Federal Reserve Bulletin, 2001-09

Volume 87 • Number 9 • September 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 567 OPPORTUNITIES AND CHALLENGES 582 INDUSTRIAL PRODUCTION AND CAPACITY OF THE U.S. DOLLAR AS AN UTILIZATION FOR JULY 2001 INCREASINGLY GLOBAL CURRENCY: Industrial production contracted 0.1 percent in A FEDERAL RESERVE PERSPECTIVE July, its tenth consecutive monthly decline. At The rapid growth of demand for U.S. currency 142.8 percent of its 1992 average, industrial over the past two decades, especially the pro- production in July was 3.2 percent lower than in portion estimated to be held abroad, has posed July 2000. Capacity utilization for total industry challenges for the Federal Reserve in meeting was 77.0 percent, a level more than 5 percentage its congressionally mandated responsibilities points below its 1967-2000 average. for currency availability and distribution. Those challenges lie in making certain that the Bureau 586 TESTIMONY OF FEDERAL RESERVE of Engraving and Printing (BEP) prints adequate OFFICIALS amounts of currency; that overseas distribution channels have sufficient capacity to distribute Dolores S. Smith, Director, Division of Con- U.S. currency when and where it is needed; sumer and Community Affairs, Board of Goverand that the integrity of U.S. currency is main- nors of the Federal Reserve System, offers the tained by monitoring counterfeiting activity. In views of Board staff on H.R. 1701, the Conthe process of meeting these challenges, the sumer Rental Purchase Agreement Act, which Federal Reserve has improved its methods of would require cost disclosures for "rentalforecasting demand for U.S. currency, expanded purchase" agreements, also known as "rent-tocurrency distribution channels, and worked with own" transactions; she states that H.R. 1701 the BEP and the U.S. Secret Service to protect treats rent-to-own transactions differently from against counterfeiting threats. both credit sales and traditional leases and This article gives an overview of the evolu- would, therefore, cover them under a separate tion of the Federal Reserve's responsibilities for regulatory scheme altogether. Further, she states U.S. currency, particularly in relation to the that consumer disclosures are most effective increase in foreign demand over the past two when consumers receive them early enough in decades, and also discusses work on counterfeit the process to use them as a shopping tool and deterrence. when the disclosures are presented in a way that enables consumers to focus on the key costs 576 TREASURY AND FEDERAL RESERVE and terms (Testimony before the Subcommittee FOREIGN EXCHANGE OPERATIONS on Financial Institutions and Consumer Credit of the House Committee on Financial Services, During the second quarter of 2001, the dollar July 12, 2001). appreciated 3.3 percent against the euro and depreciated 1.2 percent against the yen. On a 588 Alan Greenspan, Chairman, Board of Govertrade-weighted basis, the dollar ended the quar- nors, presents the Board's semiannual report on ter nearly unchanged against the currencies monetary policy and testifies that by aggresof the United States' major trading partners. sively easing the stance of monetary policy, the Over the quarter, market perceptions that the Federal Reserve has moved to support demand U.S. economy would emerge from its down- and help lay the groundwork for the economy to turn sooner than the euro area provided under- achieve maximum sustainable growth. He states lying support for the dollar. The U.S. monetary further that once the forces that are currently authorities did not intervene in the foreign containing investment initiatives dissipate, new exchange markets during the quarter. applications of innovative technologies should Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

again strengthen demand for capital equipment 600 LEGAL DEVELOPMENTS and restore solid economic growth over time Various bank holding company, bank service that benefits us all (Testimony before the House corporation, and bank merger orders; and pend- Committee on Financial Services, July 18, 2001. ing cases. Chairman Greenspan presented identical testimony before the Senate Committee on Banking, A1 FINANCIAL AND BUSINESS STATISTICS Housing, and Urban Affairs on July 24, 2001). These tables reflect data available as of 593 Laurence H. Meyer, Member, Board of Gover- July 27, 2001. nors, presents the views of the Board on deposit insurance reform as proposed by the Federal A3 GUIDE TO TABULAR PRESENTATION Deposit Insurance Corporation (FDIC) this past spring and states that there are several aspects of A4 Domestic Financial Statistics the deposit insurance system that need reform; A42 Domestic Nonfinancial Statistics the Board supports, with some modifications, all A50 International Statistics except one of the FDIC's recommendations. Further, with no clear public benefit to increas- A63 GUIDE TO STATISTICAL RELEASES AND ing deposit insurance, the Board sees no reason SPECIAL TABLES to increase the scope of the safety net and believes that the time has come to draw the line A80 INDEX TO STATISTICAL TABLES on expanding government guarantees (Testimony before the Subcommittee on Financial A82 BOARD OF GOVERNORS AND STAFF Institutions and Consumer Credit of the House Committee on Financial Services, July 26, A84 FEDERAL OPEN MARKET COMMITTEE AND 2001). STAFF; ADVISORY COUNCILS 598 ANNOUNCEMENTS A86 FEDERAL RESERVE BOARD PUBLICATIONS Vice Chairman Ferguson sworn in to new term on the Board of Governors. A88 MAPS OF THE FEDERAL RESERVE SYSTEM Compliance date lifted for consumer electronic A90 FEDERAL RESERVE BANKS, BRANCHES, disclosures. AND OFFICES Advance notice of proposed rulemaking regarding the Community Reinvestment Act. Availability of Spanish-language brochure on bank complaint instructions. Enforcement action. 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

Opportunities and Challenges of the U.S. Dollar as an Increasingly Global Currency: A Federal Reserve Perspective Michael J. Lambert and Kristin D. Stanton, of the DEMAND FOR U.S. CURRENCY Board's Division of Reserve Bank Operations and Payment Systems, prepared this article. The Federal Reserve measures demand for U.S. currency by the amount of currency in circulation.2 Over the past two decades, demand for U.S. currency, From 1980 to 1998, currency in circulation increased especially the proportion estimated to be held abroad, an average of 8 percent per year—from $124.8 bilhas increased markedly. As a result, U.S. bank notes lion to $492.2 billion. In December 1999, in preparaare now the most widely recognized and used cur- tion for the century date change, currency in circularency in the world. Businesses and households out- tion increased 22.1 percent from its December 1998 side the United States have long held U.S. currency level, to $601.2 billion. Uncertainty associated with for savings, especially during times of crisis. Over the century date change increased the public's pretime, businesses and households abroad are increas- cautionary demand for cash, but as the event passed ingly turning to dollars for transactions purposes. without incident, the public returned much of the The rapid growth of demand for U.S. currency has currency it had amassed to depository institutions. posed challenges for the Federal Reserve in meeting Depository institutions, in turn, returned excess curits congressionally mandated responsibilities for cur- rency to the Reserve Banks. Thus, in the first quarter rency availability and distribution.1 Those challenges of 2000, the Reserve Banks received record levels of lie in making certain that the Bureau of Engraving currency from depository institutions, and currency and Printing (BEP) prints adequate amounts of cur- in circulation declined to $535.4 billion, a level more rency; that overseas distribution channels have suffi- consistent with the historical trend (chart l).3 cient capacity to distribute U.S. currency when and Domestic demand for currency is largely based on where it is needed; and that the integrity of U.S. the use of currency for transactions and is influenced currency is maintained by monitoring counterfeiting primarily by income levels, prices for goods and activity. In the process of meeting these challenges, services, the availability of alternative payment meththe Federal Reserve has improved its methods of ods, and the opportunity cost of holding currency in forecasting demand for U.S. currency, expanded lieu of an interest-bearing asset. In the United States, currency distribution channels, and worked with the demand (in terms of number of notes) for smaller BEP and the U.S. Secret Service to protect against denominations ($ls through $20s) exceeds demand counterfeiting threats. for larger denominations ($50s and $100s). Con- This article gives an overview of the evolution sumers frequently use smaller-denomination notes of the Federal Reserve's responsibilities for U.S. cur- for small transactions and alternative payment methrency, particularly in relation to the increase in for- ods (for example, checks and credit cards) for large eign demand over the past two decades. It also dis- purchases. cusses work on counterfeit deterrence and concludes In contrast, foreign demand is influenced primarily with a brief note on the future of currency and coin. by the political and economic uncertainties associated with certain foreign currencies, which contrast with the U.S. dollar's high degree of stability. The 1. The Federal Reserve Act of 1913 established the Board of Governors and the twelve Federal Reserve Banks as the nation's central bank and provided that the Federal Reserve function as mone- 2. Currency in circulation is the public's cash holdings and depositary authority to establish and issue currency for the United States. By tory institutions' vault cash; it excludes Federal Reserve and BEP 1920, the Federal Reserve's role had expanded, as the Department of vault cash. the Treasury closed Subtreasuries around the country and delegated 3. In the first quarter of 2000, Federal Reserve Banks received responsibilities for distributing currency and coin to the Federal 9.3 billion notes, compared with 6.8 billion notes during the same Reserve Banks. period in 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

568 Federal Reserve Bulletin • September 2001 1. Currency in circulation, June 1997-May 2001 NOTE. The data are daily. For the definition of currency in circulation, see text note 2. dollar remains a stable currency backed by a highly on estimates of net payments, international demand productive economy with low inflation and by the for U.S. currency increased 219 percent from 1989 to assurance that it will not be demonetized, recalled, 1990 during the Gulf War. As another example, from or devalued.4 Because U.S. currency is held abroad 1993 to 1994 international net payments increased primarily as savings, foreigners tend to hold high- 24 percent during the Mexican peso crisis (chart 3).7 denomination notes. According to one estimate, about Other countries have induced their residents to three-fourths of $100 notes in circulation are held substitute from the local currency to U.S. dollars, outside the United States.5 both as a store of value and as a medium for trans- The foreign component of the amount of currency actions. In the extreme, some governments have in circulation is estimated to have increased signifi- adopted the dollar as legal tender. Schuler and Stein cantly beginning in the late 1980s and continued categorize this process of dollarization as official, to grow through most of the 1990s (chart 2).6 Because semiofficial, or unofficial. According to this classifiabout 90 percent, on average, of the $100 notes cation, official dollarization, also known as full dolordered by the Federal Reserve Bank of New York larization, occurs when a country adopts the U.S. appear to be paid out to foreign banking organiza- dollar as both legal tender and as its predominant—or tions to satisfy foreign demand, net payments (that exclusive—currency.8 Recent examples of officially is, shipments to depository institutions in excess of dollarized countries include Ecuador (January 2000), receipts from depository institutions) of $100 notes El Salvador (January 2001), and Guatemala (May from the Federal Reserve Bank of New York form 2001); other countries, such as Panama (1904), have one basis for estimating international demand. Based been dollarized for many years. Schuler and Stein define semiofficial dollarization as the use of U.S. dollars as legal tender, while both the local currency 4. Porter and Judson argue that the dollar's nearly unchanging physical appearance and the U.S. policy of never recalling older-series and U.S. currency are used in daily transactions. notes, in addition to the extraordinary strength and stability of the U.S. Examples of countries with semiofficial dollarization economy and the dollar, have given rise to near-universal recognition include the Bahamas, Cambodia, and Haiti. Finally, and acceptance of dollars. See Richard D. Porter and Ruth A. Judson, "Overseas Dollar Holdings: What Do We Know?" Wirtschaftspoli- unofficial dollarization occurs when citizens of a tische Blatter (April 2001), pp. 431^0. 5. See Richard D. Porter and Ruth A. Judson, "The Location of U.S. Currency: How Much is Abroad?" Federal Reserve Bulletin, 7. Federal Reserve net payments data suggest that in both episodes, vol. 82 (October 1996), pp. 883-903. the dollars were returned to the United States after a relatively short 6. As opposed to the overall issuance of currency, the amount held period. abroad must be inferred from a variety of sources, including reports 8. See Kurt Schuler and Robert Stein, "The International Monetary from currency shipments, the denomination of bank notes, and evolv- Stability Act: An Analysis" (paper for the North-South Institute ing seasonal patterns. Porter and Judson use several methods for Conference, "To Dollarize or Not to Dollarize?" Ottawa, October 5, estimating the foreign component of total US. currency in circulation. 2000). Schuler and Stein define legal tender as currency that is legally The current foreign estimates range from one-half to two-thirds of the acceptable as payment for all debts and differs from forced tender, total value of currency in circulation. See Porter and Judson, "The which requires that people accept a currency in payment even if they Location of U.S. Currency." would prefer another currency. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Opportunities and Challenges of the U.S. Dollar as an Increasingly Global Currency 569 2. Estimated domestic and foreign holdings of U.S. currency in circulation, 1960-2000 Billions of dollars • Domestic • Foreign — 600 IB IB IB iBi ll ll ll ll I ll I960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 NOTE. Data are as of December 31 for each year. for foreign data, Federal Reserve Board, Statistical Release Z.l, "Flow of Funds SOURCE. For domestic data, U.S. Department of the Treasury, Financial Accounts of the United States," table L. 204. Management Service, "U.S. Currency and Coins Outstanding in Circulation;" country hold a portion of their financial wealth in FEDERAL RESERVE RESPONSIBILITIES FOR U.S. dollars even if U.S. currency is not legal tender CURRENCY (or even legal to use at all). Some unofficially dollarized countries hold and use large amounts of dollars; Before passage of the Federal Reserve Act, currency others hold relatively small amounts.9 in circulation could not always accommodate changes The decision to dollarize is made by the govern- in demand that arose from seasonal and cyclical ment and residents of a country based on its own factors and from periods of financial crisis. The suppolitical and economic circumstances. If a country ply of currency was limited because the various forms decides to dollarize, the Federal Reserve stands ready of Department of the Treasury currency (U.S. notes, to supply currency to or receive currency from that Treasury notes of 1890, and gold and silver certificountry, although most of the actual shipments are cates) were fixed by statute or governed by the effected through commercial banking channels. amount of gold and silver held by the Department of the Treasury. The volume of national bank notes was dependent on the decisions of individual national 9. For a comprehensive list of dollarized countries, see Schuler and Stein, "The International Monetary Stability Act." banks; therefore, it was sensitive to liquidity strains during financial crises. To remedy this problem, the Congress passed the 3. Net international payments of U.S. currency, 1980-2000 Federal Reserve Act, which mandated an elastic currency that would expand and contract based on Billions of dollars public demand. As the public's demand for currency changed, depository institutions would either order — A A — 25 currency from or deposit currency with the Federal — / \ / \ \ Reserve Banks. Each Federal Reserve Bank and — 20 Branch was located to facilitate the exchange of currency as needed to and from the depository institu- — / V/ \/ I 1— 15 tions throughout the United States based on the distri- — / bution of the population and economic activity when 1 10 the Federal Reserve was founded.10 4- 5 1 II 1 1 1 1 1 1 I 1 1 II 1 I 1 1 1 1 1 M 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 10. In 1920, the Congress directed the Secretary of the Treasury to discontinue Subtreasuries and the exercise of all duties and functions NOTE. The dramatic decline in net international payments in 2000 largely reflects the flow back to the Reserve Banks of excess currency amassed during by the Assistant Treasurers in charge of the offices. The provisions of the century date change period. the Appropriations Act of 1920 authorized the Secretary to delegate SOURCE. Federal Reserve Board, Statistical Release Z.l, "Flow of Funds the currency and coin functions of the Subtreasuries to the Federal Accounts of the United States," table F. 204. Reserve Banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

570 Federal Reserve Bulletin • September 2001 Forecasting the Demand for Currency pare their currency demand estimates with Reserve Bank forecasts and reconcile differences until a con- In addition to requiring an elastic currency, the Fed- sensus print order is approved by the Board. eral Reserve Act also authorizes the Federal Reserve Once the print order is approved, the Board subto issue Federal Reserve notes to depository insti- mits it to the BER Based on the number of notes tutions through the Federal Reserve Banks. As the in the order, the BEP determines the unit cost nation's issuing authority for U.S. currency, the Fed- for each denomination.12 In 2000, the Federal eral Reserve Board prepares and submits an annual Reserve paid $423.4 million to the BEP to print order to the BER The order represents the Federal nearly 9 billion notes (chart 4). Reserve System's estimate of the amount of currency that the public will demand in the upcoming year and Distribution of Currency reflects estimated changes in currency usage and destruction rates of unfit currency.11 The Federal Reserve distributes U.S. currency Staff members of each Federal Reserve Bank cash throughout the United States and to all regions of the office and at the Federal Reserve Board collaborate world through banking channels. Accordingly, the to develop estimates of the demand for currency. In Federal Reserve Banks provide cash services to more making their estimates, the Reserve Banks consider than 10,000 of the 21,000 banks, savings and loan local economic and environmental conditions that institutions, and credit unions in the United States. affect demand for currency. Environmental condi- (See box "Coin Operations at the Federal Reserve.") tions, which vary across the nation, influence the The remaining institutions obtain cash through their physical appearance of bank notes and how quickly correspondent banks rather than directly from the they are soiled, worn, or torn. Each Reserve Bank Federal Reserve. When a depository institution orders assesses these conditions in its District to determine currency from a Federal Reserve Bank, the Reserve the amount of currency needed to meet daily pay- Bank provides the requested shipment to an armored ments to the public and to maintain a safety stock to carrier arranged by the depository institution and meet natural contingencies that might disrupt normal charges the depository institution's account with the distribution channels. Board staff members study Federal Reserve (or the account of a depository insti- Federal Reserve data to reconcile variations and tution that acts as the ordering depository instituevaluate trends, consider the amount of currency held tion's settlement agent) for the amount of the order. in vaults at the BEP and at the Reserve Banks, and Similarly, when a depository institution returns calculate overall growth rates of net payments and excess or unfit currency to the Federal Reserve, its currency destruction rates. Board staff members com- account is credited. Before 1996, commercial banks overseas ordered 11. The Federal Reserve, under delegated authority from the U.S. currency through bank-note dealers that, in turn, Department of the Treasury, is responsible for destroying all unfit currency. The Office of Currency Standards oversees Federal Reserve compliance with Treasury policies and procedures that govern the 12. Unit cost is higher for smaller print orders because of fixed destruction of currency by conducting regular audits of the cash production costs at the Washington, D.C., and Ft. Worth, Tex., offices at the Federal Reserve Banks. facilities. 4. Print order volume and cost of printing Federal Reserve notes, 1986-2000 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Opportunities and Challenges of the U.S. Dollar as an Increasingly Global Currency 571 for destruction and recirculate fit new-series notes Coin Operations at the Federal Reserve to the public. The Federal Reserve Bank of New York performs regular unannounced management reviews The Federal Reserve has a more limited role in coin and operational audits to ensure that the ECIs comply operations than it has in currency operations. The U.S. with legally binding agreements to safeguard the Mint determines annual coin production and monitors integrity of the process. Federal Reserve coin inventories weekly to identify trends in coin demand. To help the Mint plan for future production, the IMPLICATIONS OF THE U.S. DOLLAR Reserve Banks provide the Mint with projected monthly coin orders for each fiscal year. The Mint distributes coin AS A GLOBAL CURRENCY to the Reserve Banks from the Philadelphia and Denver production facilities, and the Federal Reserve Banks dis- Increase in Interest Income tribute coin to depository institutions as needed. In addition to the 37 cash offices, the Reserve Banks The asset counterpart to the Federal Reserve liability also use 116 coin terminals to manage the Federal for currency in circulation takes the form of securities Reserve's coin volume. Generally, armored carrier com- of the U.S. Treasury and government-approved enterpanies operate the coin terminals. The armored carriers prises (Treasury and federal agency securities reprewrap coin to meet the needs of depository institutions and sented 97.6 percent of the total collateral for currency retailers. As with currency, depository institutions order in circulation at the end of 2000). Thus, the Federal and deposit coin to meet customer demand. Reserve issues non-interest-bearing obligations (currency) and uses the proceeds to acquire interestbearing assets. The excess of the earnings that the ordered currency directly from the Federal Reserve Federal Reserve accrues from these interest-bearing Banks (primarily the Federal Reserve Bank of New financial assets, above Federal Reserve System York). In 1996, the Board approved the Extended expenses and the provision of capital, is remitted Custodial Inventory (ECI) program to facilitate the annually to the Department of the Treasury. As introduction of the new Series-1996 $100 note intercurrency in circulation has increased in response to nationally. The ECIs were established in London, growing demand for U.S. currency abroad, interest Zurich, and Frankfurt to provide currency services earnings have also increased (chart 5). For 2000, the for Europe, the Middle East, Africa, and Russia. securities counterpart to Federal Reserve notes earned Because of its success, the Federal Reserve expanded $32.7 billion in interest income. the scope of the program to facilitate the international Because the value of currency in circulation distribution of future-series U.S. bank notes and the changes daily, the Federal Reserve Banks monitor repatriation of old-series notes, to promote an internaand report changes in net payments to the Board. Net tional market for fit U.S. bank notes, and to strengthen payments represent the difference between the U.S. information gathering on the foreign use of U.S. amount of currency that the Reserve Banks pay to currency and sources of international counterfeiting. and receive from commercial banks. If net payments In part because of the success of the European ECIs, are positive, the Federal Reserve will typically purthe Federal Reserve expanded the program to Asia chase securities through open market operations in and to South America. an amount equal to the net increase of currency in The ECI program allows selected depository insticirculation to offset the monetary policy implications tutions to hold currency in their vaults but to carry of the drain on depository institutions' balances held the inventory on the books of the Federal Reserve at the Reserve Banks. Similarly, if net payments are Bank of New York.13 The Federal Reserve selects negative, the Federal Reserve will typically sell secucommercial banks to act as ECIs through a competirities in an amount equal to the decrease of currency tive bidding process. The ECIs receive deposits from in circulation. depository institutions, sort them into old- and newseries notes, and further sort the new-series notes into bundles (1,000 notes) according to whether the notes Counterfeiting Activity are fit or unfit. The ECIs return the old-series and unfit notes to the Federal Reserve Bank of New York The U.S. Secret Service was established in 1865 to suppress counterfeiting activity in the United States. 13. The opportunity cost of holding excess vault cash is reduced by During the free banking era (1837-1863), state bank permitting the ECIs to carry the currency inventory on the books of the Federal Reserve. notes became the chief form of paper currency, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

572 Federal Reserve Bulletin • September 2001 5. Currency in circulation and Federal Reserve interest earnings on U.S. Treasury securities and on federal agency securities, 1986-2000 Currency (billions of dollars) Earnings (billions of dollars) 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 each state-chartered bank could issue currency with an actual loss to the public. Some counterfeits are its own design. Because there was neither a consis- seized by law enforcement agencies before they cirtent design nor central control over currency issu- culate, whereas passed counterfeits have gone into ance, this institutional arrangement created opportu- circulation and represent an economic loss to the nities for counterfeiters to deceive the public. As a public—specifically, the final holders of counterfeit result, the Secret Service believes that during the free notes (chart 6). While any economic loss to the banking era, counterfeit currency circulated widely public is unfortunate, the domestic loss has generally and may have made up as much as one-third of total been small; in 2000, for example, it represented only currency in circulation. two-tenths of 1 percent of the total value of domestic The National Banking Act of 1863 required currency in circulation, or about 15 cents per U.S. national banks to invest in federal bonds, which citizen. entitled the banks to issue bank notes equal to 90 per- Traditionally, counterfeiters have produced bankcent of the value of the bonds (the bonds were note forgeries with offset presses, which require condeposited with the Department of the Treasury). In siderable skill to operate and are expensive to purcontrast to state bank notes, the national bank notes chase. As computer and reprographic technologies were uniform in design and were imprinted with the have improved, however, the skills required and costs name and charter number of the issuing bank. These associated with bank-note forgeries have declined notes were printed and used in circulation until 1935. significantly. At first, with advances in reprographic The Federal Reserve Act of 1913 gave to the technology, unskilled counterfeiters were able to pro- Federal Reserve central control over currency issu- duce forgeries on color copiers. Fortunately, because ance, but the Congress gave responsibility for design- such reprographic equipment is expensive and noring U.S. currency to the Department of the Treasury mally located in view of other office workers, voland established the Secret Service as a Treasury umes of counterfeits have tended to be relatively bureau to guard against counterfeiting activity. As small. Nevertheless, in fiscal year 1995, the U.S. the Federal Reserve and the Department of the public lost $2.4 million because of color-copier Treasury gained control of the design and issuance counterfeits. of U.S. currency, counterfeiting activity declined and The use of color copiers to counterfeit currency remained relatively low for nearly seventy years. was not unique to the United States. Because of the Over time, however, as U.S. currency achieved a pervasiveness of the problem, an international group greater global presence and as advances in technol- initiated discussions with the color-copier industry to ogy provided opportunities for counterfeiters, new address possible solutions to the counterfeiting threat. counterfeiting threats emerged both domestically and The international group successfully negotiated a internationally. technical solution, which was implemented in color- Today, the Secret Service categorizes counterfeit copier equipment, to recognize bank notes and precurrency by domestic or foreign origin, by method of vent them from being copied. The technology has production, and by whether the counterfeits represent been highly effective in reducing color-copier coun- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Opportunities and Challenges of the U.S. Dollar as an Increasingly Global Currency 573 6. Foreign and domestic counterfeits passed and seized, Federal Reserve Banks detect about 20 percent of fiscal years, 1995-2000 passed counterfeits that are not detected by depository institutions or the public. Millions of dollars The Secret Service analyzes suspect notes that it receives from depository institutions, Reserve Banks, other law enforcement agencies, and the public and classifies them according to identifying characteristics that help to track notes (or families of notes) that come from the same producer. Fortunately, largely through an effective counterfeit-deterrent design and the efforts of the Secret Service, counterfeiting incidents are relatively low (the probability of the public's receiving a counterfeit U.S. note is about one in 10,000), and public confidence in U.S. currency remains very high. 1995 1996 1997 1998 1999 2000 terfeiting, and in fiscal year 2000, losses in the United CURRENCY DESIGNS AS A DETERRENT States had fallen nearly 60 percent from their 1995 TO COUNTERFEITING level, to $1 million. As the threat of counterfeits produced by repro- The basic design of the Series-1929 Federal Reserve graphic equipment diminished, however, advances note required very few security features. The distincin personal computing technology increased opportu- tive feel of genuine currency paper, the raised surface nistic counterfeiting because personal computers and that results from intaglio printing, and the red and related peripheral equipment became affordable and blue security fibers were sufficient as low-level secuwidely available. The Secret Service defines counter- rity features to deter counterfeiting.14 Although counfeits that are produced with personal computers terfeiting activity existed during this period, the threat (including scanners, image-editing software, and was not significant, and the overall risk to the public printers) as inkjet counterfeits. Since 1996, the pro- was relatively inconsequential. portion of inkjet counterfeits has grown from less During the 1980s, the Department of the Treasury than 1 percent of total passed counterfeits in fiscal and the Federal Reserve recognized that U.S. curyear 1995 to nearly 50 percent in fiscal year 2000. rency was vulnerable to counterfeiting and com- Although U.S. currency includes features that are missioned a private consulting firm to evaluate not easily reproduced with personal computers, the the impact of emerging imaging technologies on the public lost about $20 million in fiscal year 2000 from counterfeiting of U.S. currency. The study concluded relatively poor-quality inkjet counterfeits. To supple- that graphic arts and reprographic imaging systems ment the existing anti-counterfeiting security fea- might eventually pose a serious counterfeiting tures, the United States is cooperating in an interna- threat.15 In response to both the study's findings and tional effort to devise technical solutions that will independent work that the Federal Reserve conreduce the ability of the opportunistic counterfeiter to ducted, the Department of the Treasury approved a reproduce currency on personal computers. new-series design in 1990. The Series-1990 currency The Federal Reserve and the Secret Service reg- incorporated a security thread and microprinting as ularly monitor counterfeiting activity to ensure that visual counterfeit-deterrent features that the public the integrity of U.S. currency is not compromised. could use to authenticate genuine currency and that Although the Secret Service is the primary agency were difficult to replicate with reprographic imaging responsible for combating counterfeiting activity, the systems. Federal Reserve also plays an important role in detecting highly deceptive counterfeit notes that pass 14. Intaglio is a printing process in which the printing plate is unnoticed to the public. Reserve Banks also detect recessed by engraving or etching on a metal plate. The printing takes other counterfeit notes of varying quality. On aver- place at very high pressure—up to 100 tons per square inch. The compression of the paper and the transfer of a thick layer of ink give age, depository institutions and the public detect an intaglio print its characteristic feel. about 80 percent of the total value of counterfeit 15. Sheldrick, J.E. et al., The Impact of Emerging Imaging Technotes passed and, as required by law, report the nologies on Counterfeiting of U.S. Currency (final report to the Board of Governors of the Federal Reserve System prepared by Battelle counterfeits to local police or the Secret Service. The Columbus Laboratories, Columbus, Ohio, August 16, 1983). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

574 Federal Reserve Bulletin • September 2001 At the time, the Department of the Treasury and PUBLIC EDUCATION ON CURRENCY REDESIGN the Federal Reserve recognized that the security features of the Series-1990 design were insufficient Over the past ten years, U.S. currency has incorpoto protect U.S. currency against counterfeits pro- rated increasingly more complex security features. duced with highly sophisticated and technologically The new designs have features that an informed advanced reprographic and personal computing sys- public can easily recognize, medium-security featems. To address the problem, a task force composed tures that retailers and other cash handlers can use to of representatives from the Department of the Trea- authenticate currency, and high-security features that sury (including the Secret Service and the BEP) only the central bank and the Secret Service can use and the Federal Reserve System investigated pos- to authenticate currency. For the Series-1996 design, sible solutions and recommended new currency the Department of the Treasury developed and disdesigns that incorporated more sophisticated security tributed educational material throughout the United features. As part of its evaluation, the task force States and the world. The goal of the educational investigated features that would be easily recognized material was to inform users of U.S. currency about by the public and other less visible features that the design changes to facilitate a smooth transition to would be difficult to replicate with the emerging the redesigned currency. Furthermore, the campaign technologies. explained the reasons for the redesign, familiarized The Series-1996 design was the first major rede- cash handlers and users with the new features, and sign of U.S. currency in nearly seventy years and assured foreign users that there would be adequate included both a different look that was intended supplies of the redesigned currency and that previous to attract public attention and sophisticated security designs would remain legal tender. features that would thwart the new counterfeiting As the United States moves forward with new threats.16 The Series-1996 design incorporates a secu- designs, public education programs will need to rity thread that, depending on denomination, glows in inform even larger segments of the public about the different colors under UV light and is located in features of genuine currency. Despite the Department different places on the note. The new design includes of the Treasury's efforts thus far to direct the public's microprinting and other fine-line printing that is diffi- attention to the features in new designs, poor-quality cult to replicate on digital-imaging equipment. Fea- inkjet counterfeits are easily passed to the domestic tures that are highly recognizable to the public public. As the Department of the Treasury introduces include the larger, slightly off-center portrait that new currency designs in the future, it must also contains considerably more detail than portraits on commit adequate resources to prepare and deliver older designs, a watermark depicting the figure in the effective public education and awareness programs. portrait, and color-shifting ink on the front bottom The goal of these programs should be to improve the right corner of the note, which changes from green to public's knowledge about the distinctive feel of genublack when viewed at different angles. ine U.S. currency and the full array of overt security In the face of continuing technological advances features. (See box "Introduction of the Euro and that will pose future challenges to U.S. currency, the Public Education.") Department of the Treasury and the Federal Reserve In Section 807 of the Antiterrorism and Effective anticipate that they will need to recommend more Death Penalty Act of 1996, the Congress imposed a frequent currency design changes to the Secretary requirement on the Department of the Treasury to of the Treasury in the future. Since the introduction report to Congress every three years through 2006 on of Series-1996 currency, the overall value of counter- the use and counterfeiting of U.S. currency abroad.17 feit notes passed has remained fairly constant at In complying with this requirement, which is aimed about $40 million annually. Nevertheless, inkjet at maintaining the integrity of and public confidence counterfeiting has become more prevalent, a develop- in U.S. currency worldwide, the Department of the ment that has motivated policymakers to evaluate Treasury and the Federal Reserve established the new design proposals. The BEP's goal is to have the International Currency Awareness Program (ICAP). next-generation currency ready for introduction as Although ICAP was initially established to aid the early as 2003. international introduction of the Series-1996 cur- 17. See U.S. Department of the Treasury, The Use and Counterfeit- 16. See Theodore E. Allison and Rosanna S. Pianalto, "The Issu- ing of United States Currency Abroad (a report to the Congress by the ance of Series-1996 $100 Federal Reserve Notes: Goals, Strategy, Secretary of the Treasury, in consultation with the Advanced Counterand Likely Results," Federal Reserve Bulletin, vol. 83 (July 1997), feit Deterrence Steering Committee, pursuant to section 807 of pp. 557-64. PL 104-132; Department of the Treasury, January 2000). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Opportunities and Challenges of the U.S. Dollar as an Increasingly Global Currency 575 FUTURE OF BANK NOTES AND COIN Introduction of the Euro and Public Education In 1999, the Department of the Treasury and the Federal Reserve Board studied the future of U.S. On January 1, 2002, the European Central Bank (ECB) currency and coin in the United States and abroad will introduce the euro as the official national currency and identified the components that drive demand for and coin for participating European Union (EU) coun- notes and coin. tries. Each of the twelve participating countries (Austria, Domestically, increases in aggregate spending will Belgium, Finland, France, Germany, Greece, Ireland, lead to continued increases in the demand for cur- Italy, Luxembourg, the Netherlands, Portugal, and Spain) rency. New coin programs, such as the 50 States may co-circulate national bank notes and coins and the Quarter Program, are likely to continue to promote euro until February 28, 2002. Each participating country the growth of coin in circulation. The increasing use has determined for how long (usually through Decern- [ of alternative payment mechanisms might, however, ber 31, 2002) its citizens can exchange national bank notes and coins at depository institutions. Thereafter, reduce demand for currency and coin. For example, if national bank notes and coins can be redeemed only at the public chooses to make relatively greater use of branches of the ECB. credit or debit cards in place of cash, demand for cash The introduction of 14.3 billion euro bank notes and will accordingly decrease. Smart card and stored- 50.1 billion euro coins has prompted the ECB to launch value card technology may eventually become popua massive public education effort, at a cost of about lar payment mechanisms, but their market niche is €80 million ($69 million), called the Euro 2002 Infor- unclear at this time. mation Campaign. The campaign will concentrate on Internationally, any further steps toward dollarifour primary issues relating to the new bank notes and zation in various countries would increase demand coins: (1) design features, (2) public security features, for U.S. currency. The effect of the euro on future (3) denominations, and (4) details of the changeover from demand for U.S. currency and coin, however, is not national bank notes and coins to euros. Accordingly, the ECB's campaign will attempt to eliminate questions and clear. Nonetheless, as long as foreigners continue to confusion by delivering throughout the EU a consistent demand U.S. currency as a hedge against political and message, which will include the following information: economic risk, the Federal Reserve can expect to see increased demand for Federal Reserve notes. • The euro will be physically available on January 1, 2002. CONCLUSION • The bank-note designs for participating countries are identical. The role of the Federal Reserve has expanded to • The eight euro coins will have twelve versions, each accommodate increasing global demand for U.S. curwith a national design of a participating country on one rency, and the Federal Reserve has instituted new side and a common EU design on the other side. policies and programs to effectively issue and dis- • The bank notes have state-of-the-art security tribute currency around the world. The Federal features. Reserve also cooperates with interagency groups that • The decisions about how long each country's citiinclude the Department of the Treasury (including zens can take to trade in their national bank notes and the Secret Service and the BEP) and international coins at central bank branches (after the co-circulation organizations to find solutions to complex currency period) will be communicated. issues that include currency management and coun- The ECB's campaign is intended to reach the widest terfeit suppression. audience possible, including partners in the changeover Like all central banks, the Federal Reserve undereffort, such as banks, retailers, tourism agencies, and stands that in the current environment, emerging techmany other businesses. nologies will continue to present new opportunities for counterfeiters. For this reason, the Department of the Treasury and the Federal Reserve recognize that currency will need to be redesigned more frequently. rency design, its goals now include quantifying the U.S. currency, however, remains highly secure, and amount of genuine and counterfeit U.S. currency the value of passed counterfeits remains relatively circulating abroad. ICAP representatives conduct low compared with the overall value of currency in interviews with high-level contacts in foreign bank- circulation. The Federal Reserve and the Department ing organizations and law enforcement agencies and of the Treasury will continue to assess counterfeiting assess regional and local capabilities of detecting threats and devise solutions to maintain confidence in counterfeit U.S. currency. the integrity of U.S. currency. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

576 Treasury and Federal Reserve Foreign Exchange Operations This report, presented by Dino Kos, Senior Vice second quarter. Market participants debated the extent President, Federal Reserve Bank of New York, and of the U.S. economic slowing and considered the Manager, System Open Market Account, describes scope for any future easing in monetary policy. Marthe foreign exchange operations of the U.S. Depart- ket discussion on the outlook for inflation contributed ment of the Treasury and the Federal Reserve System to Treasury yield curve steepening. Over the quarter, for the period from April 2001 through June 2001. the two-year Treasury yield rose 6 basis points while Krista Schwarz was primarily responsible for prepar- the yield on the ten-year note rose 49 basis points, ing the report. widening the spread between the two- and ten-year yields 43 basis points, to 117 basis points. During the second quarter of 2001, the dollar appre- Early in the quarter, the release of strongerciated 3.3 percent against the euro and depreciated than-expected data for GDP growth in the first 1.2 percent against the yen. On a trade-weighted quarter boosted optimism for growth prospects for basis, the dollar ended the quarter nearly unchanged the remainder of the year. Additionally, several against the currencies of the United States' major announcements of first-quarter earnings contributed trading partners. Over the quarter, market perceptions to a temporary revival in investor sentiment. Global that the U.S. economy would emerge from its down- equity indexes rallied, with the S&P 500, the Topix turn sooner than the euro area provided underlying (Tokyo Stock Exchange Price Index), and the support for the dollar. The U.S. monetary authorities DJ Euro Stoxx indexes gaining as much as 13.1 perdid not intervene in the foreign exchange markets cent, 12.8 percent, and 8.8 percent respectively. Howduring the quarter. ever, other U.S. economic data releases, such as the March and April employment reports, suggested continued softening in some sectors of the economy, PROSPECTS FOR AN ECONOMIC TURNAROUND heightening expectations for further easing of mone- DRIVE U.S. MARKET SENTIMENT tary policy by the FOMC. Over the quarter, yields implied by the July and September federal funds The Federal Open Market Committee (FOMC) lowfutures contracts declined 59 and 58 basis points, to ered the target federal funds rate a total of 125 basis 3.75 percent and 3.67 percent respectively. points, from 5.0 percent to 3.75 percent, during the 1. U.S. Treasury yields, 2001 :Q2 2. Federal funds target rate and yields implied by the July and September federal funds futures contracts, 2001 :Q2 Percent Ten-year Treasury note 5.5 5.00 5.0 Federal funds July federal funds _ Two-year Treasury note _ 4.5 futures contract 4.25 4.0 I L September federal funds futures contract Apr. May June 2001 I I NOTE. In this chart and those that follow, the data are for business days, except as noted. SOURCE. Bloomberg L.P. SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

577 3. Global benchmark equity indexes, 2001 :Q2 5. One-year euro-dollar and dollar-yen option implied volatility, 2001 :Q2 Index, March 30= 100 Percent S&P500 — 110 — 13 — Euro-dollar — 12 — 11 — 10 Dollar-yen 1 1 1 Apr. May June 2001 SOURCE. Bloomberg L.P. SOURCE. J.P. Morgan Chase & Co. In the second half of the quarter, additional reports implied volatilities reached their lowest levels in of declining corporate profitability and indications more than a year and ended the quarter 2.5 and of deteriorating growth in other major economies 2.3 percentage points lower, at 10.65 percent and weighed broadly on sentiment. Diminished prospects 10.9 percent respectively. for economic recovery prompted declines in global equity indexes, which pared gains made earlier in the quarter. On balance, the S&P 500, the Topix, and the EURO-AREA COUNTRIES SHOW SIGNS DJ Euro Stoxx indexes rose 5.5 percent, 1.9 percent, OF DECELERATING GROWTH; and 1.0 percent, respectively, over the second quarter. CAPITAL OUTFLOWS CONTINUE Directional trends in major currency pairs were largely muted, and the dollar closed the quarter nearly The euro depreciated 3.2 percent against the dollar unchanged on a trade-weighted basis. A notable and 4.4 percent against the yen. After trading in a decline in option implied volatility across maturirelatively narrow range against the dollar during the ties in the Group of Three currencies suggested first half of the quarter, the euro weakened to a new lower investor demand for protection against sharp low for the year. Economic data indicating slowing exchange rate movements and a greater level of comeuro-area growth and rising inflation and debate fort with recent trading ranges and directional trends. among market participants regarding the objectives The dollar traded in a range of $0.87 to $0.91 against of the European Central Bank (ECB) weighed on the euro and moved between ¥120 to ¥125 for most sentiment toward the single currency. Net crossof the quarter. One-year dollar-yen and euro-dollar border investment outflows and a shift in investor positioning further pressured the euro. According to the ECB, the net outflow of direct 4. Trade-weighted Group of Three currencies, 2001 :Q2 and portfolio investment from the euro area totaled Index, March 30 = 100 €20.8 billion in April, after an outflow of €86 billion in the first quarter of 2001. The largest outflows were Trade-weighted yen by nonresidents, totaling €11.3 billion. The data seemed to corroborate anecdotal market reports that highlighted Japanese disinvestment from the euro area as the currency-adjusted value of these investments deteriorated. Additionally, after the yen's appreciation in May, positioning data from the International Monetary Market showed that net euro positions by speculative investors turned short for the first time in nine months. Early in the quarter, euro-area economic data indi- 2001 cated that growth was slowing and price pressures SOURCES. Board of Governors of the Federal Reserve System, the Federal were rising. M3 growth and headline inflation—the Reserve Bank of New York, and the Bank of England. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

578 Federal Reserve Bulletin • September 2001 6. Currency-adjusted price returns on euro-denominated of support to expectations for further easing. Addigovernment bond index, 2001 :Q2 tionally, the ECB and several German research institutes revised their growth projections downward for Index, March 30 = 100 the euro area. Although the FOMC eased policy more than the ECB, long-dated interest rate differentials remained In euros -— 100 in favor of the dollar in the second quarter. After In dollars the ECB's May 10 move to ease rates, the spread y v /V 95 between the ten-year swap rates for the dollar and the JL In yen . euro reached its widest level for the year at 91 basis points. The euro depreciated 4.6 percent against the — 90 dollar in May after the policy change. On balance over the second quarter, short-dated interest rate dif- 1 1 1 Apr. May June ferentials moved further in favor of the euro but at a 2001 less rapid pace than in the first quarter. SOURCE. Merrill Lynch. ECB's stated monetary policy pillars—remained THE YEN RESPONDS TO BROAD SHIFTS IN above their respective reference values. On May 10, LOCAL AND INTERNATIONAL INVESTOR FLOWS the ECB surprised market participants by lowering official interest rates 25 basis points, bringing the The yen appreciated as much as 6.0 percent and two-week marginal refinancing rate to 4.50 percent. 10.0 percent against the dollar and the euro before Among the factors cited as contributing to the deci- depreciating to end the quarter 1.2 percent and sion was that the ECB identified an upward distortion 4.6 percent stronger against the dollar and the in data for M3 growth and a diminution of upward euro respectively. Investor sentiment toward Japan risks to price stability. improved after Japan's ruling party selected a new prime minister in April, and investor position adjust- Later in the quarter, however, economic data for ments contributed to yen strength in the first half the euro area continued to show signs of rising inflaof the quarter. However, signs of further economic tion, shifting expectations for another interest rate deterioration, delays in implementing anticipated reduction to a later date. The yield implied by the reforms, and market perceptions of official U.S. and September 2001 three-month euribor futures contract Japanese tolerance for yen depreciation reintroduced rose 20 basis points, to 4.25 percent, while the yield a negative bias toward Japanese assets and contribimplied by the March 2002 contract rose only uted to the yen's subsequent decline against the dol- 11 basis points. Meanwhile, data releases for the lar and the euro. euro area showed continued deceleration in economic activity, most notably in Germany, lending a measure Running on a platform of widespread reform, Junichiro Koizumi became Japan's prime minister after Liberal Democratic Party members elected him 7. Dollar-euro swap spreads, 2001 :Q1 and Q2 as their new party leader on April 24. Prime Minister Koizumi's plans for structural reform and fiscal Basis points restraint initially boosted investor optimism toward Japanese securities, providing underlying support for j Ten-year the yen. Net purchases of Japanese equities by forspread eign investors, who many market participants estimated were underweight in Japanese stocks relative Two-year : i to their benchmarks, rose to their highest level since t- i spread ~TJ December 1999. Additionally, in mid-May, the euro's weakness and resulting Japanese investor losses reportedly led to a retrenchment of European investments by Japanese investors. The yen's initial appre- 1 1 1 i h ciation sparked a spate of short yen position cover- Jan. Feb. Mar. Apr. June 2001 ing, further accelerating the exchange rate movement. Against this backdrop of position adjustment and NOTE. Dashed vertical lines denote interest rate cuts by the FOMC. Solid vertical line denotes the interest rate cut by the ECB. capital flows, the yen appreciated sharply in late May, SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 579 8. Foreign investor flows for Japanese equities 10. Yields on short-term Japanese fixed-income securities, and the Topix equity index, 2001 :Q2 2001 :Q2 Points Billions of yen Apr. May June SOURCES. Tokyo Stock Exchange and Bloomberg L.P. SOURCE. Bloomberg L.P. breaking below the ¥120 and ¥101 levels against the In an effort to better maintain its target level of dollar and the euro respectively. ¥5 trillion in current account balances, the Bank of In June, this price action was largely reversed: Japan implemented several operational changes in its The yen weakened 4.5 percent against the euro and money market and repurchase agreement transactions 4.9 percent against the dollar, as post-election enthu- during the quarter. Market impressions that economic siasm and initial hopes for specific structural reform conditions in Japan were worsening were confirmed plans began to ebb. In addition, market participants by economic data that showed that GDP growth interpreted a Japanese newspaper report as suggest- was negative in the first quarter and by the Bank of ing that U.S. policymakers would tolerate a weaker Japan's downgrade of its assessment of the state of yen exchange rate if it resulted from a restructuring the Japanese economy. This led to market speculation of Japan's economy. Japanese economic data and that the Bank of Japan may be preparing to adopt downward revisions of growth forecasts reduced measures to further ease its monetary policy stance, investor expectations for an economic recovery. perhaps by raising its target level for financial institu- Japan's trade surplus for May declined markedly, tions' current account balances. Reflecting a growing largely attributed to economic deceleration in Japan's certainty among market participants that short-term major trading partners. According to the Tokyo Stock spot interest rates will remain near zero for some Exchange, net foreign buying of Japanese equities time, yields implied by euro-yen futures contracts early in the quarter became net foreign selling in the across maturities fell, and the yield on the two-year second half of the quarter. The Topix subindex for the Japanese government bond declined 8 basis points, to banking sector fell as much as 15 percent, reaching 6 basis points. its lowest level since October 1998. TREASURY AND FEDERAL RESERVE FOREIGN 9. The yen against the dollar and the euro, 2001:Q2 EXCHANGE OPERATIONS Yen per dollar or euro The U.S. monetary authorities did not undertake any intervention operations this quarter. At the end of the quarter, the current values of the euro and yen reserve holdings totaled $14.5 billion for the Federal Reserve's System Open Market Account and $14.5 billion for the U.S. Treasury's Exchange Stabilization Fund. The U.S. monetary authorities invest all of their foreign currency balances in a variety of instruments that yield market-related rates of return and have a high degree of liquidity and credit quality. To the greatest extent possible, these investments are split evenly between the Federal Reserve System and the Treasury. SOURCE. Bloomberg L.P. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

580 Federal Reserve Bulletin • September 2001 A significant portion of the U.S. monetary authorities' foreign exchange reserves is invested in govern- Discontinuation of "Treasury and Federal ment securities held outright or under repurchase Reserve Foreign Exchange Operations" agreements. During the quarter, the U.S. monetary in the Federal Reserve Bulletin authorities expanded the pool of euro-denominated repurchase agreement collateral that they will accept. The quarterly report "Treasury and Federal Reserve For- In addition to German sovereign debt, the U.S. mone- eign Exchange Operations," by the Federal Reserve Bank tary authorities now accept sovereign debt backed of New York, will not be reprinted in the Federal Reserve by the full faith and credit of the governments of Bulletin after the December 2001 issue. Each quarter's report is available soon after the end of the quarter on Belgium, France, Italy, the Netherlands, and Spain. the web site of the Federal Reserve Bank of New York Foreign currency reserves are also invested in (www.newyorkfed.org/pihome/news/forex/), which also deposits at the Bank for International Settlements has the reports back to 1996. The reports for years before and in facilities at other official institutions. As of 1996 are available in paper copies from the Public Infor- June 30, direct holdings of foreign government secu- mation Department, Federal Reserve Bank of New York, rities totaled $12.9 billion, split evenly between 33 Liberty Street, New York, NY 10045 (tel. 212-720the Federal Reserve's System Open Market Account 5424). and the U.S. Treasury's Exchange Stabilization Fund. jJI JJS sfc sfc Foreign government securities held under repurchase agreement totaled $2.8 billion at the end of the Other reprints will also be eliminated from the Bulletin quarter and were also split evenly between the two after December 2001: the monthly report on industrial authorities. • production and capacity utilization, congressional testimony, the FOMC minutes, and the Federal Reserve Bank of New York's annual "Open Market Operations" report (the text portion of "Open Market Operations" will be reprinted in the Board's Annual Report rather than in the Bulletin). The documents are widely distributed when originally published, and several sources for historical information are available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Treasury and Federal Reserve Foreign Exchange Operations 581 1. Foreign currency holdings of U.S. monetary authorities based on current exchange rates, 2001 :Q2 Millions of dollars Quarterly changes in balances, by source BBaallaannccee,, J '9 ' BBaallaannccee,, IItteemm MMaarr.. 3311,, 22000011 Net purchases Effect of Investment Currency Interest JJuunnee 3300,, 22000011 and sales1 sales2 income ad v j a u l s u t a m ti e o n n t s3 an a d c c o ru th a e l r4 FEDERAL RESERVE SYSTEM OPEN MARKET ACCOUNT (SOMA) Euro 6,995.7 .0 .0 81.9 -257.2 6,820.4 Japanese yen 7,515.3 .0 .0 4.6 48.7 7,568.6 Total 14,511.0 .0 .0 86.5 -208.5 14,389.0 Interest receivables (net)5 75.9 -7.6 68.3 Other cash flow from investments4 .0 .0 .0 Total 14,586.9 .0 .0 86.5 -208.5 -7.6 14,457.3 U.S. TREASURY EXCHANGE STABILIZATION FUND (ESF) Euro 6,993.5 .0 .0 81.6 -257.2 6,817.9 Japanese yen 7,515.3 .0 .0 4.6 48.7 7,568.6 Total 14,508.8 .0 .0 86.2 -208.5 14,386.5 Interest receivables5 72.4 -9.7 67.0 Other cash flow from investments4 .0 .0 .0 Total 14,581.2 .0 .0 86.2 -208.5 -9.7 14,453.5 NOTE. Figures may not sum to totals because of rounding. 3. Foreign currency balances are marked to market monthly at month-end 1. Purchases and sales for the purpose of this table include foreign cur- exchange rates. rency sales and purchases related to official activity, swap drawings and repay- 4. Values are cash flow differences from payments and collection of funds ments, and warehousing. between quarters. 2. This figure is calculated using marked-to-market exchange rates; it 5. Interest receivables for the ESF are revalued at month-end exchange rates. represents the difference between the sale exchange rate and the most recent Interest receivables for the Federal Reserve System are carried at average cost revaluation exchange rate. Realized profits and losses on sales of foreign cur- of acquisition and are not marked to market until interest is paid. rencies, computed as the difference between the historical cost-of-acquisition . . . Not applicable. exchange rate and the sale exchange rate, are reflected in table 2. 2. Net profits or losses (-) on U.S. Treasury 3. Reciprocal currency arrangements, June 30, 2001 and Federal Reserve foreign exchange operations, Millions of dollars based on historical cost-of-acquisition exchange rates, Amount of Outstanding, 2001 :Q2 Institution facility June 30, 2001 Millions of dollars Reciprocal currency Federal U.S. Treasury arrangements Reserve Exchange Period and item System Open Stabilization BBaannkk ooff CCaannaaddaa 22,,000000 ..00 Market Account Fund BBaannkk ooff MMeexxiiccoo 33,,000000 ..00 Valuation profits and losses on TToottaall 55,,000000 ..00 outstanding assets and liabilities, Mar. 31, 2001 Federal Reserve and U.S. Treasury Euro -1,408.1 -1,624.6 Exchange Stabilization Fund Japanese yen 459.5 671.6 currency arrangements Total -948.6 -953.0 BBBaaannnkkk ooofff MMMeeexxxiiicccooo 33,,000000 ..00 Realized profits and losses TTToootttaaalll 33,,000000 ..00 from foreign currency sales, Mar. 31, 2001-June 30, 2001 Euro .0 .0 Japanese yen .0 .0 Total .0 .0 Valuation profits and losses on outstanding assets and liabilities, June 30, 2001 Euro -1,665.4 -1,881.8 Japanese yen 508.2 720.4 Total -1,157.2 -1,161.4 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

582 Industrial Production and Capacity Utilization for July 2001 Released for publication August 15 which had dropped sharply in June, was unchanged in July; utilities production declined 0.5 percent, and Industrial production contracted 0.1 percent in July, mining output decreased 0.6 percent. At 142.8 perits tenth consecutive monthly decline. Production in cent of its 1992 average, industrial production in July the second quarter was revised up but still fell at an was 3.2 percent lower than in July 2000. Capacity annual rate of 4.2 percent. Manufacturing output, utilization for total industry was 77.0 percent, a level Industrial production Ratio scale, 1992 = 100 145 - Total industrial production 125 - ^ » ^^ Excluding high-tech industries — 105 — — 85 i i i i i i i i i i i i i Capacity utilization Percent of capacity Total industry 85 75 70 I I ML I I X I I I I I I I I L 1977 1979 1981 1983 1985 1987 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

583 Industrial production and capacity utilization, July 2001 Industrial production, index, 1992=100 Percent change Category 2001 20011 July 2000 to Apr.r Mayr Juner JulyP Apr/ Mayr Juner JulyP July 2001 Total 144.6 144.2 143.0 142.8 -.3 -.3 -.9 -.1 -3.2 Previous estimate 144.2 143.5 142.5 -.5 -.5 -.7 Major market groups Products, total2 133.8 133.6 132.7 132.8 -.5 -.2 -.6 .1 -2.2 Consumer goods ... 122.1 122.6 122.2 122.8 -.3 .4 -.3 .5 -.1 Business equipment 193.3 191.5 188.2 187.7 -1.2 -.9 -1.7 -.3 -3.8 Construction supplies 139.6 139.4 138.8 138.6 -.6 -.2 -.4 -.2 -3.6 Materials 164.1 163.4 161.5 160.9 .1 -.4 -1.2 -.3 -4.8 Major industry groups Manufacturing 149.6 149.2 147.7 147.7 -.3 -.2 -1.0 .0 -3.9 Durable 190.1 189.8 187.3 187.5 -.6 -.2 -1.3 .1 -3.7 Nondurable 112.8 112.4 111.7 111.6 .1 -.3 -.6 -.1 Mining 103.5 103.8 103.1 102.5 .8 .3 -.7 -.6 2.0 Utilities 120.9 119.0 120.1 119.6 -.9 -1.6 1.0 -.5 .4 Capacity utilization, percent MEMO Capacity, percent 2000 2001 change, Average, Low, High, July 2000 1967-00 1982 to July Apr.r Mayr Juner JulyP July 2001 Total 82.1 71.1 85.4 82.3 78.4 78.0 77.2 77.0 3.3 Previous estimates .. 78.1 77.6 77.0 Manufacturing 81.1 69.0 85.7 81.6 76.9 76.6 75.7 75.6 3.7 Advanced processing 80.6 71.0 84.2 79.8 77.4 77.1 76.4 76.4 2.1 Primary processing . 82.2 65.7 88.3 85.6 77.2 76.7 75.6 75.3 6.5 Mining 87.4 80.3 88.0 86.3 90.0 90.3 89.8 89.3 -1.4 Utilities 87.6 75.9 92.6 89.5 88.5 86.8 87.4 86.6 3.7 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. more than 5 percentage points below its 1967-2000 1.4 percent, its sixth consecutive monthly decline; average. since January, production has dropped nearly 7 percent, and the output of communications equipment over the period has been particularly weak. Although MARKET GROUPS the production of transit equipment rose 2.0 percent in July, it remained more than 7 percent below its The output of consumer goods increased 0.5 percent level in July 2000. The output of industrial and other after a decline of 0.3 percent in June. The 2.5 percent equipment dipped 0.1 percent in July after having rise in the production of durable consumer goods was fallen almost 2 percent per month over the previous led by a sizable gain in the output of automotive three months. products, particularly light trucks, which more than The output of business supplies fell 0.5 percent offset declines in the production of home electronics from a downward-revised June estimate; it was the and appliances. The output of nondurable consumer sector's eighth consecutive monthly decline. Among goods was unchanged. The output of consumer the contributors to the contraction were paper busienergy products fell 0.7 percent; the production of ness supplies, newspaper advertising, and job printnon-energy nondurables edged up 0.1 percent, as ing. The production of construction supplies fell increases in the production of foods and tobacco, 0.2 percent. clothing, and chemical products slightly outweighed The output of industrial materials decreased a drop in the output of paper products. 0.3 percent. The declining output of equipment parts, Continuing its slide of recent months, the index for particularly semiconductors, was responsible for a business equipment declined 0.3 percent in July. The decrease in the index for durable materials. Among production of information processing equipment fell nondurable materials, the output of chemicals, tex- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

584 Federal Reserve Bulletin • September 2001 tiles, and paper continued to fall; the production of energy materials fell 0.6 percent. Discontinuation of "Industrial Production and Capacity Utilization" in the Federal Reserve Bulletin INDUSTRY GROUPS "Industrial Production and Capacity Utilization" will not After a 1.0 percent contraction in June, manufactur- be reprinted in the Federal Reserve Bulletin after the ing output held steady in July but remained 3.9 per- December 2001 issue. The Federal Reserve's monthly cent below its level in July 2000. After large declines G.17 statistical release, "Industrial Production and Capacity Utilization," which this section of the Bulletin in June, the production of durables edged up 0.1 persummarizes each month, is available on the Board's web cent in July, while the production of nondurables fell site (www.federalreserve.gov/releases/gl7/); historical by the same amount; output in both industry groups data back to 1919 are also available on the web site. The remained well below their year-earlier levels. The data are also available in paper copies and on diskettes largest advance among major durable goods indusfrom Publications Services, mail stop 127, Board of tries was in motor vehicles and parts. Smaller gains Governors of the Federal Reserve System, Washingwere recorded by instruments, miscellaneous manu- ton, DC 20551 (tel. 202-452-3244). facturing, fabricated metal products, and stone, clay, and glass products. The output of electrical machinery dropped more than 2 percent; furniture and fix- Other reprints will also be eliminated from the Bulletin tures production also declined. Within nondurables, after December 2001: congressional testimony, the increases in apparel and in rubber and plastics pro- FOMC minutes, the quarterly report "Treasury and Federal Reserve Foreign Exchange Operations," by the Fedduction were slightly more than offset by declines in eral Reserve Bank of New York, and the annual report petroleum products and in printing and publishing. "Open Market Operations," also by the Federal Reserve The factory operating rate edged down 0.1 percent- Bank of New York (the text portion of "Open Market age point, to 75.6 percent. After June revisions, the Operations" will be reprinted in the Board's Annual utilization rate for primary-processing industries Report rather than in the Bulletin). The documents are declined to 75.3 percent, while the rate for advanced widely distributed when originally published, and several processing held steady at 76.4 percent. The operating sources for historical information are available. rates of almost all manufacturing industries contracted, as they have through much of the past year. Declines have been particularly notable in the indus- Industrial production and capacity utilization will trial machinery and equipment industry, in which continue to be based on the 1987 Standard Industrial utilization has fallen to 73.5 percent from 82.1 per- Classification (SIC) until the 2002 annual revision, cent in July 2000, and in the electrical machinery after which they will be constructed from the North industry, in which the rate dropped 23.2 percentage American Industrial Classification System (NAICS). points in the past year. The operating rate at utilities The new NAICS-related production indexes will be fell 0.8 percentage point, to 86.6 percent. The operat- based on annual output measures that are constructed ing rate for mining slipped 0.5 percentage point, to by reclassifying the establishments in historical Cen- 89.3 percent. suses of Manufactures and Mineral Industries under NAICS; annual output indexes constructed this way will maximize the reliability and historical consis- REVISION OF INDUSTRIAL PRODUCTION AND tency of the IP industry detail. CAPACITY UTILIZATION The updating of source data for IP in the 2001 annual revision will include annual data from the On November 27, the Federal Reserve Board will 1999 Bureau of the Census Annual Survey of Manupublish revisions to the index of industrial production factures and from selected editions of its 1999 and (IP), to the related measures of capacity and capacity 2000 Current Industrial Reports. Annual data from utilization, and to the index of industrial use of elec- the U.S. Geological Survey regarding metallic and tric power. The updated measures will reflect the nonmetallic minerals (except fuels) for 1999 and incorporation of newly available, more comprehen- 2000 will also be introduced. The updating will sive source data typical of annual revisions. The new include revisions to the monthly indicator for each source data are for recent years, primarily 1999 and industry (either physical product data, production- 2000, although data from 1992 onward will be sub- worker hours, or electric power usage) and to seaject to revision. sonal factors. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Industrial Production and Capacity Utilization 585 Capacity and capacity utilization will be revised to from the 1997 Census of Manufactures and the 1998 incorporate preliminary data from the 2000 Survey of and 1999 Annual Survey of Manufactures. Plant Capacity of the Bureau of the Census, which Once the revision is published, it will be made covers manufacturing, along with other new data on available on the Board's web site. The revised data capacity from the U.S. Geological Survey, the Depart- will also be available through the web site of the ment of Energy, and other organizations. The statis- Department of Commerce. Further information on tics on the industrial use of electric power will incor- these revisions is available from the Board's Indusporate additional information received from utilities trial Output Section (telephone 202-452-3197). • for the past few years and will include some data Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

586 Testimony of Federal Reserve Officials Testimony of Dolores S. Smith, Director, Division of extend for longer periods. These agreements are not Consumer and Community Affairs, Board of Gover- covered by the disclosure requirements of the federal nors of the Federal Reserve System, before the Sub- Consumer Leasing Act, which applies to leases that committee on Financial Institutions and Consumer initially exceed four months. Nor are these transac- Credit of the Committee on Financial Services, U.S. tions generally credit sales for purposes of Truth in House of Representatives, July 12, 2001 Lending Act disclosures. Contracts in the form of a lease are treated as credit under Truth in Lending I appreciate the opportunity to appear before this only if the consumer is obligated to purchase the subcommittee to offer staff comments on H.R. 1701, property and pay an amount equal to or exceeding the the Consumer Rental Purchase Agreement Act, which total value of the property; such an obligation does would amend the Consumer Credit Protection Act. I not typically exist in rent-to-own transactions. am the Director of the Federal Reserve Board's Divi- Under the Consumer Leasing Act, consumers sion of Consumer and Community Affairs, which receive federally mandated disclosures concerning carries out the Board's responsibilities for administer- the cost of the transaction prior to entering into the ing a number of the consumer protection laws that lease. These disclosures include a description of the make up the Consumer Credit Protection Act, includ- leased property, an itemization of any up-front paying the Truth in Lending Act and the Consumer ments, a payment schedule showing the amount of Leasing Act. each periodic (typically monthly) payment, a listing H.R. 1701 would require cost disclosures for of any other charges the consumer will have to pay, "rental-purchase" agreements, which are also known and the total of payments that the consumer will have as "rent-to-own" transactions. The bill has substan- paid by the end of the lease. There are also disclotive provisions. For example, it establishes consum- sures regarding early termination charges, late payers' right to reinstate an agreement after failing to ment fees, property maintenance responsibilities, and the consumer's options for purchasing the property. make a timely payment. The bill also would prohibit certain provisions in rental-purchase contracts, such Under the Truth in Lending Act, consumers must as confession-of-judgment clauses that prevent con- receive disclosure of the key costs and terms of credit sumers from defending any legal action brought transactions before they become obligated for the under the contract. H.R. 1701 treats rent-to-own extension of credit. Consumers receive disclosures transactions differently from both credit sales and that include the amount of credit extended (known as traditional leases and would, therefore, cover them the amount financed), the cost of credit expressed as under a separate regulatory scheme altogether. a dollar amount (the finance charge) and as an annual The Federal Reserve Board has not taken a posi- percentage rate (APR), the total amount the consumer tion on H.R. 1701. However, I am glad to share the will pay, and a payment schedule showing the timing Board staff's observations—about the bill and some and amount of each payment. of the issues raised—in response to your request. Rental-purchase transactions involve short-term, renewable rentals of personal property, typically on ASSESSING THE NEED FOR LEGISLATION a week-to-week or month-to-month basis. For example, a consumer may rent a television set, major While, currently, there is no federal regulation of household appliances such as a washing machine or rental-purchase transactions, laws governing these refrigerator, or home furnishings such as living room transactions have been adopted in forty-seven states. furniture. By renewing the rental from one period to These laws were enacted largely with the support of the next, a consumer can ultimately purchase the item the industry. All of the state laws have been enacted after making a specified number of payments, but the since 1984 (twenty-four of them since 1990). consumer is not obligated to do so. In the early 1980s, before any action was taken at Rental-purchase transactions typically are for less the state level, representatives of the rental-purchase than four months initially—although they often industry supported federal legislation to cover these Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

587 transactions. For firms operating in multiple states, a consider in determining what disclosures consumers uniform regulatory framework eases the compliance need. Although there may be some disagreement costs. At the time, federal legislation was also advo- about the purchase rate for rent-to-own merchandise, cated by the industry to clarify that rental-purchase the percentage of purchases by customers who enter transactions are leases under the tax laws, and to into these transactions appears to be substantial. The preclude states from applying their credit laws and FTC's survey found that about 70 percent of rent-tousury limits to these transactions. The subsequent own merchandise was purchased by consumers. But enactment of state laws and other legal developments as the FTC report also notes, industry sources have may have settled these issues to some extent. consistently maintained that the purchase rate is con- In the early 1980s, some consumer advocates also siderably lower, about 25 percent to 30 percent. favored federal legislation covering rental-purchase Under H.R. 1701, key cost disclosures must be transactions because of the lack of state law con- provided on merchandise tags or labels for property sumer protections. Since the mid- to late 1980s, how- that is displayed or offered in a dealer's place of ever, consumer advocates have generally objected to business. As the bill recognizes, such disclosures legislation proposed at the federal level for several could be a useful shopping tool for consumers. Only reasons—because they believe the federal proposals eighteen states currently require merchandise discloprovided insufficient consumer protections; because sures, so this is one aspect in which federal law could federal legislation might have preempted state laws directly enhance state-law protections, although some that they viewed as more protective; and, in the case firms may voluntarily be providing these disclosures. of some consumer advocates, because they continued As to the content of merchandise tags, we concur to view rent-to-own transactions as credit sales under with the FTC report's assessment about disclosure the Truth in Lending Act. of total cost for purposes of comparison shopping. Given the existing body of state law, the subcom- Because many customers may end up purchasing mittee is to be commended for holding these hearings the property, merchandise tags and labels should to explore—with industry representatives and con- show the total cost to purchase the item, as prosumer advocates—the need for federal legislation. vided in H.R. 1701, and not just the rental fee. Of The views of the state agencies charged with admin- the states that require merchandise tags, all but a istering and enforcing the applicable state laws few require inclusion of the total purchase price. should also be helpful in this process. Much can be Consumers could use the total purchase cost disclolearned, for example, about the effectiveness and sure while shopping, to compare the dealer's puradequacy of the existing state laws and the states' chase price with the prices offered by other rent-toexperience in enforcing them. I expect you will find own dealers. the Federal Trade Commission's survey on the rent- In addition to the total rental-purchase cost, to-own industry particularly useful in identifying and H.R. 1701 would require merchants also to disclose a discussing relevant issues. The FTC report on its "cash price" for the property covered by the rentalsurvey of rent-to-own customers has been a purchase agreement. This disclosure would enable primary—and important—source of information for consumers to compare the cash price from a rent-tothe Board staff's consideration of these issues. own dealer with the sale prices at traditional retail stores. In making this comparison, a consumer could judge whether the rent-to-own dealer's cash price is EFFECTIVE DISCLOSURES reasonable for the goods and services being provided, Several provisions of H.R. 1701 focus on consumer and they can look at the difference between the disclosures in advertising, on price tags, in catalogs, dealer's cash price and the total purchase price under and in contracts. Disclosures are most effective when the rental-purchase agreement. consumers receive them early enough in the process H.R. 1701 also requires that more detailed discloto use them as a shopping tool, and when the disclo- sures be made in connection with the rental-purchase sures are presented in a way that enables consumers agreement, at or before the date of consummation. to focus on the key costs and terms. We also offer the Most of the cost disclosures would have to be general observation that, while disclosure is impor- grouped together and segregated from other informatant, too much information can sometimes obscure tion. Disclosures about other terms and conditions the basic, key information consumers may need to must be clearly and conspicuously included in the make an informed choice. rental-purchase agreement. This segregation is consistent with the approach used in the Consumer Leas- The fact that rent-to-own transactions have charing Act and Truth in Lending Act, and is an approach acteristics of both sales and leases is important to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

588 Federal Reserve Bulletin • September 2001 that we believe is effective in calling the consumer's specified in H.R. 1701. The effect on these laws attention to the most important terms. should be clarified. THE STANDARD FOR PREEMPTION RULEWRITING AUTHORITY OF STATE LAWS You also have asked us to comment on whether the You asked us to comment on the impact of H.R. 1701 FTC or the Federal Reserve should write the reguon state law. A bill establishing federal minimum lations implementing H.R. 1701, and who should standards for consumer disclosures in rental-purchase be responsible for enforcing these regulations. As transactions may offer some benefits to consumers drafted, the bill currently gives rulewriting authority and to the industry. The effect of any federal legisla- to the Federal Reserve Board. We strongly urge that tion on the ability of states to retain more protective further thought be given to whether the Federal statutory provisions, or adopt new consumer protec- Reserve is the appropriate agency to regulate these tions, should also be taken into account. transactions. H.R. 1701 would amend the Consumer Credit Pro- The Federal Reserve has no supervisory relationtection Act. But as drafted, the bill applies a standard ship with rent-to-own dealers, which are firms that for preemption that differs from the standard used are not generally subject to Board regulations governunder other titles of the act. Under the existing fed- ing financial services. These transactions are not coveral statutes, a specific provision in state law is gener- ered by the existing credit or leasing regulations, and ally preempted only to the extent that the state provi- hence the Board's staff has no direct experience with sion is inconsistent with the federal statute. H.R. 1701 industry practices and how rental-purchase transcontains this language but omits other language used actions are conducted. in the Consumer Credit Protection Act statutes. The We believe the Federal Trade Commission's expeomitted language provides that a state law is not rience in regulating the trade practices of commercial inconsistent with the federal statute if it is found to firms makes that agency the more logical choice for give greater protection to the consumer. writing regulations. As H.R. 1701 recognizes, the The preemption provisions in H.R. 1701 would FTC is the most appropriate agency for purposes of expressly preclude states from requiring an APR enforcement because it is the principal agency disclosure or subjecting rental-purchase transactions charged with enforcing the Consumer Credit Protecto state credit laws, including usury limits. It is not tion Act with respect to companies that are not clear whether the preemption provisions in H.R. 1701 depository institutions. The Federal Reserve and the are intended to limit the states' ability to retain (or other federal banking agencies have enforcement adopt) more protective rules on other aspects of rent- authority under that act only with respect to the to-own transactions. For example, some states man- depository institutions they supervise. date longer reinstatement periods than the periods Testimony by Alan Greenspan, Chairman, Board Monetary policy this year has confronted an econof Governors of the Federal Reserve System, before omy that slowed sharply late last year and has the Committee on Financial Services, U.S. House remained weak this year, following an extraordinary of Representatives, July 18, 2001. (Chairman period of buoyant expansion. Greenspan presented identical testimony before the By aggressively easing the stance of monetary Committee on Banking, Housing, and Urban Affairs, policy, the Federal Reserve has moved to support U.S. Senate, on July 24, 2001.) demand and, we trust, help lay the groundwork for the economy to achieve maximum sustainable I appreciate the opportunity this morning to present growth. Our accelerated action reflected the prothe Federal Reserve's semiannual report on monetary nounced downshift in economic activity, which was policy.1 accentuated by the especially prompt and synchronous adjustment of production by businesses utilizing the faster flow of information coming from the adop- 1. See "Monetary Policy Report to the Congress," Federal Reserve tion of new technologies. A rapid and sizable easing Bulletin, vol. 87 (July 2001), pp. 501-27; also on the Board's web site was made possible by reasonably well-anchored at www.federalreserve.gov/boarddocs/hh/. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Testimony of Federal Reserve Officials 589 inflation expectations, which helped to keep under- many types of consumer durable goods and business lying inflation at a modest rate, and by the prospect capital equipment to rates that could not be sustained. that inflation would remain contained as resource Even though demand for a number of high-tech produtilization eased and energy prices backed down. ucts was doubling or tripling annually, in some cases In addition to the more accommodative stance of new supply was coming on even faster. Overall, monetary policy, demand should be assisted going capacity in high-tech manufacturing industries, for forward by the effects of the tax cut, by falling energy example, rose nearly 50 percent last year, well in costs, by the spur to production once businesses work excess of its already rapid rate of increase over the down their inventories to more comfortable levels, previous three years. Hence, a temporary glut in these and, most important, by the inducement to resume industries and falling short-term prospective rates of increases in capital spending. That inducement should return were inevitable at some point. This tendency be provided by the continuation of cost-saving oppor- was reinforced by a more realistic evaluation of the tunities associated with rapid technological innova- prospects for returns on some high-tech investments, tion. Such innovation has been the driving force which, while still quite elevated by historical stanraising the growth of structural productivity over the dards, apparently could not measure up to the prelast half-dozen years. To be sure, measured produc- vious exaggerated hopes. Moreover, as I testified tivity has softened in recent quarters, but by no more before this Committee last year, the economy as a than one would anticipate from cyclical influences whole was growing at an unsustainable pace, drawlayered on top of a faster long-term trend. ing further on an already diminished pool of available workers and relying increasingly on savings But the uncertainties surrounding the current ecofrom abroad. Clearly, some moderation in the pace nomic situation are considerable, and, until we see of spending was necessary and expected if the econmore concrete evidence that the adjustments of omy was to progress along a more balanced growth inventories and capital spending are well along, the path. risks would seem to remain mostly tilted toward weakness in the economy. Still, the FOMC opted for In the event, the adjustment occurred much faster a smaller policy move at our last meeting because we than most businesses anticipated, with the slowdown recognized that the effects of policy actions are felt likely intensified by the rise in the cost of energy that with a lag, and, with our cumulative 23/4 percentage until quite recently had drained businesses and housepoints of easing this year, we have moved a consider- holds of purchasing power. Growth of outlays of able distance in the direction of monetary stimulus. consumer durable goods slowed in the middle of Certainly, should conditions warrant, we may need 2000, and shipments of nondefense capital goods to ease further, but we must not lose sight of the have declined since autumn. prerequisite of longer-run price stability for realizing Moreover, weakness emerged more recently among the economy's full growth potential over time. our trading partners in Europe, Asia, and Latin Despite the recent economic slowdown, the past America. The interaction of slowdowns in a number decade has been extraordinary for the American of countries simultaneously has magnified the softeneconomy. The synergies of key technologies mark- ing each of the individual economies would have edly elevated prospective rates of return on high-tech experienced on its own. investments, led to a surge in business capital spend- Because the extent of the slowdown was not anticiing, and significantly increased the growth rate of pated by businesses, some backup in inventories structural productivity. The capitalization of those occurred, especially in the United States. Innovahigher expected returns lifted equity prices, which in tions, such as more advanced supply-chain manturn contributed to a substantial pickup in household agement and flexible manufacturing technologies, spending on a broad range of goods and services, have enabled firms to adjust production levels more especially on new homes and durable goods. This rapidly to changes in sales. But these improvements increase in spending by both households and busi- apparently have not solved the thornier problem of nesses exceeded even the enhanced rise in real house- correctly anticipating demand. Although inventoryhold incomes and business earnings. The evident sales ratios in most industries rose only moderately, attractiveness of investment opportunities in the those measures should be judged against businesses' United States induced substantial inflows of funds desired levels. In this regard, extrapolation of the from abroad, raising the dollar's exchange rate while downtrend in inventory-sales ratios over the past financing a growing portion of domestic spending. decade suggests that considerable imbalances emerged late last year. Confirming this impression, By early 2000, the surge in household and business purchasing managers in the manufacturing sector purchases had increased growth of the stocks of Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

