156,177 155,101 155,061 153,010 158,967 155,667 155,204 144,158 U.S. Treasury bonds and notes 4 Marketable 432,127 422,266 419,863 414,896 415,964 418,190 418,857 419,106 410,066 5 Nonmarketable4 6,074 6,111 5,280 5,313 5,348 4,923 4,953 4,984 5,017 6 U.S. securities other than U.S. Treasury securities5 61,667 82,917 123,420 126,148 126,954 129,510 129,953 131,531 137,470 By area 7 Europe' 256,026 244,805 264,131 262,099 253,592 259,829 256,180 250,420 248,106 8 Canada 10,552 12,503 12,632 11,744 12,394 11,220 10,794 10,396 10,474 9 Latin America and Caribbean 79,503 73,518 77,526 78,742 76,812 80,117 80,389 79,185 79,457 10 Asia 400,631 463,703 481,344 481,094 488,168 499,925 501,486 511,023 500,670 11 Africa 10,059 7,523 8,323 8,012 9,165 8,965 9,586 9,102 9,341 12 Other countries 3,157 4,266 6,160 7,358 5,795 6,829 6,158 5,340 7,660 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 2000 2001 IItteemm 11999977 11999988 11999999 June Sept. Dec/ Mar. 1 Banks' liabilities 117,524 101,125 88,537 85,842 78,852 77,935 88,653 2 Banks' claims 83,038 78,162 67,365 67,862 60,355 57,005 71,075 3 Deposits 28,661 45,985 34,426 31,724r 26,306r 23,407 27,004 4 Other claims 54,377 32,177 32,939 36,138r 34,049r 33,598 44,071 5 Claims of banks' domestic customers2 8,191 20,718 20,826 18,802 19,123 24,411 20,682 1. Data on claims exclude foreign currencies held by U.S. monetary authorities. 2. Assets owned by customers of the reporting bank located in the United States that represent claims on foreigners held by reporting banks for the accounts of the domestic customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A53 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2000 2001 IItteemm 11999988 11999999 22000000 Oct. Nov. Dec. Jan. Feb.r Mar. Apr.P BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,347,837 1,408,740 1,523,669 1,511,173 1,525,179 1,523,669 1,569,027r 1,534,075 1,498,780 1,531,621 2 Banks' own liabilities 884,939 971,536 1,049,070 1,074,575 1,073,536 1,049,070 1,086,287' 1,050,242 1,038,209 1,062,835 3 Demand deposits 29,558 42,884 33,553 29,500 31,701 33,553 30,864R 35,765 33,868 31,267 4 Time deposits2 151,761 163,620 191,791 185,454 192,422 191,791 187,383R 191,653 182,479 190,704 Other1 140,752 155,853 173,233 194,659 187,066 173,233 203,269 198,788 199,882 201,381 6 Own foreign offices4 562,868 609,179 650,493 664,962 662,347 650,493 664,771 624,036 621,980 639,483 7 Banks' custodial liabilities5 462,898 437,204 474,599 436,598 451,643 474,599 482,740 483,833 460,571 468,786 8 U.S. Treasury bills and certificates6 183,494 185,676 177,742 173,984 173,896 177,742 182,276 179,277 171,755 159,686 9 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. n.a. 66,604R 74,282 71,460 69,228 10 Other negotiable and readily transferable instruments8 141,699 132,617 144,858 129,753 132,453 144,858 76,694R 72,489 63,169 78,058 11 Other 137,705 118,911 151,999 132,861 145,294 151,999 157,166 157,785 154,187 161,814 12 Nonmonetary international and regional organizations9 . . 11,883 15,276 12,560 17,104 17,074 12,560 10,938 11,596 11,645 12,213 13 Banks' own liabilities 10,850 14,357 12,158 16,751 16,676 12,158 10,595 11,220 11,101 11,724 14 Demand deposits 172 98 41 48 30 41 27 19 23 14 15 Time deposits2 5,793 10,349 6,264 5,918 6,542 6,264 5,641 4,984 5,252 5,301 16 Other3 4,885 3,910 5,853 10,785 10,104 5,853 4,927 6,217 5,826 6,409 17 Banks' custodial liabilities5 1,033 919 402 353 398 402 343 376 544 489 18 U.S. Treasury bills and certificates6 636 680 252 215 249 252 294 248 229 170 19 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. n.a. 26 108 137 144 20 Other negotiable and readily transferable instruments8 397 233 149 138 147 149 23 15 177 117755 21 Other 0 6 1 0 2 1 0 5 1 0 22 Official institutions'0 260,060 295,024 297,660 301,553 302,692 297,660 314,262' 310,830 309,845 303,155 73 Banks' own liabilities 80,256 97,615 97,052 102,654 102,110 97,052 103,447R 99,602 97,068 104,064 74 Demand deposits 3,003 3,341 3,950 4,361 4,702 3,950 3,201R 4,444 3,509 3,530 75 Time deposits2 29,506 28,942 35,638 34,035 35,335 35,638 33,026R 29,957 28,001 32,032 26 Other3 47,747 65,332 57,464 64,258 62,073 57,464 67,220 65,201 65,558 68,502 77 Banks' custodial liabilities5 179,804 197,409 200,608 198,899 200,582 200,608 210,815 211,228 212,777 199,091 28 U.S. Treasury bills and certificates6 134,177 156,177 153,010 155,101 155,061 153,010 158,967 155,667 155,204 144,158 29 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. n.a. 45,384 49,594 53,295 51,107 30 Other negotiable and readily transferable instruments8 44,953 41,182 47,360 43,753 44,828 47,360 5,337 5,325 4,064 3,325 31 Other 674 50 238 45 693 238 1,127 642 214 501 32 Banks" 885,336 900,379 981,552 963,643 973,539 981,552 1,008,771 976,200 953,725 966,235 33 Banks' own liabilities 676,057 728,492 789,052 797,391 794,924 789,052 810,402 779,504 774,936 784,879 34 Unaffiliated foreign banks 113,189 119,313 138,559 132,429 132,577 138,559 145,631 155,468 152,956 145,396 35 Demand deposits 14,071 17,583 15,532 12,160 12,834 15,532 14,297 12,600 16,433 13,027 36 Time deposits2 45,904 48,140 67,498 64,301 68,828 67,498 70,896 78,599 73,017 72,656 37 Other3 53,214 53,590 55,529 55,968 50,915 55,529 60,438 64,269 63,506 59,713 38 Own foreign offices4 562,868 609,179 650,493 664,962 662,347 650,493 664,771 624,036 621,980 639,483 39 Banks' custodial liabilities5 209,279 171,887 192,500 166,252 178,615 192,500 198,369 196,696 178,789 181,356 40 U.S. Treasury bills and certificates6 35,359 16,796 15,919 9,972 10,285 15,919 14,484 13,909 7,922 7,022 41 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. n.a. 7,573R 8,008 2,330 2,779 42 Other negotiable and readily transferable instruments8 45,332 45,695 35,104 34,261 34,643 35,104 30,623R 29,099 26,016 24,062 43 Other 128,588 109,396 141,477 122,019 133,687 141,477 145,689 145,680 142,521 147,493 44 Other foreigners 190,558 198,061 231,897 228,873 231,874 231,897 235,056R 235,449 223,565 250,018 45 Banks' own liabilities 117,776 131,072 150,808 157,779 159,826 150,808 161,843' 159,916 155,104 162,168 46 Demand deposits 12,312 21,862 14,030 12,931 14,135 14,030 13,339R 18,702 13,903 14,696 47 Time deposits2 70,558 76,189 82,391 81,200 81,717 82,391 77,820 78,113 76,209 80,715 48 Other3 34,906 33,021 54,387 63,648 63,974 54,387 70,684 63,101 64,992 66,757 49 Banks' custodial liabilities5 72,782 66,989 81,089 71,094 72,048 81,089 73,213 75,533 68,461 87,850 50 U.S. Treasury bills and certificates6 13,322 12,023 8,561 8,696 8,301 8,561 8,531 9,453 8,400 8,336 51 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. n.a. 13,621R 16,572 15,698 15,198 52 Other negotiable and readily transferable instruments8 51,017 45,507 62,245 51,601 52,835 62,245 40,7 llr 38,050 32,912 50,496 53 Other 8,443 9,459 10,283 10,797 10,912 10,283 10,350 11,458 11,451 13,820 MEMO 54 Negotiable time certificates of deposit in custody for foreigners 27,026 30,345 34,088 27,164 25,854 34,088 31,389 30,277 24,518 25,372 55 Repurchase agreements7 n.a. n.a. n.a. n.a. n.a. n.a. 125,225' 120,444 129,671 119,141 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. Data available beginning January 2001. ble and readily transferable instruments." 8. Principally bankers acceptances, commercial paper, and negotiable time certificates of 3. Includes borrowing under repurchase agreements. deposit. 4. For U.S. banks, includes amounts owed to own foreign branches and foreign subsidiar- 9. Principally the International Bank for Reconstruction and Development, the Interies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory American Development Bank, and the Asian Development Bank. Excludes "holdings of agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists dollars" of the International Monetary Fund. principally of amounts owed to the head office or parent foreign bank, and to foreign 10. Foreign central banks, foreign central governments, and the Bank for International branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. Settlements. 5. Financial claims on residents of the United States, other than long-term securities, held 11. Excludes central banks, which are included in "Official institutions." by or through reporting banks for foreign customers. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A54 International Statistics • August 2001 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States'—Continued Payable in U.S. dollars Millions of dollars, end of period 2000 2001 IItteemm 11999988 11999999 22000000 Oct. Nov. Dec. Jan. Feb. Mar. Apr.P AREA 56 Total, all foreigners 1347,837 1,408,740 1,523,669 1,511,173 1,525,179 1,523,669 1,569,027r 1,534,075r 1,498,780 1,531,621 57 Foreign countries 1,335,954 1,393,464 1,511,108 1,494,069 1,508,105 1,511,108 1,558,088r 1,522,478r 1,487,134 1,519,407 58 Europe 427,375 441,810 449,152 483,826 471,979 449,152 477,162 448,113R 429,275 433,388 59 Austria 3,178 2,789 2,724 2,037 2,671 2,724 2,366 2,124 2,178 2,773 60 Belgium12 42,818 44,692 33,401 29,648 32,389 33,401 7,357 5,709R 5,432 5,309 61 Denmark 1,437 2,196 3,001 3,001 3,531 3,001 3,391 4,182 2,919 3,413 62 Finland 1,862 1,658 1,412 1,418 1,874 1,412 1,155 1,667 1,286 1,769 63 France 44,616 49,790 37,840 41,736 43,534 37,840 49,045 45,435R 42,758 39,125 64 Germany 21,357 24,753 35,535 28,633 27,084 35,535 30,250 30,432R 30,662 30,569 65 Greece 2,066 3,748 2,013 3,445 3,344 2,013 1,888 1,963 1,496 1,336 66 Italy 7,103 6,775 5,079 5,594 5,521 5,079 4,997 5,07 R 5,770 5,268 67 Luxembourg n.a. n.a. n.a. n.a. n.a. n.a. 27,095 24,234R 12,585 16,296 68 Netherlands 10,793 8,143 7,485 14,450 13,283 7,485 8,504 8,413 7,265 9,954 69 Norway 710 1,327 2,305 4,102 5,159 2,305 4,762 6,331 8,361 4,806 70 Portugal 3,236 2,228 2,404 2,262 2,379 2,404 2,571 2,625 1,731 1,949 71 Russia 2,439 5,475 19,020 17,260 20,022 19,020 17,233 19,029 18,625 19,917 72 Spain 15,781 10,426 7,801 9,270 6,900 7,801 8,129 8,24 R 9,500 7,741 73 Sweden 3,027 4,652 6,498 6,247 7,362 6,498 5,648 5,959 6,738 6,299 74 Switzerland 50,654 63,485 74,732 97,151 86,154 74,732 83,096 64,748R 54,028 65,806 75 Turkey 4,286 7,842 7,548 8,492 4,525 7,548 7,783 5,382R 5,635 4,549 76 United Kingdom 181,554 172,687 169,484 173,254 172,281 169,484 143,476R 134,449R 146,942 137,837 77 Channel Islands & Isle of Man13 n.a. n.a. n.a. n.a. n.a. n.a. 36,373R 43,087' 36,040 36,013 78 Yugoslavia'4 233 286 276 270 279 276 287 294 294 305 79 Other Europe and other former U.S.S.R." 30,225 28,858 30,594 35,556 33,687 30,594 31,756 28,738' 29,030 32,354 80 Canada 30,212 34,214 31,059 34,367 31,252 31,059 23,927 23,945 24,253 27,768 81 Latin America 121,327 117,495 121,719 121,417 121,353 121,719 118,928 120,971' 114,511 117,444 82 Argentina 19,014 18,633 19,493 18,746 17,886 19,493 18,936 18,011' 12,878 14,610 83 Brazil 15,815 12,865 10,953 10,204 11,663 10,953 10,542 11,473 10,571 10,851 84 Chile 5,015 7,008 5,895 5,105 5,327 5,895 5,647 5,955 5,175 5,449 85 Colombia 4,624 5,669 4,555 4,945 4,560 4,555 4,552 4,445 4,344 4,618 86 Ecuador 1,572 1,956 2,119 2,084 2,059 2,119 2,157 2,254 2,179 2,164 87 Guatemala 1,336 1,626 1,637 1,667 1,678 1,637 1,581 1,535 1,509 1,557 88 Mexico 37,157 30,717 33,157 36,054 33,856 33,157 33,721 35,408' 34,084 34,269 89 Panama 3,864 4,415 4,292 3,788 3,980 4,292 3,615 3,885 4,014 3,476 90 Peru 840 1,142 1,435 1,153 1,194 1,435 1,355 1,459 1,788 1,767 91 Uruguay 2,486 2,386 3,006 2,512 2,944 3,006 2,798 2,844 3,365 3,410 92 Venezuela 19,894 20,192 24,779 24,288 25,963 24,779 26,996 26,525' 27,415 27,847 93 Other Latin America16 9,710 10,886 10,398 10,871 10,243 10,398 7,028 7,177 7,189 7,426 94 Caribbean 433,539 461,200 580,562 533,961 560,281 580,562 601,777 590,403' 577,706 606,544 95 Bahamas 118,085 135,811 189,454 178,113 176,823 189,454 186,180 185,562 174,174 177,533 96 Bermuda 6,846 7,874 9,695 8,730 8,404 9,695 9,488 8,119' 8,401 8,261 97 British West Indies'7 302,486 312,278 374,107 340,926 368,175 374,107 n.a. n.a. n.a. n.a. 98 Caymen Islands'7 n.a. n.a. n.a. n.a. n.a. n.a. 384,398r 376,109' 375,607 402,309 99 Cuba 62 75 90 94 88 90 130 84 85 83 100 Jamaica 577 520 815 680 722 815 792 945 1,238 899 101 Netherlands Antilles 5,010 4,047 5,496 4,614 5,318 5,496 6,565 5,537 4,504 4,516 102 Trinidad and Tobago 473 595 905 804 751 905 797 886 1,048 1,114 103 Other Caribbean'6 n.a. n.a. n.a. n.a. n.a. n.a. 13,427' 13,161' 12,649 11,829 104 Asia 307,960 319,489 306,412 299,164 301,595 306,412 315,128r 317,069' 320,174 310,808 China 105 Mainland 13,441 12,325 16,538 13,719 15,835 16,538 27,451 31,654 39,928 34,692 106 Taiwan 12,708 13,603 17,690 18,289 17,630 17,690 19,828 18,192' 17,891 19,962 107 Hong Kong 20,900 27,701 26,768 25,784 25,924 26,768 27,013 27,674 29,088 26,587 108 India 5,250 7,367 4,532 5,548 5,173 4,532 4,197 4,058 4,547 4,113 109 Indonesia 8,282 6,567 8,524 7,589 8,375 8,524 8,536 9,027 8,605 10,733 no Israel 7,749 7,488 8,055 6,668 6,538 8,055 7,666 7,262 8,803 7,095 III Japan 168,563 159,075 150,434 150,196 149,679 150,434 148,730 150,830' 146,441 144,478 112 Korea (South) 12,524 12,988 7,967 6,684 6,689 7,967 7,155 6,273 6,096 5,370 113 Philippines 3,324 3,268 2,430 1,676 2,334 2,430 1,769 1,422 1,428 1,645 114 Thailand 7,359 6,050 3,129 3,178 3,477 3,129 3,157 3,455' 3,252 2,935 115 Middle Eastern oil-exporting countries'8 15,609 21,314 23,760 23,856 23,732 23,760 22,425 21,613 21,634 20,534 116 Other 32,251 41,743 36,585 35,977 36,209 36,585 37,201r 35,609' 32,461 32,664 117 8,905 9,468 10,836 9,663 9,515 10,836 10,552 10,984 10,564 10,821 118 Egypt 1,339 2,022 2,622 1,546 1,655 2,622 2,552 2,336 2,282 2,375 119 Morocco 97 179 139 121 100 139 157 139 133 139 120 South Africa 1,522 1,495 1,011 767 853 1,011 843 914 651 791 121 Congo (formerly Zaire) 5 14 4 4 4 4 10 10 8 5 122 Oil-exporting countries19 3,088 2,914 4,052 4,405 4,027 4,052 4,317 4,750 4,593 4,753 123 Other 2,854 2,844 3,008 2,820 2,876 3,008 2,673 2,835 2,897 2,758 124 Other Countries 6,636 9,788 11,368 11,671 12,130 11,368 10,614 10,993 10,651 12,634 125 Australia 5,495 8,377 10,090 10,562 10,961 10,090 8,854 9,519 9,448 11,382 126 New Zealand20 n.a. n.a. n.a. n.a. n.a. n.a. 1,032 328 424 501 127 All other 1,141 1,411 1,278 1,109 1,169 1,278 728 1,146 779 751 128 Nonmonetary international and regional organizations . . 11,883 15,276 12,561 17,104 17,074 12,561 10,939 11,597 11,646 12,214 129 International2' 10,221 12,876 11,288 16,133 16,068 11,288 9,024 10,811 10,734 10,715 130 Latin American regional22 594 1,150 740 582 523 740 1,493 223 272 327 131 Other regional23 1,068 1,250 533 389 483 533 422 534 640 620 12. Before January 2001, combined data reported for Belgium-Luxembourg. 18. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 13. Before January 2001, data included in United Kingdom. Emirates (Trucial States). 14. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. 19. Comprises Algeria, Gabon, Libya, and Nigeria. 15. Includes the Bank for International Settlements and European Central Bank. Since 20. Before January 2001, included in "All other." December 1992, has included all parts of the former U.S.S.R. (except Russia) and Bosnia, 21. Principally the International Bank for Reconstruction and Development. Excludes Croatia, and Slovenia. "holdings of dollars" of the International Monetary Fund. 16. Before January 2001, "Other Latin America" and "Other Caribbean" were reported as 22. Principally the Inter-American Development Bank. combined "Other Latin America and Caribbean." 23. Asian, African, Middle Eastern, and European regional organizations, except the Bank 17. Beginning January 2001, Cayman Islands replaced British West Indies in the data for International Settlements, which is included in "Other Europe." series. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2000 2001 AArreeaa oorr ccoouunnttrryy 11999988 11999999 22000000 Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Total, all foreigners 734,995 793,139 911,879 879,626 882,419 911,879 961,897r 918,728r 991,105 997,303 2 Foreign countries 731,378 788,576 907,193 874,403 878,579 907,193 958,670r 915,411r 988,329 994,548 3 Europe 233,321 311,686 383,876 365,709 371,894 383,876 422,170r 406,999r 443,367 442,745 4 Austria 1,043 2,643 2,941 2,809 2,681 2,941 3,664 2,927 3,101 3,728 5 Belgium2 7,187 10,193 5,540 6,044 5,060 5,540 4,635 5,321 4,852 4,375 6 Denmark 2,383 1,669 3,312 3,093 3,462 3,312 3,402 3,499 3,242 2,954 7 Finland 1,070 2,020 7,402 4,927 6,517 7,402 6,772 7,122 7,185 8,901 8 15,251 29,142 40,303 34,217 34,547 40,303 43,290 44,104 45,555 46,378 9 Germany 15,923 29,205 36,973 33,017 32,160 36,973 39,744 39,375 45,764 49,222 10 Greece 575 806 658 628 876 658 526 466 278 265 11 Italy 7,284 8,496 7,629 6,482 6,738 7,629 6,310 6,315 6,976 7,274 1? Luxembourg2 n.a. n.a. n.a. n.a. n.a. n.a. 2,825 2,659 2,569 2,012 13 Netherlands 5,697 11,810 17,294 16,165 15,975 17,294 18,864 21,680 22,629 22,698 14 Norway 827 1,000 5,012 4,655 6,159 5,012 2,971 5,339 8,228 5,296 15 Portugal 669 1,571 1.382 1,574 1,249 1,382 1,109 1,312 1,426 1,535 16 Russia 789 713 517 647 663 517 518 561 1,008 813 17 Spain 5,735 3,796 2,848 3,360 2,593 2,848 3,808 4,199 4,722 3,445 18 Sweden 4,223 3,264 9,301 8,504 8,815 9,301 10,353 10,131 10,286 11,934 19 Switzerland 46,874 79,158 82,383 103,818 107,986 82,383 102,545 97,186 96,487 104,808 70 Turkey 1,982 2,617 3,175 2,831 3,260 3,175 3,300 3,104 2,698 2,773 21 United Kingdom 106,349 115,971 148,875 122,829 125,223 148,875 154,339r 140,974' 166,367 155,535 77 Channel Islands & Isle of Man3 n.a. n.a. n.a. n.a. n.a. n.a. 3,127r 3,23 lr 3,250 3,310 ?3 Yugoslavia4 53 50 50 49 49 50 50 49 49 49 24 Other Europe and other former U.S.S.R.5 9,407 7,562 8,281 10,060 7,881 8,281 10,018 7,445 6,695 5,440 25 Canada 47,037 37,206 40,068 38,648 39,291 40,068 41,654r 42,487 43,839 45,097 76 Latin America 79,976 74,040 76,614 73,692 74,399 76,614 74,463r 74,224r 73,905 73,810 27 Argentina 9,552 10,894 11,546 11,166 11,468 11,546 11,317 11,612 11,241 11,532 ?8 16,184 16,987 20,567 20,202 19,840 20,567 20,372 20,008 20,275 20,278 ?9 Chile 8,250 6,607 5,816 5,756 5,772 5,816 6,223 5,961 5,932 5,628 30 Colombia 6,507 4,524 4,370 3,846 3,938 4,370 3,816 3,941 4,022 3,723 31 Ecuador 1,400 760 635 639 629 635 563 584 534 522 3? Guatemala 1,127 1,135 1,246 1,245 1,247 1,246 1,364 1,176 1,176 1,171 33 Mexico 21,212 17,899 17,430 16,723 16,945 17,430 17,598 17,918 17,762 18,012 34 3,584 3,387 2,935 2,668 2,839 2,935 2,775 2,908 3,008 3,162 35 Peru 3,275 2,529 2,808 2,653 2,713 2,808 2,689 2,673 2,809 2,770 36 Uruguay 1,126 801 675 663 677 675 641 455 366 367 37 Venezuela 3,089 3,494 3,520 3,321 3,451 3,520 3,306 3,264 3,239 3,154 38 Other Latin America6 4,670 5,023 5,066 4,810 4,880 5,066 3,799r 3,724r 3,541 3,491 39 Caribbean 262,678 281,128 319,512 300,805 301,544 319,512 320,544r 299,191r 325,134 332,963 40 Bahamas 96,455 99,066 114,090 100,445 96,718 114,090 109,284r 101,284r 105,064 112,425 41 Bermuda 5,011 8,007 9,343 8,426 8,324 9,343 8,673 7,138 8,186 6,838 4? British West Indies7 153,749 167,189 189,315 184,812 188,994 189,315 n.a. n.a. n.a. n.a. 43 Caymen Islands7 n.a. n.a. n.a. n.a. n.a. n.a. 187,790r 177,338r 199,345 199,790 44 Cuba 0 0 0 0 0 0 117 0 n.a. 3 45 Jamaica 239 295 355 379 355 355 357 331 348 332 46 Netherlands Antilles 6,779 5,982 5,801 6,158 6,554 5,801 9,077 7,156 6,921 9,384 47 Trinidad and Tobago 445 589 608 585 599 608 658 663 710 783 48 Other Caribbean6 n.a. n.a. n.a. n.a. n.a. n.a. 4,588r 5,281r 4,560 3,408 49 98,607 75,143 78,762 87,682 83,359 78,762 90,332 81,896 87,626 83,562 China 50 Mainland 1,261 2,110 1,606 1,912 1,644 1,606 1,562 1,530 1,338 3,171 51 Taiwan 1,041 1,390 2,247 3,691 2,483 2,247 1,037 1,365 1,846 2,253 5? Hong Kong 9,080 5,903 6,715 6,540 6,454 6,715 7,458 8,506 11,068 10,461 53 India 1,440 1,738 2,178 1,787 1,736 2,178 1,886 1,700 1,827 1,675 54 Indonesia 1,942 1,776 1,914 2,009 1,958 1,914 2,075 1,987 2,001 2,033 55 Israel 1,166 1,875 2,729 1,551 1,911 2,729 2,343 3,249 2,339 2,526 56 Japan 46,713 28,641 35,109 35,773 36,467 35,109 38,901 34,778r 39,311 32,969 57 Korea (South) 8,289 9,426 7,784 18,589 16,189 7,784 18,736 14,147 12,186 13,937 58 Philippines 1,465 1,410 1,784 1,473 1,758 1,784 1,217 1,172 1,195 1,835 59 Thailand 1,807 1,515 1,381 1,046 1,221 1,381 1,170 1,244 1,258 1,062 60 Middle Eastern oil-exporting countries8 16,130 14,267 10,091 9,867 8,487 10,091 10,549 8,750r 9,120 7,936 61 Other 8,273 5,092 5,224 3,444 3,051 5,224 3,398 3,468 4,137 3,704 6? 3,122 2,268 2,151 2,291 1,977 2,151 2,176 1,899 2,111 2,035 63 Egypt 257 258 201 201 184 201 170 271 343 308 64 Morocco 372 352 204 252 235 204 182 185 189 185 65 South Africa 643 622 366 322 341 366 492 544 586 444 66 Congo (formerly Zaire) 0 24 0 0 0 0 19 0 0 0 67 Oil-exporting countries9 936 276 471 656 342 471 582 153 217 267 68 Other 914 736 909 860 875 909 731 746 776 831 69 Other countries 6,637 7,105 6,210 5,576 6,115 6,210 7,331 8,715 12,347 14,336 70 Australia 6,173 6,824 5,961 5,238 5,937 5,961 6,906 8,377 12,013 13,832 71 New Zealand10 n.a. n.a. n.a. n.a. n.a. n.a. 283 207 208 325 72 All other 464 281 249 338 178 249 142 131 126 179 73 Nonmonetary international and regional organizations" . . 3,617 4,563 4,686 5,223 3,840 4,686 3,363 3,317 2,776 2,755 1. Reporting banks include all types of depository institutions as well as some brokers and 6. Before January 2001, "Other Latin America" and "Other Caribbean" were reported as dealers. combined "Other Latin America and Caribbean." 2. Before January 2001, combined data reported for Belgium-Luxembourg. 7. Beginning 2001, Cayman Islands replaced British West Indies in the data series. 3. Before January 2001, data included in United Kingdom. 8. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab 4. Since December 1992, has excluded Bosnia, Croatia, and Slovenia. Emirates (Trucial States). 5. Includes the Bank for International Settlements and European Central Bank. Since 9. Comprises Algeria, Gabon, Libya, and Nigeria. December 1992, has included all parts of the former U.S.S.R. (except Russia), and Bosnia, 10. Before January 2001, included in "All other." Croatia, and Slovenia. 11. Excludes the Bank for International Settlements, which is included in "Other Europe." Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A56 International Statistics • August 2001 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States' Payable in U.S. dollars Millions of dollars, end of period 2000 2001 TTyyppee ooff ccllaaiimm 11999988 11999999 22000000 Oct. Nov. Dec. Jan.r Feb.r Mar. Apr.p 1 Total 875,891 944,937 l,103,076r l,103,076r 1,201,852 2 Banks' claims 734,995 793,139 911,879 879,626 882,419 911,879 961,897 918,728 991,105 997,303 3 Foreign public borrowers 23,542 35,090 38,327 49,693 49,373 38,327 52,989 54,219 49,122 52,353 4 Own foreign offices2 484,535 529,682 630,105 603,873 610,839 630,105 647,273 610,256 670,609 682,201 5 Unaffiliated foreign banks 106,206 97,186 99,622 83,035 82,962 99,622 102,473 99,088 112,135 102,706 6 Deposits 27,230 34,538 23,886 23,598 23,756 23,886 23,908 25,679 26,233 29,155 7 Other 78,976 62,648 75,736 59,437 59,206 75,736 78,565 73,409 85,902 73,551 8 All other foreigners 120,712 131,181 143,825 143,025 139,245 143,825 159,162 155,165 159,239 160,043 9 Claims of banks' domestic customers3 140,896 151,798 191,197R 191,197R 210,747 10 Deposits 79,363 88,006 100,327R 100,327R 105,554 11 Negotiable and readily transferable instruments4 47,914 51,161 78,147 78,147 91,827 12 Outstanding collections and other claims 13,619 12,631 12,723 12,723 13,366 MEMO 13 Customer liability on acceptances 4,520 4,553 4,258 4,258 2,995 14 Banks' loans under resale agreements5 n.a. n.a. n.a. n.a. n.a. n.a. 122,720 118,705 134,083 126,871 15 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States6 39,978 31,125 53,153 53,848 55,899 53,153 59,893 70,964 67,204 60,796 1. For banks' claims, data are monthly; for claims of banks' domestic customers, data are branches, agencies, or wholly owned subsidiaries of the head office or parent foreign bank. for quarter ending with month indicated. 3. Assets held by reporting banks in the accounts of their domestic customers. Reporting banks include all types of depository institution as well as some brokers and 4. Principally negotiable time certificates of deposit, bankers acceptances, and commercial dealers. paper. 2. For U.S. banks, includes amounts due from own foreign branches and foreign subsidiar- 5. Data available beginning January 2001. ies consolidated in quarterly Consolidated Reports of Condition filed with bank regulatory 6. Includes demand and time deposits and negotiable and nonnegotiable certificates of agencies. For agencies, branches, and majority-owned subsidiaries of foreign banks, consists deposit denominated in U.S. dollars issued by banks abroad. principally of amounts due from the head office or parent foreign bank, and from foreign 3.20 BANKS' OWN CLAIMS ON UNAFFILIATED FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2000 2001 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa22 11999977 11999988 11999999 June Sept. Dec.r Mar.p 1 Total 276,550 250,418 267,082 268,905r 263,383 281,526 318,275 By borrower 2 Maturity of one year or less 205,781 186,526 187,894 181,815r 174,650 188,731 201,518 3 Foreign public borrowers 12,081 13,671 22,811 24,849 23,646 21,399 23,742 4 All other foreigners 193,700 172,855 165,083 156,966r 151,004 167,332 177,776 5 Maturity of more than one year 70,769 63,892 79,188 87,090 88,733 92,795 116,757 6 Foreign public borrowers 8,499 9,839 12,013 15,900 16,238 16,258 24,949 7 All other foreigners 62,270 54,053 67,175 71,190 72,495 76,537 91,808 By area Maturity of one year or less X Europe 58,294 68,679 80,842 71,492 69,447 73,253 89,639 9 Canada 9,917 10,968 7,859 7,344 8,225 8,395 7,069 10 Latin America and Caribbean 97,207 81,766 69,498 66,096 65,881 77,304 72,423 11 33,964 18,007 21,802 29,092r 23,791 22,751 20,737 1?. Africa 2,211 1,835 1,122 1,520 1,594 1,168 970 13 All other3 4,188 5,271 6,771 6,271 5,712 5,860 10,680 Maturity of more than one year 14 Europe 13,240 14,923 22,951 25,417 27,589 33,483 42,341 15 Canada 2,525 3,140 3,192 3,323 3,261 3,312 3,249 16 Latin America and Caribbean 42,049 33,442 39,051 42,291 41,168 41,870 50,222 17 Asia 10,235 10,018 11,257 12,550 13,132 10,154 17,176 18 Africa 1,236 1,232 1,065 924 895 891 763 19 All other3 1,484 1,137 1,672 2,585 2,688 3,085 3,006 1. Reporting banks include all types of depository institutions as well as some brokers and 2. Maturity is time remaining until maturity. dealers. 