590 Federal Reserve Bulletin • September 2001 reported in January that inventories in the hands of unrelenting. Although earnings weakness has been their customers had risen to excessively high levels. most pronounced for high-tech firms, where the pre- As a result, a round of inventory rebalancing was vious extraordinary pace of expansion left oversupundertaken, and the slowdown in the economy that ply in its wake, weakness is evident virtually across began in the middle of 2000 intensified. The adjust- the board, including most recently in earnings of the ment process started late last year when manufactur- foreign affiliates of American firms. ers began to cut production to stem the accumulation Much of the squeeze on profit margins of domestic of unwanted inventories. But inventories did not actu- operations results from a rise in unit labor costs. ally begin falling until early this year as producers Gains in compensation per hour picked up over the decreased output levels considerably further. past year or so, responding to a long period of tight Much of the inventory reduction in the first quarter labor markets, the earlier acceleration of productivity, reflected a dramatic scaling back of motor vehicle and the effects of an energy-induced run-up in conassemblies. However, inventories of computers, semi- sumer prices. The faster upward movement in hourly conductors, and communications products continued compensation, coupled with the cyclical slowdown in to build into the first quarter, and these stocks are the growth of output per hour, has elevated the rate only belatedly being brought under control. As best of increase in unit labor costs. In part, fixed costs, we can judge, some progress seems to have been nonlabor as well as labor, are being spread over a made on inventories of semiconductors and comput- smaller production base for many industries. ers, but little gain is apparent with respect to commu- The surge in energy costs has also pressed down nications equipment. Inventories of high-tech prod- on profit margins, especially in the fourth and first ucts overall have probably been reduced a bit, but a quarters. In fact, a substantial portion of the rise in period of substantial liquidation of stocks still seem- total costs of domestic nonfinancial corporations ingly lies ahead for these products. between the second quarter of last year and the first For all inventories, the rate of liquidation appears quarter of this year reflected the increase in energy to have been especially pronounced this winter, and costs. The decline in energy prices since the spring, the available data suggest that it continued, though however, should be contributing positively to marperhaps at a more moderate pace, this spring. A not gins in the third quarter. Moreover, the rate of inconsequential proportion of the current liquidation increase in compensation is likely to moderate, with undoubtedly is of imported products, and thus will inflation expectations contained and labor markets presumably affect foreign production, but most of the becoming less taut in response to the slower pace of adjustment has fallen on domestic producers. growth in economic activity. In addition, continued At some point, inventory liquidation will come to rapid gains in structural productivity should help to an end, and its termination will spur production and suppress the rise in unit labor costs over time. incomes. Of course, the timing and force with which Eventually, the high-tech correction will abate, and that process of recovery plays out will depend on the these industries will reestablish themselves as a solbehavior of final demand. In that regard, the demand idly expanding, though less frenetic, part of our econfor capital equipment, particularly in the near term, omy. When they do, growth in that sector presumably could pose a continuing problem. Despite evidence will not return to the outsized 50 percent annual that expected long-term rates of return on the newer growth rates of last year, but rather to a more sustaintechnologies remain high, growth of investment in able pace. equipment and software has turned decidedly nega- Of course, investment spending ultimately depends tive. Sharp increases in uncertainties about the short- on the strength of consumer demand for goods and term outlook have significantly foreshortened the services. Here, too, longer-run increases in real time frame over which businesses are requiring new incomes of consumers engendered by the rapid capital projects to pay off. The consequent heavier advances in structural productivity should provide discounts applied to those long-term expectations support to demand over time. And thus far this year, have induced a major scaling back of new capital consumer spending has indeed risen further, presumspending initiatives, though one that presumably is ably assisted in part by a continued rapid growth in not long-lasting given the continuing inducements the market value of homes, from which a significant to embody improving technologies in new capital amount of equity is being extracted. Moreover, equipment. household disposable income is now being bolstered In addition, a deterioration in sales, profitability, by tax cuts. and cash flow has exacerbated the weakness in capi- But there are also downside risks to consumer tal spending. Pressures on profit margins have been spending over the next few quarters. Importantly, the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Testimony of Federal Reserve Officials 591 same pressure on profits and the heightened sense of by our December meeting, the Federal Open Market risk that have held down investment have also low- Committee decided that the time to counter cumuered equity prices and reduced household wealth lative economic weakness was close at hand. We despite the rise in home equity. We can expect the altered our assessment of the risks to the economy, decline in stock market wealth that has occurred over and with incoming information following the meetthe past year to restrain the growth of household ing continuing to be downbeat, we took our first spending relative to income, just as the previous easing action on January 3. We viewed the faster increase gave an extra spur to household demand. downshift in economic activity, in part a consequence Furthermore, while most survey measures suggest of the technology-enhanced speed and volume of consumer sentiment has stabilized recently, softer job information flows, as calling for a quicker pace of markets could induce a further deterioration in confi- policy adjustment. Acting on that view, we have dence and spending intentions. lowered the federal funds rate 23A percentage points While this litany of risks should not be down- since the turn of the year, with last month's action played, it is notable how well the U.S. economy has leaving the federal funds rate at 33A percent. withstood the many negative forces weighing on it. Most long-term interest rates, however, have barely Economic activity has held up remarkably in the face budged despite the appreciable reductions in shortof a difficult adjustment toward a more sustainable term rates since the beginning of the year. This has pattern of expansion. led many commentators to ask whether inflation The economic developments of the last couple expectations have risen. Surely, one reason long-term of years have been a particular challenge for rates have held up is changed expectations in the monetary policy. Once the financial crises of late Treasury market, as forecasts of the unified budget 1998 that followed the Russian default eased, efforts surplus were revised down, indicating that the supto address Y2K problems and growing optimism— plies of outstanding marketable Treasury debt are if not euphoria—about profit opportunities pro- unlikely to shrink as rapidly as previously anticiduced a surge in investment, particularly in high-tech pated. Beyond that, it is difficult to judge whether equipment and software. The upswing outstripped long-term rates have held up because of firming what the nation could finance on a sustainable basis inflation expectations or a belief that economic from domestic saving and funds attracted from growth is likely to strengthen, spurring a rise in real abroad. long-term rates. The shortfall of saving to finance investment One measure often useful in separating the real showed through in a significant rise in average real interest rates from inflation expectations is the spread long-term corporate interest rates starting in early between rates on nominal ten-year Treasury notes 1999. By June of that year, it was evident to the and inflation-indexed notes of similar maturity. That Federal Open Market Committee that to continue to spread rose more than three-fourths of a percentage hold the funds rate at the then-prevailing level of point through the first five months of this year, a not 4% percent in the face of rising real long-term corpo- insignificant change, though half of that increase has rate rates would have required a major infusion of been reversed since. By the nature of the indexed liquidity into an economy already threatening to over- instrument, the spread between it and the comparable heat. In fact, the increase in our target federal funds nominal rate reflects expected CPI inflation. While rate of 175 basis points through May of 2000 barely actual CPI inflation has picked up this year, this rise slowed the expansion of liquidity, judging from the has not been mirrored uniformly in other broad price M2 measure of the money supply, whose rate of measures. For example, there has been little, if any, increase declined only modestly through the tighten- acceleration in the index of core personal consumping period. tion expenditure prices, which we consider to be a By summer of last year, it started to become appar- more reliable measure of inflation. Moreover, survey ent that the growth of demand finally was slowing, readings on long-term inflation expectations have and seemingly by enough to bring it into approximate remained quite stable. alignment with the expansion of potential supply, as The lack of pricing power reported overwhelmindicated by the fact that the pool of available labor ingly by business people underscores the quiescence was no longer being drawn down. It was well into of inflationary pressures. Businesses are experiencing autumn, however, before one could be confident that the effects of softer demand in product markets overthe growth of aggregate demand had softened enough all, but these effects have been especially marked for to bring it into a more lasting balance with potential many producers at earlier stages of processing, where supply. Growth continued to decline to a point that prices generally have been flat to down thus far this Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

592 Federal Reserve Bulletin • September 2001 year. With energy prices now also moving lower and economic performance appeared to come from excesthe lessening of tautness in labor markets expected to sive weakness in activity. damp wage increases, overall prices seem likely to be As a consequence of the policy actions of the contained in the period ahead. FOMC, some of the stringent financial conditions Forecasts of inflation, however, like all economic evident late last year have been eased. Real interest forecasts, do not have an enviable record. Faced with rates are down on a wide variety of borrowing instrusuch uncertainties, a central bank's vigilance against ments. Private rates have benefited from some narinflation is more than a monetary policy cliche; it is, rowing of risk premiums in many markets. And the of course, the way we fulfill our ultimate mandate to growth of liquidity, as measured by M2, has picked promote maximum sustainable growth. up. More recently, incoming data on economic activ- A central bank can contain inflation over time ity have turned from persistently negative to more under most conditions. But do we have the capability mixed. to eliminate booms and busts in economic activity? The period of subpar economic performance, how- Can fiscal and monetary policy acting at their opti- ever, is not yet over, and we are not free of the risk mum eliminate the business cycle, as some of the that economic weakness will be greater than curmore optimistic followers of J.M. Keynes seemed to rently anticipated, and require further policy believe several decades ago? response. That weakness could arise from softer The answer, in my judgment, is no, because there demand abroad as well as from domestic developis no tool to change human nature. Too often people ments. But we need also to be aware that our frontare prone to recurring bouts of optimism and pessi- loaded policy actions this year coupled with the tax mism that manifest themselves from time to time in cuts under way should be increasingly affecting ecothe buildup or cessation of speculative excesses. As I nomic activity as the year progresses. have noted in recent years, our only realistic response The views of the Federal Reserve Governors and to a speculative bubble is to lean against the eco- Reserve Bank Presidents reflect this assessment. nomic pressures that may accompany a rise in asset While recognizing the downside risks to their current prices, bubble or not, and address forcefully the con- forecast, most anticipate at least a slight strengthensequences of a sharp deflation of asset prices should ing of real activity later this year. This is implied they occur. by the central tendency of their individual projec- While we are limited in our ability to anticipate tions, which is for real GDP growth over all four and act on asset price bubbles, expectations about quarters of 2001 of VA to 2 percent. Next year, the future economic developments nonetheless inevitably comparable figures are 3 to 3 lA percent. The civilian play a crucial role in our policymaking. If we react unemployment rate is projected to rise further over only to past or current developments, lags in the the second half of the year, with a central tendency effects of monetary policy could end up destabilizing of 43/4 to 5 percent by the fourth quarter and 43A to the economy, as history has amply demonstrated. 5lA percent four quarters later. This easing of pres- Because accurate point forecasts are extraordinar- sures in product and labor markets lies behind the ily difficult to fashion, we are forced also to consider central tendency for PCE price inflation of 2 to the probability distribution of possible economic out- 2Vi percent over the four quarters of this year and comes. Against these distributions, we endeavor to P/4 to 2Vi percent next year. judge the possible consequences of various alterna- As for the years beyond this horizon, there is still, tive policy actions, especially the consequences of a in my judgment, ample evidence that we are experipolicy mistake. We recognize that this policy process encing only a pause in the investment in a broad set may require substantial swings in the federal funds of innovations that has elevated the underlying rate over time to help stabilize the economy, as, for growth in productivity to a rate significantly above example, recurring bouts of consumer and business that of the two decades preceding 1995. By all evioptimism and pessimism drive economic activity. dence, we are not yet dealing with maturing technolo- In reducing the federal funds rate so substantially gies that, after having sparkled for a half-decade, are this year, we have been responding to our judgment now in the process of fizzling out. To the contrary, that a good part of the recent weakening of demand once the forces that are currently containing investwas likely to persist for a while, and that there were ment initiatives dissipate, new applications of innovasignificant downside risks even to a reduced central tive technologies should again strengthen demand for tendency forecast. Moreover, with inflation low and capital equipment and restore solid economic growth likely to be contained, the main threat to satisfactory over time that benefits us all. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Testimony of Federal Reserve Officials 593 Testimony of Laurence H. Meyer, Member, Board of insured depositors largely indifferent to the risks Governors of the Federal Reserve System, before the taken by their banks because their funds are not at Subcommittee on Financial Institutions and Con- risk if their institution is unable to meet its obligasumer Credit, Committee on Financial Services, U.S. tions. As a result, the market discipline to control House of Representatives, July 26, 2001 risks that insured depositors would otherwise have imposed on banks and thrifts has been weakened. It is a pleasure, Mr. Chairman, to appear before this Relieved of that discipline, banks and thrifts naturally subcommittee to present the views of the Board of feel less inhibited from taking on more risk than they Governors of the Federal Reserve System on deposit would otherwise assume. No other type of private insurance reform as proposed by the Federal Deposit financial institution is able to attract funds from the Insurance Corporation (FDIC) this past spring. At public without regard to the risk it takes with its this point, the Federal Reserve Board's views are creditors' resources. This incentive to take excessive necessarily general because the FDIC's recommenda- risks is the so-called moral hazard problem of deposit tions were purposefully quite broad. insurance, the inducement to take risk at the expense That said, on behalf of the Board I want to compli- of the insurer. ment the FDIC for an excellent report that highlights Because of the reduced market discipline and the issues and develops an integrated framework for moral hazard, there is an intensified need for governaddressing them. We urge the Congress to use that ment supervision to protect the interests of taxpayers framework for promptly developing a detailed legis- and, in essence, substitute for the reduced market lative proposal that addresses the most important discipline. Deposit insurance and other components deficiencies in our current deposit insurance system. I of the safety net also enable banks and thrifts to hope my comments this morning will be helpful in attract more resources than would otherwise be the doing so. case. In short, insured banks and thrifts receive a subsidy in the form of a government guarantee that allows them both to attract deposits at lower interest BENEFITS AND COSTS OF DEPOSIT INSURANCE rates than would be required without deposit insurance and to take more risk without the fear of losing As background to our suggestions, the Board believes their deposit funding. Put another way, deposit insurit is important first to understand the benefits and ance misallocates resources by breaking the link costs of deposit insurance. Deposit insurance has between risks and rewards for a select set of market played a key—at times even critical—role in achiev- competitors. ing the stability in banking and financial markets that From the very beginning, deposit insurance has has characterized the past almost seventy years. involved a tradeoff. On the one hand, there are bene- Deposit insurance, combined with other components fits from the contribution of deposit insurance to of our banking safety net—the Federal Reserve's overall financial stability and the protection of small discount window and payment system guarantees— depositors. On the other hand, deposit insurance and with enhanced macroeconomic stability resulting imposes costs from the inducement to risk-taking, the from monetary and fiscal policies, has meant that misallocation of resources, and the increased need periods of financial stress are no longer characterized for government supervision to protect the taxpayers' by depositor runs on banks and thrifts. Quite the interests. The crafting of reforms of the deposit insuropposite: Asset holders now seek out deposits as safe ance system must struggle to balance these tradeoffs. havens when they have strong doubts about other Moreover, the Board urges, we should be reasonably financial assets. certain that any reforms are aimed primarily at pro- Looking beyond the contribution of deposit insur- tecting the public interest and not the profits or marance to overall financial stability, we should not ket shares of particular businesses. minimize the security it has brought to millions of The Federal Reserve Board believes that deposit households and small businesses. Deposit insurance insurance reforms should be designed to preserve the has provided a safe and secure place for those house- benefits of heightened financial stability and the proholds and small businesses with relatively modest tection of small depositors without at the same time amounts of financial assets to hold their transaction increasing moral hazard or reducing market disciand other balances. pline. This view underpins the response of the Fed- These benefits of deposit insurance, as significant eral Reserve Board to the FDIC's recommendations. as they are, have not come without cost. The very In addition, although at this time we are responding same process that has ended deposit runs has made to very broad recommendations, we urge that the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

594 Federal Reserve Bulletin • September 2001 implementing details be kept as straightforward as thrifts were paying no premium. Included in this possible to minimize the risk of unintended conse- group were banks that have never paid any premium quences that comes with complexity. for their, in some cases substantial, coverage and fast-growing entities whose past premiums were extraordinarily small relative to their current cover- RECOMMENDATIONS FOR REFORM age. We believe that these anomalies were never intended by the framers of the Deposit Insurance Fund Act of 1996 and should be addressed by the The FDIC has made five broad recommendations. Congress. The Congress did intend that the FDIC impose Merging BIF and SAIF risk-based premiums, but the 1996 act limits the ability of the FDIC to impose risk-based premiums The Board strongly supports the FDIC's proposal to on well-capitalized and well-rated banks. And these merge the Bank Insurance Fund (BIF) and Savings two variables—capital strength and examiner over- Association Insurance Fund (SAIF) funds. Because all rating—do not capture all of the risk that banks the charters and operations of banks and thrifts have and thrifts could create for the insurer. The Board become so similar, it makes no sense to continue the believes the FDIC should be free to establish risk separate funds. Separate funds reflect the past, but categories based on any well-researched economic neither the present nor the future. Equally important, variables and to impose premiums commensurate the insurance products provided to the two sets of with these risk classifications. Although a robust riskinstitutions are identical, and thus the premiums based premium system would be technically difficult should be identical as well. Under current arrangeto design, a closer link between insurance premiums ments, the premiums could differ significantly if one and individual bank or thrift risk would reduce moral of the funds fell below the designated reserve ratio of hazard and the distortions in resource allocation that 1.25 percent of insured deposits and the other fund accompany deposit insurance. did not. Merging the funds would also diversify their We note, however, that significant benefits in this risks and reduce administrative expenses. regard are likely to require a substantial range of premiums but that the FDIC has concluded in its Statutory Restrictions on Premiums report that premiums for the riskiest banks would probably need to be capped in order to avoid induc- Current law requires the FDIC to impose higher ing failure at these weaker institutions. We believe premiums on riskier banks and thrifts but restricts its that capping premiums may end up costing the insurability to impose any premium on well-capitalized ance fund more in the long run should these weak and highly rated institutions whenever the corre- institutions fail anyway, with the delay increasing sponding fund's reserves exceed 1.25 percent of the ultimate cost of resolution. The Board has insured deposits. The Board strongly endorses the concluded, therefore, that if a cap is required, it FDIC recommendations that would (1) require that a should be set quite high so that risk-based premiums premium be imposed on every insured depository can be as effective as possible in deterring excessive institution, no matter how well capitalized and well risk-taking. rated it may be or how high the fund's reserves, and (2) eliminate the statutory restrictions on risk-based pricing. Designated Reserve Ratios and Premiums The current statutory requirement that free deposit insurance be provided to well-capitalized and well- The current law establishes a designated reserve ratio rated banks when FDIC reserves exceed a predeter- for BIF and SAIF of 1.25 percent. If that ratio is mined ratio maximizes the subsidy provided to these exceeded, the statute requires that premiums on wellinstitutions and is inconsistent with efforts to avoid capitalized and well-rated banks must be disconinducing moral hazard. Put differently, the current tinued. If the ratio declines below 1.25 percent, the rule requires the government to give away its valu- FDIC must develop a set of premiums to restore the able guarantee when fund reserves meet some ceiling reserve ratio to 1.25 percent; if it appears that the level. This free guarantee is of value to banks and fund ratio cannot be restored to its statutorily desigthrifts even when they themselves are in sound finan- nated level in twelve months, the law requires that a cial condition and when macroeconomic times are premium of at least 23 basis points be imposed on good. At the end of last year, 92 percent of banks and the least risky category of banks. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Testimony of Federal Reserve Officials 595 These requirements are clearly pro-cyclical, lower- have in the past paid premiums that are not coming or eliminating fees in good times when bank mensurate with their present size and hence FDIC credit is readily available and fund reserves should be exposure. built up, and abruptly increasing fees sharply in times The devil, of course, is in the details. But this latter of weakness when bank credit availability is under proposal makes considerable sense, and the Board pressure and fund resources are drawn down to cover endorses it. There are over 900 banks—some now the resolution of failed banks. The FDIC recom- quite large—that have never paid a premium, and mends that surcharges or rebates should be used to without this modification they would continue to pay bring the fund back to the target reserve ratio gradu- virtually nothing, net of rebates, as long as their ally. The FDIC also recommends the possibility of a strong capital and high supervisory ratings were target range for the designated reserve ratio, over maintained. Such an approach is both competitively which the premiums may remain constant, rather inequitable and contributes to moral hazard. It should than a fixed target reserve ratio and abruptly chang- be addressed. ing premiums. We strongly support such increased flexibility and Indexing Insured-Deposit Coverage Ceilings smoothing of premiums. Indeed, we recommend that the FDIC's suggested target reserve range be wid- The FDIC recommends that the current $100,000 ened in order to reduce the need to change premiums ceiling on insured deposits be indexed. The Board sharply. Any floor or ceiling, regardless of its level, does not support this recommendation and believes could result in requiring that premiums be increased that, at this time, the current ceiling should be at exactly the time when banks and thrifts could be maintained. under stress and, similarly, that premiums be reduced In the Board's judgment, it is unlikely that at the time that depositories are in the best position to increased coverage, even by indexing, today would fund an increase in reserves. Building a larger fund in add measurably to the stability of the banking sysgood times and permitting it to decline when necestem. Macroeconomic policy and other elements of sary are prerequisites to less variability in the prethe safety net, combined with the current, stillmium. In addition to widening the range, the Board significant level of deposit insurance, continue to would recommend that the FDIC be given the latiunderpin the stability of the financial system. Thus, tude to temporarily relax floor or ceiling ratios on the the problem that increased coverage is designed to basis of current and anticipated banking conditions solve must be related to either the individual deposiand expected needs for resources to resolve failing tor, the party originally intended to be protected by institutions. deposit insurance, or to the individual bank or thrift. Clearly, both groups would prefer higher coverage if there were no costs. But Congress needs to be clear Rebates about the problem for which increased coverage would be the solution. Since its early days, the FDIC has rebated "excess" premiums whenever it felt its reserves were adequate. This procedure was replaced in the 1996 law by the Depositors requirement that no premium be imposed on wellcapitalized and highly rated banks and thrifts when At the Federal Reserve, we frequently receive letters the fund reaches its designated reserve ratio. The from banks urging that we support increased deposit FDIC proposals would re-impose a minimum pre- insurance coverage. But we virtually never receive mium on all banks and thrifts and a more risk- similar letters from depositors, who are not shy about sensitive premium structure. These provisions would sharing their many other concerns. This experience be coupled with rebates for the stronger entities when may reflect the fact that, as our surveys of consumer the fund approaches what we recommend be a higher finances suggest, depositors are adept at achieving upper end of a target range than the FDIC has sug- the level of deposit insurance coverage they desire by gested, and surcharges when the Fund trends below opening multiple accounts. Such spreading of asset what we suggest be a lower end of a target range. holdings is perfectly consistent with the counsel The FDIC also recommends that the rebates not be always given to investors to diversify their assets— uniform for the stronger entities. Rather, the FDIC whether stocks, bonds, or mutual funds—across difargues that rebates should be smaller for those banks ferent issuers. The cost of diversifying for insured that have paid premiums for only short periods or that deposits is surely no greater than doing so for other Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

596 Federal Reserve Bulletin • September 2001 assets. An individual bank would clearly prefer that tiveness of banking is evidenced by the fact that the depositor maintain all of his or her funds at that 1,363 banks were chartered during the past decade, bank and would prefer to eliminate the need for two-thirds since 1995, when bank credit demands depositor diversification by being able to offer higher began to intensify. deposit insurance coverage. Nonetheless, the deposi- Some small banks argue that they need enhanced tor appears to have no great difficulty—should he deposit insurance coverage to equalize their competior she want insured deposits—in finding multiple tion with large banks because depositors prefer to put sources of fully insured accounts. their uninsured funds in an institution considered too In addition, the singular characteristic of postwar big to fail. As I have noted, however, small banks household financial asset holdings has been the have more than held their own in the market for increasing diversity of portfolio choices. The share of uninsured deposits. In addition, the Board rejects the household financial assets in bank deposits has been notion that any bank is too big to fail. In the Federal declining steadily throughout the postwar period as Deposit Insurance Corporation Improvement Act of households have taken advantage of innovations that 1991, the Congress made it clear that the systemicmake available to them attractive financial instru- risk exception to the FDIC's least-cost resolution of a ments with market rates of return. There has been no failing bank should be invoked only under the most break in that trend that seems related to past increases unusual circumstances. Moreover, the resolution rules in insurance ceilings. Indeed, the most dramatic sub- under the systemic-risk exception do not require that stitution out of deposits in recent years has been from uninsured depositors and other creditors, much less both insured and uninsured deposits to equities and stockholders, be made whole. Consistent with this mutual funds. It is difficult to believe that a change view, the market clearly believes that large instituin ceilings during the 1990s would have made any tions are not too big for uninsured creditors to take at measurable difference in that shift. In fact, bankers' least some loss, with spreads on their subordinated comments and the data indicate that the weakness in debt larger than those on similar debt of large and stock prices in recent quarters has been marked by highly rated nonbank financial institutions. Indeed, increased flows into bank and thrift deposits. there are no Aaa-rated U.S. banking organizations. Another argument often raised by smaller banks regarding the need for increased deposit insurance Depository Institutions coverage is their inability to match the competition from those large securities firms and bank hold- Does the problem to be solved by increased deposit ing companies with multiple bank affiliates, offering insurance coverage concern the individual depository multiple insured accounts through one organization. institution? If so, the problem would necessarily be While the Board believes that such offerings are a concentrated at smaller banks that generally do not misuse of deposit insurance, raising the coverage have access to the money market or foreign branch limit for each account would also increase the aggrenetworks for supplementary funds. Since the mid- gate amount of insurance coverage that large multi- 1990s, banks' U.S. assets have grown at an average bank organizations would be able to offer, so the annual rate of 7.7 percent. Adjusted for the effects of disparity would remain. mergers, the smaller banks, those below the largest 1,000, have actually grown at a more rapid average annual rate of 13 percent. Uninsured deposits at these CONCLUSION smaller banks have also grown more rapidly than at larger banks—at average annual rates of 20.5 percent The Board commends the FDIC for its review, analyat the small banks versus 10.9 percent at the large sis, and recommendations for reform of the deposit banks, both on the same merger-adjusted basis. insurance system. There are several aspects of that Clearly, small banks have a demonstrated skill and system that need reform. The Board supports, with ability to compete for uninsured deposits. To be sure, some modifications, all of the FDIC's recommendauninsured deposits are more expensive than insured tions except indexing of the current $100,000 ceiling. deposits, and bank costs would decline if their cur- The thrust of our proposed modifications would call rently uninsured liabilities received a government for a wider permissible range for the size of the fund guarantee. But that is a different matter and raises the relative to insured liabilities, reduced variation of the issue of a subsidy in its starkest terms. I might add insurance premium as the relative size of the fund that throughout the 1990s, small banks' return on changes with banking and economic conditions, and equity was well maintained. Indeed, the attrac- a premium net of rebates. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Testimony of Federal Reserve Officials 597 There may come a time when the Board finds that households and businesses with modest resources are Discontinuation of "Testimony finding difficulty in placing their funds in safe vehi- of Federal Reserve Officials" in the cles or that there is reason to be concerned that the Federal Reserve Bulletin level of deposit coverage could endanger financial stability. Should either of those events occur, the "Testimony of Federal Reserve Officials" will not be Board would call our concerns to the attention of the reprinted in the Federal Reserve Bulletin after the Congress and support adjustments to the ceiling by December 2001 issue. When testimony is released to indexing or other methods. the public, it is simultaneously placed on the Board's web site (www.federalreserve.gov/boarddocs/testimony/), But today, in our judgment, neither financial stabilwhich also has testimony back to 1996. Paper copies of ity, nor depositors, nor depositories are being disadtestimony are also available by mail from Publications vantaged by the current ceiling. Raising the ceiling Services, mail stop 127, Board of Governors of the now would extend the safety net, increase the govern- Federal Reserve System, Washington, DC (tel. 202-452ment subsidy to banking, expand moral hazard, and 3244). reduce the incentive for market discipline, without providing any real public benefits. With no clear public benefit to increasing deposit insurance, the Other reprints will also be eliminated from the Bulletin Board sees no reason to increase the scope of the after December 2001: the monthly report on industrial safety net. Indeed, the Board believes the time has production and capacity utilization, the FOMC minutes, come to draw the line on expanding government the quarterly report "Treasury and Federal Reserve guarantees. • Foreign Exchange Operations," by the Federal Reserve Bank of New York, and the annual report "Open Market Operations," also by the Federal Reserve Bank of New York (the text portion of "Open Market Operations" will be reprinted in the Board's Annual Report rather than in the Bulletin). The documents are widely distributed when originally published, and several sources for historical information are available. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

598 Announcements VICE CHAIRMAN FERGUSON SWORN IN TO NEW adjustments to the rules to provide additional flexi- TERM ON BOARD bility. Therefore, the Board is lifting the October 1, 2001, compliance date for the interim rules. Once Vice Chairman Roger W. Ferguson, Jr., on July 26, permanent final rules are issued, the Board expects 2001, took the oath of office to a new term on to afford institutions a reasonable period of time to the Board of Governors of the Federal Reserve Sys- comply with those rules. tem. The oath was administered in the presence of Dr. Ferguson's wife, Annette L. Nazareth, by Chair- ADVANCE NOTICE OF PROPOSED RULEMAKING man Alan Greenspan in the Chairman's office. REGARDING THE COMMUNITY REINVESTMENT President Bush nominated Dr. Ferguson on ACT March 5, and the Senate confirmed him on July 19. He originally took office on November 5, 1997, as a Federal bank and thrift regulatory agencies member of the Board to fill an unexpired term. The announced on July 19, 2001, the approval of a joint new Board term expires January 31, 2014. interagency advance notice of proposed rulemaking Separately, Dr. Ferguson was sworn in on Octo- (ANPR) regarding the Community Reinvestment Act ber 5, 1999, to a four-year term as Vice Chairman (CRA). The CRA directs the agencies to assess a that ends October 5, 2003. financial institution's record of meeting the credit needs of its entire community and to consider that record when acting on certain applications for deposit COMPLIANCE DATE LIFTED FOR CONSUMER facilities. When the agencies revised the CRA regula- ELECTRONIC DISCLOSURES tions in 1995, they committed to review the regulations in 2002 to determine whether the revised The Federal Reserve Board announced on August 3, regulations had met the goals of more objective, 2001, the lifting of the October 1, 2001, mandatory performance-based CRA evaluations. compliance date for interim rules governing the elec- The ANPR, published in the Federal Register, by tronic delivery of certain consumer disclosures. the Board of Governors of the Federal Reserve Sys- On March 29, 2001, the Board published interim tem, the Office of the Comptroller of the Currency, final rules on electronic disclosures and invited pubthe Office of Thrift Supervision, and the Federal lic comment. The rules establish uniform standards Deposit Insurance Corporation initiates this review of for the electronic delivery of federally mandated disthe CRA regulations. Through the ANPR, the agenclosures under five consumer protection regulations: cies invite comment on a number of key issues raised B (Equal Credit Opportunity), E (Electronic Fund since 1995 by representatives of financial institutions, Transfers), M (Consumer Leasing), Z (Truth in Lendconsumer and community groups, members of Coning), and DD (Truth in Savings). gress, and the public. The agencies also request com- Financial institutions, creditors, lessors, and others ment on other issues related to the CRA regulations, may deliver disclosures electronically if they obtain including whether any change to the regulations consumers' consent in accordance with the requirewould be beneficial or is warranted, and what steps ments of the Electronic Signatures in Global and the agencies might take instead of, or in addition to, National Commerce Act (the "E-Sign Act"), enacted revising the regulations. Comments from the public in June 2000. must be received by October 17, 2001. Some commenters indicated that there are operational issues raised by the requirements of the interim rules. They also noted that the October 1, 2001, SPANISH-LANGUAGE CONSUMER BROCHURE deadline does not afford financial institutions and ON BANK COMPLAINT INSTRUCTIONS others covered by the Board's consumer disclosure rules adequate time for making the needed changes. The Federal Reserve Board announced on August 7, Based on the comments, the Board is considering 2001, that it has published a Spanish version of its Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

599 brochure for consumers, Como puede un consumidor System, Washington, DC 20551, or phone 202-452presentar una queja acerca de un banco (How to File 3245. The first 100 copies are free of charge. a Consumer Complaint About a Bank). The brochure is also available on the Board's The brochure covers the kinds of complaints the web site at http://www.federalreserve.gov/pubs/ Federal Reserve System investigates and information complaints/spanish.htm. needed from consumers to assist in an investigation. The brochure also provides information about major consumer protection laws and lists the other federal ENFORCEMENT ACTION regulatory agencies and the types of financial institutions they supervise. The Federal Reserve Board announced on July 23, Single as well as multiple copies of the brochure 2001, the issuance of a cease and desist order against are available from Publications Services, Mail Stop Kenneth Goglia, a former managing director of the 127, Board of Governors of the Federal Reserve Bankers Trust Company, New York. • Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

600 Legal Developments ORDERS ISSUED UNDER BANK HOLDING COMPANY nizations in the world.2 Citigroup operates the second ACT largest depository organization in New York, with $53.6 billion in deposits, representing approximately 12.2 per- Orders Issued Under Section 3 of the Bank Holding cent of total deposits in insured depository institutions in Company Act the state ("state deposits").3 Citigroup also operates depository institutions in California, Connecticut, Delaware, Citigroup Inc. Florida, Georgia, Illinois, Maryland, Nevada, New Jersey, New York, New York South Dakota, Texas, Utah, Virginia, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Citigroup Holdings Company EAB operates only in New York and is the 11th largest Wilmington, Delaware depository institution in the state, with $10.9 billion in deposits, representing approximately 2.5 percent of state Citicorp deposits. After consummation of the proposal, Citigroup New York, New York would remain the second largest depository organization in New York, with $64.5 billion in deposits, representing Order Approving Acquisition of a Bank approximately 14.6 percent of state deposits. Citigroup also would remain the largest commercial banking organi- Citigroup Inc., Citigroup Holdings Company, and Citicorp, zation in the United States.4 financial holding companies within the meaning of the Bank Holding Company Act ("BHC Act") (together, Factors Governing Board Review of Bank Acquisition "Citigroup"), have applied under section 3 of the BHC Act (12 U.S.C. § 1842) to acquire indirectly all the voting The BHC Act sets forth the factors that the Board must shares of European American Bank, Uniondale, New York consider when reviewing the formation of bank holding ("EAB"). EAB is a wholly owned subsidiary of ABN companies or the acquisition of banks. These factors are AMRO, Amsterdam, The Netherlands. The proposed trans- the competitive effects of the proposal in the relevant action is primarily a merger of EAB with and into Citi- geographic markets; the convenience and needs of the bank, N.A., New York, New York ("Citibank NA"), a community to be served, including the records of perforwholly owned subsidiary of Citigroup, with Citibank NA mance of the insured depository institutions involved in the as the surviving entity.1 As a merger of banks, the transac- transaction under the Community Reinvestment Act tion is subject to review by the Office of the Comptroller of ("CRA");5 the financial and managerial resources and futhe Currency ("OCC") under the Bank Merger Act ture prospects of the companies and banks involved in the (12 U.S.C. § 1828(c)). The OCC has completed its review proposal; and the availability of information needed to under that Act and has today approved the merger based on determine and enforce compliance with the BHC Act and its review of essentially the same standards as the Board is other applicable federal banking laws.6 required to review under the BHC Act. The Board has considered these factors in light of a Notice of the proposal, affording interested persons an record that includes information provided by Citigroup, opportunity to submit comments, has been published confidential supervisory and examination information, pub- (66 Federal Register 13,927 (2001)). The time for filing licly reported financial and other information, and public comments has expired, and the Board has considered the comments submitted on the proposal. proposal and all comments received in light of the factors set forth in section 3 of the BHC Act. Citigroup, with total consolidated assets of $902.2 billion, is the largest commercial banking organization in the 2. Asset and U.S. ranking data are as of December 31, 2000. United States, controlling approximately 3.9 percent of the 3. In this context, depository institutions include commercial banks, savings banks, and savings associations. Deposit and state ranking total assets of insured commercial banks in the United data are as of June 30, 2000. States, and is one of the largest commercial banking orga- 4. In connection with the proposed bank merger, EAB's branch in The Bahamas will be merged into Citibank NA's existing branch in The Bahamas. 5. 12 U.S.C. § 2901 et seq. 1. Under the proposal, Citibank NA would acquire 100 percent of 6. See 12 U.S.C. § 1842(c). The BHC Act requires review of addithe voting shares of EAB for a moment in time and, immediately after tional factors in cases involving the acquisition of a bank by a foreign acquiring the shares, merge EAB with and into Citibank NA. bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 601 Competitive Considerations tory organization in the market, controlling deposits of $62.3 billion, representing approximately 13.4 percent of Section 3 of the BHC Act prohibits the Board from approv- market deposits. The HHI for the market would increase ing a proposal that would result in a monopoly or be in 52 points to 931. The New York banking market would furtherance of a monopoly. The BHC Act also prohibits the remain unconcentrated after consummation of the pro- Board from approving a proposal that would substantially posal, with numerous competitors in the market. lessen competition in any relevant banking market unless The Department of Justice has reviewed the proposal the anticompetitive effects of the proposal in that banking and advised the Board that consummation of the proposal market are clearly outweighed in the public interest by the would not likely have any significantly adverse competiprobable effects of the proposal in meeting the convenience tive effects in the New York banking market or any other and needs of the community to be served.7 relevant banking market. The OCC has reviewed the com- Citigroup and EAB compete directly in the Metropolitan petitive factors as part of its analysis under the Bank New York/New Jersey banking market ("New York bank- Merger Act and has approved the transaction. The Federal ing market").8 The Board has reviewed carefully the com- Deposit Insurance Corporation ("FDIC") has been propetitive effects of the proposal in the New York banking vided an opportunity to comment and has not objected to market in light of all the facts of record, including the the proposal. number of competitors that would remain in the market, After carefully reviewing all the facts of record, and for the relative shares of total deposits in depository institu- the reasons discussed in this order, the Board concludes tions in the market ("market deposits") controlled by that consummation of the proposal would not likely result Citigroup and EAB,9 the concentration level of market in a significantly adverse effect on competition or on the deposits and the increase in this level as measured by the concentration of banking resources in the New York bank- Herfindahl-Hirschman Index ("HHI") under the Depart- ing market or in any other relevant banking market. ment of Justice Merger Guidelines ("DOJ Guidelines"),10 and other characteristics of the market. Convenience and Needs Factor Citigroup operates the second largest depository organization in the New York banking market, controlling market In acting on a proposal under section 3 of the BHC Act, the deposits of $51.4 billion, representing approximately Board is required to consider the effect of the proposal on 11 percent of market deposits. EAB is the eighth largest the convenience and needs of the communities to be served depository organization in the market, with deposits of and take into account the records of the relevant depository $10.9 billion, representing approximately 2.3 percent of institutions under the CRA. The purpose of the CRA is to market deposits. On consummation of the proposal, Citi- require the federal financial supervisory agencies to engroup would continue to operate the second largest deposi- courage insured depository institutions to help meet the credit needs of local communities in which they operate, consistent with safe and sound operation. Accordingly, the CRA requires the appropriate federal supervisory agency 7. See 12 U.S.C. § 1842(c). 8. The New York banking market is defined as New York City; to take into account an institution's record of meeting the Nassau, Orange, Putnam, Rockland, Suffolk, Sullivan, and Westches- credit needs of its entire community, including low- and ter Counties in New York; Bergen, Essex, Hudson, Hunterdon, Mid- moderate-income ("LMI") neighborhoods, in evaluating dlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union, bank expansion proposals. The Board has carefully consid- Warren, and a portion of Mercer Counties in New Jersey; Pike County ered the convenience and needs and the CRA performance in Pennsylvania; and portions of Fairfield and Litchfield Counties in Connecticut. records of Citigroup's subsidiary depository institutions 9. Market share data are as of June 30, 2000, adjusted to reflect and EAB in light of all the facts of record, including mergers since that date, and are based on calculations that include the comments received on the effect the proposal would have deposits of thrift institutions (savings banks and savings associations) on the communities to be served by the combined bank. weighted at 50 percent. The Board has indicated previously that thrift institutions have become, or have the potential to become, significant competitors of commercial banks. See, e.g., Midwest Financial Group, A. Summary of Public Comments 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board regularly has Eleven commenters responded to the Board's request for included thrift deposits in the calculation of market share on a public comment on this proposal. These commenters op- 50-percent weighted basis. See, e.g., First Hawaiian, Inc., 77 Federal Reserve Bulletin 52 (1991). posed the proposal, requested that the Board approve the 10. Under the DOJ Guidelines, 49 Federal Register 26,823 proposal subject to conditions suggested by the com- (June 29, 1984), a market is considered unconcentrated if the post- menter, or expressed concerns about the record of Citimerger HHI is below 1000. The Department of Justice has informed group in meeting the convenience and needs of the commuthe Board that a bank merger or acquisition generally will not be challenged (in the absence of other factors indicating anticompetitive nities it serves.11 The commenters generally criticized effects) unless the post-merger HHI is at least 1800 and the merger increases the HHI by more than 200 points. The Department of Justice has stated that the higher than normal HHI thresholds for screening bank mergers for anticompetitive effects implicitly recognize the 11. Several commenters requested that Citigroup provide certain competitive effects of limited-purpose lenders and other nondeposi- commitments and answer certain questions, or that the Board impose tory financial institutions. specific conditions or take specific actions, particularly with respect to Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

602 Federal Reserve Bulletin • September 2001 Citigroup's record of home mortgage lending to LMI and with other banking institutions in the area. In addition, minority residents and in LMI communities and communi- several commenters expressed concern that the proposal ties with predominantly minority populations ("minority would result in branch closings that would adversely imcommunities"). Some commenters asserted that Citigroup pact LMI and minority communities. A commenter also had low levels of home purchase mortgage lending to LMI expressed concern about the possible termination or reducor minority residents or in LMI or minority communities. tion of EAB's affordable housing and community develop- Several commenters alleged or expressed concern that data ment products and programs. submitted under the Home Mortgage Disclosure Act ("HMDA")'2 demonstrated that Citigroup engaged in dis- B. CRA Performance Examinations parate treatment of LMI or minority individuals in several areas in the United States, including New York, New York, As provided in the CRA, the Board has evaluated the and Los Angeles, Oakland, San Diego, and San Jose, convenience and needs factor in light of examinations by California.13 As discussed in more detail below, comment- the appropriate federal supervisors of the CRA perforers criticized the lending and credit insurance practices of mance records of the relevant depository institutions. An Citigroup's subprime lending subsidiaries, particularly institution's most recent CRA performance evaluation is a those of Associates First Capital Corporation and its sub- particularly important consideration in the applications prosidiaries (collectively, "Associates").14 cess because it represents a detailed evaluation of the A commenter also criticized Citigroup's level of commu- institution's overall record of performance under the CRA nity development lending and investment activities in New by its appropriate federal supervisors.15 Citibank NA, the York City as being too low, especially when compared lead depository institution of Citigroup, received a "satisfactory" rating at its most recent CRA performance examination by the OCC, as of October 26, 1998 ("1998 CRA the subprime lending activities of Citigroup's affiliates. A commenter Evaluation"). The other subsidiary depository institutions also criticized the CRA-related pledge that Travelers Group Inc. of Citigroup, with one exception discussed below, received ("Travelers") and Citicorp made in connection with their merger in "outstanding" or "satisfactory" ratings at their most re- 1998 as being vague and inelfective. Another commenter alleged that cent CRA performance examinations.16 EAB received a Citigroup's senior management had declined requests for meetings "satisfactory" rating from the Federal Reserve Bank of with some community groups. The Board notes that the CRA requires that, in considering an acquisition proposal, the Board carefully re- New York, as of October 2, 2000. view the actual performance records of the relevant depository institu- Associates National Bank (Delaware), Wilmington, Deltions in helping to meet the credit needs of their communities. Neither aware ("Associates Delaware"), a limited-purpose bank the CRA nor the federal banking agencies' CRA regulations require that engages only in credit card operations and represents depository institutions to make pledges concerning future performance under the CRA, confer authority on the agencies to enforce less than 1 percent of the consolidated assets of Citigroup, pledges made to third parties, or require depository institutions to received a "needs to improve" rating from the OCC, as of meet with particular persons. The Board also notes that future activi- May 30, 1997, before Citigroup acquired the bank as part ties of Citigroup's subsidiary depository institutions will be reviewed of its acquisition of Associates in November 2000.17 As by the appropriate federal supervisors in future performance examinations, and that their CRA performance records will be considered by the Board in any subsequent applications by Citigroup to acquire a depository institution. 15. See Interagency Questions and Answers Regarding Community 12. 12U.S.C. § 2801 etseq. Reinvestment, 65 Federal Register 25,088 and 25,107 (2000). 13. A commenter asserted that Citigroup has discriminated in pro- 16. Citibank (New York State), Pittsford, New York ("Citibank viding homeowners insurance by citing a complaint that was filed NYS"), received an "outstanding" rating from the FDIC, as of against Travelers in 1997. The Board considered a substantially iden- March 6, 2000; Citibank Delaware, New Castle, Delaware, received a tical comment in the proposed acquisition of Citicorp by Travelers. "satisfactory" rating from the FDIC, as of May 15, 2000; Citibank Travelers Group Inc., 84 Federal Reserve Bulletin 985, 1001 n.66 (Nevada), N.A., Las Vegas, Nevada ("Citibank Nevada"), received (1998) ("Travelers"). As noted in Travelers, the Fair Housing Council an "outstanding" rating from the OCC, as of March 29, 1999; of Greater Washington and the National Fair Housing Alliance filed Citibank (South Dakota), N.A., received an "outstanding" rating from complaints with the Department of Housing and Urban Development the OCC, as of May 24, 1999; Citibank Federal Savings Bank, Long ("HUD") in 1997, alleging that Travelers and other insurance compa- Island City, New York ("Citibank FSB"), received an "outstanding" nies systematically violated the Fair Housing Act in four cities, rating from the Office of Thrift Supervision ("OTS"), as of July 12, including Washington, D.C. Travelers denied the allegations of dis- 1999; Travelers Bank and Trust, fsb, Newark, Delaware, received an crimination in these complaints, and there has been no adjudication of "outstanding" rating from the OTS, as of February 5, 2001; Universal wrongdoing by HUD. Bank, N.A., Columbus, Georgia, received a "satisfactory" rating 14. One commenter asserted that Citigroup should include in its from the OCC, as of February 22, 1999; Citibank USA (formerly The CRA assessment areas those offices of Citigroup's subsidiaries en- Travelers Bank USA), Newark, Delaware, received an "outstanding" gaged in the sale of insurance products where such products are rating from the FDIC, as of March 15, 1999; Universal Financial cross-marketed with the bank products of Citigroup's subsidiary de- Corporation, Salt Lake City, Utah, received a "satisfactory" rating pository institutions. The regulations promulgated by the bank super- from the FDIC, as of March 31, 1999; Associates Capital Bank, Inc., visory agencies require that a bank delineate its CRA assessment area Salt Lake City, Utah, received an "outstanding" rating from the based on the geographies in which the bank has offices, branches, and FDIC, as of September 27, 1999; and Hurley State Bank, Sioux Falls, deposit-taking ATMs, as well as surrounding geographies in which the South Dakota, received a "satisfactory" rating from the FDIC, as of bank has originated or purchased a substantial portion of its loans. April 19, 1999. See, e.g., 12 C.F.R. 228.41(c). There is no requirement that a bank's 17. Several commenters asserted that the Board should deny the CRA assessment area include geographies in which nonbank affiliates proposal on the basis of the "needs to improve" CRA rating of are located. Associates Delaware. These commenters cited previous Board actions Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 603 discussed in more detail below, the Board has carefully C. CRA Performance Record of Citigroup reviewed the steps taken by Associates Delaware and those taken by Citigroup since it acquired the bank to correct the As noted above, Citigroup proposes to merge EAB into deficiencies noted in the examination and has consulted Citibank NA, with Citibank NA as the surviving entity. with the OCC, the appropriate federal supervisor of Asso- Accordingly, the branches and operations of EAB would ciates Delaware. Examiners found no evidence of prohib- become subject to the CRA policies of Citigroup and ited discrimination or other illegal credit practices, or any Citibank NA. Citigroup has represented that it would consubstantive violations of fair lending laws at any of the tinue six of the major affordable mortgage programs of other subsidiary insured depository institutions of Citi- EAB and incorporate five of its other major affordable group or EAB. mortgage programs into existing programs of Citibank NA. As discussed in more detail below, the Board has care- In addition, Citigroup has represented that it would honor fully considered the fair lending policies and procedures of community development loan commitments made by EAB Citigroup and all its affiliates, including Associates Dela- and pursue new community development loans that are ware.18 The Board also has evaluated substantial informa- currently under consideration by EAB. tion submitted by Citigroup concerning the CRA perfor- Citibank NA. In the 1998 CRA Evaluation, examiners mance of its subsidiary insured depository institutions since rated Citibank NA's lending activity as "high satisfactory" the dates of their most recent CRA performance evalua- and found that the bank's community development activity tions. In addition, the Board has consulted with the OCC substantially augmented its lending activity in the assessand has considered confidential supervisory information ment areas in New York.19 Examiners indicated that the regarding Citigroup's CRA performance provided by the overall record of lending of Citibank NA and, specifically, OCC. its home mortgage and small business lending were adequate for the size and complexity of the bank.20 Citibank NA made $2.6 billion in HMDA-reportable loans during the review period,21 which included $1.9 billion in home purchase loans, representing 71 percent of Citibank NA's total residential lending. Examiners commended Citibank NA for increasing the number of HMDA-reportable loans denying applications of bank holding companies with subsidiary banks with less than satisfactory CRA ratings. See e.g., Totalbank Corpora- in the New York assessment area by more than 225 percent tion of Florida, 81 Federal Reserve Bulletin 876 (1995); First Inter- from October 1997 to October 1998.22 state BancSystem of Montana, Inc., 77 Federal Reserve Bulletin 1007 (1991). In these actions, the subsidiary banks with less than satisfactory CRA performance ratings were controlled by the applicants at the time the ratings were assigned and represented a significant portion of 19. The assessment areas of Citibank NA in New York included the or all of the depository institutions controlled by the applicant. The New York City Primary Metropolitan Statistical Area ("PMSA"), Board has approved an application of a bank holding company that excluding Putnam County (the "New York City PMSA"), and the had a few subsidiary banks with less than satisfactory CRA ratings on Nassau-Suffolk County, New York, PMSA (the "Long Island PMSA") the basis that the bank subsidiaries represented a small percentage of (collectively, the "New York assessment area"). Examiners noted that the organization's assets, the organization had taken concrete steps to the median cost of housing in the New York City PMSA was very address the banks' CRA deficiencies, and the problems did not indi- high compared with median family incomes, particularly in Manhatcate chronic CRA deficiencies at the organization. Sun Trust Banks, tan, the Bronx, and Brooklyn. Examiners indicated that only 5 percent Inc., 76 Federal Reserve Bulletin 542 (1990). In addition to represent- of all owner-occupied units in the New York City PMSA were in ing less than 1 percent of Citigroup's consolidated assets, Associates low-income census tracts, resulting in a high demand for affordable Delaware received its "needs to improve" rating before it was ac- rental housing. Examiners commended Citibank NA for responding to quired by Citigroup. Moreover, examiners stated in the CRA perfor- this demand with investments in city housing and community developmance evaluation that the bank had completed a majority of the ment funds. corrective actions that it had initiated to address examiner concerns 20. Several commenters asserted that Citigroup's competitors, inidentified during a fair lending examination of the bank that was cluding EAB, have stronger lending records in the New York assessconducted concurrently with the CRA examination. Examiners also ment area than Citigroup's record. noted that Associates Delaware was taking steps to strengthen poli- 21. The review period was from October 4, 1996, to October 26, cies, procedures, training programs, and internal assessment efforts to 1998. The HMDA data reviewed by examiners included data reported prevent illegal discriminatory credit practices. by Citibank NA and Citicorp Mortgage (renamed CitiMortgage), 18. A commenter disagreed with regulations promulgated by the which became a subsidiary of Citibank NA during the review period. Board that permit Citigroup, as a financial holding company (as 22. Examiners attributed this increase to an increase in home defined in section 4 of the BHC Act), to continue to engage in improvement loans by Citibank NA. Citigroup has represented that expanded financial activities that are permissible for financial holding the home improvement loans were made under a home improvement companies while Associates Delaware has a less than satisfactory loan program it began in 1997. Several commenters criticized Citi- CRA performance rating. As noted above, Associates Delaware re- group for originating a large number of home improvement loans with ceived its CRA rating before its acquisition by Citigroup. Under the low principal amounts, particularly in LMI and minority communities. Board's regulations, Citigroup would become subject to activity re- In assessing the effects of this proposal on the convenience and needs strictions if Associates Delaware does not receive at least a satisfac- of the communities to be served, the Board has carefully reviewed the tory rating at its next CRA examination. See Federal Reserve System, entire record of lending of the institutions involved in the proposal. As 66 Federal Register 400, 404 (2001). As required in the regulations, discussed below, Citibank NA and Citigroup's other lending affiliates Citigroup submitted to the OCC a corrective action plan outlining the offer a broad range of mortgage and other lending products and steps that are necessary for the bank to achieve at least a "satisfacto- programs. Neither the CRA nor the CRA regulations of the federal ry" rating at its next CRA examination. See id. at 402 and 416 (to be supervisory agencies dictate the types of loan products or the amount codified at 12 C.F.R. 225.82(d)). of loans a depository institution must provide. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

604 Federal Reserve Bulletin • September 2001 Citigroup stated that, in 1999, Citibank NA and its $22 million under these two programs during 1999 and affiliates, CitiMortgage, Inc. ("CitiMortgage") and Source 2000. One Mortgage Corporation ("Source One"), made home In the 1998 CRA Evaluation, examiners concluded that purchase loans totaling $544 million in the New York Citibank NA had a good distribution of business loans with assessment area, including loans totaling $18 million in a principal amount of less than $1 million ("small business LMI census tracts and loans totaling $18 million to LMI loans") to businesses of different sizes, particularly to households.23 Citigroup reported that the overall home businesses with revenues of $1 million or less, in the purchase lending of Citibank NA, CitiMortgage, and New York assessment area during the review period. Ex- Source One increased to $847 million in the New York aminers reported that Citibank NA made 41 percent of its assessment area in 2000, including loans totaling $28 mil- small business loans in the New York City PMSA to lion to borrowers in LMI census tracts and loans totaling businesses with revenues of $1 million or less. $21 million to LMI households.24 Citigroup represented that more than 55 percent of Citi- Citibank NA offers a variety of loan products and pro- bank NA's small business loans in the New York City grams designed to meet the credit needs of LMI individu- PMSA were made to businesses with revenues of $1 milals and communities through reduced interest rates, low lion or less in each of 1999 and 2000. In addition, Citidown payment requirements, or flexible underwriting crite- group stated that it offers various outreach programs deria. These affordable mortgage products include propri- signed to provide loans and other assistance to small etary loan products and various products and programs of businesses in the New York assessment area, including the the Federal National Mortgage Association ("FNMA"), CitiBusiness Resource Network, which provides business the State of New York Mortgage Agency ("SONYMA"), and consulting services to small businesses and refers and other organizations.25 Citigroup reported that Citibank small businesses to third parties that provide their services NA and CitiMortgage made loans in the New York assess- at reduced rates to businesses in the Network program. ment area totaling more than $100 million through these In the 1998 CRA Evaluation, examiners found that Citiaffordable mortgage products and programs in 1999 and bank NA engaged in a high level of community develop- 2000,26 including more than $62 million in affordable ment lending activity during the review period through its mortgage loans in the New York assessment area under affiliate, Citibank Community Development ("CCD"), programs of FNMA, the Federal Home Loan Mortgage which compared very favorably with that activity by other Corporation, SONYMA, the Neighborhood Housing Ser- lenders. Examiners reported that CCD made community vices, and the New York City Housing Partnership. Other development loans totaling more than $200 million in the examples of Citigroup's affordable mortgage programs in- New York assessment area during the review period. Apclude the Mitchell Lama and Limited Equity Co-Ops loan proximately 82 percent were community development program, which provides reduced interest rate loans to loans in the New York City PMSA. Examiners noted that LMI borrowers for the purchase of cooperatives, and the CCD's community development lending had resulted in Budget and Credit Counseling program, which provides the creation of more than 14,000 units of affordable houshome purchase financing to individuals who have under- ing for LMI individuals. gone a rigorous program to improve their credit rating. Citigroup stated that, since the 1998 CRA Evaluation, it Citigroup represented that Citibank NA and CitiMortgage has made more than 200 community development loans made approximately 450 loans totaling more than totaling more than $240 million in the New York assessment area.27 This community development lending includes $15 million in loans to assist in the rehabilitation of These commenters also asserted that Citigroup's reliance on home more than 12,000 housing units in the Northeast Bronx, improvement loans with low principal amounts failed to meet projec- $14.3 million in loans to a community-based corporation tions Citicorp made in a July 1998 letter agreement with the organized for the development and management of five New York State Banking Department ("NYSBD") in connection with buildings in the Bronx for low-income individuals, and the merger of Travelers and Citicorp. The Board notes that compli- $43 million in loans to the New York Equity Fund, a ance with projections in an agreement made with the NYSBD is a matter within the exclusive jurisdiction of the NYSBD. The Board has syndicator of low-income housing tax credits in New York. consulted with the NYSBD on Citigroup's lending record in In the 1998 CRA Evaluation, examiners concluded that New York State. The Board also notes that the NYSBD and Citigroup Citibank NA had an excellent level of CRA-qualified inhave entered into a letter agreement, executed on June 25, that vestments that compared favorably with other lenders and clarifies the projections and extends them for an additional three years. responded positively to community needs. Examiners fa- 23. Citigroup acquired Source One in 1999 and merged it into CitiMortgage, a subsidiary of Citibank NA, in 2000. vorably noted that Citibank NA made approximately 24. Citigroup represented that the home purchase lending data $115 million in CRA-qualified investments during the reinclude originations and purchases, excluding interaffiliate loan pur- view period, including investments totaling $88 million in chases. the New York assessment area. Examiners also noted that 25. Citigroup represented that CitiMortgage has initiated a fiveyear program with FNMA under which CitiMortgage has committed to originate and FNMA has committed to purchase $12 billion in affordable mortgage loans nationwide through a number of affordable 27. Citigroup represented that it consolidated most of its community mortgage programs of Citigroup. development lending and investment activities into a separate affiliate, 26. This amount included mortgage loans totaling $77 million in the the National Center for Community Development Enterprise, in New York City PMSA. March 2000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 605 59 percent of these CRA-qualified investments in the New noted that the geographic distribution of its small business York assessment area promoted affordable housing. In lending in low-income areas was generally favorable. Exaddition, examiners commended Citibank NA for making aminers also indicated that the savings association ranked $6.9 million in qualified grants and contributions during first in small business loan originations (based on dollar the review period. amount) among savings associations nationwide and 12th Citigroup represented that it has made more than in small business lending among all banks and savings $200 million in CRA-qualified investments and $29 mil- associations in its combined assessment areas. lion in grants to organizations in New York State since the In the 1999 CRA Evaluation, examiners determined that 1998 CRA Evaluation. These grants and investments were Citibank FSB's overall community development lending used to promote affordable housing, small businesses and was excellent. The examiners favorably noted that the economic development, and other community develop- savings association engaged in a variety of community ment projects.28 development lending activities, including multifamily Examiners indicated that Citibank NA is a leader in the home mortgage lending that provided housing for LMI development and use of technology, and that the bank's families and lending to community development organizabranching and other alternative delivery systems provided tions that focused on affordable housing programs and the good access to all customers, including those in LMI areas. stabilization or revitalization of economically distressed Examiners commended the bank for providing community areas. Citibank FSB originated community development development services in all its assessment areas. In addi- loans totaling more than $365 million during the review tion, examiners commended the bank for providing credit period. counseling, educational seminars, individual consultations, Examiners also commended Citibank FSB for its comand other educational programs for prospective homebuy- munity development investment program, which focused ers and other retail customers. on providing equity investments for affordable housing, improving liquidity in the market for affordable mortgages, Citibank FSB and strengthening community development financial institutions. During the review period, Citibank FSB doubled Overview. As previously noted, Citibank FSB received an the amount of its CRA-qualified investments to approxi- "outstanding" CRA performance rating from the OTS in mately $63 million. Examiners also commended the savits 1999 CRA performance evaluation ("1999 CRA Evalu- ings association for making almost $5 million in commuation"). Examiners strongly commended the savings asso- nity development grants during the review period. ciation for its lending performance in all its assessment In addition, examiners commended Citibank FSB for areas during the review period.29 Examiners reported that offering an extensive number of alternative systems for Citibank FSB made more than 25 percent of its total delivering retail banking services in LMI areas. Examiners HMDA-reportable loans in its combined nationwide as- also indicated that Citibank FSB provided an exceptional sessment areas in LMI census tracts during the review level of community development services, including eduperiod. Examiners noted that this percentage exceeded the cational seminars for LMI individuals, first-time homebuypercentage of total owner-occupied housing units in LMI ers, and small business owners. census tracts in its combined assessment areas and the California. In the 1999 CRA Evaluation, examiners indipercentage level of total HMDA-reportable loans made by cated that Citibank FSB had a strong overall record of the aggregate of lenders ("aggregate lenders") in these lending in California during the review period. Examiners LMI census tracts in 1997.30 Examiners also noted that also found that the savings association's HMDA-reportable Citibank FSB offered a variety of home mortgage products loans to LMI borrowers showed strong increases each year and programs designed to meet the needs of first-time during the review period. For example, the percentage of homebuyers and LMI borrowers, including programs offer- Citibank FSB's total number of HMDA-reportable loans to ing reduced closing costs and down payment requirements LMI borrowers almost tripled to 33 percent from the and flexible underwriting standards. beginning of 1996 and through the first quarter of 1999.31 In addition, examiners commended Citibank FSB for the Examiners indicated that the geographic distribution of variety of small business loan programs it provided and Citibank FSB's small business loans in low-income census tracts compared favorably with the number of small businesses in these census tracts. Examiners also noted that 28. These grants were made through an affiliate, the Citigroup Citibank FSB offered a diverse array of products to address Foundation. Citigroup represented that the Citigroup Foundation had short- and long-term financing needs of small businesses in made $75 million in community development grants nationwide in the California. In addition, examiners commended the savings past two years. association for creating a pilot small business program 29. At the time of the CRA performance evaluation, Citibank FSB called Capital Access that provided loans to creditworthy, had 20 assessment areas in California, Illinois, Florida, Maryland, Virginia, Connecticut, New Jersey, Texas, and the District of Columbia. The review period was from January 1, 1997, through March 31, 1999. 31. Examiners noted that the large increase in lending in LMI 30. The lending data of the aggregate lenders represent the cumula- geographies from 1997 to 1998 resulted from the introduction of tive lending for all financial institutions that have reported HMDA Citigroup's home improvement loan program, as discussed earlier in data in a given market. this order. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

606 Federal Reserve Bulletin • September 2001 underserved small businesses, such as high technology mended EAB's geographic distribution of multifamily businesses, growth businesses, export businesses, and busi- loans, which enhanced the distribution of the bank's other nesses owned by minorities, women, and veterans. Exam- HMDA-reportable loans. Examiners found that the impact of iners also noted that Citibank FSB actively promoted small EAB's multifamily loans was most important in its businesses through workshops and seminars for small busi- New York City assessment area, where examiners indicated ness owners, and that the savings association had an active that 69 percent of occupied housing units were rentals. Small Business Administration loan program in Califor- Examiners reported that EAB's small business loans nia.32 reflected a good distribution among various income-level In the 1999 CRA Evaluation, examiners determined that geographies. In its New York City assessment area, the Citibank FSB's community development loans in Califor- bank originated 27 percent of its small business loans in nia, which totaled more than $63 million, represented an LMI census tracts during the review period. This exceeded excellent volume of community development lending. Ex- the percentage level achieved by the aggregate lenders, aminers also commended the savings association for which originated an average of 25 percent of their loans in making CRA-qualified investments totaling more than LMI census tracts. Eleven percent of EAB's small business $21 million during the review period. loans in the Long Island PMSA were originated in LMI In addition, examiners noted favorably that Citibank census tracts during the review period, which was only FSB delivered retail banking services throughout its assess- slightly less than the percentage level of the aggregate ment areas in California through its branch network, a lenders. Examiners also noted that the majority of EAB's large network of ATMs, and the alternative delivery sys- small business loans in its assessment areas were for tems discussed above. Examiners also indicated that Citi- amounts of $100,000 or less. bank FSB offered a wide range of deposit and loan prod- In addition, examiners commended EAB for its excellent ucts at all its branches, including a low-cost checking level of community development lending. During the reaccount.33 view period, the bank's community development loan commitments totaled $241 million, of which $135 million was D. CRA Performance Record of EAB for affordable housing initiatives, which examiners identified as a pressing need in both of the bank's assessment As noted above, EAB received a "satisfactory" rating for areas. In the New York City assessment area, $110 million CRA performance from the Federal Reserve Bank of New of EAB's community development loans were directed York, as of October 2, 2000. Examiners rated EAB's toward affordable rental housing initiatives. Examiners performance under the lending test during the review peri- noted that EAB's community development lending in the od34 as "high satisfactory," and commended EAB's loan Long Island PMSA provided for the construction or rehavolume and general responsiveness to the credit needs in bilitation of almost 300 affordable housing units, including the bank's assessment areas. For example, examiners found some designed for the developmentally disabled and senior that EAB and its mortgage lending affiliate (collectively, citizens. "EAB") originated or purchased HMDA-reportable loans Examiners rated EAB's performance under the investtotaling approximately $1.3 billion during the review pe- ment test as "high satisfactory." Examiners reported that riod. EAB's CRA- qualified investments during the review pe- In addition, examiners noted that EAB's overall geo- riod totaled $10.5 million, consisting primarily of complex graphic distribution of its housing-related and small busi- low-income housing tax credits that help provide affordness loans reflected good loan penetration throughout the able rental housing. EAB's investments included $6 mil- LMI census tracts of its assessment areas, and they com- lion directed toward affordable housing initiatives, mended the bank's distribution of lending to customers of $3.3 million directed toward community service investdifferent income levels.35 In particular, examiners com- ments, and $1.2 million directed toward economic development initiatives. 32. One commenter criticized Citibank FSB for developing a small E. Subprime Lending of Citigroup business loan product in California that has a minimum loan amount of $100,000. The commenter asserted that this minimum prevents As discussed above, several commenters criticized the many small businesses owned by minorities and persons living in LMI lending and credit insurance practices of Citigroup's areas from qualifying for loans under the program. In the 1999 CRA Evaluation, examiners reported that Citibank FSB made almost subprime lending subsidiaries, particularly those of Associ- $135 million of loans with principal amounts of $100,000 or less ates, which Citigroup acquired in November 2000. The during the review period, which represented almost 30 percent of the commenters asserted that these entities are engaged in savings association's total dollar amount of small business lending. certain abusive lending practices, commonly referred to as 33. One commenter asserted that Citibank FSB had eliminated low- "predatory lending," that are harmful to LMI and minority cost deposit products designed to meet the needs of LMI consumers. 34. The review period was from January 1, 1998, through Decem- borrowers.36 Several commenters requested that the Board ber 31, 1999. 35. The assessment areas of EAB included (i) the Long Island PMSA and (ii) a portion of the New York City PMSA that includes Bronx, Kings, New York, Queens, and Richmond Counties 36. Commenters asserted that Associates engages in abusive market- ("New York City assessment area"). ing and sales practices that include misleading customers about key Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 607 deny the application in light of the recent lawsuit filed by ships with unaffiliated third parties engaged in subprime the Federal Trade Commission ("FTC") against Associ- lending.41 ates and Citigroup, as the successor owner of Associates, The Board notes that subprime lending is a permissible or delay action on the proposal until this lawsuit and other activity and provides needed credit to consumers who have consumer lawsuits concerning the lending and credit insur- difficulty meeting conventional underwriting criteria. An ance sales activities of Associates and Citigroup are re- analysis of urban metropolitan data submitted under solved.37 The consumer protection claims in the FTC's HMDA indicates that LMI and minority consumers, who lawsuit allege that Associates, before its acquisition by traditionally have experienced difficulty in obtaining mort- Citigroup in November 2000, engaged in abusive lending gage credit, have obtained loans at record levels in recent practices and lending law violations. There has been no years.42 Much of this increased lending can be attributed to adjudication of wrongdoing or injunctive action taken the development of the subprime loan market. against Citigroup or any of its affiliates in connection with The Board recognizes that the development of the the FTC lawsuit. subprime loan market has been marred with reports of Some commenters also asserted that Citigroup's other abusive and deceptive practices that can deny the market's subprime lender affiliates, such as CitiFinancial Credit beneficial aspects to borrowers. Identifying the lending Company ("CitiFinancial"), engage in many of the same practices that can be considered "predatory" covers a lending practices as Associates.38 Commenters asserted potentially broad range of behavior and does not lend itself that Citigroup has failed to correct these practices at Asso- to a concise or comprehensive definition. Predatory lendciates, CitiFinancial, and its other subprime lender affili- ing generally entails either fraud or the misuse of loan ates.39 Some commenters also contended, based in part on provisions that might under ordinary circumstances en- HMDA data, that Citigroup improperly markets higher- hance the credit market. A loan is not "predatory" simply cost subprime loan products to minority and LMI communities while it markets lower-cost prime loan products to nonminority and more affluent communities.40 In addition, several commenters alleged that Citigroup has indirectly 41. Several commenters alleged that Citigroup has indirectly supsupported predatory lending through its business relationported predatory lending by a number of unaffiliated consumer lenders through the warehouse lending and securitization activities of its subsidiary, Salomon Smith Barney, Inc., New York, New York terms of a loan, such as the cost of credit insurance associated with the ("SSB"). Citigroup indicated that SSB engages in underwriting seculoan and the effect of balloon payments, and coercing customers to rities backed by subprime mortgage loans and provides warehouse refinance loans that result in high points (interest paid at settlement) loans to some of its mortgage banking customers for which it underand other refinance charges. Commenters also asserted that Associates writes securities. In addition, Citigroup represented that a company maintains aggressive foreclosure policies. Several commenters re- Citigroup acquired in December 2000 in connection with its acquisiquested that the Board conduct fair lending examinations of all tion of Associates, First Collateral Services ("FCS"), engages in Citigroup's nonbanking subsidiaries that engage in subprime lending traditional mortgage warehouse lending to consumer lenders, includbefore it acts on the proposal. ing some engaged in subprime lending. 37. Several commenters asserted that the Board should deny Citi- The Board has considered all the facts of record, including the group's proposal, citing the Board's earlier denial of an application of actions taken by SSB and FCS in connection with their relationships Shawmut National Corporation ("Shawmut National") to acquire a with unaffiliated consumer lenders. Citigroup stated that SSB does not bank while Shawmut National's past mortgage lending operations control the origination of subprime loans from its unaffiliated mortwere under investigation by the Department of Justice. See Shawmut gage banking customers, but that it reviews each lender's policies and National Corporation, 80 Federal Reserve Bulletin 47 (1994) ("Shaw- procedures and sets eligibility criteria for the loans it will finance mut"). Unlike the facts in Shawmut, where the mortgage subsidiary through its warehouse lending and securitization arrangements. In under investigation was controlled by Shawmut National at all rele- addition, SSB reviews a sample of any loan pool to be securitized and vant times, the activities at issue in the pending FTC lawsuit involving hires an outside firm to review the loans in the pool for compliance Associates relate solely to the operations of Associates' affiliates with consumer protection laws and its loan eligibility criteria before before their acquisition by Citigroup. As noted below, the Board will making any warehouse loan advance. Citigroup represented that FCS monitor Citigroup's progress in addressing any adverse findings re- does not have a role (formal or otherwise) in the lending practices and sulting from the FTC lawsuit or any other litigation. credit review processes of its warehouse finance customers, and that 38. For example, a commenter asserted that CitiFinancial has ag- as part of its agreements with customers, FCS requires its warehouse gressive foreclosure policies. Commenters also noted that the lending finance customers to comply with all applicable federal and state laws and insurance practices of Associates, CitiFinancial, and Citigroup's in their origination and servicing of mortgage loans. Moreover, the Primerica Financial Services have resulted in several pending judicial Board notes that the FTC, HUD, and Department of Justice have proceedings in addition to the FTC litigation involving Associates and responsibility for enforcing the compliance with fair lending laws of are the subject of consumer complaints filed with several state and nondepository institutions. federal supervisory authorities. There has been no adjudication of 42. See Federal Financial Institutions Examination Council, Nationwrongdoing by any Citigroup affiliate in these matters. wide Summary Statistics for 1999 Home Mortgage Disclosure Act 39. Several commenters also asserted that the management of Data (August 2000) at Table 5. The HMDA data indicate that, Citigroup has failed to take an appropriate leadership role in address- between 1993 and 1999, the number of conventional home purchase ing predatory lending problems in the subprime lending market and loans made in census tracts with minorities as a percentage of populahas lobbied against some state and municipal legislative efforts to tion of between 50 and 79 percent increased 91.7 percent, and the address predatory lending. number of such loans made in census tracts with minorities as a 40. A commenter also asserted that the CRA is undermined when percentage of population of between 80 and 100 percent increased large financial holding companies without a significant presence in 100.7 percent. The data also indicate that the number of HMDA loans rural communities, such as Citigroup, acquire subprime lenders with a made in LMI census tracts increased 97.9 percent during the same significant presence in rural communities, such as Associates. period. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

608 Federal Reserve Bulletin • September 2001 because it is made at a high interest rate or involves high The Board notes that many of the concerns expressed by costs.43 commenters about the subprime lending activities of Citi- Borrowers do not benefit from expanded access to credit group focus on the historical practices of Associates, which if the credit involves abusive lending practices. Accord- Citigroup acquired in November 2000. In connection with ingly, the Board expects bank holding companies and their its proposed acquisition of Associates, Citigroup anaffiliates to conduct their subprime lending operations free nounced in November 2000 consumer protection initiatives of any abusive lending practices. that are in the process of being implemented at CitiFinan- In reviewing the convenience and needs factor in this cial (including the former branches of Associates) and proposal, the Board has carefully considered the record of certain other affiliates.46 These initiatives relate to loans lending of Citigroup's affiliates, including those engaged in secured by real estate in the United States and include subprime lending, in light of all the comments received. enhancing oral and written disclosures to purchasers of The Board has reviewed the subprime loan products of- credit insurance products concerning the cost, coverage, fered by Citigroup and the underwriting and compliance terms, and cancellation policies of the insurance products policies and procedures adopted by Citigroup and each of offered.47 In addition, Citigroup affiliates that engage in its subprime lending affiliates. The Board also has carefully subprime lending will not originate subprime real estate reviewed the actions Citigroup has taken and is in the loans with balloon payments and will not originate or process of implementing to address concerns about the purchase real estate loans with negative amortization fealending practices of Associates before its acquisition and to tures 48 The initiatives also include plans for a "referralstrengthen consumer protections in connection with the up" program to be implemented nationwide by the end of real estate-secured lending activities of CitiFinancial, Citi- 2001 that will refer CitiFinancial loan applicants who meet Mortgage, and Citigroup's other affiliates that engage in certain qualification criteria to CitiMortgage for a prime subprime lending.44 In addition, the Board has consulted mortgage loan. In addition, Citigroup is implementing a with each federal supervisory agency responsible for the program at CitiFinancial to provide rate reductions to oversight of Citigroup's subprime lending affiliates. subprime loan borrowers who make timely payments and a In January 2001, the network of retail branches of Asso- graduation program at CitiFinancial and CitiFinancial ciates were transferred to CitiFinancial and the former Mortgage (AHES) that refers qualifying borrowers who Associates consumer finance businesses in the United have CitiFinancial subprime loans to CitiMortgage for a States and Canada became subject to the underwriting and prime loan product49 As part of the initiatives, CitiFinancompliance policies, procedures, and programs of Citi- cial also has created a compliance department that reviews group and CitiFinancial 45 CitiFinancial and Citigroup's pending and potential foreclosures to protect against inapother subsidiaries that engage in subprime lending have propriate foreclosure proceedings against the borrowers' underwriting policies and procedures designed to prevent homes.50 abusive lending practices, which include requiring all real estate-secured loan applications to be evaluated on an applicant's creditworthiness and ability to repay, using 46. Several commenters challenged the adequacy of these initiatives credit bureau scoring and proprietary models, and limiting and expressed concern that Citigroup would not implement them points charged on certain refinanced loans. In addition, the effectively. subprime lending affiliates of Citigroup have adopted a 47. Currently, CitiFinancial customers have the choice of purchasing single premium credit life insurance, which is financed as part of number of programs and other policies and procedures, the total loan amount, or no credit life insurance. Citigroup repreincluding centralized loan underwriting systems, fair lendsented that CitiFinancial is in the process of obtaining the appropriate ing self-assessments (including matched-pair analyses), state insurance licenses so that it may offer nationwide credit life branch and corporate audits, and fair lending and compli- insurance with a premium paid monthly by the borrower. In addition, ance training, that are designed to prevent deceptive and Citigroup represented that it will discontinue the sale of single premium credit insurance for all real estate-secured loans by the end of abusive lending practices. 2001. 48. Citigroup has represented that, in the case of purchased or existing subprime loans in Citigroup's portfolio, borrowers with balloon payments coming due will be given the option to refinance the loan in lieu of making the balloon payment. 43. See 65 Federal Register 81,438 (2000) (proposed rule amending 49. Citigroup represented that qualifying subprime borrowers of the Board's Regulation Z that implements the Home Ownership and CitiFinancial will not be required to pay prepayment penalties for Equity Protection Act). refinancing their loans with CitiFinancial or any other Citigroup 44. CitiMortgage's lending activities include the subprime lending affiliate. operations that comprised a small portion of Source One's mortgage 50. In addition, the initiatives being implemented include loan business. (i) Giving subprime loan borrowers a choice of paying a higher 45. The legal entities through which the Associates' branches oper- interest rate loan in exchange for the elimination of a prepayated continue to exist and hold loans that were originated before the ment penalty fee; transfer of the branches to CitiFinancial. The former Associates Home (ii) Limiting prepayment fees to the lesser of three years after a Equity Services, now CitiFinancial Mortgage (AHES), engages in loan is made or the maximum term mandated by state law; indirect, real estate-secured lending through brokers and correspon- (iii) Establishing toll-free "hotlines" for customers to seek redents and will continue to operate. The continuing Associates entities dress for complaints and problems concerning their loans; currently are operating and will continue to operate under Citigroup's (iv) Implementing a "mystery shopper" program at CitiFinancial lending and compliance policies and procedures. branches (including former Associates branches) adminis- Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 609 Citigroup has adopted comprehensive policies and pro- by its subsidiaries.51 In 1998 and 1999, Citigroup's lending cedures that are reasonably designed to ensure compliance to African-American and Hispanic individuals and to borwith the fair lending laws and to prevent abusive lending rowers in minority census tracts,52 as a percentage of its practices by its holding company affiliates. At the same total HMDA-reportable lending (which includes home purtime, the Board believes that the effective implementation chase, home improvement, and multifamily residential of the initiatives and other consumer protection measures loans and refinancings), generally exceeded or was compaproposed or adopted by Citigroup is particularly important rable to that of the aggregate lenders in many markets.53 In for addressing weaknesses in the historical performance addition, in 1998 and 1999, Citigroup's lending to LMI record of Associates' subprime lending. Accordingly, the borrowers and in LMI census tracts in its assessment areas, Board will conduct a thorough examination to assess the as a percentage of the number of Citigroup's total HMDAeffectiveness of that implementation at Citigroup's reportable loans, generally exceeded or was comparable to subprime affiliates, CitiFinancial and CitiFinancial Mort- that of the aggregate lenders. gage (AHES). The HMDA data for the subcategory of home purchase To assist the Board in this monitoring and review, Citi- loans, however, indicate some disparities. The percentages group must submit to the Board quarterly reports on the of Citigroup's home purchase loans originated to minoristatus of all major litigation involving any of its affiliates ties and to borrowers in minority census tracts in 1998 and engaged in subprime lending activities and Citigroup's 1999 were less than the percentages of the aggregate compliance with any resulting court orders or court- lenders in several markets. For instance, the number of approved settlements. Citigroup must submit these quar- Citigroup's home purchase loans originated to Africanterly reports for two years, or such longer time period as American and Hispanic individuals and to borrowers in the Board in its sole discretion determines is needed, minority census tracts, as a percentage of Citigroup's total beginning on September 30, 2001. home purchase loan originations, in the PMSAs of New If the examination of CitiFinancial or CitiFinancial York City and Los Angeles in 1998 and 1999 generally Mortgage (AHES), including the monitoring of the imple- lagged behind the percentage for the aggregate lenders. mentation of the initiatives, indicates a problem with the The data, however, generally show that Citigroup's home oversight, procedures, or practices associated with the purchase lending to these individuals and communities subprime lending of CitiFinancial or CitiFinancial Mort- significantly improved during this time period and substangage (AHES), the Board has broad supervisory authority tially exceeded the percentage increases of the aggregate under the banking laws to require Citigroup to take any lenders. other steps necessary to address deficiencies identified in Citigroup's percentage of home purchase loans origithe examination. The Board will coordinate its examina- nated to LMI borrowers and in LMI census tracts in 1998 tion and monitoring with the other agencies responsible for and 1999 also generally were lower than the percentages of enforcing laws that are applicable to these matters, includ- the aggregate lenders in many markets. However, the data ing the appropriate banking supervisory agencies. The also show that Citigroup's volume of home purchase loans Board also will consider any information gathered in these reports or the examination in reviewing future proposals by Citigroup, as relevant and appropriate. 51. Based on 1999 and 2000 HMDA data, commenters criticized Citigroup's record of home mortgage lending to African-American or F. HMDA Data Hispanic individuals in the following PMSAs and Metropolitan Statistical Areas ("MSAs"): New York City, Long Island, Buffalo, and The Board also has carefully considered Citigroup's lend- Rochester, New York; Chicago, Illinois; Los Angeles, Oakland, ing record in light of comments on HMDA data reported San Diego, and San Jose, California; Washington, D.C.; Philadelphia, Pennsylvania; Newark, New Jersey; Memphis, Tennessee; St. Louis, Missouri; Tampa, Florida; Wilmington, Delaware; Phoenix, Arizona; Milwaukee, Wisconsin; and Salt Lake City, Utah. Commenters also criticized Citigroup's record of home mortgage lending to LMI inditered by a third party to help ensure that compliance proce- viduals, based on 1999 and 2000 HMDA data, in the following MSAs: dures are followed; Los Angeles, San Diego, and San Jose, California; Sioux Falls, South (v) Providing updated training on compliance (including fair Dakota; and Salt Lake City, Utah. lending) for all consumer finance employees; 52. For purposes of this HMDA analysis, minority census tract (vi) Strengthening compliance by and oversight of loan brokers; means a census tract with a minority population of 80 percent or more, (vii) Enhancing fair lending self-evaluations in consultation with and Citigroup includes Citibank NA, Citibank NYS, Citibank FSB, outside counsel; CitiMortgage, and Source One. As previously noted, in 2000, Source (viii) Prohibiting refinancing of certain below-market rate loans by One was merged into CitiMortgage through which it reported its 2000 nonprofit organizations and certain other programs within a HMDA data. The data reviewed in this analysis do not include loans specified timeframe; purchased by Citigroup. (ix) Implementing additional limits on points charged on the 53. For example, the percentages of Citigroup's home purchase refinancing by CitiFinancial of some of its loans; loans originated to borrowers in minority census tracts in the PMSAs (x) Enhancing disclosures regarding refinancing; and of Los Angeles and Oakland, California, in 2000, exceeded (xi) Evaluating CitiFinancial's policies and procedures to prevent the percentages achieved by the aggregate lenders in 1999. In the "loan flipping" (e.g., repeated refinancing of a loan to charge New York City PMSA, Citigroup's percentage of home refinance high points or fees) and implementing additional appropriate loans originated to Hispanics in 2000 exceeded that of the aggregate safeguards. lenders in 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

610 Federal Reserve Bulletin • September 2001 to LMI borrowers and in LMI census tracts generally laws. Citigroup has instituted corporate-wide compliance increased during this time period.54 policies and procedures to help ensure compliance with all Importantly, the HMDA data generally do not indicate fair lending and other consumer protection laws and reguthat Citigroup is excluding any race or income segment of lations, employed compliance officers and staff charged the population or geographic areas on a prohibited basis. with monitoring compliance, and conducted regular corpo- The data, however, reflect certain disparities in the rates of rate and branch audits of compliance. Citigroup's housingloan applications, originations, and denials among mem- related lending subsidiaries have established detailed fair bers of different racial groups and persons at different lending procedures in addition to Citigroup's corporate income levels generally and in certain local areas. The policies and procedures, including extensive fair lending Board is concerned when the record of an institution indi- training programs for employees and fair lending selfcates disparities in lending and believes that all banks are assessments using matched-pair testing and statistical analobligated to ensure that their lending practices are based on yses. CitiMortgage and CitiFinancial also have implecriteria that ensure not only safe and sound lending, but mented a "mystery shopping" program administered by a also equal access to credit by creditworthy applicants re- third party to help verify that compliance procedures are gardless of their race or income level. The Board recog- followed. nizes, however, that HMDA data alone provide an incom- The Board also has considered the HMDA data in light plete measure of an institution's lending in its community of Citigroup's overall lending and community developbecause these data cover only a few categories of housing- ment activities discussed above, which show that Citirelated lending. HMDA data, moreover, provide only lim- group's subsidiary banks significantly assist in helping to ited information about the covered loans.55 HMDA data, meet the credit needs of their entire communities, includtherefore, have limitations that make them an inadequate ing LMI areas.57 The Board does not believe that, viewed basis, absent other information, for concluding that an in light of the entire record, the HMDA data indicate that institution has not assisted adequately in meeting its com- Citigroup's record of performance in helping to serve the munity's credit needs or has engaged in illegal lending needs of its communities is inconsistent with approval of discrimination. the proposal. Because of the limitations of HMDA data, the Board has considered these data carefully in light of other informa- G. Branch Closings tion, including examination reports that provide an on-site evaluation of compliance by the subsidiary depository in- Several commenters expressed concern about the possible stitutions of Citigroup with fair lending laws. As noted effect of branch closings in Citigroup's New York assessabove, examiners found no evidence of prohibited discrim- ment areas that might result from this proposal. The Board ination or other illegal credit practices at any of the subsid- has carefully considered the comments concerning poteniary depository institutions controlled by Citigroup.56 The tial branch closings in light of all the facts of record, record also indicates that Citigroup has taken a number of including the preliminary branch closing and consolidation affirmative steps to ensure compliance with fair lending information submitted by Citigroup, the branch closing policies of Citigroup and EAB, and the record of the two organizations in opening and closing branches. Citigroup 54. The HMDA data indicate that, in the subcategory of home has identified 24 branches, including nine EAB branches in improvement loans, Citigroup's volume of lending to LMI borrowers supermarkets, that it intends to close or consolidate into and in LMI census tracts declined from 1998 through 2000. nearby branches. None of the 24 branches proposed to be 55. The data, for example, do not account for the possibility that an institution's outreach eiforts may attract a larger proportion of margin- consolidated or closed is in a low-income census tract, and ally qualified applicants than other institutions attract and do not only three are in moderate-income census tracts. These provide a basis for an independent assessment of whether an applicant three branches are on Long Island, and an existing branch who was denied credit was, in fact, creditworthy. Credit history of Citibank NA or EAB within relatively close proximity problems and excessive debt levels relative to income (reasons most frequently cited for a credit denial) are not available from HMDA to each branch would remain to serve each branch's data. moderate-income community.58 56. As noted above, Associates Delaware received a "needs to Citigroup has represented that it would follow its existimprove" rating in its most recent CRA performance evaluation. This ing branch closure policy before closing or consolidating rating was received before Citigroup acquired control of Associates. any of the branches. The Board has carefully considered Examiners stated that the bank initiated corrective actions to address the examiner criticisms, and that a majority of these actions were completed during the fair lending examination. Examiners also noted that additional steps were being taken to strengthen policies, proce- 57. Two commenters alleged that some of Citigroup's lending dures, training programs, and internal assessment efforts to prevent subsidiaries have violated HMDA reporting requirements. These alleillegal discriminatory credit practices. Citigroup reported that it has gations have been forwarded to HUD. A commenter also alleged a strengthened the compliance processes at Associates Delaware since pre-screening and reporting violation by Citibank NA under the Equal acquiring control of the bank in November 2000, and that it has Credit Opportunity Act (15 U.S.C. § 1691 et seq.). The OCC, the increased compliance staff and expanded internal audit and control appropriate federal supervisor for Citibank NA, has been informed of procedures. Citigroup also noted that all new employees receive fair this allegation. lending training as part of their orientation, and that fair lending 58. Remaining branches of Citibank NA or EAB would be located training recertification is conducted for all employees who received less than one-half mile from two of these branches and less than fair lending training in the past. 1 Vi miles from the third branch. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 611 the branch closing policy of Citigroup and its record of relating to the convenience and needs factor, including the opening and closing branches. Under Citigroup's branch CRA performance records of the relevant depository insticlosing policy, Citibank must review a number of factors tutions, are consistent with approval of the proposal. before closing or consolidating a branch, including a profile of the branch, the marketplace demographics, a profile Financial and Managerial Considerations of the community in which the branch is located, and the effect on customers. Also, Citibank's CRA Director and Section 3 of the BHC Act requires the Board to consider legal/regulatory staff must approve any branch closing, the financial and managerial resources and future prospects consolidation, or relocation. Examiners have reviewed the of the companies and banks involved in the proposal and branch closing policies and record of opening and closing certain other supervisory factors. The Board has carefully branches of Citigroup's subsidiary banks under the branch considered these factors in light of all the facts of record, closing policy on several occasions.59 In the 1998 CRA including public comments, supervisory reports of exami- Evaluation, examiners noted that Citibank NA had not nation, other confidential supervisory information assessclosed any branches in LMI census tracts during the evalu- ing the financial and managerial resources of the organizaation period. Citigroup represented that, since September tions, and other information provided by Citigroup. 1998, Citibank NA has not closed or consolidated any In evaluating financial factors in expansion proposals by branches in LMI census tracts.60 banking organizations, the Board consistently has consid- The Board also has considered that federal banking law ered capital adequacy to be especially important. The proprovides a specific mechanism for addressing branch clos- posed acquisition is structured as a cash purchase of EAB's ings. Federal law requires an insured depository institution common stock and an exchange of preferred shares. Citito provide notice to the public and to the appropriate group would not directly or indirectly incur any debt to federal supervisory agency before closing a branch.61 In finance the proposed transaction. The Board notes that addition, the Board notes that the OCC, as the appropriate Citigroup and its subsidiary depository institutions and federal supervisor of Citibank NA, will continue to review EAB are well capitalized and would remain well capital- Citibank NA's branch closing record in the course of ized on consummation of the proposal. conducting CRA performance examinations. The Board also has considered the managerial resources of Citigroup and EAB, the examination reports of the H. Conclusion on Convenience and Needs Consideration federal financial supervisory agencies that supervise these organizations, including Citigroup's subsidiary depository In reviewing the effect of the proposal on the convenience institutions, and other confidential supervisory informaand needs of the communities to be served, the Board has tion. In addition, the Board has consulted with these fedcarefully considered the entire record; all the information eral financial supervisory agencies. provided by commenters, Citigroup, and EAB; evaluations The Board received several comments on the proposal of the performance of Citigroup's insured depository insti- criticizing the managerial resources of Citigroup and its tution subsidiaries and EAB under the CRA; and confiden- subsidiaries. Several commenters asserted that Citigroup's tial supervisory information. management has failed to implement effective policies and Based on all the facts of record and for the reasons programs to address alleged abusive sales and lending discussed above, the Board concludes that considerations practices of Citigroup's subsidiaries, including those engaged in subprime lending and insurance activities. These commenters asserted that adverse managerial resources are 59. Two commenters also alleged that Citigroup has closed branches evidenced by the pending FTC lawsuit against Associates in LMI and predominantly minority communities in the past, citing and Citigroup, as its successor owner, and by consumer press reports in 1996. The Board considered substantially identical lawsuits and complaints filed against Associates and other comments when it approved the acquisition of Citicorp by Travelers Citigroup affiliates.62 in 1998. As noted in Travelers, the appropriate federal and state financial supervisors of the relevant subsidiary banks, Citibank NA After reviewing all the facts of record, the Board conand Citibank NYS, stated in CRA examination reports that the branch cludes that Citigroup and its subsidiary depository instituclosures and consolidations in question had not negatively affected the tions and EAB are well managed and have appropriate risk accessibility of banking services in the banks' New York assessment management systems in place.63 In reaching this concluareas, including LMI communities. See 84 Federal Reserve Bulletin at 999, 1000. 60. Citigroup reported that, since September 1998, Citibank NA has relocated one branch from an upper-income to a lower-income census 62. A commenter also expressed concern that Citigroup conducted tract and relocated a second branch within a moderate- income census an inadequate due diligence review when it acquired Associates. The tract. commenter further alleged, based on press reports, that SSB improp- 61. Section 42 of the Federal Deposit Insurance Act (12U.S.C. erly provided advice to an unaffiliated bank holding company on a § 183 lr-1), as implemented by the Joint Policy Statement Regarding potential acquisition of EAB while Citigroup was considering whether Branch Closings (64 Federal Register 34,844 (1999)), requires that a to acquire EAB. bank provide the public with at least 30-days' notice and the appropri- 63. Several commenters also expressed concern that Citigroup has ate federal supervisory agency with at least 90-days' notice before the helped to finance various activities and projects worldwide that might date of the proposed branch closing. The bank also is required to damage the environment or cause other social harm. These contenprovide reasons and other supporting data for the closure, consistent tions contain no allegations of illegality or action that would affect the with the institution's written policy for branch closings. safety and soundness of the institutions involved in the proposal, and Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

612 Federal Reserve Bulletin • September 2001 sion, the Board has considered the supervisory experience clusion, the Board has considered all the facts of record in and assessments of management by the various bank super- light of the factors that it is required to consider under the visory agencies, Citigroup's efforts to address supervisory BHC Act and other applicable statutes.66 The Board's and other concerns about the operation and management of approval is specifically conditioned on compliance by Citithe organization, management's due diligence efforts and group with all the representations and commitments made record of integrating other organizations, and the organiza- in connection with the application, the conditions detion's record of compliance with applicable banking law. scribed or referenced in this order, and on the receipt by As previously discussed, the Board has reviewed the com- Citigroup of all necessary regulatory approvals. These reppliance policies and procedures of Citigroup and its subsid- resentations, commitments, and conditions are deemed to iaries, including those engaged in subprime lending, and be conditions imposed in writing by the Board in connecconsulted with the appropriate federal supervisory agencies tion with its findings and decision and, as such, may be and state supervisors.64 Based on these and all other facts enforced in proceedings under applicable law. of record, the Board concludes that the financial and mana- The acquisition of EAB may not be consummated before gerial resources and the future prospects of Citigroup and the fifteenth calendar day after the effective date of this its subsidiary depository institutions and EAB are consis- order, and the proposal may not be consummated later than tent with approval, as are the other supervisory factors the three months after the effective date of this order, unless Board must consider under section 3 of the BHC Act. such period is extended for good cause by the Board or by the Federal Reserve Bank of New York, acting pursuant to Conclusion delegated authority. By order of the Board of Governors, effective July 2, Based on the foregoing and in light of all the facts of 2001. record, the Board has determined that the application should be, and hereby is, approved.65 In reaching its con- Voting for this action: Chairman Greenspan, Vice Chairman Ferguson, and Governors Kelley, Meyer, and Gramlich. ROBERT DEV. FRIERSON are outside the limited statutory factors that the Board is authorized to Associate Secretary of the Board consider when reviewing an application under the BHC Act. See Western Bancshares, Inc. v. Board of Governors, 480 F.2d 749 (10th Cir. 1973). 64. The Board also received several comments asserting that recent investigations of staif of the Subcommittee on Investigations of the Committee on Governmental Affairs of the United States Senate and the United States General Accounting Office demonstrate that Citibank NA and other affiliates of Citigroup lack sufficient policies and procedures and other resources to protect against money laundering. See Correspondent Banking: A Gateway for Money Laundering, S. Doc. No. 69-919 (1st Sess. February 5. 2001) (Report of the Minority Staff of the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs of the United States Senate); Suspicious Banking Activities, General Accounting Office, GAO-Ol- 120 (October 2000). The Board has reviewed carefully supervisory examinations of Citibank NA and consulted with the OCC, the appropriate federal financial supervisory agency of the bank, regarding the policies, procedures, and practices of Citigroup to comply with the Bank Secrecy Act. In addition, the Board has reviewed recent enhancements to Citigroup's policies and procedures to prevent money laundering that address the issues raised in those investigations. 65. Several commenters requested that the Board hold a public meeting or hearing on the proposal. Section 3 of the BHC Act does or warranted in this case. Accordingly, the requests for a public not require the Board to hold a public hearing on an application unless meeting or hearing on the proposal are denied. the appropriate supervisory authority for the bank to be acquired 66. A number of commenters requested that the Board delay action makes a timely written recommendation of denial of the application. or extend the comment period on the proposal. The Board has accumu- The Board has not received such a recommendation from the appropri- lated a significant record in this case, including reports of examinaate supervisory authorities. Under its rules, the Board also may, in its tion, confidential supervisory information, public reports and informadiscretion, hold a public meeting or hearing on an application to tion, and considerable public comment. In the Board's view, for the acquire a bank if a meeting or hearing is necessary or appropriate to reasons discussed above, commenters have had ample opportunity to clarify factual issues related to the application and to provide an submit their views and, in fact, have provided substantial written opportunity for testimony. 12 C.F.R. 225.16(e). The Board has consid- submissions that the Board has considered carefully in acting on the ered carefully these commenters' requests in light of all the facts of proposal. Moreover, the BHC Act and Regulation Y require the Board record. In the Board's view, the public has had ample opportunity to to act on proposals submitted under those provisions within certain submit comments on the proposal and, in fact, the commenters have time periods. Based on a review of all the facts of record, the Board submitted written comments that the Board has considered carefully has concluded that the record in this case is sufficient to warrant action in acting on the proposal. The commenters' requests fail to demon- at this time, and that a further delay in considering the proposal, an strate why their written comments do not present their views ade- extension of the comment period, or a denial of the proposal on the quately. For these reasons, and based on all the facts of record, the grounds discussed above or on the basis of informational insufficiency Board has determined that a public meeting or hearing is not required is not warranted. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 613 Orders Issued Under Sections 3 and 4 of the Bank pository institutions in the state ("state deposits").4 Citi- Holding Company Act group also operates depository institutions in New York, Connecticut, Delaware, Florida, Georgia, Illinois, Mary- Citigroup Inc. land, Nevada, New Jersey, South Dakota, Texas, Utah, New York, New York Virginia, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Citigroup Holdings Company CCB operates only in California and is the 41st largest Wilmington, Delaware depository institution in the state, with $1.3 billion in deposits, representing less than 1 percent of state deposits. Citicorp After consummation of the proposal, Citigroup would be- New York, New York come the seventh largest depository organization in California, with $7.3 billion in deposits, representing approxi- Order Approving Acquisition of a Bank Holding mately 1.6 percent of state deposits. Company Interstate Analysis Citigroup Inc., Citigroup Holdings Company, and Citicorp, financial holding companies within the meaning of the Section 3(d) of the BHC Act allows the Board to approve Bank Holding Company Act ("BHC Act") (together, an application by a bank holding company to acquire "Citigroup"), have applied under section 3 of the BHC Act control of a bank located in a state other than the home (12 U.S.C. § 1842) to acquire at least 51 percent of the state of such bank holding company if certain conditions voting shares of Grupo Financiero Banamex Accival, S.A. are met.5 For purposes of the BHC Act, the home state of de C.V. ("Banacci"), and Banco Nacional de Mexico, S.A. Citigroup is New York, and CCB is located in California. ("Banamex"), both in Mexico City, Mexico, and thereby Based on a review of the facts of record, including a indirectly acquire Banamex USA Bancorp, and its subsid- review of the relevant state statutes, the Board finds that all iary, California Commerce Bank, both in Los Angeles, the conditions enumerated in section 3(d) of the BHC Act California ("CCB").1 for an interstate acquisition are met in this case.6 In light of Citigroup also has filed a notice under section 4(c)(13) all the facts of record, the Board is permitted to approve of the BHC Act (12 U.S.C. § 1843(c)(13)) and the Board's the proposal under section 3(d) of the BHC Act. Regulation K (12 C.F.R. 211) to acquire Banamex, and its foreign banking and nonbanking investments.2 Competitive Considerations Notice of the proposal, affording interested persons an opportunity to submit comments, has been published Section 3 of the BHC Act prohibits the Board from approv- (66 Federal Register 31,649 (2001)). The time for filing ing a proposal that would result in a monopoly or be in comments has expired, and the Board has considered the furtherance of a monopoly. The BHC Act also prohibits the proposal and all comments received in light of the factors Board from approving a proposal that would substantially set forth in the BHC Act and other applicable statutes. lessen competition in any relevant banking market unless Citigroup, with total consolidated assets of $902.2 bil- the anticompetitive effects of the proposal in that banking lion, is the largest commercial banking organization in the market are clearly outweighed in the public interest by the United States, controlling approximately 3.9 percent of the probable effects of the proposal in meeting the convenience total assets of insured commercial banks in the United and needs of the community to be served.7 States, and is one of the largest commercial banking organizations in the world.3 In California, Citigroup operates Citibank, Federal Savings Bank, San Francisco, California ("Citibank FSB"), the 11th largest depository organization 4. In this context, depository institutions include commercial banks, in California, with $6 billion in deposits, representing savings banks, and savings associations. Deposit and state ranking approximately 1.3 percent of total deposits in insured de- data are as of June 30, 2000. 5. See 12 U.S.C. § 1842(d). A bank holding company's home state is the state in which the total deposits of all banking subsidiaries of such company were the largest on July 1, 1966, or the date on which the company became a bank holding company, whichever is later. 12 U.S.C. § 1841(o)(4)(C). 1. Citigroup also has proposed to form another intermediate bank 6. See 12 U.S.C. §§ 1842(d)(1)(A) and (B) and 1842(d)(2)(A). Citiholding company between Citigroup and CCB. group is well capitalized and well managed. On consummation of the 2. Banacci is a financial services holding company organized under proposal, Citigroup would control less than 10 percent of the total the laws of Mexico. In addition to CCB and Banamex, Banacci's main amount of deposits of insured depository institutions in the United financial subsidiaries are Acciones y Valores de Mexico, S.A. de C.V., States and less than 30 percent of the total amount of deposits of which engages in securities activities, and Seguros Banamex insured depository institutions in California. CCB has been in exis- AEGON, S.A. de C.V., which engages in insurance underwriting and tence and operated continuously for at least five years, the period of related activities. As a financial holding company, Citigroup has time required by California law. See 12 U.S.C. § 1842(d)(1)(B); Cal. proposed to acquire these Banacci nonbanking subsidiaries pursuant Fin. Code § 3825 (1999). The other requirements of section 3(d) also to section 4(k) of the BHC Act. 12 U.S.C. § 1843(k). have been met. 3. Asset and U.S. ranking data are as of December 31, 2000. 7 .See 12 U.S.C. § 1842(c). 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614 Federal Reserve Bulletin • September 2001 Citigroup's subsidiary savings association, Citibank an opportunity to comment and have not objected to con- FSB, competes directly with CCB compete in the summation of the proposal.11 Los Angeles, California banking market ("Los Angeles After carefully reviewing all the facts of record, and for banking market").8 The Board has reviewed carefully the the reasons discussed in this order, the Board concludes competitive effects of the proposal in the Los Angeles that consummation of the proposal would not likely result banking market in light of all the facts of record, including in a significantly adverse effect on competition or on the the number of competitors that would remain in the mar- concentration of banking resources in the Los Angeles ket, the relative shares of total deposits in depository banking market or in any other relevant banking market.12 institutions in the market ("market deposits") controlled by Citigroup and CCB,9 the concentration level of market Convenience and Needs Factor deposits and the increase in this level as measured by the Herfindahl-Hirschman Index ("HHI"), and other charac- In acting on a proposal under section 3 of the BHC Act, the teristics of the market.10 Board is required to consider the effect of the proposal on Citigroup operates the 15th largest depository organiza- the convenience and needs of the communities to be served tion in the Los Angeles banking market, controlling market and take into account the records of the relevant insured deposits of $1.7 billion, representing approximately depository institutions under the Community Reinvestment 1.2 percent of market deposits. CCB is the 22nd largest Act ("CRA").13 The purpose of the CRA is to require the depository organization in the market, with deposits of federal financial supervisory agencies to encourage insured $1.3 billion, representing less than 1 percent of market depository institutions to help meet the credit needs of deposits. On consummation of the proposal, Citigroup local communities in which they operate, consistent with would operate the ninth largest depository organization in safe and sound operation. Accordingly, the CRA requires the market, controlling deposits of $3 billion, representing the appropriate federal supervisory agency to take into approximately 2.1 percent of market deposits. The HHI for account an institution's record of meeting the credit needs the market would increase 2 points to 1019. The Los of its entire community, including low- and moderate- Angeles banking market would remain moderately concen- income ("LMI") neighborhoods, in evaluating certain trated after consummation of the proposal, with numerous types of expansion proposals. competitors in the market. The Board has carefully considered the convenience and The Department of Justice has reviewed the proposal needs and the CRA performance records of Citigroup's and advised the Board that consummation of the proposal subsidiary insured depository institutions and CCB in light would not likely have any significantly adverse competi- of all the facts of record, including comments received on tive effects in the Los Angeles banking market or any other the effect the proposal would have on the communities to relevant banking market. The Office of the Comptroller of be served by the relevant insured depository institutions. In the Currency ("OCC") and the California Department of this regard, the Board recently conducted a detailed review Financial Institutions ("CDFI") also have been provided of the CRA performance records of the insured depository institutions controlled by Citigroup and found those records to be consistent with approval of a bank expansion propos- 8. The Los Angeles banking market is defined as the Los Angeles al.14 The Board notes that the OCC also recently conducted Ranally Metro Area and the towns of Acton, Rancho Santa Margarita, a detailed review of the CRA performance record of Citiand Rosamond, California. bank, N.A., New York, New York ("Citibank NA"), the 9. Market share data are as of June 30, 2000, and are based on lead subsidiary insured depository institution of Citigroup, calculations that include the deposits of thrift institutions, except the deposits of Citibank FSB, weighted at 50 percent. The Board has and found that record to be consistent with approval of a indicated previously that thrift institutions have become, or have the bank expansion proposal.15 potential to become, significant competitors of commercial banks. See, e.g., Midwest Financial Group, 75 Federal Reserve Bulletin 386 (1989); National City Corporation, 70 Federal Reserve Bulletin 743 (1984). Thus, the Board regularly has included thrift deposits in the 11. The CDFI approved Citigroup's proposed acquisition of CCB calculation of market share on a 50-percent weighted basis. See, e.g., on July 12, 2001. First Hawaiian, Inc., 11 Federal Reserve Bulletin 52 (1991). Because 12. Several commenters urged the Board to deny this transaction Citibank FSB is affiliated with a commercial banking organization, its because it would result in the acquisition by Citigroup of a banking deposits are included at 100 percent. See First Banks, Inc., 76 Federal organization that controls assets representing more than 10 percent of Reserve Bulletin 669 (1990). the assets controlled by banks in Mexico. These commenters argued 10. Under the Department of Justice Merger Guidelines ("DOJ that the provision restricting banking organizations from acquiring in Guidelines"), 49 Federal Register 26,823 (June 29, 1984), a market is excess of 10 percent of the total deposits in depository institutions in considered moderately concentrated if the post-merger HHI is be- the United States should be applied to the acquisition by Citigroup of tween 1000 and 1800. The Department of Justice has informed the a Mexican bank. This provision of law does not apply outside the Board that a bank merger or acquisition generally will not be chal- U.S., and the Mexican governmental authorities have already relenged (in the absence of other factors indicating anticompetitive viewed this transaction and found it to be in accordance with applicaeffects) unless the post-merger HHI is at least 1800 and the merger ble Mexican law. increases the HHI by more than 200 points. The Department of Justice 13. 12 U.S.C. § 2901 et seq. has stated that the higher than normal HHI thresholds for screening 14. Citigroup, Inc., 87 Federal Reserve Bulletin 600 (2001) (probank mergers or acquisitions for anticompetitive effects implicitly posal by Citigroup to acquire European American Bank) ("Citigroup/ recognize the competitive effects of limited-purpose lenders and other EAB Order"). nondepository financial institutions. 15. See Citigroup/EAB Order. 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Legal Developments 615 A. Summary of Public Comments commenters expressed concern that consummation of the proposal would adversely affect Mexican national inter- Approximately 80 commenters responded to the Board's ests.21 request for public comment on this proposal. All the com- In addition, commenters criticized the lending and credit menters opposed the proposal, suggested that the Board insurance practices of Citigroup's subprime lending subsidapprove the proposal subject to conditions suggested by iaries, particularly those of Associates First Capital Corpothe commenter, or expressed concerns about the record of ration and its subsidiaries (together, "Associates"), which Citigroup in meeting the convenience and needs of the Citigroup acquired in November 2000. The commenters communities it serves. One commenter also questioned asserted that these entities are engaged in certain abusive whether CCB served the credit needs of its entire assess- lending practices, commonly referred to as "predatory ment area.16 lending," that are harmful to LMI and minority borrow- The commenters generally criticized Citigroup's record ers.22 Several commenters requested that the Board deny of home mortgage lending to LMI and minority residents the application in light of the recent lawsuit filed by the and in LMI communities and communities with predomi- Federal Trade Commission ("FTC") against Associates nantly minority populations ("minority communities"), and Citigroup, as the successor owner of Associates, or particularly in New York and California.17 Some comment- delay action on the proposal until this lawsuit and other ers asserted that Citigroup had low levels of home pur- consumer lawsuits concerning the lending and credit insurchase mortgage lending to LMI or minority residents or in ance sales activities of Associates and Citigroup are re- LMI or minority communities.18 Several commenters al- solved.23 Some commenters also asserted that Citigroup's leged or expressed concern that data submitted under the other subprime lender affiliates, such as CitiFinancial Home Mortgage Disclosure Act ("HMDA")19 demonstrated that Citigroup engaged in disparate treatment of LMI or minority individuals in various areas in the United tical comment in connection with its approvals of the proposed States, including New York, and Los Angeles, Oakland, acquisition of EAB by Citicorp and the proposed acquisition of San Diego, and San Jose, California.20 In addition, several Citicorp by Travelers. See Citigroup/EAB Order; Travelers Group Inc., 84 Federal Reserve Bulletin 985, 1001 n.66 (1998). As noted in these orders, Travelers denied the allegations of discrimination in the complaints, and there has been no adjudication of wrongdoing by the 16. Several commenters requested that Citigroup provide certain Department of Housing and Urban Development ("HUD") or any commitments and answer certain questions, or that the Board impose court regarding this matter. specific conditions or take specific actions, particularly with respect to 21. Included among these concerns are that consummation of the the subprime lending activities of Citigroup's affiliates. Several com- proposal could adversely affect the Mexican economy and banking menters also criticized the CRA-related pledge that Travelers Group system, in addition to LMI individuals and communities in Mexico, Inc. ("Travelers") and Citicorp made in connection with their merger through anticipated Banamex branch closures by Citigroup to achieve in 1998 as being vague, ineffective, and insufficient as compared to reductions in Banamex operating costs. Citigroup has not announced commitments by other commercial banking organizations. Comment- any decisions regarding the closing of branches of Banamex in Mexers also alleged that Citigroup's senior management had declined ico. If Citigroup determines to close any branches of Banamex, the requests for meetings with some community groups. The Board notes Board expects Citigroup and Banamex to make and implement that that the CRA requires that, in considering an acquisition proposal, the decision in full compliance with applicable Mexican law. This is a Board carefully review the actual performance records of the relevant matter that is not governed by U.S. banking law and is within the depository institutions in helping to meet the credit needs of their jurisdiction of the Mexican banking authority, not the Board. communities. Neither the CRA nor the federal banking agencies' 22. Commenters asserted that Associates engaged in abusive mar- CRA regulations require depository institutions to make pledges con- keting and sales practices that included misleading customers about cerning future performance under the CRA, confer authority on the key terms of a loan, such as the cost of credit insurance associated agencies to enforce pledges made to third parties, or require deposi- with the loan and the effect of balloon payments, and coercing tory institutions to meet with particular persons. customers to refinance loans that result in high points (interest paid at 17. Commenters were concerned about Citigroup's stated intention settlement) and other refinance charges. Commenters also asserted to use the Banamex brand name to market banking products and that Associates engaged in aggressive collection and foreclosure pracservices to Hispanics and predominantly Hispanic communities in the tices. United States. These commenters were particularly concerned that 23. As noted in the Citigroup/EAB Order, the consumer protection Citigroup would focus its strategy on credit cards with high fees and claims in the FTC's lawsuit allege that Associates, before its acquisiinterest rates and would not invest in or provide lower cost loans to tion by Citigroup in November 2000, engaged in abusive lending these individuals or communities. In addition, commenters urged practices and lending law violations. There has been no adjudication Citigroup to reduce the fees for and increase the availability of money of wrongdoing or injunctive action taken against Citigroup or any of transmission services. its affiliates in connection with the FTC lawsuit. See Citigroup/EAB 18. Commenters also criticized Citigroup for providing electronic Order. A commenter asserted that the Board should deny Citigroup's benefit transfers ("EBT") to low-income individuals in areas where it proposal, citing the Board's earlier denial of an application of Shawhas no bank branches and otherwise offers no access to other banking mut National Corporation ("Shawmut National") to acquire a bank services and noted that this business practice resulted in a lawsuit while Shawmut National's past mortgage lending operations were against Citigroup by the State of New York. The parties settled the under investigation by the Department of Justice. See Shawmut Nalawsuit in April 2001 after Citigroup agreed to provide a number of tional Corporation, 80 Federal Reserve Bulletin 47 (1994) ("Shawautomatic teller machines for use by EBT recipients without a sur- mut Order"). Unlike the facts in the Shawmut Order, where the charge. mortgage subsidiary under investigation was controlled by Shawmut 19. 12 U.S.C. § 2801 etseq. National at all relevant times, the activities at issue in the FTC's 20. A commenter asserted that Citigroup has discriminated in pro- complaint in the pending lawsuit involving Associates relate solely to viding homeowners insurance by citing a complaint that was filed the operations of Associates' affiliates before their acquisition by against Travelers in 1997. The Board considered a substantially iden- Citigroup. The Board will monitor Citigroup's progress in addressing Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

616 Federal Reserve Bulletin • September 2001 Credit Company ("CitiFinancial"), engage in many of the CRA performance rating from the FDIC, at its most recent same lending practices as Associates.24 In addition, some CRA examination as of January 10, 2000. commenters contended, based in part on HMDA data, that Associates National Bank (Delaware), Wilmington, Del- Citigroup improperly markets higher-cost subprime loan aware ("Associates Delaware"), a limited-purpose bank products to minority and LMI communities while it mar- that engages only in credit card operations and represents kets lower-cost prime loan products to nonminority and less than 1 percent of the consolidated assets of Citigroup, more affluent communities. Several commenters also al- received a "needs to improve" rating from the OCC, as of leged that Citigroup has indirectly supported predatory May 30, 1997, before Citigroup acquired the bank as part lending through its business relationships with unaffiliated of its acquisition of Associates in November 2000.27 The third parties engaged in subprime lending. Board has carefully reviewed the steps taken by Associates Delaware and those taken by Citigroup since it acquired B. CRA Performance Examinations the bank to correct the deficiencies noted in the examination and has consulted with the OCC, the appropriate As provided in the CRA, the Board has evaluated the federal supervisor of Associates Delaware.28 Examiners convenience and needs factor in this case in light of exam- found no evidence of prohibited discrimination or other inations by the appropriate federal supervisors of the CRA illegal credit practices, or any substantive violations of fair performance records of the relevant depository institutions. lending laws at any of the other subsidiary insured deposi- An institution's most recent CRA performance evaluation tory institutions of Citigroup or at CCB. The Board also is a particularly important consideration in the applications has evaluated substantial information submitted by Citiprocess because it represents a detailed evaluation of the group concerning the CRA performance of its subsidiary institution's overall record of performance under the CRA insured depository institutions since the dates of their most by its appropriate federal supervisors.25 Citibank N.A., the recent CRA performance evaluations. In addition, the lead insured depository institution of Citigroup, received a Board has consulted with the OCC and has considered "satisfactory" rating at its most recent CRA performance confidential supervisory information regarding Citigroup's examination by the OCC, as of October 26, 1998. The CRA performance provided by the OCC. other subsidiary depository institutions of Citigroup, with one exception discussed below, received "outstanding" or C. CRA Performance Record of Citigroup "satisfactory" ratings at their most recent CRA performance examinations.26 CCB received a "satisfactory" Citigroup proposes to acquire CCB and continue to operate it as a separate insured depository institution at this time. any adverse findings that may result from the FTC lawsuit or any other litigation. March 31, 1999; Associates Capital Bank, Inc., Salt Lake City, Utah, 24. Several commenters also asserted that the management of received an "outstanding" rating from the FDIC, as of September 27, Citigroup has failed to take an appropriate leadership role in address- 1999; and Hurley State Bank, Sioux Falls, South Dakota, received a ing abusive lending problems in the subprime lending market and has "satisfactory" rating from the FDIC, as of April 19, 1999. lobbied against some state and municipal legislative efforts to address 27. Several commenters asserted that the Board should deny the predatory lending. In addition, commenters noted that the lending and proposal on the basis of the "needs to improve" CRA rating of insurance practices of Associates, CitiFinancial, and Citigroup's Prim- Associates Delaware. In addition to representing less than 1 percent of erica Financial Services have resulted in several pending judicial Citigroup's consolidated assets, Associates Delaware received its proceedings (in addition to the FTC litigation involving Associates) "needs to improve" rating before it was acquired by Citigroup. and that these pratices are the subject of consumer complaints filed Moreover, examiners stated in the CRA performance evaluation that with several state and federal supervisory authorities. There has been the bank had completed a majority of the corrective actions that it had no adjudication of wrongdoing by any Citigroup affiliate in these initiated to address examiner concerns identified during a fair lending matters. examination of the bank that was conducted concurrently with the 25. See Interagency Questions and Answers Regarding Community CRA examination. Examiners also noted that Associates Delaware Reinvestment, 65 Federal Register 25,088 and 25,107 (2000). was taking steps to strengthen policies, procedures, training programs, 26. Citibank (New York State), Pittsford, New York ("Citibank and internal assessment efforts to prevent illegal discriminatory credit NYS"), received an "outstanding" rating from the Federal Deposit practices. See Citigroup/EAB Order; see also Sun Trust Banks, Inc., Insurance Corporation ("FDIC"), as of March 6, 2000; Citibank 76 Federal Reserve Bulletin 542 (1990). Delaware, New Castle, Delaware, received a "satisfactory" rating 28. Several commenters disagreed with regulations promulgated by from the FDIC, as of May 15, 2000; Citibank (Nevada), N.A., the Board that permit Citigroup, as a financial holding company (as Las Vegas, Nevada ("Citibank Nevada"), received an "outstanding" defined in section 4 of the BHC Act), to continue to engage in rating from the OCC, as of March 29, 1999; Citibank (South Dakota), expanded financial activities that are permissible for financial holding N.A., Sioux Falls, South Dakota ("Citibank South Dakota"), received companies while Associates Delaware has a less than satisfactory an "outstanding" rating from the OCC, as of May 24, 1999; Citibank CRA performance rating. As noted above. Associates Delaware re- FSB received an "outstanding" rating from the Office of Thrift ceived its CRA rating before it was acquired by Citigroup. Under the Supervision ("OTS"), as of July 12, 1999; Travelers Bank and Trust, Board's regulations, Citigroup would become subject to activity refsb, Newark, Delaware, received an "outstanding" rating from the strictions if Associates Delaware does not receive at least a satisfac- OTS, as of February 5, 2001; Universal Bank, N.A., Columbus, tory rating at its next CRA examination. See Federal Reserve System, Georgia, received a "satisfactory" rating from the OCC, as of Febru- 66 Federal Register 400, 404 (2001). As required in the regulations, ary 22, 1999; Citibank USA (formerly The Travelers Bank USA), Citigroup submitted to the OCC a corrective action plan outlining the Newark, Delaware, received an "outstanding" rating from the FDIC, steps that are necessary for the bank to achieve at least a "satisfactoas of March 15, 1999; Universal Financial Corporation, Salt Lake ry" rating at its next CRA examination. See id. at 402 and 416 (to be City, Utah, received a "satisfactory" rating from the FDIC, as of codified at 12 C.F.R. 225.82(d)). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 617 Citigroup has represented that it expects CCB will expand noted that the geographic distribution of its small business its CRA offerings to include products and programs offered lending in low-income areas was generally favorable.32 by Citigroup, including Citigroup's community develop- Examiners also indicated that the savings association ment programs for lending, investing, and services. In ranked first in small business loan originations (based on addition, Citigroup stated that it anticipates conforming dollar amount) among savings associations nationwide and CCB's current lending activities to Citigroup's fair lending 12th in small business lending among all banks and savpolicies and procedures. ings associations in its combined assessment areas. The Board has carefully reviewed the CRA performance In the 1999 CRA Evaluation, examiners determined that records of the insured depository institution subsidiaries of Citibank FSB's overall community development lending Citigroup. A detailed description of the CRA lending, was excellent. The examiners favorably noted that the investment, and service activities of those subsidiaries is savings association engaged in a variety of community included in the Citigroup/EAB Order. Based on its review development lending activities, including multifamily of the record in this case, the Board reaffirms and adopts in home mortgage lending that provided housing for LMI this case the facts and findings detailed in the Citigroup/ families and lending to community development organiza- EAB Order. tions that focused on affordable housing programs and the Because the proposal in this case involves the acquisi- stabilization or revitalization of economically distressed tion by Citigroup of an insured depository institution in areas. Citibank FSB originated community development California, the Board has devoted particular attention to the loans totaling more than $365 million during the review CRA performance records of Citibank FSB, Citigroup's period. subsidiary insured depository institution operating in Cali- Examiners also commended Citibank FSB for its comfornia, as well as the CRA performance record of CCB. munity development investment program, which focused on providing equity investments for affordable housing, Citibank FSB improving liquidity in the market for affordable mortgages, and strengthening community development financial insti- Overview. As previously noted, Citibank FSB received an tutions. During the review period, Citibank FSB doubled "outstanding" CRA performance rating from the OTS in the amount of its CRA-qualified investments to approxiits 1999 CRA performance evaluation ("1999 CRA Evalu- mately $63 million. Examiners also commended the savation"). Examiners commended the savings association for ings association for making almost $5 million in commuits lending performance in its assessment areas during the nity development grants during the review period. review period.29 Examiners reported that Citibank FSB In addition, examiners commended Citibank FSB for made more than 25 percent of its total HMDA-reportable offering an extensive number of alternative systems for loans in its combined nationwide assessment areas in LMI delivering retail banking services in LMI areas. Examiners census tracts during the review period.30 Examiners noted also indicated that Citibank FSB provided an exceptional that this percentage exceeded the percentage of total level of community development services, including eduowner-occupied housing units in LMI census tracts in its cational seminars for LMI individuals, first-time homebuycombined assessment areas and the percentage of total ers, and small business owners. HMDA-reportable loans made by the aggregate of lenders California. In the 1999 CRA Evaluation, examiners indi- ("aggregate lenders") in these LMI census tracts in 1997.31 cated that Citibank FSB had a strong overall record of Examiners also noted that Citibank FSB offered a variety lending in its assessment areas in California during the of home mortgage products and programs designed to meet review period.33 Examiners also found that the savings the needs of first-time homebuyers and LMI borrowers, association's HMDA-reportable lending to LMI borrowers including programs that offer reduced closing costs and increased significantly each year during the review period. down payment requirements and flexible underwriting For example, the percentage of Citibank FSB's total numstandards. ber of HMDA-reportable loans to LMI borrowers almost In addition, examiners commended Citibank FSB for the tripled to 33 percent from the beginning of 1996 and variety of small business loan programs it provided and through the first quarter of 1999.34 29. At the time of the CRA performance evaluation, Citibank FSB had 20 assessment areas in California, Illinois, Florida, Maryland, 32. The evaluation of Citibank FSB's small business lending in- Virginia, Connecticut, New Jersey, Texas, and the District of Colum- cluded lending of the following Citigroup entities in Citibank FSB's bia. The review period was from January 1, 1997, through March 31, assessment areas: Citibank FSB; Citibank NA; Citibank NYS; Citi- 1999. bank Nevada; and Citibank South Dakota. 30. The evaluation of Citibank FSB's HMDA-reportable lending 33. The assessment areas of Citibank FSB include the following included lending of the following Citigroup entities in Citibank FSB's PMSAs: Los Angeles-Long Beach, Orange County, Ventura, assessment areas: Citibank FSB; Citibank; Citicorp Mortgage (re- San Francisco, Oakland, and San Jose, all in California. named CitiMortgage, Inc.); Citibank NYS; Citibank Nevada; Com- 34. Examiners noted that the large increase in lending in LMI mercial Credit (renamed CitiFinancial). geographies from 1997 to 1998 resulted from the introduction by 31. The lending data of the aggregate lenders represent the cumula- Citigroup of a program offering home improvement loans with low tive lending for all financial institutions that have reported HMDA principal amounts. This program is discussed in more detail in the data in a given market. Citigroup/EAB Order. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

618 Federal Reserve Bulletin • September 2001 Citigroup stated that Citibank FSB increased the number small businesses in LMI census tracts by 100 percent to and dollar volume of its home purchase lending in LMI more than 7,400 loans in 2000. Citigroup also stated that it census tracts in California by 25 percent and 32 percent, made more than 9,100 small business loans in majorityrespectively, as compared to its 1999 totals.35 In 2000, minority census tracts in its California assessment areas in 23 percent of Citibank FSB's total home purchase loans 2000, which more than doubled its total in 1999.39 were made to borrowers in LMI census tracts in California, In the 1999 CRA Evaluation, examiners determined that and more than 14 percent of its total home purchase loans Citibank FSB's community development loans in Califorwere made to LMI households.36 nia, which totaled more than $63 million, represented an In addition, Citigroup represented that the number of excellent volume of community development lending. Exhome purchase loans that Citibank FSB made to Hispanic aminers also commended the savings association for makand African-American borrowers increased by 10 percent ing CRA-qualified investments totaling more than and 5 percent, respectively, in 2000 as compared to its $21 million during the review period. 1999 totals. Citigroup stated that more than 22 percent of Citigroup stated that it increased the amount of its comits total home purchase loans were made to Hispanic munity development financing in California to more than individuals and almost 4 percent were made to African- $153 million in 2000, more than double its 1999 total. Of American individuals.37 this amount, more than $136 million was provided for Examiners indicated that the geographic distribution of development of affordable housing. Citigroup noted that Citibank FSB's small business loans in low-income census this community development funding included a financing tracts compared favorably with the number of small busi- package of more than $30 million for an affordable nesses in these census tracts. Examiners also noted that housing/redevelopment project in the Mission Bay neigh- Citibank FSB offered a diverse array of products to address borhood in San Francisco that will include 100 apartments short- and long-term financing needs of small businesses in for low-income residents; $33.6 million in financing for California. In addition, examiners commended the savings three affordable housing projects that include 324 units of association for creating a pilot small business program affordable housing in a low-income district of San Francalled Capital Access that provided loans to creditworthy, cisco; and financing for a housing rehabilitation project by underserved small businesses, such as high technology a Hispanic community development organization serving businesses, export businesses, and businesses owned by East Los Angeles. minorities, women, and veterans. Examiners also noted In addition, Citigroup stated that it made more than that Citibank FSB actively promoted small businesses $17 million in qualified CRA investments in California through workshops and seminars for small business own- during 2000 and the first six months of 2001. These investers, and that the savings association had an active Small ments included $5 million in a venture capital fund formed Business Administration loan program in California. to invest in commercial real estate in LMI areas of Los Citigroup stated that, in 2000, it more than doubled the Angeles; $10 million in a syndication formed to invest in number of loans to small businesses in California to more telecommunications companies owned or managed by mithan 30,300 loans, and it increased the dollar volume of nority individuals; and $4 million in a Habitat for such loans by 45 percent to more than $372 million.38 Humanity-related entity to help generate liquidity to build Citigroup added that more than 95 percent of its small new housing for LMI community residents. Citigroup also business loans in 2000 were in amounts less than $100,000. stated that the Citigroup Foundation awarded more than In addition, Citigroup stated that it increased its lending to $3 million in grants to organizations in California during the last two years.40 Seventy percent of this funding was provided to organizations that work to revitalize neighbor- 35. Citigroup's representations regarding Citibank FSB's home hoods, help low-income individuals develop assets, inmortgage lending included lending by the following Citigroup entities crease financial literacy, and improve educational opportuin Citibank FSB's California assessment areas: Citibank FSB; Citinities for children. bank NA; CitiMortgage, Inc. ("CitiMortgage"), including Source One In the 1999 CRA Evaluation, examiners noted favorably Mortgage Corporation, which was merged into CitiMortgage in 2000; Citibank NYS; and Citibank Nevada. that Citibank FSB delivered retail banking services 36. As noted in the Citigroup/EAB Order, Citigroup represented throughout its assessment areas in California through its that CitiMortgage has initiated a five-year program with the Federal branch network, a large network of ATMs, and alternative National Mortgage Association ("FNMA") under which CitiMort- delivery systems.41 Examiners also indicated that Citibank gage has committed to originate, and FNMA has committed to purchase, $12 billion in affordable mortgage loans nationwide through a number of affordable mortgage programs of Citigroup. Of this amount, $1.4 billion is allocated to Northern California and $1.2 billion is 39. The term "majority-minority census tracts" means those tracts allocated to Southern California/Nevada. in which minority populations comprise at least 50 percent of the 37. Some commenters criticized the percentage of Citigroup's total tract's population. home mortgage loans made to Hispanic individuals and communities 40. Some commenters asserted that Citigroup did not provide a as being too low and lagging behind the percentages achieved by other sufficient amount of grants to nonprofit organizations operated by large depository organizations in the market. Hispanics. 38. Citigroup's representations regarding Citibank FSB's small 41. Some commenters asserted that Citibank FSB maintained few business lending in its California assessment areas included lending branches in California, particularly in LMI areas. Citigroup stated that by the following entities: Citibank FSB; Citibank South Dakota; and Citibank FSB currently has 78 branches in California, including 18 Universal Financial Corporation (Utah). located in majority-minority census tracts. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 619 FSB offered a wide range of deposit and loan products at gram, the credit is secured by a savings account that is all its branches, including a low-cost checking account. opened at the time the credit application is submitted. Originally, the minimum savings account needed to open D. CRA Performance Record of CCB and secure a CCB credit card was $300, but CCB lowered this amount to $200 in 1999. CCB also offers a semi- As noted above, CCB received a "satisfactory" rating for secured credit card program to participants in the secured CRA performance from the FDIC, as of January 10, 2000. card program who have maintained a good payment record CCB's primary business focus, as noted by examiners, is for a defined period of time. Under this program, CCB international lending, particularly commercial lending to increases the credit limit by 100 percent of the amount in companies doing business in or with Mexico. Examiners the participant's savings account, up to a maximum credit reported that CCB also offers secured and unsecured con- limit of $2,000. CCB also offers a further upgrade to a fully sumer credit cards nationwide, purchases mortgage loans unsecured credit card with a maximum credit limit of originated within its assessment area, offers mortgage $3,000. Qualification for this upgrade also is based on the warehouse lines of credit, and engages in community de- participant's tenure in the CCB credit card program and velopment lending, investment, and services activities.42 maintenance of a good payment record. Examiners rated CCB's performance under the lending Examiners rated CCB's performance under the investtest during the review period as "high satisfactory," and ment test as "high satisfactory." In particular, examiners stated that the bank's lending levels reflected a strong commended CCB for increasing its qualified community responsiveness to the credit needs of its assessment area. In development investment and grant levels by more than particular, examiners commended the bank for its excellent 350 percent since the previous CRA performance examinadistribution of loans among borrowers of different income tion, which resulted in $14.1 million in qualified investlevels.43 Examiners also commended the bank for its good ments and grants. CCB's qualified investments included record of serving the credit needs of the most economically the purchase of three government-sponsored mortgagedisadvantaged areas of its assessment area and low-income backed securities with 90 percent of the securities' princiindividuals. pal amount backed by loans to LMI borrowers in Los Examiners noted that CCB had substantially increased Angeles County; commitments to invest in two equity the volume of purchased HMDA-reportable loans in its funds established to help rebuild distressed neighborhoods assessment area since 1998. In 1999, 53 percent of CCB's in California; and investments in community development purchased HMDA- reportable loans by number and dollar corporations in California that provide small business and real estate loans to borrowers who do not qualify for volume were in LMI census tracts. Examiners noted that conventional bank loans, loans to small businesses in LMI this percentage of HMDA-reportable lending in LMI cenareas, or loans to LMI borrowers. sus tracts well exceeded that of the aggregate lenders in 1998. Examiners also noted that the number and dollar Examiners noted that the bank operates two branches in volume of the HMDA-reportable loans to LMI individuals Los Angeles. One branch is in an upper-income census that CCB purchased exceeded the percentage of LMI tract in Century City and the other branch is in a moderatehouseholds in its assessment area. income census tract in East Los Angeles. CCB also has In addition, examiners noted that CCB provided mort- established an ATM to serve East Los Angeles. Examiners gage warehouse lines of credit to mortgage banking compa- found that the branches offered reasonable accessibility to nies that extend funds primarily for loans guaranteed by all portions of CCB's assessment area 44 In addition, examthe Federal Housing Administration and the Veterans Ad- iners found that the bank used its Call Center effectively as ministration. In 1998 and 1999, CCB provided approxi- an alternative delivery system by offering bilingual telemately $58 million through these lines of credit to finance phone banking service with a toll-free number that is 400 homes within its assessment area. Examiners noted available 24 hours a day. Examiners noted that the Call that CCB reduced its processing fee for loans extended Center processed more than one million customer inquiries within its assessment area as an incentive for these mort- and requests in 1999. gage banking companies to increase their lending in the area. E. Subprime Lending of Citigroup Examiners commended CCB for using innovative and flexible lending practices to serve the credit needs of its As noted above, the Board carefully reviewed the issues assessment area. In particular, examiners commended CCB raised by commenters concerning the subprime lending for its secured consumer credit card program, which was activities of Citigroup. Many commenters raised substandesigned to help meet the needs of LMI individuals, partic- tially the same issues as were raised in connection with ularly new residents and immigrants without credit or Citigroup's proposal to acquire EAB. These issues were employment history. In CCB's secured credit card pro- carefully and fully reviewed by the Board in that case.45 42. The assessment area of CCB includes about 80 percent of the 44. A commenter asserted that CCB's branch in East Los Angeles Los Angeles-Long Beach PMSA. provided little access to traditional banking services. 43. The review period was from January 1, 1998, through Septem- 45. Commenters have expressed various concerns about the lending ber 30, 1999. practices of Associates and other subsidiaries of Citigroup, including Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

620 Federal Reserve Bulletin • September 2001 The Board reiterates its expectation that bank holding policies of the insurance products offered.49 In addition, companies and their affiliates conduct their subprime lend- Citigroup affiliates that engage in subprime lending will ing operations free of abusive lending practices.46 The not originate subprime real estate loans with balloon pay- Board has carefully considered the record of lending of ments and will not originate or purchase real estate loans Citigroup's affiliates, including those engaged in subprime with negative amortization features.50 The initiatives also lending, in light of all the comments received. In addition, include plans for a "referral-up" program to be implethe Board has consulted with each federal supervisory mented nationwide by the end of 2001 that will refer agency responsible for overseeing Citigroup's subprime CitiFinancial loan applicants who meet certain qualificalending affiliates. tion criteria to CitiMortgage for a prime mortgage loan. In CitiFinancial and Citigroup's other subsidiaries that en- addition, Citigroup is implementing a program at Citigage in subprime lending have underwriting policies and Financial to provide rate reductions to subprime loan borprocedures designed to prevent abusive lending practices, rowers who make timely payments and a graduation prowhich include requiring all real estate-secured loan applica- gram at CitiFinancial and CitiFinancial Mortgage (AHES) tions to be evaluated on an applicant's creditworthiness that refers qualifying borrowers who have CitiFinancial and ability to repay, using credit bureau scoring and propri- subprime loans to CitiMortgage for a prime loan product.51 etary models, and limiting points charged on certain refi- As part of the initiatives, CitiFinancial also has created a nanced loans. In addition, Citigroup's subprime lending compliance department that reviews pending and potential affiliates have adopted a number of programs and other foreclosures to protect against inappropriate foreclosure policies and procedures, including centralized loan under- proceedings against the borrowers' homes.52 writing systems, fair lending self-assessments (including For the reasons explained in this order and the Citigroup/ matched-pair analyses), branch and corporate audits, and EAB Order, the Board believes that Citigroup has adopted fair lending and compliance training, that are designed to comprehensive policies and procedures that are reasonably prevent deceptive and abusive lending practices.47 designed to ensure compliance with the fair lending laws In January 2001, the network of retail branches of Associates was transferred to CitiFinancial, and the former Associates consumer finance businesses in the United 49. Citigroup recently announced that it will discontinue the sale of States and Canada became subject to the underwriting and single premium credit insurance for all real estate- secured loans by compliance policies, procedures, and programs of Citi- the end of 2001. Citigroup represented that CitiFinancial is in the group and CitiFinancial. In connection with its proposed process of obtaining the appropriate state insurance licenses so that it may offer nationwide credit life insurance with a premium paid acquisition of Associates in November 2000, Citigroup monthly by the borrower. announced consumer protection initiatives that are in the 50. Citigroup has represented that, in the case of purchased or process of being implemented at CitiFinancial (including existing subprime loans in Citigroup's portfolio, borrowers with balthe former branch offices of Associates) and certain other loon payments coming due will be given the option to refinance the affiliates.48 These initiatives relate to loans secured by real loan in lieu of making the balloon payment. 51. Citigroup represented that qualifying subprime borrowers of estate in the United States and include enhanced oral and CitiFinancial will not be required to pay prepayment penalties for written disclosures to purchasers of credit insurance prod- refinancing their loans with CitiFinancial or any other Citigroup ucts concerning the cost, coverage, terms, and cancellation affiliate. 52. In addition, the initiatives being implemented include: (i) Giving subprime loan borrowers a choice of paying a higher interest rate loan in exchange for the elimination of a prepaymatters related to the sale of insurance, matters raised in affidavits or ment penalty fee; statements by former or current employees of these subsidiaries, and (ii) Limiting prepayment fees to the lesser of three years after a concerns about foreclosure practices of these subsidiaries. In connec- loan is made or the maximum term mandated by state law; tion with the Board's recent review of the proposed acquisition by (iii) Establishing toll-free "hotlines" for customers to seek redress Citigroup of EAB, the Board carefully and extensively considered for complaints and problems concerning their loans; these concerns, including information provided by commenters and (iv) Implementing a "mystery shopper" program at CitiFinancial the affidavit of a former CitiFinancial employee filed in the FTC branches (including former Associates branches) administered litigation. Commenters have provided no additional information that by a third party to help ensure that compliance procedures are warrants a change in the Board's findings on these matters in the followed; Citigroup/EAB Order. As discussed in that order and below, the Board (v) Providing updated training on compliance (including fair lendwill conduct an examination of CitiFinancial pursuant to its supervi- ing) for all consumer finance employees, sory authority. (vi) Strengthening compliance by and oversight of loan brokers; 46. Several commenters contended that Citigroup will employ at (vii) Enhancing fair lending self-evaluations in consultation with Banamex and its affiliates in Mexico various lending practices that outside counsel; commenters believe are abusive. The lending activities of Banamex (viii) Prohibiting refinancing of certain below-market rate loans by and its affiliates in Mexico are subject to the supervision and legal nonprofit organizations and certain other programs within a requirements of Mexican law and the Mexican banking authorities. specified timeframe; The Board expects Citigroup to operate with the highest integrity (ix) Implementing additional limits on points charged on the refiworldwide and in compliance with the laws of each country in which nancing by CitiFinancial of some of its loans; it operates. (x) Enhancing disclosures regarding refinancing; and 47. See Citigroup/EAB Order. (xi) Evaluating CitiFinancial's policies and procedures to prevent 48. Some commenters challenged the adequacy of these initiatives "loan flipping" (e.g., repeated refinancing of a loan to charge and expressed concern that Citigroup would not implement them high points or fees) and implementing additional appropriate effectively. safeguards. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 621 and to prevent abusive lending practices by its holding for concluding that an institution has not assisted adecompany affiliates. As noted above, Citigroup has begun to quately in meeting its community's credit needs or has implement many of these practices and consumer protec- engaged in illegal lending discrimination. tion initiatives at CitiFinancial, including the former branch Because of the limitations of HMDA data, the Board has offices of Associates. considered these data carefully in light of other informa- As indicated in the Citigroup/EAB Order, the Board will tion, including examination reports that provide an on-site conduct a thorough examination to assess the effectiveness evaluation of compliance by the subsidiary depository inof the implementation of the initiatives and other consumer stitutions of Citigroup with fair lending laws. As noted in protection measures proposed or adopted by Citigroup at the Citigroup/EAB Order, examiners found no evidence of its subprime lending affiliates, CitiFinancial and CitiFinan- prohibited discrimination or other illegal credit practices at cial Mortgage (AHES).53 The Board has broad supervisory any of the subsidiary depository institutions controlled by authority under the banking laws to require Citigroup to Citigroup.56 The record also indicates that Citigroup has take any other steps necessary to address deficiencies iden- taken a number of affirmative steps to ensure compliance tified in the examination. with fair lending laws. As discussed in the EAB Order, Citigroup has instituted corporate-wide compliance poli- F. HMDA Data cies and procedures to help ensure compliance with all fair lending and other consumer protection laws and regula- The Board also has carefully considered Citigroup's lend- tions, employed compliance officers and staff charged with ing record in light of comments about HMDA data re- monitoring compliance, and conducted corporate and ported by its subsidiaries.54 These HMDA data-related branch audits of compliance. Citigroup's housing-related comments were substantially similar to those considered lending subsidiaries have established detailed fair lending by the Board in connection with its approval of Citigroup's procedures in addition to Citigroup's corporate policies proposed acquisition of EAB. The Board's analysis of and procedures, including extensive fair lending training Citigroup's HMDA data, as detailed in the Citigroup/EAB programs for employees and fair lending self-assessments Order, is incorporated by reference herein. using matched-pair testing and statistical analyses. Citi- As noted in the Citigroup/EAB Order, the HMDA data Mortgage and CitiFinancial also have implemented a generally do not indicate that Citigroup is excluding any "mystery shopping" program administered by a third party race or income segment of the population or geographic to help verify that compliance procedures are followed. areas on a prohibited basis. The data, however, reflect In addition, the Board has considered the HMDA data in certain disparities in the rates of loan applications, origina- light of Citigroup's overall lending and community develtions, and denials among members of different racial opment activities discussed above and in the Citigroup/ groups and persons at different income levels generally and EAB Order, which show that Citigroup's subsidiary banks in certain local areas. The Board is concerned when the significantly assist in helping to meet the credit needs of record of an institution indicates disparities in lending and their entire communities, including LMI areas.57 The Board believes that all banks are obligated to ensure that their believes that, viewed in light of the entire record, the lending practices are based on criteria that ensure not only HMDA data indicate that Citigroup's record of perforsafe and sound lending, but also equal access to credit by mance in helping to serve the needs of its communities is creditworthy applicants regardless of their race or income consistent with approval of the proposal. level. The Board recognizes, however, that HMDA data alone provide an incomplete measure of an institution's lending in its community because these data cover only a few categories of housing-related lending. HMDA data, moreover, provide only limited information about the covered loans.55 HMDA data, therefore, have limitations that 56. As noted above, Associates Delaware received a "needs to make them an inadequate basis, absent other information, improve" rating in its most recent CRA performance evaluation. This rating was received before Citigroup acquired control of Associates. Examiners stated that the bank had initiated corrective actions to 53. This examination will include CitiFinancial's offices in various address the examiner criticisms and implemented additional measures areas in the United States, including Southern California. to strengthen policies, procedures, training programs, and internal 54. Based on 1999 and 2000 HMDA data, commenters criticized assessment efforts to prevent illegal discriminatory credit practices. Citigroup's record of home mortgage lending to African-American, 57. Commenters alleged that some of Citigroup's lending subsidiar- Hispanic, or Native-American individuals or to LMI individuals in ies have violated HMDA reporting requirements. The Board considvarious areas throughout the United States, particularly in New York ered the same comments when it evaluated Citigroup's proposal to and California. acquire EAB. As noted in the Citigroup/EAB Order, the Board has 55. The data, for example, do not account for the possibility that an forwarded these allegations to HUD. Some commenters also noted institution's outreach efforts may attract a larger proportion of margin- that the New York State Banking Department ("NYSBD") and Citially qualified applicants than other institutions attract and do not group entered into a letter agreement executed on June 25, 2001 provide a basis for an independent assessment of whether an applicant ("June 2001 Agreement"), that stated two affiliates of Associates who was denied credit was, in fact, creditworthy. Credit history submitted erroneous 1999 and 2000 HMDA data. In the June 2001 problems and excessive debt levels relative to income (reasons most Agreement, Citigroup committed to submit to HUD a corrected data frequently cited for a credit denial) are not available from HMDA report or a plan satisfactory to HUD for addressing the identified data. errors, within six months of the agreement. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