3. Includes nonmonetary international and regional organizations. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks' Billions of dollars, end of period 1999 2000 2001 AArreeaa oorr ccoouunnttrryy 11999977 11999988 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar. 1 Total 721.8 1051.6 993.4 941.2 941.6 945.5 943.7 983.4 955.5 1034.9 1152.0 2 G-10 countries and Switzerland 242.8 217.7 220.4 234.7 219.4 243.4 272.7 313.7 280.9 306.4 337.1 3 Belgium and Luxembourg 11.0 10.7 15.6 16.2 15.7 14.3 14.2 13.8 13.0 14.3 15.3 4 France 15.4 18.4 21.6 20.7 20.0 29.0 27.3 32.6 29.1 29.9 30.1 5 Germany 28.6 30.9 34.7 32.1 37.4 38.7 37.3 31.5 37.7 45.2 45.2 6 Italy 15.5 11.5 17.8 16.4 15.0 18.1 20.0 20.5 18.6 21.3 20.3 7 Netherlands 6.2 7.8 10.7 13.3 11.7 12.3 17.1 16.1 17.6 18.7 18.9 8 Sweden 3.3 2.3 4.0 2.6 3.6 3.0 3.9 3.5 4.3 3.7 4.7 9 Switzerland 7.2 8.5 7.8 8.3 8.8 10.3 10.1 13.8 10.9 13.5 13.9 10 United Kingdom 113.4 85.4 67.7 85.5 63.5 79.3 101.9 138.2 112.9 119.8 145.4 11 Canada 13.7 16.8 15.9 17.1 17.9 16.3 17.5 18.3 18.7 16.9 15.4 12 Japan 28.6 25.4 24.6 22.6 25.7 22.1 23.5 25.4 18.1 23.1 28.0 13 Other industrialized countries 65.5 69.0 80.1 79.7 71.7 68.4 62.8 75.2 73.8 75.3 82.1 14 Austria 1.5 1.4 2.8 2.8 3.0 3.5 2.6 2.8 3.5 4.1 3.8 15 Denmark 2.4 2.2 3.4 2.9 2.1 2.6 1.5 1.2 1.8 1.9 3.1 16 Finland 1.3 1.4 1.5 .9 .9 .9 .8 1.2 2.8 1.5 1.4 17 Greece 5.1 5.9 6.5 5.9 6.6 6.0 5.7 6.8 6.4 8.3 4.1 18 Norway 3.6 3.2 3.1 3.0 3.8 3.3 3.0 4.6 8.5 8.3 10.2 19 Portugal .9 1.4 1.4 1.2 1.2 1.0 1.0 2.0 1.5 2.0 1.9 20 Spain 12.6 13.7 15.7 16.6 15.1 12.1 11.3 12.2 10.5 10.6 12.6 21 Turkey 4.5 4.8 5.2 4.9 4.7 4.8 5.1 5.6 5.6 6.0 5.2 22 Other Western Europe 8.3 10.4 10.2 10.3 9.2 6.8 8.4 8.0 8.4 6.7 7.4 23 South Africa 2.2 4.4 4.8 4.7 4.0 3.8 4.9 4.6 4.2 3.7 4.1 24 Australia 23.1 20.3 25.4 26.6 21.1 23.5 18.6 26.3 20.5 22.2 28.2 25 OPEC2 26.0 27.1 26.2 26.2 30.1 31.4 28.9 32.3 31.8 29.6 28.2 ?6 Ecuador 1.3 1.3 1.2 1.1 .9 .8 .7 .7 .6 .6 .6 7.7 Venezuela 2.5 3.2 3.5 3.2 3.0 2.8 3.0 2.9 2.9 2.5 2.7 28 Indonesia 6.7 4.7 4.5 5.0 4.4 4.2 3.9 4.1 4.4 4.6 4.4 29 Middle East countries 14.4 17.0 16.7 16.5 21.4 23.1 21.1 24.0 22.7 21.1 20.1 30 African countries 1.2 1.0 .4 .5 .5 .5 .2 .7 1.2 .8 .5 31 Non-OPEC developing countries 139.2 143.4 146.4 148.6 144.6 149.4 154.9 158.3 149.6 145.7 144.6 Latin America 32 Argentina 18.4 23.1 24.4 22.8 22.8 23.2 22.4 21.6 21.4 21.4 20.8 33 Brazil 28.6 24.7 24.2 25.2 23.5 27.7 28.1 28.3 28.6 28.8 29.4 34 Chile 8.7 8.3 8.6 8.2 7.7 7.4 8.2 8.1 7.3 7.6 7.4 35 Colombia 3.4 3.2 3.3 3.1 2.7 2.5 2.5 2.4 2.4 2.4 2.4 36 Mexico 17.4 18.9 19.7 18.5 19.4 18.7 18.3 20.4 17.5 15.7 16.7 37 2.0 2.2 2.2 2.1 1.8 1.7 1.9 2.1 2.1 2.0 2.0 38 Other 4.1 5.4 5.3 5.5 5.5 5.9 6.6 6.9 6.4 6.5 8.7 Asia China 39 Mainland 3.2 3.0 5.0 5.3 3.3 3.6 4.6 3.8 3.4 2.9 3.4 40 Taiwan 9.5 13.3 11.8 12.6 12.3 12.0 12.6 12.6 12.8 10.8 11.1 41 India 4.9 5.5 5.5 6.7 7.0 7.7 7.9 8.2 5.8 9.1 6.5 42 Israel .7 1.1 1.1 2.0 1.0 1.8 3.3 1.5 1.1 2.7 2.2 43 Korea (South) 15.6 13.7 13.7 15.3 16.0 15.2 17.3 21.1 20.8 15.1 19.3 44 Malaysia 5.1 5.6 5.9 6.0 6.1 6.1 6.5 6.8 6.9 7.1 6.5 45 Philippines 5.7 5.1 5.4 5.7 5.8 6.2 5.3 5.3 4.7 5.1 5.2 46 Thailand 5.4 4.7 4.5 4.2 4.0 4.1 4.3 4.0 3.9 4.0 4.2 47 Other Asia 4.3 2.9 3.0 2.8 2.9 2.9 2.6 2.5 2.3 2.4 2.2 Africa 48 Egypt .9 1.3 1.4 1.4 1.3 1.4 1.4 1.3 1.1 1.1 1.2 49 Morocco .6 .5 .5 .5 .5 .4 .3 .3 .4 .3 .3 50 Zaire .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 51 Other Africa3 .8 1.0 .9 1.0 1.0 1.0 .9 .9 .8 .7 .7 52 Eastern Europe 9.1 5.5 6.8 5.7 5.4 5.2 6.3 9.4 9.0 10.1 9.5 53 Russia4 5.1 2.2 2.0 2.1 2.0 1.6 1.7 1.5 1.4 1.0 1.5 54 Other 4.0 3.3 4.8 3.7 3.4 3.6 4.7 7.9 7.6 9.1 8.0 55 Offshore banking centers 155.1 134.4 114.4 107.5 122.5 114.5 42.0 47.2 53.4 61.8 57.9 56 Bahamas 24.2 35.4 22.0 10.4 18.2 13.7 2.4 .5 9.3 13.5 7.0 57 Bermuda 9.8 4.6 3.9 5.7 8.2 8.0 7.3 6.3 6.3 9.0 7.9 58 Cayman Islands and other British West Indies 43.4 12.8 13.9 7.2 6.3 1.3 .0 5.1 5.9 14.6 14.3 59 Netherlands Antilles 14.6 2.6 2.7 1.3 9.1 1.7 2.5 2.6 1.9 1.9 2.9 60 Panama5 3.1 3.9 3.9 3.9 3.9 3.9 3.4 3.3 2.5 3.2 3.8 61 Lebanon .1 .1 .1 .1 .2 .1 .1 .1 .1 .1 .1 62 Hong Kong, China 32.2 23.3 22.8 22.0 22.4 21.0 22.2 20.7 20.6 18.8 21.7 63 Singapore 12.7 11.1 13.5 15.2 10.6 10.1 4.1 13.6 12.6 15.2 14.5 64 Other6 .1 .2 .2 .1 .2 .1 .1 .1 .1 .2 .1 65 Miscellaneous and unallocated7 99.1 495.1 430.4 380.2 391.2 387.9 376.1 342.1 351.1 391.2 472.7 1. The banking offices covered by these data include U.S. offices and foreign branches of 2. Organization of Petroleum Exporting Countries, shown individually; other members of U.S. banks, including U.S. banks that are subsidiaries of foreign banks. Offices not covered OPEC (Algeria, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, and United include U.S. agencies and branches of foreign banks. Beginning March 1994, the data include Arab Emirates); and Bahrain and Oman (not formally members of OPEC). large foreign subsidiaries of U.S. banks. The data also include other types of U.S. depository 3. Excludes Liberia. Beginning March 1994 includes Namibia. institutions as well as some types of brokers and dealers. To eliminate duplication, the data 4. As of December 1992, excludes other republics of the former Soviet Union. are adjusted to exclude the claims on foreign branches held by a U.S. office or another foreign 5. Includes Canal Zone. branch of the same banking institution. 6. Foreign branch claims only. These data are on a gross claims basis and do not necessarily reflect the ultimate country 7. Includes New Zealand, Liberia, and international and regional organizations. risk or exposure of U.S. banks. More complete data on the country risk exposure of U.S. banks are available in the quarterly Country Exposure Lending Survey published by the Federal Financial Institutions Examination Council. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A58 International Statistics • August 2001 3.22 LIABILITIES TO UNAFFILIATED FOREIGNERS Reported by Nonbanking Business Enterprises in the United States Millions of dollars, end of period 1999 2000 2001 TTyyppee ooff lliiaabbiilliittyy,, aanndd aarreeaa oorr ccoouunnttrryy 11999977 11999988 11999999 Dec. Mar. June Sept. Dec. Mar.p 1 Total 57,382 46,570 53,044 53,044 53,489 70,534 76,644 73,904r 74,484 2 Payable in dollars 41,543 36,668 37,605 37,605 35.614 47,864 51,451 48,93 lr 46,870 3 Payable in foreign currencies 15,839 9,902 15,415 15,415 17,875 22,670 25,193 24,973r 27,614 By type 4 Financial liabilities 26,877 19,255 27,980 27,980 29,180 44,068 49,895 47,419 48,461 5 Payable in dollars 12,630 10,371 13,883 13,883 12,858 22,803 26,159 25,246 23,369 6 Payable in foreign currencies 14,247 8,884 14,097 14,097 16,322 21,265 23,736 22,173 25,092 7 Commercial liabilities 30,505 27,315 25,064 25,064 24.309 26,466 26,749 26,485r 26,023 8 Trade payables 10,904 10,978 12,857 12,857 12,401 13,764 13,918 14,293r 12,657 y Advance receipts and other liabilities 19,601 16,337 12,207 12,207 11,908 12,702 12,831 12,192r 13,366 10 Payable in dollars 28,913 26,297 23,722 23,722 22,756 25,061 25,292 23,685r 23,501 n Payable in foreign currencies 1,592 1,018 1,318 1,318 1,553 1,405 1,457 2,800r 2,522 By area or country Financial liabilities 12 Europe 18,027 12,589 23,241 23,241 24,050 30,332 36,175 34,172 37,990 13 Belgium and Luxembourg 186 79 31 31 4 163 169 147 112 14 France 1,425 1,097 1,659 1,659 1,849 1,702 1,299 1,480 1,557 15 Germany 1,958 2,063 1,974 1,974 1,880 1,671 2,132 2,168 2,745 16 Netherlands 494 1,406 1,996 1,996 1,970 2,035 2,040 2,016 2,169 17 Switzerland 561 155 147 147 97 137 178 104 116 18 United Kingdom 11,667 5,980 16,521 16,521 16,579 21,463 28,601 26,362 29,241 19 Canada 2,374 693 284 284 313 714 249 411 719 20 Latin America and Caribbean 1,386 1,495 892 892 846 2,874 3,447 4,125 3,651 21 Bahamas 141 7 1 1 1 78 105 6 18 22 Bermuda 229 101 5 5 1 1,016 1,182 1,739 1,837 23 Brazil 143 152 126 126 128 146 132 148 26 24 British West Indies 604 957 492 492 489 463 501 406 410 25 Mexico 26 59 25 25 22 26 35 26 32 26 Venezuela 1 2 0 0 0 0 0 2 1 27 Asia 4,387 3,785 3,437 3,437 3,275 9,453 9,320 7,965 5,389 28 Japan 4,102 3,612 3,142 3,142 2,985 6,024 4,782 6,216 4,779 29 Middle Eastern oil-exporting countries' 27 0 4 4 4 5 7 11 15 30 Africa 60 28 28 28 28 33 48 52 38 31 Oil-exporting countries2 0 0 0 0 0 0 0 0 0 32 All other3 643 665 98 98 668 662 656 694 674 Commercial liabilities 33 Europe 10,228 10,030 9,262 9,262 8,646 9,293 9,411 9,629r 8,950 34 Belgium and Luxembourg 666 278 140 140 78 178 201 293 251 35 France 764 920 672 672 539 711 716 979 689 36 Germany 1,274 1,392 1,131 1,131 914 948 1,023 1,047r 982 37 Netherlands 439 429 507 507 648 562 424 300r 373 38 Switzerland 375 499 626 626 536 565 647 502 656 39 United Kingdom 4,086 3,697 3,071 3,071 2,661 2,982 2,951 2,847r 2,619 40 Canada 1,175 1,390 1,775 1,775 2,024 2,053 1,889 l,933r 1,627 41 Latin America and Caribbean 2,176 1,618 2,310 2,310 2,286 2,607 2,443 2,381 2.166 42 Bahamas 16 14 22 22 9 10 15 31 5 43 Bermuda 203 198 152 152 287 300 377 281 280 44 Brazil 220 152 145 145 115 119 167 114 239 45 British West Indies 12 10 48 48 23 22 19 76 64 46 Mexico 565 347 887 887 805 1,073 1,079 841 792 47 Venezuela 261 202 305 305 193 239 124 284 243 48 Asia 14,966 12,342 9,886 9,886 9,681 10,965 11,133 10,983r 11,558 49 Japan 4,500 3,827 2,609 2,609 2,274 2,200 1,998 2,757r 2,432 50 Middle Eastern oil-exporting countries' 3,111 2,852 2,551 2,551 2,308 3,489 3,706 2,832r 3,359 51 Africa 874 794 950 950 y43 950 1,220 948r 1.072 52 Oil-exporting countries2 408 393 499 499 536 575 663 483r 566 53 Other3 1,086 1,141 881 881 729 598 653 614r 650 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 2001 TTyyppee ooff ccllaaiimm,, aanndd aarreeaa oorr ccoouunnttrryy 11999977 11999988 11999999 Dec. Mar. June Sept. Dec. Mar.p 1 Total 68,128 77,462 76,669 76,669 84,266 80,73lr 94,803 90,157r 109,443 2 Payable in dollars 62,173 72,171 69,170 69,170 74,331 72,300r 82,872 79,558r 96,230 3 Payable in foreign currencies 5,955 5,291 7,472 7,472 9,935 8,431 11,931 10,599r 13,213 By type 4 Financial claims 36,959 46,260 40,231 40,231 47,798 44,303 58,303 53,031 74,458 5 Deposits 22,909 30,199 18,566 18,566 23,316 17,462 30,928 23,374 29,119 6 Payable in dollars 21,060 28,549 16,373 16,373 21,442 15,361 27,974 21,015 26,944 7 Payable in foreign currencies 1,849 1,650 2,193 2,193 1,874 2,101 2,954 2,359 2,175 8 Other financial claims 14,050 16,061 21,665 21,665 24,482 26,841 27,375 29,657 45,339 9 Payable in dollars 11,806 14,049 18,593 18,593 19,659 22,384 20,541 25,142 37,480 10 Payable in foreign currencies 2,244 2,012 3,072 3,072 4,823 4,457 6,834 4,515 7,859 11 Commercial claims 31,169 31,202 36,438 36,438 36,468 36,428r 36,500 37,126r 34,985 12 Trade receivables 27,536 27,202 32,629 32,629 31,443 31,283r 31,530 33,104r 30,493 13 Advance payments and other claims 3,633 4,000 3,809 3,809 5,025 5,145 4,970 4,022r 4,492 14 Payable in dollars 29,307 29,573 34,204 34,204 33,230 34,555r 34,357 33,40 r 31,806 15 Payable in foreign currencies 1,862 1,629 2,207 2,207 3,238 1,873 2,143 3,725r 3,179 By area or country Financial claims 16 Europe 14,999 12,294 13,023 13,023 16,789 18,254 23,706 23,136 31,946 17 Belgium and Luxembourg 406 661 529 529 540 317 304 296 430 18 France 1,015 864 967 967 1,835 1,292 1,477 1,206 3,149 19 Germany 427 304 504 504 669 576 696 848 1,405 20 Netherlands 677 875 1,229 1,229 1,981 1,984 2,486 1,396 2,313 7.1 Switzerland 434 414 643 643 612 624 626 699 605 22 United Kingdom 10,337 7,766 7,561 7,561 9,044 11,668 16,191 15,900 21,070 23 Canada 3,313 2,503 2,553 2,553 3,175 5,799 7,517 4,576 4,854 74 Latin America and Caribbean 15,543 27,714 18,206 18,206 21,945 14,874 21,691 19,317 28,674 25 Bahamas 2,308 403 1,593 1,593 1,299 655 1,358 1,353 561 7.6 Bermuda 108 39 11 11 11 34 22 19 1,729 27 Brazil 1,313 835 1,476 1,476 1,646 1,666 1,568 1,827 1,564 78 British West Indies 10,462 24,388 12,099 12,099 15,814 7,751 15,722 12,596 16,366 29 Mexico 537 1,245 1,798 1,798 1,979 2,048 2,280 2,448 2,459 30 Venezuela 36 55 48 48 65 78 101 87 31 31 2,133 3,027 5,457 5,457 4,430 3,923 4,002 4,697 7,444 32 Japan 823 1,194 3,262 3,262 2,021 1,410 1,726 1,631 4,065 33 Middle Eastern oil-exporting countries' 11 9 23 23 29 42 85 80 70 34 Africa 319 159 286 286 232 320 284 411 423 35 Oil-exporting countries2 15 16 15 15 15 39 3 57 42 36 All other1 652 563 706 706 1,227 1,133 1,103 894 1,117 Commercial claims 37 Europe 12,120 13,246 16,389 16,389 16,118 15,935r 16,486 15,938 14,534 38 Belgium and Luxembourg 328 238 316 316 271 425 393 452 395 39 France 1,796 2,171 2,236 2,236 2,520 2,693r 2,921 3,095 3,480 40 Germany 1,614 1,822 1,960 1,960 2,034 l,905r 2,159 1,982 1,763 41 Netherlands 597 467 1,429 1,429 1,337 1,242 1,310 1,729 757 42 Switzerland 554 483 610 610 611 562r 684 763 666 43 United Kingdom 3,660 4,769 5,827 5,827 5,354 4,937r 5,193 4,502 4,031 44 Canada 2,660 2,617 2,757 2,757 3,088 3,250 2,953 3,502r 3,393 45 Latin America and Caribbean 5,750 6,296 5,959 5,959 5,899 5,792 5,788 5,85 lr 5,306 46 Bahamas 27 24 20 20 15 48 75 37 20 47 Bermuda 244 536 390 390 404 381 387 376 418 48 Brazil 1,162 1,024 905 905 849 894 981 957r 1,057 49 British West Indies 109 104 181 181 95 51 55 137 131 50 Mexico 1,392 1,545 1,678 1.678 1,529 1,565 1,612 1,507 1,418 51 Venezuela 576 401 439 439 435 466 379 328r 292 "52 8,713 7,192 9,165 9,165 9,101 9,172r 8,986 9,630r 9,544 53 Japan 1,976 1,681 2,074 2,074 2,082 1,881r 2,074 2,796r 2,575 54 Middle Eastern oil-exporting countries' 1,107 1,135 1,625 1,625 1,533 1,241 1,199 1,024 966 55 Africa 680 711 631 631 716 766 895 672r 773 56 Oil-exporting countries2 119 165 171 171 82 160 392 180r 165 57 Other1 1,246 1,140 1,537 1,537 1,546 1,513 1,392 l,572r 1,435 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 • August 2001 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2001 2000 2001 Transaction, and area or country 1999 2000 Jan.- Apr. Oct. Nov. Dec. Jan. Feb. Mar. Apr? U.S. corporate securities STOCKS 1 Foreign purchases 2,340,659 3,605,196 1,097,283 339,995 284,909 286,161 301,650 259,101 285,528 251,004 2 Foreign sales 2,233,137 3,430,306 1,048,333 323,659 275,855 275,034 277,706 249,423 277,473 243,731 3 Net purchases, or sales (—) 107,522 174,890 48,950 16,336 9,054 11,127 23,944 9,678 8,055 7,273 4 Foreign countries 107,578 174,903 48,837 16,338 9,068 11,145 23,906 9,707 7,929 7,295 5 Europe 98,060 164,656 37,733 14,040 7,485 10,779 12,329 13,713 7,983 3,708 6 France 3,813 5,727 3,260 1,757 408 40 243 1,869 1,041 107 7 Germany 13,410 31,752 3,974 1,383 988 111 2,380 1,217 174 203 8 Netherlands 8,083 4,915 5,487 -135 323 1,691 2,206 1,379 790 1,112 9 Switzerland 5,650 11,960 2,222 488 -598 -684 70 775 1,237 140 10 United Kingdom 42,902 58,736 12,065 6,283 3,210 7,773 3,064 5,120 3,280 601 11 Channel Islands & Isle of Man1 0 0 -299 0 0 0 -13 -32 -110 -144 12 Canada -335 5,956 5,993 194 1,477 1,468 1,490 468 2,464 1,571 13 Latin America and Caribbean 5,187 -17,812 -4,164 -4,400 -2,979 -2,759 5,445 -4,927 -3,516 -1,166 14 Middle East2 -1,066 9,189 96 754 340 277 -554 264 442 -56 15 Other Asia 4,445 12,494 10,198 5,840 3,310 1,451 5,565 355 684 3,594 16 Japan 5,723 2,070 3,517 2,640 662 1,615 1,002 -672 512 2,675 17 Africa 372 415 -261 -27 80 -45 -362 52 93 -44 18 Other countries 915 5 -758 -63 -645 -26 -7 -218 -221 -312 19 Nonmonetary international and regional organizations -56 -11 113 -2 -14 -18 38 -29 126 -22 BONDS3 20 Foreign purchases 854,692 1,206,662 605,411 103,028 114,686 117,904 138,294 147,852r 170,098 149,167 21 Foreign sales 602,100 871,418 455,750 71,686 77,596 90,143 111,327 108,792 124,000 111,631 22 Net purchases, or sales (—) 252,592 335,244 149,661 31,342 37,090 27,761 26,967 39,060r 46,098 37,536 23 Foreign countries 252,994 335,348 149,474 31,356 37,224 27,759 27,065 39,019r 45,880 37,510 24 Europe 140,674 179,706 84,036 16,965 16,522 16,560 17,397 22,064r 26,420 18,155 25 France 1,870 2,216 2,846 347 272 138 405 660 1,262 519 26 Germany 7,723 4,067 6,352 433 537 -78 2,450 1,352 911 1,639 27 Netherlands 2,446 1,130 1,211 848 183 275 664 496 92 -41 28 Switzerland 4,553 3,833 3,376 350 483 -89 321 782 1,564 709 29 United Kingdom 106,344 140,152 61,954 12,503 12,952 12,825 11,251 17,893r 20,347 12,463 30 Channel Islands & Isle of Man1 0 0 644 0 0 0 107 118 101 318 31 Canada 6,043 13,287 2,874 897 1,179 414 376 1,031 309 1,158 32 Latin America and Caribbean 58,783 59,443 27,088 5,018 6,600 4,126 4,969 8,009 6,564 7,546 33 Middle East1 1,979 2,076 1,922 -54 437 1,077 726 443 624 129 34 Other Asia 42,817 78,280 32,813 8,215 11,839 5,535 3,514 7,162 11,683 10,454 35 Japan 17,541 38,842 7,863 3,690 7,435 2,932 910 914 5,570 469 36 Africa 1,411 938 80 58 25 76 29 46 38 -33 37 Other countries 1,287 1,618 661 257 622 -29 54 264 242 101 38 Nonmonetary international and regional organizations -402 -70 188 -14 -134 2 -97 41 218 26 Foreign securities 39 Stocks, net purchases, or sales (—) 15,640 -9,297 -27,230 3,011 5,563 -3,195 -2,940 -2,491 -14,540 -7,259 40 Foreign purchases 1,177,303 1,802,452 534,308 152,872 141,600 135,417 148,111 130,972 134,166 121,059 41 Foreign sales 1,161,663 1,811,749 561,538 149,861 136,037 138,612 151,051 133,463 148,706 128,318 42 Bonds, net purchases, or sales (—) -5,676 -3,878 4,353 -3,443 8,434 -1,175 -1,360 1,994r -1,450 5,169 43 Foreign purchases 798,267 959,408 437,783 98,519 94,938 83,721 120,666 104,235' 117,444 95,438 44 Foreign sales 803,943 963,286 433,430 101,962 86,504 84,896 122,026 102,241' 118,894 90,269 45 Net purchases, or sales (-), of stocks and bonds .... 9,964 -13,175 -22,877 -432 13,997 —4,370 —4,300 —497r -15,990 -2,090 46 Foreign countries 9,679 -13,311 —22,310 -599 13,758 -3,951 -4,011 -536r -15,685 -2,078 47 Europe 59,247 -23,609 -15,873 -3,879 7,373 -4,452 -4,878 -1,421' -13,487 3,913 48 Canada -999 -3,856 1,838 1,813 574 -1,357 767 1,588 876 -1,393 49 Latin America and Caribbean -4,726 -15,116 -995 1,010 -521 -205 863 811 34 -2,703 50 Asia -42,961 25,975 -6,732 -73 5,742 1,872 -1,005 -1,148 -3,221 -1,358 51 Japan -43,637 21,886 -8,691 -1,262 2,067 1,824 164 -1,963 -3,866 -3,026 52 Africa 710 947 37 14 -28 -4 -70 -15 25 97 53 Other countries -1,592 2,348 -585 516 618 195 312 -351 88 -634 54 Nonmonetary international and regional organizations 285 150 -567 167 239 -419 -289 39 -305 -12 1. Before January 2001, these data were included in United Kingdom. 3. Includes state and local government securities and securities of U.S. government 2. Comprises oil-exporting countries as follows: Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, agencies and corporations. Also includes issues of new debt securities sold abroad by U.S. Saudi Arabia, and United Arab Emirates (Trucial States). corporations organized to finance direct investments abroad. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Securities Holdings and Transactions A61 3.25 MARKETABLE U.S. TREASURY BONDS AND NOTES Foreign Transactions' Millions of dollars; net purchases, or sales (—) during period 2001 2000 2001 AArreeaa oorr ccoouunnttrryy 11999999 22000000 J A an pr .- . Oct. Nov. Dec. Jan. Feb. Mar. Apr.P 1 Total estimated -9,953 -53,790 -10,825 -3,037 -14,106 -9,789 -9,064 7,011 4,975 -13,747 2 Foreign countries -10,518 -53,329 -10,135 -3,222 -13,959 -9,904 -8,531 6,972 4,977 -13,553 3 Europe -38,228 -50,704 -5,573 -3,707 -10,991 -6,850 -5,000 -337 5,363 -5,599 4 Belgium" -81 73 88 320 53 -96 0 0 -152 240 5 Germany 2,285 -7,304 -1,048 1,424 -2,185 -1,065 -873 -3,180 1,236 1,769 6 Luxembourg" 0 0 223 0 0 0 411 9 -401 204 7 Netherlands 2,122 2,140 -4,177 183 264 -1,622 -793 2,808 -3,704 -2,488 8 Sweden 1,699 1,082 -1,619 -118 -104 328 218 -1,039 -993 195 9 Switzerland -1,761 -10,326 912 -57 -301 64 755 161 -120 116 10 United Kingdom -20,232 -33,669 3,344 -3,793 -6,035 -4,199 -2,695 937 9,838 -4,736 11 Channel Islands and Isle of Man3 0 0 25 0 0 0 -98 -68 222 -31 12 Other Europe and former U.S.S.R -22,260 -2,700 -1,525 -1,666 -2,683 -260 -2,089 564 -868 -563 13 Canada 7,348 -308 -1,542 160 -1,173 -1,492 -2,067 -554 -169 1,248 14 Latin America and Caribbean -7,523 -4,914 -574,505 3,963 -507 -245 2,407 3,620 827 -7,095 15 Venezuela 362 1,288 229 152 251 300 227 292 -142 -148 16 Other Latin America and Caribbean 1,661 -11,581 7,321 3,030 -1,262 -1,746 3,261 4,279 3,009 -3,228 17 Netherlands Antilles -9,546 5,379 -7,791 781 504 1,201 -1,081 -951 -2,040 -3,719 18 29,359 1,639 -3,259 -4,688 -1,289 -458 -4,641 4,387 -41 -2,964 19 Japan 20,102 10,580 -1,156 1,608 4,445 -3,855 -4,261 1,468 -1,426 3,063 70 Africa -3,021 -414 -88 -6 -16 -44 -91 36 -60 27 21 Other 1,547 1,372 568 1,056 17 -815 861 -180 -943 830 22 Nonmonetary international and regional organizations 565 -461 -690 185 —147 115 -533 39 -2 -194 7.3 International 190 -483 -693 39 -146 24 -275 -194 -11 -213 24 Latin American Caribbean regional 666 76 32 28 -1 6 1 -4 10 25 MEMO 75 Foreign countries -10,518 -53,329 -10,135 -3,222 -13,959 -9,904 -8,531 6,972 4,977 -13,553 76 Official institutions -9,861 -6,302 -5,898 -7,150 -4,967 1,068 2,226 667 249 -9,040 27 Other foreign -657 -47,027 -4,237 3,928 -8,992 -10,972 -10,757 6,305 4,728 -4,513 Oil-exporting countries 78 Middle East4 2,207 3,483 -2,518 -724 -888 48 -176 -719 -1,240 -383 29 Africa5 0 0 -4 0 0 0 -6 0 2 0 1. Official and private transactions in marketable U.S. Treasury securities having an 3. Before January 2001, these data were included in United Kingdom. original maturity of more than one year. Data are based on monthly transactions reports. 4. Comprises Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Excludes nonmarketable U.S. Treasury bonds and notes held by official institutions of foreign Emirates (Trucial States). countries. 5. Comprises Algeria, Gabon, Libya, and Nigeria. 2. Before January 2001, combined data reported for Belgium and Luxembourg. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A62 International Statistics • August 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 2001 IItteemm 11999988 11999999 22000000 Jan. Feb. Mar. Apr. May June Exchange rates COUNTRY/CURRENCY UNIT 1 Australia/dollar2 62.91 64.54 58.15 55.52 53.38 50.31 50.16 51.99 51.80 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 1.9561 2.0060 2.0955 2.1934 2.2926 2.3788 5 Canada/dollar 1.4836 1.4858 1.4855 1.5032 1.5216 1.5587 1.5578 1.5411 1.5245 6 China, P.R./yuan 8.3008 8.2783 8.2784 8.2776 8.2771 8.2775 8.2771 8.2770 8.2770 7 Denmark/krone 6.7030 6.9900 8.0953 7.9629 8.1103 8.2229 8.3657 8.5256 8.7397 8 European Monetary Union/euro3 . . n.a. 1.0653 0.9232 0.9376 0.9205 0.9083 0.8925 0.8753 0.8530 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 n.a. n.a. n.a. n.a. n.a. n.a. 13 Hong Kong/dollar 7.7467 7.7594 7.7924 7.7998 7.7999 7.7999 7.7993 7.7999 7.7997 14 India/rupee 41.36 43.13 45.00 46.61 46.56 46.65 46.79 46.95 47.04 15 Ireland/pound2 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 130.99 113.73 107.80 116.67 116.23 121.51 123.77 121.77 122.35 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 9.769 9.711 9.599 9.328 9.148 9.088 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 44.42 43.45 41.82 40.69 42.18 41.41 22 Norway/krone 7.5521 7.8071 8.8131 8.7817 8.9180 8.9859 9.0920 9.1380 9.3014 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 1.7380 1.7435 1.7732 1.8118 1.8141 1.8170 25 South Africa/rand 5.5417 6.1191 6.9468 7.7786 7.8214 7.8980 8.0783 7.9789 8.0595 26 South Korea/won 1,400.40 1,189.84 1,130.90 1,272.63 1,252.85 1,291.41 1,327.76 1,298.90 1,295.05 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 85.833 87.136 85.730 88.205 90.848 90.371 29 Sweden/krona 7.9522 8.2740 9.1735 9.4910 9.7518 10.0516 10.2035 10.3513 10.7930 30 Switzerland/franc 1.4506 1.5045 1.6904 1.6305 1.6686 1.6908 1.7131 1.7528 1.7856 31 Taiwan/dollar 33.547 32.322 31.260 32.673 32.330 32.622 32.941 33.203 34.328 32 Thailand/baht 41.262 37.887 40.210 43.149 42.665 43.988 45.494 45.525 45.263 33 United Kingdom/pound2 165.73 161.72 151.56 147.75 145.25 144.45 143.48 142.65 140.20 34 Venezuela/bolivar 548.39 606.82 680.52 700.02 703.36 706.06 710.39 714.86 717.27 Indexes4 NOMINAL 35 Broad (January 1997= 100)5 116.48 116.87 119.93 123.14 123.77 125.91 126.97 126.77 127.58 36 Major currencies (March 1973= 100)6 . . 95.79 94.07 98.34 100.24 101.44 103.98 105.09 105.03 105.91 37 Other important trading partners (January 1997= 100)7 126.03 129.94 130.26 135.01 134.52 135.56 136.30 135.92 136.43 REAL 38 Broad (March 1973 = 100)5 99.49r 98.81r 102.49r 105.56r 106.27r 108.13r 109.02r 108.98r 110.09 39 Major currencies (March 1973 = 100)6 . . . 97.23 96.66 102.85 105.90r 107.29 109.90 110.99r 110.79' 112.13 40 Other important trading partners (March 1973 = 100)7 108.86r 107.98r 108.44r 111.73r 111.59r 112.57r 113.27r 113.43r 114.30 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

63 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases June 2001 A72 SPECIAL TABLES—Data Published Irregularly, with Latest Bulletin Reference Title and Date Issue Page Assets and liabilities of commercial banks June 30, 2000 November 2000 A64 September 30, 2000 February 2001 A64 December 31, 2000 May 2001 A64 March 31,2001 August 2001 A64 Terms of lending at commercial banks August 2000 November 2000 A66 November 2000 February 2001 A66 February 2001 May 2001 A66 May 2001 August 2001 A66 Assets and liabilities of U.S. branches and agencies of foreign banks June 30, 2000 November 2000 A72 September 30, 2000 February 2001 A72 December 31, 2000 May 2001 A72 March 31,2001 August 2001 A72 Pro forma balance sheet and income statements for priced service operations June 30, 2000 November 2000 A76 September 30, 2000 February 2001 A76 March 31,2001 August 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

A64 Special Tables • August 2001 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities Consolidated Report of Condition, March 31, 2001 Millions of dollars except as noted Banks with Banks with foreign offices' domestic DDoomm sstic offices only TToottaall ttoott al Total Domestic Total 1 Total assets 6,232,042 5,486,991 4,240,211 3,495,160 1,991,831 2 Cash and balances due from depository institutions 359,666 239,932 275,519 155,785 84,146 3 Cash items in process of collection, unposted debits, and currency and coin 116,775 114,422 fT 4 Cash items in process of collection and unposted debits I n.a. 92,898 5 Currency and coin n.a. n.a. 21,524 n.a. 6 Balances due from depository institutions in the United States 1 36,786 26,253 1 7 Balances due from banks in foreign countries and foreign central banks 110,010 3,243 i 1 8 Balances due from Federal Reserve Banks 1 11,950 11,867 9 Total securities, held-to-maturity (amortized cost) and available-for-sale (fair value) 1,028,839 575,607 453,232 10 U.S. Treasury securities 54,665 30,460 24,205 11 U.S. government agency and corporation obligations (excludes mortgage-backed securities) 200,041 78,512 121,529 12 Issued by U.S. government agencies 5,848 3,009 2,840 13 Issued by U.S. government-sponsored agencies 194,192 75,503 118,689 14 Securities issued by states and political subdivisions in the United States 93,286 33,115 60,171 15 Mortgage-backed securities (MBS) 486 ,289 319,706 166,583 16 Pass-through securities 313,046 224,451 88,595 17 Guaranteed by GNMA 75,533 43,786 31,748 18 Issued by FNMA and FHLMC 231,163 n.a. 175,634 55,530 19 Other pass-through securities 6,350 5,032 1,318 20 Other mortgage-backed securities (includes CMOs. REMICs, and stripped MBS) 173,243 95,255 77,988 21 Issued or guaranteed by FNMA, FHLMC, or GNMA 110,295 64,741 n.a. 45,554 22 Collateralized by MBS issued or guaranteed by FNMA, FHLMC, or GNMA 4,622 3,181 1,441 23 All other mortgage-backed securities 58,326 27,333 30,993 24 Asset-backed securities 70,574 28,716 41,858 25 Credit card receivables 23,945 5,713 18,232 26 Home equity lines 20,314 15,934 4,380 27 Automobile loans 13,832 2,244 11,588 28 Other consumer loans 1,058 581 477 29 Commercial and industrial loans 5,190 1,715 3,476 30 Other 6,235 2,529 3,705 31 Other debt securities 105,933 73,743 32,190 32 Other domestic debt securities 43,233 15,743 27,490 33 Foreign debt securities 62,700 58,000 4,700 34 Investments in mutual funds and other equity securities with readily determinable fair value 18,051 11,355 6,696 35 Federal funds sold and securities purchased under agreements to resell 326,611 253,882 240,538 167,810 86,073 36 Total loans and leases (gross) and lease-financing receivables (net) 3,780,073 3,492,279 2,506,425 2,218,631 1,273,647 37 LESS: Unearned income on loans 2,704 2,074 1,444 814 1,260 38 LESS: Loans and leases held for sale 120,749 n.a. 88 ,907 n.a. 31,842 39 Total loans and leases (net of unearned income) 3,656,620 n.a. 2,416,074 n.a. 1,240,545 40 LESS: Allowance for loan and lease losses 63,551 n.a. 42,838 n.a. 20,713 41 Loans and leases, net of unearned income and allowance 3,593,069 n.a. 2,373,236 n.a. 1,219,832 Total loans and leases, gross, by category 42 Loans secured by real estate 1,68c1 ,832 1,652,694 970,382 938,243 714,451 43 Construction and land development 172,442 8 J,353 83,089 44 Farmland 34,269 6,556 27,713 45 One- to four-family residential properties 918,900 582,994 335,907 46 Revolving, open-end loans, extended under lines of credit n.a. 129,939 n.a. 90,558 39,381 Closed-end loans secured by one- to four-family residential properties 47 Secured by first liens 683,579 427,023 256,556 48 Secured by junior liens 105,382 65,413 39,970 49 Multifamily (five or more) residential properties 60,914 33,372 27,542 50 Nonfarm nonresidential properties 466,169 225,970 240,200 51 Loans to depository institutions and acceptances of other banks 119,079 103,337 102,107 8 5,364 16,973 52 Commercial banks in the United States n.a. n.a. 67,760 66,900 n.a. 53 Other depository institutions in the United States n.a. n.a. 9,790 9,703 n.a. 54 Banks in foreign countries n.a. n.a. 24,556 9,762 n.a. 55 Loans to finance agricultural production and other loans to farmers 45,971 45,103 12,283 11,416 33,688 56 Commercial and industrial loans 1,038,110 875,683 80 5,811 646,384 229,298 57 U.S. addressees (domicile) n.a. n a. 657,617 636,110 n.a. 58 Non-U.S. addressees (domicile) n.a. n a. 151,195 10,275 n.a. 59 Loans to individuals for household, family, and other personal expenditures (includes purchased paper) 574,870 532,675 332,541 290,346 242,329 60 Credit cards 200,024 185,256 109,604 94,836 90,420 61 Other revolving credit plans 26,421 24,259 19,588 17,426 6,832 62 Other consumer loans (including single-payment, installment, and all student loans) 348,425 323,161 203,349 178,084 145,077 63 Obligations (other than securities) of states and political subdivisions in the United States (includes nonrated industrial development obligations) 21,436 21,303 13,849 13,716 7,587 64 All other loans 129,797 101,955 119,163 91,321 10,635 65 Loans to foreign governments and official institutions 5,880 1,958 5,849 1,928 30 66 Other loans 123,918 99,997 113,313 8 9,393 10,604 67 Loans for purchasing and carrying securities n.a. n.a. n a. 16,682 n.a. 68 All other loans (excludes consumer loans) n.a. n.a. n.a. 72,711 n.a. 69 Lease-financing receivables 165,977 159,528 147,290 140,840 18,688 7 7 0 1 Tra P d r i e n m g is a e s s s e a ts n d fixed assets (including capitalized leases) 32 7 0 5 , , 0 0 5 9 8 0 f T 3 4 1 5 8 , ,5 5 2 6 5 4 1 29 1 , , 5 5 2 3 6 3 7 7 7 2 3 4 Cu O I s n t t v o h e m e s r e t m r re s e ' a n l l t i s e a s b i t i n a l t i e t u y n o c o w o n n n s e a o d c l c i e d p at t e a d n c s e u s b o s u id ts ia ta ri n e d s i n a g n d associated companies 3 8 8 , , , 3 9 2 0 9 5 1 2 0 n i . I a . 1 3 8 , , , 7 0 0 0 2 2 6 3 5 n. i 1 a . 1, 9 2 5 7 9 2 0 6 5 75 Net due from own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. 29,770 n a. 29,770 n.a. 76 Intangible assets 100,656 n.a. 85,179 n.a. 15,477 77 Goodwill 58,733 n.a. 4 8,601 n.a. 10,132 78 Other intangible assets 41,923 n.a. 36,578 n.a. 5,345 79 All other assets 286,759 n.a. 219,382 n.a. 67,378 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Commercial Banks A65 4.20 DOMESTIC AND FOREIGN OFFICES Insured Commercial Bank Assets and Liabilities—Continued Consolidated Report of Condition, March 31, 2001 Millions of dollars except as noted Banks with Banks with foreign offices' domestic IItteemm TToottaall DDoommeessttiicc offices only ttoottaall Total Domestic Total 80 Total liabilities, minority interest, and equity capital 6,232,042 n.a. 4,240,211 n.a. 1,991,831 81 Total liabilities 5,688,864 4,943,813 3,885,325 3,140,274 1,803,539 82 Total deposits 4,151,311 3,480,478 2,673,013 2,002,180 1,478,298 83 Individuals, partnerships, and corporations (include all certified and official checks) 3,758,645 3,258,714 2,386,900 1,886,969 1,371,745 84 U.S. government n.a. 10,569 n.a. 9,774 795 85 States and political subdivisions in the United States n.a. 153,163 n.a. 63,490 89,673 86 Commercial banks and other depository institutions in the United States 110,688 43,261 95,380 27,953 15,309 87 Banks in foreign countries 81,772 7,491 81,175 6,893 597 88 Foreign governments and official institutions (including foreign central banks) 35,823 7,280 35,644 7,100 179 89 Total transaction accounts 631,087 346,008 285,079 90 Individuals, partnerships, and corporations (include all certified and official checks) 551,353 298,908 252,444 91 U.S. government 2,174 1,729 445 92 States and political subdivisions in the United States 42,787 17,971 24,817 93 Commercial banks and other depository institutions in the United States 28,531 21,434 7,098 94 Banks in foreign countries 5,591 5,344 247 95 Foreign governments and official institutions (including foreign central banks) 651 622 29 96 Total demand deposits n a. 484,580 n a. 304,057 180,523 97 Total nontransaction accounts 2,849,391 1,656,172 1,193,219 98 Individuals, partnerships, and corporations (include all certified and official checks) 2,707,362 1,588,061 1,119,301 99 U.S. government 8,395 8,045 350 100 States and political subdivisions in the United States 110,376 45,519 64,856 101 Commercial banks and other depository institutions in the United States 14,730 6,519 8,211 102 Banks in foreign countries 1,900 1,550 350 103 Foreign governments and official institutions (including foreign central banks) 6,628 6,478 150 104 Federal funds purchased and securities sold under agreements to repurchase 495,733 450,894 401,003 356,165 94,730 105 Trading liabilities 218,150 n.a. 217,612 n.a. 538 106 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) 543,895 501,971 359,814 317,890 184,081 107 Banks' liability on acceptances executed and outstanding 5,261 5,983 5,036 5,758 225 108 Subordinated notes and debentures to deposits 8( >,877 n.a. 82,127 n.a. 7,750 109 Net due to own foreign offices, Edge Act and agreement subsidiaries, and IBFs n.a. 152,467 n.a. 152,467 n.a. 110 All other liabilities 181,638 n.a. 143,720 n.a. 37,918 111 Minority interest in consolidated subsidiaries 7,617 n.a. 6,926 n.a. 691 112 Total equity capital 535,561 n.a. 347,960 n.a. 187,601 MEMO 113 Trading assets at large banks2 320,018 159,954 318,524 158,461 1,494 114 U.S. Treasury securities (domestic offices) • 18,220 • 18,201 18 115 U.S. government agency obligations (excluding MBS) 5,945 5,532 413 116 Securities issued by states and political subdivisions in the United States n a. 1,305 n.a. 1,071 234 117 Mortgage-backed securities 11,919 11,539 380 118 Other debt securities 1 27,964 27,941 23 119 Other trading assets 16,563 16,452 111 120 Trading assets in foreign offices 87,851 0 87,851 0 0 121 Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity contracts 150,251 78,039 149,937 77,725 314 122 Total individual retirement (IRA) and Keogh plan accounts -• 160,604 78,711 81,893 123 Total brokered deposits 210,320 94,707 115,613 124 Fully insured brokered deposits 156,675 63,663 93,012 125 Issued in denominations of less than $100,000 n a. 7744,,004400 n.a. 18,302 5555,,773388 126 Issued in denominations of $100,000, or in denominations greater than $100,000 and participated out by the broker in shares of $100,000 or less 82,635 45,361 37,274 127 Money market deposit accounts (MMDAs) 1,055,927 695,872 360,056 128 Other savings deposits (excluding MMDAs) 441,039 276,576 164,462 129 Total time deposits of less than $100,000 789,553 367,125 422,428 130 Total time deposits of $100,000 or more 562,872 316,599 246,273 131 Number of banks ,212 8,212 145 n.a. 8,067 NOTE. The notation "n.a." indicates the lesser detail available from banks that don't have Foreign offices include branches in foreign countries, Puerto Rico, and U.S.-affiliated foreign offices, the inapplicability of certain items to banks that have only domestic offices, or insular areas; subsidiaries in foreign countries; all offices of Edge Act and agreement the absence of detail on a fully consolidated basis for banks that have foreign offices. corporations wherever located; and international banking facility (IBF). 1. All transactions between domestic and foreign offices of a bank are reported in "net due 2. Components of "Trading Assets at Large Banks" are reported only by banks that from" and "net due to" lines. All other lines represent transactions with parties other than the reported trading assets of $2 million or more any quarter of the preceding calendar year. domestic and foreign offices of each bank. Because these intra-office transactions are nullified by consolidation, total assets and total liabilities for the entire bank may not equal the sum of assets and liabilities respectively of the domestic and foreign offices. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Special Tables • August 2001 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 2001 A. Commercial and industrial loans made by all commercial banks' Weighted- Amount of loans (percent) Weighted- Amount of Average loan average e a f v fe er c a ti g v e e loans size maturity3 ( l p o e a r n c e r n a t t ) e 2 o ( f m d il o l l i l o a n r s s ) (tho d u o s ll a a n r d s s ) of Days S c e o c l u la re te d r a b l y p S re u p p b e a n je y a c m lt t y e t n o t c M om ad m e it u m nd e e n r t LOAN RISK5 1 All commercial and industrial loans 6.22 91,790 575 378 40.6 29.9 70.0 2 Minimal risk 6.01 5,138 535 362 39.8 17.3 71.5 3 Low risk 5.44 19,963 1,306 300 19.9 12.4 50.9 74.3 4 Moderate risk 6.38 26,568 490 587 42.9 8.9 32.6 81.4 5 Other 6.82 18,113 415 263 44.2 9.9 22.9 74.2 By maturity/repricing interval6 6 Zero interval 6.86 23,505 430 387 60.7 7.1 4.0 65.7 7 Minimal risk 6.96 269 282 242 70.7 22.9 17.1 93.9 8 Low risk 7.12 2,016 479 647 32.2 12.3 19.8 90.9 9 Moderate risk 7.39 4,701 215 465 48.6 19.1 7.3 94.7 10 Other 8.19 3,242 157 512 63.9 12.4 4.6 89.9 11 Daily 5.94 31.780 705 225 28.1 10.2 43.3 66.6 12 Minimal risk 6.31 2,938 558 227 47.5 9.9 15.5 63.8 13 Low risk 5.18 9,048 4,025 155 9.8 7.0 66.4 70.8 14 Moderate risk 6.06 8,268 726 417 30.0 11.9 44.7 88.7 15 Other 6.35 7,032 708 131 42.2 12.3 17.0 50.4 16 2 to 30 days 5.80 14,172 845 192 29.3 6.2 38.0 85.0 17 Minimal risk 5.20 853 1,581 124 7.5 6.0 33.3 96.9 18 Low risk 5.09 3,485 1,109 249 21.5 9.6 45.8 80.4 19 Moderate risk 5.76 4,336 999 234 33.0 4.6 43.8 92.7 20 Other 6.70 3,445 662 127 37.3 6.1 27.2 88.7 21 31 to 365 days 5.90 16,512 614 415 29.5 3.5 43.5 82.6 22 Minimal risk 5.24 888 445 723 23.3 5.1 9.9 63.3 23 Low risk 5.44 4,215 1,119 385 15.3 7.6 50.6 83.6 24 Moderate risk 5.77 5,735 561 386 38.2 1.3 45.4 87.1 25 Other 6.47 3,882 890 366 31.5 2.4 47.1 90.3 26 More than 365 days 7.61 4,323 325 85.2 27 Minimal risk . .. 7.23 190 224 100.0 28 Low risk 6.97 390 214 62.3 36.7 8.6 59.0 29 Moderate risk . . 7.62 3,284 632 87.0 1.3 3.4 18.9 30 Other 8.30 274 120 85.0 7.5 13.5 67.5 Weighted- Weighted- average average risk maturity/ rating5 repricing interval6 Days SIZE OF LOAN (thousands of dollars) 31 1-99 8.38 2,840 147 84.3 25.2 3.2 81.8 32 100-999 7.59 10,358 148 74.7 17.1 8.3 83.4 33 1,000-9,999 6.28 28,753 3.0 41 39.8 25.6 76.1 34 10,000 or more 5.79 49,840 2.8 120 31.5 38.5 62.9 BASE RATE OF LOAN4 35 Prime7 7.91 24,142 3.0 238 15.5 2.1 67.9 36 Fed funds 5.20 19,565 2.8 20 9.5 25.3 52.6 37 Other domestic 5.50 10.396 2.5 15 11.7 79.6 65.7 38 Foreign 5.67 22,571 2.8 36 30.1 2.7 52.9 84.9 39 Other 6.19 15,118 3.3 132 50.8 3.5 12.0 76.2 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A67 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 2001—Continued B. Commercial and industrial loans made by all domestic banks' Weighted- Amount of loans (percent) Weighted- Amount of Average loan average Most average loans size maturity3 common ( l e p o f e a f r n e c c e t r n i a v t t ) e e " o ( f m d il o l l i l o a n r s s ) (tho d u o s l a la n r d s s ) of Days S c e o c l u la re te d r a b l y p S re u p p b e a n je y a c m lt t y e t n o t c M om ad m e it u m nd e e n r t base r a p te ri 4 c ing LOAN RISK5 1 All commercial and industrial loans 6.61 58,759 387 568 47.4 10.2 23.2 74.2 Prime 2 Minimal risk 6.92 2,466 262 528 74.8 10.1 13.1 92.6 Prime 3 Low risk 5.63 13,533 933 444 24.8 16.2 51.6 87.1 Domestic 4 Moderate risk 6.69 19,535 374 782 51.4 10.2 26.0 80.7 Prime 5 Other 7.28 10,056 245 437 60.4 9.5 12.3 83.6 Prime By maturity/repricing interval6 6 Zero interval 7.24 17,862 344 489 52.1 9.1 5.1 55.9 Prime 7 Minimal risk 6.92 252 268 243 74.9 24.4 18.2 93.5 Prime 8 Low risk 7.13 1,991 486 653 32.3 12.2 19.3 90.9 Prime 9 Moderate risk 7.37 4,490 208 466 50.2 19.8 7.5 94.4 Prime 10 Other 8.01 2,698 136 500 74.0 14.1 5.2 88.2 Prime 11 Daily 6.30 17,512 403 413 40.5 11.3 40.7 91.1 Prime 12 Minimal risk 7.64 1,248 240 506 95.8 7.1 .0 97.5 Prime 13 Low risk 5.23 5,380 2,639 259 16.4 9.2 77.3 96.6 Domestic 14 Moderate risk 6.40 5,460 504 627 43.5 12.8 50.3 94.6 Domestic 15 Other 6.88 3,350 354 283 43.7 8.2 6.0 71.7 Fed funds 16 2 to 30 days 6.01 8,389 547 309 35.5 7.4 22.9 93.4 Other 17 Minimal risk 5.23 474 1,023 212 13.4 10.8 53.4 94.4 Domestic 18 Low risk 5.31 2,052 704 407 21.9 11.5 42.0 94.9 Foreign 19 Moderate risk 5.90 2,675 695 360 32.3 4.4 21.5 96.7 Other 20 Other 6.96 1,961 415 202 62.2 6.8 11.7 89.9 Other 21 31 to 365 days 6.23 9,483 378 615 39.4 5.2 36.9 86.4 Foreign 22 Minimal risk 6.36 301 154 500 68.7 15.1 2.3 73.5 Prime 23 Low risk 5.61 2,908 824 532 11.7 9.5 53.3 88.0 Foreign 24 Moderate risk 6.01 3,385 350 45.8 2.1 38.7 86.5 Foreign 25 Other 7.13 1,652 468 64.0 3.5 38.1 94.3 Foreign 26 More than 365 days 7.61 4,323 325 85.2 Prime 27 Minimal risk . . . 7.23 190 224 100.0 Other 28 Low risk 6.97 390 214 62.3 36.7 8.6 59.0 Other 29 Moderate risk . . 7.62 3,284 632 87.0 1.3 3.4 18.9 Prime 30 Other 8.30 274 120 85.0 7.5 13.5 67.5 Other Weighted- Weighted- average average risk maturity/ rating5 repricing interval6 Days SIZE OF LOAN (thousands of dollars) 31 1-99 8.40 2,787 3.1 149 84.6 25.3 3.0 81.7 Prime 32 100-999 7.73 9,294 3.1 162 77.4 17.4 5.1 82.8 Prime 33 1,000-9,999 6.61 18,986 3.0 52 45.1 8.7 18.0 75.2 Prime 34 10,000 or more 6.06 27,691 2.7 204 35.2 7.4 35.0 70.0 Prime Average size (thousands of dollars) BASE RATE OF LOAN4 35 Prime7 7.90 21,794 3.0 259 72.7 12.4 1.6 65.6 207 36 Fed funds 5.18 6,244 3.0 54 35.5 18.8 34.6 60.0 4,545 37 Other domestic 5.45 7,166 2.5 16 12.1 16.9 70.4 95.3 2,561 38 Foreign 5.96 12,145 2.8 33 38.0 3.5 36.0 75.4 1,526 39 Other 6.35 11,409 3.0 176 37.9 4.4 15.2 84.2 335 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • August 2001 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 2001—Continued C. Commercial and industrial loans made by large domestic banks1 Weighted- Weighted- Amount of loans (percent) average Amount of Average loan average effective loans size maturity ( l p o e a r n c e r n a t t ) e 2 o ( f m d i o ll l i l o a n rs s ) (tho d u o s ll a a n r d s) s of Days S c e o c l u la re te d r a b l y p S re p u p e b a n je y a c m lt t y e t n o t c M om ad m e it u m nd en er t LOAN RISK5 1 All commercial and industrial loans 6.46 52,177 655 558 44.1 9.0 25.6 73.4 2 Minimal risk 6.77 2,006 352 471 75.9 7.2 14.0 95.0 3 Low risk 5.48 12,543 2,018 423 22.1 16.0 55.3 88.0 4 Moderate risk 6.53 17,519 712 760 47.3 8.5 28.0 5 Other 7.14 8,516 381 422 56.6 6.9 13.9 By maturity/repricing interval6 6 Zero interval 7.15 15,112 636 516 47.8 5.8 5.3 50.2 7 Minimal risk 5.71 77 297 325 62.7 26.0 45.3 96.6 8 Low risk 7.15 1,563 1,554 730 27.8 10.4 23.3 95.3 9 Moderate risk 7.21 3,683 342 480 42.3 14.6 7.9 96.2 10 Other 7.96 1,891 222 531 72.1 7.8 5.3 89.3 11 Daily 6.22 16,760 447 403 38.6 11.1 42.4 91.0 12 Minimal risk 7.64 1,243 255 507 95.8 7.1 97.5 13 Low risk 5.16 5,233 4,137 258 15.3 8.7 79.4 96.6 14 Moderate risk 6.28 5,134 601 605 40.2 12.7 53.2 94.7 15 Other 6.82 3,253 364 275 42.2 8.4 6.1 70.9 16 2 to 30 days 5.96 7,591 745 317 34.1 6.7 24.9 93.3 17 Minimal risk 4.75 379 2,552 99 5.5 6.3 58.9 93.7 18 Low risk 5.27 1,973 794 402 22.0 11.8 43.6 95.2 19 Moderate risk 5.83 2,536 1,099 369 30.1 4.4 22.7 96.7 20 Other 6.96 1,723 698 204 59.6 3.5 13.3 90.0 21 31 to 365 days 5.93 8,287 2,031 661 36.2 4.2 42.1 88.9 22 Minimal risk 5.67 192 1,016 667 77.5 5.6 2.8 77.9 23 Low risk 5.49 2,789 2,895 532 9.2 9.7 55.5 89.3 24 Moderate risk 5.77 3,127 2,049 625 43.3 1.6 41.8 87.5 25 Other 6.96 1,420 1,588 775 61.7 1.3 44.2 96.9 26 More than 365 days 3,279 1,474 82.2 1.8 19.8 27 Minimal risk .. . 113 517 100.0 14.7 99.3 28 Low risk 5.45 176 439 25.8 48.9 2.6 49.2 2 3 9 0 M Ot o h d e e r rate risk . . 7 7. . 7 5 2 3 2,8 1 2 1 5 9 3,8 2 3 3 1 0 8 7 5 1 . . 7 8 2. . 8 2 26. . 8 0 8 1 6 1 . . 