622 Federal Reserve Bulletin • September 2001 G. Conclusion on Convenience and Needs Consideration The Board received several comments on the proposal criticizing the managerial resources of Citigroup and its subsidiaries.58 Several commenters asserted that Citi- In reviewing the effect of the proposal on the convenience group's management has failed to implement effective and needs of the communities to be served, the Board has policies and programs to address alleged abusive lending carefully considered the entire record, including all the and sales practices of Citigroup's subsidiaries, including information provided by commenters, Citigroup, and CCB; those engaged in subprime lending and insurance activievaluations of the performance of Citigroup's insured deties.59 These commenters asserted that adverse managerial pository institution subsidiaries and CCB under the CRA; resources are evidenced by the pending FTC lawsuit and confidential supervisory information. against Associates and Citigroup, as Associate's successor Based on all the facts of record and for the reasons owner, and by consumer lawsuits and complaints filed discussed above and in the Citigroup/EAB Order, the against Associates and other Citigroup affiliates.60 Board concludes that considerations relating to the conve- After reviewing all the facts of record, the Board connience and needs factor, including the CRA performance cludes that Citigroup and its subsidiary insured depository records of the relevant depository institutions, are consisinstitutions and CCB are well managed.61 In reaching this tent with approval of the proposal. conclusion, the Board has considered the supervisory experience and assessments of management by the various bank Financial and Managerial Considerations supervisory agencies, Citigroup's efforts to address supervisory and other concerns about the operation and manage- Section 3 of the BHC Act requires the Board to consider ment of the organization, the management's due diligence the financial and managerial resources and future prospects efforts and record of integrating other organizations, and of the companies and banks involved in the proposal and the organization's record of compliance with applicable certain other supervisory factors. The Board has carefully banking law. As previously discussed, the Board has reconsidered these factors in light of all the facts of record, viewed the compliance policies and procedures of Citiincluding public comments, supervisory reports of exami- group and its subsidiaries, including those engaged in nation, other confidential supervisory information assess- subprime lending, and consulted with the appropriate feding the financial and managerial resources of the organiza- eral supervisory agencies and state supervisors.62 Based on tions, and other information provided by Citigroup. In evaluating financial factors in expansion proposals by banking organizations, the Board consistently has consid- 58. One commenter alleged that Citigroup's management lacks ered capital adequacy to be especially important. The proethnic diversity and raised questions regarding Citigroup's failure to posed acquisition is structured as an exchange of cash and use more minority vendors. Although the Board fully supports pro- Citigroup shares, and Citigroup proposes to incur debt to grams designed to promote equal opportunity and economic opportufinance the cash portion of the proposal. As a result of this nities for all members of society, these issues are beyond the factors the Board is authorized to consider under the BHC Act. See, e.g., acquisition, the Board notes that Citigroup's risk-based Deutsche Bank AG, 86 Federal Reserve Bulletin 509, 513 (1999). regulatory capital ratios would decline by approximately 59. Commenters also asserted that Citigroup relied on home im- 90 basis points. Citigroup's ratios on a consolidated basis provement loans with low principal amounts, resulting in Citigroup's would remain above the well-capitalized thresholds appli- alleged failure to meet lending projections made by Citicorp a July 1998 letter agreement with the NYSBD in connection with the merger cable to banking organizations; however, bank regulatory of Travelers and Citicorp. The Board notes that compliance with capital ratios do not address insurance underwriting risks, projections in an agreement made with the NYSBD is a matter within nor do they take explicit account of diversification consid- the exclusive jurisdiction of the NYSBD. In the June 2001 Agreeerations, credit risk concentrations, or credit risk differen- ment, the NYSBD and Citigroup clarified the projections and extials within the loan portfolio. The Board believes that all tended them for an additional three years. 60. These comments were substantially similar to those considered banking organizations, particularly those undertaking sigby the Board in connection with its approval of Citicorp's proposal to nificant expansion, should have robust risk management acquire EAB. See Citigroup/EAB Order. and economic capital assessment processes and need to 61. Several commenters also raised other matters, including contenensure on an ongoing basis that their capital positions are tions regarding the terms under which Citigroup originally acquired adequate in relation to the full array of risks to which the its existing affiliate bank in Mexico, environmental claims, claims about lending activities in India, and concerns about the Board's organizations are exposed. As part of the ongoing superviability to obtain information regarding the activities of offices of sory process, the Board will continue to assess Citigroup's Banamex and Citigroup located outside the United States. All these consolidated capital adequacy on this basis and in light of matters are either outside the jurisdiction of the Board or have been its future acquisition plans. previously considered by the Board and involve matters regarding which commenters have presented no new information. The Board also has considered the managerial resources 62. The Board also received several comments asserting that recent of Citigroup and CCB, the examination reports of the investigations on money laundering activities by staff of the Subcomfederal financial supervisory agencies that supervise these mittee on Investigations of the Committee on Governmental Affairs of organizations, including Citigroup's subsidiary depository the United States Senate and the United States General Accounting Office and several press reports demonstrate that Citibank NA and institutions, and other confidential supervisory informaother affiliates of Citigroup lack sufficient policies and procedures and tion. In addition, the Board has consulted with these fedother resources to protect against money laundering. See Corresponeral financial supervisory agencies. dent Banking: A Gateway for Money Laundering, S. Doc. No. 69-919 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 623 these and all other facts of record, the Board concludes that committed that each of these agencies will engage only in the financial and managerial resources and the future pros- activities permitted to an Edge corporation under Regulapects of Citigroup and its subsidiary depository institutions tion K (12 C.F.R. 211.4(e)). Based on the facts of record, and CCB are consistent with approval, as are the other the Board has determined that all factors required to be supervisory factors the Board must consider under section considered under the BHC Act and Regulation K are 3 of the BHC Act.63 consistent with approval. To the extent that any activities or investments of Banamex do not currently comply with Investments and Activities Abroad the provisions of Regulation K, Citigroup has committed to conform these activities or investments within six months Citigroup also has requested the Board's consent under of the acquisition of Banamex.64 section 4(c)(13) of the BHC Act and section 211.5(c) of the Board's Regulation K 12 C.F.R. 211.5(c)) to acquire Bana- Conclusion mex and its foreign banking and nonbanking investments. Under section 4(c)(13) of the BHC Act, the Board may Based on the foregoing and in light of all the facts of permit a bank holding company to acquire a company that record, the Board has determined that the application and does no business in the United States except as incident to notice should be, and hereby are approved.65 In reaching its its international or foreign business if the Board determines conclusion, the Board has considered all the facts of record that the acquisition would not be substantially at variance in light of the factors that it is required to consider under with the purposes of the BHC Act and would be in the the BHC Act and other applicable statutes.66 The Board's public interest. Regulation K provides that a bank holding company may acquire companies engaged in activities usual in connection with the transaction of banking or 64. The Board also has received a comment questioning Citigroup's other financial operations abroad. Regulation K further authority to own an interest in a telecommunications company whose states the Board's policy that investors shall at all times act shares are currently owned by Banamex. Citigroup will acquire and in accordance with high standards of banking or financial temporarily hold this interest pursuant to section 4(c)(13) of the BHC Act while Banamex divests control of the company, in accordance prudence, having due regard for diversification of risks, with the requirements of Mexican law, after Citigroup consummates suitable liquidity, and adequacy of capital. its proposed acquisition of Banacci and Banamex. Citigroup must The Board has reviewed information with respect to fully conform any remaining investment in the company to the mer- Banamex and its existing operations and has determined chant banking provisions of section 4(k) of the BHC Act (12 U.S.C. § 1843(k)) and the Board's Regulation Y (12 C.F.R. Subthat Banamex may be considered well capitalized and well part J), within six months of consummation. managed within the meaning of Regulation Y (12 C.F.R. 65. Several commenters requested that the Board hold a public 225.90). Banamex currently operates agencies in meeting or hearing on the proposal. Section 3 of the BHC Act does New York, New York, and Houston, Texas. Citigroup has not require the Board to hold a public hearing on an application unless the appropriate supervisory authority for the bank to be acquired makes a timely written recommendation of denial of the application. The Board has not received such a recommendation from the appropri- (1st Sess. February 5, 2001) (Report of the Minority Staff of the ate supervisory authority. Under its rules, the Board also may, in its Permanent Subcommittee on Investigations of the Committee on discretion, hold a public meeting or hearing on an application to Governmental Affairs of the United States Senate); Suspicious Bank- acquire a bank if a meeting or hearing is necessary or appropriate to ing Activities, General Accounting Office, GAO-01-120 (October clarify factual issues related to the application and to provide an 2000). These comments also were substantially the same as those opportunity for testimony. 12 C.F.R. 225.16(e). The Board has considconsidered by the Board in connection with its approval of Citigroup's ered carefully these commenters' requests in light of all the facts of proposal to acquire EAB. As noted in the Citigroup/EAB Order, the record. In the Board's view, the public has had ample opportunity to Board has carefully reviewed supervisory examinations of Citibank submit comments on the proposal and, in fact, the commenters have NA and consulted with the OCC, the appropriate federal financial submitted extensive written comments that the Board has considered supervisory agency of the bank, regarding the policies, procedures, carefully in acting on the proposal. Many of the commenters' requests and practices of Citigroup to comply with the Bank Secrecy Act. In were based on issues that the Board carefully considered in connecaddition, the Board has reviewed recent enhancements to Citigroup's tion with its action on Citigroup's proposal to acquire EAB. In policies and procedures to prevent money laundering that address the addition, many requests were based on activities of Banacci or Citiissues raised in those investigations. See Citigroup/EAB Order. A group in Mexico that are subject to the supervision and legal requirecommenter also noted that Banamex was subject to a temporary ments of Mexican law and Mexican governmental authorities. The cease-and-desist order issued by the Board in 1998 concerning the commenters' requests fail to demonstrate why their written comments bank's compliance with U.S. anti-money laundering laws. The Board do not present their views adequately or why a meeting or hearing released Banamex from this order in March 2000 after determining otherwise would be necessary or appropriate. For these reasons, and that the bank had sufficiently enhanced its anti-money laundering based on all the facts of record, the Board has determined that a public compliance policies and procedures. meeting or hearing is not required or warranted in this case. Accord- 63. Commenters asserted that senior officials of Citigroup had ingly, the requests for a public meeting or hearing on the proposal are improper ex parte communications with various U.S. and Mexican denied. government officials regarding the proposed acquisition. The Board's 66. A number of commenters requested that the Board delay action policies regarding ex parte communications do not apply to contacts or extend the comment period on the proposal. The Board has accumubetween an applicant and officials outside the Federal Reserve Sys- lated a significant record in this case, including reports of examinatem, and do not govern communications with an applicant concerning tion, confidential supervisory information, public reports and informaissues that are not raised by a timely comment or communications tion, and considerable public comment. In the Board's view, for the when no application or other request for approval of the proposed reasons discussed above, commenters have had ample opportunity to acquisition is pending. submit their views and, in fact, have provided substantial written Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

624 Federal Reserve Bulletin • September 2001 approval is specifically conditioned on compliance by Citi- Federal Register 21,158 and 22,559 (2001)). The time for group with all the representations and commitments made filing comments has expired, and the Board has considered in connection with the application and notice, the condi- the proposal and all comments received in light of the tions described or referenced in this order, and on the factors set forth in the BHC Act. receipt by Citigroup of all necessary regulatory approvals. First Financial, with total consolidated assets of These representations, commitments, and conditions are $113.9 million, is the 98th largest depository organization deemed to be conditions imposed in writing by the Board in Kentucky, controlling deposits of $87.4 million, reprein connection with its findings and decision and, as such, senting less than 1 percent of total deposits of insured may be enforced in proceedings under applicable law. depository institutions in the state.1 The acquisition of Banacci, Banamex, and CCB may not be consummated before the fifteenth calendar day after the Competitive Considerations effective date of this order, and the proposal may not be consummated later than three months after the effective The Board received comments on the competitive aspects date of this order, unless such period is extended for good of Harrodsburg's proposal to establish a de novo bank in cause by the Board or by the Federal Reserve Bank of New Glasgow from two in-market competitors of Citizens who York, acting pursuant to delegated authority. each claim that Barren County, Kentucky, currently is By order of the Board of Governors, effective July 16, served by too many banks.2 The Board has previously 2001. noted that the establishment of a de novo bank enhances competition in the relevant banking market and is a posi- Voting for this action: Chairman Greenspan, Vice Chairman Fergu- tive consideration in an application under section 3 of the son, and Governors Kelley, Meyer, and Gramlich. BHC Act.3 There is no evidence in this case that this transaction would lessen competition or create or further a JENNIFER J. JOHNSON monopoly in any relevant market.4 Accordingly, the Board Secretary of the Board concludes that consummation of the proposal would not have a significantly adverse effect on competition or on the Harrodsburg First Financial Bancorp, Inc. concentration of banking resources in any relevant banking Harrodsburg, Kentucky market, and that competitive considerations are consistent with approval. Order Approving the Formation of a Bank Holding Company Financial, Managerial, and Other Considerations Harrodsburg First Financial Bancorp, Inc. ("Harrods- The BHC Act requires the Board to consider the financial burg") has requested the Board's approval under section 3 and managerial resources and future prospects of the comof the Bank Holding Company Act ("BHC Act") panies and banks involved in the proposal and certain (12 U.S.C. § 1842) to acquire 55.7 percent of the voting supervisory factors. The Board has reviewed information shares of Citizens Financial Bank, Inc., Glasgow, Kenprovided by Harrodsburg, confidential supervisory and extucky ("Citizens"), a de novo state-chartered bank, and amination information, and publicly reported financial and thereby become a bank holding company. Harrodsburg, other information in assessing the financial and managerial which is currently a savings and loan holding company, strength of Harrodsburg, First Financial, and Citizens. The also has requested the Board's approval under sections Board has reviewed the relevant factors in light of these 4(c)(8) and 4(j) of the BHC Act (12 U.S.C. §§ 1843(c)(8) and all other facts of record and concludes that the finanand (j)) and section 225.24 of the Board's Regulation Y (12 C.F.R. 225.24) to retain and operate its wholly owned subsidiary savings association, First Financial Bank, also in Harrodsburg ("First Financial"), in accordance with 1. Asset, deposit, and ranking data for First Financial are as of June 30, 2000. section 225.28(b)(4) of Regulation Y (12 C.F.R. 2. Commenters claim that the financial performance of the banks 225.28(b)(4)), after Harrodsburg becomes a bank holding currently operating in the Barren County has, in general, declined over company. the last three years, and they argue that the opening of a new bank in Notice of the proposal, affording interested persons an Barren County would only accelerate this trend, to the detriment of the local community. The Supreme Court has held that the antitrust opportunity to submit comments, has been published (66 laws are intended for the "protection of competition, not competitors." Brown Shoe Co. v. U.S., 370 U.S. 294, 319 (1962). See also BankAmerica Corporation, 66 Federal Reserve Bulletin 511, 515 submissions that the Board has considered carefully in acting on the (1980). proposal. Moreover, the BHC Act and Regulation Y require the Board 3. See Wilson Bank Holding Company, 82 Federal Reserve Bulletin to act on proposals submitted under those provisions within certain 568 (1996). time periods. Based on a review of all the facts of record, the Board 4. Citizens and First Financial would not compete in the same local has concluded that the record in this case is sufficient to warrant action banking market. Citizens would operate in the Glasgow banking at this time, and that a further delay in considering the proposal, an market (defined as Barren and Hart Counties and the western half of extension of the comment period, or a denial of the proposal on the Metcalfe County, all in Kentucky), while First Financial competes in grounds discussed above or on the basis of informational insufficiency the Mercer and Anderson Counties, Kentucky, banking markets (deis not warranted. fined as Mercer County and Anderson County, respectively). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 625 cial and managerial resources and future prospects of Har- As part of its evaluation of these factors, the Board has rodsburg, First Financial, and Citizens are consistent with considered the financial and managerial resources of Harapproval, as are the other supervisory factors the Board rodsburg, First Financial, and Citizens and the effect of the must consider under the BHC Act. proposed transaction on those resources. For the reasons Section 3 of the BHC Act also requires the Board to noted above, and based on all the facts of record, the Board consider the elfect of the transaction on the convenience has concluded that financial and managerial considerations and needs of the community to be served.5 In evaluating are consistent with approval of the notice. this factor, the Board places particular emphasis on the The Board also has considered the competitive effects of ratings the insured depository institutions involved in a Harrodsburg's proposed retention of its nonbanking subsidproposal received at their most recent examinations under iary, First Financial, in light of all the facts of record. For the Community Reinvestment Act (12 U.S.C. § 2901 the reasons discussed, the Board has concluded that Haret seq.) ("CRA"). First Financial received an overall rating rodsburg's proposed retention of First Financial would not of "satisfactory" from its primary federal supervisor, the likely result in decreased or unfair competition or undue Office of Thrift Supervision, at its most recent evaluation concentration of resources in the Anderson or Mercer for CRA performance, as of January 1999. Citizens, a Counties banking markets. Harrodsburg has indicated that de novo bank that has not commenced operations, has not the proposal would benefit the communities served by First been evaluated for CRA performance by its primary fed- Financial by allowing them continued access to First Finaneral supervisor, the Federal Deposit Insurance Corporation. cial's primary loan products, which are single-family and Citizens has filed a business plan with the State of multifamily residential mortgages. Harrodsburg also stated Kentucky that calls for it to develop and apply flexible that its continued operation of First Financial would preunderwriting standards for loans that benefit low- or serve a proven competitor for deposit and loan products in moderate-income areas or individuals, including purchase the banking markets of Anderson and Mercer Counties. money and property improvement real estate loans; various The Board also concludes that the conduct of the proconsumer loans; and commercial, agricultural, church, and posed nonbanking activities within the framework of Regstudent loans. Citizens also intends to take advantage of ulation Y and Board precedent is not likely to result in active participation by its officers in Barren County civic adverse effects, such as undue concentration of resources, clubs, associations, and other community organizations to decreased or unfair competition, conflicts of interests, or ascertain the banking services needed by the community unsound banking practices that would not be outweighed and to develop and provide these services to all segments by its likely public benefits. Accordingly, the Board has of the community. determined that the balance of public interest factors it Based on all the facts of record, including First Finan- must consider under section 4(j)(2)(A) of the BHC Act is cial's record of performance under the CRA, the Board favorable and consistent with approval of Harrodsburg's concludes that convenience and needs considerations are notice to retain and operate First Financial. consistent with approval of the proposal. Conclusion Nonbanking Activities Harrodsburg also has filed a notice under sections 4(c)(8) Based on the foregoing and in light of all the facts of and 4(j) of the BHC Act (12 U.S.C. §§ 1843(c)(8) and (j)) record, the Board has determined that the application and to retain and operate First Financial and thereby engage in notice should be, and hereby are, approved. In reaching its operating a savings association. The Board has determined conclusion, the Board has considered all the facts of record by regulation that operating a savings association is closely in light of the factors that it is required to consider under related to banking for purposes of the BHC Act.6 Harrods- the BHC Act. The Board's approval is specifically condiburg has committed to conduct this nonbanking activity in tioned on compliance by Harrodsburg with all commitaccordance with the limitations set forth in Regulation Y ments made in connection with the application and notice. and the Board's orders and interpretations. The Board's determination on the nonbanking activities In order to approve this notice, the Board is required by also is subject to all the terms and conditions set forth in section 4(j)(2)(A) of the BHC Act to determine that the Regulation Y, including those in sections 225.7 and retention and operation of its savings association by Har- 225.25(c) (12 C.F.R. 225.7 and 225.25(c)), and the Board's rodsburg "can reasonably be expected to produce benefits authority to require such modification or termination of the to the public" that outweigh possible adverse effects, such activities of a bank holding company or any of its subsidas undue concentration of resources, decreased or unfair iaries as the Board finds necessary to ensure compliance competition, conflicts of interests, or unsound banking with, and to prevent evasion of, the BHC Act and the practices."7 Board's regulations and orders thereunder. For purposes of this transaction, the commitments and conditions referred to in this order shall be deemed to be conditions imposed in writing by the Board in connection with its findings and 5. 12 U.S.C. § 1842(c)(2). decision and, as such, may be enforced in proceedings 6. See 12 C.F.R. 225.28(b)(4)(ii). 7. 12 U.S.C. § 1843(j)(2)(A). under applicable law. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

626 Federal Reserve Bulletin • September 2001 The acquisition of Citizens may not be consummated and out-of-state banks pursuant to the provisions of the before the fifteenth calendar day after the effective date of Riegle-Neal Act. Chase Bank has provided a copy of its this order, or later than three months following the effective Bank Merger Act application to all the relevant state agendate of this order, and Citizens shall be open for business cies. The proposal also complies with all the other requirewithin six months following the effective date of this order, ments of the Riegle-Neal Act.3 Accordingly, the Riegleunless such period is extended for good cause by the Board Neal Act authorizes the proposed transaction. or by the Federal Reserve Bank of St. Louis, acting pursuant to delegated authority. Competitive, Financial, and Managerial Factors By order of the Board of Governors, effective July 2, 2001. The Bank Merger Act prohibits the Board from approving an application if the proposal would result in a monopoly Voting for this action: Chairman Greenspan, Vice Chairman Fergu- or would be in furtherance of an attempt to monopolize the son, and Governors Kelley, Meyer, and Gramlich. business of banking.4 The Bank Merger Act also prohibits the Board from approving a proposal that would substan- ROBERT DEV. FRIERSON tially lessen competition or tend to create a monopoly in Associate Secretary of the Board any relevant market, unless the Board finds that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effects of ORDERS ISSUED UNDER BANK MERGER ACT the transaction in meeting the convenience and needs of the community to be served.5 The proposed merger of The Chase Manhattan Bank Chase Bank and Chase Texas is a consolidation of two New York, New York banks that are affiliates in the same organization. The Board has received no objections to the proposal from the Order Approving the Merger of Banks Department of Justice or from the other federal banking agencies. Accordingly, the Board concludes that consum- The Chase Manhattan Bank ("Chase Bank"), a state memmation of the proposed transaction would not be likely to ber bank, has applied under section 18(c) of the Federal result in a significantly adverse effect on competition or on Deposit Insurance Act (12U.S.C. § 1828(c)) (the "Bank the concentration of banking resources in any banking Merger Act") to merge with Chase Bank of Texas B San market, and that competitive factors are consistent with Angelo, National Association, San Angelo, Texas ("Chase approval.6 Texas"). Chase Bank would be the surviving institution.1 The Board also has considered the financial and manage- Notice of the application, affording interested persons an rial resources and future prospects of Chase Bank and opportunity to submit comments, has been given in accor- Chase Texas. The Board has reviewed these factors in light dance with the Bank Merger Act and the Board's Rules of of all the facts of record, including supervisory reports of Procedure (12C.F.R. 262.3(b)). As required by the Bank examination assessing the financial and managerial re- Merger Act, reports on the competitive effects of the acquisources of the bank. Based on all the facts of record, the sitions were requested from the United States Attorney Board concludes that considerations relating to the finan- General and the other federal banking agencies. The time cial and managerial resources and future prospects of the for filing comments has expired, and the Board has considinstitutions involved are consistent with approval. ered the application and all facts of record, including the public comments received, in light of the factors set forth in the Bank Merger Act. Interstate Analysis 3. See 12 U.S.C. § 1831u. Chase Bank is adequately capitalized and adequately managed, as defined in the Riegle-Neal Act. The New York and Texas Departments of Banking have indicated that this Section 102 of the Riegle-Neal Interstate Banking and transaction would comply with applicable New York and Texas law. Branching Efficiency Act of 1994 ("Riegle-Neal Act") See NY Banking Law, Art. 5-C, § 225; Tex. Fin. Code Ann authorizes a bank to merge with another bank under certain §§ 202.001, 203.003. Chase Texas has been in existence and operation conditions unless, before June 1, 1997, the home state of for the minimum amount of time required by Texas law. See Tex. Fin. Code Ann. § 203.005. On consummation of the proposal, Chase Bank one of the banks involved in the transaction adopted a law would control less than 10 percent of the total amount of deposits in expressly prohibiting merger transactions involving out-of- insured institutions in the United States. All other requirements of state banks.2 New York and Texas have enacted legislation section 102 of the Riegle-Neal Act would also be met on consummaallowing interstate mergers between banks in their states tion of the proposal. 4. 12 U.S.C. § 1828(c)(5)(A). 5. 12 U.S.C. § 1828(c)(5)(B). 6. In reviewing the competitive effect of the proposal, the Board 1. Chase Bank and Chase Texas are wholly owned subsidiaries of also reviewed a comment objecting to consolidation in the banking J.P. Morgan Chase & Co., New York, New York ("JPMC"). Chase industry and maintaining that consolidation does not benefit the gen- Texas has one location in San Angelo, does not take deposits, and eral public. The current proposal would have a de minimis effect on limits its activities to providing cash management services. competition in the banking industry and on the assets controlled by 2. 12 U.S.C. § 183 lu. Chase Bank. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 627 Convenience and Needs Factor related lending increased 25 percent by volume. From 1997 to 1998, HMDA-related lending increased by The Bank Merger Act requires the Board to consider the 62 percent overall and by 63 percent in LMI geographies.11 convenience and needs of the communities to be served. Chase Bank represented that the bank and its affiliates The Board has long held that consideration of the conve- originated or purchased a total of more than 111 ,000 home nience and needs factor includes a review of the records of purchase or refinancing loans in 1999 and 2000. Chase performance of the relevant depository institutions under Bank also represented that 21.4 percent of these loans in the Community Reinvestment Act, 12 U.S.C. 2901 et seq. 2000 were to LMI borrowers. ("CRA"). Accordingly, the Board has carefully considered Community development lending at Chase Bank was the effect of the proposed merger on the convenience and considered by examiners to be outstanding. Examiners needs of the community to be served and the CRA records found that since its last CRA examination, Chase Bank's of performance of the institutions involved in light of all community development loans had increased by 34 percent the facts of record, including comments received about the to approximately $613 million. Chase Bank dedicated a proposal. large portion of its community development lending to Chase Bank received an "outstanding" rating at its most support housing initiatives by financing the construction of recent CRA examination by the Federal Reserve Bank of more than 4,000 housing units in the bank's assessment New York ("FRBNY"), as of July 1999. As noted, Chase areas. Chase Bank represented that in 1999 and 2000, the Texas takes no deposits and only provides cash manage- bank and its affiliates made 419 community development ment controlled disbursement services. Accordingly, it is loans totaling $750 million in Chase Bank's assessment not evaluated for CRA performance under the regulations area. of the Office of the Comptroller of the Currency ("OCC") Examiners found that Chase Bank offered a variety of because it is a special purpose bank.7 loan products that featured innovative and flexible lending As part of its 1999 examination by the FRBNY, Chase practices to serve the credit needs of its assessment area. Bank received a rating of "outstanding" for its lending During the examination period, the bank originated approxactivities. Examiners characterized as excellent the bank's imately 3,600 of these loans, totaling approximately responsiveness to the credit needs of its assessment areas $380 million, to assist LMI borrowers or borrowers in LMI and all segments of its community, including low- and geographies. Chase Bank was instrumental in developing moderate-income ("LMI") geographies and borrowers. and testing the "FA$TRAK" program and other loan pro- During the review period of January 1997 to March 1999, grams designed by the Small Business Administration Chase Bank and its affiliates originated or purchased ap- ("SBA") to provide loans in amounts of $150,000 or less proximately 87,600 small business loans, totaling more to small businesses. In 1997 and 1998, the bank originated than $5.1 billion.8 More than 90 percent of these loans more SBA loans than any other lender in the New York were in amounts of less than $100,000, with an average region. Chase Bank also used credit enhancements, such as loan amount of approximately $33,000, and 21 percent by guarantees provided by the SBA and other government number were to businesses in LMI census tracts.9 Chase agencies, to provide small business credit to borrowers Bank represented that the bank and its affiliates originated who would not normally qualify for conventional loan a total of almost 95,500 small business loans in 1999 and products. In the area comprising New York State and 2000, and that 21 percent of the loans were to businesses in the New York consolidated metropolitan statistical area LMI census tracts. During the review period, Chase Bank and its affiliates originated or purchased approximately 67,100 loans, total- ported by Chase Mortgage Corporation-West and cited by the coming more than $11 billion, reportable under the Home menter was loan information from the former Mellon Mortgage Mortgage Disclosure Act, 12 U.S.C. § 2801 et seq. Company, which was acquired by Chase USA in 1999. In addition, Chase Bank stated that HMDA information reported by the mortgage ("HMDA").10 From 1996 to 1997, Chase Bank's HMDAunits of Advanta Corporation, Horsham, Pennsylvania ("Advanta"), and cited by the commenter involved applications made by telephone. The Board notes that HMDA regulations do not require lenders to 7. See 12 C.F.R. 25.11(c)(3). Chase Texas used to take deposits and inquire about the race of individuals making mortgage loan applicaoperate as a full-service bank. The bank received a "satisfactory" tions by telephone, nor are lenders required to report the race of rating at its CRA examination by the OCC, as of August 1996, when it applicants who apply for a mortgage loan by mail, but do not provide operated as Texas Commerce Bank B San Angelo, National Associa- race information. See 12 C.F.R. Pt. 202, App. B. In addition, a lender tion. is not required to collect data about the race of borrowers with respect 8. In this context, "small business loans" means loans in amounts to mortgage loans purchased by the lender. See 12 C.F.R. of less than $1 million. Chase Bank also made 54 percent of its small 203.4(b)(2)(i). The Board notes that the OCC reviews Chase USA's business loans to businesses with gross annual revenues of $1 million compliance with data collection and reporting requirements under or less ("loans to small businesses"). HMDA as part of the agency's periodic consumer compliance exami- 9. Examiners noted that 21 percent of all businesses in Chase nations of Chase USA. Chase USA received an "outstanding" rating Bank's assessment area were in LMI areas. at its most recent CRA examination by the OCC, as of May 1999. 10. A commenter asserted that Chase Bank and two mortgage Chase Bank's compliance with these requirements is also reviewed as lending units recently acquired by Chase Manhattan Bank USA, N.A., part of the FRBNY's periodic consumer compliance examinations of Newark, Delaware ("Chase USA"), an affiliate of Chase Bank, did not Chase Bank. adequately collect or report data on the race of applicants for HMDA- 11. In this context, "HMDA-related loans" includes home purchase related loans. Chase Bank responded that HMDA information re- mortgage loans and refinancing of such loans. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

628 Federal Reserve Bulletin • September 2001 ("New York CMS A"), Chase Bank originated 424 innova- of record, and for the reasons discussed above, the Board tive or flexible small business loans during 1997 and 1998, concludes that considerations relating to the convenience totaling more than $56 million. and needs factor, including the CRA performance records Examiners noted that Chase Bank offered innovative and of the relevant insured depository institutions, are consisflexible home mortgage products. Chase Bank participated tent with approval.12 in special lending programs, through the State of New York Mortgage Agency, the Federal National Mort- Conclusion gage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), that were Based on the foregoing and all the facts of record, the designed to help LMI and other borrowers purchase homes Board has determined that the proposal should be, and in LMI geographies. In addition, the bank offered a propri- hereby is, approved.13 The Board's approval is specifically etary mortgage loan program for customers financing prop- conditioned on compliance by Chase Bank with all the erties in LMI geographies who did not qualify for conven- commitments made in connection with the application. For tional mortgage products. Chase Bank also offered a purposes of this action, the commitments and conditions program of flexible mortgages in cooperation with a relied on in reaching this decision are conditions imposed community-based organization. In the area comprising in writing by the Board and, as such, may be enforced in New York State and the New York CMSA, Chase origi- proceedings under applicable law. nated more than 3,100 innovative or flexible mortgage The merger may not be consummated before the loans in 1997 and 1998, totaling approximately $325 mil- fifteenth calendar day after the effective date of this order, lion. or later than three months after the effective date of this Chase Bank received an "outstanding" examination rat- order, unless such period is extended by the Board or by ing for its investment activities. Examiners indicated that the Federal Reserve Bank of New York, acting pursuant to Chase Bank was responsive to the primary credit and delegated authority. community development needs of its assessment areas. By order of the Board of Governors, effective July 9, During the examination period, Chase's level of qualified 2001. investments totaled approximately $377 million. Examiners also characterized as excellent Chase Bank's level of Voting for this action: Chairman Greenspan, Vice Chairman Ferguqualified community development investments in facilities son, and Governors Kelley, Meyer, and Gramlich. and organizations supporting affordable housing, economic ROBERT DEV. FRIERSON development, and community services. Chase Bank repre- Associate Secretary of the Board sented that qualified investments and grants by the bank and its affiliates exceeded $586 million, as of December 31, 2000. Chase Bank received a "high satisfactory" examination 12. Commenter also expressed concern about Chase USA's acquisirating for its record of providing retail banking and com- tion of Advanta in March 2001, and sought information about the fair munity development services in its assessment area. Exam- lending policies to be implemented by JPMC for Advanta's subprime iners stated that Chase Bank's branch delivery system was lending. Chase Bank stated that the mortgage business purchased from Advanta is in the process of being integrated into JPMC's business, reasonably accessible to essentially all portions of its asand that JPMC's fair lending policies and procedures will apply to the sessment areas. At the time of the examination, Chase former Advanta business. Moreover, examiners found no evidence of Bank operated 486 retail branches in its combined assess- illegal discrimination or credit practices at Chase Bank or Chase USA. ment area, 22 percent of which were in LMI geographies. Chase Bank also stated that the staff of Chase Bank and Chase USA review subprime mortgage applications and inform applicants who Chase Bank's business hours and services were responsive might qualify for a prime loan of other available mortgage products. to the needs of all portions of its assessment areas, includ- 13. The commenter has requested a public meeting or hearing on the ing LMI geographies, and the needs of LMI individuals. proposal. The Bank Merger Act does not require the Board to hold a Examiners found that Chase offered a wide range of special public meeting or hearing. Under its rules, the Board may, in its banking products designed to support community develop- discretion, hold a public meeting or hearing if necessary or appropriate to clarify factual issues related to the application or to provide an ment, including special savings accounts used to save for opportunity for testimony. 12 C.F.R. 262.3(i). The Board has carefully first-time home purchase expenses, education expenses, considered the requests for a public meeting or hearing in light of all and small business capitalization. Chase Bank also pro- the facts of record. In the Board's view, the commenter has had ample vided services to nonprofit organizations seeking assis- opportunity to submit its views and, in fact, has submitted written comments that have been carefully considered by the Board in acting tance with administering affordable housing construction on the proposal. The request fails to identify issues that may be loans. clarified by a public meeting or hearing. The commenter has provided In its review of the convenience and needs factor, the substantial written comments that have been carefully considered by Board has carefully considered the entire record, including the Board, and the request fails to show why a public meeting or hearing is necessary for the proper presentation or consideration of the the CRA performance examinations of the insured deposicommenter's views. For these reasons, and based on all the facts of tory institutions involved in the proposal, all the informa- record, the Board has determined that a public meeting or hearing is tion provided by the commenter and by Chase Bank, and not required or warranted in this case. Accordingly, the request is confidential supervisory information. Based on all the facts hereby denied. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 629 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 ABC Bancorp, Golden Isles Financial Holdings, Inc. Atlanta July 5, 2001 Moultrie, Georgia St. Simons Island, Georgia The First Bank of Brunswick, Brunswick, Georgia Bank of Montreal, First National Bancorp, Inc., Chicago June 22, 2001 Toronto, Ontario, Canada Joliet, Illinois Bankmont Financial Corp., First National Bank of Joliet, Chicago, Illinois Joliet, Illinois Bank of Montreal, First National Bancorp, Inc., Chicago June 22, 2001 Toronto, Ontario, Canada Joliet, Illinois Harris Joliet Bankcorp, Inc., First National Bank of Joliet, Chicago, Illinois Joliet, Illinois Cascade Financial Corporation, Cascade Bank, San Francisco July 9, 2001 Everett, Washington Everett, Washington Clark County Bancorporation, Bank of Clark County, Vancouver, San Francisco July 11, 2001 Vancouver, Washington Washington Farmers State Corporation, Owatonna Bancshares, Inc., Minneapolis July 18, 2001 Mankato, Minnesota Owatonna, Minnesota Community Bank Minnesota, Owatonna, Minnesota Financial Investors of the South, Capital Bank, Atlanta June 29, 2001 Inc., Montgomery, Alabama Birmingham, Alabama First Indiana Corporation, First Indiana Bank, FSB, Chicago July 10, 2001 Indianapolis, Indiana Indianapolis, Indiana First National Bancshares of First National Bank of Huntsville, Dallas June 29, 2001 Huntsville, Inc., Huntsville, Texas Huntsville, Texas Huntsville Delaware Holdings, Inc. Wilmington, Delaware Franklin Financial Services American Home Bank, National Philadelphia July 9, 2001 Corporation, Association, Chambersburg, Pennsylvania Lancaster, Pennsylvania Geneva State Company, Grafton State Bank, Kansas City June 27, 2001 Geneva, Nebraska Grafton, Nebraska Harvard Bancorp, Inc., Hebron Bancshares, Inc., Chicago July 10, 2001 Harvard, Illinois Hebron, Illinois Hebron State Bank, Hebron, Illinois Henry State Bancorp, Inc., Henry State Bank, Chicago July 6, 2001 Henry, Illinois Henry, Illinois Mason National Bank Employee Mason National Bancshares, Inc., Dallas June 27, 2001 Stock Ownership Plan, Mason, Texas Mason, Texas Mason National Bancshares of Nevada, Inc., Carson City, Nevada The Mason National Bank, Mason, Texas Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

630 Federal Reserve Bulletin • September 2001 Section 3—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Porter Bancorp, Inc., US Access Bank, Inc., St. Louis June 29, 2001 Shepherdsville, Kentucky Louisville, Kentucky The Peoples Bank & Trust Company, Greensburg, Kentucky Raton Capital Corporation, Trinidad Capital Corporation, Kansas City July 3, 2001 Raton, New Mexico Trinidad, Colorado State Bank of Slater Employee Slater Bancshares, Inc., Kansas City May 31, 2001 Stock Ownership Plan, Slater, Missouri Slater, Missouri Timberland Bancshares, Inc., Timberland Bank, St. Louis June 20, 2001 El Dorado, Arkansas El Dorado, Arkansas TRB Bancorp, Inc., Greenbelt Bancshares, Inc., Dallas June 27, 2001 Dallas, Texas Quanah, Texas Security National Bank, Quanah, Texas Section 4 Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Camden National Corporation, Acadia Trust, National Association, Boston June 29, 2001 Camden, Maine Portland, Maine Gouws Capital Management, Inc., Portland, Maine Dexia S.A., Artesia Mortgage Capital Corporation, New York July 2, 2001 Brussels, Belgium Issaqua, Washington Artesia Mortgage SMBS, Inc., Issaqua, Washington Artesia Delaware Inc., Wilmington, Delaware Artesia North America Inc., Wilmington, Delaware Israel Discount Bank Limited, IDB Mortgage Corp., New York July 5, 2001 Tel Aviv, Israel New York, New York Discount Bancorp, Inc., New York, New York Marshall & Ilsley Corporation, Metavante Corporation, Chicago June 18, 2001 Milwaukee, Wisconsin Brown Deer, Wisconsin CyberBills, Inc., San Jose, California Norway Bancorp, MHC, Norway Savings Bank, Boston June 29, 2001 Norway, Maine Norway, Maine Norway Bancorp, Inc., Financial Institutions Service Norway, Maine Corporation, Lewiston, Maine PSB Bancorp, Inc., Jade Financial Corporation, Philadelphia June 26, 2001 Philadelphia, Pennsylvania Feasterville, Pennsylvania WFC, Inc., To engage de novo in extending credit Chicago June 18,2001 Waukon, Iowa and servicing loans Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Legal Developments 631 Section 4—Continued Applicant(s) Nonbanking Activity/Company Reserve Bank Effective Date Marshall & Ilsley Corporation, National City Bancorporation, Chicago July 9, 2001 Milwaukee, Wisconsin Minneapolis, Minnesota National City Bank of Minneapolis, Minneapolis, Minnesota Diversified Business Credit, Inc., Minneapolis, Minnesota 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 Centura Bank, Security First Network Bank, July 20, 2001 Rocky Mount, North Carolina Atlanta, Georgia 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 Bank Independent, Union Planters Bank, N.A., Atlanta June 29, 2001 Sheffield, Alabama Memphis, Tennessee Bank of Blue Valley, Citizens Bank, N.A., Kansas City July 17, 2001 Overland Park, Kansas Fort Scott, Kansas Bank of Louisville, Bank of Louisville, FSB, St. Louis July 11, 2001 Louisville, Kentucky La Grange, Kentucky Big Sky Western Bank, Western Security Bank, Minneapolis July 6, 2001 Gallatin Gateway, Montana Billings, Montana Central Trust and Savings Bank, First Federal Bank, Chicago July 10, 2001 Cherokee, Iowa Sioux City, Iowa Commercial Bank - California, Imperial Bank, Chicago July 18, 2001 San Jose, California Inglewood, California English State Bank, Peoples Trust Bank Company, St. Louis July 9, 2001 English, Indiana Corydon, Indiana Falcon International Bank, National Bank and Trust, Dallas July 25, 2001 Laredo, Texas La Grange, Texas First Penn Bank, IGA Federal Savings Bank, Philadelphia June 26, 2001 Philadelphia, Pennsylvania Feasterville, Pennsylvania First Security Bank of Missoula, Western Security Bank, Minneapolis July 6, 2001 Missoula, Montana Billings, Montana Glacier Bank, Western Security Bank, Minneapolis July 6, 2001 Kalispell, Montana Billings, Montana Glacier Bank of Whitefish, Glacier Bank of Eureka, Minneapolis July 12, 2001 Whitefish, Montana Eureka, Montana Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

632 Federal Reserve Bulletin • September 2001 Applications Approved Under Bank Merger Act—Continued Applicant(s) Bank(s) Reserve Bank Effective Date Horizon Bank, BankAtlantic, A Federal Savings Bank, Atlanta July 10, 2001 Bradenton, Florida Fort Lauderdale, Florida SouthTrust Bank, CENIT Bank, Atlanta July 9, 2001 Birmingham, Alabama Norfolk, Virginia The Commercial Trust & Savings Commercial Federal Bank, Chicago July 13, 2001 Bank, Omaha, Nebraska Storm Lake, Iowa Titonka Savings Bank, Commercial Federal Bank, Chicago July 12, 2001 Titonka, Iowa Omaha, Nebraska PENDING CASES INVOLVING THE BOARD OF GOVERNORS This list of pending cases does not include suits against the district court order entered April 30, 2001, upholding an Federal Reserve Banks in which the Board of Governors is not interagency rule regarding Privacy of Consumer Finance named a party. Information. On June 21, 2001, the court consolidated these cases with Reed Elsevier Inc. v. Board of Governors, Radfar v. United States, No. 1:01CV1292 (PLF) (D.D.C., No. 00-1289 (D.C. Cir., filed June 30, 2000), and related complaint filed June 11, 2001). Action under the Federal petitions for review filed against other federal agencies Tort Claims Act for injury on Board premises. challenging the same rules. On June 28, 2001, the court Artis v. Greenspan, No. 01-CV-0400(ESG) (D.D.C., complaint denied the appellants' emergency motion for an injunction filed February 22, 2001. Employment discrimination action. pending appeal. On July 23, 2001, the appellants and peti- Dime Bancorp, Inc. v. Board of Governors, No. 00-4249 tioners in all cases other than Trans Union LLC moved to (2d Cir., filed December 11, 2000). Petition for review of a dismiss the appeals and petitions. Board order dated September 27, 2000, approving the appli- Bettersworth v. Board of Governors, No. 00-50262 (5th Cir., cations of North Fork Corporation, Inc., Melville, filed April 14, 2000). Appeal of district court's dismissal of New York, to acquire control of Dime Bancorp, Inc. and to Privacy Act claims. On April 12, 2001, the court denied the thereby acquire its wholly owned subsidiary, The Dime petition for review. On June 12, 2001, the court denied the Savings Bank of New York, FSB, both of New York, petitioner's request for rehearing. New York. The petition was dismissed on the parties' Albrecht v. Board of Governors, No. 00-CV-317 (CKK) stipulation on July 23, 2001. (D.D.C., filed February 18, 2000). Action challenging the Nelson v. Greenspan, No. 99-215(EGS) (D.D.C., amended method of funding of the retirement plan for certain Board complaint filed December 8, 2000). Employment discrimi- employees. On March 30, 2001, the district court granted in nation action. part and denied in part the Board's motion to dismiss. Howe v. Bank for International Settlements, No. 00CV12485 Guerrero v. United States, No. CV-F-99-6771(OWW) (E.D. RCL (D. Mass., filed December 7, 2000). Action seeking Cal., filed November 29, 1999). Prisoner suit. damages in connection with gold market activities and the Artis v. Greenspan, No. 1:99CV02073 (EGS) (D.D.C., filed repurchase of privately-owned shares of the Bank for Inter- August 3, 1999). Employment discrimination action. national Settlements. Fraternal Order of Police v. Board of Governors, Individual Reference Services Group, Inc., v. Board of Gover- No. 1:98CV03116 (WBB) (D.D.C., filed December 22, nors, et al., No. 01-5175 (D.C. Cir., filed May 25, 2001); 1998). Declaratory judgment action challenging Board la- Trans Union LLC v. Federal Trade Commission, et al., bor practices. On February 26, 1999, the Board filed a No. 01-5202 (D.C. Cir., filed June 4, 2001). Appeals of motion to dismiss the action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A1 Financial and Business Statistics A3 GUIDE TO TABULAR PRESENTATION Federal Finance—Continued All Gross public debt of U.S. Treasury— DOMESTIC FINANCIAL STATISTICS Types and ownership A28 U.S. government securities Money Stock and Bank Credit dealers—Transactions A4 Reserves, money stock, and debt measures A29 U.S. government securities dealers— A5 Reserves of depository institutions and Reserve Bank Positions and financing credit A30 Federal and federally sponsored credit A6 Reserves and borrowings—Depository agencies—Debt outstanding institutions Securities Markets and Corporate Finance Policy Instruments A31 New security issues—Tax-exempt state and local A7 Federal Reserve Bank interest rates governments and corporations A8 Reserve requirements of depository institutions A32 Open-end investment companies—Net sales A9 Federal Reserve open market transactions and assets A32 Corporate profits and their distribution Federal Reserve Banks A32 Domestic finance companies—Assets and liabilities A33 Domestic finance companies—Owned and managed A10 Condition and Federal Reserve note statements receivables All Maturity distribution of loan and security holding Real Estate Monetary and Credit Aggregates A34 Mortgage markets—New homes A12 Aggregate reserves of depository institutions A35 Mortgage debt outstanding and monetary base A13 Money stock and debt measures Consumer Credit A36 Total outstanding Commercial Banking Institutions— A3 6 Terms Assets and Liabilities A15 All commercial banks in the United States Flow of Funds A16 Domestically chartered commercial banks A17 Large domestically chartered commercial banks A37 Funds raised in U.S. credit markets A19 Small domestically chartered commercial banks A39 Summary of financial transactions A20 Foreign-related institutions A40 Summary of credit market debt outstanding A41 Summary of financial assets and liabilities Financial Markets A22 Commercial paper and bankers dollar DOMESTIC NONFINANCIAL STATISTICS acceptances outstanding A22 Prime rate charged by banks on short-term Selected Measures business loans A23 Interest rates—Money and capital markets A42 Nonfinancial business activity A24 Stock market—Selected statistics A42 Labor force, employment, and unemployment A43 Output, capacity, and capacity utilization A44 Industrial production—Indexes and gross value Federal Finance A46 Housing and construction A25 Federal fiscal and financing operations A47 Consumer and producer prices A26 U.S. budget receipts and outlays A48 Gross domestic product and income 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 • September 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 SPECIAL TABLES A52 Liabilities to, and claims on, foreigners A53 Liabilities to foreigners A64 Residential lending reported under the A55 Banks' own claims on foreigners Home Mortgage Disclosure Act, 2000 A73 Disposition of applications for A56 Banks' own and domestic customers' claims on foreigners private mortgage insurance, 2000 A56 Banks' own claims on unaffiliated foreigners A76 Small loans to businesses and farms, 2000 A79 Community development lending reported A57 Claims on foreign countries—Combined domestic offices and foreign branches under the Community Reinvestment Act, 2000 Reported by Nonbanking Business A80 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