3 0 Weighted- Weighted- average average risk maturity/ rating5 repricing interval6 Days SIZE OF LOAN (thousands of dollars) 31 1-99 8.05 1,463 3.2 86.2 26.0 1.9 89.0 32 100-999 7.56 6,372 3.2 74.5 15.2 3.8 86.0 33 1,000-9,999 6.56 17,094 3.0 43 43.9 8.2 19.8 73.6 34 10,000 or more 6.05 27,246 2.7 204 34.8 7.2 35.5 69.5 BASE RATE OF LOAN4 35 Prime7 7.81 17,850 3.0 283 70.7 9.6 1.1 61.1 36 Fed funds 5.15 6,141 3.0 20 34.7 18.9 34.4 59.4 37 Other domestic 5.42 7,069 2.5 6 11.5 16.5 71.3 95.5 38 Foreign 5.97 11,355 2.8 33 38.1 3.3 38.4 73.7 39 Other 6.12 9,761 3.0 31.8 3.0 16.7 88.5 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A69 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 2001—Continued D. Commercial and industrial loans made by small domestic banks' Weighted- Amount of loans (percent) Weighted- Amount of Average loan average average loans size maturity3 effective (millions (thousands of Subject to ( l p o e a r n c e r n a t t ) e 2 of dollars) dollars) Days S c e o c l u la re te d r a b l y pre p p e a n y a m lty e nt c M om ad m e i u tm nd e e n r t LOAN RISK3 1 All commercial and industrial loans 7.82 6,582 91 652 74.0 19.6 5.0 2 Minimal risk 7.56 460 125 775 70.1 22.9 9.3 82.1 3 Low risk 7.49 990 119 710 59.1 18.2 5.6 75.6 4 Moderate risk 8.16 2,016 73 986 87.5 24.4 8.7 81.3 5 Other 8.06 1,540 83 518 81.7 23.8 3.4 82.8 By maturity/repricing interval6 6 Zero interval 7.73 2,750 329 75.9 27.1 4.2 86.9 7 Minimal risk 7.44 175 257 212 80.3 23.7 6.4 92.2 8 Low risk 7.06 429 139 313 48.6 18.7 4.7 75.1 9 Moderate risk 8.10 806 75 396 86.5 43.1 5.5 86.3 10 Other 8.13 807 71 430 78.6 28.6 5.0 85.8 11 Daily 8.12 752 125 638 84.2 17.6 3.1 92.0 12 Minimal risk 7.30 5 16 306 100.0 13.4 2.1 89.7 13 Low risk 7.68 148 191 272 54.2 24.4 1.5 97.0 14 Moderate risk 8.17 327 143 1,003 94.5 15.3 5.2 92.3 15 Other 532 95.0 1.9 3.6 98.1 16 2 to 30 days 6.53 799 156 238 48.9 14.1 4.0 94.7 17 Minimal risk 7.16 95 301 663 45.4 28.7 31.7 97.2 18 Low risk 6.09 79 184 521 19.5 1.7 1.4 86.5 19 Moderate risk 7.15 138 90 202 71.9 5.3 .4 97.6 20 Other 6.95 238 105 191 81.0 31.2 .3 89.4 21 31 to 365 days 8.29 1,196 57 295 61.3 11.6 .6 69.2 22 Minimal risk 7.57 109 62 217 53.0 32.0 1.4 65.7 23 Low risk 8.37 119 46 533 68.8 4.1 2.9 58.6 24 Moderate risk 8.82 258 32 393 76.1 8.0 .2 75.4 25 Other 8.20 232 334 77.8 17.0 .9 78.4 26 More than 365 days 8.31 1,043 94 94.9 12.5 61.0 27 Minimal risk .. . 8.35 76 122 100.0 1.9 63.4 28 Low risk 8.23 214 150 92.5 26.6 13.5 67.1 29 Moderate risk .. 8.19 459 103 95.3 8.3 24.4 67.5 30 Other 8.74 155 95.1 11.0 3.4 53.2 Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN (thousands of dollars) 31 1-99 1,324 3.1 257 82.8 24.4 4.2 73.7 32 100-999 8.11 2,922 3.0 409 83.9 22.2 7.8 75.6 33 1,000-9,999 7.05 1,892 2.7 135 56.4 13.0 2.4 89.3 34 10,000 or more 6.36 444 3.4 209 57.8 16.4 100.0 BASE RATE OF LOAN4 35 Prime7 8.28 3,944 3.0 147 81.8 24.7 4.2 86.0 36 Fed funds 7.16 103 3.0 1,782 81.2 13.2 46.6 97.1 37 Other domestic 8.16 97 1.9 726 57.2 46.9 1.6 81.5 38 Foreign 5.82 790 3.2 29 36.6 5.2 1.9 98.9 39 Other 7.72 1,648 3.0 620 73.9 13.1 5.9 58.6 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • August 2001 4.23 TERMS OF LENDING AT COMMERCIAL BANKS Survey of Loans Made, May 7-11, 2001—Continued E. Commercial and industrial loans made by U.S. branches and agencies of foreign banks1 Weighted- Weighted- Amount of loans (percent) average Amount of Average loan average effective loans size maturity ( l p o e a r n c e ra n t t e - o ( f m d il o l l i l o a n r s s ) (tho d u o s l a la n r d s s ) of Days S c e o c l u la re te d r a b l y p S re u p p b e a n je y a c m l t t y e t n o t c M om ad m e it u m nd e e n r t LOAN RISK3 1 All commercial and industrial loans 5.53 33,031 4,226 41 28.5 5.9 41.8 62.3 2 Minimal risk 5.17 2,672 13,100 202 7.6 7.5 21.2 52.1 3 Low risk 5.03 6,431 8,261 19 9.5 4.6 49.5 47.4 4 Moderate risk 5.53 7,032 3,604 29 19.1 5.3 50.8 83.6 5 Other 6.23 8,057 3,029 43 23.9 10.5 36.1 62.5 By maturity/repricing interval6 6 Zero interval 5,643 2,050 96.6 7 Minimal risk 8 Low risk 6.31 24 227 94 24.7 15.7 62.4 90.9 9 Moderate risk 7.80 212 639 200 13.5 4.3 2.9 99.3 10 Other 9.07 544 741 748 13.6 4.5 1.5 98.4 11 Daily 5.49 14,268 9,175 2 12.8 46.5 36.5 12 Minimal risk 5.32 1,690 23,676 1 11.9 11.9 27.0 38.9 13 Low risk 5.11 3,667 17,543 2 3.9 50.5 32.9 14 Moderate risk 5.42 2,808 5,052 1 3.7 10.0 33.8 77.3 15 Other 5.86 3,681 7,764 2 40.8 16.1 27.0 31.1 16 2 to 30 days 5.48 5,782 4,007 23 4.5 60.0 72.8 17 Minimal risk 5.17 379 4,955 15 8.1 100.0 18 Low risk 4.78 1,433 6,291 28 20.8 7.1 51.3 59.6 19 Moderate risk 5.54 1,661 3,394 19 34.1 5.0 79.7 86.3 20 Other 6.36 1,484 3,119 32 4.5 5.0 47.7 87.0 21 31 to 365 days 5.46 7,029 52.4 77.4 22 Minimal risk 23 Low risk 5.06 1,306 5,570 23.5 3.5 44.4 73.9 24 Moderate risk 5.44 2,351 4,166 27.3 .0 55.1 87.9 25 Other 5.98 2,230 2,678 7.4 1.6 53.7 87.4 26 More than 365 days 27 Minimal risk . .. 28 Low risk 29 Moderate risk . . 30 Other Weighted- Weighted- average average risk maturity/ rating5 repricing interval Days SIZE OF LOAN (thousands of dollars) 31 1-99 7.17 52 3.7 67.8 22.0 14.8 88.0 32 100-999 6.35 1,063 3.6 51.1 14.4 36.4 89.1 33 1,000-9,999 5.63 9,766 3.1 29.5 8.9 40.2 77.9 34 10,000 or more 5.45 22,149 2.8 26.8 4.1 42.9 54.1 BASE RATE OF LOAN4 35 Prime7 8.02 2,347 3.4 33.1 44.5 6.6 36 Fed funds 5.20 13,320 2.7 22.8 5.1 20.9 49.1 37 Other domestic 5.59 3,230 2.0 1.3 100.0 .1 38 Foreign 5.33 10,426 2.8 20.9 72.6 96.0 39 Other 5.67 3,708 4.8 90.7 2.2 51.8 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Financial Markets A71 NOTES TO TABLE 4.23 NOTE. The Survey of Terms of Business Lending collects data on gross loan extensions 5. A complete description of these risk categories is available from the Banking Analysis made during the first full business week in the mid-month of each quarter. The authorized Section, Mail Stop 81, Board of Governors of the Federal Reserve System, Washington, DC panel size for the survey is 348 domestically chartered commercial banks and 50 U.S. 20551. The category "Moderate risk" includes the average loan, under average economic branches and agencies of foreign banks. The sample data are used to estimate the terms of conditions, at the typical lender. The category "Other" includes loans rated "acceptable" as loans extended during that week at all domestic commercial banks and all U.S. branches and well as special mention or classified loans. The weighted-average risk ratings published for agencies of foreign banks. Note that the terms on loans extended during the survey week may loans in rows 31-39 are calculated by assigning a value of "1" to minimal risk loans; "2" to differ from those extended during other weeks of the quarter. The estimates reported here are low risk loans; "3" to moderate risk loans, "4" to acceptable risk loans; and "5" to special not intended to measure the average terms on all business loans in bank portfolios. mention and classified loans. These values are weighted by loan amount and exclude loans 1. As of December 31, 1996, assets of most of the large banks were at least $7.0 billion. with no risk rating. Some of the loans in lines 1, 6, 11, 16, 21, 26, and 31-39 are not rated for Median total assets for all insured banks were roughly $62 million. Assets at all U.S. branches risk. and agencies averaged 1.3 billion. 6. The maturity/repricing interval measures the period from the date the loan is made until it 2. Effective (compounded) annual interest rates are calculated from the stated rate and first may reprice or it matures. For floating-rate loans that are subject to repricing at any other terms of the loans and weighted by loan amount. The standard error of the loan rate for time—such as many prime-based loans—the maturity/repricing interval is zero. For floating-rate all commercial and industrial loans in the current survey (line 1, column 1) is 0.13 percentage loans that have a scheduled repricing interval, the maturity/repricing interval measures the number point. The chances are about two out of three that the average rate shown would differ by less of days between the date the loan is made and the date on which it is next scheduled to reprice. For than this amount from the average rate that would be found by a complete survey of the loans having rates that remain fixed until the loan matures (fixed-rate loans), the maturity/repricing universe of all banks. interval measures the number of days between the date the loan is made and the date on which it 3. Average maturities are weighted by loan amount and exclude loans with no stated matures. Loans that reprice daily mature or reprice on the business day after they are made. Owing maturities. to weekends and holidays, such loans may have maturity/repricing intervals in excess of one day; 4. The most common base pricing rate is that used to price the largest dollar volume of such loans are not included in the "2 to 30 day" category. loans. Base pricing rates include the prime rate (sometimes referred to as a bank's "base" or 7. For the current survey, the average reported prime rate, weighted by the amount of "reference" rate); the federal funds rate; domestic money market rates other than the prime loans priced relative to a prime base rate, was 7.55 percent for all banks; 7.54 percent for rate and the federal funds rate; foreign money market rates; and other base rates not included large domestic banks, 7.63 percent for small domestic banks; and 7.50 percent for U.S. in the foregoing classifications. branches and agencies of foreign banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • August 2001 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2001'—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm in I c T B l o u F t d a s i l 3 n g o IB nl F y s ' inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u F t d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 1 Total assets4 1,016,396 193,606 861,083 166,776 24,660 5,330 44,580 5,263 2 Claims on nonrelated parties 798,218 77,433 666,120 68,788 23,959 1,508 44,580 2,758 3 Cash and balances due from depository institutions 69,417 32,333 65,260 29,401 539 125 2,769 2,625 4 Cash items in process of collection and unposted debits 1,612 0 1,537 0 7 0 26 0 5 Currency and coin (U.S. and foreign) 13 n.a. 9 n.a. 1 0 6 Balances with depository institutions in United States 4466,,884477 1133,,888899 4444,,884499 1122,,990088 501 112 815 771155 / U.S. branches and agencies of other foreign banks (including IBFs) 40.097 13,034 38,740 12,390 300 91 499 415 8 Other depository institutions in United States (including IBFs) . . . 66,,775500 854 66,,110099 519 202 21 331166 330000 9 Balances with banks in foreign countries and with foreign central banks 20,478 18,444 18,509 16,493 15 13 1,912 1,910 10 Foreign branches of U.S. banks 318 191 316 191 0 00 0 0 11 Banks in home country and home-country central banks 5,594 5,328 5,586 5,320 8 88 0 0 12 All other banks in foreign countries and foreign central banks .... 14,566 12,925 12,607 10,982 7 5 1,912 1,910 13 Balances with Federal Reserve Banks 467 n.a. 355 n.a. 15 n.a. 17 n.a. 14 Total securities and loans 450,399 36,478 362,510 31,094 22,653 1,339 30,016 30 15 Total securities, book value 106,655 3,869 98,500 3,386 1,195 439 4,871 11 16 U.S. Treasury 10,770 n.a. 10,210 n.a. 44 n.a. 497 n.a. 17 Obligations of U.S. government agencies and corporations 4466,,117755 n.a. 4444,,005522 n.a. 179 11,,881122 nn..aa.. IS Other bonds, notes, debentures, and corporate stock (including state and local securities) 49,710 3,869 44,239 3,386 972 439 2,562 11 iy Securities of foreign governmental units 9,441 1,784 9,234 1,720 164 51 11 11 20 All Other 40,270 2,085 35,005 1,665 808 388 2,550 0 21 Federal funds sold and securities purchased under agreements to resell 125,886 6,480 123,869 6,314 287 19 1,075 75 22 U.S. branches and agencies of other foreign banks 11,286 3,189 11,039 3,128 93 19 0 0 23 Commercial banks in United States 15,903 11 15,429 10 115 0 0 0 24 Other 98,697 3,280 97,401 3,176 79 0 1,075 75 25 Total loans, gross 344,099 32,650 264,292 27,747 21,487 901 25,159 19 26 LESS: Unearned income on loans 354 41 282 39 29 1 13 0 2/ EQUALS: Loans, net 343,744 32,609 264,010 27,709 21,458 900 25,145 19 Total loans, gross, by category 28 Real estate loans 16,966 52 12,417 52 2,976 0 134 0 19 Loans to depository institutions 26,454 15,330 20,732 12,180 11,,118877 718 682 16 30 Commercial banks in United States (including IBFs) 7,130 2,208 5,436 1,739 886600 403 432 0 31 U.S. branches and agencies of other foreign banks 4,116 1,997 2,771 1,529 844 403 250 0 32 Other commercial banks in United States 3,014 211 2,665 210 15 0 182 0 33 Other depository institutions in United States (including IBFs) 14 0 0 0 0 0 0 0 34 Banks in foreign countries 19,310 13,123 15,296 10,441 328 315 250 16 35 Foreign branches of U.S. banks 320 271 273 231 40 40 0 0 36 Other banks in foreign countries 18,990 12,852 15,023 10,210 288 275 250 16 37 Loans to other financial institutions 49,066 1,570 39,714 1,408 986 0 4,775 0 38 Commercial and industrial loans 225,057 13,447 168,296 11,989 15,657 161 17,955 0 39 U.S. addressees (domicile) 185,407 30 138,970 30 14,509 0 15,612 0 40 Non-U.S. addressees (domicile) 39,650 13,417 29,326 11,959 1,149 161 2,343 0 41 Acceptances of other banks 606 18 147 18 40 0 420 0 42 U.S. banks 8 0 3 0 5 0 0 0 43 Foreign banks 599 18 144 18 35 0 420 0 44 Loans to foreign governments and official institutions (including foreign central banks) 3.820 2,151 3,186 2,036 234 22 244 3 45 Loans for purchasing or carrying securities (secured and unsecured) . . . 13,956 0 13,298 0 0 0 330 0 46 All other loans 7,557 81 6,235 64 406 0 271 0 47 Lease financing receivables (net of unearned income) 616 0 268 0 0 0 348 0 48 U.S. addressees (domicile) 616 0 268 0 0 0 348 0 49 Non-U.S. addressees (domicile) 0 0 0 0 0 0 0 0 50 Trading assets 116,623 666 82,128 665 74 0 8,890 1 51 All other assets 35,892 1,476 32,352 1,314 406 24 1,829 28 52 Customers' liabilities on acceptances outstanding 1,314 n.a. 975 n.a. 52 n.a. 230 n.a. 53 U.S. addressees (domicile) 552 n.a. 474 n.a. 50 n.a. 7 n.a. 54 Non-U.S. addressees (domicile) 761 n.a. 501 n.a. 2 n.a. 223 n.a. 55 Other assets including other claims on nonrelated parties 34,579 1,476 31,377 1,314 354 24 1,599 28 5 5 / 6 Ne N t e d t u e d u f e r o f m ro m re l h at e e a d d d o e f p fi o c s e i t a o n r d y o in th s e ti r t u r t e i l o a n te s5 d depository institutions5. . . 2 2 21 1 18 8 8, , ,1 1 17 7 7 8 88 11 n 6 . , a 1 . 7 3 1 1 19 9 94 4 4, , ,9 9 96 6 63 3 3 9 n 7 . , a 9 . 8 8 7 7 0 0 1 1 3 n ,8 .a 2 . 3 0 0 2,504 58 Net due from establishing entity, head office, and other related depository institutions5 n.a. 116,173 n.a. 97,988 n.a. 3,823 n.a. 2,504 59 Total liabilities4 1,016,396 193,606 861,083 166,776 24,660 5,330 44,580 5,263 60 Liabilities to nonrelated parties 901,292 175,584 785,729 150,468 9,420 5,225 38,058 4,318 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A73 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2001'—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 exc T IB l o u F t d a s i l n g I o B n F ly s exc T IB l o u t F d a s i l n g I o B n F ly s exc T IB l o u F t d a s i l n g I o B n F ly s 61 Total deposits and credit balances 395,882 130,842 339,069 118,356 2,675 1,227 13,477 2,369 62 Individuals, partnerships, and corporations 302,025 11,250 253,143 6,006 2,309 154 12,533 40 63 U.S. addressees (domicile) 285,675 1 242,669 0 640 0 12,479 0 64 Non-US. addressees (domicile) 16,350 11,249 10,473 6,006 l,t 68 154 54 40 65 Commercial banks in United States (including IBFs) 45,673 13,212 41,160 12,934 314 140 478 61 66 U.S. branches and agencies of other foreign banks 21,576 11,715 19,217 11,484 0 120 75 61 67 Other commercial banks in United States 24,097 1,497 21,942 1,450 314 20 403 0 68 Banks in foreign countries 11,339 80,500 11,093 78,391 10 102 0 572 69 Foreign branches of U.S. banks 1,723 3,719 1,723 3,714 0 5 0 0 70 Other banks in foreign countries 9,616 76,781 9,370 74,676 10 97 0 572 71 Foreign governments and official institutions (including foreign central banks) 18,401 25,780 16,018 20,927 11 832 465 1,696 72 All other deposits and credit balances 18,283 99 17,518 99 27 0 0 0 73 Certified and official checks 161 137 4 1 74 Transaction accounts and credit balances (excluding IBFs) 7,664 6,079 285 315 75 Individuals, partnerships, and corporations 6,372 4,967 268 313 76 U.S. addressees (domicile) 3,876 3,258 164 299 77 Non-U.S. addressees (domicile) 2,496 1,709 104 14 78 Commercial banks in United States (including IBFs) 61 58 0 0 79 U.S. branches and agencies of other foreign banks 22 21 0 0 80 Other commercial banks in United States 39 37 0 0 81 Banks in foreign countries 498 393 10 0 82 Foreign branches of U.S. banks 6 6 0 0 83 Other banks in foreign countries 493 387 10 0 84 Foreign governments and official institutions (including foreign central banks) 329 301 1 0 85 AH other deposits and credit balances 243 223 1 0 86 Certified and official checks 161 137 4 1 87 Demand deposits (included in transaction accounts and credit balances) 7,079 5,734 215 313 88 Individuals, partnerships, and corporations 5,958 4,778 199 310 89 U.S. addressees (domicile) 3,741 3,198 140 296 90 Non-U.S. addressees (domicile) 2,217 1,580 58 14 91 Commercial banks in United States (including IBFs) 44 n.a. 42 n a. 0 n.a. 0 n.a. 92 U.S. branches and agencies of other foreign banks 12 12 0 0 93 Other commercial banks in United States 32 30 0 0 94 Banks in foreign countries 485 380 10 0 95 Foreign branches of U.S. banks 4 4 0 0 96 Other banks in foreign countries 481 376 10 0 97 Foreign governments and official institutions (including foreign central banks) 312 284 1 0 98 All other deposits and credit balances 119 114 1 0 99 Certified and official checks 161 137 4 1 100 Nontransaction accounts (including MMDAs, excluding IBFs) 388,218 332,990 2,390 13,161 101 Individuals, partnerships, and corporations 295,653 248,176 2,040 12,219 102 U.S. addressees (domicile) 281,799 239,412 476 12,180 103 Non-U.S. addressees (domicile) 13,854 8,764 1,564 39 104 Commercial banks in United States (including IBFs) 45,612 41,101 314 478 105 US. branches and agencies of other foreign banks 21,554 19,196 0 75 106 Other commercial banks in United States 24,058 21,905 314 403 107 Banks in foreign countries 10,841 10,701 0 0 108 Foreign branches of U.S. banks 1,717 1,717 0 0 109 Other banks in foreign countries 9,124 8,983 0 0 110 Foreign governments and official institutions (including foreign central banks) 18,071 15,717 10 464 111 All other deposits and credit balances 18,040 17,295 26 0 112 IBF deposit liabilities 130,842 118,356 1,227 2,369 113 Individuals, partnerships, and corporations 11,250 6,006 154 40 114 U.S. addressees (domicile) 1 0 0 0 115 Non-U.S. addressees (domicile) 11,249 6,006 154 40 116 Commercial banks in United States (including IBFs) 13,212 12,934 140 61 117 U.S. branches and agencies of other foreign banks 11,715 11,484 120 61 118 Other commercial banks in United States n.a. 1,497 n.a. 1,450 n.a. 20 n.a. 0 119 Banks in foreign countries 80,500 78,391 102 572 120 Foreign branches of U.S. banks 3,719 3,714 5 0 121 Other banks in foreign countries 76.781 74.676 97 572 122 Foreign governments and official institutions (including foreign central banks) 25.780 20.927 832 1,696 123 All other deposits and credit balances 99 99 0 0 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • August 2001 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2001'—Continued Millions of dollars except as noted All states- New York California Illinois IItteemm in I c T B l o u F t d a s i l 3 n g o IB nl F y s 5 inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s inc T I l B o u t F d a s i l n g I o B n F ly s 124 Federal funds purchased and securities sold under agreements to repurchase 187,047 22,149 175,353 14,803 941 312 5,161 1,642 125 U.S. branches and agencies of other foreign banks 12,637 4,114 10,251 2,419 162 47 969 393 17.6 Other commercial banks in United States 18,550 1,734 16,529 856 351 45 1,138 333 177 Other 155,859 16,301 148,573 11,529 428 220 3,054 917 128 Other borrowed money 75,248 20,428 59,010 15,266 4,324 3,646 6,434 296 129 Owed to nonrelated commercial banks in United States (including IBFs) 11,245 4,066 9,540 3,548 748 436 269 2 no Owed to U.S. offices of nonrelated U.S. banks 5,085 660 4,606 621 57 35 154 0 131 Owed to U.S. branches and agencies of nonrelated foreign banks 6,160 3,407 4,935 2,926 691 401 115 2 132 Owed to nonrelated banks in foreign countries 14,746 12,297 10,521 8,170 2,731 2,700 297 294 133 Owed to foreign branches of nonrelated U.S. banks 780 704 474 410 282 282 0 0 134 Owed to foreign offices of nonrelated foreign banks 13,966 11,593 10,047 7,760 2,449 2,418 297 294 135 Owed to others 49,257 4,065 38,949 3,548 846 510 5,868 0 136 All other liabilities 112,275 2,165 93,940 2,042 253 39 10,617 11 137 Branch or agency liability on acceptances executed and outstanding 1,685 n.a. 1,214 n.a. 52 n. a. 359 n.a. 138 Trading liabilities 78,583 68 64,191 66 51 0 8,987 2 139 Other liabilities to nonrelated parties 32,007 2,097 28,536 1,976 150 39 1,271 9 140 Net due to related depository institutions5 115,104 18,022 75,355 16,308 15,240 106 6,522 945 141 Net due to head office and other related depository institutions5 .... 115,104 n.a. 75,355 n.a. 15,240 n.a. 6,522 n.a. 142 Net due to establishing entity, head office, and other related depository institutions5 n.a. 18,022 n.a. 16,308 n.a. 106 n.a. 945 MEMO 143 Non-interest-bearing balances with commercial banks in United States 1,605 0 1,521 0 33 0 5 0 144 Holding of own acceptances included in commercial and industrial loans 1,725 •> 1,353 •> 95 •> 201 •• 145 Commercial and industrial loans with remaining maturity of one year or less (excluding those in nonaccrual status) 111,973 76,241 7,927 13,879 146 Predetermined interest rates 61,201 n.a. 38,105 n.a. 4,046 n.a. 11,434 n.a. 147 Floating interest rates 5500,,777722 3388,,113366 3,881 2,446 148 Commercial and industrial loans with remaining maturity of more than one year (excluding those in nonaccrual status) 109,547 89,235 7,367 4,049 149 Predetermined interest rates 24,300 21,035 937 496 150 Floating interest rates 85,247 68,200 6,430 3,553 Footnotes appear at end of table. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

U.S. Branches and Agencies A75 4.30 ASSETS AND LIABILITIES of U.S. Branches and Agencies of Foreign Banks, March 31, 2001'—Continued Millions of dollars except as noted All states2 New York California Illinois IItteemm ex I c T B l o u F t d a s i l 3 n g o IB nl F y s 3 exc T IB l o u F t d a s i l n g I o B n F ly s exc T IB l o u F t d a s i l n g I o B n F ly s exc T IB l o u F t d a s i l n g I o B n F ly s 111155551111 CCCCoooommmmppppoooonnnneeeennnnttttssss ooooffff ttttoooottttaaaallll nnnnoooonnnnttttrrrraaaannnnssssaaaaccccttttiiiioooonnnn aaaaccccccccoooouuuunnnnttttssss,,,, iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ttttoooottttaaaallll ddddeeeeppppoooossssiiiittttssss aaaannnndddd ccccrrrreeeeddddiiiitttt bbbbaaaallllaaaannnncccceeeessss ((((eeeexxxxcccclllluuuuddddiiiinnnngggg IIIIBBBBFFFFssss)))) 387,041 n.a. 333,154 n.a. 2,205 n.a. 13,093 n.a. 111155552222 TTTTiiiimmmmeeee ddddeeeeppppoooossssiiiittttssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee 383,382 n.a. 329,561 n.a. 2,205 n.a. 13,091 n.a. 111155553333 TTTTiiiimmmmeeee CCCCDDDDssss iiiinnnn ddddeeeennnnoooommmmiiiinnnnaaaattttiiiioooonnnnssss ooooffff $$$$111100000000,,,,000000000000 oooorrrr mmmmoooorrrreeee wwwwiiiitttthhhh rrrreeeemmmmaaaaiiiinnnniiiinnnngggg mmmmaaaattttuuuurrrriiiittttyyyy ooooffff mmmmoooorrrreeee tttthhhhaaaannnn 11112222 mmmmoooonnnntttthhhhssss 3,659 n.a. 3,593 n.a. 0 n.a. 2 n.a. All states2 New York California Illinois inc T l o u t d a i l n g IBFs inc T l o u t d a i l n g IBFs inc T l o u t d a i l n g IBFs inc T l o u t d a i l n g IBFs IBFs only IBFs only IBFs only IBFs only 111155554444 IIIImmmmmmmmeeeeddddiiiiaaaatttteeeellllyyyy aaaavvvvaaaaiiiillllaaaabbbblllleeee ffffuuuunnnnddddssss wwwwiiiitttthhhh aaaa mmmmaaaattttuuuurrrriiiittttyyyy ggggrrrreeeeaaaatttteeeerrrr tttthhhhaaaannnn oooonnnneeee ddddaaaayyyy iiiinnnncccclllluuuuddddeeeedddd iiiinnnn ooootttthhhheeeerrrr bbbboooorrrrrrrroooowwwweeeedddd mmmmoooonnnneeeeyyyy 26,775 n.a. 23,148 n.a. 2,365 n.a. 597 n.a. 111155555555 NNNNuuuummmmbbbbeeeerrrr ooooffff rrrreeeeppppoooorrrrttttssss ffffiiiilllleeeedddd6666 334 0 173 0 68 0 26 0 1. Data are aggregates of categories reported on the quarterly form FFIEC 002, "Report of either because the item is not an eligible IBF asset or liability or because that level of detail is Assets and Liabilities of U.S. Branches and Agencies of Foreign Banks." The form was first not reported for IBFs. From December 1981 through September 1985, IBF data were used for reporting data as of June 30, 1980, and was revised as of December 31, 1985. From included in all applicable items reported. November 1972 through May 1980, U.S. branches and agencies of foreign banks had filed a 4. Total assets and total liabilities include net balances, if any, due from or owed to related monthly FR 886a report. Aggregate data from that report were available through the Federal banking institutions in the United States and in foreign countries (see note 5). On the former Reserve monthly statistical release G.l 1, last issued on July 10, 1980. Data in this table and in monthly branch and agency report, available through the G. 11 monthly statistical release, the G. 11 tables are not strictly comparable because of differences in reporting panels and in gross balances were included in total assets and total liabilities. Therefore, total asset and total definitions of balance sheet items. liability figures in this table are not comparable to those in the G.l 1 tables. 2. Includes the District of Columbia. 5. Related depository institutions includes the foreign head office and other U.S. and 3. Effective December 1981, the Federal Reserve Board amended Regulations D and Q to foreign branches and agencies of a bank, a bank's parent holding company, and majoritypermit banking offices located in the United States to operate international banking facilities owned banking subsidiaries of the bank and of its parent holding company (including (IBFs). Since December 31, 1985, data for IBFs have been reported in a separate column. subsidiaries owned both directly and indirectly). These data are either included in or excluded from the total columns as indicated in the 6. In some cases, two or more offices of a foreign bank within the same metropolitan area headings. The notation "n.a." indicates that no IBF data have been reported for that item, file a consolidated report. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • August 2001 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES A. Pro forma balance sheet Millions of dollars Item Mar. 31, 2001 Mar. 31, 2000 Short-term assets (Note 1) Imputed reserve requirement on clearing balances 649.6 640.9 Investment in marketable securities 5,846.0 5.768.1 Receivables 78.7 80.5 Materials and supplies 3.3 3.5 Prepaid expenses 41.3 32.9 Items in process of collection 4,045.3 2.823.2 Total short-term assets 10,664.2 9,349.1 Long-term assets (Note 2) Premises 465.4 440.2 Furniture and equipment 170.6 167.5 Leases and leasehold improvements 74.6 48.1 Prepaid pension costs 685.0 571.7 Total long-term assets 1,395.6 1,227.5 Total assets 12,059.8 10,576.6 Short-term liabilities Clearing balances and balances arising from early credit of uncollected items 6,922.7 6,173.2 Deferred-availability items 3,618.1 3,059.0 Short-term debt and payables 123.4 116.8 Total short-term liabilities 10,664.2 9,349.1 Long-term liabilities Long-term debt 481.1 390.5 Postretirement/postemployment benefits obligation 247.4 236.4 Total long-term liabilities 728.5 626.9 Total liabilities 11,392.7 9,976.0 Equity 667.1 600.6 Total liabilities and equity (Note 3) 12,059.8 10,576.6 NOTE. Components may not sum to totals because of rounding. The priced services (2) LONG-TERM ASSETS financial statements consist of these tables and the accompanying notes. Consists of long-term assets used solely in priced services, the priced-services portion of (L) SHORT-TERM ASSETS long-term assets shared with nonpriced services, and an estimate of the assets of the Board of Governors used in the development of priced services. Effective Jan. 1, 1987, the Reserve The imputed reserve requirement on clearing balances held at Reserve Banks by depository Banks implemented the Financial Accounting Standards Board's Statement of Financial institutions reflects a treatment comparable to that of compensating balances held at corre- Accounting Standards No. 87, Employers' Accounting for Pensions (SFAS 87). Accordingly, spondent banks by respondent institutions. The reserve requirement imposed on respondent the Federal Reserve Banks recognized credits to expenses of $25.2 million in the first quarter balances must be held as vault cash or as nonearning balances maintained at a Reserve Bank; of 2001, and $28.9 million in the first quarter of 2000, and corresponding increases in this thus, a portion of priced services clearing balances held with the Federal Reserve is shown as asset account. required reserves on the asset side of the balance sheet. The remainder of clearing balances is assumed to be invested in three-month Treasury bills, shown as investment in marketable securities. (3) LIABILITIES AND EQUITY Receivables are (1) amounts due the Reserve Banks for priced services and (2) the share of Under the matched-book capital structure for assets that are not "self-financing," short-term suspense-account and difference-account balances related to priced services. assets are financed with short-term debt and payables. Long-term assets are financed with Materials and supplies are the inventory value of short-term assets. long-term debt and equity in a proportion equal to the ratio of long-term debt to equity for the Prepaid expenses include salary advances and travel advances for priced-service personnel. fifty largest bank holding companies, which are used in the model for the private-sector Items in process of collection is gross Federal Reserve cash items in process of collection adjustment factor (PSAF). The PSAF consists of the taxes that would have been paid and the (CIPC) stated on a basis comparable to that of a commercial bank. It reflects adjustments for return on capital that would have been provided had priced services been furnished by a intra-System items that would otherwise be double-counted on a consolidated Federal private-sector firm. Other short-term liabilities include clearing balances maintained at Reserve balance sheet; adjustments for items associated with non-priced items, such as those Reserve Banks and deposit balances arising from float. Other long-term liabilities consist of collected for government agencies; and adjustments for items associated with providing fixed obligations on capital leases. availability or credit before items are received and processed. Among the costs to be recovered under the Monetary Control Act is the cost of float, or net CIPC during the period (the difference between gross CIPC and deferred-availability items which is the portion of gross CIPC that involves a financing cost), valued at the federal funds rate. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Bank-Reported Data All 4.31 PRO FORMA FINANCIAL STATEMENTS FOR FEDERAL RESERVE PRICED SERVICES B. Pro forma income statement Millions of dollars Item Quarter ending Mar. 31, 2001 Quarter ending Mar. 31, 2000 Revenue from services provided to depository institutions (Note 4) 230.8 211.5 Operating expenses (Note 5) 197.9 172.8 Income from operations 32.9 38.8 Inputed costs (Note 6) Interest on float 3.2 2.8 Interest on debt 8.0 7.9 Sales taxes 2.8 2.3 FDIC insurance 0.0 14.0 0.0 13.0 Income from operations after imputed costs 18.9 25.8 Other income and expenses (Note 7) Investment income on clearing balances 80.9 104.9 Earnings credits (78.8) 2.1 (88.4) 16.4 Income before income taxes 21.0 42.2 Inputed income taxes (Note 8) 6.6 13.3 Net income 14.4 28.9 MEMO Targeted return on equity (Note 9) 27.3 24.6 NOTE. Components may not sum to totals because of rounding. The priced services Unrecovered float includes float generated by services to government agencies and by other financial statements consist of these tables and the accompanying notes. central bank services. Float recovered through income on clearing balances is the result of the increase in investable clearing balances; the increase is produced by a deduction for float for cash items in process of collection, which reduces imputed reserve requirements. The income (4) REVENUE on clearing balances reduces the float to be recovered through other means. As-of adjustments Revenue represents charges to depository institutions for priced services and is realized from are memorandum adjustments to an institution's reserve or clearing position to recover float each institution through one of two methods: direct charges to an institution's account or incurred by the institution. Direct charges are billed to the institution for float incurred when charges against its accumulated earnings credits. an institution chooses to close on a normal business day and for float incurred on interterritory check transportation. Float recovered through direct charges is valued at cost using the federal funds rate and charged directly to an institution's account. Float recovered through per-item (5) OPERATING EXPENSES fees is valued at the federal funds rate and has been added to the cost base subject to recovery Operating expenses consist of the direct, indirect, and other general administrative expenses in the first quarter of 2001 and 2000. of the Reserve Banks for priced services plus the expenses for staff members of the Board of Governors working directly on the development of priced services. The expenses for Board (7) OTHER INCOME AND EXPENSES staff members were $1.2 million in the first quarter of 2001 and $1.05 million in the first quarter of 2000. The credit to expenses under SFAS 87 (see note 2) is reflected in operating Consists of imputed investment income on clearing balances and the actual cost of earnings expenses. credits. Investment income on clearing balances represents the average coupon-equivalent yield on three-month Treasury bills applied to the total clearing balance maintained, adjusted for the effect of reserve requirements on clearing balances. Expenses for earnings credits (6) IMPUTED COSTS granted to depository institutions on their clearing balances are derived by applying the Imputed costs consist of interest on float, interest on debt, sales taxes, and the FDIC average federal funds rate to the required portion of the clearing balances, adjusted for the net assessment. Interest on float is derived from the value of float to be recovered, either effect of reserve requirements on clearing balances. explicitly or through per-item fees, during the period. Float costs include costs for checks, book-entry securities, noncash collection, ACH, and funds transfers. (8) INCOME TAXES Interest is imputed on the debt assumed necessary to finance priced-service assets. The sales taxes and FDIC assessment that the Federal Reserve would have paid had it been a Imputed income taxes are calculated at the effective tax rate derived from the PSAF model private-sector firm are among the components of the PSAF (see note 3). (see note 3). Float costs are based on the actual float incurred for each priced service, multiplied by the appropriate federal funds rate. Other imputed costs are allocated among priced services (9) RETURN ON EQUITY according to the ratio of operating expenses less shipping expenses for each service to the total expenses for all services less the total shipping expenses for all services. Represents the after-tax rate of return on equity that the Federal Reserve would have earned The following list shows the daily average recovery of float (before converting to float had it been a private business firm, as derived from the PSAF model (see note 3). costs) by the Reserve Banks for the first quarter of 2001 and 2000 in millions of dollars: 2001 2000 Total float 797.5 222.9 Unrecovered float 61.0 (436.5) Float subject to recovery 736.5 659.4 Sources of float recovery: Income on clearing balances 73.4 66.0 As-of adjustments 512.2 451.7 Direct charges 424.2 311.3 Per-item fees (273.4) (169.6) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