A3 Guide to Tabular Presentation SYMBOLS AND ABBREVIATIONS c Corrected G-7 Group of Seven e Estimated G-10 Group of Ten n.a. Not available GDP Gross domestic product n.e.c. Not elsewhere classified GNMA Government National Mortgage Association P Preliminary HUD Department of Housing and Urban r Revised (Notation appears on column heading Development when about half of the figures in that column IMF International Monetary Fund are changed.) IOs Interest only, stripped, mortgage-back securities * Amounts insignificant in terms of the last decimal IPCs Individuals, partnerships, and corporations place shown in the table (for example, less than IRA Individual retirement account 500,000 when the smallest unit given is millions) MMDA Money market deposit account 0 Calculated to be zero MSA Metropolitan statistical area Cell not applicable NOW Negotiable order of withdrawal ABS Asset-backed security OCDs Other checkable deposits ATS Automatic transfer service OPEC Organization of Petroleum Exporting Countries BIF Bank insurance fund OTS Office of Thrift Supervision CD Certificate of deposit PMI Private mortgage insurance CMO Collateralized mortgage obligation POs Principal only, stripped, mortgage-back securities CRA Community Reinvestment Act of 1977 REIT Real estate investment trust FAMC Federal 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 tl September 2001 1.10 RESERVES, MONEY STOCK, AND DEBT MEASURES Percent annual rate of change, seasonally adjusted1 Monetary or credit aggregate Q3 Q4 Q1 Q2 Apr.r Mayr Reserves of depository institutions 1 Total .' -8.3 -8.7 -2.1 1.7 1.2 -18.8 16.6 3.1 -4.0 2 Required -8.6 -10.4 -3.5 3.3 -4.5 -18.0 20.8 11.5 -14.3 3 Nonborrowed -9.9 -6.4 .5 .6 1.9 -19.0 16.9 -1.9 -4.5 4 Monetary base3 2.5 2.8 6.4 5.4 3.5 2.6 7.1 6.3 5.6 Concepts of money and debt4 5 Ml ' -3.7 -3.3 5.1 5.6 .9 13.8 5.4 -.6 6.4 6 M2 5.6 6.3 10.7 10.2 10.9 14.4 10.4 5.2 9.6 7 M3 7.0 12.3r 13.7 9.9 9.5 17.7 13.6 12.5 8 Debt 4.5 4.8 5.0 6.1r 3.8 4.0 Nontransaction components 9 In M25 8.5 9.1 12.3 11.5 13.7 14.6 11.9 6.8 10.5 10 In M3 only6 16.3 8.9r 16.0r 21.7 7.5 - 1.6r 34.5 32.6 18.9 Time and savings deposits Commercial banks 1 1 1 2 S S m av a i l n l g t s i , m i e n 7 c luding MMDAs 1 1 0 1 . . 5 8 1 5 2 . . 6 0 1 2 7 . . 5 4 - 2 8 0 . . 2 4 - 2 4 4 . . 8 7 - 1 6 9 . . 9 7 r - 2 9 0 . . 0 5 - 1 8 8 .9 .0 -1 1 1 8 .6 .9 13 Large time8'9 11.5 4.1 — 1.3 —3.4 -57.4 -47.0r 34.9 10.0 3.1 Thrift institutions 14 Savings, including MMDAs 3.1 .4 6.4 21.8 26.5 23.6 10.2 32.1 24.1 15 Small time7 10.8 9.5 6.4 .7 2.7 -3.4 1.0 7.2 -7.2 16 Large time8 23.2 14.0 11.9 11.4 6.8 2.3 20.2 19.9 -9.8 Money market mutual funds 17 Retail 3.9 11.6 16.9 11.2 24.6 18.1 -11.8 12.1 18 Institution-only 29.0 18.6 49.8 54.8 40.7 42.4 67.2 44.1 Repurchase agreements and eurodollars 19 Repurchase agreements10 8.2 -3.3r -12.91" 14.6 -33.6r -24.2r 71.3 3.3 -2.0 20 Eurodollars10 .6 10.3 3.1 -12.9 4.9 14.7 -58.2 10.8 5.0 Debt components4 21 Federal -7.3 -8.0 -5.4 -3.0r 1.2 -10.9 n.a. 22 Nonfederal 7.6 7.5 7.2 6.8 7.1 7.2 n.a. 1. Unless otherwise noted, rates of change are calculated from average amounts outstand- depository institutions, and (4) eurodollars (overnight and term) held by U.S. residents at ing during preceding month or quarter. foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom 2. Figures incorporate adjustments for discontinuities, or "breaks," associated with and Canada. Excludes amounts held by depository institutions, the U.S. government, money regulatory changes in reserve requirements. (See also table 1.20.) market funds, and foreign banks and official institutions. Seasonally adjusted M3 is calculated 3. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally by summing large time deposits, institutional money fund balances, RP liabilities, adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency and eurodollars, each seasonally adjusted separately, and adding this result to seasonally component of the money stock, plus (3) (for all quarterly reporters on the "Report of adjusted M2. Transaction Accounts, Other Deposits and Vault Cash" and for all weekly reporters whose Debt: The debt aggregate is the outstanding credit market debt of the domestic nonfinancial vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference sectors—the federal sector (U.S. government, not including government-sponsored enterbetween current vault cash and the amount applied to satisfy current reserve requirements. prises or federally related mortgage pools) and the nonfederal sectors (state and local 4. Composition of the money stock measures and debt is as follows: governments, households and nonprofit organizations, nonfinancial corporate and nonfarm Ml: (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of noncorporate businesses, and farms). Nonfederal debt consists of mortgages, tax-exempt and depository institutions, (2) travelers checks of nonbank issuers, (3) demand deposits at all corporate bonds, consumer credit, bank loans, commercial paper, and other loans. The data, commercial banks other than those owed to depository institutions, the U.S. government, and which are derived from the Federal Reserve Board's flow of funds accounts, are breakforeign banks and official institutions, less cash items in the process of collection and Federal adjusted (that is, discontinuities in the data have been smoothed into the series) and Reserve float, and (4) other checkable deposits (OCDs), consisting of negotiable order of month-averaged (that is, the data have been derived by averaging adjacent month-end levels). withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, 5. Sum of (1) savings deposits (including MMDAs), (2) small time deposits, and (3) retail credit union share draft accounts, and demand deposits at thrift institutions. Seasonally money fund balances, each seasonally adjusted separately. adjusted Ml is computed by summing currency, travelers checks, demand deposits, and 6. Sum of (1) large time deposits, (2) institutional money fund balances, (3) RP liabilities OCDs, each seasonally adjusted separately. (overnight and term) issued by depository institutions, and (4) eurodollars (overnight and M2: Ml plus (1) savings (including MMDAs), (2) small-denomination time deposits (time term) of U.S. addressees, each seasonally adjusted separately. deposits—including retail RPs—in amounts of less than $100,000), and (3) balances in retail 7. Small time deposits—including retail RPs—are those issued in amounts of less than money market mutual funds. Excludes individual retirement accounts (IRAs) and Keogh $100,000. All IRA and Keogh account balances at commercial banks and thrift institutions balances at depository institutions and money market funds. Seasonally adjusted M2 is are subtracted from small time deposits. calculated by summing savings deposits, small-denomination time deposits, and retail money 8. Large time deposits are those issued in amounts of $100,000 or more, excluding those fund balances, each seasonally adjusted separately, and adding this result to seasonally booked at international banking facilities. adjusted Ml. 9. Large time deposits at commercial banks less those held by money market funds, M3: M2 plus (1) large-denomination time deposits (in amounts of $100,000 or more), (2) depository institutions, the U.S. government, and foreign banks and official institutions. balances in institutional money funds, (3) RP liabilities (overnight and term) issued by all 10. Includes both overnight and term. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Money Stock and Bank Credit A5 1.11 RESERVES OF DEPOSITORY INSTITUTIONS AND RESERVE BANK CREDIT 1 Millions of dollars Average of Average of daily figures for week ending on date indicated daily figures 2001 2001 Apr. May June May 16 May 23 May 30 June 6 June 13 June 20 June 27 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 580,694 585,031 587,457 584,842 582,062 590,572 587,740 585,179 587,588 586,991 U.S. government securities2 2 Bought outright—System account3 523,962 526,810 532,187 527,258 526,099 529,168 527,940 531,105 532,906 535,009 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 10 10 10 10 10 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 20,009 21,907 18,444 20,053 20,915 26,534 24,054 17,643 17,286 14,931 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 29 129 105 525 3 22 120 268 57 14 9 Seasonal credit 35 80 119 88 83 86 95 106 122 138 10 Special Liquidity Facility credit 0 0 0 0 0 0 0 0 0 0 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float 251 -91 539 -153 130 -507 455 455 1,002 147 13 Other Federal Reserve assets 36,398 36,187 36,052 37,061 34,823 35,259 35,067 35,592 36,205 36,742 14 Gold stock 11,046 11,046 11,044 11,046 11,046 11,046 11,046 11,045 11,044 11,044 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 32,349 32,488r 32,612 32,475r 32,504r 32,533r 32,562 32,593 32,618 32,644 ABSORBING RESERVE FUNDS 17 Currency in circulation 588,086 591,535r 594,536 590,329r 590,98 lr 594,970r 595,205 594,278 594,018 593,979 18 Reverse repurchase agreements—triparty4 . . . 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 500 514 469 517 511 510 506 481 463 444 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 5,903 5,149 5,605 5,169 4,993 5,148 4,796 4,878 5,194 6,748 21 Foreign 92 100 88 104 76 148 83 85 101 79 22 Service-related balances and adjustments . . 6,940 6,946 7,185 6,843 7,087 6,878r 7,044 7,008 7,204 7,299 23 Other 352 350 298 395 342 294 332 311 284 279 24 Other Federal Reserve liabilities and capital 17,806 17,971 18,027 17,946 17,944 17,960 17,909 18,130 18,065 18,100 25 Reserve balances with Federal Reserve Banks' 6,609 8,199r 7,106 9,261 5,877 10,442r 7,671 5,846 8,121 5,951 End-of-month figures Wednesday figures Apr. May June May 16 May 23 May 30 June 6 June 13 June 20 June 27 SUPPLYING RESERVE FUNDS 1 Reserve Bank credit outstanding 587,708 591,914r 595,137 594,063 584,945 608,194 585,309 589,447 584,961 591,383 U.S. government securities2 2 Bought outright—System account- 525,911 527,562 535,1 10 528,380 525,608 529,372 527,124 531,874 534,482 535,191 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 10 10 10 10 10 5 Held under repurchase agreements 0 0 0 0 0 0 0 0 0 0 6 Repurchase agreements—triparty4 25,007 30,310 23,250 31,747 23,705 42,380 19,050 20,500 13,750 19,505 7 Acceptances 0 0 0 0 0 0 0 0 0 0 Loans to depository institutions 8 Adjustment credit 44 67 3 24 1 1 12 29 83 10 9 Seasonal credit 36 86 146 86 84 89 101 111 128 142 10 Special Liquidity Facility credit 0 0 0 0 0 0 0 0 0 0 11 Extended credit 0 0 0 0 0 0 0 0 0 0 12 Float -370 -998r -373 -683 478 846 3,670 1,104 43 -417 13 Other Federal Reserve assets 37,069 34,877r 36.992 34,500 35,058 35,495 35,341 35,820 36,465 36,942 14 Gold stock 11,046 11,046 11,044 11,046 11,046 11,046 11,046 11,044 11,044 11,044 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 32,417 32,562r 32,670 32,475r 32,504r 32,533r 32,562 32,593 32,618 32,644 ABSORBING RESERVE FUNDS 17 Currency in circulation 588,191 595,91 lr 596,674 591,648r 593,31 lr 596,594r 595,733 595,384 595,172 596,044 18 Reverse repurchase agreements—triparty 0 0 0 0 0 0 0 0 0 0 19 Treasury cash holdings 516 510 444 511 510 510 483 466 444 444 Deposits, other than reserve balances, with Federal Reserve Banks 20 Treasury 7,894 4,396 7,188 5,309 4,788 4,301 5,926 4.729 6,758 6,857 21 Foreign 102 85 102 76 84 72 82 82 133 73 22 Service-related balances and adjustments . . 7,241 7,044r 7,571 6,843 7,087 6,878r 7,044 7,008 7,204 7,299 23 Other 403 321 271 355 328 295 327 288 266 279 24 Other Federal Reserve liabilities and capital . 18,232 17,845 17,583 17.654 17,685 17,738 17,667 17,766 17.851 17,869 25 Reserve balances with Federal Reserve Banks' 10,792 11,609r 11,217 17,389 6,901 27,584r 3,855 9,560 2,996 8,405 1. Amounts of cash held as reserves are shown in table 1.12, line 2. 4. Cash value of agreements arranged through third-party custodial banks. These agree- 2. Includes securities loaned—fully guaranteed by U.S. government securities pledged ments are collateralized by U.S. government and federal agency securities. with Federal Reserve Banks—and excludes securities sold and scheduled to be bought back 5. Excludes required clearing balances and adjustments to compensate for float, under matched sale-purchase transactions. 3. Includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A6 Domestic Nonfinancial Statistics tl September 2001 1.12 RESERVES AND BORROWINGS Depository Institutions' Millions of dollars Prorated monthly averages of biweekly averages RReesseerrvvee ccllaassssiiffiiccaattiioonn 1998 1999 2000 2000 2001 Dec. Dec. Dec. Dec. Jan. Feb. Mar. Apr. May June 1 Reserve balances with Reserve Banks" 9,026 5,262 7,159 7.159 7,190 6,615 6,737 6,863 7,610r 7,041 9 Total vault cash1 44,294 60,619 45,229 45.229 47,683 48,517 44,104 43,656 43,263 43,133 3 Applied vault cash4 36,183 36,392 31,381 31,381 32,601 32,734 30,978 31,728 31,772r 31,176 4 Surplus vault cash5 8,111 24,227 13,848 13,848 15,083 15,783 13,127 11,929 11,491r 11,956 5 Total reserves6 45,209 41.654 38,540 38,540 39,791 39,349 37,715 38,591 39,382r 38,218 6 Required reserves 43,695 40,357 37,216 37,216 38,538 37,917 36,329 37,314 38,363 36,876 7 Excess reserve balances at Reserve Banks7 1,514 1,297 1,325 1.325 1,253 1,432 1,385 1,277 l,019r 1,342 8 Total borrowing at Reserve Banks 117 320 210 210 73 51 58 51 213 229 9 Adjustment 101 179 99 99 39 30 38 15 134 110 10 Seasonal 15 67 111 111 34 21 20 35 79 120 11 Special Liquidity Facility8 0 74 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 Mar. 7 Mar. 21 Apr. 4 Apr. 18 May 2 May 16 May 30 June 13 June 27 July 11 1 Reserve balances with Reserve Banks" 6,836 6,296 7,287 6,326 7,350 7,159 8,159r 6,756r 7,279 7,170 2 Total vault cash" 44,107 43,875 44,424 43.409 43,690 42,645 43,900 42,155 43,811 44,209 3 Applied vault cash4 31,547 30,304 31,523 31.199 32,413 31,031' 32,530 30,270r 31,964 31,431 4 Surplus vault cash5 12,561 13,571 12,902 12.210 11,277 1 l,615r 11,370 1 l,885r 11.846 12,777 5 Total reserves6 38,382 36,600 38,809 37.525 39,763 38,189r 40,689r 37,026r 39,243 38,601 6 Required reserves 37,103 35,419 37,062 36,329 38,549 37,302r 39,582r 35,776 37,819 37,243 7 Excess reserve balances at Reserve Banks7 1,279 1,180 1,747 1.196 1.214 887' 1,107r l,249r 1,424 1,358 8 Total borrowing at Reserve Banks 95 38 60 42 59 346 97 295 166 244 9 Adjustment 76 17 42 4 20 267 13 195 36 89 10 Seasonal 19 21 18 38 39 79 85 101 130 155 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 Centurv 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 i. 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 A 7 1.14 FEDERAL RESERVE BANK INTEREST RATES Percent per year Current and previous levels Adjustment credit Seasonal credir Extended credit Federal Reserve Bank On On Effective date Previous rate On 8/3/01 8/3/01 8/3/01 Boston 6/27/01 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 6/27/01 Range of rates for adjustment credit in recent years Range (or F.R. Bank Range (or F.R. Bank Range (or F.R. Ban Effective date level)—All of level)—All of Effective date level)—All of F.R. Banks N.Y. F.R. Banks N.Y. F.R. Banks N.Y. In effect Dec. 31, 1977 -Oct. 12 9.5-10 9.5 11999944——MMaayy 17 3-3.5 3.5 13 9.5 9.5 18 3.5 3.5 1978-—Jan. 9 6-6.5 6.5 Nov. 22 9-9.5 9 AAuugg.. 16 3.5-4 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 -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 4.50-1.75 4.75 >1 11 11 Apr. 21 6.5-7 6.5 26 4.75 4.75 Oct. 1 8 0 111-212 1 12 2 July 2 1 3 1 . 6 6 .5 6 6 .5 Nov. 1 1 6 8 4.7 5 5 . - 0 5 0 . 00 4 5 . . 7 0 5 0 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 1 1-12 11 MMaayy 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 -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 1981-—May 5 13-14 14 1991--Feb. 1 6-6.5 6 21 4.50 4.50 14 14 4 6 6 AApprr.. 18 4.00^1.50 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 MMaayy 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 3.5-4.5 3.5 In effect Aug. 3, 2001 3.25 3.25 3 11 11 24 3.5 3.5 16 10.5 10.5 10-10.5 10 -July 2 3-3.5 3 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: Bunking 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 NonfinancialS tatistics tl September 2001 1.15 RESERVE REQUIREMENTS OF DEPOSITORY INSTITUTIONS1 Requirement TTyyppee ooff ddeeppoossiitt Percentage of deposits Effective date 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 A 9 1.17 FEDERAL RESERVE OPEN MARKET TRANSACTIONS' Millions of dollars 2000 2001 TTyyppee ooff ttrraannssaaccttiioonn aanndd mmaattuurriittyy 11999988 11999999 22000000 Nov. Dec. Jan. Feb. Mar. Apr. May U.S. TREASURY SECURITIES2 Outright transactions (excluding matched transactions) Treasury bills 1 Gross purchases 3,550 0 8,676 2,507 509 520 2,683 557799 330088 662244 ? Gross sales 0 0 0 0 0 0 0 0 0 0 Exchanges 450,835 464,218 477,904 45,182 39,428 40,769 42,767 46,712 38,317 47,112 4 For new bills 450,835 464,218 477,904 45,182 39,428 40,769 42,767 46,712 38,317 47,112 5 Redemptions 2,000 0 24,522 1,145 1,145 228 638 211 3,537 3,939 Others within one year Gross purchases 6,297 11,895 8,809 580 1,420 0 1,605 67 3,027 2,174 7 Gross sales 0 0 0 0 0 0 0 0 0 0 8 Maturity shifts 46,062 50,590 62,025 7,957 0 10,296 5,609 0 12,204 8,117 Exchanges -49,434 —53,315 -54,656 -7,012 0 -6,667 -6,799 0 -7,000 -8,965 10 Redemptions 2,676 1,429 3,779 780 0 2,422 1,529 0 4,368 2,287 One to five years 11 Gross purchases 12,901 19,731 14,482 1,332 1,045 925 2,983 1,883 4,480 2,685 1? Gross sales 0 0 0 0 0 0 0 0 0 0 n Maturity shifts -37,777 -44,032 -52,068 -5,997 0 -10,296 -2,784 0 -12,204 -1,913 14 Exchanges 37,154 42,604 46,177 5,737 0 6,667 4,945 0 7,000 6,508 Five to ten years 15 Gross purchases 2,294 4,303 5,871 510 771 1,283 0 0 1,390 657 lis Gross sales 0 0 0 0 0 0 0 0 0 0 17 Maturity shifts -5,908 -5,841 -6,801 -699 0 0 -1,855 0 0 -5,130 18 Exchanges 7,439 7,583 6,585 1,275 0 0 971 0 0 2,457 More than ten years 19 Gross purchases 4,884 9,428 5,833 0 0 296 495 1,000 913 1,241 70 Gross sales 0 0 0 0 0 0 0 0 0 0 21 Maturity shifts -2,377 -717 -3,155 -1,261 0 0 -971 0 0 -1,074 22 Exchanges 4,842 3,139 1,894 0 0 0 883 0 0 0 All maturities 23 Gross purchases 29,926 45,357 43,670 4,929 3,745 3,024 7,766 3,529 10,118 7,380 74 Gross sales 0 0 0 0 0 0 0 0 0 0 25 Redemptions 4,676 1,429 28,301 1,802 1,145 2,650 2,166 211 7,905 6,226 Matched transactions 76 Gross purchases 4,430,457 4,413,430 4,399,257 351,391 345,680 356,250 320,060 396,029 381,667 398,039 27 Gross sales 4,434,358 4,431,685 4,381,188 351,232 348,917 352,336 322,056 395,151 381,895 397,600 Repurchase agreements 28 Gross purchases 512,671 281,599 0 0 0 0 0 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 3,286 -637 4,289 3,604 4,196 1,984 1,592 FEDERAL AGENCY OBLIGATIONS Outright transactions 31 Gross purchases 0 0 0 0 0 0 0 0 00 0 37 Gross sales 25 0 0 0 0 0 0 0 0 0 33 Redemptions 322 157 51 0 0 0 120 0 0 0 Repurchase agreements 34 Gross purchases 284,316 360,069 0 0 0 0 0 00 00 0 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 -120 0 0 0 Reverse repurchase agreements 37 Gross purchases 0 0 0 0 0 0 0 0 0 0 38 Gross sales 0 0 0 0 0 0 0 0 0 0 Repurchase agreements 39 Gross purchases 0 304,989 890,236 87,125 95,470 104,930 67,655 86,472 85,166 120,135 40 Gross sales 0 164,349 987,501 79,295 79,365 129,385 62,910 88,142 82,154 114,832 41 Net change in triparty obligations 0 140,640 -97,265 7,830 16,105 -24,455 4,745 -1,670 3,012 5,303 42 Total net change in System Open Market Account. . . 27,538 135,780 -63,877 11,116 15,468 -20,166 8,229 2,526 4,996 6,895 1. Sales, redemptions, and negative figures reduce holdings of the System Open Market 2. Transactions exclude changes in compensation for the effects of inflation on the principal Account; all other figures increase such holdings. of inflation-indexed securities. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A10 Domestic Nonfinancial Statistics tl September 2001 1.18 FEDERAL RESERVE BANKS Condition and Federal Reserve Note Statements1 Millions of dollars Wednesday End of month AAccccoouunntt 2001 2001 May 30 June 6 June 13 June 20 June 27 Apr. 30 May 31 June 30 Consolidated condition statement ASSETS 1 Gold certificate account 11,046 11,046 11,044 11,044 11,044 11,046 11,046 11,044 2 Special drawing rights certificate account 2,200 2,200 2,200 2,200 2,200 2,200 2,200 2,200 3 Coin 1,070 1,074 1,105 1,121 1,120 1,129 1,075 1,126 Loans 4 To depository institutions 90 114 139 211 152 80 154 150 5 Other 0 0 0 0 0 0 0 0 6 Acceptances held under repurchase agreements 0 0 0 0 0 0 0 0 Triparty Obligations 7 Repurchase agreements—triparty" 42,380 19,050 20,500 13,750 19,505 25,007 30,310 23,250 Federal agency obligations3 8 Bought outright 10 10 10 10 10 10 10 10 9 Held under repurchase agreements 0 0 0 0 0 0 0 0 10 Total U.S. Treasury securities3 529,372 527,124 531,874 534,482 535,191 525,911 527,562 535,110 11 Bought outright4 529,372 527,124 531.874 534,482 535.191 525,911 527,562 535,110 12 Bills 178,786 177.467 181.228 181,249 181,211 180,787 177,911 181,126 N Notes 252,357 251,419 251,425 253,531 254,225 247,965 251,415 254,228 14 Bonds 98,230 98,238 99,221 99,702 99,754 97.159 98,236 99,756 15 Held under repurchase agreements 0 0 0 0 0 0 0 0 16 Total loans and securities 571,853 546,298 552,523 548,453 554,858 551,008 558,035 558,519 17 Items in process of collection 10,612 11,706 8,787 8,869 7,888 2,569 7.670 5,573 18 Bank premises 1,499 1.504 1.507 1,507 1,505 1,497 1,504 1,509 Other assets 19 Denominated in foreign currencies5 14,793 14,764 14.770 14,776 14,782 14,766 14,759 14,428 20 All other6 19,020 18,843 19,371 20,018 20,490 20,602 18,441 20,667 21 Total assets 632,094 607,435 611,307 607,986 613,887 604,818 614,730 615,066 LIABILITIES ?? Federal Reserve notes 565,642 564,727 564,362 564,118 564,964 557,418 564,934 565,574 23 Reverse repurchase agreements—triparty2 0 0 0 0 0 0 0 0 24 Total deposits 38,664 16,594 21,693 18,231 23,675 26,571 24,040 26,208 25 Depository institutions 33,995 10,259 16.594 11,074 16,466 18,172 19,238 18,647 26 U.S. Treasury—General account 4,301 5,926 4.729 6,758 6,857 7,894 4,396 7,188 27 Foreign—Official accounts 72 82 82 133 73 102 85 102 28 Other 295 327 288 266 279 403 321 271 90 Deferred credit items 10.050 8,447 7.485 7,787 7,380 2,596 7,910 5,701 30 Other liabilities and accrued dividends 3,390 3,370 3,389 3,358 3,305 3,520 3,467 3,140 31 Total liabilities 617,746 593,138 596,929 593,494 599,324 590,105 600,351 600,623 CAPITAL ACCOUNTS 3? Capital paid in 7,069 7,061 7.064 7.133 7,139 7,043 7,070 7,143 33 Surplus 6,566 6,584 6.617 6,645 6.671 6,371 6,557 6,584 34 Other capital accounts 712 653 696 715 753 1,299 751 716 35 Total liabilities and capital accounts 632,094 607,435 611,307 607,986 613,887 604,818 614,730 615,066 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) 737,129 736,621 736,154 736,351 736,246 739,839 736,954 735,805 38 LESS: Held by Federal Reserve Banks 171,487 171,894 171.792 172,233 171,282 182,421 172,020 170,231 39 Federal Reserve notes, net 565,642 564,727 564.362 564,118 564,964 557,418 564,934 565,574 Collateral held against notes, net 40 Gold certificate account 11,046 11,046 11.044 11,044 11,044 11,046 11,046 11,044 41 Special drawing rights certificate account 2,200 2,200 2.200 2,200 2,200 2,200 2,200 2,200 42 Other eligible assets 0 5,297 0 2,633 0 0 0 0 43 U.S. Treasury and agency securities 552,396 546,184 551,119 548,242 551,721 544,172 551,689 552,330 44 Total collateral 565,642 564,727 564.362 564,118 564,964 557,418 564,934 565,574 1. Some of the data in this table also appear in the Board's H.4.1 (503) weekly statistical 5. Valued monthly at market exchange rates. release. For ordering address, see inside front cover. 6. Includes special investment account at the Federal Reserve Bank of Chicago in Treasury 2. Cash value of agreements arranged through third-party custodial banks. bills maturing within ninety days. 3. Face value of the securities. 7. Includes exchange-translation account reflecting the monthly revaluation at market 4. Includes securities loaned—fully guaranteed by U.S. Treasury securities pledged with exchange rates of foreign exchange commitments. Federal Reserve Banks—and includes compensation that adjusts for the effects of inflation on the principal of inflation-indexed securities. Excludes securities sold and scheduled to be bought back under matched sale-purchase transactions. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Federal Reserve Banks All 1.19 FEDERAL RESERVE BANKS Maturity Distribution of Loan and Security Holding Millions of dollars Wednesday End of month1 TTTyyypppeee ooofff hhhooollldddiiinnnggg aaannnddd mmmaaatttuuurrriiitttyyy 2001 2001 May 30 June 6 June 13 June 20 June 27 Apr. 30 May 31 June 30 1 Total loans 91 114 139 211 152 80 154 150 2 Within fifteen days" 86 26 49 202 146 72 132 114 3 Sixteen days to ninety days 5 88 90 9 6 8 21 36 4 91 days to 1 year 0 0 0 0 0 0 0 0 5 Total U.S. Treasury securities3 529,372 527,124 531,874 534,482 535,191 525,912 527,562 535,108 6 Within fifteen days2 18,608 15,867 14,586 19,475 21,211 18,127 4,645 10,105 7 Sixteen days to ninety days 116,467 118,440 123,727 118,433 115,867 113,525 115,568 126,214 8 Ninety-one days to one year 120,387 120,883 120,639 122,474 123,266 127,821 135,422 123,941 9 One year to five years 141,641 139,659 139,659 140,350 141,089 135,551 139,658 141,089 10 Five years to ten years 57,507 57,511 57,516 57,520 57,526 56,337 57,508 57,527 11 More than ten years 74,762 74,764 75,747 76,228 76,232 74,551 74,762 76,232 12 Total federal agency obligations 10 10 10 10 10 10 10 10 1.3 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 lb 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 business day 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 NonfinancialS tatistics tl September 2001 1.20 AGGREGATE RESERVES OF DEPOSITORY INSTITUTIONS AND MONETARY BASE1 Billions of dollars, averages of daily figures 2000 2001 IItteemm D 19 e 9 c 7 . D 19 e 9 c 8 . D 19 e 9 c 9 . 2 D 0 e 0 c 0 . Nov. Dec. Jan. Feb. Mar. Apr. May June Seasonally adjusted ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS2 1 Total reserves3 46.85 45.18 41.78 38.51 39.02 38.51 38.83 38.87 38.26 38.79 38.89 38.76 2 Nonborrowed reserves4 46.52 45.07 41.46 38.30 38.74 38.30 38.75 38.82 38.20 38.74 38.68 38.53 3 Nonborrowed reserves plus extended credit5 46.52 45.07 41.46 38.30 38.74 38.30 38.75 38.82 38.20 38.74 38.68 38.53 4 Required reserves 45.16 43.67 40.48 37.18 37.82 37.18 37.57 37.43 36.87 37.51 37.87 37.42 5 Monetary base6 479.47 513.49 593.09 583.96 581.40 583.96 589.39 591.12 592.42 595.92 599.06r 601.84 Not seasonally adjusted 6 Total reserves7 48.01 45.31 41.89 38.60 38.85 38.60 39.78 39.38 37.76 38.66 39.46r 38.32 7 Nonborrowed reserves 47.69 45.19 41.57 38.39 38.56 38.39 39.70 39.33 37.71 38.61 39.25 38.09 8 Nonborrowed reserves plus extended credit5 47.69 45.19 41.57 38.39 38.56 38.39 39.70 39.33 37.71 38.61 39.25 38.09 9 Required reserves8 46.33 43.80 40.59 37.27 37.65 37.27 38.52 37.95 36.38 37.38 38.44 36.97 10 Monetary base9 484.98 518.27 600.72 590.20 582.36 590.20 591.50 589.04 591.36 594.92 598.57r 601.65 NOT ADJUSTED FOR CHANGES IN RESERVE REQUIREMENTS10 11 Total reserves" 47.92 45.21 41.65 38.54 38.79 38.54 39.79 39.35 37.72 38.59 39.38r 38.22 12 Nonborrowed reserves 47.60 45.09 41.33 38.33 38.50 38.33 39.72 39.30 37.66 38.54 39.17 37.99 13 Nonborrowed reserves plus extended credit5 47.60 45.09 41.33 38.33 38.50 38.33 39.72 39.30 37.66 38.54 39.17 37.99 14 Required reserves 46.24 43.70 40.36 37.22 37.58 37.22 38.54 37.92 36.33 37.31 38.36 36.88 15 Monetary base12 491.79 525.06 608.02 597.12 589.12 597.12 598.38 595.59 598.20 601.84 605.48r 608.79 16 Excess reserves13 1.69 1.51 1.30 1.33 1.20 1.33 1.25 1.43 1.39 1.28 1.02 1.34 17 Borrowings from the Federal Reserve .32 .12 .32 .21 .28 .21 .07 .05 .06 .05 .21 .23 1. Latest monthly and biweekly figures are available from the Board's H.3 (502) weekly 8. To adjust required reserves for discontinuities that are due to regulatory changes in statistical release. Historical data starting in 1959 and estimates of the effect on required reserve requirements, a multiplicative procedure is used to estimate what required reserves reserves of changes in reserve requirements are available from the Money and Reserves would have been in past periods had current reserve requirements been in effect. Break- Projections Section, Division of Monetary Affairs, Board of Governors of the Federal Reserve adjusted required reserves include required reserves against transactions deposits and nonper- System, Washington, DC 20551. sonal time and savings deposits (but not reservable nondeposit liabilities). 2. Figures reflect adjustments for discontinuities, or "breaks," associated with regulatory 9. The break-adjusted monetary base equals (1) break-adjusted total reserves (line 6), plus changes in reserve requirements. (See also table 1.10.) (2) the (unadjusted) currency component of the money stock, plus (3) (for all quarterly 3. Seasonally adjusted, break-adjusted total reserves equal seasonally adjusted, break- reporters on the "Report of Transaction Accounts, Other Deposits and Vault Cash" and for all adjusted required reserves (line 4) plus excess reserves (line 16). those weekly reporters whose vault cash exceeds their required reserves) the break-adjusted 4. Seasonally adjusted, break-adjusted nonborrowed reserves equal seasonally adjusted, difference between current vault cash and the amount applied to satisfy current reserve break-adjusted total reserves (line 1) less total borrowings of depository institutions from the requirements. Federal Reserve (line 17). 10. Reflects actual reserve requirements, including those on nondeposit liabilities, with no 5. Extended credit consists of borrowing at the discount window under the terms and adjustments to eliminate the effects of discontinuities associated with regulatory changes in conditions established for the extended credit program to help depository institutions deal reserve requirements. with sustained liquidity pressures. Because there is not the same need to repay such 11. Reserve balances with Federal Reserve Banks plus vault cash used to satisfy reserve borrowing promptly as with traditional short-term adjustment credit, the money market effect requirements. of extended credit is similar to that of nonborrowed reserves. 12. The monetary base, not break-adjusted and not seasonally adjusted, consists of (1) total 6. The seasonally adjusted, break-adjusted monetary base consists of (1) seasonally reserves (line 11), plus (2) required clearing balances and adjustments to compensate for float adjusted, break-adjusted total reserves (line 1), plus (2) the seasonally adjusted currency at Federal Reserve Banks, plus (3) the currency component of the money stock, plus (4) (for component of the money stock, plus (3) (for all quarterly reporters on the "Report of all quarterly reporters on the "Report of Transaction Accounts, Other Deposits and Vault Transaction Accounts, Other Deposits and Vault Cash" and for all those weekly reporters Cash" and for all those weekly reporters whose vault cash exceeds their required reserves) the whose vault cash exceeds their required reserves) the seasonally adjusted, break-adjusted difference between current vault cash and the amount applied to satisfy current reserve difference between current vault cash and the amount applied to satisfy current reserve requirements. Since February 1984, currency and vault cash figures have been measured over requirements. the computation periods ending on Mondays. 7. Break-adjusted total reserves equal break-adjusted required reserves (line 9) plus excess 13. Unadjusted total reserves (line 11) less unadjusted required reserves (line 14). reserves (line 16). Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Monetary and Credit Aggregates A13 1.21 MONEY STOCK AND DEBT MEASURES1 Billions of dollars, averages of daily figures 2001 1997 1998 1999 2000 IItteemm Dec. Dec. Dec. Dec. Mar. Apr.1 Mayr June Seasonally adjusted Measures2 1 Ml 1,073.4 1,097.0 1,124.8 1,088.2 1,113.1 1,118.1 1,117.5 1,123.5 7 M2 4,031.9 4,385.9 4,653.3 4,945. T 5,101.1 5,145.5 5,167.7 5,208.9 M3 5,430.8 6,030.8 6,530.6 7,101.3r 7,311.3r 7,419.3 7,503.2 7,581.2 4 Debt 15,223.2 16,246.1 17,315.1 18,222.0r 18,440.4 18,499.5 18,561.3 n.a. MI components 5 Currency3 424.3 459.2 516.7 529.9 539.8 542.6 546.1 554488..44 6 Travelers checks 8.1 8.2 8.2 8.0 7.9 7.8 8.0 8.2 7 Demand deposits5 395.4 379.4 356.1 311.3 316.5 312.9 312.4 310.9 8 Other checkable deposits6 245.7 250.1 243.7 239.0 248.9 254.8 251.1 256.0 Nontransaction components 9 In M27 2,958.5 3,288.9 3,528.5 3,856.9r 3,988.0 4,027.4 4,050.1 4,085.4 10 In M3 only8 1,399.0 1,645.0 1,877.3 2,156.2r 2,210.2r 2,273.8 2,335.5 2,372.3 Commercial banks 11 Savings deposits, including MMDAs 1,021.1 1,185.8 1,287.0 1,421.7 1,491.7 1,517.2 1,540.0 1,564.3 17 Small time deposits9 625.5 626.4 635.2 699.6r 695.9 690.7 685.6 679.0 13 Large time deposits10, " 517.4 575.2 648.3 726.6r 677.4 697.1 702.9 704.7 Thrift institutions 14 Savings deposits, including MMDAs 376.8 414.1 449.3 451.9 471.1 475.1 487.8 497.6 15 Small time deposits9 342.9 325.8 320.9 346.6 349.6 349.9 352.0 349.9 16 Large time deposits10 85.5 88.7 91.3 103.2 106.8 108.6 110.4 109.5 Money market mutual funds 17 Retail 592.1 736.8 836.2 937.2 979.8 994.6 984.8 994.7 18 Institution-only 391.8 531.8 623.5 768.3 888.0 919.4 970.9 1,006.6 Repurchase agreements and eurodollars 19 Repurchase agreements12 254.3 297.5 340.8 361. r 340.0r 360.2 361.2 336600..66 20 Eurodollars1" 150.0 151.8 173.3 197.1 198.0 188.4 190.1 190.9 Debt components 71 Federal debt 3,800.6 3,751.2 3,660.3 3,400.5 3,375.4 3,344.7 3,295.6 n.a. 22 Nonfederal debt 11,422.6 12,494.9 13,654.9 14,821,5r 15,064.9r 15,154.8 15,265.7 n.a. Not seasonally adjusted Measures2 73 Ml 1,096.9 1,120.4 1,148.3 1,112.4 1,107.8 1,123.2 1,111.5 1,123.0 74 M2 4,053.2 4,408.2 4,677.3 4,973.7r 5,135.6 5,209.5 5,143.6 5,191.7 75 M3 5,456.2 6,062.9 6,568.1 7,146.3r 7,373.4r 7,482.0 7,478.7 7,551.0 26 Debt 15,218.9 16,241.4 17,310.5 18,214.6r 18,439.3r 18,472.3 18,498.1 n.a. Ml components 27 Currency3 428.1 463.3 521.5 535.2 539.8 543.0 546.1 554499..11 7.8 Travelers checks 8.3 8.4 8.4 8.1 8.0 7.9 8.0 8.0 79 Demand deposits5 412.4 395.9 371.7 326.6 311.4 313.0 307.2 309.7 30 Other checkable deposits6 248.2 252.8 246.6 242.5 248.6 259.3 250.2 256.1 Nontransaction components 31 In M27 2,956.3 3,287.8 3,529.1 3,861.3r 4,027.8 4,086.2 4,032.1 4,068.7 32 In M3 only8 1,403.0 1,654.8 1,890.7 2,172.7r 2,237.8r 2,272.5 2,335.1 2,359.3 Commercial banks 33 Savings deposits, including MMDAs 1,020.4 1,186.0 1,288.5 1,426.4 1,498.6r 1,542.2 1,535.6 1,566.9 34 Small time deposits9 625.3 626.5 635.4 699.8r 697.7 691.2 683.3 675.3 35 Large time deposits10' " 516.8 574.5 647.7 725.9r 682.9r 702.0 708.7 707.8 Thrift institutions 36 Savings deposits, including MMDAs 376.5 414.2 449.8 453.4 473.2 482.9 486.4 498.4 37 Small time deposits9 342.8 325.8 321.0 346.8 350.5 350.2 350.8 348.0 38 Large time deposits10 85.4 88.6 91.2 103.1 107.6 109.4 111.3 110.0 Money market mutual funds 39 Retail 591.3 735.2 834.3 935.0 1,007.9 1,019.6 976.0 980.2 40 Institution-only 398.9 543.7 638.4 786.2 905.6 915.3 957.1 985.0 Repurchase agreements and eurodollars 41 Repurchase agreements'" 249.5 293.4 337.4 358.0r 342.7r 356.9 366.1 365.2 42 Eurodollars'" 152.3 154.5 176.0 199.5 199.0 188.9 191.8 191.3 Debt components 43 Federal debt 3,805.8 3,754.9 3,663.2 3,403.5 3,392.5 3,341.0 3,262.9 n.a. 44 Nonfederal debt 11,413.1 12,486.5 13,647.3 14,811.r 15,046.8 15,131.2 15,235.2 n.a. Footnotes appear on following page. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A14 Domestic NonfinancialS tatistics tl September 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 2000 2001 2001 June Dec. Jan." Feb." Mar." Apr." Mayr June June 6 June 13 June 20 June 27 Seasonally adjusted Assets 1 Bank credit 5,031.8r 5,215.5r 5,263.0 5,272.6 5,282.5 5,304.2 5,313.1 5,307.4 5,325.6 5,307.8 5,309.7 5,299.6 2 Securities in bank credit 1,303.2 1,335.4 1,356.6 1,350.8 1,345.4 1,360.9 1,369.2 1,378.2 1,388.5 1,383.2 1,375.9 1,369.4 3 U.S. government securities 817.5 788.7 786.3 777.5 758.7 767.1 769.7 767.9 776.6 772.4 764.1 760.4 4 Other securities 485.8 546.7 570.3 573.3 586.6 593.8 599.5 610.4 612.0 610.9 611.9 609.1 5 Loans and leases in bank credit2 . . . 3,728.6 3,880. r 3,906.4 3,921.8 3,937.2 3,943.3 3,943.9 3,929.2 3,937.1 3,924.6 3,933.8 3,930.1 6 Commercial and industrial l,064.5r 1,089.0" 1,101.1 1,105.7 1,103.8 1,100.5 1,097.6 1,080.5 1,087.5 1,082.4 1,083.2 1,076.0 7 Real estate l,595.6r 1,656. lr 1,658.6 1,669.5 1,677.4 1,683.6 1,694.1 1,696.4 1,698.6 1,695.9 1,696.2 1,695.6 8 Revolving home equity 115.4 129.9" 132.2 133.9 135.7 137.0 138.7 139.8 139.1 139.1 139.8 140.6 9 Other l,480.2r 1,526.2r 1,526.4 1,535.6 1,541.7 1,546.6 1,555.5 1,556.7 1.559.6 1,556.8 1,556.4 1.555.0 10 Consumer 517.4 542.3 547.0 546.5 544.9 549.3 553.0 550.9 551.9 550.3 552.8 550.2 11 Security' 153.0 168.7 169.9 168.2 173.5 174.1 163.0 166.9 163.3 \(A.b 165.3 174.0 12 Other loans and leases 398.0r 424. r 429.8 431.9 437.6 435.8 436.2 434.5 435.8 431.4 436.4 434.3 13 Interbank loans 225.6 252.2 270.4 267.2 276.1 293.2 287.1 272.2 267.3 272.0 283.1 270.4 14 Cash assets4 269.9 267.2 273.4 265.4 268.4 270.6 263.7 255.9 247.6 253.3 257.2 259.9 15 Other assets5 378.4 397.1 412.1 414.0 431.0 431.6 425.5 420.1 420.3 419.3 415.4 422.5 16 Total assets6 5,845.7r 6,068.1r 6,154.1 6,1543 6,1933 6,234.4 6,2243 6,190.6 6,195.9 6,187.5 6,200.4 6,187.4 Liabilities 17 Deposits 3,669.2 3,847.7r 3,892.1 3,890.6 3,925.1 3,987.5 4,000.9 4,033.8 4,023.4 4,036.0 4,026.8 4,024.9 18 Transaction 616.4 601.9 608.2 607.7 606.9 610.3 613.9 601.8 576.7 593.3 608.1 629.0 19 Nontransaction 3,052.8 3,245.7 3,283.9 3,283.0 3,318.2 3,377.2 3,387.0 3,431.9 3,446.8 3,442.7 3,418.6 3,395.9 20 Large time 897.1 934.7 941.8 936.9 935.0 947.8 962.2 975.0 975.1 974.7 973.0 970.6 21 Other 2,155.7 2,311.0 2,342.1 2,346.1 2,383.3 2,429.4 2,424.8 2,457.0 2,471.6 2,468.0 2,445.6 2,425.4 22 Borrowings 1,206.5 1,242.4 1,264.2 1,259.2 1,243.5 1,278.1 1,248.0 1,214.8 1.228.4 1,213.9 1,207.5 1,216.1 23 From banks in the U.S 378.7 396.7 397.2 396.2 395.5 405.1 385.0 383.7 382.8 384.0 385.9 381.0 24 From others 827.8 845.7 866.9 863.0 848.0 873.1 863.0 831.1 845.6 829.8 821.6 835.1 25 Net due to related foreign offices 257.7 225.8 221.2 219.4 233.2 189.7 207.0 184.1 179.0 172.3 194.1 200.7 26 Other liabilities 305.7 345.4 364.8 343.1 351.4 346.1 336.1 347.0 341.4 357.6 360.2 337.3 27 Total liabilities 5,439.1 5,661.4r 5,742.4 5,7123 5,753.2 5,801.4 5,792.0 5,779.6 5,772.3 5,779.7 5,788.6 5,778.9 28 Residual (assets less liabilities)7 406.6r 406.7r 411.7 442.0 440.1 433.0 432.2 411.0 423.6 407.8 411.9 408.5 Not seasonally adjusted 29 Bank credit 5,025.6r 5,251 ff 5,277.9 5,267.6 5,269.8 5,296.6 5,302.4 5,300.3 5,320.7 5,302.8 5,295.0 5,291.3 30 Securities in bank credit 1,302.2 1,341.0 1,361.8 1,352.6 1,349.5 1,362.5 1,368.4 1,377.6 1,393.1 1,384.8 1,373.1 1,365.4 31 U.S. government securities 817.2 788.5 788.5 779.3 764.6 771.9 770.5 768.2 780.9 773.7 762.8 758.5 32 Other securities 485.1 552.5 573.3 573.3 584.9 590.6 597.9 609.3 612.2 611.1 610.3 606.9 33 Loans and leases in bank credit2 . . . 3,723.3r 3,910.9"" 3,916.1 3,915.0 3,920.3 3,934.1 3,933.9 3,922.7 3,927.6 3,918.0 3,921.9 3,925.9 34 Commercial and industrial l,066.6r 1,091,2r 1,098.4 1,105.1 1,105.3 1,105.2 1,099.8 1,082.7 1,088.9 1,082.0 1,084.5 1,080.1 35 Real estate 1,594.9r 1,660.7r 1,657.6 1,662.9 1,670.0 1,679.3 1,694.5 1,695.8 1,699.5 1,696.8 1,690.8 1,696.4 36 Revolving home equity 115.5 130.0" 131.3 132.7 134.1 136.0 138.7 139.9 139.0 139.2 139.9 141.1 37 Other l,479.4r 1,530./ 1,526.3 1,530.2 1,535.9 1,543.3 1,555.8 1,555.9 1,560.6 1,557.6 1,550.9 1,555.2 38 Consumer 515.2 548.2 551.4 547.2 541.1 546.1 550.8 548.2 548.3 546.2 548.5 550.9 39 Credit cards and related plans. . n.a. 218.2 218.3 213.3 209.1 214.2 218.8 216.7 217.2 215.0 216.6 218.8 40 Other n.a. 330.0" 333.1 333.9 332.0 331.9 332.0 331.5 331.2 331.2 331.9 332.1 41 Security' 149.3 180.8 177.7 171.0 169.6 169.8 157.0 162.4 155.4 163.6 164.5 166.3 42 Other loans and leases 397.4r 430.0" 431.0 428.8 434.3 433.7 431.8 433.6 435.5 429.5 433.6 432.2 43 Interbank loans 226.8 260.9 272.4 269.0 283.5 299.3 280.3 269.8 272.9 274.3 274.8 256.9 44 Cash assets4 265.8 286.5 289.4 266.5 258.6 266.4 261.7 252.3 246.6 246.4 253.4 248.8 45 Other assets5 378.8 403.3 414.0 413.2 430.3 431.4 425.8 420.8 422.3 420.5 414.7 421.0 46 Total assets6 5,836.8r 6,138.7r 6,1893 6,1513 6,1773 6,228.8 6,205.0 6,178.1 6,1973 6,178.8 6,172.9 6,153.0 Liabilities 47 Deposits 3,653.8 3,894.2 3,907.0 3,907.6 3,935.5 4,006.7 3,988.9 4,014.9 4,030.4 4,028.9 3,988.9 3,976.1 48 Transaction 615.8 631.1 620.0 599.5 600.9 616.5 604.2 601.5 579.5 594.0 601.5 616.6 49 Nontransaction 3,038.0 3,263. lr 3,287.0 3,308.1 3,334.6 3,390.2 3,384.7 3,413.5 3,450.9 3,434.9 3,387.4 3,359.4 50 Large time 888.7 948.7" 954.8 948.5 938.2 949.1 960.9 965.5 971.5 968.9 962.6 957.3 51 Other 2,149.4 2,314.4 2,332.2 2,359.6 2,396.4 2,441.1 2,423.8 2.448.0 2,479.4 2,466.0 2,424.8 2,402.1 52 Borrowings 1,207.6 1,245.3 1,281.4 1,262.8 1,241.9 1,278.8 1,253.1 1,215.7 1,226.2 1,203.1 1,222.4 1,217.3 53 From banks in the U.S 379.5 398.6 403.5 400.6 399.1 408.3 388.2 384.5 384.3 382.1 389.9 380.6 54 From others 828.1 846.7 878.0 862.3 842.8 870.5 865.0 831.1 841.9 821.0 832.5 836.7 55 Net due to related foreign offices .... 253.5 230.6 225.4 225.5 232.2 182.7 206.2 180.2 179.5 167.5 185.0 199.4 56 Other liabilities 303.6 347.9 367.3 347.0 350.1 341.2 336.7 344.9 341.9 354.8 354.6 337.7 57 Total liabilities 5,418.6 5,718.0 5,781.0 5,742.9 5,759.7 5,809.5 5,784.9 5,755.7 5,778.0 5,7543 5,750.9 5,730.4 58 Residual (assets less liabilities)7 418.2r 420.7" 408.2 408.4 417.6 419.3 420.0 422.4 419.3 424.5 422.0 422.7 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A16 Domestic Financial Statistics • September 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 June Dec. Jan. Feb.r Mar.r Apr/ Mayr June June 6 June 13 June 20 June 27 Seasonally adjusted Assets 1 Bank credit 4,455.9 4,616.1r 4,649.5r 4,665.5 4,662.0 4,688.0 4,710.6 4,713.7 4,727.1 4,717.5 4,713.9 4,704.5 2 Securities in bank credit 1,098.6 1,130.3 l,148.2r 1,152.0 1,139.7 1,146.3 1,158.9 1,165.9 1,175.8 1,173.5 1,163.6 1,156.2 3 U.S. government securities 739.0 719.5 719.8 713.2 690.7 692.0 699.9 700.0 708.7 704.6 696.9 692.5 4 Other securities 359.6 410.8 428.3 438.8 449.0 454.3 459.0 465.9 467.1 468.9 466.7 463.7 5 Loans and leases in bank credit2 3,357.3r 3,485.7r 3,501.3r 3,513.5 3,522.3 3,541.7 3,551.7 3,547.8 3,551.3 3,544.0 3,550.3 3,548.3 6 Commercial and industrial 859.7r 880.0r 886.7r 889.0 883.9 880.1 879.0 869.8 874.0 871.4 871.7 866.3 7 Real estate l,577.6r l,637.6r l,640.1r 1,650.8 1,658.9 1,665.7 1,676.1 1,678.6 1,681.0 1,678.0 1,678.3 1,677.7 8 Revolving home equity 115.4 129.9r 132.2r 133.9 135.7 137.0 138.7 139.8 139.1 139.1 139.8 140.6 9 Other l,462.2r 1,507.7' l,508.0r 1,516.9 1,523.2 1,528.7 1,537.4 1,538.9 1,541.9 1,538.9 1,538.6 1,537.1 10 Consumer 517.4 542.3 547.0 546.5 544.9 549.3 553.0 550.9 551.9 550.3 552.8 550.2 11 Security3 70.3 68.6 64.8 62.9 66.9 78.8 75.2 80.7 75.2 79.4 79.0 86.5 1? Other loans and leases 332.3 357.4r 362.6r 364.3 367.6 367.8 368.4 367.7 369.3 364.8 368.5 367.5 13 Interbank loans 199.3 225.1 241.2 238.8 245.5 263.8 255.2 247.5 244.8 248.2 251.9 249.2 14 Cash assets4 225.3 227.3 231.9r 223.7 227.7 231.3 226.2 219.9 212.5 217.6 219.8 223.9 15 Other assets5 336.6 360.9 375.0r 377.6 392.6 390.4 386.6 381.0 382.5 381.9 377.4 377.6 16 Total assets6 5,157.4r 5,365.9r 5,433.2r 5,441.0 5,463.5 5,508.7 5,513.9 5,497.5 5,502.4 5,500.7 5,498.2 5,490.6 Liabilities 17 Deposits 3,283.4 33,,446677..77rr 3,505.5r 3,510.1 3,546.4 3,595.0 3,594.2 3,616.6 3,608.6 3,619.2 3,608.1 3,610.9 18 Transaction 605.2 591.3 598.0 597.4 597.4 599.8 603.4 592.3 567.3 583.8 597.9 620.1 19 Nontransaction 2,678.1 2,876.4r 2,907.5r 2,912.7 2,949.0 2,995.2 2,990.7 3,024.3 3,041.3 3,035.4 3,010.2 2,990.8 20 Large time 523.1 563.9 567.5 568.8 567.9 568.0 568.2 569.6 571.9 569.7 566.9 567.7 21 Other 2,155.0 2,312.5 2,340.0r 2,343.9 2,381.0 2,427.2 2,422.6 2,454.7 2,469.4 2,465.7 2,443.3 2,423.1 22 Borrowings 1,003.6 1,002.8 1,020.7 1,020.8 1,010.2 1,042.1 1,031.7 1,001.4 1,019.2 1,002.8 992.2 1,000.5 23 From banks in the U.S 359.5 374.5 372.1 373.7 371.3 381.5 365.5 361.5 363.9 362.9 361.0 359.9 74 From others 644.1 628.3 648.6 647.1 638.9 660.6 666.1 639.9 655.2 639.9 631.2 640.6 25 Net due to related foreign offices .... 236.0 227.6 217.7 214.6 211.5 185.5 211.7 204.1 203.4 198.8 202.9 213.4 26 Other liabilities 229.2 272.8 285.2 266.1 268.8 257.8 249.8 262.5 256.7 270.7 273.9 255.0 27 Total liabilities 4,752.2 4,970.8 5,029.1 5,011.6 5,036.9 5,080.4 5,087.4 5,084.6 5,087.9 5,091.6 5,077.0 5,079.8 28 Residual (assets less liabilities)7 405.2r 395. r 404. lr 429.4 426.5 428.3 426.5 413.0 414.5 409.1 421.2 410.8 Not seasonally adjusted Assets 29 Bank credit 4,452.9r 4,641.7r 4,656.3r 4,657.3 4,654.1 4,683.2 4,704.5 4,710.2 4,729.0 4,715.7 4,701.6 4,699.4 30 Securities in bank credit 1,097.6 1,135.9 1,153.3 1,153.8 1,143.8 1,147.9 1,158.2 1,165.2 1,180.4 1,175.1 1,160.8 1,152.2 31 U.S. government securities 738.7 719.3 722.0 715.0 696.6 696.9 700.8 700.3 713.0 705.9 695.6 690.6 32 Other securities 358.9 416.6 431.3 438.8 447.2 451.0 457.4 464.9 467.4 469.2 465.2 461.6 33 Loans and leases in bank credit2 3,355.3r 3,505.8r 3,502.9r 3,503.5 3,510.3 3,535.3 3,546.4 3,545.0 3,548.6 3,540.6 3,540.8 3,547.2 34 Commercial and industrial 862.9r 879.8r 882.3r 886.1 884.3 886.5 884.3 873.2 877.1 872.9 874.3 870.7 35 Real estate l,576.9r l,642.2r 1,639.2r 1,644.3 1,651.5 1,661.3 1,676.5 1,678.0 1,681.9 1,678.9 1,673.0 1,678.5 36 Revolving home equity 115.5 130.0r 131.3r 132.7 134.1 136.0 138.7 139.9 139.0 139.2 139.9 141.1 3/ Other 1,461.4r l,512.2r l,507.9r 1,511.5 1,517.4 1,525.3 1,537.8 1,538.0 1,542.9 1,539.7 1,533.0 1,537.4 38 Consumer 515.2 548.2 551.4 547.2 541.1 546.1 550.8 548.2 548.3 546.2 548.5 550.9 39 Credit cards and related plans. . n.a. 218.2 218.3 213.3 209.1 214.2 218.8 216.7 217.2 215.0 216.6 218.8 40 Other n.a. 330.0r 333. r 333.9 332.0 331.9 332.0 331.5 331.2 331.2 331.9 332.1 41 Security3 68.1 74.6 67.4 64.7 68.9 75.8 70.0 78.1 72.1 79.2 78.3 80.7 42 Other loans and leases 332.2r 361.r 362.7r 361.2 364.4 365.5 364.8 367.4 369.3 363.4 366.8 366.4 43 Interbank loans 200.5 233.9 243.2 240.6 252.8 269.9 248.4 245.1 250.5 250.5 243.5 235.6 44 Cash assets4 222.3 243.8 245.3 224.7 219.2 228.7 225.1 217.4 212.1 212.0 217.2 214.1 45 Other assets5 338.5 365.4 375.7 375.8 391.3 391.1 387.4 383.2 385.4 383.9 378.3 378.3 46 Total assets6 5,154.4r 5,421.3r 5,456.4r 5,433.7 5,453.0 5,508.3 5,500.7 5,491.1 5,512.1 5,497.3 5,475.9 5,462.8 Liabilities 47 Deposits 3,274.0 3,503.5 3,5l0.4r 3,518.8 3,552.3 3,611.3 3,581.0 3,604.8 3,619.1 3,617.5 3,578.5 3,569.7 48 Transaction 604.8 619.8 609.6 589.4 591.7 606.6 594.1 592.0 570.5 584.9 591.4 607.7 49 Nontransaction 2,669.3 2,883.7 2,900.8r 2,929.4 2,960.6 3,004.8 2,986.9 3,012.8 3,048.6 3,032.6 2,987.1 2,962.0 50 Large time 520.6 567.7 570.8 572.1 566.4 565.9 565.3 567.0 571.5 568.8 564.6 562.1 51 Other 2,148.6 2,315.9 2,330.0r 2,357.3 2,394.2 2,438.9 2,421.6 2,445.8 2,477.1 2,463.7 2,422.5 2,399.9 52 Borrowings 1,004.7 1,005.7 1,038.0 1,024.4 1,008.6 1,042.8 1,036.8 1,002.3 1,017.0 992.1 1,007.1 1,001.7 53 From banks in the U.S 360.2 376.4 378.3 378.1 374.9 384.8 368.6 362.3 365.5 360.9 365.0 359.5 54 From others 644.5 629.3 659.7 646.3 633.7 658.1 668.1 639.9 651.5 631.1 642.1 642.2 55 Net due to related foreign offices .... 235.1 227.7 218.6 217.4 210.3 183.1 214.1 203.4 203.4 197.7 200.5 215.5 56 Other liabilities 228.6 273. r 286.2 268.7 267.5 255.0 251.9 261.9 256.8 269.8 271.5 256.9 57 Total liabilities 4,742.4 5,010.0 5,053.2 5,029.3 5,038.7 5,092.2 5,083.8 5,072.4 5,096.3 5,077.0 5,057.6 5,043.8 58 Residual (assets less liabilities)7 412.0r 411.2r 403.2r 404.4 414.4 416.1 417.0 418.8 415.7 420.3 418.3 419.1 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 2000 2001 2001 June Dec. Jan. Feb. Mar. Apr. May June June 6 June 13 June 20 June 27 Seasonally adjusted Assets 1 Bank credit 2,529.7 2,566.5 2,586.8 2,596.0 2,601.7 2,623.5 2,636.3 2,635.1 2,650.0 2,639.8 2,627.7 2,631.6 ? Securities in bank credit 587.0 586.5 598.0 601.0 596.7 603.3 613.4 617.1 628.3 624.2 614.1 608.8 U.S. government securities 371.3 357.8 359.1 355.0 344.3 347.5 355.6 353.8 363.9 358.9 349.9 346.8 4 Trading account 22.7 28.8 34.2 37.5 35.4 33.7 35.3 35.1 41.8 38.8 32.9 28.2 Investment account 348.6 328.9 324.9 317.6 308.9 313.8 320.3 318.7 322.1 320.1 317.0 318.6 6 Other securities 215.7 228.7 238.9 245.9 252.3 255.8 257.8 263.3 264.4 265.3 264.2 261.9 7 Trading account 100.5 119.0 126.0 129.3 132.5 135.9 137.0 143.5 144.5 144.7 143.0 143.2 8 Investment account 115.3 109.8 112.9 116.6 119.9 119.9 120.8 119.9 120.0 120.6 121.2 118.8 9 State and local government . 25.6 26.3 27.1 27.6 28.1 28.4 28.1 27.9 27.9 27.9 28.3 27.6 10 Other 89.7 83.5 85.8 89.0 91.8 91.5 92.7 92.0 92.1 92.6 93.0 91.1 11 Loans and leases in bank credit2 . . . 1,942.7 1,980.1 1,988.8 1,995.1 2,005.0 2,020.2 2,022.9 2,018.0 2,021.7 2,015.6 2,013.6 2,022.9 17 Commercial and industrial 589.3 592.9 594.9 595.2 589.4 586.2 585.1 574.6 579.2 576.4 575.2 571.9 13 Bankers acceptances 1.0 1.0 .8 .8 .8 .8 .8 .7 .8 .8 .8 ..88 14 Other 588.2 591.8 594.1 594.5 588.5 585.3 584.3 573.8 578.4 575.6 574.3 557711..11 15 Real estate 813.8 824.5 825.1 831.4 839.7 846.5 852.3 850.9 855.3 851.8 847.3 850.3 16 Revolving home equity 75.1 84.4 86.3 87.6 89.5 90.5 91.2 91.4 91.2 91.1 91.0 92.1 17 Other 738.6 740.1 738.9 743.8 750.1 755.9 761.1 759.5 764.1 760.7 756.2 758.2 18 Consumer 231.0 242.7 244.2 246.3 247.7 249.4 251.8 253.7 252.2 252.7 254.4 255.2 19 Security3 64.1 57.3 57.8 55.4 59.0 70.3 66.6 72.3 66.8 71.0 70.4 78.0 20 Federal funds sold to and repurchase agreements with broker-dealers 44.1 42.0 41.7 39.5 43.7 53.8 49.4 54.7 5500..00 5533..55 5522..33 6600..11 21 Other 20.1 15.3 16.1 16.0 15.3 16.5 17.3 17.6 16.8 17.5 18.0 17.9 77 State and local government 12.4 12.6 12.8 12.9 13.0 13.0 13.0 13.3 12.9 12.9 12.8 14.3 23 Agricultural 9.6 10.0 10.1 10.3 10.4 10.4 10.7 10.5 10.6 10.6 10.5 10.4 24 Federal funds sold to and repurchase agreements with others 13.7 21.1 25.9 26.3 26.1 23.0 23.6 25.5 25.0 24.7 25.2 2255..88 75 All other loans 84.4 87.9 86.7 85.8 86.8 87.8 85.5 84.8 85.0 83.2 85.5 85.2 76 Lease-financing receivables 124.5 131.1 131.2 131.6 133.0 133.7 134.3 132.5 134.7 132.3 132.3 131.7 27 Interbank loans 134.6 138.9 155.2 142.4 138.7 146.8 132.7 128.8 129.0 132.3 129.7 127.1 28 Federal funds sold to and repurchase agreements with commercial banks 68.6 65.0 80.3 71.6 71.6 83.2 72.3 71.6 68.7 74.7 7744..77 7700..22 79 Other 66.1 73.9 74.9 70.7 67.0 63.5 60.4 57.2 60.3 57.6 55.0 56.9 30 Cash assets4 147.7 144.8 147.0 138.2 142.6 145.4 139.8 135.5 130.2 134.3 135.9 137.1 31 Other assets5 227.6 250.1 258.5 254.5 257.9 248.1 244.4 234.6 237.4 234.6 233.8 232.6 32 Total assets6 3,004.7 3,0635 3,110.0 3,093.2 3,103.1 3,125.9 3,1155 3,0963 3,109.0 3,1033 3,089.5 3,090.7 Liabilities 33 Deposits 1,665.1 1,687.1 1,694.9 1,688.3 1,714.9 1,739.9 1,730.8 1,735.4 1,734.8 1,740.9 1,724.9 1,729.9 34 Transaction 312.8 299.3 302.5 300.2 303.5 303.4 304.3 299.8 285.2 296.7 301.6 314.6 35 Nontransaction 1,352.3 1,387.8 1,392.4 1,388.1 1,411.4 1,436.5 1,426.5 1,435.5 1,449.6 1,444.3 1,423.4 1.415.3 36 Large time 261.9 269.4 271.4 266.8 269.1 269.0 271.3 274.8 278.2 276.0 272.0 271.6 37 Other 1,090.4 1,118.3 1,121.1 1,121.3 1,142.3 1,167.5 1,155.2 1,160.8 1,171.4 1,168.2 1,151.4 1,143.7 38 Borrowings 665.0 667.8 683.2 685.8 683.1 712.0 697.9 669.4 688.4 676.0 656.8 664.5 39 From banks in the U.S 198.0 216.0 216.0 217.7 221.7 232.0 214.6 212.1 215.9 215.9 210.6 207.1 40 From others 467.1 451.8 467.3 468.2 461.5 480.0 483.3 457.2 472.4 460.1 446.2 457.4 41 Net due to related foreign offices 226.9 206.7 200.9 197.8 196.1 173.0 195.0 191.2 189.9 184.0 191.6 200.3 42 Other liabilities 175.2 218.8 228.6 202.9 196.9 181.1 172.1 185.4 180.1 194.1 197.1 177.5 43 Total liabilities 2,732.2 2,7803 2,807.6 2,774.8 2,791.1 2,806.0 2,795.7 2,7813 2,793.1 2,795.1 2,770.4 2,1122 44 Residual (assets less liabilities)7 272.5 283.2 302.4 318.4 312.0 319.9 319.8 315.0 315.8 308.2 319.1 318.5 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A18 Domestic Nonfinancial Statistics tl September 2001 1.26 COMMERCIAL BANKS IN THE UNITED STATES Assets and Liabilities'—Continued C. Large domestically chartered commercial banks—Continued Billions of dollars Monthly averages Wednesday figures AAAccccccooouuunnnttt 2000 2000 2001 2001 June Dec. Jan. Feb. Mar. Apr. May June June 6 June 13 June 20 June 27 Not seasonally adjusted Assets 45 Bank credit 2,523.5 2,587.2 2,597.9 2,598.8 2,598.2 2,619.1 2,629.7 2,629.7 2,651.0 2,637.8 2,622.2 2,616.1 46 Securities in bank credit 584.2 592.9 603.7 604.1 598.5 602.2 611.1 614.8 631.9 624.2 610.3 601.5 47 U.S. government securities 369.1 358.4 361.9 358.7 348.0 349.7 354.9 352.5 367.2 358.7 347.7 341.7 48 Trading account 22.6 28.9 34.5 37.9 35.8 34.0 35.2 35.0 42.2 38.8 32.7 27.8 49 Investment account 346.6 329.5 327.4 320.9 312.1 315.7 319.7 317.5 325.0 319.9 314.9 313.9 50 Mortgage-backed securities . . 223.5 218.2 224.7 220.5 218.9 226.4 233.1 229.5 236.3 229.2 226.5 227.8 51 Other 123.1 111.3 102.7 100.4 93.2 89.3 86.6 88.0 88.7 90.7 88.4 86.1 52 One year or less 31.7 31.6 31.7 33.8 33.5 31.9 28.8 27.3 28.9 29.8 27.0 24.9 53 One to five years 54.8 45.3 38.7 37.3 34.3 31.4 31.2 34.3 33.7 34.6 34.4 34.6 54 More than five years . . . 36.6 34.4 32.3 29.2 25.4 25.9 26.6 26.5 26.0 26.3 27.0 26.5 55 Other securities 215.0 234.5 241.9 246.0 250.5 252.5 256.2 262.3 264.7 265.5 262.7 259.8 56 Trading account 100.2 122.0 127.6 129.3 131.5 134.2 136.1 142.9 144.6 144.9 142.1 142.0 57 Investment account 114.9 112.5 114.3 116.6 119.0 118.4 120.0 119.4 120.1 120.7 120.5 117.8 58 State and local government . . 25.5 26.9 27.5 27.6 27.9 28.0 28.0 27.8 27.9 27.9 28.1 27.4 59 Other 89.4 85.6 86.8 89.0 91.1 90.3 92.1 91.6 92.2 92.7 92.4 90.4 60 Loans and leases in bank credit2 . . 1.939.3 1,994.4 1,994.2 1,994.1 1,999.6 2,016.9 2,018.7 2,015.0 2,019.1 2,013.5 2,011.8 2,014.6 61 Commercial and industrial 590.8 591.9 591.4 594.1 590.1 590.4 587.9 576.2 580.5 576.6 577.3 573.2 62 Bankers acceptances 1.0 1.0 .8 .8 .8 .8 .8 .7 .8 .8 .8 .8 63 Other 589.7 590.9 590.6 593.3 589.3 589.6 587.1 575.4 579.7 575.7 576.4 572.4 64 Real estate 812.2 829.1 825.8 828.1 833.9 842.5 851.9 849.5 855.4 852.0 844.7 847.4 65 Revolving home equity 75.3 84.3 85.4 86.6 88.1 89.6 91.1 91.6 91.1 91.2 91.5 92.4 66 Other 447.7 449.2 446.2 445.7 449.8 456.1 462.1 457.7 464.9 460.8 452.6 454.6 67 Commercial 289.3 295.5 294.1 295.8 296.0 296.8 298.7 300.2 299.4 300.0 300.6 300.4 68 Consumer 230.2 244.8 247.8 248.4 247.4 250.0 252.3 253.2 251.8 252.1 254.1 254.7 69 Credit cards and related plans. . n.a. 82.4 83.5 83.2 82.7 84.7 87.0 88.0 87.6 87.6 88.2 88.5 70 Other n.a. 162.4 164.3 165.3 164.7 165.3 165.3 165.2 164.2 164.5 165.9 166.1 71 Security1 62.1 62.7 60.4 57.2 60.7 67.3 61.8 69.9 63.5 70.8 70.2 72.9 72 Federal funds sold to and repurchase agreements with broker-dealers .... 42.7 45.9 43.6 40.8 45.0 51.5 45.7 52.9 47.5 53.4 52.2 56.1 73 Other 19.4 16.7 16.8 16.5 15.7 15.8 16.0 17.0 16.0 17.4 18.0 16.7 74 State and local government .... 12.4 12.6 12.8 12.9 13.0 13.0 13.0 13.3 12.9 12.9 12.8 14.3 75 Agricultural 9.6 10.0 10.1 10.1 10.2 10.3 10.6 10.5 10.6 10.6 10.6 10.5 76 Federal funds sold to and repurchase agreements with others 13.7 21.1 25.9 26.3 26.1 23.0 23.6 25.5 25.0 24.7 25.2 25.8 77 All other loans 84.4 90.8 86.7 84.0 84.8 86.6 84.0 84.8 85.2 82.1 85.2 84.5 78 Lease-financing receivables .... 124.0 131.3 133.3 132.9 133.4 133.8 133.7 132.1 134.0 131.8 131.8 131.3 79 Interbank loans 139.3 142.7 156.7 141.2 139.8 148.9 135.0 133.2 132.0 136.4 133.9 130.3 80 Federal funds sold to and repurchase agreements with commercial banks 71.1 66.8 81.0 71.1 72.2 84.4 73.5 74.0 70.3 77.0 77.1 72.0 81 Other 68.2 75.9 75.7 70.2 67.6 64.4 61.5 59.2 61.7 59.4 56.8 58.3 82 Cash assets4 145.4 156.2 157.8 140.1 137.7 145.7 139.9 134.0 129.3 131.1 135.7 130.4 83 Other assets^ 229.6 254.5 259.1 252.8 256.7 248.8 245.2 236.6 240.0 236.5 234.7 233.3 84 Total assets6 3,002.7 3,103.8 3,134.4 3,095.1 3,094.5 3,124.7 3,112.1 3,095.6 3,1143 3,103.8 3,088.7 3,072.5 Liabilities 85 Deposits 1,663.9 1,704.9 1,701.1 1,696.1 1,713.4 1,749.0 1,724.0 1,734.9 1,744.3 1,747.2 1,718.1 1,709.7 86 Transaction 312.6 317.1 311.4 297.2 299.8 310.7 300.0 299.9 285.0 297.6 299.1 307.6 87 Nontransaction 1,351.3 1,387.7 1,389.7 1,398.9 1,413.5 1,438.3 1,424.0 1,435.0 1,459.3 1,449.6 1,419.0 1,402.1 88 Large time 259.4 273.3 274.7 270.1 267.5 266.9 268.5 272.1 277.8 275.2 269.7 266.0 89 Other 1,091.9 1,114.4 1.115.0 1,128.9 1,146.0 1,171.4 1,155.5 1,162.8 1,181.5 1,174.4 1,149.3 1,136.1 90 Borrowings 666.1 670.6 700.5 689.4 681.5 712.7 703.0 670.2 686.2 665.2 671.7 665.8 91 From banks in the U.S 198.7 217.9 222.2 222.0 225.3 235.2 217.7 212.9 217.4 213.9 214.7 206.7 92 From nonbanks in the U.S 467.4 452.8 478.3 467.4 456.2 477.4 485.3 457.3 468.7 451.3 457.0 459.0 93 Net due to related foreign offices . . . 225.9 206.7 201.8 200.8 194.9 170.3 197.5 190.3 189.6 182.7 189.0 202.5 94 Other liabilities 174.5 219.1 229.6 205.3 195.7 178.6 174.0 184.9 180.2 193.2 194.9 179.2 95 Total liabilities 2,730.5 2,801.4 2,833.0 2,791.6 2,785.5 2,810.6 2,798.5 2,780_3 2,800.4 2,7883 2,773.7 2,757.1 96 Residual (assets less liabilities)7 272.2 302.4 301.4 303.5 309.0 314.1 313.6 315.3 313.9 315.5 315.0 315.4 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 Liabilities'—Continued D. Small domestically chartered commercial banks Billions of dollars Monthly averages Wednesday figures Account 2000 2000 2001 2001 June Dec. Jan. Feb. Mar. Apr. May June June 6 June 13 June 20 June 27 Seasonally adjusted Assets 1 Bank credit 1,943.5 2,062.6 2,080.1 2,086.9' 2,077.7" 2,082.2" 2,092.3 2,096.3 2,095.2 2,095.6 2,103.9 2,090.6 ? Securities in bank credit 517.3 549.4 555.9" 556.6" 548.5 548.7" 551.3 554.5 553.4 555.1 555.2 553.1 U.S. government securities 373.5 367.4 366.4 363.7 351.9" 350.2" 350.1" 351.9 350.7 351.5 352.7 351.4 4 Other securities 143.8 182.1 189.5" 192.8 196.7" 198.5" 201.2r 202.5 202.7 203.6 202.5 201.8 Loans and leases in bank credit2 1,426.2 1,513.2 1,524.3 1,530.3 1,529.2" 1.533.6" 1,541.0 1,541.8 1,541.8 1,540.4 1,548.7 1,537.5 6 Commercial and industrial 274.0 290.6r 295.3 297.3 298.0 297.5" 297.4" 298.7 298.2 298.4 300.0 297.8 7 Real estate 768.7 818.0 819.9 824.4 824.2 824.3" 829.0" 832.9 830.8 831.4 836.2 832.5 8 Revolving home equity 40.6 45.9" 46.4r 46.8" 46.7" 47.0" 48.0" 48.9 48.4 48.5 49.2 49.0 9 Other 728.1 772. r 773.5r 777.6" 777.5' 777.4' 781.0" 784.0 782.5 782.9 786.9 783.5 10 Consumer 287.5 300.8r 304.0 301.5 298.5 301.2 302.5 298.5 301.1 298.9 299.7 296.4 i I Security1 6.4 7.1 7.2 7.6 8.1 8.6 8.7 8.6 8.6 8.6 8.8 8.7 i? Other loans and leases 89.6 96.7 97.9 99.5 100.3 102.0 103.4 103.0 103.1 103.2 104.1 102.2 n Interbank loans 65.9 87.4 87.3 97.6 108.0 118.5 123.7 119.9 117.1 117.3 123.4 123.3 14 Cash assets4 78.3 83.1 85.5 86.1 85.7" 86.6 87.1 85.1 82.8 83.9 84.4 87.4 15 Other assets5 110.4 112.4 114.8" 115.0" 120.5" 123.9 122.7 128.5 126.8 129.9 126.1 126.5 16 Total assets6 2,173.2 2,318.7 2340.9r 2,358.8 2365.2r 2,384.1 2398.6 2,402.7 2394.7 2399.6 2,410.7 2,400.7 Liabilities 17 Deposits 1,632.1 1,794.8 1,824.8" 1,835.9 1,845.8 1.870.0" 1,878.1 1,896.0 1,888.7 1,893.1 1.897.8 1.895.5 18 Transaction 294.5 294.1 297.6 299.1 295.9 298.6 301.3 294.5 284.1 289.2 298.4 307.7 19 Nontransaction 1,337.6 1,500.7 1,527.2" 1,536.9" 1,549.9 1,571.4 1,576.8 1,601.4 1,604.6 1.603.9 1.599.4 1,587.8 70 Large time 265.2 298.6 300.3 306.1 302.9 303.0 300.9 299.0 297.9 297.8 299.0 3(X).l ?1 Other 1,072.4 1,202.1 1,226.9" 1,230.7 1,247.0 1,268.4" 1,275.8 1,302.4 1.306.7 1.306.1 1.300.4 1.287.7 72 Borrowings 344.8 336.5 343.9 341.2 333.3 336.7 340.2 338.2 337.1 332.9 341.6 342.0 ?3 From banks in the U.S 163.4 160.5 158.1 158.1 151.7" 151.7' 152.9" 151.3 150.0 148.9 152.3 154.6 74 From others 181.4 176.0 185.7 183.2 181.7 185.0" 187.3" 186.8 187.1 184.0 189.2 187.4 25 Net due to related foreign offices .... 9.1 20.9 16.8 16.7 15.4 12.8 16.6 13.1 13.7 15.0 11.5 13.3 26 Other liabilities 54.1 54.1 53.4 53.9 56.1 56.4 57.0 57.4 56.6 57.7 57.6 57.6 27 Total liabilities 2,040.1 2,2063 2,238.8 2,247.7 2,250.7r 2»275.9r 2,291.8r 2304.7 2,296.2 2,298.7 2308.5 2308.4 28 Residual (assets less liabilities)7 133.1 112.4r 102.0 111.1 114.5 108.2 106.8 98.0 98.6 100.8 102.2 92.4 Not seasonally adjusted Assets 79 Bank credit 1,946.7 2,067.1 2,075.9" 2,075.8 2,073.3 2.081.9" 2,092.8 2,098.1 2.096.1 2,095.8 2,097.1 2,101.0 30 Securities in bank credit 519.2 548.6 555.3" 554.6 550.8' 551.3 552.9 556.1 554.4 556.6 556.1 556.4 31 U.S. government securities 375.3 366.5 365.8 361.8 354.1" 352.9" 351.7" 353.6 351.8 353.0 353.6 354.6 37 Other securities 143.8 182.1 189.5" 192.8 196.7" 198.5" 201.2" 202.5 202.7 203.6 202.5 201.8 33 Loans and leases in bank credit2 1,427.6 1.518.5 1,520.6 1,521.2 1,522.6" 1,530.6" 1,539.9 1.542.0 1.541.7 1,539.1 1.541.0 1.544.7 34 Commercial and industrial 275.6 291.4 294.4 295.6 297.7 299.6r 300.0" 300.5 300.0 299.8 300.4 300.9 35 Real estate 769.7 818.0 818.3 821.1 822.6 824.0" 829.8r 833.6 831.6 832.1 833.4 836.2 36 Revolving home equity 40.6 46. r 46.4" 46.6" 46.5" 46.9" 48.1' 48.8 48.3 48.5 48.9 49.2 37 Other 729.0 772.0" 772.0" 774.5" 776.1" 777.1" 781.7" 784.8 783.3 783.6 784.5 787.0 38 Consumer 286.1 304.5 304.8 300.0 295.0 297.4" 299.8 296.4 297.8 295.4 295.7 297.6 39 Credit cards and related plans. . n.a. 135.8 134.9 130.2" 126.5 129.6 131.9 128.8 129.6 127.5 128.4 130.3 40 Other n.a. 168.7 169.9 169.7 168.5 167.9 168.0" 167.6 168.2 167.9 167.3 167.3 41 Security1 6.2 7.3 7.1 7.6 8.4 8.7 8.4 8.4 8.7 8.5 8.3 8.0 4? Other loans and leases 90.0 97.2 96.0 96.9 98.9 100.9 102.0 103.1 103.5 103.4 103.2 101.9 43 Interbank loans 62.4 92.3 87.8 100.6 114.3 122.5 114.7 113.1 119.7 115.4 110.9 106.5 44 Cash assets4 77.5 88.3 88.1 85.2" 82. r 83.7 85.9 84.1 83.4 81.5 82.1 84.2 45 Other assets5 110.4 112.4 114.8" 115.0" 120.5" 123.9 122.7 128.5 126.8 129.9 126.1 126.5 46 Total assets6 2,172.2 2333.2 2339.7 2349.7 2363.4 2384.9r 2388.8 2396.8 2398.9 2395.5 2389.1 2391.1 Liabilities 47 Deposits 1,624.0 1.812.8 1,823.5" 1,836.9 1.853.3" 1,877.2 1,871.6 1,884.7 1,889.6 1.885.1 1.875.0 1,874.4 48 Transaction 294.3 304.8 300.2" 294.2 293.9 298.0 296.1" 294.2 287.4 289.3 294.3 302.2 49 Nontransaction 1,329.7 1,508.0 1,523.2 1,542.7" 1,559.4" 1,579.2" 1,575.5 1,590.5 1,602.2 1.595.8 1.580.6 1,572.2 50 Large time 265.2 298.6 300.3 306.1 302.9 303.0 300.9 299.0 297.9 297.8 299.0 300.1 51 Other 1,064.5 1,209.4 1,222.9 1,236.6r 1,256.5" 1.276.1 1,274.6" 1,291.5 1,304.3 1,297.9 1.281.6 1,272.1 52 Borrowings 344.8 336.5 343.9 341.2 333.3 336.7 340.2 338.2 337.1 332.9 341.6 342.0 53 From banks in the U.S 163.4 160.5 158.1 158.1 151.7" 151.7" 152.9" 151.3 150.0 148.9 152.3 154.6 54 From others 181.4 176.0 185.7 183.2 181.7 185.0" 187.3" 186.8 187.1 184.0 189.2 187.4 55 Net due to related foreign offices .... 9.1 20.9 16.8 16.7 15.4 12.8 16.6 13.1 13.7 15.0 11.5 13.3 56 Other liabilities 54.1 54.1 53.4 53.9 56.1 56.4 57.0 57.4 56.6 57.7 57.6 57.6 57 Total liabilities 2,032.0 2,2243 2,237.5 2r248.7r 2v258.1 2,283.1 2,285.4 2,293.4 2,297.1 2,290.7 2,285.7 2,2873 58 Residual (assets less liabilities)7 140.2 108.9 102.2 101.0 105.3 101.8 103.4 103.5 101.8 104.8 103.4 103.8 Footnotes appear on p. A21. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A20 DomesticN onfinancialS tatistics tl September 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 June Dec. Jan. Feb. Mar. Apr. May June June 6 June 13 June 20 June 27 Seasonally adjusted Assets 1 Bank credit 575.9 599.4 613.5 607. r 620.5r 616.2" 602.5" 593.7 598.5 590.3 595.9 595.0 2 Securities in bank credit 204.7 205. r 208.4r 198.8 205.6 214.6 210.3 212.3 212.7 209.7 212.3 213.2 3 U.S. government securities 78.5 69.2 66.5r 64.3 68.0" 75.1" 69.8 67.9 67.9 67.7 67.2 67.9 4 Other securities 126.2 135.9 141.9 134.5r 137.6r 139.6 140.5 144.4 144.8 142.0 145.1 145.3 5 Loans and leases in bank credit2 . . . 371.3 394.4 405. r 408.3r 414.9" 401.6" 392.2" 381.4 385.8 380.6 383.5 381.8 6 Commercial and industrial 204.8 209.0 214.41" 216.8r 219.9" 220.4" 218.6" 210.6 213.5 211.0 211.5 209.7 7 Real estate 18.0 18.5 18.5 18.6r 18.5r 18.0" 18.0 17.8 17.7 17.9 17.8 17.9 8 Security3 82.7 100.1 105.1 105.3 106.5r 95.3 87.8 86.2 88.1 85.2 86.3 87.5 y Other loans and leases 65.8 66.7 67.2 67.6 69.9 67.9 67.8 66.8 66.5 66.5 67.9 66.8 10 Interbank loans 26.3 27.0 29.2 28.4 30.7 29.5 31.9 24.7 22.4 23.8 31.3 21.3 11 Cash assets4 44.6 39.9 41.5 41.7r 40.7 39.3 37.5 36.0 35.2 35.7 37.5 36.0 12 Other assets5 41.8 36.1 37.0r 36.5 38.4r 41.1" 38.9 39.1 37.7 37.4 38.0 44.9 13 Total assets6 6883 702.1 720.9 7133" 729.9r 725.8 710.4" 693.1 6935 686.8 702.2 696.8 Liabilities 14 Deposits 385.9 380.0 386.7" 380.6r 378.7r 392.5' 406.8 417.2 414.8 416.8 418.7 414.0 15 Transaction 11.2 10.6 10.2 10.3 9.4 10.5 10.5 9.6 9.4 9.5 10.3 8.9 16 Nontransaction 374.7 369.4 376.5r 370.3r 369.2 382.0" 396.3 407.6 405.4 407.3 408.4 405.2 17 Borrowings 202.9 239.6 243.5 238.4r 233.3 236.0 216.3" 213.4 209.2 211.0 215.3 215.6 18 From banks in the U.S 19.2 22.2 25.1' 22.5 24.2 23.5 19.5 22.2 18.9 21.1 24.9 21.1 19 From others 183.6 217.4 218.3 216.0 209.1 212.5 196.8 191.2 190.4 189.9 190.4 194.5 20 Net due to related foreign offices 21.7 -1.8 3.5 4.8 21.8 4.2 -4.7 -20.0 -24.4 -26.5 -8.7 -12.8 21 Other liabilities 76.5 72.6 79.6 77.0r 82.5 88.3" 86.3 84.5 84.8 86.8 86.3 82.3 22 Total liabilities 686.9 6905 7133r 700.7r 7163r 721.1r 704.7 695.1 684.4 688.1 7115 699.1 23 Residual (assets less liabilities)7 1.4 11.6 7.6r 12.6r 13.6r 4.7" 5.7" -2.0 9.1 -1.3 -9.3 -2.3 Not seasonally adjusted Assets 24 Bank credit 572.7 610.2r 621.6 610.4r 615.6r 613.4" 597.8" 590.1 591.8 587.1 593.4 591.9 25 Securities in bank credit 204.7 205. r 208.4r 198.8 205.6 214.6 210.3 212.3 212.7 209.7 212.3 213.2 26 U.S. government securities 78.5 69.2 66.5r 64.3 68.0" 75.1" 69.8 67.9 67.9 67.7 67.2 67.9 27 Trading account 12.0 11.8 11.4 10.4 9.5 14.2 13.4 13.5 13.3 13.3 13.1 13.3 28 Investment account 66.5 57.3 55.1 53.9" 58.5r 60.9" 56.4 54.4 54.6 54.4 54.1 54.6 29 Other securities 126.2 135.9 141.9 134.5r 137.6r 139.6 140.5 144.4 144.8 142.0 145.1 145.3 30 Trading account 82.4 90.8r 96.4r 90.8 94.5 96.6" 98.2 104.4 102.6 101.9 105.5 106.3 31 Investment account 43.8 45.1 45.6 43.7r 43. r 43.0" 42.3 40.1 42.3 40.1 39.6 39.0 32 Loans and leases in bank credit2 . . . 368.0 405.1 413.2r 411.5r 410.0" 398.8" 387.5" 377.8 379.0 377.4 381.1 378.7 33 Commercial and industrial 203.7 211.4 216.1r 219.0" 221.0" 218.6" 215.5" 209.5 211.9 209.1 210.2 209.4 34 Real estate 18.0 18.5 18.5 18.6r 18.5" 18.0" 18.0 17.8 17.7 17.9 17.8 17.9 35 Security3 81.1 106.2 110.3r 106.3 100.6 94.0 87.0 84.3 83.3 84.4 86.2 85.6 36 Other loans and leases 65.2 69.0 68.3 67.7 69.9 68.2 67.0 66.1 66.2 66.0 66.8 65.8 37 Interbank loans 26.3 27.0 29.2 28.4 30.7 29.5 31.9 24.7 22.4 23.8 31.3 21.3 38 Cash assets4 43.5 42.7 44.1 41.8r 39.3 37.7 36.6 34.9 34.5 34.4 36.2 34.8 39 Other assets5 40.3 37.9 38.3 37.4 39.0 40.2" 38.4" 37.7 36.9 36.6 36.4 42.7 40 Total assets6 682.4 717.4 732.8 717.6r 724.2" 720.4" 704.2" 687.0 685.2 6815 696.9 690.2 Liabilities 41 Deposits 379.8 390.7 396.6r 388.8r 383.2" 395.4 407.9 410.1 411.3 411.5 410.3 406.4 42 Transaction 11.0 11.3 10.4 10.1 9.2 10.0 10.1 9.4 9.0 9.1 10.1 8.9 43 Nontransaction 368.8 379.4 386.2r 378.7 374.0 385.5 397.8 400.7 402.3 402.3 400.3 397.5 44 Borrowings 202.9 239.6 243.5 238.4r 233.3 236.0 216.3" 213.4 209.2 211.0 215.3 215.6 45 From banks in the U.S 19.2 22.2 25. r 22.5 24.2 23.5 19.5 22.2 18.9 21.1 24.9 21.1 46 From others 183.6 217.4 218.3 216.0 209.1 212.5 196.8 191.2 190.4 189.9 190.4 194.5 47 Net due to related foreign offices .... 18.4 2.9 6.8 8.0 21.9 -.4 -7.9 -23.2 -23.9 -30.2 -15.5 -16.1 48 Other liabilities 75.1 74.7 81.0 78.4r 82.6 86.2" 84.8 83.0 85.0 85.0 83.1 80.7 49 Total liabilities 6762 708.0 727.8 713.6r 721.0r 717.2r 701.1 6833 681.7 6773 6933 686.6 50 Residual (assets less liabilities)7 6.2 9.4 5.(7 4.0" 3.3" 3.2" 3.1" 3.6 3.5 4.2 3.7 3.6 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 June Dec. Jan.r Feb/ Mar/ Apr. May June June 6 June 13 June 20 June 27 Not seasonally adjusted MEMO Large domestically chartered banks, adjusted for mergers 1 Revaluation gains on off-balance-sheet items8 68.3 77.8 79.5 77.6 80.6 79.6 81.7 87.0 87.6 92.3 87.1 83.9 2 Revaluation losses on off-balancesheet items8 68.5 83.1 82.5 81.0 79.8 74.9 74.7 81.5 83.7 86.0 83.5 76.9 3 Mortgage-backed securities9 251.0 242.6 248.0 244.5 244.8 252.2 258.9 255.2 262.6 255.7 253.2 251.8 4 Pass-through 178.4 177.5 182.6 178.9 180.9 189.8 195.2 195.3 199.8 194.2 194.6 194.1 5 CMO, REMIC, and other 72.7 65.0 65.3 65.6 63.9 62.4 63.7 60.0 62.7 61.5 58.6 57.7 6 Net unrealized gains (losses) on available-for-sale securities10 .... -8.7 1.4 ,4R 2Sf 3.6R .4' -1.5' -1.7 -1.8 -1.7 -1.4 -1.8 7 Off-shore credit to U.S. residents''. . . . 22.4 23.4 23.0 22.7 22.6 21.7 21.0 20.6 20.8 20.6 20.7 20.5 8 Securitized consumer loans12 n.a. 82.2 82.4 80.8 80.2 78.8 77.0 76.7 76.6 76.5 76.5 77.2 9 Credit cards and related plans n.a. 68.6 68.5 67.3 67.3 66.4 65.0 65.3 64.9 64.9 65.1 65.8 10 Other n.a. 13.6 13.9 13.4 12.9 12.4 12.0 11.5 11.7 11.6 11.4 11.4 11 Securitized business loans'2 n.a. 18.6 18.4 18.6 18.7 18.8 19.8 20.4 20.0 20.4 20.3 20.7 Small domestically chartered commercial banks, adjusted for mergers 12 Mortgage-backed securities9 206.4 214.5 218.2 222.7 229.3R 238. R 242.6R 245.8 244.2 245.6 245.4 245.8 13 Securitized consumer loans'2 n.a. 231.1 231.5 235.6 238.6 241.2 242.2 248.1 245.2 247.1 249.1 249.3 14 Credit cards and related plans n.a. 221.9 222.4 226.8 229.9 232.6 233.8 239.6 236.9 238.9 240.3 240.6 15 Other n.a. 9.2 9.1 8.9 8.7 8.6 8.4 8.5 8.3 8.2 8.8 8.7 Foreign-related institutions 16 Revaluation gains on off-balancesheet items8 44.4 45.7 52.0R 49.4 52.5 54.2R 56.3R 57.1 59.3 58.6 56.7 55.1 17 Revaluation losses on off-balancesheet items8 40.5 41.7 49.(/ 47.(f 49.5 50./ 51.6 51.9 53.9 53.6 51.5 49.7 18 Securitized business loans'" n.a. 23.1 23.2 22.4 21.5 19.8 18.0 17.2 17.4 17.2 17.0 17.1 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 tl September 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 Dec. Jan. Feb. Mar. Apr. May 1 All issuers 775,371 966,699 1,163,303 1,403,023 1,615,341 1,615,341 1,566,104 1,544,572 1,511,354 1,519,528 1,501,113 Financial companies' 2 Dealer-placed paper, total" 361,147 513,307 614.142 786,643 973,060 973,060 976,735 977,791 978,225 995,072 986,369 3 Directly placed paper, total3 229,662 252,536 322,030 337,240 298,848 298,848 270,922 263,554 249,420 247,333 245,768 4 Nonfinancial companies4 184,563 200,857 227,132 279,140 343,433 343,433 318,447 303,227 283,711 277,123 268,976 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 Loans' Percent per year Period Average Average rate rate 888...555000 1998 8.35 —Jan 7.75 2000—Jan. 888...222555 1999 8.00 Feb 7.75 Feb. .. 888...000000 2000 9.23 Mar. 7.75 Mar. .. 7.75 Apr 7.75 Apr. .. 1998—Jan 8.50 May 7.75 May .. 8.00 Feb 8.50 June 7.75 June .. 8.25 Mar 8.50 July 8.00 July ... 8.50 Apr 8.50 Aug 8.06 Aug. .. May 8.50 Sept 8.25 Sept. . 8.75 June 8.50 Oct 8.25 Oct. ... 9.00 July 8.50 Nov 8.37 Nov. .. 9.50 Aug 8.50 Dec 8.50 Dec. .. Sept 8.49 9.00 Oct 8.12 2001—Jan. ... 8.50 Nov 7.89 Feb. .. 8.00 Dec 7.75 Mar. .. 7.50 Apr. .. 7.00 May .. 6.75 June .. July ... 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 Mar. Apr. May June June 1 June 8 June 15 June 22 June 29 MONEY MARKET INSTRUMENTS 1 Federal funds1'2'3 5.35 4.97 6.24 5.31 4.80 4.21 3.97 .3.9 8 4. 08 4.00 3.95 3.91 2 Discount window borrowing"'4 4.92 4.62 5.73 4. 81 4.28 3.73 3.47 3.50 3.50 3.50 3.50 3.46 Commercial paper ,5'6 Nonfinancial 3 1-month 5.40 5.09 6.27 5.02 4.71 4.06 3.82 3.97 3.93 3. 88 3.73 3.69 4 2-month 5.38 5.14 6.29 4.87 4.54 .3.9 8 3.73 3. S9 3.82 3.77 3.66 3.63 5 3-month 5.34 5.18 6.31 4.78 4.44 3.93 3.67 3.83 3.77 3.71 3.60 3.59 Financial 6 1-month 5.42 5.11 6.28 5.06 4.74 4.08 3.84 3.99 3.95 3.90 3.77 3.72 7 2-month 5.40 5.16 6.30 4.93 4.57 4.00 3.75 3.92 3.84 3.81 3.66 3.66 8 3-month 5.37 5.22 6.33 4.81 4.47 3. 96 3.69 3. 86 3.78 3.73 3.60 3.60 Commercial paper (historical)3'5"1 9 1-month n.a. n.a. n.a. 10 3-month n.a. n.a. n.a. 11 6-month n.a. n.a. n.a. Finance paper, directly placed (historicalJ3'5'8 12 1-month 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. Bankers acceptances3'5-l) 15 3-month 5.39 5.24 6.23 16 6-month 5.30 5.30 6.37 Certificates of deposit, secondary market3'10 17 1 -month 5.49 5.19 6.35 5.09 4.77 4.11 3. S6 4.02 3.99 3.92 3.77 3.73 18 3-month 5.47 5.33 6.46 4.89 4.53 4.02 3.74 3.91 3. 84 3.78 3.65 3. 68 19 6-month 5.44 5.46 6.59 4.74 4.41 4.01 3.74 3.90 3. 84 3.77 3.64 3.69 20 Eurodollar deposits, 3-month3'" 5.45 5.31 6.45 4. 89 4.55 4.01 3.73 3.90 3.83 3.75 3.65 3.67 U.S. Treasury bills Secondary market3'5 21 3-month 4.78 4.64 5.82 4.42 3.87 3.62 3.49 3.59 3.56 3.48 3.42 3.47 77 6-month 4.83 4.75 5.90 4.28 3.85 3.62 3.45 3.52 3.50 3.48 3.36 3.44 23 1-year 4.80 4.81 5.78 4.11 3.80 3.60 3.37 3.51 3.46 3.37 3.26 3.38 Auction high3'51" 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. US. TREASURY NOTES AND BONDS Constant maturities13 77 1-year 5.05 5.08 6.11 4.30 3. 3.78 3.58 3.70 3.64 3.59 3.46 3.60 78 2-year 5.13 5.43 6.26 4.34 4.23 4.26 4.08 4.28 4.15 4.07 3.97 4.10 79 3-year 5.14 5.49 6.22 4.43 4.42 4.51 4.35 4.55 4.42 4.34 4.23 4.38 30 5-year 5.15 5.55 6.16 4.64 4.76 4.93 4.81 5.00 4. i8 4.80 4.70 4.82 31 7-year 5.28 5.79 6.20 4. 88 5.03 5.24 5.14 5.33 5.20 5.14 5.05 5.14 37 10-year 5.26 5.65 6.03 4. 89 5.14 5.39 5.28 5. 18 5.32 5.28 5.23 5.29 33 20-year 5.72 6.20 6.23 5.49 5.78 5.92 5.82 5. 48 5.87 5.82 5.79 5.81 34 30-year 5.58 5.87 5.94 5.34 5.65 5.78 5.67 5.80 5.69 5.67 5. 66 5.66 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 5.00 5.14 5.15 5.03 5.14 5.03 5.02 5.02 5.05 37 Baa 5.14 5.70 6.19 5. SO 5.96 5.94 5.82 5.91 5.82 5.81 5. 80 5. 84 38 Bond Buyer series ' 5.09 5.43 5.71 5.13 5.27 5.29 5.20 5.28 5.21 5.19 5.20 5.21 CORPORATE BONDS 39 Seasoned issues, all industries'6 6.87 7.45 7.98 7.41 7.63 7.69 7.56 7.71 7.58 7.55 7.55 7.54 Rating group 40 Aaa 6.53 7.05 7.62 6.98 7.20 7.29 7.18 7.31 7.20 7.17 7.17 7.17 41 Aa 6.80 7.36 7.83 7.22 7.43 7.50 7.34 7.52 7.37 7.33 7.32 7.32 47 A 6.93 7.53 8.11 7.61 7.82 7. S8 7.73 7. <8 7.76 7.72 7.72 7.70 43 Baa 7.22 7.88 8.36 7.84 8.07 8.07 7.97 8. 1 7.99 7.96 7.96 7. MEMO Dividend-price ratio17 44 Common stocks 1.49 1.25 1.15 1.33 1.32 1.23 1.27 1.26 1.23 1.28 1.28 1.29 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 tl September 2001 1.36 STOCK MARKET Selected Statistics 2000 2001 IInnddiiccaattoorr 11999988 11999999 22000000 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June Prices and trading volume (averages of daily figures) Common stock prices (indexes) 1 New York Stock Exchange (Dec. 31, 1965 = 50) 550.65 619.52 643.71 646.53 646.64 645.44 650.55 648.05 603.44 607.06 644.44 630.86 2 Industrial 684.35 775.29 809.40 797.00 800.88 792.66 796.74 799.38 744.21 747.48 798.94 782.73 3 Transportation 468.61 491.62 414.73 403.20 434.92 457.53 471.21 482.26 452.36 455.22 477.21 458.60 4 Utility 190.52 284.82 478.99 469.16 455.66 444.16 440.36 424.53 395.34 400.49 414.69 382.98 5 Finance 516.65 530.97 552.48 587.76 600.45 621.62 634.17 626.41 583.38 587.88 618.74 622.17 6 Standard & Poor's Corporation (1941-43 = 10)' 1,085.50 1,327.33 1,427.22 1,390.14 1,375.04 1,330.93 1,335.63 1,305.75 1,185.85 1,189.84 1,270.37 1,238.71 7 American Stock Exchange (Aug. 31, 1973 = 50)2 682.69 770.90 922.22 913.64 892.60 870.16 898.18 923.99 891.22 891.18 940.73 923.06 Volume of trading (thousands of shares) 8 New York Stock Exchange 666,534 799,554 1,026,867 1,167,025 1,015,606 1,183,149 1,299,986 1,117,977 1,251,569 1,247,382 1,091,366 1,152,193 9 American Stock Exchange 28,870 32,629 51,437 57,915 58,541 73,759 72,312 70,648 81,666 77,612 66,103 62,395 Customer financing (millions of dollars, end-of-period balances) 10 Margin credit at broker-dealers 140,980 228,530 198,790 233,380 219,110 198,790 197,110 186,810 165,350 166,940 174,180 170,000 Free credit balances at brokers4 11 Margin accounts5 40,250 55,130 100,680 82,990 96,730 100,680 90,380 99,390 106,300 97,470 91,990 98,430 12 Cash accounts 62,450 79,070 84,400 73,410 74,050 84,400 81,380 78,660 77,520 77,460 76,260 75,270 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. I, 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 2001 11999988 11999999 22000000 Jan. Feb. Mar. Apr. May June U.S. budget1 1 Receipts, total 1,721,798 1,827,302 2,025,218 219,215 110,481 130,071 331,796 125,590 202,887 2 On-budget 1,305,999 1,382,986 1,544,634 171,001 70,555 84,120 278,611 84,759 151,482 3 Off-budget 415.799 444,468 480,584 48,214 39,926 45,951 53,185 40,831 51,405 4 Outlays, total 1,652,619 1,702,875 1,788,826 142,836 158,649 180,733 141,999 153,508 171,025 5 On-budget 1,336,015 1,382,097 1,458,061 144,448 123,573 145,182 109,938 118,517 167,796 6 Off-budget 316.604 320,778 330,765 -1,613 35,076 35,550 32,062 34,992 3,229 7 Surplus or deficit (-), total 69.179 124,579 236,392 76,379 -48,168 -50,662 189,796 -27,919 31,862 8 On-budget -30,016 889 86,573 26,553 -53,018 -61,062 168,673 -33,758 -16,314 9 Off-budget 99,195 123,690 149,819 49,827 4,850 10,401 21,123 5,839 48,176 Source of financing (total) 10 Borrowing from the public -51,211 -88,674 -222,672 -23,990 15,100 32,557 -135,572 -20,608 -1,212 11 Operating cash (decrease, or increase [—]) 4,743 -17,580 3,799 -45,761 45,717 -7,171 -36,846 58,856 -37,413 12 Other 2 -22,711 -18,325 -17,519 -6,628 -12,649 25,276 -17,378 -10,329 6,763 MEMO 13 Treasury operating balance (level, end of period) 38,878 56,458 52,659 66,830 21,113 28,284 65,130 6,274 43,687 14 Federal Reserve Banks 4,952 6,641 8,459 5,256 4,956 5,657 7,894 4,396 7,188 15 Tax and loan accounts 33,926 49,817 44,199 61,574 16,158 22,627 57,236 1,878 36,498 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 tl September 2001 1.39 U.S. BUDGET RECEIPTS AND OUTLAYS1 Millions of dollars Fiscal year Calendar year SSSooouuurrrccceee ooorrr tttyyypppeee 1999 2000 2001 2001 11999999 22000000 H2 HI H2 HI Apr. May June RECEIPTS 1 All sources 1,827,302 2,025,218 892,266 1,089,763 952,942 1,120,040 331,796 125,590r 202,887 2 Individual income taxes, net 879,480 1,004,462 425,451 550,208 458,679 580,236 220,386r 47,39 lr 93,676 3 Withheld 693,940 780,397 372,012 388,526 395,572 402,417 64,489 63,237 53,125 4 Nonwithheld 308,185 358,049 68,302 281,103 77,732 308,418 187,032 13,753 43,804 5 Refunds 122,706 134,046 14,841 119,477 14,628 130,652 31,147r 29,609r 3,263 Corporation income taxes 6 Gross receipts 216,324 235,655 110,111 119,166 123,962 102,947 26,693 6,453 31.563 7 Refunds 31,645 28,367 13,996 13,781 15,776 20,262 3,308r 2,000r 1,617 8 Social insurance taxes and contributions, net . . . 611,833 652,852 292,551 353,514 310,122 379,878 73,887 61,437 66,732 y Employment taxes and contributions2 580,880 620,451 280.059 333,584 297,665 359,648 68,773 52,210 66,039 10 Unemployment insurance 26,480 27,640 10,173 17,562 10,097 17,842 4,760 8,786 344 n Other net receipts3 4,473 4,761 2,319 2,368 2.360 2,387 354 441 349 12 Excise taxes 70,414 68,865 34,262 33,532 35,501 32,490 5,690 4,390 5,965 13 Customs deposits 18,336 19,914 10,287 9,218 10,676 9,370 1,477 1,501 1,571 14 Estate and gift taxes 27,782 29,010 14,001 15,073 13,216 15,471 4,460' 2,465r 2,058 15 Miscellaneous receipts4 34,929 42,826 19,569 22,831 16,556 19,517 2,510 3,559 2,939 OUTLAYS 16 All types 1,702,875 1,788,826 882,465 892,947 894,905 948,750 141,999 153,508r 171,025 17 National defense 274,873 294,494 149,573 143,476 147,651 153,154 22,253 26,028 29,382 18 International affairs 15,243 17,216 8,530 7,250 11,902 6,522 1,272 -1.490 2,318 19 General science, space, and technology 18,125 18,637 10,089 9.601 10,389 10,073 1,547 1,892 1,821 20 Energy 912 -1,060 -90 -893 -595 -244 -390 -25 536 21 Natural resources and environment 23,970 25,031 12,100 10,814 12,907 11,059 1,741 2,136 1,915 22 Agriculture 23,011 36,641 20,887 11,164 20,977 10,832 1,272 711 893 23 Commerce and housing credit 2,649 3,211 7,353 -2,497 4,408 -1,539 -260 -907 33 24 Transportation 42,531 46,854 23,199 21,054 25,841 23,810 3.593 4,850 4,643 25 Community and regional development 11,870 10,629 6,806 5,050 5,962 5,265 855 928 1,205 26 Education, training, employment, and social services 56,402 59,201 27,532 31,234 29,263 35,698 4,798 5,907 6,502 27 Health 141,079 154,534 74,490 75,871 81,413 87,427 14,844 14,954 15,768 28 Social security and Medicare 580,488 606,549 295,030 306,966 307,473 328,072 50,826 55,876 61,115 29 Income security 237,707 247,895 113,504 133,915 113,212 146,913 19,913 22,005r 21,667 30 Veterans benefits and services 43,212 47,083 23,412 23,174 22,615 23,171 2,164 2,865 5,619 31 Administration of justice 25,924 27,820 13,459 13,981 14,635 14,694 2,562 2,450 2,320 32 General government 15,771 13,454 7,010 6,198 6,461 8,887 1,162 849 2,669 33 Net interest5 229,735 223,218 112,420 115.545 104,685 107,824 17,816 18,363 15,912 34 Undistributed offsetting receipts6 -40,445 -42,581 -22,850 -19,346 -24,070 -22,865 -3,970 -3,882 -3,294 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 A27 1.40 FEDERAL DEBT SUBJECT TO STATUTORY LIMITATION Billions of dollars, end of month 1999 2000 2001 IItteemm June 30 Sept. 30 Dec. 31 Mar. 31 June 30 Sept. 30 Dec. 31 Mar. 31 June 30 1 Federal debt outstanding 5,668 5,685 5,805 5,802 5,714 5,702 5,690 5,801 5,754 2 Public debt securities 5,639 5,656 5,776 5,773 5,686 5,674 5,662 5,774 5,727 3 Held by public 3,685 3,667 3,716 3,688 3,496 3,439 3,414 3,434 3,274 4 Held by agencies 1,954 1,989 2,061 2,085 2,190 2,236 2,249 2,339 2,453 5 Agencv securities 29 29 29 28 28 28 27 27 27 6 Held by public 28 28 28 28 28 28 27 27 27 7 Held by agencies 1 1 1 0 0 0 0 0 0 8 Debt subject to statutory limit 5,552 5,568 5,687 5,687 5,601 5,592 5,581 5,693 5,645 9 Public debt securities 5,552 5,568 5,687 5,686 5,601 5,591 5,580 5,692 5,645 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 Q3 Q4 Q1 Q2 1 Total gross public debt 5,502.4 5,614.2 5,776.1 5,662.2 5,674.2 5,662.2 5,773.7 5,726.8 By type 2 Interest-bearing 5,494.9 5,605.4 5,766.1 5,618.1 5,622.1 5,618.1 5,752.0 5,682.8 3 Marketable 3,456.8 3,355.5 3,281.0 2,966.9 2,992.8 2,966.9 2,981.9 2,822.3 4 Bills 715.4 691.0 737.1 646.9 616.2 646.9 712.0 620.1 5 Notes 2,106.1 1,960.7 1,784.5 1,557.3 1,611.3 1,557.3 1,499.0 1,441.0 6 Bonds 587.3 621.2 643.7 626.5 635.3 626.5 627.9 616.9 7 Inflation-indexed notes and bonds' 33.0 67.6 100.7 121.2 115.0 121.2 128.0 129.3 8 Nonmarketable2 2,038.1 2,249.9 2,485.1 2,651.2 2,629.3 2,651.2 2,770.0 2,8 d0.5 9 State and local government series 124.1 165.3 165.7 151.0 153.3 151.0 152.9 153.3 10 Foreign issues3 36.2 34.3 31.3 27.2 25.4 27.2 24.7 24.0 11 Government 36.2 34.3 31.3 27.2 25.4 27.2 24.7 24.0 12 Public .0 .0 .0 .0 .0 .0 .0 .0 13 Savings bonds and notes 181.2 180.3 179.4 176.9 177.7 176.9 177.4 178.4 14 Government account series4 1,666.7 1,840.0 2,078.7 2,266.1 2,242.9 2,266.1 2,360.3 2,474.7 15 Non-interest-bearing 7.5 8.8 10.0 44.2 52.1 44.2 46.5 44.0 By holder5 16 U.S. Treasury and other federal agencies and trust funds 1,657.1 1,828.1 2,064.2 2,270.2 2,226.5 2,270.2 2,357.0 n.a. 17 Federal Reserve Banks6 430.7 452.1 478.0 511.7 511.4 511.7 523.9 535.1 18 Private investors 3,414.6 3,334.0 3,233.9 2,880.4 2,936.2 2,880.4 2,892.9 19 Depository institutions 300.3 237.3 246.5 197.8 218.3 197.8 188.1 20 Mutual funds 321.5 343.2 348.6 339.0 324.3 339.0 348.1 21 Insurance companies 176.6 144.5 125.3 116.6 119.3 116.6 112.7 22 State and local treasuries7 239.3 269.3 266.8 246.2 241.9 246.2 234.1 n.a. Individuals 23 Savings bonds 186.5 186.6 186.4 184.8 184.3 184.8 184.8 24 Pension funds 360.5 375.3 378.9 387.7 383.1 387.7 384.9 25 Private 143.5 157.6 167.7 181.6 179.2 181.6 181.3 26 State and Local 216.9 217.7 211.2 206.1 203.9 206.1 203.6 27 Foreign and international8 1,241.6 1,278.7 1,268.7 1,201.4 1,225.2 1,201.4 1,196.2 28 Other miscellaneous investors7'9 589.5 499.0 410.8 218.3 237.9 218.3 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 tl September 2001 1.42 U.S. GOVERNMENT SECURITIES DEALERS Transactions' Millions of dollars, daily averages 2001 2001, week ending IItteemm Mar. Apr. May May 2 May 9 May 16 May 23 May 30 June 6 June 13 June 20 June 27 OUTRIGHT TRANSACTIONS2 By type of security 1 U.S. Treasury bills 32,043' 32,414 23,093 20,894 17,560 20,596 20,583 34,425 34,861 19,936 26,042 23,775 Coupon securities, by maturity 2 Five years or less 170,530 180,666 182,875 182,562 196,987 201,426 163,520 170,148 167,864 134,526 158,770 173,345 3 More than five years 87,263 82,663 86,179 82,012 94,801 94,370 80,939 74,755 82,341 63,801 64,580 71,589 4 Inflation-indexed 1,575 1,847 1,833 2,044 1,629 2,650 1,469 1,633 974 1,532 1,048 1,542 Federal agency 5 Discount notes 62,429 61,242 55,738 63,766 59,305 52,421 52,497 56,532 51,465 44,842 56,196 56,276 Coupon securities, by maturity 6 One year or less 998 1,188 1,550 1,352 1,730 1,588 11,,119944 1,903 1,221 11,,668822 11,,007777 11,,444488 7 More than one year, but less than or equal to five years 16,460 18,577 16,787 17,867 15,792 18,626 17,249 14,387 17,689 21,288 23,634 22,168 8 More than five years 13,912r 7,125 9,174 8,307 6,490 8,903 13,506 7,244 11,750 8,003 8,416 7,943 9 Mortgage-backed 105,381 107,684 100,310 79,022 120,064 122,504 87,584 72,304 108,791 137,587 80,404 69,699 By type of counterparty With interdealer broker 10 U.S. Treasury 151,017r 152,513r 151,800 150,604 159,235 165,885 140,001 144,299 135,599 115,835 129,802 137,422 11 Federal agency 15,012r 12,924r 12,451 13,632 12,476 12,561 12,696 10,856 14,572 14,838 14,236 14,597 12 Mortgage-backed 34,045 34,441 32,101 27,882 39,299 31,380 31,511 26,367 34,030 3388,,889999 2266,,001133 2288,,111155 With other 13 U.S. Treasury 140,393r 145,077r 142,180 136,908 151,742 153,157 126,510 136,662 150,441 103,960 120,638 132,829 14 Federal agency 78,786r 75,208r 70,798 77,660 70,842 68,977 71,750 69,211 67,554 60,977 75,087 73,238 15 Mortgage-backed 71,337 73,244 68,209 51,140 80,765 91,124 56,073 45,937 74,761 98,689 54,392 41,585 FUTURES TRANSACTIONS3 By type of deliverable security 16 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. 0 Coupon securities, by maturity 1177 Five years or less 4,208 3,482 5,125 3,161 4,387 5,762 4,177 7,214 5,936 3,975 4,122 3,484 18 More than five years 16,989 17,079 18,048 16,015 16,450 16,392 19,139 22,237 16,165 14,300 16,419 14,694 19 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 00 Federal agency 20 Discount notes 0 0 0 0 0 0 0 0 0 0 0 0 Coupon securities, by maturity 21 One year or less 0 0 0 0 0 0 0 0 00 00 00 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 55 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 57 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 2266 Five years or less 1,167 1,022 1,091 696 1,366 1,140 728 1,285 1,306 925 858 1,164 27 More than five years 4,188 4,119 3,527 2,561 3,060 4,111 3,133 4,336 3,602 2,038 2,463 3,225 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 85 72 91 0 0 0 0 0 0 0 0 0 32 More than five years 133 118 163 190 196 131 n.a. 40 591 93 n.a. 107 33 Mortgage-backed 1,863 1,024 1,466 932 2,435 1,520 1,192 863 1,209 779 824 431 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 IItteemm Mar. Apr. May May 2 May 9 May 16 May 23 May 30 June 6 June 13 June 20 Positions2 NET OUTRIGHT POSITIONS3 By type of security 1 U.S.'Treasury bills 20,272 30,544 -332 1,469 387 -1,152 -3,039 590 9,269 4,271 -485 Coupon securities, by maturity 2 Five years or less -14,721 -17,951 -17,389 -24,868 -10,566 -17,324 -20,578 -19,455 -13,855 -20,675 -20,021 3 More than five years -6,315 -7,938 -12,752 -9,514 -12,556 -13,569 -12,359 -13,165 -14,754 -10,342 -9,609 4 Inflation-indexed 4,146 4,196 4,128 4,026 3,420 3,907 5,444 3,762 4,181 3,120 3,439 Federal agency 5 Discount notes 36,096 49,374 51,428 47,111 47,215 51,112 51,121 56,934 55,382 61,718 54,516 Coupon securities, by maturity 6 One year or less 16,162 15,777 13,828 15,529 1144,,666666 12,933 13,294 14,038 13,107 12,921 13,138 7 More than one year, but less than or equal to five years 5,802 7,171 8,882 9,759 7,730 7,246 11,572 8,931 7,474 6,911 6,307 8 More than five years 8,578 8,699 6,255 8,222 7,161 5,873 6,562 5,008 5,236 7,661 8,063 9 Mortgage-backed 9,611 12,181 16,811 14,358 13,940 15,511 16,402 21,585 20,369 17,004 17,128 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 -1,421 -1,673 1,001 -1,842 -1,949 1,174 1,881 3,684 1,195 2,186 1,610 12 More than five years -10,207 -5,836 -5,698 -3,659 -6,652 -6,233 -5,458 -4,833 -7,089 -4,303 -6,837 13 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 14 Discount notes 0 0 0 00 00 0 0 0 0 0 0 Coupon securities, by maturity 15 One year or less 00 00 00 00 00 00 00 00 00 00 00 16 More than one year, but less than or equal to five years 0 0 0 0 0 0 0 0 0 0 0 17 More than five years -341 -335 -302 -253 -266 -372 -270 -313 -321 -387 -429 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 295 -356 764 735 11,,772244 1,356 276 -220 272 687 654 21 More than five years 730 658 2,077 956 1,429 2,000 3,246 1,938 2,192 2,494 2,314 22 Inflation-indexed 0 0 0 0 0 0 0 0 0 0 0 Federal agency 23 Discount notes 0 0 0 00 00 00 0 0 0 0 0 Coupon securities, by maturity 24 One year or less 00 00 00 00 00 00 00 0 00 00 00 25 More than one year, but less than or equal to five years 355 302 291 411 565 459 328 -164 -106 -53 57 26 More than five years 593 103 329 350 607 135 299 253 434 245 288 27 Mortgage-backed 2,485 1,368 892 823 -41 1,135 1,543 772 2,128 1,518 2,228 Financing5 Reverse repurchase agreements 28 Overnight and continuing 376,076 366,382 383,190 374,868 377,131 396,864 376,925 383,646 387,199 374,728 360,779 29 Term 881,202 925,786 953,256 961,871 1,018,020 865,077 946,881 973,678 1,001,600 1,024,000 1,055,391 Securities borrowed 30 Overnight and continuing 278,034 280,746 295,962 293,294 294,510 308,057 298,110 284,010 295,432 297,057 302,844 31 Term 123,908 125,608 120,829 126,859 128.300 115,417 118,057 120,611 115,286 120,587 119,399 Securities received as pledge 32 Overnight and continuing 3,391 3,161 3,323 3.251 3,694 3,450 3,148 2,843 4,576 4,012 3,998 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 836,852 869,117 865,375 853,874 870,984 874,702 862,049 852,035 900,477 899,998 903,325 35 Term 842,163 852,132 877,681 888,398 934,216 802,259 869,971 895,796 915,611 934,937 958,305 Securities loaned 36 Overnight and continuing 9,463 9,626 9,826 9,346 9,681 10,371 9,665 9,582 10,809 11,018 9,504 37 Term 4,429 4,411 4,565 4,303 4,883 4,552 4,451 4,467 4,425 4,360 4,409 Securities pledged 38 Overnight and continuing 50,758 53,318 56,976 56,220 58,123 57,947 57,773 54,674 54,207 53,674 55,607 39 Term 5,938 6,529 7,482 6,753 6,685 7,753 7,809 7,827 7,921 8,213 8,078 Collateralized loans 40 Total 23,731 24,336 23,680 23,123 23,209 24,038 20,984 26,080 27,658 32,890 24,938 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 tl September 2001 1.44 FEDERAL AND FEDERALLY SPONSORED CREDIT AGENCIES Debt Outstanding Millions of dollars, end of period 2000 2001 AAggeennccyy 11999977 11999988 11999999 22000000 Dec. Jan. Feb. Mar. Apr. 1 Federal and federally sponsored agencies 1,022,609 1,296,477 1,616,492 1,851,632 1,851,632 n.a. 1,917,503 1,919,761 2 Federal agencies 27,792 26,502 26,376 25,666 25,666 25,426 25,141 25,063 3 Defense Department1 6 6 6 6 6 6 6 6 4 Export-Import Bank2"1 552 n.a. n.a. n.a. n.a. n.a. n.a. n.a. 5 Federal Housing Administration4 102 205 126 255 255 275 291 307 6 Government National Mortgage Association certificates of participation5 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 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 25,660 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. 10 Federally sponsored agencies7 994,817 1,269,975 1,590,116 1,825,966 1,825,966 1,873,199 1,892,362 1,894,698 11 Federal Home Loan Banks 313,919 382,131 529,005 594,404 594,404 604,904 598,586 602,824 12 Federal Home Loan Mortgage Corporation 169,200 287,396 360,711 426,899 426,899 446,997 455,623 461,338 478,447 13 Federal National Mortgage Association 369,774 460,291 547,619 642,700 642,700 654,200 668,200 666,600 682,500 14 Farm Credit Banks8 63,517 63,488 68,883 74,181 74,181 73,925 73,647 74,174 74,456 15 Student Loan Marketing Association9 37,717 35,399 41,988 45,375 45,375 50,669 53,886 47,322 n.a. 16 Financing Corporation10 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 8,170 17 Farm Credit Financial Assistance Corporation" 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 1,261 18 Resolution Funding Corporation12 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 29,996 MEMO 19 Federal Financing Bank debt13 49,090 44,129 42,152 40,575 40,575 39,348 38,924 39,341 n.a. Lending to federal and federally sponsored agencies 20 Export-Import Bank3 552 1 • • • 21 Postal Service6 n.a. T 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. 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 . . 1 I 1 I 1 1 1 1 1 1 •I 1 I n.a. Other lending14 25 Farmers Home Administration 13,530 9,500 6,665 5,275 5,275 5,155 5,155 5,155 26 Rural Electrification Administration 14,898 14,091 14,085 13,126 13,126 13,197 13,281 13,371 21 Other 20,110 20,538 21,402 22,174 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 Nov. Dec. Jan. Feb. Mar. Apr. May June 1 All issues, new and refunding' 262,342 215,427 180,403 18,079 15,348 11,255 19,829 24,495 16,985 26,248 29,298 By type of issue 2 General obligation V . . . 87,015 73,308 64,475 5,044 5,060 6,256 9,389 7,668 6,890 8,385 9,691 3 Revenue 175,327 142,120 115,928 13,036 10,288 4,999 10,441 16,827 10,094 17,863 19,606 By type of issuer 4 State 23,506 16,376 19,944 1,942 1,640 1,738 3,268 1,893 1,900 3,123 2,905 5 Special district or statutory authority2 178,421 152,418 111,695 12,311 1,053 7,061 11,011 17,280 113,344 17,281 20,672 6 Municipality, county, or township 60,173 46,634 39,273 3,827 3,165 2,456 5,550 5,323 3,740 5,845 5,721 7 Issues for new capital 160,568 161,065 154,257 14,520 13,286 8,758 13,384 15,387 12,264 20,002 20,044 By use of proceeds 8 Education 36,904 36,563 38,665 3,446 2,919 2,786 3,102 5,343 3,731 5,714 6,460 9 Transportation 19,926 17,394 19,730 2,124 1,381 780 2,411 1,219 1,381 2,522 1,258 10 Utilities and conservation 21,037 15,098 11,917 1,973 1,307 678 1,335 1,677 1,447 2,969 3,191 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 7,122 500 615 63 281 396 436 422 443 13 Other purposes 42,450 47,896 47,309 3,787 4,264 3,013 4,742 4,368 3,010 4,736 5,047 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 Oct. Nov. Dec. Jan. Feb. Mar. Apr. May 1 All issues' 1,128,491 1,072,866 942,198 62,466 95,595 61,378 125,894 96,206 139,267 92,778r 164,373 2 Bonds2 1,001,736 941,298 807,281 53,345 84,094 58,713 118,372 88,806 127,956 86,274 154,623 By type of offering 3 Sold in the United States 923,771 818,683 684,484 47,415 76,383 57,189 115,583 86,146 118,779 81,156 146,164 4 Sold abroad 77,965 122,615 122,798 5,930 7,712 1,525 2,789 2,660 9,177 5,117 8,459 MEMO 5 Private placements, domestic n.a. n.a. n.a. 127 5,534 3,709 26 1,897 652 0 2,563 By industry group 6 Nonfinancial 307,711 293,963 242,452 12,547 25,784 18,219 44,443 34,604 44,385 33,549 67,142 7 Financial 694,025 647,335 564,829 40,799 58,310 40,495 73,928 54,201 83,571 52,725 87,481 8 Stocks3 182,055 223,968 283,717 21,521 23,901 15,065 7,522 7,400 11,311 6,504r 9,750 By type of offering 9 Public 126,755 131,568 134,917 9,121 11,501 2,665 7,522 7,400 11,311 6,504r 9,750 10 Private placement4 55,300 92,400 148,800 12,400 12,400 12,400 n.a. n.a. n.a. n.a. n.a. By industry group 11 Nonfinancial 74,113 110,284 118,369 8,278 10,794 2,146 4,356 4,463 7,718 4,822r 6,809 12 Financial 52,642 21,284 16,548 843 707 519 3,166 2,937 3,593 l,682r 2,941 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 Financial Statistics • September 2001 1.47 OPEN-END INVESTMENT COMPANIES Net Sales and Assets1 Millions of dollars 2000 2001 IItteemm 11999999 22000000 Nov. Dec. Jan. Feb. Mar. Apr. Mayr June 1 Sales of own shares2 1,791,894 2,279,315 143,412 170,255 206,765 148,362 162,548 152,327 158,361 140,085 2 Redemptions of own shares 1,621,987 2,057,277 138,791 160.918 171,819 141,663 175,633 130,454 132,574 125,435 3 Net sales3 169,906 222,038 4,621 9,337 34,946 6,699 -13,085 21,873 25,787 14,650 4 Assets4 5,233,191 5,123,747 4,993,008 5,123,747 5,280,222 4,879,229 4,594,182 4,910,568 4,956,982 4,887,681 5 Cash5 219,189 277,386 300,133 277,386 280,472 274,077 241,518 247,169 237,487 240,954 6 Other 5,014,002 4,846,361 4,692,875 4,846,361 4,999,750 4,605,152 4,352,664 4,663,399 4,719,495 4,646,727 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 1999r 2000r 2001 AAccccoouunntt 11999988rr 11999999rr 22000000rr Q3 Q4 QL Q2 Q3 Q4 QIR Q2 1 Profits with inventory valuation and capital consumption adjustment 777.4 825.2 876.4 800.2 857.6 870.3 892.8 895.0 847.6 789.8 n.a. 2 Profits before taxes 721.1 776.3 845.4 765.8 825.0 844.9 862.0 858.3 816.5 755.7 n.a. 3 Profits-tax liability 238.8 253.0 271.5 250.7 267.3 277.0 280.4 274.9 253.5 236.8 n.a. 4 Profits after taxes 482.3 523.3 573.9 515.1 557.7 567.8 581.6 583.4 563.0 518.9 n.a. 5 Dividends 348.7 343.5 379.6 342.2 349.6 361.5 373.7 386.2 397.0 405.2 412.3 6 Undistributed profits 133.6 179.8 194.3 172.9 208.1 206.3 207.9 197.2 165.9 113.7 n.a. 7 Inventory valuation 18.3 -2.9 -12.4 -17.7 -21.0 -23.8 -14.8 -3.6 -7.3 -1.9 n.a. 8 Capital consumption adjustment 38.0 51.7 43.4 52.1 53.6 49.2 45.5 40.4 38.4 36.0 31.8 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 2 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 1? 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 Dec. Jan. Feb. Mar. Apr. May Seasonally adjusted 1 Total 875.8 993.9 1,145.2 1,145.2 1,156.7 1,159.7 1,158.6 l,171.4r 1,171.2 2 Consumer 352.8 385.3 439.3 439.3 443.8 447.1 449.8 456.3' 454.2 3 Real estate 131.4 154.7 174.9 174.9 177.7 179.0 177.7 182.5 184.4 4 Business . 391.6 453.9 531.0 531.0 535.2 533.6 531.1 532.6 532.5 Not seasonally adjusted 5 Total 884.0 1,003.2 1,156.0 1,156.0 1,156.7 1,159.7 1,163.1 l,173.7r 1,174.4 6 Consumer 356.1 388.8 443.4 443.4 443.9 445.1 445.7 451.0r 451.7 7 Motor vehicles loans 103.1 114.7 122.5 122.5 117.5 118.5r 118.9r 127.0r 127.7 8 Motor vehicle leases 93.3 98.3 102.9 102.9 103.3 102.4r 101.3r 101.9r 101.7 9 Revolving2 32.3 33.8 38.3 38.3 37.1 36.9r 35.6' 36.0' 37.5 10 Other3 33.1 33.1 32.4 32.4 32.4 32.0r 31.3r 28.2r 26.6 Securitized assets4 11 Motor vehicle loans 54.8 71.1 97.1 97.1 103.9 105.2 108.1 106.1 107.8 12 Motor vehicle leases 12.7 9.7 6.6 6.6 6.3 6.9 6.6 7.0 6.9 13 Revolving 8.7 10.5 27.5 27.5 27.6 27.6 27.6 28.8 27.8 14 Other 18.1 17.7 16.0 16.0 15.8 15.5 16.2 16.0r 15.7 15 Real estate 131.4 154.7 174.9 174.9 177.7 179.0 177.7 182.5 184.4 16 One- to four-family 75.7 88.3 105.4 105.4 108.2 109.5' 108.1' 112.3r 114.4 17 Other 26.6 38.3 42.9 42.9 43.2 43.4 43.8r 43.8 43.9 Securitized real estate assets4 18 One- to four-family 29.0 28.0 24.7 24.7 24.4 24.2 23.9 23.8r 23.6 19 Other .1 .2 1.9 1.9 1.9 1.9 1.9 2.6 2.6 20 Business 396.5 459.6 537.7 537.7 535.1 535.6 539.7 540.2 538.2 21 Motor vehicles 79.6 87.8 95.2 95.2 93.6 93.6 91.9r 91.0 90.8 22 Retail loans 28.1 33.2 31.0 31.0 30.8 30.7r 30.5r 29.9r 29.8 23 Wholesale loans5 32.8 34.7 39.6 39.6 38.2 37.6r 35.8r 35.3' 35.2 24 Leases 18.7 19.9 24.6 24.6 24.6 25.3r 25.6r 25.8' 25.8 25 Equipment 198.0 221.9 267.3 267.3 265.6 262.5 264.6 267.5 268.0 26 Loans 50.4 52.2 56.2 56.2 56.3 55.6r 57.T 57.1' 57.1 27 Leases 147.6 169.7 211.1 211.1 209.3 206.9r 207.5r 210.4' 210.9 28 Other business receivables6 69.9 95.5 108.6 108.6 110.4 114.5r 115.2r 113.5' 112.1 Securitized assets4 29 Motor vehicles 29.2 31.5 37.8 37.8 37.3 37.2 40.0 40.3 40.0 30 Retail loans 2.6 2.9 3.2 3.2 3.1 2.9 2.8 3.1 3.0 31 Wholesale loans 24.7 26.4 32.5 32.5 32.1 31.7 34.5 34.6 34.3 .32 Leases 1.9 2.1 2.2 2.2 2.2 2.6 2.6 2.6 2.7 33 Equipment 13.0 14.6 23.1 23.1 22.5 22.2 22.5 22.2 21.6 34 Loans 6.6 7.9 15.5 15.5 14.7 14.5 14.6 14.4 13.9 35 Leases 6.4 6.7 7.6 7.6 7.8 7.8 7.9 7.8 7.7 36 Other business receivables6 6.8 8.4 5.6 5.6 5.6 5.6 5.6 5.7 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 tl September 2001 1.53 MORTGAGE MARKETS Mortgages on New Homes Millions of dollars except as noted 2000 2001 IItteemm 11999988 11999999 22000000 Dec. Jan. Feb. Mar. Apr. May June Terms and yields in primary and secondary markets PRIMARY MARKETS Terms' 1 Purchase price (thousands of dollars) 195.2 210.7 234.5 250.0 238.7 245.0 244.5 240.8 241.4 250.6 2 Amount of loan (thousands of dollars) 151.1 161.7 177.0 187.3 181.6 185.4 182.9 181.5 181.4 188.7 3 Loan-to-price ratio (percent) 80.0 78.7 77.4 76.5 78.2 77.9 77.2 77.6 77.6 77.3 4 Maturity (years) 28.4 28.8 29.2 29.1 29.4 29.0 28.8 28.5 28.6 28.7 5 Fees and charges (percent of loan amount)2 .89 .77 .70 .73 .71 .70 .66 .71 .69 .66 Yield (percent per year) 6 Contract rate1 6.95 6.94 7.41 7.29 7.09 6.99 6.94 6.96 7.02 7.02 7 Effective rate1'3 7.08 7.06 7.52 7.40 7.20 7.10 7.04 7.07 7.12 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 6.83 6.57 6.61 6.41 6.53 6.61 6.55 Activity in secondary markets FEDERAL NATIONAL MORTGAGE ASSOCIATION Mortgage holdings (end of period) 11 Total 414,515 523,941 610,122 610,122 623,950 632,850 n.a. n.a. n.a. n.a. 12 FHA/VA insured 33,770 55,318 61.539 61,539 62,970 63,337 n.a. n.a. n.a. n.a. 13 Conventional 380,745 468,623 548,583 548,583 560,980 569,513 n.a. n.a. n.a. n.a. 14 Mortgage transactions purchased (during period) 188,448 195,210 154,231 17,193 20,598 17,230 20,899 24,015 16,825 24,430 Mortgage commitments (during period) 15 Issued7 193,795 187,948 163,689 20,120 27,325 25,471 n.a. n.a. n.a. n.a. 16 To sell8 1,880 5,900 11,786 1,436 766 835 n.a. n.a. n.a. n.a. FEDERAL HOME LOAN MORTGAGE CORPORATION Mortgage holdings (end of period)8 1/ Total 255,010 324,443 385.693 385,693 391,679 407,086 421,655 430,960 437,582 443,810 18 FHA/VA insured 785 1,836 3,332 3,332 3,307 3,319 3,329 2,878 2,785 2,738 19 Conventional 254,225 322,607 382,361 382,361 388,372 403,767 418,326 428,082 434,797 441,072 Mortgage transactions (during period) 20 Purchases 267,402 239,793 174,043 24,313 15,658 16,536 24,648 n.a. n.a. n.a. 21 Sales 250,565 233,031 166,901 22,277 15,364 15,549 23,367 31,219 33,670 38,133 22 Mortgage commitments contracted (during period)9 281,899 228,432 169,231 21,780 18,685 17,664 26,682 32,758 39,897 37,312 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 11999977 11999988 11999999 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 Farm 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 banks" 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 institutions3 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 15 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 407,000 563,546 655,533 661,252 679,527 700,792 739,506 771,106 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 tl September 2001 1.55 CONSUMER CREDIT1 Millions of dollars, amounts outstanding, end of period 2000 2001 HHoollddeerr aanndd ttyyppee ooff ccrreeddiitt 11999988 11999999 22000000 Dec. Jan. Feb. Mar. Apr/ May Seasonally adjusted 1 Total 1,301,023 1,393,657 1,531,469 1,531,469 1,548,486 1,562,937 l,571,588r 1,584,383 1,591,239 2 Revolving 560,504 595,610 663,830 663,830 669,780 681,384 689,462r 697,636 701,101 3 Nonrevolving2 740,519 798,047 867,639 867,639 878,706 881,553 882,126r 886,746 890,137 Not seasonally adjusted 4 Total 1,331,742 1,426,151 1,566,457 1,566,457 1,560,357 1,558,086 l,559,178r 1,570,232 1,576,531 By major holder 5 Commercial banks 508,932 499,758 541,470 541,470 539,796 535,137 534,545 540,686 543,162 6 Finance companies 168,491 181,573 193,189 193,189 187,029 187,493 185,862r 191,028 191,539 7 Credit unions 155,406 167,921 184,434 184,434 184,120 183,548 182,918 184,280 185,971 8 Savings institutions 51,611 61,527 64,557 64,557 64,667 64,777 64,887 64,950 65,014 9 Nonfinancial business 74,877 80,311 82,662 82,662 77,685 73,020 71,757 71,511 70,010 10 Pools of securitized assets3 372,425 435,061 500,145 500,145 507,060 514,111 519,209r 517,777 520,835 By major type of credit4 11 Revolving 586,528 623,245 693,645 693,645 681,812 682,143 682,422r 690,420 693,679 12 Commercial banks 210,346 189,352 218,063 218,063 211,006 208,192 208,924 215,207 217,438 13 Finance companies 32,309 33,814 38,251 38,251 37,098 36,938 35,626 36,044 37,509 14 Credit unions 19,930 20,641 22,226 22,226 21,714 21,415 20,902 21,068 21,226 15 Savings institutions 12,450 15,838 16,560 16,560 16,701 16,842 16,983 16,975 16,968 16 Nonfinancial business 39,166 42,783 42,430 42,430 38,934 35,290 34,150 33,815 32,690 17 Pools of securitized assets3 272,327 320,817 356,114 356,114 356,359 363,466 365,837r 367,310 367,849 18 Nonrevolving 745,214 802,906 872,812 872,812 878,545 875,943 876,756r 879,812 882,851 19 Commercial banks 298,586 310,406 323,407 323,407 328,790 326,945 325,621 325,478 325,724 20 Finance companies 136,182 147,759 154,938 154,938 149,931 150,555 150,236r 154,985 154,030 21 Credit unions 135,476 147,280 162,208 162,208 162,406 162,133 162,016 163,212 164,745 22 Savings institutions 39,161 45,689 47,997 47,997 47,966 47,935 47,904 47,975 48,046 23 Nonfinancial business 35,711 37,528 40,232 40,232 38,750 37,729 37,607 37,695 37,321 24 Pools of securitized assets3 100,098 114,244 144,031 144,031 150,701 150,645 153,372r 150,468 152,986 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 Nov. Dec. Jan. Feb. Mar. Apr. May INTEREST RATES Commercial banks2 1 48-month new car 8.72 8.44 9.34 9.63 n.a. n.a. 9.17 n.a. n.a. 8.67 2 24-month personal 13.74 13.39 13.90 14.12 n.a. n.a. 13.71 n.a. n.a. 13.28 Credit card plan 3 All accounts 15.71 15.21 15.71 15.99 n.a. n.a. 15.66 n.a. n.a. 15.07 4 Accounts assessed interest 15.59 14.81 14.91 15.23 n.a. n.a. 14.61 n.a. n.a. 14.63 Auto finance companies 5 New car 6.30 6.66 6.61 5.41 7.45 7.29 7.19 6.80 6.80 6.56 6 Used car 12.64 12.60 13.55 13.66 13.58 13.11 13.34 13.19 12.82 12.57 OTHER TERMS3 Maturity (months) 1 New car 52.1 52.7 54.9 5577..33 5555..22 54.3 55.5 55.6 56.3 57.0 8 Used car 53.5 55.9 57.0 56.8 56.6 57.8 58.0 58.0 57.9 57.8 Loan-to-value ratio 9 New car 92 92 92 93 91 90 91 91 91 92 10 Used car 99 99 99 100 100 98 99 100 100 100 Amount financed (dollars) 11 New car 19,083 19,880 20,923 22,443 2211,,886677 21,315 21,993 22,131 21,914 21,871 12 Used car 12,691 13,642 14,058 14,325 14,591 14,155 14,095 14,214 14,347 14,350 1. The Board's series on amounts of credit covers most short- and intermediate-term credit 2. Data are available for only the second month of each quarter, extended to individuals. Data in this table also appear in the Board's G.19 (421) monthly 3. At auto finance companies, statistical release. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.57 FUNDS RAISED IN U.S. CREDIT MARKETS1 Billions of dollars; quarterly data at seasonally adjusted annual rates 1999 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr Q3 Q4 Qi 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 2 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 n 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 l? Home 181.0 242.1 252.3 379.7 426.1 473.6 391.3 336.5 482.4 428.4 413.5 406.3 13 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 15 Farm 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 Household 363.5 357.8 337.1 472.1 532.4 574.8 492.2 516.2 632.7 550.5 565.2 559.9 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 19 Corporate 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 21 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 25 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 26 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 US. government .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 .0 34 Private 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 23.5 30.8 138.4 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 42 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