78 Federal Reserve Bulletin • August 2001 Index to Statistical Tables References are to pages A3-A77, although the prefix "A" is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Federal credit agencies, 30 Assets and liabilities (See also Foreigners) Federal finance Commercial banks, 15-21, 64-65 Debt subject to statutory limitation, and types and ownership Domestic finance companies, 32, 33 of gross debt, 27 Federal Reserve Banks, 10 Receipts and outlays, 25, 26 Foreign banks, U.S. branches and agencies, 72-5 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, 72-5 (See also Foreigners) Bonds (See also U.S. government securities) Federal National Mortgage Association, 30, 34, 35 New issues, 31 Federal Reserve Banks Rates, 23 Balance sheet, priced services, 76, 77 Business activity, nonfinancial, 42 Condition statement, 10, 77 Business loans (See Commercial and industrial loans) Discount rates (See Interest rates) U.S. government securities held, 5, 10, 11, 27 Federal Reserve credit, 5, 6, 10, 12 CAPACITY utilization, 43 Federal Reserve notes, 10 Capital accounts Federal Reserve System Commercial banks, 15-21, 64-65 Balanced sheet for priced services, 76, 77 Federal Reserve Banks, 10 Condition statement for priced services, 76, 77 Certificates of deposit, 23 Federally sponsored credit agencies, 30 Commercial and industrial loans Finance companies Commercial banks, 15-21, 64-65, 66-71 Assets and liabilities, 32 Weekly reporting banks, 17, 18 Business credit, 33 Commercial banks Loans, 36 Assets and liabilities, 15-21, 64-65 Paper, 22, 23 Commercial and industrial loans, 15-21, 64-65, 66-71 Float, 5 Consumer loans held, by type and terms, 36, 66-71 Flow of funds, 37^11 Real estate mortgages held, by holder and property, 35 Foreign banks, U.S. branches and agencies, 71-5 Terms of lending, 64-65 Foreign currency operations, 10 Time and savings deposits, 4 Foreign deposits in U.S. banks, 5 Commercial paper, 22, 23, 32 Foreign exchange rates, 62 Condition statements (See Assets and liabilities) Foreign-related institutions, 20 Construction, 42, 46 Foreign trade, 51 Consumer credit, 36 Foreigners Consumer prices, 42 Claims on, 52, 55-7, 59 Consumption expenditures, 48, 49 Liabilities to, 51^1, 58, 60, 61 Corporations Profits and their distribution, 32 Security issues, 31, 61 GOLD Cost of living (See Consumer prices) Certificate account, 10 Credit unions, 36 Stock, 5, 51 Currency in circulation, 5, 13 Government National Mortgage Association, 30, 34, 35 Customer credit, stock market, 24 Gross domestic product, 48, 49 DEBT (See specific types of debt or securities) HOUSING, new and existing units, 46 Demand deposits, 15—21 Depository institutions Reserve requirements, 8 INCOME and expenses, Federal Reserve System, 76, 77 Reserves and related items, 4—6, 12, 64-65 Income, personal and national, 42, 48, 49 Deposits (See also specific types) Industrial production, 42, 44 Commercial banks, 4, 15-21, 64-65 Insurance companies, 27, 35 Federal Reserve Banks, 5, 10 Interest rates Discount rates at Reserve Banks and at foreign central banks and Bonds, 23 foreign countries (See Interest rates) Commercial banks, 66-71 Discounts and advances by Reserve Banks (See Loans) Consumer credit, 36 Dividends, corporate, 32 Federal Reserve Banks, 7 Money and capital markets, 23 Mortgages, 34 EMPLOYMENT, 42 Prime rate, 22, 66-71 Euro, 62 International capital transactions of United States, 50-61 International organizations, 52, 53, 55, 58, 59 FARM mortgage loans, 35 Inventories, 48 Federal agency obligations, 5, 9-11, 28, 29 Investment companies, issues and assets, 32 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

79 Investments (See also specific types) Residential mortgage loans, 34, 35 Commercial banks, 4, 15-21, 66-71 Retail credit and retail sales, 36, 42 Federal Reserve Banks, 10, 11 Financial institutions, 35 SAVING Flow of funds, 37-41 LABOR force, 42 National income accounts, 48 Life insurance companies (See Insurance companies) Savings deposits (See Time and savings deposits) Loans (See also specific types) Savings institutions, 35, 36, 37^4-1 Commercial banks, 15-21, 64-65, 66-71 Securities (See also specific types) Federal Reserve Banks, 5-7, 10, 11 Federal and federally sponsored credit agencies, 30 Federal Reserve System, 76, 77 Foreign transactions, 60 Financial institutions, 35 New issues, 31 Foreign banks, U.S. branches and agencies, 72 Prices, 24 Insured or guaranteed by United States, 34, 35 Special drawing rights, 5, 10, 50, 51 State and local governments MANUFACTURING Holdings of U.S. government securities, 27 Capacity utilization, 43 New security issues, 31 Production, 43, 45 Rates on securities, 23 Margin requirements, 24 Stock market, selected statistics, 24 Member banks, reserve requirements, 8 Stocks (See also Securities) Mining production, 45 New issues, 31 Mobile homes shipped, 46 Prices, 24 Monetary and credit aggregates, 4, 12 Money and capital market rates, 23 Student Loan Marketing Association, 30 Money stock measures and components, 4, 13 Mortgages (See Real estate loans) TAX receipts, federal, 26 Mutual funds, 13, 32 Thrift institutions, 4 (See also Credit unions and Savings Mutual savings banks (See Thrift institutions) institutions) Time and savings deposits, 4, 13, 15-21, 64—65 NATIONAL defense outlays, 26 Trade, foreign, 51 National income, 48 Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 OPEN market transactions, 9 Treasury operating balance, 25 UNEMPLOYMENT, 42 PERSONAL income, 49 U.S. government balances Priced services, Federal Reserve income statements, 76, 77 Commercial bank holdings, 15-21 Prices Treasury deposits at Reserve Banks, 5, 10, 25 Consumer and producer, 42, 47 U.S. government securities Stock market, 24 Bank holdings, 15-21, 27 Prime rate, 22, 66-71 Dealer transactions, positions, and financing, 29 Producer prices, 42, 47 Federal Reserve Bank holdings, 5, 10, 11, 27 Production, 42, 44 Foreign and international holdings and transactions, 10, 27, 61 Profits, corporate, 32 Open market transactions, 9 Outstanding, by type and holder, 27, 28 REAL estate loans Rates, 23 Banks, 15-21, 35 U.S. international transactions, 50-62 Terms, yields, and activity, 34 Utilities, production, 45 Type and holder and property mortgaged, 35 Reserve requirements, 8 VETERANS Administration, 34, 35 Reserves Commercial banks, 15-21 WEEKLY reporting banks, 17, 18 Depository institutions, 4-6, 12 Wholesale (producer) prices, 42, 47 Federal Reserve Banks, 10 US. reserve assets, 51 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • August 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 BANKING SUPERVISION LYNN S. FOX, Assistant to the Board AND REGULATION—Continued MICHELLE A. SMITH, Assistant to the Board SIDNEY M. SUSSAN, Adviser DONALD J. WINN, Assistant to the Board WILLIAM C. SCHNEIDER, JR., Project Director, DONALD L. KOHN, Adviser to the Board National Information Center WINTHROP P. HAMBLEY, Deputy Congressional Liaison NORMAND R. V. BERNARD, Special Assistant to the Board DIVISION OF INTERNATIONAL FINANCE JOHN LOPEZ, Special Assistant to the Board KAREN H. JOHNSON, Director BOB STAHLY MOORE, Special Assistant to the Board DAVID H. HOWARD, Deputy Director ROSANNA PIANALTO-CAMERON, Special Assistant to the Board THOMAS A. CONNORS, Associate Director DAVID W. SKIDMORE, Special Assistant to the Board DALE W. HENDERSON, Associate Director LEGAL DIVISION RICHARD T. FREEMAN, Assistant Director WILLIAM L. HELKIE, Assistant Director J. VIRGIL MATTINGLY, JR., General Counsel STEVEN B. KAMIN, Assistant Director SCOTT G. ALVAREZ, Associate General Counsel RALPH W. TRYON, Assistant Director RICHARD M. ASHTON, Associate General Counsel KATHLEEN M. O'DAY, Associate General Counsel DIVISION OF RESEARCH AND STATISTICS STEPHANIE MARTIN, Assistant General Counsel DAVID J. STOCKTON, Director ANN E. MISBACK, Assistant General Counsel EDWARD C. ETTIN, Deputy Director STEPHEN L. SICILIANO, Assistant General Counsel DAVID WILCOX, Deputy Director KATHERINE H. WHEATLEY, Assistant General Counsel WILLIAM R. JONES, Associate Director CARY K. WILLIAMS, Assistant General Counsel MYRON L. KWAST, Associate Director OFFICE OF THE SECRETARY STEPHEN D. OLINER, Associate Director PATRICK M. PARKINSON, Associate Director JENNIFER J. JOHNSON, Secretary LAWRENCE SLIFMAN, Associate Director ROBERT DEV. FRIERSON, Deputy Secretary CHARLES S. STRUCKMEYER, Associate Director BARBARA R. LOWREY, Associate Secretary and Ombudsman MARTHA S. SCANLON, Deputy Associate Director MARGARET M. SHANKS, Assistant Secretary JOYCE K. ZICKLER, Deputy Associate Director WAYNE S. PASSMORE, Assistant Director DIVISION OF BANKING SUPERVISION DAVID L. REIFSCHNEIDER, Assistant Director AND REGULATION JANICE SHACK-MARQUEZ, Assistant Director RICHARD SPILLENKOTHEN, Director ALICE PATRICIA WHITE, Assistant Director STEPHEN C. SCHEMERING, Deputy Director GLENN B. CANNER, Senior Adviser HERBERT A. BIERN, Senior Associate Director DAVID S. JONES, Senior Adviser ROGER T. COLE, Senior Associate Director THOMAS D. SIMPSON, Senior Adviser WILLIAM A. RYBACK, Senior Associate Director GERALD A. EDWARDS, JR., Associate Director and DIVISION OF MONETARY AFFAIRS Chief Accountant, Supervision STEPHEN M. HOFFMAN, JR., Associate Director VINCENT R. REINHART, Director JAMES V. HOUPT, Associate Director DAVID E. LINDSEY, Deputy Director JACK P. JENNINGS, Associate Director BRIAN F. MADIGAN, Deputy Director MICHAEL G. MARTINSON, Associate Director RICHARD D. PORTER, Deputy Associate Director MOLLY S. WASSOM, Associate Director WILLIAM C. WHITESELL, Assistant Director HOWARD A. AMER, Deputy Associate Director NORAH M. BARGER, Deputy Associate Director DIVISION OF CONSUMER BETSY CROSS, Deputy Associate Director AND COMMUNITY AFFAIRS DEBORAH P. BAILEY, Assistant Director DOLORES S. SMITH, Director BARBARA J. BOUCHARD, Assistant Director GLENN E. LONEY, Deputy Director ANGELA DESMOND, Assistant Director SANDRA F. BRAUNSTEIN, Assistant Director JAMES A. EMBERSIT, Assistant Director MAUREEN P. ENGLISH, Assistant Director CHARLES H. HOLM, Assistant Director ADRIENNE D. HURT, Assistant Director HEIDI WILLMANN RICHARDS, Assistant Director IRENE SHAWN MCNULTY, Assistant Director WILLIAM G. SPANIEL, Assistant Director DAVID M. WRIGHT, Assistant Director Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