A108 Domestic Nonfinancial Statistics tl September 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 Ql Q2 Q3 Q4 Ql All sectors 52 Total net borrowing, all sectors 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 53 Open market paper 74.3 102.6 184.1 193.1 229.9 180.7 556.6 218.4 199.8 128.4 283.6 -352.1 54 US. government securities 348.6 376.4 236.0 418.3 520.7 582.7 516.1 33.0 -43.5 283.8 277.6 450.3 55 Municipal securities -48.2 2.6 71.4 96.8 68.2 71.3 52.5 8.9 34.0 29.8 68.6 94.3 56 Corporate and foreign bonds 344.1 357.0 422.4 550.4 455.2 421.2 115.9 367.0 359.5 444.6 396.4 855.4 57 Bank loans n.e.c 114.7 92.1 128.2 145.0 68.9 99.8 55.2 147.7 174.2 42.9 92.5 22.6 58 Other loans and advances 70.1 62.5 102.8 158.5 162.0 212.8 131.7 219.2 251.7 -48.3 159.0 59.7 59 Mortgages 201.1 283.5 332.6 498.8 592.0 642.7 579.5 482.0 650.4 563.4 569.9 546.3 60 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 Funds raised through mutual funds and corporate equities 61 Total net issues 131.7 231.7 181.2 101.6 161.6 129.6 178.1 366.3 142.4 170.9 -170.9 127.4 62 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 63 Nonfinancial corporations -58.3 -69.5 -114.4 -267.0 -143.5 -128.4 -55.0 61.2 -245.2 -87.7 -394.8 -33.9 64 Foreign shares purchased by U.S. residents 50.4 82.8 57.6 101.2 114.4 121.7 71.3 63.3 180.1 61.1 90.5 79.8 65 Financial corporations -7.8 -19.2 -27.1 -7.3 2.4 8.8 -11.1 -64.2 -30.2 -62.3 -37.8 -23.2 66 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 1. Data in this table also appear in the Board's Z.l (780) quarterly statistical release, tables F.2 through F.4. For ordering address, see inside front cover. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Flow of Funds A3 7 1.58 SUMMARY OF FINANCIAL TRANSACTIONS1 Billions of dollars except as noted; quarterly data at seasonally adjusted annual rates 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 7 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 3 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 5 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 Rest of the world 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 Financial sectors 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 17 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 13 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 Savings institutions -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 Credit unions 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 20 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 21 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 1.1 80.6 58.8 73 Money market mutual funds 86.5 88.8 87.5 244.0 182.0 224.8 354.5 208.8 -156.2 244.9 297.9 357.7 7,4 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 7.6 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 27 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 29 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 6.6 --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 Money market fund shares 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 88.8 48 Security credit 26.7 52.4 111.0 103.3 104.3 29.7 321.3 489.9 -86.2 102.2 57.9 -118.8 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 Pension fund reserves 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 -2.2 -1.8 -.7 .9 --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 11.9 -10.7 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. 1 (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 NonfinancialS tatistics tl September 2001 1.59 SUMMARY OF CREDIT MARKET DEBT OUTSTANDING1 Billions of dollars, end of period 1999 2000 2001 TTrraannssaaccttiioonn ccaatteeggoorryy oorr sseeccttoorr 11999966 11999977 11999988 11999999 Q3 Q4 Ql Q2 Q3 Q4 Ql Nonfinancial sectors l Total credit market debt owed by domestic nonfinancial sectors 14,443.7 15,246.8 16,258.2 17,381.6 17,052.5 17,381.6 17,609.4 17,784.7 17,984.2 18,263.4 18,506.5 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 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 1 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 18,314.0 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 7,340.1 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 US. 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 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 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 57 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 A3 7 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 QI Q2 Q3 Q4 QI 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 Household 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 6 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 Federal government 200.2 205.4 219.1 258.0 260.7 258.0 259.6 261.6 262.7 265.2 268.3 8 Rest of the world 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 Financial sectors 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 Monetary authority 393.1 431.4 452.5 478.1 489.3 478.1 501.9 505.1 511.5 511.8 523.9 11 Commercial banking 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 1? U.S.-chartered banks 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 Credit unions 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 Private pension funds 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 Mutual funds 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 75 Closed-end funds 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 27 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 ?9 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 Brokers and dealers 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 45.3 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 Treasury currency 18.9 19.3 19.9 20.9 20.9 20.9 21.4 22.1 23.2 23.2 22.9 38 Foreign deposits 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 Mutual fund shares 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 Security credit 358.1 469.1 572.3 676.6 593.1 676.6 795.4 775.5 800.4 817.6 784.5 47 Life insurance reserves 610.6 665.0 718.3 783.9 756.2 783.9 801.0 806.5 815.5 819.4 817.0 48 Pension fund reserves 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 Trade payables 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 Taxes payable 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 21.4 21.6 21.4 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 noncorporate 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 -9.1 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 Taxes payable 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 -22.3 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 tl September 2001 2.10 NONFINANCIAL BUSINESS ACTIVITY Selected Measures Monthly data seasonally adjusted, and indexes 1992=100, except as noted 2000 2001 MMeeaassuurree 11999988rr 11999999rr 22000000 Oct. Nov/ Dec. Jan. Feb.r Mar.r Apr.1" May Junep 1 Industrial production' 134.0 139.6 147.5 148.7 148.2 147.3 146.0 145.4 145.0 144.2 143.5 142.5 Market groups 2 Products, total 127.2 131.2 136.2 136.3 136.3 136.0 135.0 134.6 134.5 133.6 133.1 132.4 3 Final, total 129.3 133.3 138.8 138.8 138.8 139.0 137.8 137.7 137.9 136.9 136.6 135.7 4 Consumer goods 118.4 120.8 123.0 122.7 122.4 123.1 121.8 122.3 122.4 121.7 121.7 121.5 5 Equipment 147.1 153.8 166.1 169.1 169.9 168.9 168.0 166.2 166.8 165.0 164.0 161.9 6 Intermediate 121.0 125.1 128.7 128.7 128.5 126.8 126.7 125.5 124.4 123.9 122.8 122.5 7 Materials 145,7 154.5 167.8 171.1 169.9 167.8 165.9 165.0 163.9 163.4 162.2 160.7 Industry groups 8 Manufacturing 138,2 144.8 153.6 154.9 154.1 152.6 151.3 150.7 150.0 149.3 148.6 147.4 9 Capacity utilization, manufacturing (percent)2. . 81.3 80.5 81.3 81.2 80.5 79.3 78.4 77.9 77.3 76.8 76.3 75.5 10 Construction contracts3 122.7 135.2 142.1 151.0 144.0 140.0 152.0 149.0 138.0 141.0 141.0 147.0 11 Nonagricultural employment, total4 115.9 118.6 121.0r 121.7r 121.8 121.9r 122.0r 122.1 122.2 122.0 122.0 122.0 12 Goods-producing, total 109.4 109.7 110.5r 110.7r 110.7 110.6r 110.3r 110.3 110.2 109.4 109.0 108.5 13 Manufacturing, total 103.9 102.4 101.8r 101.6r 101.5 101.3r 100.8r 100.5 100.1 99.5 98.7 98.1 14 Manufacturing, production workers 105.4 103.7 102.9r 102. r 101.8 101.4r 100.9r 100.3 99.7 99.0 98.2 97.4 lb Service-producing 117.7 121.0 123.9r 124.7r 124.8 125.0r 125.r 125.3 125.4 125.4 125.6 125.6 16 Personal income, total 137.8 144.3 154.3r 157.3r 157.9 158.9r 159.6r 160.3 161.0 161.4 161.7 162.2 17 Wages and salary disbursements 140.6 149.9 162.2r 165.8r 166.8 167.6r 168.4r 169.4 170.1 170.7 170.7 171.4 18 Manufacturing 129.7 134.0 142.3r 145.61" 146.3 146.2r 146.1r 146.3 146.3 146.8 145.5 145.1 19 Disposable personal income5 133.7 139.2 147.9r 150.5' 151.1 152.0r 152.8r 153.4 154.1 154.6 155.0 155.4 20 Retail sales5 142.8 155.1 167.0r 168.7r 167.8 167.8r no.r 170.4 169.6 172.2 172.4 172.2 Prices6 21 Consumer (1982-84=100) 163.0 166.6 172.2 174.0 174.1 174.0 175.1 175.8 176.2 176.9 177.7 178.0 22 Producer finished goods (1982= 100) 130.7 133.0 138.0 140.1 140.0 139.7 141.2 141.4 140.9 141.7 142.5 142.1 1. Data in this table appear in the Board's G. 17 (419) monthly statistical release. The data 3. Index of dollar value of total construction contracts, including residential, nonresidenare also available on the Board's web site, http://www.federalreserve.gov/releases/gl7. The tial, and heavy engineering, from McGraw-Hill Information Systems Company, F.W. Dodge latest historical revision of the industrial production index and the capacity utilization rates Division. was released in December 2000. The recent annual revision is described in an article in the 4. Based on data from the U.S. Department of Labor, Employment and Earnings. Series March 2001 issue of the Bulletin. For a description of the methods of estimating industrial covers employees only, excluding personnel in the armed forces. production and capacity utilization, see "Industrial Production and Capacity Utilization: 5. Based on data from U.S. Department of Commerce, Survey of Current Business. Historical Revision and Recent Developments," Federal Reserve Bulletin, vol. 83 (February 6. Based on data not seasonally adjusted. Seasonally adjusted data for changes in the price 1997), pp. 67-92, and the references cited therein. For details about the construction of indexes can be obtained from the U.S. Department of Labor, Bureau of Labor Statistics, individual industrial production series, see "Industrial Production: 1989 Developments and Monthly Labor Review. Historical Revision," Federal Reserve Bulletin, vol. 76 (April 1990), pp. 187-204. NOTE. Basic data (not indexes) for series mentioned in notes 4 and 5, and indexes for series 2. Ratio of index of production to index of capacity. Based on data from the Federal mentioned in notes 3 and 6, can also be found in the Survey of Current Business. Reserve, U.S. Department of Commerce, and other sources. 2.11 LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT Thousands of persons; monthly data seasonally adjusted 2000 2001 CCaatteeggoorryy 11999988 11999999 22000000 Nov.1" Dec.r Jan.r Feb.1" Mar.r Apr.r Mayr Junep 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 Number 6,210 5,880 5,655 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 11 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 Q3 Q4 Qir Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Output (1992=100) Capacity (percent of 1992 output) Capacity utilization rate (percent)2 1 Total industry 148.4 148.1 145.5 143.4 180.1 182.1 183.7 184.9 82.4 81.3 79.2 77.6 2 Manufacturing 154.4 153.8 150.7 148.4 189.2 191.5 193.5 194.8 81.7 80.3 77.9 76.2 3 Primary processing3 180.3 178.7 172.6 169.6 211.2 216.0 220.0 222.4 85.4 82.7 78.4 76.2 4 Advanced processing4 140.3 140.2 138.5 136.7 175.2 176.2 177.2 178.0 80.1 79.5 78.2 76.8 Durable goods 196.7 196.5 191.6 188.8 238.3 243.6 248.1 251.2 82.5 80.7 77.2 75.2 6 Lumber and products 117.0 113.2 109.6 111.6 147.9 148.4 148.7 149.0 79.1 76.3 73.7 74.9 7 Primary metals 133.4 127.5 121.1 120.6 153.4 153.5 153.5 153.5 87.0 83.1 78.8 78.6 8 Iron and steel 130.5 121.5 114.9 119.0 153.4 153.6 153.6 153.2 85.1 79.1 74.8 77.7 9 Nonferrous 137.0 134.7 128.3 122.7 153.4 153.4 153.5 153.8 89.3 87.8 83.6 79.8 10 Industrial machinery and equipment 257.3 261.9 256.3 248.1 311.1 317.3 322.5 326.5 82.7 82.5 79.5 76.0 11 Electrical machinery 581.1 604.0 593.0 558.5 639.1 694.1 741.7 773.0 90.9 87.1 80.0r 72.3 17. Motor vehicles and parts 170.8 159.7 147.5 159.0 209.2 210.1 210.9 211.7 81.7 76.0 69.9 75.1 13 Aerospace and miscellaneous transportation equipment , . . 93.5 94.8 94.1 93.9 130.4 130.2 130.0 130.1 71.7 72.8 72.3 72.1 14 Nondurable goods 116.2 115.3 113.6 111.8 144.4 144.6 144.7 144.6 80.5 79.7 78.5 77.3 15 Textile mill products 99.8 94.7 92.7 88.7 123.3 122.8 122.0 120.9 80.9 77.1 76.0r 73.4 16 Paper and products 114.0 114.9 110.8 111.5 137.5 137.9 138.3 138.6 82.9 83.3 80.1 80.5 17 Chemicals and products 125.4 124.5 121.9 118.9 164.1 164.8 165.0 165.0 76.4 75.5 73.8r 72.1 18 Plastics materials 137.6 131.0 130.9 124.7 151.9 152.3 152.7 153.2 90.5 86.0 85.7 81.4 19 Petroleum products 117.3 116.0 115.5 115.8 123.2 123.1 123.1 123.3 95.3 94.3 93.8 94.0 70 Mining 100.6 100.3 101.7 102.6 116.3 115.8 115.3 114.9 86.6 86.6 88.2 89.2 71 Utilities 121.0 123.7 122.6 119.0 133.4 134.5 135.7 137.0 90.7 92.0 90.4r 86.8 22 Electric 123.9 127.5 125.4 123.4 132.3 133.8 135.3 136.8 93.7 95.3 92.7 90.3 1973 1975 Previous cycle5 Latest cycle6 2000 2001 High Low High Low High Low June Jan. Feb. Mar.r Apr.r May June15 Capacity utilization rate (percent)2 1 Total industry 89.2 72.6 87.3 71.1 85.4 78.1 82.7 79.7 79.2 78.7 78.1 77.6 77.0 2 Manufacturing 88.5 70.5 86.9 69.0 85.7 76.6 82.0 78.4 77.9 77.3 76.8 76.3 75.5 3 Primary processing' 91.2 68.2 88.1 66.2 88.9 77.7 86.5 79.2 78.6 77.4 77.1 76.3 75.4 4 Advanced processing4 87.2 71.8 86.7 70.4 84.2 76.1 79.9 78.6 78.1 77.9 77.2 76.9 76.2 5 Durable goods 89.2 68.9 87.7 63.9 84.6 73.1 82.8 77.9 77.0 76.8 75.9 75.4 74.2 6 Lumber and products 88.7 61.2 87.9 60.8 93.6 75.5 80.4 72.9 73.3 74.8 74.4 75.7 74.7 7 Primary metals 100.2 65.9 94.2 45.1 92.7 73.7 89.0 80.7 79.0 76.8 79.3 78.6 77.9 8 Iron and steel 105.8 66.6 95.8 37.0 95.2 71.8 88.5 75.5 75.2 73.8 77.0 78.4 77.6 9 Nonferrous 90.8 59.8 91.1 60.1 89.3 74.2 89.7 86.9 83.6 80.3 82.1 78.9 78.3 10 Industrial machinery and equipment 96.0 74.3 93.2 64.0 85.4 72.3 81.7 80.5 79.1 78.9 77.3 76.0 74.7 11 Electrical machinery 89.2 64.7 89.4 71.6 84.0 75.0 91.5 82.9 80.0 77.0 74.3 72.3 70.1 12 Motor vehicles and parts 93.4 51.3 95.0 45.5 89.1 55.9 84.5 65.8 69.9 74.1 73.5 76.7 75.0 13 Aerospace and miscellaneous transportation equipment 78.4 67.6 81.9 66.6 87.3 79.2 71.6 72.5 71.9 72.5 72.4 72.1 71.9 14 Nondurable goods 87.8 71.7 87.5 76.4 87.3 80.7 80.9 78.8 78.8 77.9 77.7 77.2 77.0 15 Textile mill products 91.4 60.0 91.2 72.3 90.4 77.7 83.3 76.0 76.0 76.0 75.2 72.6 72.5 16 Paper and products 97.1 69.2 96.1 80.6 93.5 85.0 86.5 81.0 81.6 77.8 82.1 79.9 79.4 17 Chemicals and products 87.6 69.7 84.6 69.9 86.2 79.3 77.1 73.8 74.3 73.4 72.3 72.3 71.7 18 Plastics materials 102.0 50.6 90.9 63.4 97.0 74.8 93.5 83.9 88.2 85.0 82.7 81.2 80.3 19 Petroleum products 96.7 81.1 90.0 66.8 88.5 85.1 96.4 93.5 94.6 93.4 94.2 93.3 94.3 20 Mining 94.3 88.2 96.0 80.3 88.0 87.0 86.2 87.5 87.9 89.2 89.3 89.3 89.1 71 Utilities 96.2 82.9 89.1 75.9 92.6 83.4 91.7 91.7 89.8 89.6 87.8 86.1 86.6 22 Electric 99.0 82.7 88.2 78.9 95.0 87.1 95.0 94.0 91.6 92.4 92.0 89.2 89.6 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 tl September 2001 2.13 INDUSTRIAL PRODUCTION Indexes and Gross Value1 Monthly data seasonally adjusted 1992 2000 2001 pro- 2000 GGrroouupp por- avg. tion June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar.r Apr.r May Junep Index (1992= 100) MAJOR MARKETS 1 Total index 100.0 147.5 147.9 147.6 148.6 149.0 148.7 148.2 147.3 146.0 145.4 145.0 144.2 143.5 142.5 2 Products 60.5 136.2 136.0 135.8 136.6 136.7 136.3 136.3 136.0 135.0 134.6 134.5 133.6 133.1 132.4 3 Final products 46.3 138.8 138.3 138.1 139.2 139.3 138.8 138.8 139.0 137.8 137.7 137.9 136.9 136.6 135.7 4 Consumer goods, total 29.1 123.0 124.2 122.9 123.8 123.8 122.7 122.4 123.1 121.8 122.3 122.4 121.7 121.7 121.5 5 Durable consumer goods 6.1 160.8 164.4 158.7 160.0 162.8 157.3 154.3 153.4 148.9 150.8 153.6 153.4 155.1 153.3 6 Automotive products 2.6 153.2 157.8 149.4 153.8 156.7 148.0 143.6 140.7 133.8 138.2 145.4 145.1 148.8 146.8 7 Autos and trucks 1.7 166.9 174.8 160.5 169.8 172.7 159.1 153.0 144.1 136.2 143.5 154.9 154.9 162.2 159.4 8 Autos, consumer .9 114.0 118.1 113.6 120.3 120.5 107.8 103.0 94.3 99.4 100.3 104.0 102.7 105.2 104.0 9 Trucks, consumer .7 221.6 233.2 209.8 221.8 227.1 212.0 204.3 194.7 175.5 188.6 207.1 208.2 219.8 215.6 10 Auto parts and allied goods .... .9 131.7 131.6 131.6 129.1 132.1 130.2 128.2 133.8 128.4 128.7 130.1 129.2 128.0 127.1 11 Other 3.5 167.1 169.8 166.7 165.2 167.7 165.4 163.7 164.7 162.7 162.2 160.5 160.4 160.2 158.6 12 Appliances, televisions, and air conditioners 1.0 332.6 348.2 322.3 325.0 340.5 332.5 332.7 341.7 332.0 322.5 317.1 319.3 321.3 314.1 13 Carpeting and furniture .8 129.7 130.1 131.5 128.6 131.9 129.8 125.4 127.4 123.9 128.2 127.1 125.6 123.4 123.3 14 Miscellaneous home goods 1.6 120.4 120.5 121.3 119.7 118.1 117.5 117.1 115.5 116.5 115.4 114.7 114.9 115.2 114.4 15 Nondurable consumer goods 23.0 114.2 114.8 114.5 115.2 114.7 114.5 114.6 115.7 114.9 115.3 114.8 114.1 113.7 113.8 16 Foods and tobacco 10.3 110.7 110.8 111.0 111.4 110.5 110.4 110.7 110.1 110.3 110.7 110.1 109.7 109.4 109.0 17 Clothing 2.4 85.0 85.1 85.6 84.2 83.1 82.7 83.2 82.4 82.6 82.8 82.2 81.2 79.7 78.8 18 Chemical products 4.5 137.0 139.3 137.4 139.4 138.4 139.0 138.5 139.0 139.1 141.5 141.5 140.4 142.0 141.0 19 Paper products 2.9 111.1 111.6 112.4 112.4 112.4 113.8 112.5 112.2 113.7 111.1 110.9 111.5 110.2 111.7 20 Energy 2.9 116.3 117.0 114.9 117.1 118.4 115.5 117.3 126.1 119.0 119.2 118.6 116.2 114.7 116.6 21 Fuels .8 113.0 113.4 112.6 113.1 115.8 113.0 115.5 112.3 112.0 114.7 113.7 114.7 113.2 115.8 22 Residential utilities 2.1 117.9 118.5 115.6 119.0 119.1 116.2 117.6 134.5 122.8 121.3 121.0 116.2 114.8 116.3 23 Equipment 17.2 166.1 164.3 166.3 167.9 168.3 169.1 169.9 168.9 168.0 166.2 166.8 165.0 164.0 161.9 24 Business equipment 13.2 194.2 192.8 195.0 197.8 199.5 200.0 200.6 199.2 197.4 195.3 195.6 193.0 191.8 189.0 25 Information processing and related 5.4 312.2 307.0 313.9 322.1 327.2 332.3 336.7 335.9 337.4 330.6 327.7 326.5 324.0 320.2 26 Computer and office equipment 1.1 1,157.6 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 1,304.4 1,301.7 1,300.4 1,300.5 27 Industrial 4.0 144.6 143.8 144.4 147.7 146.5 146.9 147.4 145.8 145.7 141.4 142.3 139.5 136.9 133.4 28 Transit 2.5 127.7 130.1 127.6 126.8 127.7 121.6 121.8 117.4 111.7 114.4 117.8 116.4 118.1 116.6 29 Autos and trucks 1.2 145.6 152.9 141.5 142.8 144.2 131.4 130.4 122.0 115.6 120.9 129.0 126.6 130.1 126.4 30 Other 1.3 145.7 142.8 148.1 144.8 149.3 154.2 148.6 153.5 149.3 153.9 151.2 146.3 146.5 146.7 31 Defense and space equipment 3.3 76.2 76.3 77.9 76.1 73.7 75.3 77.0 77.5 78.5 76.7 77.7 77.9 76.7 76.6 32 Oil and gas well drilling .6 131.8 130.8 136.2 137.1 132.8 136.5 138.9 139.1 146.7 147.9 150.7 151.2 152.2 150.6 33 Manufactured homes .2 116.2 121.9 116.8 115.5 109.3 98.8 90.9 83.5 73.5 81.9 83.2 85.0 89.6 87.0 34 Intermediate products, total 14.2 128.7 129.0 128.7 128.8 128.6 128.7 128.5 126.8 126.7 125.5 124.4 123.9 122.8 122.5 35 Construction supplies 5.3 143.2 143.4 143.8 142.7 143.1 142.3 141.6 140.6 140.7 139.9 140.5 139.6 138.7 137.6 36 Business supplies 8.9 120.1 120.5 119.8 120.6 120.0 120.7 120.7 118.5 118.4 117.0 114.9 114.6 113.5 113.6 37 Materials 39.5 167.8 169.4 169.0 170.5 171.3 171.1 169.9 167.8 165.9 165.0 163.9 163.4 162.2 160.7 38 Durable goods materials 20.8 227.6 230.3 230.5 233.8 235.7 235.0 232.9 230.3 226.6 225.2 223.6 222.3 221.7 218.9 39 Durable consumer parts 4.0 165.3 165.7 158.3 168.3 169.0 168.5 161.8 157.6 146.1 149.9 153.1 152.9 156.7 153.2 40 Equipment parts 7.6 478.3 486.2 499.9 505.7 512.1 515.9 521.4 522.3 517.5 514.9 508.2 497.5 492.2 483.7 41 Other 9.2 134.6 135.9 135.3 134.7 135.5 133.7 131.8 129.6 130.1 127.2 125.5 126.3 125.4 124.9 42 Basic metal materials 3.1 128.7 130.7 128.5 127.5 129.2 125.9 124.4 123.6 121.2 118.3 114.5 117.5 115.8 115.0 43 Nondurable goods materials 8.9 113.8 115.2 113.9 112.8 112.7 113.4 110.7 108.6 107.5 107.2 104.6 105.5 103.7 102.6 44 Textile materials 1.1 97.9 101.7 97.9 99.3 95.9 94.0 89.5 90.3 91.0 87.7 87.4 87.1 84.1 82.4 45 Paper materials 1.8 115.8 118.1 114.9 112.8 113.8 117.2 113.4 109.4 110.3 112.4 105.9 111.3 108.1 107.2 46 Chemical materials 3.9 117.0 118.4 117.0 116.8 116.3 115.9 113.7 109.8 108.5 108.2 105.9 104.4 103.2 101.9 47 Other 2.1 113.0 112.3 113.7 110.2 112.0 114.0 111.9 113.9 111.0 110.2 109.1 112.2 110.9 110.5 48 Energy materials 9.7 103.4 103.1 102.9 104.2 104.3 103.9 105.4 104.5 104.4 103.9 104.9 104.4 103.3 103.3 49 Primary energy 6.3 98.1 98.4 98.7 98.9 98.5 97.8 99.3 98.6 100.3 99.3 100.4 100.3 99.9 99.8 50 Converted fuel materials 3.3 114.3 112.4 110.8 115.1 116.6 117.2 118.7 117.3 111.8 113.1 113.7 111.7 108.5 108.8 SPECIAL AGGREGATES 51 Total excluding autos and trucks 97.1 147.2 147.5 147.5 148.4 148.7 148.8 148.4 147.8 146.6 145.9 145.1 144.3 143.4 142.5 52 Total excluding motor vehicles and parts 95.1 146.3 146.5 146.9 147.4 147.7 147.8 147.7 147.2 146.5 145.4 144.5 143.7 142.6 141.7 53 Total excluding computer and office equipment 98.2 140.4 141.0 140.5 141.4 141.6 141.2 140.8 139.9 138.6 138.1 137.7 136.9 136.2 135.3 54 Consumer goods excluding autos and trucks . 27.4 120.6 121.5 120.9 121.3 121.2 120.7 120.6 121.9 120.8 121.1 120.6 119.9 119.5 119.4 55 Consumer goods excluding energy 26.2 123.9 125.0 123.9 124.5 124.4 123.6 122.9 122.5 122.0 122.6 122.8 122.4 122.5 122.0 56 Business equipment excluding autos and trucks 12.0 200.1 197.6 201.5 204.5 206.3 208.5 209.4 208.9 207.7 204.6 203.8 201.2 199.4 196.8 57 Business equipment excluding computer and office equipment 12.1 158.4 157.6 158.6 160.3 161.2 161.2 161.5 159.9 158.4 156.5 156.8 154.5 153.5 151.0 58 Materials excluding energy 29.8 188.5 190.7 190.3 191.8 193.0 192.8 190.4 187.8 185.1 184.1 182.0 181.6 180.4 178.3 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 2000 Group S co IC de Z p p r o o r - - 2 a 0 v 0 g 0 . tion July Aug. Sept. Mar.r Apr.r May Junep Index (1992=100) MAJOR INDUSTRIES 59 Total index 100.0 147.5 147.9 147.6 148.6 149.0 148.7 148.2 147.3 146.0 145.4 145.0 144.2 143.5 142.5 60 Manufacturing 85.4 153.6 153.8 153.7 154.6 155.1 154.9 154.1 152.6 151.3 150.7 150.0 149.3 148.6 147.4 61 Primary processing 26.5 178.0 180.1 179.4 180.3 181.2 181.1 178.8 176.1 173.5 173.1 171.1 170.9 169.7 168.0 62 Advanced processing 58.9 139.3 139.4 139.5 140.5 140.8 140.5 140.5 139.6 139.0 138.4 138.3 137.3 136.8 135.9 63 Durable goods 45.0 193.4 194.6 194.7 196.9 198.4 197.6 196.7 195.1 192.3 191.1 191.3 189.9 189.4 187.0 64 Lumber and products "24 2.0 118.3 118.7 118.6 115.5 116.8 114.8 113.2 111.5 108.3 109.1 111.4 110.7 112.7 111.4 65 Furniture and fixtures 25 1.4 142.9 141.9 142.6 143.8 146.6 147.2 145.0 145.3 144.1 143.8 143.2 141.8 141.5 139.8 66 Stone, clay, and glass products 32 2.1 134.7 134.6 136.3 136.1 136.5 137.3 134.6 132.4 135.2 134.3 134.3 134.3 134.0 133.4 67 Primary metals 33 3.1 133.7 136.4 133.9 132.4 133.9 129.0 127.3 126.3 124.0 121.3 117.8 121.7 120.6 119.5 68 Iron and steel 331,2 1.7 131.1 135.5 129.9 129.7 131.9 123.7 122.0 118.7 116.0 115.5 113.3 118.0 120.1 118.8 69 Raw steel 331PT .1 120.9 128.2 126.4 123.9 117.7 115.6 106.3 104.6 108.3 109.1 109.2 101.3 109.0 109.3 70 Nonferrous 333-6,9 1.4 136.8 137.6 138.8 135.7 136.5 135.3 133.6 135.2 133.4 128.2 123.3 126.1 121.4 120.5 71 Fabricated metal products . . 34 5.0 135.6 135.7 136.1 136.3 136.0 136.0 134.7 132.9 133.5 130.3 129.8 128.9 128.1 126.3 72 Industrial machinery and equipment 35 8.0 252.8 250.9 253.9 257.9 260.0 261.5 261.9 262.3 258.4 255.0 255.7 251.4 248.0 245.0 73 Computer and office equipment 357 1.8 1,343.6 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 1,474.6 1,473.1 1,473.3 74 Electrical machinery 36 7.3 549.7 555.0 571.2 580.0 592.2 597.4 604.4 610.2 604.3 593.7 581.0 568.6 559.4 547.6 75 Transportation equipment. . . 37 9.5 131.0 133.5 128.0 132.4 132.4 129.2 126.8 122.8 116.0 119.8 124.5 123.9 127.1 125.4 76 Motor vehicles and parts . 371 4.9 170.5 176.1 163.1 173.9 175.5 167.2 160.1 151.8 138.6 147.4 156.5 155.4 162.4 159.0 77 Autos and light trucks . 371PT 2.6 153.0 160.1 147.8 156.4 158.8 145.8 140.1 131.5 125.9 131.9 141.8 141.6 147.9 145.4 78 Aerospace and miscellaneous transportation equipment 372-6,9 4.6 93.8 93.6 94.9 93.5 92.1 93.6 95.4 95.3 94.3 93.5 94.3 94.1 93.8 9933..66 79 Instruments 38 5.4 122.2 122.2 122.6 123.3 123.7 123.5 124.6 123.1 125.0 123.3 122.6 122.8 122.0 121.0 80 Miscellaneous 39 1.3 130.8 130.5 132.1 130.8 130.9 131.1 130.2 129.4 130.4 127.6 127.6 128.0 125.8 127.8 81 Nondurable goods 40.4 116.9 116.7 116.3 116.3 116.0 116.3 115.5 114.1 114.0 114.0 112.7 112.4 111.7 111.3 82 Foods 20 9.4 114.7 114.9 115.0 115.1 114.6 114.8 115.0 114.2 114.1 115.0 114.6 113.6 113.7 112.9 83 Tobacco products 21 1.6 95.3 93.8 95.8 96.6 94.5 93.7 93.1 94.2 95.2 93.7 92.2 93.8 92.3 93.4 84 Textile mill products 22 1.8 100.1 103.1 101.4 99.4 98.4 96.7 92.8 94.5 93.0 92.7 92.4 91.2 87.7 87.3 85 Apparel products 23 2.2 91.7 91.2 92.0 90.7 89.5 89.2 89.2 88.2 88.9 88.7 88.4 88.2 87.9 86.3 86 Paper and products 26 3.6 116.1 118.8 114.9 113.3 113.7 117.1 114.7 112.7 111.8 112.8 107.7 113.7 110.7 110.1 87 Printing and publishing .... 27 6.7 109.9 109.1 UO.O 110.4 110.9 111.6 111.2 109.2 109.6 107.7 106.2 105.5 104.5 105.1 88 Chemicals and products .... 28 9.9 128.3 125.9 124.8 125.9 125.4 125.8 124.8 122.9 121.8 122.6 121.2 119.3 119.3 118.2 89 Petroleum products 29 1.4 117.1 118.8 117.0 117.6 117.4 116.5 116.9 114.7 115.1 116.5 115.0 116.0 115.0 116.4 90 Rubber and plastic products . 30 3.5 142.3 143.5 144.4 142.1 141.9 141.3 139.1 137.3 138.5 137.3 136.5 135.7 135.0 134.9 91 Leather and products 31 .3 69.8 69.3 70.0 68.8 69.8 68.6 68.9 66.9 67.1 69.3 67.7 65.8 64.6 62.8 92 Mining 6.9 100.0 100.4 100.5 101.0 100.4 100.1 101.1 99.6 101.0 101.4 102.7 102.8 102.7 102.3 93 Metal 10 .5 97.4 97.5 92.9 95.8 99.3 96.3 93.7 99.5 94.6 91.7 85.4 88.8 86.1 84.9 94 Coal 12 1.0 108.9 113.6 110.3 109.3 107.0 110.2 108.6 106.1 115.2 110.7 116.6 116.8 116.5 115.2 95 Oil and gas extraction 13 4.8 95.0 94.8 95.7 96.3 95.7 95.1 96.6 95.2 96.1 96.7 97.7 97.7 97.7 97.4 96 Stone and earth minerals 14 .6 126.4 127.7 124.4 125.0 123.7 124.6 123.2 119.3 121.7 126.4 129.6 129.1 128.9 128.5 97 Utilities 7.7 120.4 121.7 119.1 122.1 121.7 120.0 121.9 129.1 124.0 121.8 122.0 120.0 118.0 119.0 98 Electric 491,3PT 6.2 123.9 124.8 121.1 126.1 124.7 124.2 127.3 131.2 126.7 123.9 125.5 125.3 122.0 123.0 99 Gas 491.2PT 1.6 109.3 110.5 111.0 108.4 110.5 105.8 104.5 120.2 113.7 112.9 109.7 102.8 104.2 105.6 SPECIAL AGGREGATES 100 Manufacturing excluding motor vehicles and parts 80.5 152.6 152.6 153.2 153.5 153.9 154.3 153.8 152.7 152.2 151.1 149.8 149.0 147.8 146.8 101 Manufacturing excluding computer and office equipment 83.6 145.4 145.8 145.4 146.2 146.5 146.2 145.4 143.9 142.7 142.2 141.5 140.8 140.1 139.0 102 Computers, communications equipment, and semiconductors 5.9 1,195.2 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 1,312.2 1,284.3 1,262.3 1,242.0 103 Manufacturing excluding computers and semiconductors 81.1 128.3 128.4 127.7 128.2 128.4 128.0 127.1 125.6 124.7 124.3 123.8 123.4 122.9 122.0 104 Manufacturing excluding computers, communications equipment, and semiconductors 79.5 125.1 125.3 124.5 124.9 125.0 124.6 123.6 122.1 121.1 120.8 120.4 120.0 119.6 118.7 Gross value (billions of 1992 dollars, annual rates) MAJOR MARKETS 105 Products, total 2,001.9 2,860.5 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 2,826.9 2,809.2 2,804.9 2,791.0 106 Final 1,552.1 2,203.4 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 2,186.0 2,170.4 2,170.9 2,158.4 107 Consumer goods 1,049.6 1,340.0 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 1,328.2 1,322.3 1,325.3 1,323.3 108 Equipment 502.5 865.7 867.3 872.8 880.8 883.3 880.9 883.3 874.9 864.8 859.8 866.4 855.5 852.2 839.9 109 Intermediate 449.9 656.7 663.9 661.8 661.5 660.2 661.0 658.6 651.2 649.9 644.5 640.4 638.2 633.6 632.1 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 tl September 2001 2.14 HOUSING AND CONSTRUCTION Monthly figures at seasonally adjusted annual rates except as noted 2000 2001 IItteemm 11999988 11999999 22000000 Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May Private residential real estate activity (thousands of units except as noted) NEW UNITS 1 Permits authorized 1,612 1,664 1,592 1,544 1,549 1,562 1,614 1,553 1,724 1,663 1,627 1,587 1,621 2 One-family 1,188 1,247 1,198 1,169 1,173 1,212 1,203 1,187 1,283 1,228 1,209 1,218 1,205 3 Two-family or more 425 417 394 375 376 350 411 366 441 435 418 369 416 4 Started 1,617 1,641 1,569 1,531 1,508 1,527 1,559 1,532 1,666 1,623 1,592 1,626 1,610 5 One-family 1,271 1,302 1,231 1,228 1,196 1.218 1,209 1,236 1,336 1,288 1,208 1,295 1,286 6 Two-family or more 346 339 338 303 312 309 350 296 330 335 384 331 324 7 Under construction at end of period1 971 953 934 975 971 971 969 965 985 989 1,002 1,006 1,006 8 One-family 659 648 623 659 658 659 655 652 669 675 676 682 683 9 Two-family or more 312 305 310 316 313 312 314 313 316 314 326 324 323 10 Completed 1,474 1,605 1,574 1,583 1,526 1,509 1,548 1,527 1,424 1,531 1,478 1,569 1,494 11 One-family 1,160 1,270 1,242 1,235 1,181 1,172 1,236 1,228 1,090 1,201 1,207 1,232 1,219 12 Two-family or more 315 335 332 348 345 337 312 299 334 330 271 337 275 13 Mobile homes shipped 374 348 250 249 231 213 196 176 164 177 179 183 188 Merchant builder activity in one-family units 14 Number sold 886 880 877 839 902 922 882 1,001 938 959 953 905 907 15 Number for sale at end of period1 300 315 301 304 301 301 304 297 295 295 289 290 290 Price of units sold (thousands of dollars)2 16 Median 152.5 161.0 169.0 166.6 171.5 176.3 174.7 162.0 171.3 169.1 166.3 174.6 172.7 17 Average 181.9 195.6 207.0 200.2 208.3 215.1 210.7 208.1 209.0 211.0 210.2 205.6 209.3 EXISTING UNITS (one-family) 18 Number sold 4,970 5,205 5,113 5,240 5,160 5,070 5,300 4,940 5,200 5,190 5,430 5,220 5,360 Price of units sold (thousands of dollars)2 19 Median 128.4 133.3 139.0 143.2 141.6 138.6 139.5 139.7 137.1 138.6 143.4 143.1 145.0 20 Average 159.1 168.3 176.2 183.0 178.6 176.9 176.5 178.5 175.8 174.6 179.5 179.9 183.6 Value of new construction (millions of dollars)3 CONSTRUCTION 21 Total f>ut in place 703,533 763,914 817,130 803,968 815,410 820,805 826,746 838,731 859,815 869,334 869,140 868,703 867,303 22 Private 550,754 595,667 641,269 630,656 638,851 644,836 651,066 660,849 673,715 681,826 681,176 674,856 663,072 23 Residential 314,514 349,560 375,268 364,039 364,372 370,256 374,281 379,593 386,088 398,863 395,080 392,919 393,706 24 Nonresidential 236,240 246,107 266,001 266,617 274,479 274,580 276,785 281,256 287,627 282,963 286,096 281,937 269,366 25 Industrial buildings 40,547 32,794 31,984 32,623 31,384 32,125 33,265 31,398 35,878 33,386 34,823 34,698 31,338 26 Commercial buildings 95,760 104,531 116,988 119,139 121,349 121,760 120,587 125,234 125,402 124,568 128,792 125,438 114,419 27 Other buildings 39,609 40,906 44,505 45,544 45,020 45,645 45,628 45,707 46,567 46,264 47,117 46,039 46,539 28 Public utilities and other 60,324 67,876 72,523 69,311 76,726 75,050 77,305 78,917 79,780 78,745 75,364 75,762 77,070 29 Public 152,779 168,247 175,861 173,311 176,559 175,969 175,680 177,883 186,100 187,508 187,964 193,847 204,231 30 Military 2,539 2,142 2,334 2,386 2,509 1,883 2,629 2,107 2,270 2,342 2,131 2,534 2,280 31 Highway 45,251 52,024 52,851 52,777 53,923 48,764 48,858 50,189 55,368 56,204 57,443 58,188 60,486 32 Conservation and development 5,415 5,995 6,043 5,568 6,425 6,815 5,789 6,339 7,381 7,838 7,573 6,343 6,994 33 Other 99,575 108,086 114,634 112,580 113,702 118,507 118,404 119,248 121,081 121,124 120,817 126,782 134,471 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 JJJuuunnneee 22000000 22000011 222000000111111 JJuunnee JJuunnee Sept. Dec. Mar. June Feb. Mar. Apr. May June CONSUMER PRICES2 (1982-84=100) 1 All items 3.7 3.2 3.3 2.3 4.0 3.7 .3 .1 .3 .4 .2 178.0 ? Food 2.3 3.4 4.1 2.1 4.1 3.3 .5 .2 .1 .3 .4 173.0 Energy items 21.3 8.4 7.9 3.8 6.0 16.8 -.2 -2.1 11..88 3.1 -.9 140.5 4 All items less food and energy 2.5 2.7 2.9 2.0 3.5 2.6 .3 .2 ..22 .1 .3 185.9 Commodities .6 .3 1.7 .0 1.4 -1.6 .3 -.1 .0 -.4 .0 144.9 6 Services 3.4 3.7 3.2 3.2 4.2 4.5 .3 .3 .3 .3 .5 209.4 PRODUCER PRICES (1982=100) 7 Finished goods 4.4 2.5 2.0 2.9 4.9 .0 .1 ,0R .3 .1 -.4 142.1 8 Consumer foods 1.9 3.1 -1.2 2.7 10.2 1.1 ,8R .8' .6 -.4 .1 141.9 9 Consumer energy 24.3 5.1 6.4 12.0 12.6 -8.6 ,4R -1.7' .1 .2 -2.5 102.7 10 Other consumer goods 1.7 2.0 2.4 1.0 2.1 2.6 -.2' .1' .2 .4 .0 156.7 11 Capital equipment .9 .8 1.7 .3 .0 1.2 -.4' .1' .3 -.1 .1 139.6 Intermediate materials 12 Excluding foods and feeds 5.7 1.2 3.1 1.2 1.8 -1.5 -.2 -.2 -.3 .2 --..22 113322..33 13 Excluding energy 3.1 .1 .3 -.3 1.5 -.9 .1 .1 -.1 .1 -.3 137.2 Crude materials 14 Foods 2.4 7.7 -8.2 36.5 14.8 -6.4 - 1.3R 3.2' -.5 -1.1 -.1 110099..77 IS Energy 69.4 -5.7 20.0 102.6 -44.1 -41.9 -23.0' -14.7' 3.0 -3.7 -11.9 123.1 16 Other 11.0 -11.0 -8.8 -9.2 -13.4 -11.1 -1.8' -1.8' -2.6 -.2 -.2 130.6 1. Not seasonally adjusted. SOURCE. U.S. Department of Labor, Bureau of Labor Statistics. 2. Figures for consumer prices are for all urban consumers and reflect a rental-equivalence measure of homeownership. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A48 Domestic Nonfinancial Statistics tl September 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 Q2 Q3 Q4 QI Q2 GROSS DOMESTIC PRODUCT 1 Total 8,781.5 9,268.6 9,872.9 9,857.6 9,937.5 10,027.9 10,141.7 10,217.6 By source 2 Personal consumption expenditures 5,856.0 6,250.2 6,728.4 6,674.9 6,785.5 6,871.4 6,977.6 7,044.9 3 Durable goods 693.2 760.9 819.6 813.8 825.4 818.7 838.1 842.7 4 Nondurable goods 1,708.5 1,831.3 1,989.6 1,978.3 2,012.4 2,025.1 2,047.1 2,063.1 Services 3,454.3 3,658.0 3,919.2 3,882.8 3,947.7 4,027.5 4,092.4 4,139.1 6 Gross private domestic investment 1,538.7 1,636.7 1,767.5 1,792.4 1,788.4 1,780.3 1,722.8 1,684.4 V Fixed investment 1,465.6 1,578.2 1,718.1 1,717.0 1,735.9 1,741.6 1,748.3 1,710.3 8 Nonresidential 1,101.2 1,174.6 1,293.1 1,288.3 1,314.9 1,318.2 1,311.2 1,263.1 y Structures 282.4 283.5 313.6 306.4 321.1 330.9 345.8 339.1 10 Producers' durable equipment 818.9 891.1 979.5 981.8 993.8 987.3 965.4 923.9 11 Residential structures 364.4 403.5 425.1 428.7 421.0 423.4 437.0 447.2 12 Change in business inventories 73.1 58.6 49.4 75.4 52.5 38.7 -25.5 -25.9 13 Nonfarm 72.2 60.1 51.1 74.0 55.3 37.8 -26.2 -25.1 14 Net exports of goods and services -151.7 -250.9 -364.0 -350.8 -380.6 -390.6 -363.8 -349.1 15 Exports 964.9 989.8 1,102.9 1,099.7 1,131.1 1,121.0 1,117.4 1,087.2 16 Imports 1,116.7 1,240.6 1,466.9 1,450.4 1,511.8 1,511.6 1,481.2 1,436.3 17 Government consumption expenditures and gross investment 1,538.5 1,632.5 1,741.0 1,741.1 1,744.2 1,766.8 1,805.2 1,837.4 18 Federal 539.2 564.0 590.2 601.0 587.0 594.2 605.3 609.8 19 State and local 999.3 1,068.5 1,150.8 1,140.1 1,157.2 1,172.6 1,199.8 1,227.6 By major type of product 20 Final sales, total 8,708.4 9,210.0 9,823.6 9,782.2 9,884.9 9,989.2 10,167.2 10,243.5 21 3,232.3 3,418.6 3,644.8 3,636.0 3,677.2 3,670.6 3,718.8 3,714.4 22 Durable 1,524.4 1,618.8 1,735.2 1,735.2 1,753.8 1,740.7 1,755.8 1,736.0 23 Nondurable 1,707.9 1,799.8 1,909.7 1,900.8 1,923.5 1,929.9 1,963.1 1,978.4 24 Services 4,678.6 4,939.1 5,268.5 5,243.1 5,296.1 5,393.0 5,482.8 5,545.9 25 Structures 797.5 852.4 910.3 903.1 911.6 925.6 965.6 983.2 26 Change in business inventories 73.1 58.6 49.4 75.4 52.5 38.7 -25.5 -25.9 27 Durable goods 44.7 35.3 34.7 51.0 33.0 31.5 -31.0 -28.5 28 Nondurable goods 28.5 23.3 14.7 24.4 19.5 7.2 5.5 2.6 MEMO 29 Total GDP in chained 1996 dollars 8,508.9 8,856.5 9,224.0 9,229.4 9,260.1 9,303.9 9,334.5 9,351.6 NATIONAL INCOME 30 Total 7,041.4 7,462.1 7,980.9 7,956.1 8,047.2 8,124.0 8,169.7 n.a. 31 Compensation of employees 4,989.6 5,310.7 5,715.2 5,669.9 5,759.3 5,868.9 5,955.7 6,010.2 32 Wages and salaries 4,192.1 4,477.4 4,837.2 4,798.0 4,875.8 4,973.2 5,049.4 5,099.3 33 Government and government enterprises 692.7 724.3 768.4 768.3 772.6 776.6 788.8 798.9 34 Other 3,499.4 3,753.1 4,068.8 4,029.7 4,103.2 4,196.6 4,260.6 4,300.4 35 Supplement to wages and salaries 797.5 833.4 878.0 872.0 883.5 895.7 906.3 910.9 36 Employer contributions for social insurance 306.9 323.6 343.8 341.8 345.6 350.8 357.1 358.9 37 Other labor income 490.6 509.7 534.2 530.1 537.9 544.9 549.3 552.1 38 Proprietors' income1 623.8 672.0 715.0 717.9 719.3 725.2 735.2 747.2 39 Business and professional1 598.2 645.4 684.4 685.4 687.6 693.5 705.4 717.9 40 Farm1 25.6 26.6 30.6 32.5 31.6 31.7 29.8 29.3 41 Rental income of persons" 138.6 147.7 141.6 141.4 138.3 141.7 139.6 140.9 42 Corporate profits1 777.4 825.2 876.4 892.8 895.0 847.6 789.8 n.a. 43 Profits before tax" 721.1 776.3 845.4 862.0 858.3 816.5 755.7 n.a. 44 Inventory valuation adjustment 18.3 -2.9 -12.4 -14.8 -3.6 -7.3 -1.9 n.a. 45 Capital consumption adjustment 38.0 51.7 43.4 45.5 40.4 38.4 36.0 31.8 46 Net interest 511.9 506.5 532.7 534.1 535.3 540.6 549.4 n.a. 1. With inventory valuation and capital consumption adjustments. 3. For after-tax profits, dividends, and the like, see table 1.48. 2. With capital consumption adjustment. SOURCE. U.S. Department of Commerce, Survey of Current Business. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Selected Measures A49 2.17 PERSONAL INCOME AND SAVING Billions of current dollars except as noted; quarterly data at seasonally adjusted annual rates 2000r 2001 AAccccoouunntt 11999988rr 11999999rr 22000000rr Q2 Q3 Q4 Ql Q2 PERSONAL INCOME AND SAVING 1 Total personal income 7,426.0 7,777.3 8,319.2 8,271.0 8,381.5 8,519.6 8,640.2 8,721.3 7 Wage and salary disbursements 4,192.8 4,472.2 4,837.2 4,798.0 4,875.8 4,973.2 5,049.4 5,099.3 Commodity-producing industries 1,038.5 1,088.7 1,163.7 1,151.8 1,173.2 1,195.5 1,206.3 1,205.2 4 Manufacturing 756.6 782.0 830.1 822.0 838.0 852.2 853.3 850.6 5 Distributive industries 948.9 1,021.0 1,095.6 1,086.1 1,102.4 1,125.9 1,140.3 1,148.0 6 Service industries 1,512.7 1,638.2 1,809.5 1,791.7 1,827.6 1,875.2 1,914.0 1,947.2 7 Government and government enterprises 692.7 724.3 768.4 768.3 772.6 776.6 788.8 798.9 8 Other labor income 490.6 509.7 534.2 530.1 537.9 544.9 549.3 552.1 9 Proprietors' income1 623.8 672.0 715.0 717.9 719.3 725.2 735.2 747.2 in Business and professional1 598.2 645.4 684.4 685.4 687.6 693.5 705.4 717.9 n 25.6 26.6 30.6 32.5 31.6 31.7 29.8 29.3 i? Rental income of persons2 138.6 147.7 141.6 141.4 138.3 141.7 139.6 140.9 n 348.3 343.1 379.2 373.3 385.8 396.6 404.8 411.9 14 Personal interest income 964.4 950.0 1,000.6 999.9 1,009.2 1,013.1 1,010.9 1,005.7 is Transfer payments 983.7 1,019.6 1,069.1 1,066.3 1,074.6 1,089.0 1,123.1 1,138.3 16 Old age survivors, disability, and health insurance benefits 578.1 588.0 617.3 618.6 620.9 626.5 651.4 660.2 17 LESS: Personal contributions for social insurance 316.3 337.1 357.7 355.8 359.4 364.1 372.1 373.9 18 EQUALS: Personal income 7,426.0 7,777.3 8,319.2 8,271.0 8,381.5 8,519.6 8,640.2 8,721.3 19 LESS: Personal tax and nontax payments 1,070.4 1,159.2 1,288.2 1,277.3 1,300.2 1,329.8 1,345.2 1,350.4 20 EQUALS: Disposable personal income 6,355.6 6,618.0 7,031.0 6,993.7 7,081.3 7,189.8 7,295.0 7,371.0 21 LESS: Personal outlays 6,054.1 6,457.2 6,963.3 6,905.6 7,026.9 7,115.1 7,216.2 7,283.4 22 EQUALS: Personal saving 301.5 160.9 67.7 88.1 54.5 74.7 78.8 87.5 MEMO Per capita (chained 1996 dollars) ?3 Gross domestic product 31,449.2 32,441.9 33,490.3 33,549.2 33,587.6 3333,,666611..11 3333,,669988..55 3333,,667755..11 24 Personal consumption expenditures 21,007.2 21,862.6 22,720.7 22,632.8 22,822.4 22,941.7 23,063.1 23,127.6 25 Disposable personal income 22,800.0 23,150.0 23,742.0 23,717.0 23,814.0 24,006.0 24,111.0 24,202.0 26 Saving rate (percent) 4.7 2.4 1.0 1.3 .8 1.0 1.1 1.2 GROSS SAVING 27 Gross saving 1,647.2 1,707.4 1,785.7 1,799.4 1,807.4 1,799.7 1,754.0 n.a. 28 Gross private saving 1,375.0 1,348.0 1,323.0 1,345.8 1,329.6 1,332.7 1,307.9 n.a. ?9 Personal saving 301.5 160.9 67.7 88.1 54.5 74.7 78.8 87.5 30 Undistributed corporate profits 189.9 228.7 225.3 238.6 233.9 197.0 147.8 n.a. 31 Corporate inventory valuation adjustment 18.3 -2.9 -12.4 -14.8 -3.6 -7.3 -1.9 n.a. Capital consumption allowances 3? Corporate 620.2 669.2 727.1 719.1 736.0 749.7 776633..88 778822..66 33 Noncorporate 264.2 284.1 302.8 299.9 305.2 311.3 317.5 332.1 34 Gross government saving 272.2 359.4 462.8 453.7 477.8 467.1 446.1 n.a. 35 Federal 132.0 210.9 315.0 305.0 326.9 320.5 303.7 n.a. 36 Consumption of fixed capital 88.2 91.7 96.4 95.9 97.0 97.9 98.4 99.4 37 Current surplus or deficit (—), national accounts 43.8 119.2 218.6 209.1 229.9 222.5 205.3 n.a. 38 State and local 140.2 148.5 147.8 148.7 150.9 146.6 142.5 n.a. 39 Consumption of fixed capital 99.5 106.4 114.9 114.0 116.1 118.0 120.2 121.9 40 Current surplus or deficit (—), national accounts 40.7 42.1 32.8 34.7 34.8 28.6 22.3 n.a. 41 Gross investment 1,616.2 1,634.7 1,655.3 1,690.0 1,651.1 1,649.7 1,633.5 n.a. 4? Gross private domestic investment 1,538.7 1,636.7 1,767.5 1,792.4 1,788.4 1,780.3 1,722.8 1,684.4 43 Gross government investment 277.1 304.6 318.3 315.0 314.0 322.8 330.9 345.7 44 Net foreign investment -199.7 -306.6 -430.5 -417.4 -451.3 -453.4 -420.2 n.a. 45 Statistical discrepancy -31.0 -72.7 -130.4 -109.5 -156.3 -150.0 -120.5 n.a. 1. With inventory valuation and capital consumption adjustments. SOURCE. U.S. Department of Commerce, Survey of Current 2. With capital consumption adjustment. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A50 International Statistics • September 2001 3.10 U.S. INTERNATIONAL TRANSACTIONS Summary Millions of dollars; quarterly data seasonally adjusted except as noted' 2000 2001 IItteemm ccrreeddiittss oorr ddeebbiittss 11999988 11999999 22000000 Ql Q2 Q3 Q4 Ql 1 Balance on current account -217,457 -324,364 -444,667 -104,903 -108,134 -115,305 -116,324 -109,562 2 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 liabilities2 -3,371 -2,855 -1,987 -474 -1,000 -220 -293 -1,244 26 Other U.S. liabilities reported by U.S. banks" -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 32 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, net5 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 -1,410 190 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 l,621r 1 l,582r 6,143r l,639r 3,636r 164 -170 1. Seasonal factors are not calculated for lines 11-16, 18-20, 22-35, and 38^11. 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 2000 2001 IItteemm 11999988rr 11999999rr 22000000rr Nov. Dec. Jan. Feb. Mar. Apr/ Mayp 1 Goods and services, balance -166,686 -261,838 -375,739 -32,978 -33,291 -33,332 -28,610 -33,076 -31,993 -28,335 2 Merchandise -246,855 -345,434 -452,207 -38,955 -39,361 -39,127 -34,614 -38,781 -37,656 -34,398 3 Services 79,868 83,596 76,468 5,977 6,070 5,795 6,004 5,705 5,663 6,063 4 Goods and services, exports 933,053 957,353 1,065,702 90,478 89,241 90,104 90,475 88,716 86,929 87,731 5 Merchandise 670,324 684,553 772,210 65,856 64,574 65,309 65,748 63,884 62,170 62,828 6 Services 262,729 272,800 293,492 24,622 24,667 24,795 24,727 24,832 24,759 24,903 7 Goods and services, imports -1,099,739 -1,219,191 -1,441,441 -123,456 -122,532 -123,436 -119,085 -121,792 -118,922 -116,066 8 Merchandise -917,179 -1,029,987 -1,224,417 -104,811 -103,935 -104,436 -100,362 -102,665 -99,826 -97,226 9 Services -182,560 -189,204 -217,024 -18,645 -18,597 -19,000 -18,723 -19,127 -19,096 -18,840 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 Dec. Jan. Feb. Mar. Apr. May June JulyP 1 Total 69,954 81,761 71,516 67,647 67,542 66,486 64,222 64,731 65,254r 64,847 65,736 2 Gold stock1 11,047 11,046 11,048 11,046 11,046 11,046 11,046 11,046 11,044r 11,044 11,044 3 Special drawing rights2" 10,027 10,603 10,336 10,539 10,497 10,641 10,379 10,420 10,481 10,409 10,518 4 Reserve position in International Monetary Fund2 18,071 24,111 17,950 14,824 15,079 14,107 13,777 13,816 14,283 14,619 14,965 5 Foreign currencies4 30,809 36,001 32,182 31,238 30,920 30,692 29,020 29,449 29,446 28,775 29,209 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 Dec. Jan. Feb. Mar. Apr. May June July? 1 Deposits 457 167 71 215 199 196 70 101 86 102 84 Held in custody 2 U.S. Treasury securities" 620,885 607,574 632,482 594,094 594,694 603,906 609,440 585,710 583,655 586,607 578,573 3 Earmarked gold3 10,763 10,343 9,933 9,451 9,397 9,343 9,289 9,235 9,154 9,100 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 • September 2001 3.15 SELECTED U.S. LIABILITIES TO FOREIGN OFFICIAL INSTITUTIONS Millions of dollars, end of period 2000 2001 IItteemm 11999988 11999999 Nov. Dec. Jan. Feb. Mar. Apr. May 1 Total1 759,928 806,318 849,758 845,934 866,883 864,593 865,466 855,708 835,330 By type 2 Liabilities reported by banks in the United States2 125,883 138,847 148,340 144,658 155,293 155,163 154,641 158,997 141,947 3 US. Treasury bills and certificates3 134,177 156,177 155,061 115533,,001100 115588,,996677 115555,,666677 115555,,220044 144,158 113377,,993333 U.S. Treasury bonds and notes 4 Marketable 432,127 422,266 414,896 415,964 418,190 418,857 419,106 410,066 411,016 5 Nonmarketable4 6,074 6,111 5,313 5,348 4,923 4,953 4,984 5,017 5,049 6 U.S. securities other than U.S. Treasury securities5 61,667 82,917 126,148 126,954 129,510 129,953 113311,,553311 113377,,447700 113399,,338855 By area 7 Europe1 256,026 244,805 262,300 253,592 259,829 256,180 250,420 248,106 250,039 8 Canada 10,552 12,503 11,744 12,394 11,220 10,794 10,396 10,474 10,967 9 Latin America and Caribbean 79,503 73,518 79,238 76,818 80,115 80,389 79,185 79,457 75,657 10 Asia 400,631 463,703 481,106 488,170 499,925 501,486 511,023 500,670 482,997 11 Africa 10,059 7,523 8,012 9,165 8,965 9,586 9,102 9,341 9,272 12 Other countries 3,157 4,266 7,358 5,795 6,829 6,158 5,340 7,660 6,398 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 31,724 26,306 23,407 27,004 4 Other claims 54,377 32,177 32,939 36,138 34,049 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

Nonbank-Reported Data A53 3.17 LIABILITIES TO FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2000 2001 IItteemm 11999988 11999999 22000000rr Nov. Dec. Jan. Feb. Mar. Apr. Mayp BY HOLDER AND TYPE OF LIABILITY 1 Total, all foreigners 1,347,837 1,408,740 1,515,077 1,519,521 1,515,077 l,568,936r l,531,953r l,506,172r 1,532,610 1,531,333 2 Banks' own liabilities 884,939 971,536 1,045,236 1,071,155 1,045,236 l,086,196r l,048,120r 1,045,151' 1,063,956 1,081,302 3 Demand deposits 29,558 42,884 33,365 31,581 33,365 30,820r 35,765 33,868 31,279 29,114 4 Time deposits2 151,761 163,620 188,154 190,541 188,154 187,365r 189,53 lr 182,529' 190,804 182,202 5 Other3 140,752 155,853 173,263 187,066 173,263 203,269 198,788 200,477' 202,001 206,784 6 Own foreign offices4 562,868 609,179 650,454 661,967 650,454 664,742r 624,036 628,277' 639,872 663,202 7 Banks' custodial liabilities5 462,898 437,204 469,841 448,366 469,841 482,740 483,833 461,021' 468,654 450,031 8 U.S. Treasury bills and certificates6 183,494 185,676 177,846 173,899 177,846 182,276 179,277 171,755 159,410 155,721 9 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. 66,600r 74,28 lr 71,454' 69,223 62,092 10 Other negotiable and readily transferable instruments8 141,699 132,617 145,840 132,949 145,840 77,464r 73,258r 64,517' 79,111 78,525 11 Other 137,705 118,911 146,155 141,518 146,155 156,400r 157,017r 153,295' 160,910 153,693 12 Nonmonetary international and regional organizations9 . . 11,883 15,276 12,542 17,074 12,542 10,938 1 l,578r 12.290' 12,833 14,668 13 Banks' own liabilities 10,850 14,357 12,140 16,676 12,140 10,595 11,202r 11.746' 12,344 14,342 14 Demand deposits 172 98 41 30 41 27 19 23 14 15 15 Time deposits2 5,793 10,349 6,246 6,542 6,246 5,641 4,966r 5,302' 5,301 3,532 16 Other3 4,885 3,910 5,853 10,104 5,853 4,927 6,217 6,421' 7,029 10,795 17 Banks' custodial liabilities5 1,033 919 402 398 402 343 376 544 489 326 18 U.S. Treasury bills and certificates6 636 680 252 249 252 294 248 229 170 105 19 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. 26 108 137 144 132 20 Other negotiable and readily transferable instruments8 397 233 149 147 149 23 15 177 175 87 21 Other 0 6 1 2 1 0 5 1 0 2 22 Official institutions10 260,060 295,024 297,668 303,401 297,668 314,260r 310,830 309,845 303,155 279,880 23 Banks' own liabilities 80,256 97,615 97,054 102,422 97,054 103,445r 99,602 97,068 104,064 94,710 24 Demand deposits 3,003 3,341 3,952 4,712 3,952 3,199r 4,444 3,509 3,530 2,522 75 Time deposits2 29,506 28,942 35,638 35,437 35,638 33,026 29,957 28,001 32,032 25,867 26 Other3 47,747 65,332 57,464 62,273 57,464 67,220 65,201 65,558 68,502 66,321 27 Banks' custodial liabilities5 179,804 197,409 200,614 200,979 200,614 210,815 211,228 212,777 199,091 185,170 28 U.S. Treasury bills and certificates6 134,177 156,177 153,010 155,061 153,010 158,967 155,667 155,204 144,158 137,933 29 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. 45,384 49,594 53,295 51,107 43,193 30 Other negotiable and readily transferable instruments8 44,953 41,182 47,366 45,225 47,366 5,337 5,325 4,064 3,325 3,509 31 Other 674 50 238 693 238 1,127 642 214 501 535 32 Banks" 885,336 900,379 976,164 969,309 976,164 l,008,742r 975,078r 960,472' 966,924 989,627 33 Banks' own liabilities 676,057 728,492 788,471 794,387 788,471 810,373r 778,382r 781,233' 785,268 812,501 34 Unaffiliated foreign banks 113,189 119,313 138,017 132,420 138,017 145,631 154,346r 152,956 145,396 149,299 35 Demand deposits 14,071 17,583 15,522 12,859 15,522 14,297 12,600 16,433 13,027 12,143 36 Time deposits2 45,904 48,140 66,936 68,846 66,936 70,896 77,477' 73,017 72,656 70,837 37 Other3 53,214 53,590 55,559 50,715 55,559 60,438 64,269 63,506 59,713 66,319 38 Own foreign offices4 562,868 609,179 650,454 661,967 650,454 664,742r 624,036 628,277' 639,872 663,202 39 Banks' custodial liabilities5 209,279 171,887 187,693 174,922 187,693 198,369 196,696 179,239' 181,656 177,126 40 U.S. Treasury bills and certificates6 35,359 16,796 16,023 10,288 16,023 14,484 13,909 7,922 7,022 8,337 41 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. 7,569r 8,007" 2,324' 2,774 3,439 42 Other negotiable and readily transferable instruments8 45,332 45,695 36,036 34,723 36,036 31,393' 29,868' 27,364' 25,271 26,568 43 Other 128,588 109,396 135,634 129,911 135,634 144,923r 144,912' 141,629' 146,589 138,782 44 Other foreigners 190,558 198,061 228,703 229,737 228,703 234,996r 234,467' 223,565 249,698 247,158 45 Banks' own liabilities 117,776 131,072 147,571 157,670 147,571 161,783r 158,934' 155,104 162,280 159,749 46 Demand deposits 12,312 21,862 13,850 13,980 13,850 13,297r 18,702 13,903 14,708 14,434 47 Time deposits2 70,558 76,189 79,334 79,716 79,334 77,802r 77,131' 76,209 80,815 81,966 48 Other3 34,906 33,021 54,387 63,974 54,387 70,684 63,101 64,992 66,757 63,349 49 Banks' custodial liabilities5 72,782 66,989 81,132 72,067 81,132 73,213 75,533 68,461 87,418 87,409 50 U.S. Treasury bills and certificates6 13,322 12,023 8,561 8,301 8,561 8,531 9,453 8,400 8,060 9,346 51 Short-term agency securities7 n.a. n.a. n.a. n.a. n.a. 13,621 16,572 15,698 15,198 15,328 52 Other negotiable and readily transferable instruments8 51,017 45,507 62,289 52,854 62,289 40,711 38,050 32,912 50,340 48,361 53 Other 8,443 9,459 10,282 10,912 10,282 10,350 11,458 11,451 13,820 14,374 MEMO 54 Negotiable time certificates of deposit in custody for foreigners 27,026 30,345 34,217 26,350 34,217 31,389 30,277 24,518 25,372 25,911 55 Repurchase agreements7 n.a. n.a. n.a. n.a. n.a. 125,225 120,444 129,671 119,141 119,850 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 • September 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 22000000rr Nov. Dec. Jan. Feb. Mar. Apr. Mayp AREA 56 Total, all foreigners 1,347,837 1,408,740 1,515,077 1,519,521 1,515,077 1,568,936r 1,531,953r l,506,172r 1,532,610r 1,531,333 57 Foreign countries 1,335,954 1,393,464 1,502,534 1,502,447 1,502,534 l,557,997r l,520,374r l,493,881r l,519,776r 1,516,664 58 Europe 427,375 441,810 448,712 471,756 448,712 477,166r 447,62 lr 429,913r 433,693' 462,710 59 Austria 3,178 2,789 2,692 2,667 2,692 2,366 2,094r 2,178 2,773 2,593 60 Belgium12 42,818 44,692 33,399 32,386 33,399 7,357 5,709 5,432 5,309 5,895 61 Denmark 1,437 2,196 3,000 3,531 3,000 3,391 4,182 2,919 3,413 2,910 62 Finland 1,862 1,658 1,411 1,873 1,411 1,155 1,667 1,286 1,769 1,144 63 France 44,616 49,790 37,833 43,489 37,833 49,045 45,435 42,758 39,125 40,209 64 Germany 21,357 24,753 35,519 27,080 35,519 30,250 30,382r 30,862r 30,569 30,004 65 Greece 2,066 3,748 2,011 3,344 2,011 1,888 1,963 1,496 1,336 1,525 66 My * 7,103 6,775 5,072 5,515 5,072 4,997 5,071 5,850r 5,269r 5,530 67 Luxembourg n.a. n.a. n.a. n.a. n.a. 27,095 24,234 12,585 16,296 13,484 68 Netherlands 10,793 8,143 7,244 13,230 7,244 8,504 8,328r 7,265 9,954 10,719 69 Norway 710 1,327 2,305 5,158 2,305 4,762 6,331 8,361 4,806 2,572 70 Portugal 3,236 2,228 2,403 2,379 2,403 2,571 2,625 1,731 1,949 2,041 71 Russia 2,439 5,475 19,018 20,020 19,018 17,233 19,029 18,625 19,917 21,207 72 Spain 15,781 10,426 7,787 6,936 7,787 8,130r 8,241 9,500 7,745r 7,883 73 Sweden 3,027 4,652 6,497 7,361 6,497 5,648 5,959 6,738 6,161r 5,284 74 Switzerland 50,654 63,485 74,635 86,153 74,635 83,098r 64,428r 54,028 65,944r 93,197 75 Turkey 4,286 7,842 7,548 4,526 7,548 7,783 5,382 5,635 4,549 7,169 76 United Kingdom 181,554 172,687 169,484 172,173 169,484 143,474r 134,444r 147,300r 138,137r 139,683 77 Channel Islands & Isle of Man13 n.a. n.a. n.a. n.a. n.a. 36,376r 43,087 36,040 36,013 34,742 78 Yugoslavia14 233 286 276 279 276 287 294 294 305 303 79 Other Europe and other former U.S.S.R.15 30,225 28,858 30,578 33,656 30,578 31,756 28,736r 29,030 32,354 34,616 80 Canada 30,212 34,214 30,987 31,190 30,987 23,927 23,945 24,253 27,768 25,392 81 Latin America 121,327 117,495 120,154 120,909 120,154 118,829r 120,329r 114,511 117,446r 112,962 82 Argentina 19,014 18,633 19,487 18,244 19,487 18,944r 18,011 12,878 14,610 12,584 83 Brazil 15,815 12,865 10,852 11,647 10,852 10,527r 11,409r 10,571 10,851 11,257 84 Chile 5,015 7,008 5,892 5,324 5,892 5,645r 5,925r 5,175 5,449 5,713 85 Colombia 4,624 5,669 4,542 4,573 4,542 4,536r 4,440r 4,344 4,618 4,723 86 Ecuador 1,572 1,956 2,111 2,052 2,111 2,144r 2,254 2,179 2,164 2,115 87 Guatemala 1,336 1,626 1,604 1,645 1,604 l,579r 1,535 1,509 1,557 1,585 88 Mexico 37,157 30,717 32,169 33,266 32,169 33,719r 34,948r 34,084 34,27 lr 33,099 89 Panama 3,864 4,415 4,241 3,955 4,241 3,610r 3,861r 4,014 3,476 3,639 90 Peru 840 1,142 1,427 1,186 1,427 1,355 1,459 1,788 1,767 1,532 91 Uruguay 2,486 2,386 3,003 2,941 3,003 2,765r 2,844 3,365 3,410 3,332 92 Venezuela 19,894 20,192 24,733 25,917 24,733 26,995r 26,525 27,415 27,847 26,375 93 Other Latin America16 9,710 10,886 10,093 10,159 10,093 7,010r 7,118r 7,189 7,426 7,008 94 Caribbean 433,539 461,200 574,980 556,306 574,980 601,780r 589,974r 583,815r 607,038r 602,028 95 Bahamas 118,085 135,811 189,332 176,812 189,332 186,179r 185,369r 174,174 177,533 190,166 96 Bermuda 6,846 7,874 9,641 8,404 9,641 9,488 8,064r 8,401 8,261 6,986 97 British West Indies17 302,486 312,278 368,769 364,206 368,769 n.a. n.a. n.a. n.a. n.a. 98 Caymen Islands17 n.a. n.a. n.a. n.a. n.a. 384,399r 376,063r 381,716r 402,699r 386,861 99 Cuba 62 75 90 88 90 130 84 85 83 84 100 Jamaica 577 520 815 725 815 792 945 1,238 899 1,133 101 Netherlands Antilles 5,010 4,047 5,428 5,318 5,428 6,558r 5,484r 4,504 4,517r 3,395 102 Trinidad and Tobago 473 595 905 753 905 797 886 1,048 1,114 1,237 103 Other Caribbean16 n.a. n.a. n.a. n.a. n.a. 13,437r 13,079r 12,649 ll,932r 12,166 104 307,960 319,489 305,533 300,703 305,533 315,129r 316,529r 332200,,117744 331100,,880088 229911,,330000 China 105 Mainland 13,441 12,325 16,533 15,830 16,533 27,451 31,174r 39,928 34,692 23,158 106 Taiwan 12,708 13,603 17,352 17,271 17,352 19,828 18,192 17,891 19,962 18,119 107 Hong Kong 20,900 27,701 26,462 25,565 26,462 27,014r 27,662r 29,088 26,587 27,348 108 India 5,250 7,367 4,530 5,151 4,530 4,197 4,058 4,547 4,113 4,281 109 Indonesia 8,282 6,567 8,514 8,378 8,514 8,536 9,027 8,605 10,733 10,605 110 Israel 7,749 7,488 8,053 6,537 8,053 7,666 7,262 8,803 7,095 8,282 111 Japan 168,563 159,075 150,415 149,684 150,415 148,730 150,801r 146,441 144,478 141,248 112 Korea (South) 12,524 12,988 7,961 6,689 7,961 7,155 6,273 6,096 5,370 5,380 113 Philippines 3,324 3,268 2,316 2,219 2,316 1,769 1,422 1,428 1,645 1,660 114 Thailand 7,359 6,050 3,117 3,465 3,117 3,157 3,455 3,252 2,935 3,295 115 Middle Eastern oil-exporting countries18 15,609 21,314 23,733 23,723 23,733 22,425 21,594r 21,634 20,534 19,642 116 Other 32,251 41,743 36,547 36,191 36,547 37,201 35,609 32,461 32,664 28,282 117 8,905 9,468 10,824 9,504 10,824 10,552 10,983r 10,564 10,821 10,918 118 Egypt 1,339 2,022 2,621 1,654 2,621 2,552 2,336 2,282 2,375 2,517 119 Morocco 97 179 139 100 139 157 139 133 139 116 120 South Africa 1,522 1,495 1,010 853 1,010 843 914 651 791 706 121 Congo (formerly Zaire) 5 14 4 4 4 10 10 8 5 2 122 Oil-exporting countries" 3,088 2,914 4,052 4,027 4,052 4,317 4,750 4,593 4,753 4,741 123 Other 2,854 2,844 2,998 2,866 2,998 2,673 2,834r 2,897 2,758 2,836 124 Other Countries 6,636 9,788 11,344 12,079 11,344 10,614 10,993 10,651 12,202r 11,354 125 Australia 5,495 8,377 10,070 10,914 10,070 8,854 9,519 9,448 10,974r 10,254 126 New Zealand20 n.a. n.a. n.a. n.a. n.a. 1,032 328 424 All' 424 127 All other 1,141 1,411 1,274 1,165 1,274 728 1,146 779 751 676 128 Nonmonetary international and regional organizations .. 11,883 15,276 12,543 17,074 12,543 10,939 1 l,579r 12,291r 12,834r 14,669 129 International21 10,221 12,876 11,270 16,068 11,270 9,024 10,793r 1 l,379r 1 l,335r 1122,,996655 130 Latin American regional22 594 1,150 740 523 740 1,493 223 272 327 888866 131 Other regional23 1,068 1,250 533 483 533 422 534 640 620 518 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

Nonbank-Reported Data A55 3.18 BANKS' OWN CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2000 2001 AArreeaa oorr ccoouunnttrryy 11999988 11999999 22000000 Nov. Dec. Jan.' Feb.' Mar.' Apr. Mayp 1 Total, all foreigners 734,995 793,139 908,242r 882,441r 908,242r 961,017 912,886 984,855 989,617 997, 2 Foreign countries 731,378 788,576 903,556r 878,601r 903,556r 957,790 909,569 982,079 986,862 <mjm 3 Europe 233,321 311,686 381,471r 371,913' 381,471r 422,114 404,511 443,510 442,431 461,797 4 Austria 1,043 2,643 2,926r 2,681 2,926r 3,664 2,927 3,101 3,728 3,364 5 Belgium2 7,187 10,193 5,399r 5,079r 5,399r 4,635 5,300 4,852 4,375 5,627 6 Denmark 2,383 1,669 3,272r 3,462 3,272r 3,402 3,499 3,242 2,954 2,505 7 Finland 1,070 2,020 7,382r 6,517 7,382r 6,772 7,102 7,185 8,901 8,800 8 France 15,251 29,142 40,035r 34,547 40,035r 43,290 44,038 45,555 46,378 42,190 9 Germany 15,923 29,205 36,834r 32,160 36,834r 39,744 39,233 45,763 49,061 55,097 10 Greece 575 806 646r 876 646r 526 454 278 265 285 11 Italy 7,284 8,496 7,629 6,738 7,629 6,310 6,315 6,976 7,274 6,868 12 Luxembourg n.a. n.a. n.a. n.a. n.a. 2,825 2,659 2,569 2,012 2,976 13 Netherlands 5,697 11,810 17,044r 15,975 17,044r 18,865 21,517 22,630 22,699 16,495 14 Norway 827 1,000 5,012 6,159 5,012 2,971 5,339 8,228 5,296 2,915 IS Portugal 669 1,571 1,382 1,249 1,382 1,109 1,312 1,426 1,535 1,173 16 Russia 789 713 517 663 517 518 561 1,008 813 715 17 Spain 5,735 3,796 2,604r 2,593 2,604r 3,808 3,959 4,722 3,445 4,275 18 Sweden 4,223 3,264 9,226r 8,815 9,226r 10,353 10,131 10,286 11,934 10,986 19 Switzerland 46,874 79,158 82,085r 107,986 82,085' 102,547 97,003 96,489 104,816 137,273 70 Turkey 1,982 2,617 3,059r 3,260 3,059' 3,301 2,989 2,698 2,770 2,5% 21 United Kingdom 106,349 115,971 148,292r 125,223 148,292' 154,339 139,721 166,667 155,535 148,727 77. Channel Islands & Isle of Man3 n.a. n.a. n.a, n.a. n.a. 3,067 3,069 3,091 3,151 3,804 2.3 Yugoslavia4 53 50 50 49 50 50 49 49 49 59 24 Other Europe and other former U.S.S.R.5 9,407 7,562 8,077r 7,881 8,077' 10,018 7,334 6,695 5,440 5,067 25 Canada 47,037 37,206 39,860r 39,291 39,860' 41,654 42,377 43,839 45,091 44,584 ?6 Latin America 79,976 74,040 76,614 74,399 76,614 74,462 74,222 73,798 73,841 73,852 71 Argentina 9,552 10,894 11,546 11,468 11,546 11,319 11,614 11,243 11,541 11,732 78 Brazil 16,184 16,987 20,567 19,840 20,567 20,372 20,008 20,275 20,286 20,718 79 Chile 8,250 6,607 5,816 5,772 5,816 6,223 5,961 5,823 5,628 5,444 30 Colombia 6,507 4,524 4,370 3,938 4,370 3,816 3,941 4,022 3,720 3,740 31 Ecuador 1,400 760 635 629 635 563 584 534 526 482 37 Guatemala 1,127 1,135 1,246 1,247 1,246 1,364 1,176 1,176 1,171 1,227 33 Mexico 21,212 17,899 17,430 16,945 17,430 17,598 17,918 17,762 18,013 17,977 34 Panama 3,584 3,387 2,935 2,839 2,935 2,775 2,908 3,008 3,158 2,873 35 Peru 3,275 2,529 2,808 2,713 2,808 2,689 2,673 2,809 2,771 2,534 36 Uruguay 1,126 801 675 677 675 641 455 366 367 368 37 Venezuela 3,089 3,494 3,520 3,451 3,520 3,306 3,264 3,239 3,154 3,111 38 Other Latin America6 4,670 5,023 5,066 4,880 5,066 3,796 3,720 3,541 3,506 3,646 39 Caribbean 262,678 281,128 319,512 301,544 319,512 320,547 299,190 325,134 333,197 324,792 40 Bahamas 96,455 99,066 114,090 96,718 114,090 109,284 101,284 105,064 112,424 111,670 41 Bermuda 5,011 8,007 9,343 8,324 9,343 8,673 7,133 8,186 6,838 5,570 47 British West Indies7 153,749 167,189 189,315 188,994 189,315 n.a. n.a. n.a. n.a. n.a. 4.3 Caymen Islands7 n.a. n.a. n.a. n.a. n.a. 187,790 177,338 199,345 200,019 196,920 44 Cuba 0 0 0 0 0 117 0 0 3 0 45 Jamaica 239 295 355 355 355 357 331 348 334 396 46 Netherlands Antilles 6,779 5,982 5,801 6,554 5,801 9,077 7,156 6,921 9,384 5,738 47 Trinidad and Tobago 445 589 608 599 608 658 663 710 783 804 48 Other Caribbean6 n.a. n.a. n.a. n.a. n.a. 4,591 5,285 4,560 3,412 3,694 49 98,607 75,143 77,887r 83,362r 77,887' 90,332 81,487 87,626 83,562 81,242 China 50 Mainland 1,261 2,110 1,606 1,644 1,606 1,562 1,530 1,338 3,171 2,252 51 Taiwan 1,041 1,390 2,247 2,483 2,247 1,037 1,365 1,846 2,253 1,980 57 Hong Kong 9,080 5,903 6,669r 6,457r 6,669' 7,458 8,506 11,068 10,461 9,126 53 India 1,440 1,738 2,178 1,736 2,178 1,886 1,700 1,827 1,675 1,648 <54 Indonesia 1,942 1,776 1,914 1,958 1,914 2,075 1,987 2,001 2,033 2,015 55 Israel 1,166 1,875 2,729 1,911 2,729 2,343 3,249 2,339 2,526 2,717 56 Japan 46,713 28,641 35,032r 36,467 35,032' 38,901 34,778 39,311 32,969 34,510 57 Korea (South) 8,289 9,426 7,776r 16,189 7,776' 18,736 14,147 12,186 13,937 11,639 58 Philippines 1,465 1,410 1,784 1,758 1,784 1,217 1,172 1,195 1,835 1,788 59 Thailand 1,807 1,515 1,381 1,221 1,381 1,170 1,244 1,258 1,062 1,380 60 Middle Eastern oil-exporting countries8 16,130 14,267 9,346r 8,487 9,346' 10,549 8,341 9,120 7,936 9,926 61 Other 8,273 5,092 5,225r 3,051 5,225' 3,398 3,468 4,137 3,704 2,261 67 Africa 3,122 2,268 2,094r 1,977 2,094' 2,176 1,899 2,111 2,035 1,905 63 Egypt 257 258 201 184 201 170 271 343 308 466 64 Morocco 372 352 204 235 204 182 185 189 185 185 65 South Africa 643 622 309r 341 309' 492 544 586 444 289 66 Congo (formerly Zaire) 0 24 0 0 0 19 0 0 0 0 67 Oil-exporting countries9 936 276 471 342 471 582 153 217 267 197 68 Other 914 736 909 875 909 731 746 776 831 768 69 Other countries 6,637 7,105 6,118r 6,115 6,118' 6,505 5,883 6,061 6,705 5,523 70 Australia 6,173 6,824 5,869r 5,937 5,869' 6,080 5,587 5,769 6,257 5,211 71 New Zealand10 n.a. n.a. n.a. n.a. n.a. 283 165 166 269 136 72 All other 464 281 249 178 249 142 131 126 179 176 73 Nonmonetary international and regional organizations'1 . . 3,617 4,563 4,686 3,840 4,686 3,363 3,317 2,776 2,755 3,910 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 • September 2001 3.19 BANKS' OWN AND DOMESTIC CUSTOMERS' CLAIMS ON FOREIGNERS Reported by Banks in the United States1 Payable in U.S. dollars Millions of dollars, end of period 2000 2001 TTyyppee ooff ccllaaiimm 11999988 11999999 22000000 Nov. Dec.r Jan.r Feb.r Mar.r Apr. Mayp 1 Total 875,891 944,937 l,099,439r 1,099,439 1,195,602 2 Banks' claims 734,995 793,139 908,242R 882.44 lr 908,242 961,017 912,886 984,855 989,617 997,605 3 Foreign public borrowers 23,542 35,090 37,907R 49,373 37,907 52,990 54,220 49,123 52,357 49,533 4 Own foreign offices2 484,535 529,682 630,137R 610,861R 630,137 647,273 610,256 670,909 682,430 709,834 5 Unaffiliated foreign banks 106,206 97,186 98,667R 82,962 98,667 101,605 95,647 105,853 95,318 80,002 6 Deposits 27,230 34,538 23,886 23,756 23,886 23,083 22,848 19,948 21,533 19,717 7 Other 78,976 62,648 74,78 lr 59,206 74,781 78,522 72,799 85,905 73,785 60,285 8 All other foreigners 120,712 131,181 141,531R 139.245 141,531 159,149 152,763 158,970 159,512 158,236 9 Claims of banks' domestic customers3 140,896 151.798 191,197 191,197 210,747 10 Deposits 79,363 88,006 100,327 100,327 105,554 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. 122,720 118,705 134,083 126,871 116,938 15 Dollar deposits in banks abroad, reported by nonbanking business enterprises in the United States6 39,978 31,125 53,153 55.899 53,153 59,893 70,964 67,204 60,796 58,137 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 States' Payable in U.S. dollars Millions of dollars, end of period 2000 2001 MMaattuurriittyy,, bbyy bboorrrroowweerr aanndd aarreeaa"" 11999977 11999988 11999999 June Sept. Dec. Mar. 1 Total 276,550 250,418 267,082 268,905 263,383 281,526 318,275 By borrower 2 Maturity of one year or less 205,781 186,526 187,894 181,815 174,650 188,731 201,518 3 Foreign public borrowers 12,081 13,671 22,811 24,849 23,646 21,399 23,742 4 All other foreigners 193,700 172,855 165,083 156,966 151,004 167,332 177,776 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 8 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 Asia 33,964 18,007 21,802 29,092 23,791 22,751 20,737 12 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 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