81 EDWARD M. GRAMLICH OFFICE OF DIVISION OF RESERVE BANK OPERATIONS STAFF DIRECTOR FOR MANAGEMENT AND PAYMENT SYSTEMS STEPHEN R. MALPHRUS, Staff Director LOUISE L. ROSEMAN, Director PAUL W. BETTGE, Associate Director MANAGEMENT DIVISION KENNETH D. BUCKLEY, Assistant Director 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 W. REIDHILL, Assistant Director Function JEFF J. STEHM, Assistant Director SHEILA CLARK, EE0 Programs Director DIVISION OF SUPPORT SERVICES OFFICE OF THE INSPECTOR GENERAL BARRY R. SNYDER, Inspector General ROBERT E. FRAZIER, Director DAVID L. WILLIAMS, Associate Director DONALD L. ROBINSON, Deputy Inspector General GEORGE M. LOPEZ, 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

82 Federal Reserve Bulletin • August 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 DAVID WILCOX, Associate Economist DINO KOS, 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 STEVEN L. SCHEID, Twelfth District JAMES ANNABLE, Co-Secretary WILLIAM J. KORSVIK, Co-Secretary Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

83 CONSUMER ADVISORY COUNCIL LAUREN ANDERSON, New Orleans, Louisiana, Chairman DOROTHY BROADMAN, San Francisco, California, Vice Chairman ANTHONY S. ABB ATE, 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, Tucson, Arizona 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

84 Federal Reserve Bulletin • August 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, 2001. THE U.S. ECONOMY IN AN INTERDEPENDENT WORLD: A MULTI- FEDERAL RESERVE BULLETIN. Monthly. $25.00 per year or $2.50 COUNTRY MODEL, May 1984. 590 pp. $14.50 each. each in the United States, its possessions, Canada, and INDUSTRIAL PRODUCTION—1986 EDITION. December 1986. Mexico. Elsewhere, $35.00 per year or $3.00 each. 440 pp. $9.00 each. ANNUAL STATISTICAL DIGEST: period covered, release date, num- FINANCIAL FUTURES AND OPTIONS IN THE U.S. ECONOMY. ber of pages, and price. December 1986. 264 pp. $10.00 each. 1981 October 1982 239 pp. $ 6.50 FINANCIAL SECTORS IN OPEN ECONOMIES: EMPIRICAL ANALY- 1982 December 1983 266 pp. $ 7.50 SIS AND POLICY ISSUES. August 1990. 608 pp. $25.00 each. 1983 October 1984 264 pp. $11.50 RISK MEASUREMENT AND SYSTEMIC RISK: PROCEEDINGS OF A 1984 October 1985 254 pp. $12.50 JOINT CENTRAL BANK RESEARCH CONFERENCE. 1996. 1985 October 1986 231 pp. $15.00 578 pp. $25.00 each. 1986 November 1987 288 pp. $15.00 1987 October 1988 272 pp. $15.00 1988 November 1989 256 pp. $25.00 EDUCATION PAMPHLETS 1980-89 March 1991 712 pp. $25.00 Short pamphlets suitable for classroom use. Multiple copies are 1990 November 1991 185 pp. $25.00 available without charge. 1991 November 1992 215 pp. $25.00 1992 December 1993 215 pp. $25.00 1993 December 1994 281 pp. $25.00 Consumer Handbook on Adjustable Rate Mortgages 1994 December 1995 190 pp. $25.00 Consumer Handbook to Credit Protection Laws 1990-95 November 1996 404 pp. $25.00 A Guide to Business Credit for Women, Minorities, and Small Businesses Series on the Structure of the Federal Reserve System SELECTED INTEREST AND EXCHANGE RATES—WEEKLY SERIES OF The Board of Governors of the Federal Reserve System CHARTS. Weekly. $30.00 per year or $.70 each in the United The Federal Open Market Committee States, its possessions, Canada, and Mexico. Elsewhere, Federal Reserve Bank Board of Directors $35.00 per year or $.80 each. Federal Reserve Banks REGULATIONS OF THE BOARD OF GOVERNORS OF THE FEDERAL A Consumer's Guide to Mortgage Lock-Ins RESERVE SYSTEM. A Consumer's Guide to Mortgage Settlement Costs ANNUAL PERCENTAGE RATE TABLES (Truth in Lending— A Consumer's Guide to Mortgage Refinancings Regulation Z) Vol. I (Regular Transactions). 1969. 100 pp. Home Mortgages: Understanding the Process and Your Right Vol. II (Irregular Transactions). 1969. 116 pp. Each volume to Fair Lending $5.00. How to File a Consumer Complaint about a Bank (also available GUIDE TO THE FLOW OF FUNDS ACCOUNTS. January 2000. in Spanish) 1,186 pp. $20.00 each. Making Sense of Savings FEDERAL RESERVE REGULATORY SERVICE. Loose-leaf; updated Welcome to the Federal Reserve monthly. (Requests must be prepaid.) When Your Home is on the Line: What You Should Know Consumer and Community Affairs Handbook. $75.00 per year. About Home Equity Lines of Credit Monetary Policy and Reserve Requirements Handbook. $75.00 Keys to Vehicle Leasing (also available in Spanish) per year. Looking for the Best Mortgage (also available in Spanish) 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

85 STAFF STUDIES: Only Summaries Printed in the 167. A SUMMARY OF MERGER PERFORMANCE STUDIES IN BANK- BULLETIN ING, 1980-93, AND AN ASSESSMENT OF THE "OPERATING Studies and papers on economic and financial subjects that are of PERFORMANCE" AND "EVENT STUDY" METHODOLOGIES, by Stephen A. Rhoades. July 1994. 37 pp. general interest. Staff Studies 1-158, 161, 163, 165, 166, 168, and 169 are out of print, but photocopies of them are available. Staff 170. THE COST OF IMPLEMENTING CONSUMER FINANCIAL REGU- LATIONS: AN ANALYSIS OF EXPERIENCE WITH THE TRUTH Studies 165-174 are available on line at www.federalreserve.gov/ IN SAVINGS ACT, by Gregory Elliehausen and Barbara R. pubs/staffstudies. Requests to obtain single copies of any paper or Lowrey. December 1997. 17 pp. to be added to the mailing list for the series may be sent to 171. THE COST OF BANK REGULATION: A REVIEW OF THE EVI- Publications Services. DENCE, by Gregory Elliehausen. April 1998. 35 pp. 172. USING SUBORDINATED DEBT AS AN INSTRUMENT OF MAR- 159. NEW DATA ON THE PERFORMANCE OF NONBANK SUBSIDI- KET DISCIPLINE, by Study Group on Subordinated Notes ARIES OF BANK HOLDING COMPANIES, by Nellie Liang and and Debentures, Federal Reserve System. December 1999. Donald Savage. February 1990. 12 pp. 69 pp. 160. BANKING MARKETS AND THE USE OF FINANCIAL SER- 173. IMPROVING PUBLIC DISCLOSURE IN BANKING, by Study VICES BY SMALL AND MEDIUM-SIZED BUSINESSES, by Group on Disclosure, Federal Reserve System. March 2000. Gregory E. Elliehausen and John D. Wolken. September 35 pp. 1990. 35 pp. 174. BANK MERGERS AND BANKING STRUCTURE IN THE UNITED 162. EVIDENCE ON THE SIZE OF BANKING MARKETS FROM MORT- STATES, 1980-98, by Stephen Rhoades. August 2000. 33 pp. GAGE LOAN RATES IN TWENTY CITIES, by Stephen A. Rhoades. February 1992. 11 pp. 164. THE 1989-92 CREDIT CRUNCH FOR REAL ESTATE, by James T. Fergus and John L. Goodman, Jr. July 1993. 20 pp. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

86 Federal Reserve Bulletin • August 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

87 1-A 2-B 3-C 4-D 5-E m , Balvtimo^re r M D NY / Pittsburgh • «H Buffalo NY M ." / ^ RI • Gificninati BOSTON NEW YORK PHILADELPHIA CLKEYV ELAND RICHMOND 6-F 7-G J-H MS I JH> i ^w^ji ville New Orleans ni--L Little Y Miami ATLANTA CHICAGO ST. LOUIS 9-1 MINNEAPOLIS 10-J 12-L KANSAS CITY 11-K KL DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

88 Federal Reserve Bulletin • August 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 Gordon R. G. Werkema 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. Gambs1 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 David K.Webb1 *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

89 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

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