Nonbank-Reported Data A57 3.21 CLAIMS ON FOREIGN COUNTRIES Held by U.S. and Foreign Offices of U.S. Banks' Billions of dollars, end of period 1999 2000 2001 AArreeaa oorr ccoouunnttrryy 11999977 11999988 Mar. June Sept. Dec. Mar. June Sept. Dec. Mar. 1 Total 721.8 1051.6 993.4 941.2 941.6 945.5 955.7r 991.7r 955.5 1030.9r 1145.4r 7 G-10 countries and Switzerland 242.8 217.7 220.4 234.7 219.4 243.4 272.7 313.8r 280.9 304.T 336.9r 3 Belgium and Luxembourg 11.0 10.7 15.6 16.2 15.7 14.3 14.2 13.9r 13.0 14.2r 15.3 4 France 15.4 18.4 21.6 20.7 20.0 29.0 27.3 32.6 29.1 29.6r 30.0r 5 Germany 28.6 30.9 34.7 32.1 37.4 38.7 37.3 31.5 37.7 45. r 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 18.4r 18.8r 8 Sweden 3.3 2.3 4.0 2.6 3.6 3.0 3.9 3.5 4.3 3.6r 4.7 9 Switzerland 7.2 8.5 7.8 8.3 8.8 10.3 10.1 13.8 10.9 13.2' 13.9 10 United Kingdom 113.4 85.4 67.7 85.5 63.5 79.3 101.9 138.2 112.9 118.9r 145.3r 11 Canada 13.7 16.8 15.9 17.1 17.9 16.3 17.5 18.3 18.7 16.7r 15.4 12 Japan 28.6 25.4 24.6 22.6 25.7 22.1 23.5 25.4 18.1 23.0r 28.0 13 Other industrialized countries 65.5 69.0 80.1 79.7 71.7 68.4 62.8 75.2 73.8 74.5r 75.8r 14 Austria 1.5 1.4 2.8 2.8 3.0 3.5 2.6 2.8 3.5 4.1 3.8 1") 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 10.3r 12.6 21 Turkey 4.5 4.8 5.2 4.9 4.7 4.8 5.1 5.6 5.6 5.9r 5.2 22 Other Western Europe 8.3 10.4 10.2 10.3 9.2 6.8 8.4 8.0 8.4 6.5r 7.4 23 South Africa 2.2 4.4 4.8 4.7 4.0 3.8 4.9 4.6 4.2 3.6r 4.1 24 Australia 23.1 20.3 25.4 26.6 21.1 23.5 18.6 26.3 20.5 22. lr 21.9r 25 OPEC2 26.0 27.1 26.2 26.2 30.1 31.4 28.9 32.3 31.8 28.9r 28.2 7.6 Ecuador 1.3 1.3 1.2 1.1 .9 .8 .7 .7 .6 .6 .6 77 Venezuela 2.5 3.2 3.5 3.2 3.0 2.8 3.0 2.9 2.9 2.5 2.7 78 Indonesia 6.7 4.7 4.5 5.0 4.4 4.2 3.9 4.1 4.4 4.6 4.4 79 Middle East countries 14.4 17.0 16.7 16.5 21.4 23.1 21.1 24.0 22.7 20.3r 20.1 30 African countries 1.2 1.0 .4 .5 .5 .5 .2 .7 1.2 .8 .5 31 Non-OPEC developing countries 139.2 143.4 146.4 148.6 144.6 149.4 154.9 158.3 149.6 145.7 144.5r Latin America 37, 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 7.3r 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 Peru 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 47 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 15.0r 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 11..22 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 53.9r 55.5r 53.4 61.8 57.9 56 Bahamas 24.2 35.4 22.0 10.4 18.2 13.7 14.4r 8.8r 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 18.7r 21.7 6.3 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 • September 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. 1 Total 57,382 46,570 53,044 53,044 53,489 70,534 76,644 73,904 74,484 2 Payable in dollars 41,543 36,668 37,605 37,605 35,614 47,864 51,451 48,931 46,870 3 Payable in foreign currencies 15,839 9,902 15,415 15,415 17,875 22,670 25,193 24,973 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 26,485 26,023 8 Trade payables 10,904 10,978 12,857 12,857 12,401 13,764 13,918 14,293 12,657 y Advance receipts and other liabilities 19,601 16,337 12,207 12,207 11,908 12,702 12,831 12,192 13,366 10 Payable in dollars 28,913 26,297 23,722 23,722 22,756 25,061 25,292 23,685 23,501 n Payable in foreign currencies 1,592 1,018 1,318 1,318 1,553 1,405 1,457 2,800 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 lb 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 9,629 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 1,047 982 37 Netherlands 439 429 507 507 648 562 424 300 373 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 2,847 2,619 40 Canada 1,175 1,390 1,775 1,775 2,024 2,053 1,889 1,933 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 10,983 11,558 49 Japan 4,500 3,827 2,609 2,609 2,274 2,200 1,998 2,757 2,432 50 Middle Eastern oil-exporting countries' 3,111 2,852 2,551 2,551 2,308 3,489 3,706 2,832 3,359 51 Africa 874 794 950 950 943 950 1,220 948 1,072 52 Oil-exporting countries2 408 393 499 499 536 575 663 483 566 53 Other3 1,086 1,141 881 881 729 598 653 614 650 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. 1 Total 68,128 77,462 76,669 76,669 84,266 80,731 94,803 90,157 109,443 2 Payable in dollars 62,173 72,171 69,170 69,170 74,331 72,300 82,872 79,558 96,230 3 Payable in foreign currencies 5,955 5,291 7,472 7,472 9,935 8,431 11,931 10,599 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 1 1 Commercial claims 31,169 31,202 36,438 36,438 36,468 36,428 36,500 37,126 34,985 12 Trade receivables 27,536 27,202 32,629 32,629 31,443 31,283 31,530 33,104 30,493 13 Advance payments and other claims 3,633 4,000 3,809 3,809 5,025 5,145 4,970 4,022 4,492 14 Payable in dollars 29,307 29,573 34,204 34,204 33,230 34,555 34,357 33,401 31,806 15 Payable in foreign currencies 1,862 1,629 2,207 2,207 3,238 1,873 2,143 3,725 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 IX 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 21 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 24 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 26 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 28 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 Asia 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 countries" 15 16 15 15 15 39 3 57 42 36 All other3 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 15,935 16,486 15,938 14,534 38 Belgium and Luxembourg 328 238 316 3)6 271 425 393 452 395 39 France 1,796 2,171 2,236 2,236 2,520 2,693 2,921 3,095 3,480 40 Germany 1,614 1,822 1,960 1,960 2,034 1,905 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 554 483 610 610 611 562 684 763 666 43 United Kingdom 3,660 4,769 5,827 5,827 5,354 4,937 5,193 4,502 4,031 44 Canada 2,660 2,617 2,757 2,757 3,088 3,250 2,953 3.502 3,393 45 Latin America and Caribbean 5,750 6,296 5,959 5,959 5,899 5,792 5,788 5,851 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 1,024 905 905 849 894 981 957 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 576 401 439 439 435 466 379 328 292 52 Asia 8,713 7,192 9,165 9,165 9,101 9,172 8,986 9,630 9,544 53 Japan 1,976 1,681 2,074 2,074 2,082 1,881 2,074 2,796 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 680 711 631 631 716 766 895 672 773 56 Oil-exporting countries" 119 165 171 171 82 160 392 180 165 57 Other3 1,246 1,140 1,537 1,537 1,546 1,513 1,392 1,572 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 • September 2001 3.24 FOREIGN TRANSACTIONS IN SECURITIES Millions of dollars 2001 2000 2001 Transaction, and area or country 1999 2000 J M an ay .- Nov. Dec.r Jan.r Feb.1" Mar.' Apr. Mayp U.S. corporate securities STOCKS 1 Foreign purchases 2,340,659 3,605,196 1,374,196 284,909 286,161 301,650 259,101 285,528 250,983 276,934 2 Foreign sales 2,233,137 3,430,306 1,307,937 275,855 275,034 277,706 249,423 277,473 243,731 259,604 3 Net purchases, or sales (—) 107,522 174,890 66,259 9,054 11,127 23,944 9,678 8,055 1,252 17,330 4 Foreign countries 107,578 174,903 66,131 9,068 11,145 23,906 9,707 7,929 7,274 17,315 5 Europe 98,060 164,656 47,524 7,485 10,779 12,329 13,713 7,983 3,694 9,805 6 France 3,813 5.727 3,596 408 40 243 1,869 1,041 105 338 7 Germany 13,410 31,752 4,995 988 111 2,380 1,217 174 199 1,025 8 Netherlands 8,083 4,915 6,060 323 1,691 2,206 1,379 790 1,112 573 9 Switzerland 5,650 11,960 2,669 -598 -684 70 775 1,237 139 448 1 1 0 1 Ch U an n n it e e l d Is K la in n g d d s o & m Isle of Man1 4 n 2 .a , . 9 02 5 n 8 .a ,7 . 36 1 - 6 2 ,5 4 6 0 3 3 n , . 2 a. 1 0 n 7 . , a 7 . 7 3 3, - 0 1 6 3 4 5, - 1 3 2 2 0 3 -1 ,2 1 8 0 0 -1 5 4 9 4 8 4,50 5 1 9 12 Canada -335 5,956 6,617 1,477 1,468 1,490 468 2,464 1,567 628 13 Latin America and Caribbean 5,187 -17,812 -730 -2,979 -2,759 5,445 -4,927 -3,516 -1,168 3,436 14 Middle East2 -1,066 9,189 -77 340 277 -554 264 442 -56 -173 15 Other Asia 4,445 12,494 13,729 3,310 1,451 5.565 355 684 3,593 3,532 16 Japan 5,723 2,070 4,605 662 1,615 1,002 -672 512 2,675 1,088 17 Africa 372 415 -252 80 -45 -362 52 93 -44 9 18 Other countries 915 5 -680 -645 -26 -7 -218 -221 -312 78 19 Nonmonetary international and regional organizations -56 -11 128 -14 -18 38 -29 126 -22 15 BONDS3 20 Foreign purchases 854,692 L,208,386R 772,125 114,958R 119,125 138,294 147,852 170,098 149,181 166,700 21 Foreign sales 602,100 871,416' 584,896 77,596 90,143 111,327 108,792 124,000 111,631 129,146 22 Net purchases, or sales (—) 252,592 336,970r 187,229 37,362r 28,982 26,967 39,060 46,098 37,550 37,554 23 Foreign countries 252,994 337,074r 187,030 37,496r 28,980 27,065 39,019 45,880 37,524 37,542 24 Europe 140,674 180,917R 107,338 16,522 17,631 17,397 22,064 26,420 18,169 23,288 23 France 1,870 2,216 3,663 272 138 405 660 1,262 519 817 26 Germany 7,723 4,067 7.852 537 -78 2,450 1,352 911 1,639 1,500 27 Netherlands 2,446 1,130 1,720 183 275 664 496 92 -41 509 28 Switzerland 4,553 3,973R 3,775 483 -89 321 782 1,564 709 399 29 United Kingdom 106,344 141,223R 80,629 12.952 13,896 11,251 17,893 20,347 12,477 18,661 30 Channel Islands & Isle of Man1 0 0 426 0 0 107 118 101 318 -218 31 Canada 6,043 13,287 3,114 1,179 414 376 1,031 309 1,158 240 32 Latin America and Caribbean 58,783 59,444R 36,255 6,600 4,126 4,969 8,009 6,564 7,546 9,167 33 Middle East1 1,979 2,076 1,527 437 1,077 726 443 624 129 -395 34 Other Asia 42,817 78,794R 38,225 12,11 LR 5,685 3,514 7,162 11,683 10,329 5,412 35 Japan 17,541 39,356R 7,383 1,101' 3,082 910 914 5,570 344 -480 36 Africa 1,411 938 94 25 76 29 46 38 -33 14 37 Other countries 1,287 1,618 477 622 -29 54 264 242 101 -184 38 Nonmonetary international and regional organizations -402 -70 200 -134 2 -97 41 218 26 12 Foreign securities 39 Stocks, net purchases, or sales (-) 15,640 - 13,088R -37,611 5,003R -4,008 -3,664 -3,130 -14,940 -7,779 -8,098 40 Foreign purchases 1,177,303 L,802,185R 670,357 141,601R 135,417 148,111 130,974 134,166 121,060 136,046 41 Foreign sales 1,161,663 L,815,273R 707,968 136,598R 139,425 151,775 134,104 149,106 128,839 144,144 42 Bonds, net purchases, or sales (-) -5,676 —4,054R 6,532 8,192R -1,191 -1,448 1,994 -1,450 5,169 2,267 43 Foreign purchases 798,267 958,932R 539,124 94,817R 83,713 120,622 104,237 117,444 95,438 101,383 44 Foreign sales 803,943 962,986R 532,592 86,625R 84,904 122,070 102,243 118,894 90,269 99,116 45 Net purchases, or sales (—), of stocks and bonds .... 9,964 — 17,142r -31,079 13,195r -5,199 -5,112 -1,136 -16,390 -2,610 -5,831 46 Foreign countries 9,679 — 17,278r -30,656 12,956r -4,780 -4,822 -1,175 -16,085 -2,598 -5,976 47 Europe 59,247 -25,386R -21,974 6,972R -4,891 -5,421 -1,737 -13,650 3,637 -4,803 48 Canada -999 —3,888R 2,723 569R -1,363 766 11,,558888 844 -1,406 931 49 Latin America and Caribbean -4,726 - 15,688R 1,935 —767' -241 775 880088 17 -2,712 3,047 50 -42,961 24,488R -11,917 5,612R 1,529 -1,184 -1,439 -3,384 -1,531 -4,379 51 Japan -43,637 20,970R -13,033 L,982R 1,628 57 -2,206 -4,026 -3,188 -3,670 52 Africa 710 943R -97 -28 -5 -70 -15 24 96 -132 53 Other countries -1,592 2,253R -1,326 598R 191 312 -380 64 -682 -640 54 Nonmonetary international and regional organizations 285 150 -422 239 -419 -289 39 -305 -12 145 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 Transactions1 Millions of dollars; net purchases, or sales (—) during period 2001 2000 2001 AArreeaa oorr ccoouunnttrryy 11999999 22000000 J M an a .— y Nov. Dec. Jan. Feb. Mar. Apr. Mayp 1 Total estimated -9,953 —54,032r -7,749 -14,106 -9,789 -9,064 7,011 4,975 -13,747 3,076 2 Foreign countries -10,518 —53,57 lr -7,304 -13,959 -9,904 -8,531 6,972 4,977 -13,553 2,831 3 Europe -38,228 -50,704 -6,071 -10,991 -6,850 -5,000 -337 5,363 -5,599 -498 4 Belgium2 -81 73 -493 53 -96 164 0 -152 240 -216 5 Germany 2,285 -7,304 128 -2,185 -1,065 -873 -3,180 1,236 1,769 1,176 6 Luxembourg" n.a. n.a. 315 n.a. n.a. 411 9 -401 204 92 7 Netherlands 2,122 2,140 -5,907 264 -1,622 -793 2,808 -3,704 -2,488 -1,730 8 Sweden 1,699 1,082 -2,005 -104 328 218 -1,039 -993 195 -386 9 Switzerland -1,761 -10,326 0 -301 64 755 161 -120 116 -912 10 United Kingdom -20,232 -33,669 4,464 -6,035 -4,199 -2,695 937 9,838 -4,736 1,120 11 Channel Islands and Isle of Man3 n.a. n.a. 16 n.a. n.a. -98 -68 222 -31 -9 12 Other Europe and former U.S.S.R 22,260 -2,700 -2,589 -2,683 -260 -2,089 564 -563 -868 367 13 Canada 7,348 —550r -797 -1,173 -1,492 -2,067 -554 -169 1,248 745 14 Latin America and Caribbean -7,523 -4,914 -101 -507 -245 2,407r 3,620r 827r -7,095 140 15 Venezuela 362 1,288 280 251 300 227 292 -142 -148 51 16 Other Latin America and Caribbean 1,661 -11,581 8,908 -1,262 -1,746 3,261 4,279 3,009 -3,228 1,587 17 Netherlands Antilles -9,546 5,379 -9,289 504 1,201 -1,081 -951 -2,040 -3,719 -1,498 18 Asia 29,359 1,639 -555 -1,289 -458 -4,641 4,387 -41 -2,964 2,704 19 Japan 20,102 10,580 3,502 4,445 -3,855 -4,261 1,468 -1,426 3,063 4,658 20 Africa -3,021 -414 -94 -16 -44 -91 36 -60 27 -6 21 Other 1,547 1,372 314 17 -815 861 -180 -943 830 -254 22 Nonmonetary international and regional organizations 565 -461 -445 -147 115 -533 39 -2 -194 245 2.3 International 190 -483 -300 -146 24 -275 -194 -11 -213 393 24 Latin American Caribbean regional 666 76 28 -1 6 1 -4 10 25 -4 MEMO 25 Foreign countries -10,518 —53,57 lr -7,304 -13,959 -9,904 -8,531 6,972 4,977 13,553 2,831 26 Official institutions -9,861 -6,302 -4,985 -4,967 1,068 2,226 667 249 -9,040 950 27 Other foreign -657 -47,269r -2,356 -8,992 -10,972 -10,757 6,305 4,728 -4,513 1,881 Oil-exporting countries 28 Middle East4 2,207 3,483 -2,638 -888 48 -176 -719 -1,240 -383 -120 29 0 0 -3 0 0 -6 0 2 0 1 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 • September 2001 3.28 FOREIGN EXCHANGE RATES AND INDEXES OF THE FOREIGN EXCHANGE VALUE OF THE U.S. DOLLAR' Currency units per U.S. dollar except as noted 2001 11999988 22000000 Feb. Mar. Apr. May June July Exchange rates COUNTRY/CURRENCY UNIT 1 Australia/dollar- 62.91 64.54 58.15 53.38 50.31 50.16 51.99 51.80 50.89 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 2.0060 2.0955 2.1934 2.2926 2.3788 2.4731 5 Canada/dollar 1.4836 1.4858 1.4855 1.5216 1.5587 1.5578 1.5411 1.5245 1.5308 6 China, P.R./yuan 8.3008 8.2783 8.2784 8.2771 8.2775 8.2771 8.2770 8.2770 8.2769 7 Denmark/krone 6.7030 6.9900 8.0953 8.1103 8.2229 8.3657 8.5256 8.7397 8.6442 8 European Monetary Union/euro' n.a. 1.0653 0.9232 0.9205 0.9083 0.8925 0.8753 0.8530 0.8615 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 7.7999 7.7999 7.7993 7.7999 7.7997 7.7999 14 India/rupee 41.36 43.13 45.00 46.56 46.65 46.79 46.95 47.04 47.18 15 Ireland/pound" 142.48 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 16 Italy/lira 1,736.85 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 17 Japan/yen 130.99 113.73 107.80 116.23 121.51 123.77 121.77 122.35 124.50 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 9.711 9.599 9.328 9.148 9.088 9.168 20 Netherlands/guilder 1.9837 n.a. n.a. n.a. n.a. n.a. n.a. n.a. n.a. 21 New Zealand/dollar" 53.61 52.94 45.68 43.45 41.82 40.69 42.18 41.41 40.81 22 Norway/krone 7.5521 7.8071 8.8131 8.9180 8.9859 9.0920 9.1380 9.3014 9.2566 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 1.7435 1.7732 1.8118 1.8141 1.8170 1.8233 25 South Africa/rand 5.5417 6.1191 6.9468 7.8214 7.8980 8.0783 7.9789 8.0595 8.2094 26 South Korea/won 1,400.40 1,189.84 1.130.90 1.252.85 1,291.41 1,327.76 1,298.90 1,295.05 1,305.24 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 87.136 85.730 88.205 90.848 90.371 90.314 29 Sweden/krona 7.9522 8.2740 9.1735 9.7518 10.0516 10.2035 10.3513 10.7930 10.7603 30 Switzerland/franc 1.4506 1.5045 1.6904 1.6686 1.6908 1.7131 1.7528 1.7856 1.7570 31 Taiwan/dollar 33.547 32.322 31.260 32.330 32.622 32.941 33.203 34.328 34.821 32 Thailand/baht 41.262 37.887 40.210 42.665 43.988 45.494 45.525 45.263 45.641 33 United Kingdom/pound" 165.73 161.72 151.56 145.25 144.45 143.48 142.65 140.20 141.48 34 Venezuela/bolivar 548.39 606.82 680.52 703.36 706.06 710.39 714.86 717.27 722.72 Indexes4 NOMINAL 35 Broad (January 1997= 100)5 116.48 116.87 119.93 123.77 125.91 126.97 126.77 127.58 128.07 36 Major currencies (March 1973 = 100)6 95.79 94.07 98.34 101.44 103.98 105.09 105.03 105.91 106.07 37 Other important trading partners (January 1997= 100)7 126.03 129.94 130.26 134.52 135.56 136.30 135.92 136.43 137.37 REAL 38 Broad (March 1973= 100)5 99.53R 98.85R 102.52R 88. II1' 89.69R 90.40R 90.39R 91.14r 91.63 39 Major currencies (March 1973= 100)6 97.24R 96.67' I02.86R 107.29 109.93R m.or 110.82R 111.98R 112.44 40 Other important trading partners (March 1973= 100)7 108.98R 108.10' 108.56R 72.96R 73.65R 74.06R 74.19r 74.59R 75.12 1. Averages of certified noon buying rates in New York for cable transfers. Data in this 4. Starting with the February 2001 Bulletin, revised index values resulting from the annual table also appear in the Board's G.5 (405) monthly statistical release. For ordering address, revision of data that underlie the calculated trade weights are reported. For more information see inside front cover. on the indexes of foreign exchange value of the dollar, see Federal Reserve Bulletin, vol. 84 2. U.S. cents per currency unit. (October 1998), pp. 811-818. 3. The euro is reported in place of the individual euro area currencies. By convention, the 5. Weighted average of the foreign exchange value of the U.S. dollar against the currencies rate is reported in U.S. dollars per euro. The bilateral currency rates can be derived from the of a broad group of U.S. trading partners. The weight for each currency is computed as an euro rate by using the fixed conversion rates (in currencies per euro) as shown below: average of U.S. bilateral import shares from and export shares to the issuing country and of a measure of the importance to U.S. exporters of that country's trade in third country markets. 6. Weighted average of the foreign exchange value of the U.S. dollar against a subset of Euro equals broad index currencies that circulate widely outside the country of issue. The weight for each 13.7603 Austrian schillings 1936.27 Italian lire currency is its broad index weight scaled so that the weights of the subset of currencies in the 40.3399 Belgian francs 40.3399 Luxembourg francs index sum to one. 5.94573 Finnish markkas 2.20371 Netherlands guilders 7. Weighted average of the foreign exchange value of the U.S. dollar against a subset of 6.55957 French francs 200.482 Portuguese escudos broad index currencies that do not circulate widely outside the country of issue. The weight 1.95583 German marks 166.386 Spanish pesetas for each currency is its broad index weight scaled so that the weights of the subset of .787564 Irish pounds 340.750 Greek drachmas currencies in the index sum to one. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A63 Guide to Statistical Releases and Special Tables STATISTICAL RELEASES—List Published Semiannually, with Latest Bulletin Reference Issue Page Anticipated schedule of release dates for periodic releases 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 1999 September 2000 A64 2000 September 2001 A64 Disposition of applications for private mortgage insurance 1999 September 2000 A73 2000 September 2001 A73 Small loans to businesses and farms 1999 September 2000 A76 2000 September 2001 A76 Community development lending reported under the Community Reinvestment Act 1999 September 2000 A79 2000 September 2001 A79 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A64 Special Tables • September 2001 4.34 RESIDENTIAL LENDING ACTIVITY OF FINANCIAL INSTITUTIONS COVERED BY HMDA, 1988-2000 Number Item 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 1 Loans or applications (millions)2 3.39 3.13 6.59 7.89 12.01 15.38 12.19 11.23 14.81 16.41 24.66 22.90 19.24 2 Reporting institutions 9,319 9,203 9,332 9,358 9,073 9,650 9,858 9,539 9,328 7,925 7,836 7,832 7,713 3 Disclosure reports 13,919 14,154 24,041 25,934 28,782 35,976 38,750 36,611 42,946 47,416 57,294 56,966 52,776 1. Before 1990, includes only home purchase, home refinancing, and home-improvement 2. Revised from preliminary data published in Glenn B. Canner and Dolores S. Smith, loans originated by covered institutions; beginning in 1990 (first year under revised reporting "Home Mortgage Disclosure Act: Expanded Data on Residential Lending," Federal Reserve system), includes such loans originated and purchased, applications approved but not ac- Bulletin, vol. 77 (November 1991), p. 861, to reflect corrections and the reporting of cepted by the applicant, applications denied or withdrawn, and applications closed because additional data. information was incomplete. SOURCE. FFIEC, Home Mortgage Disclosure Act. 4.35 APPLICATIONS FOR HOME LOANS REPORTED UNDER HMDA, 2000 By Type of Dwelling, Purpose of Loan, and Loan Program Thousands One- to four-family dwellings MMuullttiiffaammiillyy LLooaann pprrooggrraamm AAllll ddwweelllliinnggss'' Home purchase Home refinancing Home improvement All 1 FHA 1.087.1 99.5 92.5 1,279.1 1.3 1,280.4 2 VA 209.6 11.2 * 221.2 * 221.3 3 FSA/RHS 22.1 .9 * 23.1 * 23.1 4 Conventional 6,947.8 6,409.8 1.914.5 15,272.1 37.3 15,309.4 5 Total 8,266.5 6,521.3 2,007.6 16,795.4 38.8 16,834.2 *Fewer than 500. SOURCE. FFIEC, Home Mortgage Disclosure Act. 1. Multifamily dwellings are those for five or more families. 4.36 HOME LOANS ORIGINATED BY LENDERS REPORTED UNDER HMDA, 2000 By Type of Dwelling, Purpose of Loan, and Type of Lender Percent One- to four-family dwellings Home purchase MMMuuullltttiiifffaaammmiiilllyyy TTTyyypppeee ooofff llleeennndddeeerrr AAAllllll HHoommee HHoommee AAllll dddwwweeelllllliiinnngggsss''' rreeffiinnaanncciinngg iimmpprroovveemmeenntt FHA-insured VA- FSA/RHS Conventional All guaranteed 1 Commercial bank 9.0 11.6 15.4 26.3 22.9 34.9 64.8 31.1 53.7 31.2 2 Savings association . . . 4.3 4.6 4.8 14.2 12.2 11.9 8.5 11.7 32.9 11.8 3 Credit union .2 2.3 .4 2.2 1.8 3.5 15.0 3.8 .4 3.8 4 Mortgage company2 . . . 86.6 81.5 79.4 57.4 63.1 49.7 11.7 53.4 13.1 53.3 5 Total 100 100 100 100 100 100 100 100 100 100 MEMO Distribution of loans 6 Number 786,989 165,145 16,315 3,814,508 4,782.957 2.433,619 893,097 8,109,673 27,846 8,137,519 7 Percent 9.7 2.0 .2 46.9 58.8 29.9 11.0 99.7 .3 100.0 *Less than .05 percent. 1. Multifamily dwellings are those for five or more families. 2. Comprises all covered mortgage companies, including those affiliated with a commercial bank, savings association, or credit union. SOURCE. FFIEC, Home Mortgage Disclosure Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A65 4.37 APPLICATIONS FOR LOANS FOR ONE- TO FOUR-FAMILY HOMES REPORTED UNDER HMDA, 2000 By Purpose of Loan and Characteristics of Applicant and Census Tract Home purchase Home refinancing Home improvement Government-backed Characteristic MEMO MEMO Percentage of Percentage of characteristic's characteristic's home purchase home purchase loans loans Racial/ethnic identity 1 American Indian or Alaskan Native . . . 7,454 .6 13.5 47,799 .8 21,184 7,936 2 Asian or Pacific Islander 20,906 1.7 8.5 223,773 3.8 91.5 95,747 2.5 24,299 2.0 3 Black 186,817 15.6 26.5 518,275 8.9 73.5 495,314 12.9 149,040 12.2 4 Hispanic 205,480 17.1 30.9 460,171 7.9 69.1 310,589 8.1 115,855 9.4 5 White 732,875 61.0 14.3 4,388,618 75.0 85.7 2,779,186 72.5 893,461 72.9 6 Other 13,170 1.1 12.6 91,235 1.6 87.4 64,978 1.7 11,897 1.0 7 All 34,276 2.9 21.5 124,844 2.1 78.5 66,396 1.7 23,935 2.0 8 Total 1,200,978 100.0 17.0 5,854,715 100.0 83.0 3,833,394 100.0 1,226,423 100.0 Income (percentage of MSA median)2 9 Less than 50 142,472 12.6 20.2 562,068 11.2 79.8 697,289 14.9 231,532 14.6 10 50-79 385,395 34.2 26.9 1,046,000 20.9 73.1 1,151,623 24.6 365,830 23.0 11 80-99 228,968 20.3 25.9 656,582 13.1 74.1 705,037 15.1 234,603 14.7 12 100-119 154,473 13.7 21.4 568,380 11.4 78.6 566,507 12.1 196,545 12.4 13 120 or more 215,686 19.1 9.1 2,166,658 43.3 90.9 1,560,486 33.3 562,750 35.4 14 Total 1,126,994 100.0 18.4 4,999,688 100.0 81.6 4,680,942 100.0 1,591,260 100.0 CENSUS TRACT Racial/ethnic composition (minorities as percentage of population) 15 Less than 10 416,921 37.4 14.7 2,411,340 47.4 85.3 2,300,149 44.6 774,994 48.0 16 10-19 253,080 22.7 18.5 1,118,241 22.0 81.5 944,410 18.3 300,773 18.6 17 20-49 282,407 25.3 21.9 1,005,748 19.8 78.1 981,107 19.0 285,241 17.7 18 50-79 93,300 8.4 22.3 324,980 6.4 77.7 433,924 8.4 115,945 7.2 19 80-100 70,340 6.3 23.9 223,384 4.4 76.1 494,052 9.6 138,128 8.6 20 Total 1,116,048 100.0 18.0 5,083,693 100.0 82.0 5,153,642 100.0 1,615,081 100.0 Income 3 21 Low 24,627 2.2 17.5 116,340 2.3 82.5 207,731 4.0 60,449 3.7 22 Moderate 191,963 17.0 22.2 671,843 13.2 77.8 928,179 17.9 278,780 16.9 2.3 Middle 656,944 58.1 20.5 2,553,333 50.1 79.5 2,748,929 53.0 874,191 53.1 24 Upper 257,774 22.8 12.8 1,755,937 34.4 87.2 1,301,731 25.1 432,953 26.3 25 Total 1,131,308 100.0 18.2 5,097,453 100.0 81.8 5,186,570 100.0 1,646,373 100.0 Location 4 26 Central city 513,252 44.8 20.0 2,053,454 39.7 80.0 2,208,142 41.9 690,645 41.3 27 Non-central city 633,644 55.2 16.9 3,118,740 60.3 83.1 3,056,383 58.1 983,579 58.7 28 Total 1,146,896 100.0 5,172,194 100.0 5,264,525 1,674,224 NOTE. Lenders reported 16,842,555 applications for home loans in 2000. Not all character- median family income for the MSA in which the tract is located. Categories are defined as istics were reported for all applications; thus, the number of applications being distributed by follows: Low income, median family income for census tract less than 50 percent of median characteristic varies by characteristic. family income for MSA; Moderate income, median family income for census tract at least 50 1. Loans backed by the Federal Housing Administration, the Department of Veterans and less than 80 percent of MSA median; Middle income, median family income at least 80 Affairs, or the Farmers Home Administration. percent and less than 120 percent of MSA median; Upper income, median family income 120 2. Median family income of the metropolitan statistical area (MSA) in which the property percent and greater of MSA median. related to the loan is located. 4. For census tracts located in MSAs. 3. Census tracts are categorized by the median family income for the tract relative to the SOURCE. FFIEC, Home Mortgage Disclosure Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A66 Special Tables • September 2001 4.38 APPLICATIONS FOR LOANS FOR ONE- TO FOUR-FAMILY HOMES REPORTED UNDER HMDA, 2000 By Purpose of Loan, with Denial Rate, and by Characteristic of Applicant Home purchase HHoommee rreeffiinnaanncciinngg HHoommee iimmpprroovveemmeenntt AAAppppppllliiicccaaannnttt ccchhhaaarrraaacccttteeerrriiissstttiiiccc111 Government-backed" Conventional Distribution Denial rate Distribution Denial rate Distribution Denial rate Distribution Denial rate American Indian or Alaskan Native 1 One male 35.50 15.70 33.90 40.30 35.10 32.30 35.40 35.30 2 Two males 1.90 12.60 6.60 12.30 3.00 22.20 3.70 17.00 3 One female 27.60 17.00 28.90 48.40 27.60 29.70 28.00 36.90 4 Two females 2.00 22.20 2.90 43.40 1.50 27.40 1.90 32.90 5 One male and one female 33.10 16.00 27.80 44.60 32.80 28.60 31.00 28.60 6 Total3 100.00 14.00 100.00 41.80 100.00 30.00 100.00 33.00 Asian or Pacific Islander 7 One male 25.80 9.80 25.80 14.30 22.70 25.70 26.40 33.60 8 Two males 4.30 8.90 2.20 14.70 1.50 21.60 2.30 21.50 9 One female 17.50 12.00 18.20 15.30 20.00 24.10 19.70 33.30 10 Two females 2.80 9.80 1.50 14.00 1.20 24.50 1.50 33.30 11 One male and one female 49.70 9.30 52.10 10.20 54.60 20.00 50.10 22.30 12 Total3 100.00 9.80 100.00 12.40 100.00 22.20 100.00 27.60 Black 13 One male 28.40 15.00 31.10 43.60 28.40 34.80 28.30 44.70 14 Two males 1.10 14.50 1.30 40.10 1.30 24.20 1.10 38.70 15 One female 38.20 15.50 39.60 47.40 37.00 33.90 40.60 45.90 16 Two females 2.70 17.90 2.70 55.70 1.80 33.00 2.00 47.60 17 One male and one female 29.60 15.50 25.30 40.10 31.60 32.40 28.10 42.60 18 Total3 100.00 15.40 100.00 44.60 100.00 33.60 100.00 44.60 Hispanic 19 One male 28.60 11.20 34.90 34.50 26.20 29.90 34.70 44.80 20 Two males 6.70 10.00 3.20 34.30 2.20 27.70 1.70 39.50 21 One female 14.70 11.90 19.80 33.00 19.00 27.40 23.00 45.00 22 Two females 2.50 12.00 1.80 37.90 1.50 27.50 1.20 41.70 23 One male and one female 47.50 10.60 40.20 27.20 51.00 25.40 39.40 37.90 24 Total3 100.00 11.00 100.00 31.40 100.00 27.10 100.00 42.00 White 25 One male 29.00 10.60 27.10 27.00 25.70 24.50 24.50 25.90 26 Two males 1.80 9.20 1.60 23.20 1.50 17.70 1.10 22.70 27 One female 18.60 10.80 19.60 27.70 18.20 22.90 18.90 25.90 28 Two females 1.40 10.40 1.20 31.50 .90 21.70 1.00 31.20 29 One male and one female 49.30 8.90 50.40 17.40 53.70 18.90 54.50 17.80 30 Total3 100.00 9.80 100.00 22.30 100.00 21.10 100.00 21.50 All 31 One male 28.80 11.40 28.10 29.10 26.10 26.50 26.10 31.10 32 Two males 2.60 9.90 1.70 25.20 1.50 19.80 1.20 26.50 33 One female 21.10 12.40 21.50 31.30 20.90 25.90 22.10 32.70 34 Two females 1.90 12.60 1.40 35.80 1.10 25.00 1.20 35.80 35 One male and one female 45.70 9.90 47.20 19.00 50.40 20.70 49.50 21.20 36 Total3 100.00 10.90 100.00 24.90 100.00 23.30 100.00 26.60 1. Applicants are categorized by race of first applicant listed on Loan Application Register, 3. Includes all applicants from racial or ethnic group regardless of whether gender was except for joint white and minority applications, which are not shown in this table. reported. 2. Loans backed by the Federal Housing Administration, the Department of Veterans SOURCE. FFIEC, Home Mortgage Disclosure Act. Affairs, or the Farmers Home Administration. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A67 4.39 APPLICATIONS FOR HOME LOANS REPORTED UNDER HMDA, 2000 By Loan Program and Size of Dwelling Percent One- to four-family dwellings Home purchase Home refinancing Type of loan Approved Approved Approved Approved and but not Denied Withdrawn File closed Total and but not Denied Withdrawn File closed Total accepted accepted accepted accepted 1 FHA 72.4 6.0 11.1 8.7 1.7 100 58.3 7.1 15.0 14.7 4.8 100 2 VA 78.8 3.6 7.9 8.3 1.5 100 62.7 6.9 13.6 11.6 5.1 100 3 FSA/RHS 73.8 2.4 13.7 8.7 1.4 100 42.7 4.7 23.3 27.9 1.4 100 4 Conventional 54.9 9.6 26.7 7.0 1.8 100 36.9 10.0 31.3 16.6 5.2 100 5 All 57.9 9.0 24.1 7.3 1.8 100 37.3 9.9 31.0 16.5 5.2 100 One- to four-family dwellings Home improvement Approved Approved Approved Approved and but not Denied Withdrawn File closed Total and but not Denied Withdrawn File closed Total accepted accepted accepted accepted 1 FHA 12.3 13.2 67.9 6.5 .1 100 55.2 3.6 31.9 5.7 3.6 100 2 VA 54.3 12.1 22.7 9.7 1.2 100 56.9 * 20.7 17.2 5.2 100 3 FSA/RHS 61.2 8.7 23.3 6.8 * 100 80.0 * 10.0 10.0 * 100 4 Conventional 46.0 14.0 33.3 5.8 .9 100 72.4 2.6 12.7 8.6 3.6 100 5 All 44.5 13.9 34.9 5.9 .9 100 71.8 2.6 13.4 8.6 3.6 100 NOTE. Loans approved and accepted were approved by the lender and accepted by the *Less than .05 percent, applicant. Loans approved but not accepted were approved by the lender but not accepted by 1. Multifamily dwellings are those for five or more families, the applicant. Applications denied were denied by the lender, and applications withdrawn SOURCE. FFIEC, Home Mortgage Disclosure Act. were withdrawn by the applicant. When an application was left incomplete by the applicant, the lender reported file closed and took no further action. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A68 Special Tables • September 2001 4.40 APPLICATIONS FOR ONE- TO FOUR-FAMILY HOME LOANS REPORTED UNDER HMDA, 2000 By Disposition of Loan and Characteristics of Applicant and Census Tract A. Home Purchase Loans Percent Government-backed 1 Conventional Characteristic Approved Denied Withdrawn File closed Total Approved Denied Withdrawn File closed Total APPLICANT Racial or ethnic identity 1 American Indian or Alaskan Native .... 75.1 14.0 8.9 1.9 100 51.3 41.8 5.4 1.5 100 2 Asian or Pacific Islander . 79.9 9.8 8.6 1.8 100 77.2 12.4 8.1 2.3 100 3 Black 73.7 15.4 8.9 2.0 100 44.8 44.6 8.0 2.6 100 4 Hispanic 77.8 11.0 9.1 2.2 100 58.6 31.4 7.5 2.4 100 5 White 81.5 9.8 7.4 1.4 100 70.1 22.3 6.1 1.4 100 6 Other 70.9 11.5 11.8 5.8 100 58.7 31.8 7.6 1.9 100 7 Joint2 81.8 9.3 7.5 1.3 100 70.4 21.0 6.9 1.7 100 Income ratio (percentage of MSA median)3 8 Less than 50 73.2 16.2 8.6 2.0 100 49.3 43.1 5.9 1.6 100 9 American Indian or Alaskan Native . . 69.9 17.5 9.8 2.8 100 56.7 36.7 4.9 1.7 100 10 Asian or Pacific Islander 74.0 15.3 8.7 2.0 100 69.3 20.0 8.1 2.6 100 11 Black 70.0 18.8 8.9 2.3 100 44.3 45.3 7.5 2.8 100 12 Hispanic 75.0 14.3 8.4 2.2 100 53.3 38.2 6.3 2.2 100 13 White 74.8 15.9 7.6 1.7 100 56.1 37.7 4.9 1.2 100 14 Other 68.5 17.0 10.3 4.3 100 47.1 43.9 6.9 2.1 100 15 Joint2 69.3 19.5 8.4 2.8 100 52.5 39.9 5.8 1.7 100 16 50-79 80.9 10.1 7.4 1.6 100 64.2 27.4 6.5 1.9 100 17 American Indian or Alaskan Native . . 79.8 10.9 7.7 1.6 100 61.7 31.0 5.2 2.2 100 18 Asian or Pacific Islander 80.6 9.9 7.6 1.9 100 77.3 13.3 7.3 2.1 100 19 Black 77.1 13.2 7.9 1.8 100 52.9 35.0 8.6 3.5 100 20 Hispanic 80.1 10.6 7.4 2.0 100 61.2 29.3 7.0 2.5 100 21 White 83.1 9.1 6.5 1.3 100 70.9 22.0 5.6 1.5 100 22 Other 75.9 10.2 8.5 5.4 100 63.3 27.4 7.2 2.1 100 23 Joint2 80.5 10.9 7.2 1.4 100 62.9 28.8 6.7 1.6 100 24 80-119 83.2 8.1 7.3 1.4 100 73.0 18.0 7.0 2.0 100 25 American Indian or Alaskan Native . . 83.4 8.4 6.9 1.3 100 67.8 22.8 7.2 2.2 100 26 Asian or Pacific Islander 82.8 7.7 8.1 1.4 100 78.5 11.4 7.7 2.4 100 27 Black 78.5 11.7 8.1 1.8 100 58.1 29.0 9.4 3.5 100 28 Hispanic 80.3 9.9 7.9 1.9 100 65.7 23.5 8.1 2.7 100 29 White 85.8 7.0 6.1 1.2 100 78.4 14.0 6.0 1.6 100 30 Other 59.4 7.9 8.7 4.3 100 18.6 5.1 2.2 .6 100 31 Joint2 84.4 7.9 6.6 1.1 100 73.4 18.0 6.8 1.8 100 32 120 or more 83.1 7.1 8.1 1.7 100 80.6 10.4 7.0 1.9 100 33 American Indian or Alaskan Native . . 82.8 8.3 7.5 1.5 100 74.5 15.1 8.3 2.1 100 34 Asian or Pacific Islander 81.2 8.5 8.6 1.8 100 80.0 10.0 7.7 2.3 100 35 Black 78.4 11.0 8.7 2.0 100 65.3 22.0 9.6 3.1 100 36 Hispanic 78.2 8.6 10.4 2.8 100 72.3 16.1 8.6 3.1 100 37 White 86.2 6.2 6.3 1.3 100 84.0 8.4 6.1 1.6 100 38 Other 72.5 9.2 12.2 6.1 100 76.0 12.9 8.8 2.4 100 39 Joint2 85.2 6.9 6.9 1.0 100 82.0 9.4 6.8 1.7 100 CENSUS TRACT Racial or ethnic composition (minorities as percentage of population) 40 Less than 10 83.5 8.6 6.7 1.3 100 75.4 17.0 6.2 1.5 100 41 10-19 82.0 8.9 7.6 1.5 100 72.7 18.0 7.3 2.0 100 42 20-49 79.9 9.9 8.5 1.7 100 67.7 22.0 8.0 2.3 100 43 50-79 75.7 12.3 9.7 2.2 100 62.3 26.3 8.7 2.8 100 44 80-100 72.4 14.1 10.8 2.7 100 54.4 32.2 10.2 3.2 100 Income4 45 Low 71.1 15.2 10.9 2.8 100 54.1 33.4 9.5 3.0 100 46 Moderate 77.5 11.9 8.6 2.0 100 60.5 29.6 7.8 2.2 100 47 Middle 81.5 9.4 7.6 1.5 100 70.0 21.3 6.9 1.8 100 48 Upper 82.6 7.9 7.9 1.5 100 79.2 11.8 7.1 1.9 100 Location5 49 Central city 79.8 10.2 8.3 1.7 100 69.5 20.9 7.5 2.1 100 50 Non-central city 81.5 141.2 78.0 25.4 100 72.7 18.6 6.9 1.8 100 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A69 4.40 APPLICATIONS FOR ONE- TO FOUR-FAMILY HOME LOANS REPORTED UNDER HMDA, 2000 By Disposition of Loan and Characteristics of Applicant and Census Tract—Continued B. Home Refinancing and Home Improvement Loans Percent Home refinancing Home improvement CChhaarraacctteerriissttiicc Approved Denied Withdrawn File closed Total Approved Denied Withdrawn File closed Total APPLICANT Racial or ethnic identity 1 American Indian or Alaskan Native .... 48.7 30.0 12.7 8.7 100 62.0 33.0 4.3 .7 100 2 Asian or Pacific Islander . 57.8 22.2 11.5 8.4 100 66.5 27.6 4.5 1.4 100 3 Black 44.5 33.6 12.7 9.2 100 52.0 44.6 3.1 .4 100 4 Hispanic 51.5 27.1 12.7 8.7 100 53.7 42.0 3.4 .9 100 5 White 62.3 21.1 10.9 5.7 100 74.8 21.5 3.3 .4 100 6 Other 36.7 35.5 24.6 3.3 100 59.7 33.5 5.9 .9 100 7 Joint2 61.8 21.8 10.6 5.8 100 71.8 24.2 3.5 .5 100 Income ratio (percentage of MSA mediany 8 Less than 50 38.9 37.9 16.3 7.0 100 44.6 50.3 4.5 .6 100 9 American Indian or Alaskan Native . . 37.6 35.1 15.3 12.0 100 52.6 43.1 3.4 .9 100 10 Asian or Pacific Islander 41.5 28.2 16.2 14.2 100 50.1 44.6 4.6 .7 100 11 Black 39.9 36.2 12.9 11.0 100 47.1 49.6 2.9 .3 100 12 Hispanic 40.2 33.2 14.4 12.3 100 42.6 54.0 2.9 .5 100 13 White 50.4 27.6 13.3 8.6 100 62.7 33.7 3.3 .3 100 14 Other 20.0 46.5 31.1 2.5 100 44.3 49.5 5.5 .6 100 15 Joint2 47.0 29.5 13.8 9.6 100 53.0 43.1 3.4 .4 100 16 50-79 46.4 31.9 15.3 6.3 100 52.6 41.7 4.9 .7 100 17 American Indian or Alaskan Native . . 47.0 29.4 12.6 11.0 100 60.1 34.3 4.7 .9 100 18 Asian or Pacific Islander 51.0 24.4 13.8 10.7 100 58.4 35.8 4.5 1.3 100 19 Black 43.4 33.9 12.7 10.1 100 50.2 46.5 3.0 .4 100 20 Hispanic 47.5 29.5 13.0 10.1 100 48.7 47.5 3.2 .6 100 21 White 57.6 23.3 11.8 7.3 100 69.3 27.1 3.2 .4 100 22 Other 30.7 39.8 26.2 3.3 100 51.3 41.7 6.3 .7 100 23 Joint2 53.3 26.5 11.9 8.3 100 60.7 34.8 4.1 .5 100 24 80-119 51.8 28.1 14.4 5.7 100 61.0 32.9 5.3 .8 100 25 American Indian or Alaskan Native . . 50.0 29.2 11.4 9.4 100 66.3 29.0 4.3 .4 100 26 Asian or Pacific Islander 56.7 22.9 11.8 8.6 100 67.3 27.2 4.3 1.2 100 27 Black 45.6 32.8 12.3 9.3 100 54.9 41.8 2.8 .4 100 28 Hispanic 50.1 28.1 12.4 9.4 100 55.2 40.8 3.2 .7 100 29 White 62.2 20.5 10.9 6.4 100 75.3 21.0 3.2 .5 100 30 Other 3.3 3.0 1.7 .3 100 2.5 1.3 .2 .0 100 31 Joint2 59.5 22.8 10.8 6.9 100 68.9 27.3 3.3 .4 100 32 120 or more 60.1 22.6 12.5 4.7 100 69.6 23.4 5.9 1.1 100 33 American Indian or Alaskan Native . . 54.1 26.4 12.0 7.6 100 72.0 22.5 4.5 1.1 100 34 Asian or Pacific Islander 63.7 20.6 9.6 6.1 100 72.8 21.1 4.3 1.8 100 35 Black 49.8 30.7 11.5 8.1 100 60.9 35.6 3.0 .5 100 36 Hispanic 58.9 22.5 11.3 7.3 100 61.8 33.1 3.5 1.6 100 37 White 69.0 17.2 9.1 4.7 100 81.4 14.6 3.4 .5 100 38 Other 52.3 27.5 16.3 3.9 100 70.7 23.6 4.5 1.3 100 39 Joint2 66.9 18.9 9.4 4.7 100 77.3 18.7 3.5 .5 100 CENSUS TRACT Racial or ethniccomposition (minorities as percentage of population) 40 Less than 10 52.3 27.5 15.5 4.7 100 65.1 28.1 5.9 .8 100 41 10-19 48.6 29.7 16.4 5.4 100 59.3 33.4 6.2 1.0 100 42 20-49 44.1 33.1 17.0 5.9 100 52.7 40.3 6.0 1.0 100 43 50-79 40.4 35.1 17.4 7.0 100 46.2 46.9 6.0 .9 100 44 80-100 37.3 37.5 18.0 7.2 100 42.5 51.0 5.6 .8 100 Income4 45 Low 38.5 38.1 17.1 6.2 100 42.0 51.8 5.4 .8 100 46 Moderate 41.7 35.3 17.0 6.0 100 48.2 45.6 5.4 .7 100 47 Middle 47.4 30.7 16.5 5.4 100 58.7 34.7 5.7 .8 100 48 Upper 54.3 25.2 15.4 5.1 100 65.9 26.4 6.5 1.2 100 Location5 49 Central city 45.7 32.0 16.5 5.7 100 54.6 39.0 5.6 .8 100 50 Non-central city 49.3 29.3 16.2 5.3 100 60.8 32.2 6.0 .9 100 NOTE. Applicant income ratio is applicant income as a percentage of MSA median. MSA median family income for the MSA in which the tract is located. Categories are defined as median is median family income of the metropolitan statistical area (MSA) in which the follows: Low income, median family income for census tract less than 50 percent of median property related to the loan is located. family income for MSA; Moderate income, median family income for census tract at least 50 1. Loans backed by the Federal Housing Administration, the Department of Veterans and less than 80 percent of MSA median; Middle income, median family income at least 80 Affairs, or the Farmers Home Administration. percent and less than 120 percent of MSA median; Upper income, median family income 120 2. White and minority. percent and greater of MSA median. 3. MSA median is median family income of the metropolitan statistical area (MSA) in 5. For census tracts located in MSAs. which the property related to the loan is located. SOURCE. FFIEC, Home Mortgage Disclosure Act. 4. Census tracts are categorized by the median family income for the tract relative to the Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A70 Special Tables • September 2001 4.41 HOME LOANS SOLD, 2000 By Purchaser and Characteristics of Borrower and Census Tract Fannie Mae Ginnie Mae Freddie Mac FAMC Commercial bank CChhaarraacctteerriissttiicc Number Percent Number Percent Number Percent Number Percent Number Percent 1 All 1,361,352 100.0 842,847 100.0 838,712 100.0 656 100.0 192,974 100.0 BORROWER Racial or ethnic identity 2 American Indian or Alaskan Native .... 3,279 .3 2,301 .4 1,845 .3 2 .3 488 .3 3 Asian or Pacific Islander 43,277 4.3 10,219 1.8 26,594 3.8 7 1.1 4,982 3.3 4 Black 43,066 4.3 83,209 14.3 24,902 3.5 139 21.7 15,202 10.1 5 Hispanic 62,541 6.2 99,287 17.1 40,182 5.7 101 15.7 15,138 10.0 6 White 819,517 81.6 361,933 62.4 588,758 83.6 375 58.4 110,460 73.0 / Other 11,129 1.1 5,487 .9 7,588 1.1 6 .9 1,793 1.2 S Joint 21,914 2.2 17,672 3.0 14,738 2.1 12 1.9 3,199 2.1 9 Total 1,004,723 100.0 580,108 100.0 704,607 100.0 642 100.0 151,262 100.0 Income ratio (percentage of MSA median j 10 Less than 50 69,676 7.2 58,109 10.3 42,812 6.5 37 8.5 12,324 8.0 II 50-79 191,113 19.8 187,516 33.2 126,455 19.2 132 30.4 33,391 21.8 12 80-99 145,578 15.1 121,210 21.4 97,447 14.8 85 19.6 22,527 14.7 13 100-119 134,756 13.9 83,948 14.9 91,110 13.8 63 14.5 19,252 12.6 14 120 or more 425,217 44.0 114,487 20.3 301,294 45.7 117 27.0 65,825 42.9 15 Total 966,340 100.0 565,270 100.0 659,118 100.0 434 100.0 153,319 100.0 CENSUS TRACT Racial or ethnic composition (minorities as percentage of population) 16 Less than 10 620,960 52.5 289,421 38.2 406,224 56.7 220 44.3 77,721 46.7 1/ 10-19 258,968 21.9 174,222 23.0 151,982 21.2 65 13.1 36,978 22.2 18 20-49 206,983 17.5 188,282 24.9 114,000 15.9 57 11.5 32,318 19.4 19 50-79 59,784 5.1 59,567 7.9 29,299 4.1 36 7.2 10,654 6.4 20 80-100 35,103 3.0 45,993 6.1 15,548 2.2 119 23.9 8,685 5.2 21 Total 1,181,798 100.0 757,485 100.0 717,053 100.0 497 100.0 166,356 100.0 Income 22 Low 15,475 1.3 14,238 1.9 7,693 1.1 21 4.2 3,435 2.0 23 Moderate 114,573 9.7 119,685 15.7 63,180 8.8 60 12.1 22,474 13.2 24 Middle 604,755 51.1 450,320 59.0 369,036 51.4 325 65.4 83,887 49.3 25 Upper 448,951 37.9 178,459 23.4 278,460 38.8 91 18.3 60,210 35.4 26 Total 1,183,754 100.0 762,702 100.0 718,369 100.0 497 100.0 170,006 100.0 Location 27 Central city 443,327 37.4 327,756 43.0 261,067 36.3 209 41.2 65,642 38.6 28 Non-central city 741,195 62.6 435,241 57.0 457,692 63.7 298 58.8 104,490 61.4 29 Total 1,184,522 100.0 762,997 100.0 718,759 100.0 507 100.0 170,132 100.0 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Home Mortgage Disclosure A71 4.41 HOME LOANS SOLD, 2000 By Purchaser and Characteristics of Borrower and Census Tract—Continued Savings bank or savings and loan Life insurance company association 96,101 1,958,194 BORROWER Racial or ethnic identity 31 American Indian or Alaskan Native 315 .4 2 1,953 .4 9,623 .6 32 Asian or Pacific Islander 4,686 5.6 18 21,346 4.2 47,707 3.2 33 Black 5,607 6.7 69 40,308 7.9 156,024 10.5 34 Hispanic 5,669 6.8 45 50,770 9.9 148,842 10.0 35 White 64,729 77.1 1,275 378,251 74.1 1,064,466 71.9 36 Other 777 .9 10 6,037 1.2 18,290 1.2 37 Joint 2,123 2.5 27 11,649 2.3 36,250 2.4 38 Total 83,906 100.0 1,446 510,314 100.0 1,481,202 100.0 Income ratio (percentage of MSA median)' 39 Less than 50 4,742 5.7 77 6.0 40,864 8.1 149,982 10.4 40 50-79 14,130 16.9 293 23.0 102,580 20.4 346,970 24.1 41 80-99 11,945 14.3 205 16.1 67,298 13.4 225,335 15.6 42 100-119 11,507 13.8 165 13.0 56,210 11.2 181,494 12.6 43 120 or more 41,290 49.4 533 41.9 235,744 46.9 538.016 37.3 44 Total 83,614 100.0 1,273 100.0 502,696 100.0 1,441,797 100.0 CENSUS TRACT Racial or ethnic composition {minorities as percentage of population) 45 Less than 10 40,295 46.1 75.9 249,997 45.1 699,299 41.7 46 10-19 19,456 22.3 159 12.2 127,051 22.9 373,531 22.3 47 20-49 17,838 20.4 101 7.8 113,662 20.5 376,067 22.4 48 50-79 5,946 6.8 26 2.0 36,193 6.5 126,131 7.5 49 80-100 3,902 4.5 27 2.1 27,928 5.0 102,306 6.1 50 Total 87,437 100.0 1,301 100.0 554,831 100.0 1,677,334 100.0 Income' 51 Low 1,700 1.9 29 2.2 13,137 2.3 43,327 2.6 52 Moderate 9,950 11.4 122 9.4 73,277 12.9 245,204 14.6 53 Middle 42,579 48.7 779 59.9 269,291 47.3 869,328 51.8 54 Upper 33,143 37.9 371 28.5 213,829 37.5 519,946 31.0 55 Total 87,372 100.0 1,301 100.0 569,534 100.0 1,677,805 100.0 Location 56 Central city 33,360 38.1 491 37.7 229,234 40.2 707,931 42.1 57 Non-central city 54,104 61.9 810 62.3 340,707 59.8 971,721 57.9 58 Total 87,464 1,301 569,941 1,679,652 Note. Includes securitized loans. See also notes to table 4.40. 2. Census tracts are categorized by the median family income for the tract relative to the Fannie Mae—Federal National Mortgage Association median family income for the MSA in which the tract is located. Categories are defined as Ginnie Mae—Government National Mortgage Association follows: Low income, median family income for census tract less than 50 percent of median Freddie Mac—Federal Home Loan Mortgage Corporation family income for MSA; Moderate income, median family income for census tract at least 50 FmHA—Farmers Home Administration and less than 80 percent of MSA median; Middle income, median family income at least 80 Affiliate—Affiliate of institution reporting the loan percent and less than 120 percent of MSA median; Upper income, median family income 120 1. Median family income of the metropolitan statistical area (MSA) in which the property percent and greater of MSA median. related to the loan is located. SOURCE. FFIEC, Home Mortgage Disclosure Act. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A72 Special Tables • September 2001 4.411 LENDER SHARE AND DOLLAR VOLUME OF RESIDENTIAL-MORTGAGE ORIGINATIONS, 1993-20001 Mortgage companies YYeeaarr SSaavviinnggss iinnssttiittuuttiioonnss22 CCoommmmeerrcciiaall bbaannkkss o S r u s b a s v i i d n i g a s r ie i s n s o t f i tu b t a io n n k s s 3 Independently owned4 CCrreeddiitt uunniioonnss ((bbii DD llll oo iioo ll nn llaa ss rr oo vv ff oo dd lluu oo mm llllaa ee rrss)) Conventional one- to four-family 1 1993 23 18 19 37 3 842 2 1994 26 21 19 31 3 539 3 1995 26 21 25 26 2 444 4 1996 26 21 25 26 3 555 5 1997 25 18 26 28 2 630 6 1998 24 16 30 28 2 1,163 7 1999 21 21 29 26 3 960 8 2000 21 23 29 25 2 783 FHA VA, and RHS one- to four-family 9 1993 9 5 26 59 1 151 10 1994 10 6 29 54 1 86 11 1995 10 7 34 49 1 95 12 1996 10 6 33 50 1 95 13 1997 9 6 37 48 1 101 14 1998 7 5 38 49 1 150 15 1999 6 6 41 46 1 133 16 2000 5 8 41 45 1 110 Total, one- to four-family 17 1993 21 16 20 40 3 993 18 1994 24 19 20 34 3 625 19 1995 24 19 26 30 2 519 20 1996 24 19 26 29 2 650 21 1997 23 17 28 30 2 731 22 1998 22 15 31 30 2 1,313 23 1999 19 19 31 29 2 11,,009933 24 2000 19 21 31 27 2 889944 Total, multifamily 25 1993 63 23 6 9 0 13 26 1994 62 30 4 5 0 15 27 1995 51 41 4 4 0 13 28 1996 50 38 6 7 0 16 29 1997 47 36 6 11 0 20 30 1998 41 36 10 13 0 28 31 1999 37 30 8 25 0 32 31 2000 39 38 8 15 0 27 Total, residential 33 1993 22 16 20 40 3 1,006 34 1994 25 19 20 33 3 640 35 1995 24 19 26 29 2 532 36 1996 24 19 26 29 2 666 37 1997 24 17 27 30 2 751 38 1998 22 15 31 30 2 1,341 39 1999 20 20 30 29 2 1,125 40 2000 19 22 30 27 2 856 NOTE. Coverage of depository institutions declined in 1997 because of an increase in the 2. Includes savings and loan associations and savings banks. asset size threshold for exempt institutions from $10 million to $28 million. Figures reported 3. Includes mortgage company subsidiaries of a bank holding company or a service here differ from those reported in previous years because some institutions have been placed corporation. in different categories. 4. Coverage of independently owned mortgage companies expanded in 1993 when those 1. Based on the dollar volume of originations reported under the Home Mortgage Disclo- companies with less than $10 million in assets but with 100 or more home-purchase sure Act. Originations insured or guaranteed by the Rural Housing Service (RHS) include the originations were included. former Farmers Home Administration. SOURCE. Home Mortgage Disclosure Act, 1990-2000. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Private Mortage Insurance A73 4.42 APPLICATIONS RECEIVED AND POLICIES WRITTEN FOR PRIVATE MORTGAGE INSURANCE, 1997-2000 By Insurance Company 1997 1998 1999 2000 CCoommppaannyy Applications P w o r l i i t c t i e e n s Applications P w o r l i i t c te ie n s Applications P w o r l i i t c te ie n s Applications P w o r l i i t c te ie n s 1 Amerin Guaranty 60,149 60,105 116,744 116,725 * * * * 2 Commonwealth Mortgage Assurance 152,874 112,513 212,097 165,336 * * * * 3 Radian1 * * * * 317,775 256,924 243,684 185,224 4 GE Capital Mortgage Insurance 210,493 160,847 302,606 244,496 304,365 221,970 259,285 185,995 5 Mortgage Guaranty Insurance 325,336 265,566 436,225 356,419 479,425 377,195 430,414 317,610 6 PMI Mortgage Insurance 152,129 119,181 255,656 211,074 267,470 212,177 254,327 206,444 7 Republic Mortgage Insurance 132,204 102,221 183,240 145,023 157,794 144,618 121,706 113,894 8 Triad Guaranty Insurance 36,908 31,129 46,568 38,518 43,633 33,116 44,165 32,870 9 United Guaranty 147,256 120,182 214,162 182,327 244,637 204,667 220,504 186,004 10 Total 1,217,349 971,744 1,767,298 1,459,918 1,815,099 1,450,667 1,574,085 1,228,041 1. Radian is the result of a merger between Amerin Guaranty and Commonwealth SOURCE. Federal Financial Institutions Examination Council. Mortgage in 1999. 4.43 APPLICATIONS RECEIVED AND POLICIES WRITTEN FOR PRIVATE MORTGAGE INSURANCE, 2000 By Purpose of Loan and Insurance Company Percent Home purchase Home refinance Total CCoommppaannyy Applications Policies written Applications Policies written Applications Policies written 1 Radian1 15.3 15.1 16.2 15.1 15.5 15.1 2 GE Capital Mortgage Insurance 17.0 15.7 13.8 12.0 16.5 15.1 3 Mortgage Guaranty Insurance 25.7 24.2 35.2 34.7 27.3 25.9 4 PMI Mortgage Insurance 15.4 15.8 19.8 22.3 16.2 16.8 5 Republic Mortgage Insurance 8.3 9.8 5.2 6.5 7.7 9.3 6 Triad Guaranty Insurance 2.9 2.8 2.6 2.3 2.8 2.7 7 United Guaranty 15.5 16.7 7.1 7.2 14.0 15.1 8 Total 100.0 100.0 100.0 100.0 100.0 100.0 MEMO 9 Number of applications or policies 1,300,069.0 1,031,461.0 274,016.0 196,580.0 1,574,085.0 1,228,041.0 1. Radian is the result of a merger between Amerin Guaranty and Commonwealth SOURCE. Federal Financial Institutions Examination Council. Mortgage in 1999. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A74 Special Tables • September 2001 4.44 APPLICATIONS FOR PRIVATE MORTGAGE INSURANCE, 2000 By Purpose of Loan and Characteristic of Applicant and Census Tract Home purchase Home refinance CChhaarraacctteerriissttiicc Number Percent Number Percent APPLICANT Race or ethnic group 1 American Indian or Alaskan Native 3,023 .3 449 .3 2 Asian or Pacific Islander 30,058 3.4 2,583 1.9 3 Black 50,746 5.7 10,655 7.7 4 Hispanic 73,374 8.2 8,820 6.4 5 White 677,876 75.6 109,543 79.1 6 Other 43,771 4.9 3,993 2.9 7 Joint (white and minority) 18,094 2.0 2,367 1.7 8 Total 896,942 100.0 138,410 100.0 Income (percentage of MSA median)' 9 Less than 50 57,831 6.0 11,190 6.8 10 50-79 202,466 20.9 35,472 21.4 11 80-99 153,683 15.9 28,056 17.0 12 100-119 141,282 14.6 24,703 14.9 13 120 or more 412,440 42.6 65,976 39.9 14 Total 967,702 100.0 165,397 100.0 CENSUS TRACT Racial composition (minorities as percentage of population) 15 Less than 10 507,200 49.8 99,524 46.8 16 10-19 220,582 21.6 41,075 19.3 17 20-49 189,802 18.6 40,219 18.9 18 50-79 61,278 6.0 16,129 7.6 19 80-100 40,498 4.0 15,897 7.5 20 Total 1,019,360 100.0 212,844 100.0 Income2 21 Lower 18,919 1.9 5,872 2.8 22 Moderate 118,414 11.6 32,690 15.4 23 Middle 525,761 51.6 117,816 55.4 24 Upper 355,531 34.9 56,346 26.5 25 Total 1,018,625 100.0 212,724 100.0 Location3 26 Central city 412,251 40.1 84,966 39.4 27 Non-central city 616,519 59.9 130,839 60.6 28 Total 1,028,770 100.0 215,805 100.0 NOTE. Not all characteristics were reported for all loans. 3. For census tracts located in MSAs. 1.MSA median is median family income of the metropolitan statistical area (MSA) in SOURCE. Federal Financial Institutions Examination Council, which the property related to the loan is located. 2. Lower: median family income for census tract less than 50 percent of median family income for MSA. Moderate: 50 percent to less than 80 percent. Middle: 80 percent to less than 120 percent. Upper: 120 percent or more. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Private Mortgage Insurance A75 4.45 APPLICATIONS FOR PRIVATE MORTGAGE INSURANCE, 2000 By Purpose of Loan, Disposition of Application, Characteristic of Applicant, and Census Tract Percent Home purchase Home refinance CChhaarraacctteerriissttiicc Approved Denied Withdrawn File closed Total Approved Denied Withdrawn File closed Total 1 Total 91.3 4.3 3.0 1.4 100.0 88.9 6.5 3.4 1.2 100.0 APPLICANT Race or ethnic group 2 American Indian or Alaskan Native 87.1 6.8 4.8 1.3 100.0 88.4 6.7 3.8 1.1 100.0 3 Asian or Pacific Islander 90.3 4.8 3.5 1.4 100.0 87.4 7.0 4.5 1.1 100.0 4 Black 85.6 8.3 4.3 1.8 100.0 82.1 11.5 4.9 1.4 100.0 5 Hispanic 87.6 6.9 3.8 1.7 100.0 83.3 9.6 5.2 1.9 100.0 6 White 91.8 3.8 3.1 1.3 100.0 87.5 6.8 4.3 1.4 100.0 7 Other 97.5 .9 1.5 .1 100.0 95.0 2.4 2.1 .5 100.0 8 Joint (white and minority) 90.0 5.1 3.5 1.4 100.0 85.7 7.6 5.0 1.8 100.0 Income (percentage of MSA median/ 9 Less than 50 90.4 5.8 2.7 1.1 100.0 83.8 10.7 4.0 1.5 100.0 10 50-79 92.8 3.8 2.5 .9 100.0 84.6 9.4 4.4 1.6 100.0 11 80-99 93.4 3.3 2.4 .8 100.0 85.9 8.3 4.3 1.5 100.0 12 100-119 93.7 3.2 2.3 .8 100.0 86.6 7.7 4.2 1.5 100.0 13 120 or more 93.7 3.0 2.5 .8 100.0 87.4 7.0 4.3 1.2 100.0 CENSUS TRACT Racial composition (minorities as percentage of population) 14 Less than 10 94.6 2.6 2.1 .7 100.0 89.4 6.1 3.4 1.1 100.0 15 10-19 93.4 3.3 2.4 .9 100.0 89.0 6.3 3.5 1.2 100.0 16 20 19 92.4 4.1 2.6 .9 100.0 88.9 6.7 3.3 1.1 100.0 17 50-79 90.9 5.2 2.8 1.1 100.0 89.3 6.7 3.1 .9 100.0 18 80-100 89.0 6.6 3.1 1.2 100.0 89.3 6.9 2.9 .9 100.0 Income~ 19 Lower 89.2 6.4 3.1 1.3 100.0 89.5 6.7 2.6 1.2 100.0 20 Moderate 91.7 4.7 2.8 .9 100.0 88.8 6.9 3.2 1.1 100.0 21 Middle 93.7 3.2 2.3 .8 100.0 89.1 6.4 3.4 1.1 100.0 22 Upper 94.1 2.8 2.3 .8 100.0 89.6 5.9 3.5 1.1 100.0 Location3 23 Central city 93.0 3.6 2.5 .9 100.08 9.1 6.4 3.3 1.1 100.0 24 Non-central city 93.9 3.1 2.3 .7 100.0 89.2 6.3 3.4 1.1 100.0 NOTE. Not all characteristics were reported for all loans. 3. For census tracts located in MSAs. 1. Median family income of the metropolitan statistical area (MSA) in which the property SOURCE. Federal Financial Institutions Examination Council, related to the loan is located. 2. Lower: median family income for census tract less than 50 percent of median family income for MSA of tract. Moderate'. 50 percent to less than 80 percent. Middle: 80 percent to less than 120 percent. Upper: 120 percent or more. Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A76 Special Tables • September 2001 4.46 SMALL LOANS TO BUSINESSES AND FARMS, 1996-2000 1996 Total business loans 1 Number 2,424,966 2,560,795 2,736,389 3,287,974 2 Amount (thousands of dollars) 149,718,193 159,401,302 161,211,231 174,538,571 Percent to small firms2 3 Number 55.9 50.0 54.5 60.2 43.1 42.1 47.0 48.5 4 Amount 5 T N o u ta m l b fa er r m loans 217,356 212,822 206,267 220,587 6 Amount (thousands of dollars) 10,480,989 11,192,400 11,373,691 12,302,881 Percent to small farms3 7 Number 88.4 89.5 90.4 90.6 8 Amount 81.4 81.3 83.0 83.7 Activity of CRA reporters (percent) All small loans to businesses3 9 Number 65.9 71.0 67.8 67.8 10 Amount 67.5 69.4 69.4 72.4 All small loans to farms3 11 Number 22.2 24.1 24.9 28.0 12 Amount 27.9 28.4 30.1 34.1 Distribution of business loans by asset size of lender Number (percent) 1 1 1 1 3 4 5 6 L 2 1 1 5 0 e ,0 0 s 0 0 s 0 t t o o t h o a 9 2 r n 9 4 m 9 9 1 o 0 r 0 e 6 1 1 0 3 9 6 . . . . 7 7 6 1 7 1 6 6 5 1 . . . . 5 6 7 2 2 7 0 2 5 1 . . . . 3 3 5 9 8 1 1 5 1 1 . . . . 8 0 9 4 17 Total 100 100 100 100 Amount (percent) 18 Less than 100 1.6 1.4 0.8 1.0 19 100 to 249 5.7 3.5 3.2 2.2 20 250 to 999 22.4 20.9 22.7 21.6 70.3 74.2 73.3 75.2 21 1,000 or more 22 Total 100 100 100 100 Distribution of farm loans by asset size of lender Number (percent) 9.8 6.4 4.9 2 2 2 4 3 5 L 2 1 5 0 e 0 0 ss t t o o th a 9 2 n 9 4 9 9 100 4 3 1 1 4 4 . . . 5 5 2 4 3 1 5 7 0 . . . 8 4 4 4 3 8 8 . . 2 7 5 3 0 7 6 . . . 8 7 6 26 1,000 or more 100 100 100 27 Total Amount (percent) 2 2 8 9 L 10 es 0 s to th a 2 n 4 9 1 00 3 1 6 1 1 . . . 4 7 5 34 5 8 . . . 1 2 2 3 3 6 6 . . . 5 6 0 3 4 6 5 . . . 0 3 6 30 250 to 999 50.4 52.5 53.9 54.1 31 1,000 or more 100 100 100 100 32 Total Distribution of business loans by income of census tract Number 3 3 3 3 3 3 4 5 6 7 L M U I M n o p o c i w d p o d d e m e r l r e e a te n ot reported 4 2 1 4 9 9 5 . . . . . 7 5 4 9 5 4 2 1 9 4 9 6 . . . . . 1 6 8 0 5 4 3 1 4 9 0 5 . . . . . 3 5 3 5 5 5 3 1 0 1 3 4 . . . . . 1 2 6 4 6 100 100 100 100 38 Total Amount 5.6 5.4 5.2 5.0 39 Low 16.0 16.0 15.7 15.5 40 Moderate 46.8 46.5 46.8 47.1 41 Middle 30.9 31.4 31.6 31.7 42 Upper .7 .7 .7 .7 43 Income not reported 100 100 100 100 44 Total MEMO Number of reporters 1,583 1,421 1,576 1,450 45 Commercial banks 496 475 290 461 46 Savings institutions 47 Total 2,079 1,896 1,866 1,911 1. Revised to reflect correction of reported data. 4. Low income: census tract median family income less than 50 percent of MSA median 2. Businesses and farms with revenues of $1 million or less. family income or nonmetropolitan portion of state median family income; moderate income: 3. Percentages reflect the ratio of activity by CRA reporters to activity by all lenders. 50-79 percent; middle income: 80-120 percent; upper income: 120 percent or more. Excludes Calculations are based on information reported in the June 1996, 1997, 1998, 1999, and 2000 loans where census tract or block number area was not reported. Call Reports for commercial banks and the Thrift Financial Reports for savings associations. SOURCE: FFIEC Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Loans to Businesses and Farms All 4.47 ORIGINATIONS AND PURCHASES OF SMALL LOANS TO BUSINESSES AND FARMS, 2000 By Size of Loan Size of loan (dollars) MMEEMMOO LLooaannss ttoo ffiirrmmss AAllll llooaannss wwiitthh rreevveennuueess ooff $$11 mmiilllliioonn Type of borrower and loan 100,000 or less 100,001 to 250,000 More than 250,000 oorr lleessss Total Percent Total Percent Total Percent Total Percent Total Percent Number of Loans Business 1 Originations 4,723,758 93.2 186,811 3.7 156,552 3.1 5,067,121 100 2,117,089 41.8 2 Purchases 32,561 75.9 4,985 11.6 5,334 12.4 42,880 100 11,834 27.6 3 Total 4,756,319 93.1 191,796 3.8 161,886 3.2 5,110,001 100 2,128,923 41.7 Farm 4 Originations 170,863 84.6 22,652 11.2 8,568 4.2 202,083 100 183,914 91.0 5 Purchases 1,695 75.8 361 16.2 179 8.0 2,235 100 445 19.9 6 Total 172,558 84.5 23,013 11.3 8,747 4.3 204,318 100 184,359 90.2 All 7 Originations 4,894,621 92.9 209,463 4.0 165,120 3.1 5,269,204 100 2,301,003 43.7 8 Purchases 34,256 75.9 5,346 11.8 5,513 12.2 45,115 100 12,279 27.2 9 Total 4,928,877 92.7 214,809 4.0 170,633 3.2 5,314,319 100 2,313,282 43.5 Amount of loans (thousands of dollars) Business 10 Originations 60,837,266 34.9 32,446,922 18.6 81,107,954 46.5 174,392,142 100 80,952,361 46.4 11 Purchases 1,063,481 22.8 850,802 18.2 2,749,779 59.0 4,664,062 100 1,148,232 24.6 12 Total 61,900,747 34.6 33,297,724 18.6 83,857,733 46.8 179,056,204 100 82,100,593 45.9 Farm 13 Originations 4,592,584 40.1 3,744,838 32.7 3,107,673 27.2 11,445,095 100 9,691,868 84.7 14 Purchases 62,897 33.1 59,064 31.1 67,824 35.7 189,785 100 53,110 28.0 15 Total 4,655,481 40.0 3,803,902 32.7 3,175,497 27.3 11,634,880 100 9,744,978 83.8 All 16 Originations 65,429,850 35.2 36,191,760 19.5 84,215,627 45.3 185,837,237 100 90,644,229 48.8 17 Purchases 1,126,378 23.2 909,866 18.7 2,817,603 58.0 4,853,847 100 1,201,342 24.8 18 Total 66,556,228 34.9 37,101,626 19.5 87,033,230 45.6 190,691,084 100 91,845,571 48.2 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A78 Special Tables • September 2001 4.48 ORIGINATIONS AND PURCHASES OF SMALL LOANS TO BUSINESSES AND FARMS, 2000 By Type of Borrower and Loan, and Distributed by Size of Lending Institution Institutions, by asset size (millions of dollars) Type of borrower and loan Less than 100 100 to 249 250 to 999 1,000 or more Total Percent Total Percent Total Percent Total Percent Total Percent Number of loans Business 1 Originations 26,651 0.5 43,307 0.9 957,727 18.9 4,039,436 79.7 5,067,121 100 2 Purchases 176 0.4 120 0.3 2,368 5.5 40,216 93.8 42,880 100 3 Total 26,827 0.5 43,427 0.8 960,095 18.8 4,079,652 79.8 5,110,001 100 Farm 4 Originations 4,456 2.2 9,819 4.9 95,052 47.0 92,756 45.9 202,083 100 5 Purchases 4 0.2 2 0.1 408 18.3 1,821 81.5 2,235 100 6 Total 4,460 2.2 9,821 4.8 95,460 46.7 94,577 46.3 204,318 100 All 7 Originations 31,107 0.6 53,126 1.0 1,052,779 20.0 4,132,192 78.4 5,269,204 100 8 Purchases 180 0.4 122 0.3 2,776 6.2 42,037 93.2 45,115 100 9 Total 31,287 0.6 53,248 1.0 1,055,555 19.9 4,174,229 78.5 5,314,319 100 Amount of loans (thousands of dollars) Business 10 Originations 1,106,920 0.6 3,482,161 2.0 40,712,480 23.3 129,090,581 74.0 174,392,142 100 11 Purchases 54,007 1.2 43,848 0.9 489,263 10.5 4,076,944 87.4 4,664,062 100 12 Total 1,160,927 0.6 3,526,009 2.0 41,201,743 23.0 133,167,525 74.4 179,056,204 100 Farm 13 Originations 201,584 1.8 465,324 4.1 4,914,656 42.9 5,863,531 51.2 11,445,095 100 14 Purchases 1,021 0.5 295 0.2 57,150 30.1 131,319 69.2 189,785 100 15 Total 202,605 1.7 465,619 4.0 4,971,806 42.7 5,994,850 51.5 11,634,880 100 All 16 Originations 1,308,504 0.7 3,947,485 2.1 45,627,136 24.6 134,954,112 72.6 185,837,237 100 17 Purchases 55,028 1.1 44,143 0.9 546,413 11.3 4,208,263 86.7 4,853,847 100 18 Total 1,363,532 0.7 3,991,628 2.1 46,173,549 24.2 139,162,375 73.0 190,691,084 100 MEMO 19 Number of institutions reporting 129 210 1,117 485 1,941 20 Number of institutions extending loans . 121 199 1,039 441 1,800 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

Community Reinvestment A79 4.49 COMMUNITY DEVELOPMENT LENDING, 2000 Number of loans (th A ou m s o an u d n s t o o f f l d o o a l n la s rs) MEMO: CRA reporters AAAsssssseeettt sssiiizzzeee ooofff llleeennndddeeerrr Community development loans (((mmmiiilllllliiiooonnnsss ooofff dddooollllllaaarrrsss))) TToottaall PPeerrcceenntt TToottaall PPeerrcceenntt NNuummbbeerr PPeerrcceenntt Number Percent extending extending Institution assets 1 Less than 100 117 0.5 51,360 0.3 129 6.6 37 3.3 2 100 to 249 466 1.9 138,972 0.7 210 10.8 82 7.3 250 to 999 6,695 27.7 2,466,773 12.6 1,117 57.5 604 54.1 4 1,000 or more 16,896 69.9 16,964,912 86.5 485 25.0 394 35.3 5 All 24,174 100.0 19,622,017 100.0 1,941 100.0 1,117 100.0 MEMO 6 Lending by all affiliates 375 1.6 563,355 2.9 40 3.6 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

80 Federal Reserve Bulletin • September 2001 Index to Statistical Tables References are to pages A3-A79, although the prefix " " is omitted in this index. ACCEPTANCES, bankers (See Bankers acceptances) Federal finance Assets and liabilities (See also Foreigners) Debt subject to statutory limitation, and types and ownership of Commercial banks, 15-21 gross debt, 27 Domestic finance companies, 32, 33 Receipts and outlays, 25, 26 Federal Reserve Banks, 10 Treasury financing of surplus, or deficit, 25 Foreign-related institutions, 20 Treasury operating balance, 25 Automobiles Federal Financing Bank, 30 Consumer credit, 36 Federal funds, 23, 25 Production, 44, 45 Federal Home Loan Banks, 30 Federal Home Loan Mortgage Corporation, 30, 34, 35 BANKERS acceptances, 5, 10, 22, 23 Federal Housing Administration, 30, 34, 35 Bankers balances, 15-21 {See also Foreigners) Federal Land Banks, 35 Bonds (See also U.S. government securities) Federal National Mortgage Association, 30, 34, 35 New issues, 31 Federal Reserve Banks Rates, 23 Condition statement, 10 Business activity, nonfinancial, 42 Discount rates (See Interest rates) Business loans (See Commercial and industrial loans) U.S. government securities held, 5, 10, 11, 27 Federal Reserve credit, 5, 6, 10, 12 CAPACITY utilization, 43 Federal Reserve notes, 10 Capital accounts Federally sponsored credit agencies, 30 Finance companies Commercial banks, 15-21 Federal Reserve Banks, 10 Assets and liabilities, 32 Certificates of deposit, 23 Business credit, 33 Commercial and industrial loans Loans, 36 Business and farms, loans to, 76-8 Paper, 22, 23 Commercial banks, 15-21 Float, 5 Weekly reporting banks, 17, 18 Flow of funds, 37-41 Commercial banks Foreign currency operations, 10 Assets and liabilities, 15-21 Foreign deposits in U.S. banks, 5 Commercial and industrial loans, 15-21, 76-9 Foreign exchange rates, 62 Consumer loans held, by type and terms, 36, 68-72 Foreign-related institutions, 20 Real estate mortgages held, by holder and property, 35, 64-72 Foreign trade, 51 Time and savings deposits, 4 Foreigners Commercial paper, 22, 23, 32 Claims on, 52, 55-7, 59 Community development loans, under CRA, 79 Liabilities to, 51—4, 58, 60, 61 Condition statements (See Assets and liabilities) Construction, 42, 46 GOLD Consumer credit, 36 Certificate account, 10 Consumer prices, 42 Stock, 5, 51 Consumption expenditures, 48, 49 Government National Mortgage Association, 30, 34, 35 Corporations Gross domestic product, 48, 49 Profits and their distribution, 32 Security issues, 31, 61 HOME Mortgage Disclosure Act Cost of living (See Consumer prices) Applications for home loans, 66-9 Credit unions, 36 Home loans, 70-2 Currency in circulation, 5, 13 Residential lending by financial institutions, 66, 70-2 Customer credit, stock market, 24 HOUSING, new and existing units, 46 DEBT (See specific types of debt or securities) INCOME, personal and national, 42, 48, 49 Demand deposits, 15-21 Industrial production, 42, 44 Depository institutions Insurance, private mortgage, 73-5 Reserve requirements, 8 Insurance companies, 27, 35 Reserves and related items, 4-6, 12 Interest rates Deposits (See also specific types) Bonds, 23 Commercial banks, 4, 15-21 Consumer credit, 36 Federal Reserve Banks, 5, 10 Federal Reserve Banks, 7 Discount rates at Reserve Banks and at foreign central banks and Money and capital markets, 23 foreign countries (See Interest rates) Mortgages, 34 Discounts and advances by Reserve Banks (See Loans) Prime rate, 22 Dividends, corporate, 32 International capital transactions of United States, 50-61 International organizations, 52, 53, 55, 58, 59 EMPLOYMENT, 42 Inventories, 48 Euro, 62 Investment companies, issues and assets, 32 Investments (See also specific types) FARM mortgage loans, 35, 76-8 Commercial banks, 4, 15-21 Federal agency obligations, 5, 9-11, 28, 29 Federal Reserve Banks, 10, 11 Federal credit agencies, 30 Financial institutions, 35 Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

A81 LABOR force, 42 Reserves—Continued Life insurance companies (See Insurance companies) Federal Reserve Banks, 10 Loans (See also specific types) U.S. reserve assets, 51 Business, 76-8 Residential mortgage loans, 34, 35, 64-72 Commercial banks, 15-21, 64-9, 76-9 Retail credit and retail sales, 36, 42 Community development, 79 Conventional, 64—6, 68 SAVING Fannie Mae, 70 Flow of funds, 37-41 Farms, 76-8 National income accounts, 48 Federal Reserve Banks, 5-7, 10, 11 Savings deposits (See Time and savings deposits) FHA, 64 Savings institutions, 35, 36, 37-41 Financial institutions, 35 Securities (See also specific types) FmHA, 64, 70 Federal and federally sponsored credit agencies, 30 Freddie Mac, 70 Foreign transactions, 60 Ginnie Mae, 70 New issues, 31 Home purchase, 65-7 Prices, 24 Insured or guaranteed by United States, 34, 35 Special drawing rights, 5, 10, 50, 51 VA, 64, 67 State and local governments Holdings of U.S. government securities, 27 MANUFACTURING New security issues, 31 Capacity utilization, 43 Rates on securities, 23 Production, 43, 45 Stock market, selected statistics, 24 Margin requirements, 24 Stocks (See also Securities) Member banks, reserve requirements, 8 New issues, 31 Mining production, 45 Prices, 24 Mobile homes shipped, 46 Monetary and credit aggregates, 4, 12 Student Loan Marketing Association, 30 Money and capital market rates, 23 Money stock measures and components, 4, 13 T TA hr X if t r e in c s e t i i p tu ts t , i o f n e s d , e 4 ra l ( , S e 2 e 6 also Credit unions and Savings Mortgage insurance, 73-5 institutions) Mortgages (See Real estate loans) Time and savings deposits, 4, 13, 14, 15-21 Mutual funds, 13, 32 Trade, foreign, 51 Mutual savings banks (See Thrift institutions) Treasury cash, Treasury currency, 5 Treasury deposits, 5, 10, 25 NATIONAL defense outlays, 26 Treasury operating balance, 25 National income, 48 UNEMPLOYMENT, 42 OPEN market transactions, 9 U.S. government balances Commercial bank holdings, 15-21 PERSONAL income, 49 Treasury deposits at Reserve Banks, 5, 10, 25 Prices U.S. government securities Consumer and producer, 42, 47 Bank holdings, 15-21, 27 Stock market, 24 Dealer transactions, positions, and financing, 29 Prime rate, 22 Federal Reserve Bank holdings, 5, 10, 11, 27 Private mortgage insurance, 73-5 Foreign and international holdings and transactions, 10, 27, 61 Producer prices, 42, 47 Open market transactions, 9 Production, 42, 44 Outstanding, by type and holder, 27, 28 Profits, corporate, 32 Rates, 23 U.S. international transactions, 50-62 REAL estate loans Utilities, production, 45 Banks, 15-21, 35 Terms, yields, and activity, 34 VETERANS Affairs, Department of, 34, 35 Type and holder and property mortgaged, 35 Reserve requirements, 8 WEEKLY reporting banks, 17, 18 Reserves Wholesale (producer) prices, 42, 47 Commercial banks, 15-21 Depository institutions, 4-6, 12 YIELDS (See Interest rates) Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

82 Federal Reserve Bulletin • September 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 REG ULA TION—Continued MICHELLE A. SMITH, Assistant to the Board WILLIAM C. SCHNEIDER, JR., Project Director, DONALD J. WINN, Assistant to the Board National Information Center DONALD L. KOHN, Adviser to the Board WINTHROP P. HAMBLEY, Deputy Congressional Liaison DIVISION OF INTERNATIONAL FINANCE NORMAND R.V. BERNARD, Special Assistant to the Board KAREN H. JOHNSON, Director JOHN LOPEZ, Special Assistant to the Board DAVID H. HOWARD, Deputy Director BOB STAHLY MOORE, Special Assistant to the Board THOMAS A. CONNORS, Associate Director ROSANNA PIANALTO-CAMERON, Special Assistant to the I DALE W. HENDERSON, Associate Director DAVID W. SKIDMORE, Special Assistant to the Board RICHARD T. FREEMAN, Assistant Director WILLIAM L. HELKIE, Assistant Director LEGAL DIVISION STEVEN B. KAMIN, Assistant Director J. VIRGIL MATTINGLY, JR., General Counsel RALPH W. TRYON, Assistant Director SCOTT G. ALVAREZ, Associate General Counsel RICHARD M. ASHTON, Associate General Counsel DIVISION OF RESEARCH AND STATISTICS KATHLEEN M. O'DAY, Associate General Counsel 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 W. 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 STEPHEN D. OLINER, Associate Director OFFICE OF THE SECRETARY PATRICK M. PARKINSON, Associate Director LAWRENCE SLIFMAN, Associate Director JENNIFER J. JOHNSON, Secretary CHARLES S. STRUCKMEYER, Associate Director ROBERT DEV. FRIERSON, Deputy Secretary MARTHA S. SCANLON, Deputy Associate Director MARGARET M. SHANKS, Assistant Secretary JOYCE K. ZICKLER, Deputy Associate Director S. WAYNE 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 DIVISION OF MONETARY AFFAIRS STEPHEN M. HOFFMAN, JR., Associate Director JAMES V. HOUPT, Associate Director VINCENT R. REINHART, Director JACK P. JENNINGS, Associate Director DAVID E. LINDSEY, Deputy Director MICHAEL G. MARTINSON, Associate Director BRIAN F. MADIGAN, Deputy Director MOLLY S. WASSOM, Associate Director RICHARD D. PORTER, Deputy Associate Director HOWARD A. AMER, Deputy Associate Director WILLIAM C. WHITESELL, Assistant Director NORAH M. BARGER, Deputy Associate Director BETSY CROSS, Deputy Associate Director DIVISION OF CONSUMER DEBORAH P. BAILEY, Assistant Director AND COMMUNITY AFFAIRS BARBARA J. BOUCHARD, Assistant Director DOLORES S. SMITH, Director ANGELA DESMOND, Assistant Director GLENN E. LONEY, Deputy Director JAMES A. EMBERSIT, Assistant Director SANDRA F. BRAUNSTEIN, Assistant Director CHARLES H. HOLM, Assistant Director MAUREEN P. ENGLISH, Assistant Director HEIDI WILLMANN RICHARDS, Assistant Director ADRIENNE D. HURT, Assistant Director WILLIAM G. SPANIEL, Assistant Director IRENE SHAWN MCNULTY, Assistant Director DAVID M. WRIGHT, Assistant Director SIDNEY M. SUSSAN, Adviser Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

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 JEFFREY C. MARQUARDT, Associate Director STEPHEN J. CLARK, Associate Director, Finance Function KENNETH D. BUCKLEY, Assistant Director DARRELL R. PAULEY, Associate Director, Human Resources TILLENA G. CLARK, Assistant Director Function JOSEPH H. HAYES, JR., Assistant Director CHRISTINE M. FIELDS, Assistant Director, Human Resources EDGAR A. MARTINDALE III, Assistant Director Function MARSHA W. REIDHILL, Assistant Director SHEILA CLARK, EEO Programs Director JEFF J. STEHM, Assistant 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

84 Federal Reserve Bulletin • September 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 CHRISTINE M. CUMMING, Associate Economist NORMAND R.V. BERNARD, Deputy Secretary JEFFREY C. FUHRER, Associate Economist LYNN S. Fox, Assistant Secretary CRAIG S. HAKKIO, Associate Economist GARY P. GILLUM, Assistant Secretary DAVID H. HOWARD, Associate Economist J. VIRGIL MATTINGLY, JR., General Counsel WILLIAM C. HUNTER, Associate Economist THOMAS C. BAXTER, JR., Deputy General Counsel DAVID E. LINDSEY, Associate Economist KAREN H. JOHNSON, Economist ROBERT H. RASCHE, Associate Economist VINCENT R. REINHART, Economist LAWRENCE SLIFMAN, Associate Economist DAVID J. STOCKTON, 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

A85 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

86 Federal Reserve Bulletin • September 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, 2000. 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

A87 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/stajfstudies. 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

88 Federal Reserve Bulletin • September 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

A89 1-A 2-B 3-C 4-D 5-E Pittsburgh Baltimore MD NY i ' / wv NC Cincinnati • Charlotte Buffalo MA ™ ^ NY VT SC BOSTON NEW YORK PHILADELPHIA CLEVELAND RICHMOND 6-F 7-G 8-H I Nashville KY , / Birmingham WI 1L / IN ' Detroit • Lcaiisville MS - TN LA ^ Jackson\ illc AR * Memphis II. New Orleans ^-y. Little / Rock ( MS Miami ATLANTA CHICAGO ST. LOUIS 9-1 MT V1N • I lelena SD MINNEAPOLIS 10-J „ 12-L WY • 1 NB CO Omaha* • KS • ' Denser SM 1 Oklahoma Citv • OK KANSAS CITY 11-K IX ^Wj Saflt lLBakeB ( it'y N'M •• ~1( • LA UT 11 11 PPaassoo A r-1 Y Houston • \ * San Antonio DALLAS SAN FRANCISCO Digitized for FRASER http://fraser.stlouisfed.org/ Federal Reserve Bank of St. Louis

90 Federal Reserve Bulletin • September 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 Maryann Hunter1 Oklahoma City 73125 Patricia B. Fennell Dwayne E. Boggs 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